1
P R O P E R T Y No. 3 |
[No. 28379. March 27, 1929]
THE GOVERNMENT OF THE PHILIPPINE ISLANDS, applicant and appellant, vs.
CONSORCIA CABAÑGIS ET AL., claimants and appellees.
VILLA-REAL, J.:
The Government of the Philippine Islands appeals to this court from the judgment of the Court
of First Instance of Manila in cadastral proceeding No. 373 of the Court of First Instance of
Manila, G. L. R. O. Cadastral Record No. 373, adjudicating the title and decreeing the
registration of lots Nos. 36, 39 and 40, block 3055 of the cadastral survey of the City of Manila in
favor of Consuelo, Consorcia, Elvira and Tomas, surnamed Cabangis, in equal parts, and
dismissing the claims presented by the Government of the Philippine Islands and the City of
Manila.
In support of its appeal, the appellant assigns the following alleged errors as committed by the
trial court in its judgment, to wit:
“1. The lower court erred in not holding that the lots in question are of the public domain, the
same having been gained from the sea (Manila Bay) by accession, by fillings made by the
Bureau of Public Works and by the construction of the break-water (built by the Bureau of
Navigation) near the mouth of Vitas Estero.
“2. The lower court erred in holding that the lots in question formed part of the big parcel of
land belonging to the spouses Maximo Cabangis and Tita Andres, and in holding that these
spouses and their successors in interest have been in continuous, public, peaceful, and
uninterrupted possession of said lots up to the time this case came up.
“3. The lower court erred in holding that said lots existed before, but that due to the current of
the Pasig River and to the action of the big waves in Manila Bay during south-west monsoons,
the same disappeared.
“4. The lower court erred in adjudicating the registration of the lands in question in the name
of the appellees, and in denying the appellant's motion for a new trial.”
A preponderance of the evidence in the record which may properly be taken into consideration
in deciding the case, proves the following facts:
Lots 36, 39 and 40, block 3035 of cadastral proceeding No. 71 of the City of Manila, G. L. R. O.
Record No. 373, were formerly a part of a large parcel of land belonging to the predecessor of
the herein claimants and appellees. From the year 1896 said land began to wear away, due to
the action of the waves of Manila Bay, until the year 1901 when the said lots became completely
submerged in water in ordinary tides, and remained in such a state until 1912 when the
Government undertook the dredging of Vitas Estuary in order to facilitate navigation, depositing
all the sand and silt taken from the bed of the estuary on the low lands which were completely
covered with water, surrounding that belonging to the Philippine Manufacturing Company,
thereby slowly and gradually forming the lots, the subject matter of this proceeding.
Up to the month of February, 1927 nobody had declared lot 39 for the purposes of taxation, and
it was only in the year 1926 that Dr. Pedro Gil, in behalf of the claimants and appellees, declared
lot No. 40 for such purpose.
In view of the facts just stated, as proved by a preponderance of the evidence, the question
arises: Who owns lots 86, 39 and 40 in question?
The claimants-appellees contend that inasmuch as the said lots once formed a part of a large
parcel of land belonging to their predecessors, whom they succeeded, and their immediate
predecessor in interest, Tomas Cabangis, having taken possession thereof as soon as they were
reclaimed, giving his permission to some fishermen to dry their fishing nets and deposit their
bancas thereon, said lots belong to them.
Article 339, subsection 1, of the Civil Code, reads:
"Art. 339. Property of public ownership is—
"1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, riverbanks, shores, roadsteads, and that of a similar character."
Article 1, case 3, of the Law of Waters of August 3, 1866, provides as follows:
"ARTICLE 1. The following are part of the national domain open to public use:
"3. The Shores. By the shore is understood that space covered and uncovered by the movement
of the tide. Its interior or terrestrial limit is the line reached by the highest equinoctial tides.
Where the tides are not appreciable, the shore begins on the land side at the line reached by the
sea during ordinary storms or tempests."
In the case of Aragon vs. Insular Government (19 Phil., 223), with reference to article 339 of the
Civil Code just quoted, this court said:
"We should not be understood, by this decision, to hold that in a case of gradual encroachment
or erosion by the ebb and flow of the tide, private property may not become 'property of public
ownership/ as defined in article 339 of the code, where it appears that the owner has to all
intents and purposes abandoned it and permitted it to be totally destroyed, so as to become a
part of the 'playa' (shore of the sea), 'rada' (roadstead), or the like. * * *"
In the Enciclopedia Jurídica Española, volume XII, page 558, we read the following:
"With relative frequency the opposite phenomenon occurs; that is, the sea advances and private
properties are permanently invaded by the waves, and in this case they become part of the
shore or beach. They then pass to the public domain, but the owner thus dispossessed does not
retain any right to the natural products resulting from their new nature; it is a de facto case of
eminent domain, and not subject to indemnity."
Now then, when said land was reclaimed, did the claimants-appellees. or their predecessors
recover it as their original property?
As we have seen, the land belonging to the predecessors of the herein claimants-appellees
began to wear away in 1896, owing to the gradual erosion caused by the ebb and flow of the
tide, until the year 1901, when the waters of Manila Bay completely submerged a portion of it,
included within lots 36, 39 and 40 here in question, remaining thus under water until reclaimed
as a result of certain work done by the Government in 1912. According to the above-cited
authorities said portion of land, that is, lots 36, 39 and 40, which was private property, became
2
P R O P E R T Y No. 3 |
a part of the public domain. The predecessors of the herein claimants-appellees could have
protected their land by building a retaining wall, with the consent of competent authority, in
1896 when the waters of the sea began to wear it away, in accordance with the provisions of
article 29 of the aforecited Law of Waters of August 3, 1866, and their failure to do so until
1901, when a portion of the same became completely covered by said waters, remaining thus
submerged until 1912, constitutes abandonment.
Now then: The lots under discussion having been reclaimed from the sea as a result of certain
work done by the Government, to whom do they belong?
The answer to this question is found in article 5 of the aforementioned Law of Waters, which is
as follows:
"ART. 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by
the provinces, pueblos, or private persons, with proper permission, shall become the property of
the party constructing such works, unless otherwise provided by the terms of the grant of
authority.”
The fact that from 1912 some fishermen had been drying their fishing nets and depositing their
bancas on lots 36, 39 and 40, by permission of Tomas Cabangis, does not confer on the latter or
his successors the ownership of said lots, because, as they were converted into public land, no
private person could acquire title thereto except in the form and manner established by the law.
In the case of Buzon vs. Insular Government and City of Manila (13 Phil., 324), cited by the
claimants-appellees, this court, admitting the findings and holdings of the lower court, said the
following:
"If we heed the parol evidence, we find that the seashore was formerly about one hundred
brazas distant from the land in question; that, in the course of time, and by the removal of a
considerable quantity of sand from the shore at the back of the land for the use of the street car
company in filling in Calle Cervantes, the sea water in ordinary tides now covers part of the land
described in the petition.
"The fact that certain land, not the bed of a river or of the sea, is covered by sea water during
the period of ordinary high tide, is not a reason established by any law to cause the loss thereof,
especially when, as in the present case, it becomes covered by water owing to circumstances
entirely independent of the will of the owner."
In the case of Director of Lands vs. Aguilar (G. R. No. 22034) ,1 also cited by the claimants-
appellees, wherein the Government adduced no evidence in support of its contention, the lower
court said in part:
"The contention of the claimants Cabangis is to the effect that said lots are a part of the
adjoining land adjudicated to their deceased father, Don Tomas Cabangis, which, for over fifty
years had belonged to their deceased grandmother, Tita Andres, and that, due to certain
improvements made in Manila Bay, the waters of the sea covered a large part of the lots herein
claimed.
"The Government of the Philippine Islands also claims the ownership of said lots, because, at
ordinary high tide, they are covered by the sea.
"Upon petition of the parties, the lower court made an ocular inspection of said lots on
September 12, 1923, and on said inspection found some light material houses built thereon, and
that on that occasion the waters of the sea did not reach the aforesaid lots.
"From the evidence adduced at the trial of this cause, it may be inferred that Tita Andres, during
her lifetime, was the owner of a rather large parcel of land which was adjudicated by a decree to
her son Tomas Cabangis; the lots now in question are contiguous to that land and are covered
by the waters of the sea at extraordinary high tide; some 50 years before the sea did not reach
said strip of land, and on it were constructed, for the most part, light material houses, occupied
by the tenants of Tita Andres, to whom they paid rent. Upon her death, her son Tomas Cabangis
succeeded to the possession, and his children succeeded him, they being the present claimants,
Consuelo, Jesus, Tomas, and Consorcia Cabangis.
"The Government of the Philippine Islands did not adduce any evidence in support of its
contention, with the exception of registry record No. 8147, to show that the lots here in question
were not excluded f rom the application presented in said proceeding.”
It will be seen that in the case of Buzon vs. Insular Government and City of Manila, cited above,
the rise of the waters of the sea that covered the lands there in dispute, was due not to the
action of the tide but to the fact that a large quantity of sand was taken from the sea at the side
of said land in order to fill in Cervantes Street, and this court properly held that because of this
act, entirely independent of the will of the owner of said land, the latter could not lose the
ownership thereof, and the mere fact that the waters of the sea covered it as a result of said
act, is not sufficient to convert it into public land, especially, as the land was high and
appropriate for building purposes.
In the case of the Director of Lands vs. Aguilar also cited by the claimants-appellees, the Insular
Government did not present any evidence in support of its contention,. thus leaving
uncontradicted the evidence adduced by the claimants Aguilar et al., as to the ownership,
possession and occupation of said lots.
In the instant case the evidence shows that from 1896, the waves of Manila Bay had been
gradually and constantly washing away the sand that formed the lots here in question, until
1901, when the sea water completely covered them, and thus they remained until the year
1912. In the latter year they were reclaimed from the sea by filling in with sand and silt
extracted from the bed of Vitas Estuary when the Government dredged said estuary in order to
facilitate navigation. Neither the herein claimants-appellees nor their predecessors did anything
to prevent their destruction.
In conclusion, then, we hold that the lots in question having disappeared on account of the
gradual erosion due to the ebb and flow of the tide, and having remained in such a state until
they were reclaimed from. the sea by the filling in done by the Government, they are public
land.
3
P R O P E R T Y No. 3 |
By virtue whereof, the judgment appealed from is reversed and lots Nos. 36, 39 and 40 of
cadastral proceeding No. 373 of the City of Manila are held to be public land belonging to the
Government of the United States under the administration and control of the Government of the
Philippine Islands. So ordered.
Judgment reversed.
No. L-40474. August 29, 1975.*
CEBU OXYGEN & ACETYLENE CO., INC., petitioner, vs. HON. PASCUAL A. BERCILLES,
Presiding Judge, Branch XV, 14th Judicial District, and JOSE L. ESPELETA, Assistant
Provincial Fiscal, Province of Cebu, representing the Solicitor General’s Office and
the Bureau of Lands, respondents.
Property; Property of public dominion withdrawn from public use becomes patrimonial property.
—Article 422 of the Civil Code expressly provides that “Property of public dominion, when no
longer intended for public use or for public service, shall form part of the patrimonial property of
the State.” Besides, the Revised Charter of the City of Cebu heretofore quoted, in very clear and
unequivocal terms, states that: “Property thus withdrawn from public servitude may be used or
conveyed for any purpose for which other real property belonging to the City may be lawfully
used or conveyed.”
Same; Same; Patrimonial property can be the object of an ordinary contract .—Since that portion
of the city street subject of petitioner’s application for registration of title was withdrawn from
public use, it follows that such withdrawn portion becomes patrimonial property which can be
the object of an ordinary contract.
CONCEPCION, Jr., J.:
This is a petition for the review of the order of the Court of First Instance of Cebu dismissing
petitioner’s application for registration of title over a parcel of land situated in the City of Cebu.
The parcel of land sought to be registered was originally a portion of M. Borces Street, Mabolo,
Cebu City. On September 23, 1968, the City Council of Cebu, through Resolution No. 2193,
approved on October 3, 1968, declared the terminal portion of M. Borces Street, Mabolo, Cebu
City, as an abandoned road, the same not being included in the City Development Plan. 1
Subsequently, on December 19, 1968, the City Council of Cebu passed Resolution No. 2755,
authorizing the Acting City Mayor to sell the land through a public bidding. 2 Pursuant thereto,
the lot was awarded to the herein petitioner being the highest bidder and on March 3, 1969, the
City of Cebu, through the Acting City Mayor, executed a deed of absolute sale to the herein
petitioner for a total consideration of P10,800.00. 3 By virtue of the aforesaid deed of absolute
sale, the petitioner filed an application with the Court of First Instance of Cebu to have its title to
the land registered.4
On June 26, 1974, the Assistant Provincial Fiscal of Cebu filed a motion to dismiss the
application on the ground that the property sought to be registered being a public road intended
for public use is considered part of the public domain and therefore outside the commerce of
man. Consequently, it cannot be subject to registration by any private individual.5
After hearing the parties, on October 11, 1974 the trial court issued an order dismissing the
petitioner’s application for registration of title. 6 Hence, the instant petition for review.
For the resolution of this case, the petitioner poses the following questions:
(1) Does the City Charter of Cebu City (Republic Act No. 3857) under Section 31,
paragraph 34, give the City of Cebu the valid right to declare a road as abandoned? and
(2) Does the declaration of the road, as abandoned, make it the patrimonial property of
the City of Cebu which may be the object of a common contract?
(1) The pertinent portions of the Revised Charter of Cebu City provides:
“Section 31. Legislative Powers. Any provision of law and executive order to the contrary
notwithstanding, the City Council shall have the following legislative powers:
(34) x x x; to close any city road, street or alley, boulevard, avenue, park or square. Property
thus withdrawn from public servitude may be used or conveyed for any purpose for which other
real property belonging to the City may be lawfully used or conveyed.”
From the foregoing, it is undoubtedly clear that the City of Cebu is empowered to close a city
road or street. In the case of Favis vs. City of Baguio, 7 where the power of the city Council of
Baguio City to close city streets and to vacate or withdraw the same from public use was
similarly assailed, this court said:
“5. So it is, that appellant may not challenge the city council’s act of withdrawing a strip of Lapu-
Lapu Street at its dead end from public use and converting the remainder thereof into an alley.
These are acts well within the ambit of the power to close a city street. The city council, it would
seem to us, is the authority competent to determine whether or not a certain property is still
necessary for public use.
“Such power to vacate a street or alley is discretionary. And the discretion will not ordinarily be
controlled or interfered with by the courts, absent a plain case of abuse or fraud or collusion.
Faithfulness to the public trust will be presumed. So the fact that some private interests may be
served incidentally will not invalidate the vacation ordinance.”
(2) Since that portion of the city street subject of petitioner’s application for registration of title
was withdrawn from public use, it follows that such withdrawn portion becomes patrimonial
property which can be the object of an ordinary contract.
Article 422 of the Civil Code expressly provides that “Property of public dominion, when no
longer intended for public use or for public service, shall form part of the patrimonial property of
the State.”
Besides, the Revised Charter of the City of Cebu heretofore quoted, in very clear and
unequivocal terms, states that: “Property thus withdrawn from public servitude may be used or
conveyed for any purpose for which other real property belonging to the City may be lawfully
used or conveyed.”
Accordingly, the withdrawal of the property in question from public use and its subsequent sale
to the petitioner is valid. Hence, the petitioner has a registerable title over the lot in question.
4
P R O P E R T Y No. 3 |
WHEREFORE, the order dated October 11, 1974, rendered by the respondent court in Land
Reg. Case No. N-948, LRC Rec. No. N-44531 is hereby set aside, and the respondent court is
hereby ordered to proceed with the hearing of the petitioner’s application for registration of title.
SO ORDERED.
[No. 24950. March 25, 1926]
VIUDA DE TAN Toco, plaintiff and appellant, vs. THE MUNICIPAL COUNCIL OF ILOILO,
defendant and appellee.
1. MUNICIPAL CORPORATIONS; EXEMPTION FROM EXECUTION.—The property of a municipality,
whether real or personal, necessary for governmental purposes cannot be attached and sold at public
auction to satisfy a judgment against the municipality.
2. ID. ; ID. ; PROPERTY EXEMPT.—Auto trucks used by a municipality in sprinkling its streets, its
police patrol automobile, police stations, and public markets, together with the land on which they
stand, are exempt from execution.
3. ID. ; ID. ; MANDAMUS.—Where after judgment is entered against a municipality, the latter has no
property subject to execution, the creditor's remedy-for collecting his judgment is mandamus.
VlLLAMOR, J.:
It appears from the record that the widow of Tan Toco had sued the municipal council of Iloilo
for the amount of P42,966.40, being the purchase price of two strips of land, one on Calle J. M.
Basa consisting of 592 square meters, and the other on Calle Aldiguer consisting of 59 square
meters, which the municipality of Iloilo had appropriated for widening said street. The Court of
First Instance of Iloilo sentenced the said municipality to pay the plaintiff the amount so claimed,
plus the interest, and the said judgment was on appeal affirmed by this court. 1
On account of lack of funds the municipality of Iloilo was unable to pay the said judgment,
wherefore plaintiff had a writ of execution issue against the property of the said municipality, by
virtue of which the sheriff attached two auto trucks used for street sprinkling, one police patrol
automobile, the police stations on Mabini street, and in Molo and Mandurriao and the concrete
structures, with the corresponding lots, used as markets by Iloilo, Molo, and Mandurriao.
After notice of the sale of said property had been made, and a few days bef ore the sale, the
provincial fiscal of Iloilo filed a motion with the Court of First Instance praying that the
attachment on the said property be dissolved, that the said attachment be declared null and void
as being illegal and violative of the rights of the defendant municipality.
Plaintiff's counsel objected to the fiscal's motion but the court, by order of August 12, 1925,
declared the attachment levied upon the aforementioned property of the defendant municipality
null and void, thereby dissolving the said attachment.
From this order the plaintiff has appealed by bill of exceptions. The fundamental question raised
by appellant in her four assignments of error is whether or not the property levied upon is
exempt from execution.
The municipal law, section 2165 of the Administrative Code, provides that:
"Municipalities are political bodies corporate, and as such are endowed with the faculties of
municipal corporations, to be exercised by and through their respective municipal government in
conformity with law.
"It shall be competent f or them, in their proper corporate name, to sue and be sued, to contract
and be contracted with, to acquire and hold real and personal property for municipal purposes,
and generally to exercise the powers hereinafter specified or otherwise conferred upon them by
law.”
For the purposes of the matter here in question, the Administrative Code does not specify the
kind of property that a municipality may acquire. However, article 343 of the Civil Code divides
the property of provinces and towns (municipalities) into property for public use and patrimonial
property. According to article 344 of the same Code, provincial roads and foot-path, squares,
streets, fountains, and public waters, drives and public improvements of general benefit built at
the expense of the said towns or provinces, are property for public use.
All other property possessed by the said towns and provinces is patrimonial and shall be subject
to the provisions of the Civil Code except as provided by special laws.
Commenting upon article 344, Mr. Manresa says that "In accordance with administrative
legislation" (Spanish) we must distinguish, as to the patrimonial property of the towns, "between
that of common benefit and that which is private property of the town. The first differs from
property for public use in that generally its enjoyment is less, as it is limited to neighbors or to a
group or class thereof; and, furthermore, such use, more or less general, is not intrinsic with this
kind of property, for by its very nature it may be enjoyed as though it were private property.
The third group, that is, private property, is used in the name of the town or province by the
entities representing it and, like any private property, giving a source of revenue.”
Such distinction, however, is of little practical importance in this jurisdiction in view of the
different principles underlying the functions of a municipality under the American rule.
Notwithstanding this, we believe that the principle governing property of the public domain of
the State is applicable to property for public use of the municipalities as said municipal property
is similar in character. The principle is that the property for public use of the State is not within
the commerce of man and, consequently, is inalienable and not subject to prescription. Likewise,
property for public use of the municipality is not within the commerce of man so long as it is
used by the public and, consequently, said property is also inalienable.
The American Law is more explicit about this matter as expounded by McQuillin in Municipal
Corporations, volume 3, paragraph 1160, where he says that:
"State statutes often provide that court houses, jails and other buildings owned by municipalities
and the lots on which they stand shall be exempt from attachment and execution. But
5
P R O P E R T Y No. 3 |
independent of express statutory exemption, as a general proposition, property, real and
personal, held by municipal corporations, in trust for the benefit of their inhabitants, and used
for public purposes, is exempt.
"For example, public buildings, school houses, streets, squares, parks, wharves, engines and
engine houses, and the like, are not subject to execution. So city waterworks, and a stock of
liquors carried in a town dispensary, are exempt. The reason for the exemption is obvious.
Municipal cor-porations are created for public purposes and for the good of the citizens in their
aggregate or public capacity. That they may properly discharge such public functions corporate
property and revenues are essential, and to deny them these means the very purpose of their
creation would be materially impeded, and in some instances practically destroy it. Respecting
this subject the Supreme Court of Louisiana remarked: 'On the first view of this question there is
something very repugnant to the moral sense in the idea that a municipal corporation should
contract debts, and that, having no resources but the taxes which are due to it, these should not
be subjected by legal process to the satisfaction of its creditors. This consideration, deduced
from the principles of moral equity has only given way to the more enlarged contemplation of
the great and paramount interests of public order and the principles of government.’
"It is generally held that property owned by a municipality, where not used for a public purpose
but for quasi private purposes, is subject to execution on a judgment against the municipality,
and may be sold. This rule applies to shares of stock owned by a municipal corporation, and the
like. But the mere fact that corporate property held for public uses is being temporarily used for
private purposes does not make it subject to execution.
"If municipal property exempt from execution is destroyed, the insurance money stands in lieu
thereof and is also exempt.
"The members or inhabitants of a municipal corporation proper are not personally liable for the
debts of the municipality, except that in the New England States the individual liability of the
inhabitant is generally maintained.”
In Corpus Juris, vol 23, page 355, the following is found:
"Where property of a municipal or other public corporation is sought to be subjected to
execution to satisfy judgments recovered against such corporation, the question as to whether
such property is leviable or not is to be determined by the usage and purposes for which it is
held. The rule is that property held for public uses, such as public buildings, streets, squares,
parks, promenades, wharves, landing places, fire engines, hose and hose carriages, engine
houses, public markets, hospitals, cemeteries, and generally everything held for governmental
purposes, is not subject to levy and sale under execution against such corporation. The rule also
applies to funds in the hands of a public officer. Likewise it has been held that taxes due to a
municipal corporation or county cannot be seized under execution by a creditor of such
corporation. But where a municipal corporation or county owns in its proprietary, as
distinguished from its public or governmental capacity, property not useful or used for a public
purpose but for quasi private purposes, the general rule is that such property may be seized and
sold under execution against the corporation, precisely as similar property of individuals is seized
and sold. But property held for public purposes is not subject to execution merely because it is
temporarily used for private purposes, although if the public use is wholly abandoned it becomes
subject to execution. Whether or not property held as public property is necessary for the public
use is a political, rather than a judicial question.”
In the case of City of New Orleans vs. Louisiana Construction Co., Ltd. (140 U. S., 654; 35 Law.
ed., 556), it was held that a wharf for unloading sugar and molasses, open to the public, was
property for the public use of the City of New Orleans and was not subject to attachment for the
payment of the debts of the said city.
In that case it was proven that the said wharf was a parcel of land adjacent to the Mississippi
River where all shipments of sugar and molasses taken to New Orleans were unloaded.
That city leased the said wharf to the Louisiana Construction Company, Ltd., in order that it
might erect warehouses so that the merchandise upon discharge might not be spoiled by the
elements. The said company was given the privilege of charging certain fees for storing
merchandise in the said warehouses and the public in general had the right to unload sugar and
molasses there by paying the required fees, 10 per cent of which was turned over to the city
treasury.
The United States Supreme Court on an appeal held that the wharf was public property, that it
never ceased to be such in order, to become private property of the city; wherefore the
company could not levy execution upon the wharf in order to collect the amount of the
judgment rendered in favor thereof.
In the case of Klein vs. City of New Orleans (98 U. S., 149; 25 Law. ed., 430), the Supreme
Court of the United States held that a public wharf on the banks of the Mississippi River was
public property and not subject to execution for the payment of a debt of the City of New
Orleans where said wharf was located.
In this case a parcel of land adjacent to the Mississippi River, which formerly was the shore of
the river and which later enlarged itself by accession, was converted into a wharf by the city for
public use, who charged a certain fee for its use.
It was held that that land was public property as necessary as a public street and was not
subject to execution on account of the debts of the city. It was further held that the fees
collected were also exempt from execution because they were a part of the income of the city.
In the case of Tufexis vs. Olaguera and Municipal Council of Guinobatan (32 Phil., 654), the
question raised was whether for the payment of a debt to a third person by the concessionaire
of a public market, the said public market could be attached and sold at public auction. The
Supreme Court held that:
"Even though a creditor is unquestionably entitled to recover out of his debtor's property, yet
when among such property there is included the special right granted by the Government of
usufruct in a building intended for a public service, and when this privilege is closely related to a
service of a public character, such right of the creditor to the collection of a debt owed him by
the debtor who enjoys the said special privilege of usufruct in a public market is not absolute
6
P R O P E R T Y No. 3 |
and may be exercised only through the action of a court of justice with respect to the profits or Judgments rendered for taxes, and the proceeds of such judgments in the hands of officers of
revenue obtained under the special right of usufruct enjoyed by debtor. the law, are not subject to execution unless so declared by statute. The doctrine of the
inviolability of the public revenues by the creditor is maintained, although the corporation is in
"The special concession of the right of usufruct in a public market cannot be attached like any
debt, and has no means of payment but the taxes which it is authorized to collect.”
ordinary right, because that would be to permit a person who has contracted with the state or
with the administrative officials thereof to conduct and manage a service of a public character, Another error assigned by counsel for appellant is the holding of the court a quo that the proper
to be substituted, without the knowledge and consent of the administrative authorities, by one remedy for collecting the judgment in favor of the plaintiff was by way of mandamus.
who took no part in the contract, thus giving rise to the possibility of' the regular course of a
While this question is not necessarily included in the one which is the subject of this appeal, yet
public service being disturbed by the more or less legal action of a grantee, to the prejudice of
we believe that the holding of the trial court, assigned as error by appellant's counsel, is true
the state and the public interests.
when, after a judgment is rendered against a municipality, it has no property subject to
"The privilege or franchise granted to a private person to enjoy the usufruct of a public market execution. This doctrine is maintained by Dillon (Municipal Corporations, vol. 4, par. 1507, 5th
cannot lawfully be attached and sold, and a creditor of such person can recover his debt only ed.) based upon the decisions of several States ,of the Union upholding the same principle and
out of the income or revenue obtained by the debtor from the enjoyment or usufruct of the said which are cited on page 2679 of the aforesaid work. In this sense this assignment of error, we
privilege, in the same manner that the rights of the creditors of a railroad company can be believe, is groundless.
exercised and their credit collected only out of the gross receipts remaining after deduction has
By virtue of all the foregoing, the judgment appealed from should be and is hereby affirmed
been made therefrom 'of the operating expenses of the road. (Law of November 12, 1869,
with costs against the appellant. So ordered.
extended to the overseas provinces by the royal order of August 3, 1886.)”
Avanceña, C. J., Street, Malcolm, Ostrand, Johns, Romualdez, and Villa-Real, JJ., concur.
For the reasons contained in the authorities above quoted we believe that this court would have
reached the same conclusion if the debtor had been the municipality of Guinobatan and the
Judgment affirmed.
public market had been levied upon by virtue of the execution.
It is evident that the movable and immovable property of a municipality, necessary for
governmental purposes, may not be attached and sold for the payment of a judgment against
the municipality. The supreme reason f or this rule is the character of the public use to which
such kind of property is devoted. The necessity for government service justifies that the property
of public use of the municipality be exempt from execution just as it is necessary to exempt
certain property of private individuals in accordance with section 452 of the Code of Civil
Procedure.
Even the municipal income, according to the above quoted authorities, is exempt from levy and
execution. In volume 1, page 467, Municipal Corporations by Dillon we find that:
"Municipal corporations are instituted by the supreme authority of a state for the public good.
They exercise, by delegation from the legislature, a portion of the sovereign power. The main
object of their creation is to act as administrative agencies for the state, and to provide for the
police and local government of certain designated civil divisions of its territory. To this end they
are invested with certain governmental powers and charged with civil, political, and municipal
duties. To enable them beneficially to exercise these powers and discharge these duties, they
are clothed with the authority to raise revenues, chiefly by taxation, and subordinately by other
modes, as by licenses, fines, and penalties. The revenue of the public corporation is the
essential means by which it is enabled to perform its appointed work. Deprived of its regular and
adequate supply of revenue, such a corporation is practically destroyed, and the ends of its
erection thwarted. Based upon considerations of this character, it is the settled doctrine of the
law that not only the public-property but also the taxes and public revenues of such corporations
cannot be seized under execution against them, either in the treasury or when in transit to it.
7
P R O P E R T Y No. 3 |
No. L-29788. August 30, 1972.
RAFAEL S. SALAS, in his capacity as Executive Secretary; CONRADO F. ESTRELLA, in
his capacity as Governor of the Land Authority; and LORENZO GELLA, in his capacity
as Register of Deeds of Manila, petitioners-appellants, vs. HON.HILARION U. JARENCIO,
as Presiding Judge of Branch XXIII, Court of First Instance of Manila; ANTONIO J.
VILLEGAS, in his capacity as Mayor of the City of Manila; and the CITY OF MANILA,
respondents-appellees.
Civil law; Property; Municipal corporations; Presumption where manner of acquisition of land by
municipality not shown.—It is true that the City of Manila as well as its predecessor, the
Ayuntamiento de Manila, could validly acquire property in its corporate or private capacity,
following” the accepted doctrine on the dual character—public and private—of a municipal
corporation. And when it acquires property in its private capacity, it acts like an ordinary person
capable of entering into contracts or making transactions for the transmission of title or other
real rights. In the absence of title deed to any land claimed by the City of Manila 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 .
Same; Same; Same; Ownership of communal lands belongs to the State.— Communal lands or
“legua comunal” came into existence when a town or pueblo was established in this country
under the laws of Spain (Law VII, Title III, Book VI, Recopilacion de las Leyes de Indios). The
municipalities of the Philippines were not entitled, as a matter of right, to any part of the public
domain for use as communal lands. The 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, upon proper petition, but until granted, no rights therein passed to the
municipalities, and, in any event, the ultimate title remained in the sovereign (City of Manila vs.
Insular Government, 10 Phil. 327).
Same; Same; Same; Rule as to ownership of land in possession of municipality. —It may be laid
down as a general rule that regardless of the source or classification of land in the possession of
a municipality, excepting those acquired with its own funds in its private or corporate capacity,
such property is held iv trust for the State for the benefit of its inhabitants, whether it be for
governmental or proprietary purposes. It holds such lands Rubiect to the paramount power of
the legislature to dispose of the same, for after all it owes its creation to it as an agent for the
performance of a part of its public work, the municipality being but a subdivision or
instrumentality thereof for purposes of local administration.
Constitutional Law; Separation of powers; Legislative classification of land not subject to judicial
review.—The Congress has dealt with the land involved as one reserved for communal use
(terreno comunal). The act of classifying State property calls for the exercise of wide
discretionary legislative power and it should not be interfered with by the Courts.
Constitutional law; Statutes; Presumption of constitutionality of statutes. —It is now well
established that the presumption is always in favor of the constitutionality of a law. To declare a
law unconstitutional, the repugnancy of that law to the Constitution must be clear and
unequivocal, for even if a law is aimed at the attainment of some public good, no infringement
of constitutional rights is allowed. To strike down a law there must be a clear showing that what
the fundamental law condemns or prohibits, the statute allows it to be done.
Municipal corporations; City of Manila; No presumption of State grant of ownership to
municipality where land remained idle.—Since the City of Manila did not actually use said land
for any recognized public purpose and allowed it to remain idle and unoccupied for a long time
until it was overrun by squatters, no presumption of State grant of ownership in favor of the City
may be acquiesced in to justify the claim that it is its own private or patrimonial property.
Constitutional law; Eminent domain; City of Manila; Republic Act 4118 merely confirmed
character of property in possession of the City of Manila. —Republic Act 4118 was never intended
to expropriate the properly involved but merely to confirm its character as communal land of the
State and to make-it available for disposition by the National Government; the subdivision of the
land and conveyance of the resulting subdivision lots to the occupants by Congressional
authorization does not operate as an exercise of the power of eminent domain without just
compensation but simply as a manifestation of its right and power to deal with state property.
ESGUERRA, J.:
This is a petition for review of the decision of the Court of First Instance of Manila, Branch XXIII,
in Civil Case No. 67946, dated September 23, 1968, the dispositive portion of which is as
follows:
“WHEREFORE, the Court renders judgment declaring Republic Act No. 4118 unconstitutional and
invalid in that it deprived the City of Manila of its property without due process and payment of
just compensation. Respondent Executive Secretary and Governor of the Land Authority are
hereby restrained and enjoined from implementing the provisions of said law. Respondent
Register of Deeds of the City of Manila is ordered to cancel Transfer Certificate of Title No.
80876 which he had issued in the name of the Land Tenure Administration and reinstate
Transfer Certificate of Title No. 22547 in the name of the City of Manila which he cancelled, if
that is feasible, or issue a new certificate of title for the same parcel of land in the name of the
City of Manila.”1
The facts necessary for a clear understanding of this case are as follows:
On February 24, 1919, the 4th Branch of the Court of First Instance of Manila, acting as a land
registration court, rendered judgment in Case No. 18, G.L.R.O. Record No. 111, declaring the
City of Manila the owner in fee simple of a parcel of land known as Lot No. 1, Block 557 of the
Cadastral Survey of the City of Manila, containing an area of 9,680.8 square meters, more or
less, Pursuant to said judgment the Register of Deeds of Manila on August 21, 1920, issued in
favor of the City of Manila, Original Certificate of Title No. 4329 covering the aforementioned
parcel of kind. On various dates in 1924, the City of Manila sold portions of the aforementioned
parcel of land in favor of Pura Villanueva. As a consequence of the transactions Original
Certificate of Title No. 4329 was cancelled and transfer certificates of title were issued in favor of
Pura Villanueva for the portions purchased by her. When the last sale to Pura Villanueva was
effected on August 22, 1924, Transfer Certificate of Title No. 21974 in the name of the City of
Manila was cancelled and in lieu thereof Transfer Certificate of Title (T.C.T,) No. 22547 covering
8
P R O P E R T Y No. 3 |
the residue thereof known as Lot 1-B-2-B of Block 557, with an area of 7,490.10 square meters,
was issued in the name of the City of Manila.
On September 21, 1980, the Municipal Board of Manila, presided by then Vice-Mayor Antonio J.
Villegas, adopted a resolution requesting His Excellency, the President of the Philippines to
consider the feasibility of declaring the City property bounded by Florida, San Andres, and
Nebraska Streets, under Transfer Certificate of Title Nos. 25545 and 22547, containing a total
area of 7,450 square meters as a patrimonial property of the City of Manila  for the purpose of
reselling these lots to the actual occupants thereof. 2
The said resolution of the Municipal Board of the City of Manila was officially transmitted to the
President of the Philippines by then Vice-Mayor Antonio J. Villegas on September 21, 1960, with
the information that the same resolution was, on the same date, transmitted to the Senate and
House of Representatives of the Congress of the Philippines. 3
During the First Session of the Fifth Congress of the Philippines, House Bill No. 191 was filed in
the House of Representatives by then Congressman Bartolome Cabangbang seeking to declare
the property in question as patrimonial property of the City of Manila, and for other purposes.
The explanatory note of the Bill gave the grounds for its enactment, to wit:
“In the particular case of the property subject of this bill, the City of Manila does not seem to
have use thereof as a public communal property. As a matter of fact, a resolution was adopted
by the Municipal Board of Manila at its regular session held on September 21, 1960, to request
the feasibility of declaring the city property bounded by Florida, San Andres and Nebraska
Streets as a patrimonial property  of the City of Manila for the purpose of reselling these lots to
the actual occupants thereof. Therefore, it will be to the best interest of society that the said
property be used in one way or another. Since this property has been occupied for a long time
by the present occupants thereof and since said occupants have expressed their willingness to
buy the said property, it is but proper that the same be sold to them.” 4
Subsequently, a revised version of the Bill was introduced in the House of Representatives by
Congressmen Manuel Cases. Antonio Raquiza and Nicanor Yñiguez as House Bill No. 1453, with
the following explanatory note:
“The accompanying bill seeks to convert one (1) parcel of land in the district of Malate,  which is
reserved as communal property into a disposable or alienable property of the State  and to
provide its subdivision and sale to bona fide occupants or tenants.
“This parcel of land in question was originally an aggregate part of a piece of land with an area
of 9,689.8 square meters, more or less, x x x On September 21, 1960, the Municipal Board of
Manila in its regular session unanimously adopted a resolution requesting the President of the
Philippines and Congress of the Philippines the feasibility of declaring this property into
disposable or alienable property of the State. There is therefore a precedent that this parcel of
land could be subdivided and sold to bona fide occupants. This parcel of land will not serve any
useful public project because it is bounded on all sides by private properties which were formerly
parts of this lot in question.
“Approval of this bill will implement the policy of the Administration of land for the landless
and the Fifth Declaration of Principles of the Constitution, which states that the promotion of
Social Justice to insure the well-being and economic security of all people should be the concern
of the State. We are ready and willing to enact legislation promoting the social and economic
well-being of the people whenever an opportunity for enacting such kind of legislation arises.
In view of the foregoing consideration and to insure fairness and justice to the present bona
fide occupants thereof, approval of this Bill is strongly urged.” 5
The Bill having been passed by the House of Representatives, the same was thereafter sent to
the Senate where it was thoroughly discussed, as evidenced by the Congressional Records for
May 20, 1964, pertinent portion of which is as follows:
“SENATOR FERNANDEZ: Mr. President, it will be recalled that when the late Mayor Lacson was
still alive, we approved a similar bill. But afterwards, the late Mayor Lacson came here and
protested against the approval, and the approval was reconsidered. May I know whether the
defect in the bill which we approved, has already been eliminated in this present bill?
“SENATOR TOLENTINO: I understand Mr. President, that that has already been eliminated, and
that is why the City of Manila has no more objection to this bill.
“SENATOR FERNANDEZ: Mr. President, in view of that manifestation and considering that Mayor
Villegas and Congressman Albert of the Fourth District of Manila are in favor of the bill. I would
not want to pretend to know more what is good for the City of Manila.
“SENATOR TOLENTINO: Mr. President, there being no objection, I move that we approve this
bill on second reading.
“PRESIDENT PRO-TEMPORE: The bill is approved on second reading after several Senators said
aye and nobody said nay.”
The bill was passed by the Senate, approved by the President on June 20, 1964, and became
Republic Act No. 4118. It reads as follows:
Lot 1-B-2-B of Block 557 of the cadastral survey of the City of Manila, situated in the District of
Malate. City of Manila, which is reserved as communal property, is hereby converted mto
disposal or alienable land of the State, to be placed under ihe disposal of the Land Tenure
Administration. The Land Tenure Administration shall subdivide the property into small
lots, none of which shall exceed one hundred and twenty square meters in area and  sell the
same on installment basis to the tenants or bona fide occupants thereof and to individuals,  in
the order mentioned: Provided, That no down payment shall be required of tenants or bona
fideoccupants. who cannot afford to pay such down payment: Provided, further, That no person
can purchase more than one lot: Provided, furthermore, That if the tenant or bona fide occupant
of any given lot is not able to purchase the same, he shall be given a lease from month to
month until such time that he is able to purchase the lot:  Provided, still further, That in the
event of lease the rentals which may be charged shall not exceed eight per cent per annum of
the assessed value of the property leased: And provided, finally, That in fixing the price of each
9
P R O P E R T Y No. 3 |
lot, wMch shall not exceed twenty pesos per square meter, the cost of subdivision and survey
shall not be included.
“Sec. 2. Upon approval of this Act no ejectment proceedings against any tenant or bona
fide occupant of the above lots shall be instituted and any ejectment proceedings pending in
court against any such tenant or bona fide occupant shall be dismissed upon motion of the
defendant: Provided, That any demolition order directed against any tenant or bona
fide occupant shall be lifted.
“Sec. 3. Upon approval of this Act, if the tenant or bona fide occupant is in arrears in the
payment of any rentals, the amount legally due shall be liquidated and shall be payable in
twenty-four equal monthly installments from the date of liquidation.
“Sec. 4. No property acquired by virtue of this Act shall be transferred, sold, mortgaged, or
otherwise disposed of within a period of five years from the date full ownership thereof has been
vested in the purchaser without the consent of the Land Tenure Administration,
“Sec. 5. In the event of the death of the purchaser prior to the complete payment of the price of
the lot purchased by him, his widow and children shall succeed in all his rights and obligations
with respect to his lot.
“Sec. 6. The Chairman of the Land Tenure Administration shall implement and issue such
rules and regulations as may be necessary to carry out the provisions of this Act.
“Sec. 7. The sum of one hundred fifty thousand pesos in appropriated out of any funds in
the National Treasury not otherwise appropriated, to carry out the purposes of this Act.
“Sec. 8. All laws or parts of laws inconsistent with this Act are repealed or modified
accordingly.
“Sec. 9. This Act shall take effect upon its approval.
“Approved, June 20, 1964.”
To implement the provisions of Republic Act No. 4118, and pursuant to the request of the
occupants of the property involved, then Deputy Governor Jose V. Yap of the Land Authority
(which succeeded the Land Tenure Administration) addressed a letter, dated February 18, 1965,
to Mayor Antonio Villegas, furnishing him with a copy of the proposed subdivision plan of said lot
as prepared for the Republic of the Philippines for resale of the subdivision lots by the Land
Authority to bona fide applicants.6
On March 2, 1965, the City Mayor of Manila, through his Executive and Technical Adviser,
acknowledged receipt of the proposed subdivision plan of the property in question attd informed
the Land Authority that his office would interpose no objection to the implementation of said
law, provided that its provisions be strictly complied with. 7
With the above-mentioned written conformity of the City of Manila for the implementation of
Republic Act No. 4118, the Land Authority, thru then Deputy Governor Jose V. Yap, requested
the City Treasurer of Manila, thru the City Mayor, for the surrender and delivery to the former of
the owner’s duplicate of Transfer Certificate of Title No. 22547 m order to obtain title thereto in
the name of the Land Authority. The request was duly granted with the knowledge and consent
of the Office of the City Mayor.8
With the presentation of Transfer Certificate of Title No. 22547, which had been yielded as
above stated by the City authorities to the Land Authority, Transfer Certificate of Title (T.C.T.
No. 22547) was cancelled by the Register of Deeds of Manila and in lieu thereof Transfer
Certificate of Title No. 80876 was issued in the name of the Land Tenure Administration (now
Land Authority) pursuant to the provisions of Republic Act No. 4118. 9
But due to reasons which do not appear in the record, the City of Manila made a complete turn-
about, for on December 20, 1966, Antonio J. Villegas, in his capacity as the City Mayor of Manila
and the City of Manila as a duly organized public corporation, brought an action for injunction
and/or prohibition with preliminary injunction to restrain, prohibit and enjoin the herein
appellants, particularly the Governor of the Land Authority and the Register of Deeds of Manila,
from further implementing Republic Act No. 4118, and praying for the declaration of Republic
Act No. 4118 as unconstitutional.
With the foregoing antecedent facts, which are all contained in the partial stipulation of facts
submitted to the trial court and approved by respondent Judge, the parties waived the
presentation of further evidence and submitted the case for decision. On September 23, 1968,
judgment was rendered by the trial court declaring Republic Act No. 4118 unconstitutional and
invalid on the ground that it deprived the City of Manila of its property without due process of
law and payment of just compensation. The respondents were ordered to undo all that had been
done to carry out the provisions of said Act and were restrained from further implementing the
same.
Two issues are presented for determination, on the resolution of which the decision in this case
hinges, to wit:
I. Is the property involved private or patrimonial property of the City of Manila?
II. Is Republic Act No. 4118 valid and not repugnant to the Constitution?
I.
As regards the first issue, appellants maintain that the land involved is a communal land or
“legua comunal” which is a portion of the public domain owned by the State; that it came into
existence as such when the City of Manila, or any pueblo or town in the Philippines for that
matter, was founded under the laws of Spain, the former sovereign; that upon the establishment
of a pueblo, the administrative authority was required to allot and set aside portions of the
public domain for a public plaza, a church site, a site for public buildings, lands to serve as
common pastures and for streets and roads; that in assigning these lands some lots were
earmarked for strictly public purposes, and ownership of these lots (for public purposes)
immediately passed to the new municipality; that in the case of common lands or “legua
comunal”, there was no such immediate acquisition of ownership by the pueblo, and the land
though administered thereby, did not automatically become its property in the absence of an
express grant from the Central Government, and that the reason for this arrangement is that
10
P R O P E R T Y No. 3 |
this class of land was not absolutely needed for the discharge of the municipality’s governmental
functions.
It is argued that the parcel of land involved herein has not been used by the City of Manila for
any public purpose and had not been officially earmarked as a site for the erection of some
public buildings; that this circumstance confirms the fact that it was originally “communal” land
al-loted to the City of Manila by the Central Government not because it was needed in
connection with its organization as a municipality but simply for the common use of its
inhabitants; that the present City of Manila as successor of the Ayuntamiento de Manila under
the former Spanish sovereign merely enjoys the usufruct over said land, and its exercise of acts
of ownership by selling parts thereof did not necessarily convert the land into a patrimonial
property of the City of Manila nor divest the State of its paramount title.
Appellants further argue that a municipal corporation, like a city is a governmental agent of the
State with authority to govern a limited portion of its territory or to administer purely local affairs
in a given political subdivision, and the extent of its authority is strictly delimited by the grant of
power conferred by the State; that Congress has the exclusive power to create, change or
destroy municipal corporations; that even if We admit that legislative control over municipal
corporations is not absolute and even if it is true that the City of Manila has a registered title
over the property in question, the mere transfer of such land by an act of the legislature from
one class of public land to another, without compensation, does not invade the vested rights of
the City.
Appellants finally argue that Republic Act No. 4118 has treated the land involved as one
reserved for communal use, and this classification is conclusive upon the courts; that if the City
of Manila feels that this is wrong and its interests have been thereby prejudiced, the matter
should be brought to the attention of Congress for correction; and that since Congress, in the
exercise of its wide discretionary powers has seen fit to classify the land in question as
communal, the Courts certainly owe it to a coordinate branch of the Government to respect such
determination and should not interfere with the enforcement of the law.
Upon the other hand, appellees argue by simply quoting portions of the appealed decision of the
trial court, which read thus:
“The respondents (petitioners-appellants herein) contend, among other defenses, that the
property in question is communal property. This contention is, however, disproved by Original
Certificate of Title No. 4329 issued on August 21, 1920 in favor of the City of Manila after the
land in question was registered in the City’s favor. The Torrens Title expressly states that the
City of Manila was the owner in ‘fee simple’ of the said land. Under Sec. 38 of the Land
Registration Act, as amended, the decree of confirmation and registration in favor of the City of
Manila . . . shall be conclusive upon and against all persons including the Insular Government
and all the branches there . . . There is nothing in the said certificate of title indicating that the
land was ‘communal’ land as contended by the respondents. The erroneous assumption by the
Municipal Board of Manila that the land in question was communal land did not make it so. The
Municipal Board had no authority to do that.
“The respondents, however, contend that Congress had the power and authority to declare that
the land in question was ‘communal’ land and the courts have no power or authority to make a
contrary finding. This contention is not entirely correct or accurate. Congress has the power to
classify ‘land of the public domain’, transfer them from one classification to another and declare
them disposable or not. Such power does not, however, extend to properties which are owned
by cities, provinces and municipalities in their ‘patrimonial’ capacity.
“Art. 324 of the Civil Code provides that properties of provinces, cities and municipalities are
divided into properties for public use and patrimonial property. Art. 424 of the same code
provides that properties for public use consist of provincial roads, city streets, municipal streets,
the squares, fountains, public waters, promenades and public works for public service paid for
by said province, cities or municipalities. All other praperty possessed by any of them is
patrimonial. Tested by this criterion the Court finds and holds that the land in question is
patrimonial property of the City of Manila.
“Respondents contend that Congress .has declared the land in question to be ‘communal’ and,
therefore, such designation is conclusive upon the courts. The Courts holds otherwise. When a
statute is assailed as unconstitutional the Courts have the power and authority to inquire into
the question and pass upon it. This has long ago been settled in Marbury vs. Madison, 2 L. ed.
60, when the United States Supreme Court speaking thru Chief Justice Marshall held:
‘x x x If an act of the legislature, repugnant to the constitution, is void, does it, notwithstanding
its validity, bind the courts, and oblige them to give effect? It is emphatically the province and
duty of the judicial department to say what the law is ... So if a law be in opposition to the
constitution; if both the law and the constitution apply to a particular case, so that the court
must either decide that case conformable to the constitution, disregarding the law, the court
must determine which of these conflicting rules governs the case. This is of the very essence of
unconstitutional judicial duty.’”
Appellees finally concluded that when the courts declare a law unconstitutional it does not mean
that the judicial power is superior to the legislative power. It simply means that the power of the
people is superior to both and that when the will of the legislature, declared in statutes, stands
in opposition to that of the people, declared in the Constitution, the judges ought to be
governed by the Constitution rather than by the statutes.
There is one outstanding factor that should be borne in mind in resolving the character of the
land involved, and it is that 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. It is true that the City of Manila as well as its
predecessor, the Ayuntamiento de Manila, could validly acquire property in its corporate or
private capacity, following the accepted doctrine on the dual character—public and private—of a
municipal corporation. And when it acquires property in its private capacity, it acts like an
ordinary person capable of entering into contracts or making transactions for the transmission of
title or other real rights. 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. In the
absence of a title deed to any land claimed by the City of Manila as its own, showing that it was
11
P R O P E R T Y No. 3 |
acquired with its private or corporate funds, the presumption is that such land came from the
State upon the creation of the municipality (Unson vs. Lacson, et al., 100 Phil. 695). Originally
the municipality owned no patrimonial property except those that were granted by the State not
for its public but for private use. Other properties it owns are acquired in the course of the
exercise of its corporate powers as a juridical entity to which category a municipal corporation
pertains.
Communal lands or “legua comunal” came into existence when a town or pueblo was
established in this country under the laws of Spain (Law VII, Title III, Book VI, Recopilacion de
las Ley es de Indios). The municipalities of the Philippines were not entitled, as a matter of right,
to any part of the public domain for use as communal lands. The 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, upon proper petition, but, until granted, no rights therein
passed to the municipalities, and, in any event, the ultimate title remained in the sovereign .
“For the establishment, then, of new pueblos the administrative authority of the province, in
representation of the Governor General, designated the territory for their location and extension
and the metes and bounds of the same; and before alloting the lands among the new settlers, a
special demarcation was made of the places which were to serve as the public square of the
pueblo, for the erection of the church, and as sites for the public buildings, among others, the
municipal building or the casa real, as well as of the lands which were to constitute ‘the common
pastures, and propios of the municipality  and the streets and roads which were to intersect the
new town were laid out, x x x.”
It may, therefore, be laid down as a general rule that regardless of the source or classification of
land in the possession of a municipality, excepting those acquired with its own funds in its
private or corporate capacity, such property is held in trust for the State for the benefit of its
inhabitants, whether it be for governmental or proprietary purposes. It holds such lands subject
to the paramount power of the legislature to dispose of the same, for after all it owes its
creation to it as an agent for the performance of a part of its public work, the municipality being
but a subdivision or instrumentality thereof for purposes of local administration. Accordingly, the
legal situation is the same as if the State itself holds the property and puts it to a different use .
True it is that the legislative control over a municipal corporation is not absolute even when it
comes to its property devoted to public use, for such control must not be exercised to the extent
of depriving persons of their property or rights without due process of law, or in a manner
impairing the obligations of contracts. Nevertheless, when it comes to property of the
municipality which it did not acquire in its private or corporate capacity with its own funds, the
legislature can transfer its administration and disposition to an agency of the National
Government to be disposed of according to its discretion. Here it did so in obedience to the
constitutional mandate of promoting social justice to insure the well-being and economic security
of the people.
It has been held that a statute authorizing the transfer of a Municipal airport to an Airport
Commission created by the legislature, even without compensation to the city, was not violative
of the due process clause of the American Federal Constitution. The Supreme Court of
Minnessota in Monagham vs. Armatage, supra, said:
“x x x The case is controlled by the further rule that the legislature, having plenary control of the
local municipality, of its creation and of all its affairs, has the right to authorize or direct the
expenditures of money in its treasury, though raised, for a particular purpose, for any legitimate
municipal purpose, or to order and direct a distribution thereof upon a division of the territory
into separate municipalities xxx. The local municipality has no such vested right in or to its
public, funds, like that which the Constitution protects in the individual as precludes legislative
interferences. People vs. Power, 25 111. 187; State Board (of Education) vs. City, 56 Miss. 518.
As remarked by the supreme court of Maryland in Mayor vs. Sehner, 37 Md. 180: ‘It is of the
essence of such a corporation, that the government has the sole right as trustee of the public
interest, at its own good will and pleasure, to inspect, regulate, control, and direct the
corporation, its funds, and franchises.’
“We therefore hold that c.500, in authorizing the transfer of the use and possession of the
municipal airport to the commission without compensation to the city or to the park board, does
not violate the Fourteenth Amendment to the Constitution of the United States.”
The Congress has dealt with the land involved as one reserved for communal use (terreno
comunal). The act of classifying State property calls for the exercise of wide discretionary
legislative power and it should not be interfered with by the courts.
This brings Us to the second question as regards the validity of Republic Act No. 4118, viewed in
the light of Article III, Sections 1, subsection (1) and (2) of the Constitution which ordain that no
person shall be deprived of his property without due process of law and that no private property
shall be taken for public use without just compensation.
II.
The trial court declared Republic Act No. 4118 unconstitutional for allegedly depriving the City of
Manila of its property without due process of law and without payment of just compensation. It
is now well established that the presumption is always in favor of the constitutionality of a law
(U.S. vs. Ten Yu, 24 PhiL 1; Go Ching, et al vs. Dinglasan, et al., 45 O.G. No. 2, pp. 703, 705).
To declare a law unconstitutional, the repugnancy of that law to the Constitution must be clear
and unequivocal, for even if a law is aimed at the attainment of some public good, no
infringement of constitutional rights is allowed. To strike down a law there must be a clear
showing that what the fundamental law condemns or prohibits, the statute allows it to be done
(Morfe vs. Mutuc, et al., G.R. No. L-20387, Jan. 31, 1968; 22 SCRA 424). That situation does not
obtain in this case as the law assailed does not in any manner trench upon the constitution as
will hereafter be shown.
Republic Act No. 4118 was intended to implement the social justice policy of the Constitution
and the Government program of “Land for the Landless”. The explanatory note of House Bill No.
1453 which became Republic Act No. 4118, reads in part as follows:
“Approval of this bill will implement the policy of the administration of ‘land for the landless’ and
the Fifth Declaration of Principles of the Constitution which states that ‘the promotion of social
12
P R O P E R T Y No. 3 |
justice to insure the well-being and economic security of all people should be the concern of the
State.’ We are ready and willing to enact legislation promoting the social and economic well-
being of the people whenever an opportunity for enacting such kind of legislation arises.’ ”
The respondent Court held that Republic Act No. 4118, “by converting the land in question—
which is the patrimonial property of the City of Manila into disposable alienable land of the State
and placing it under the disposal of the Land Tenure Administration—violates the provisions of
Article III (Secs. 1 and 2) of the Constitution which ordain that “private property shall not be
taken for public use without just compensation, and that no person shall be deprived of life,
liberty or property without due process of law”. In support thereof reliance is placed on the
ruling in Province of Zamboanga del Norte vs. City of Zamboanga, G.R. No. 2440, March 28,
1968; 22 SCRA 1334, which holds that Congress cannot deprive a municipality of its private or
patrimonial property without due process of law and without payment of just compensation
since it has no absolute control thereof. There is no quarrel over this rule if it is undisputed that
the property sought to be taken is in reality a private or patrimonial property of the municipality
or city. But it would be simply begging the question to classify the land in question as such. 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. 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 as the land covered
thereby was part of the territory of the City of Manila granted by the sovereign upon its creation.
That the National Government, through the Director of Lands, represented by the Solicitor
General, in the cadastral proceedings did not contest the claim of the City of Manila that the land
is its property, does not detract from its character as State property and in no way divests the
legislature of its power to deal with it as such, the state not being bound by the mistakes and/or
negligence of its officers.
One decisive fact that should be noted is that the City of Manila expressly recognized the
paramount title of the State over said land when by its resolution of September 20, 1960, the
Municipal Board, presided by then Vice-Mayor Antonio Villegas, requested “His Excellency the
President of the Philippines to consider the feasibility of declaring the city property bounded by
Florida, San Andres and Nebraska Streets, under Transfer Certificate of Title Nos. 25545 and
25547, containing an area of 7,450 square meters, as patrimonial property of the City of Manila
for the purpose of reselling these lots to the actual occupants thereof.
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. If it were its patrimonial property why should the City of Manila be requesting the
President to make representation to the legislature to declare it as such so it can be disposed of
in favor of the actual occupants? There could be no more 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. But since the City did not actually use said land for any recognized public
purpose and allowed it to remain idle and unoccupied for a long time until it was overrun by
squatters, 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 (Municipality of
Tigbauan vs. Director of Lands, 35 Phil. 798; City of Manila vs. Insular Government, 10 Phil. 327;
Municipality of Luzuriaga V3. Director of Lands, 24 Phil. 193), The conclusion of the respondent
court that Republic Act No, 4118 converted a patrimonial property of the City of Manila into a
parcel of disposable land of the State and took it away from the City without compensation is,
therefore, unfounded. In the last analysis the land in question pertains to the State and the City
of Manila merely acted as trustee for the benefit of the people therein for whom the State can
legislate in the exercise of its legitimate powers.
Republic Act No. 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: And this was done at the instance or upon the request of the City of
Manila itself. The subdivision of the land and conveyance of the resulting subdivision lots to the
occupants by Congressional authorization does not operate as an exercise of the power of
eminent domain without just compensation in violation of Section 1, subsection (2), Article III of
the Constitution, but simply as a manifestation of its right and power to deal with state property.
It should be emphasized that the law assailed was enacted upon formal written petition of the
Municipal Board o£ Manila in the form of a legally approved resolution* The certificate of title
over the property in the name of the City of Manila was accordingly cancelled and another
issued to the Land Tenure Administration after the voluntary surrender of the City’s duplicate
certificate of title by the City Treasurer with the knowledge and consent of the City Mayor. To
implement the provisions of Republic Act No. 4118, the then Deputy Governor of the Land
Authority sent a letter, dated February 18, 1965, to the City Mayor furnishing him with a copy of
the “proposed subdivision plan of the said lot as prepared for the Republic of the Philippines for
subdivision and resale by the Land Authority to bona fide applicants.” On March 2, 1965, the
Mayor of Manila, through his Executive and Technical Adviser, acknowledged receipt of the
subdivision plan and informed the Land Authority that his Office ‘Viii interpose no objection to
the implementation of said law provided that its provisions are strictly complied with.” The
foregoing sequence of events, clearly indicate a pattern of regularity and observance of due
process in the reversion of the property to the National Government. All such acts were done in
recognition by the City of Manila of the right and power of the Congress to dispose of the land
involved.
Consequently, the City of Manila was not deprived of anything it owns, either under the due
process clause or under the eminent domain provisions of the Constitution. If it failed to get
from the Congress the concession it sought of having the land involved given to it as its
patrimonial property, the Courts possess no power to grant that relief. Republic Act No. 4118
does not, therefore, suffer from any constitutional infirmity.
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.
Decision reversed.
Notes.—Test as to the extent of legislative control aver properties of the municipalities.  If the
property is owned by the municipality in its public and governmental capacity, the property is
public and Congress has absolute control over it. But if the property is owned in its private or
13
P R O P E R T Y No. 3 |
proprietary capacity, then it is patrimonial and Congress has no absolute control. The
municipality cannot be deprived of it without due process and payment of just
compensation. Province of Zamboanga del Norte vs. City of Zamboanga,  L-24440, March 28,
1968, 22 SCRA 1334.

Classification of properties of public corporations. —Articles 423 and 424 of the Civil Code classify
property of provinces, cities, and municipalities into property for public use and patrimonial
property. Property for public U3e consists of provincial roads, city streets, municipal streets, the
squares, fountains, public waters, promenades, and public works for public service paid for by
said provinces, cities, or municipalities. All other property possessed by any of them is
patrimonial and shall be governed by the Code, without prejudice to the provisions of special
laws.
14
P R O P E R T Y No. 3 |
No. L-61744. June 25, 1984. *
MUNICIPALITY OF SAN MIGUEL, BULACAN, petitioner, vs. HONORABLE OSCAR C.
FERNANDEZ, in his capacity as the Presiding Judge, Branch IV, Baliuag, Bulacan, The
PROVINCIAL SHERIFF of Bulacan, MARGARITA D. VDA. DE IMPERIO, ADORACION
IMPERIO, RODOLFO IMPERIO, CONRADO IMPERIO, ERNESTO IMPERIO, ALFREDO
IMPERIO, CARLOS IMPERIO, JR., JUAN IMPERIO and SPOUSES MARCELO PINEDA
and LUCILA PONGCO, respondents.
Municipal Corporations; Execution; Rule that public funds not subject to levy and execution;
Municipal funds in possession of provincial and municipal treasurers are public funds exempt
from execution; Reason.—Well settled is the rule that public funds are not subject to levy and
execution. The reason for this was explained in the case of Municipality of Paoay vs. Manaois, 86
Phil. 629 “that they are held in trust for the people, intended and used for the accomplishment
of the purposes for which municipal corporations are created, and that to subject said properties
and public funds to execution would materially impede, even defeat and in some instances
destroy said purpose.” And, in Tantoco vs. Municipal Council of Iloilo, 49 Phil. 52, it was held
that “it is the settled doctrine of the law that not only the public property but also the taxes and
public revenues of such corporations cannot be seized under execution against them, either in
the treasury or when in transit to it. Judgments rendered for taxes, and the proceeds of such
judgments in the hands of officers of the law, are not subject to execution unless so declared by
statute.” Thus, it is clear that all the funds of petitioner municipality in the possession of the
Municipal Treasurer of San Miguel, as well as those in the possession of the Provincial Treasurer
of Bulacan, are also public funds and as such they are exempt from execution.
Same; Same; Same; Same; Appropriation in the form of an ordinance passed by the
Sangguniang Bayan, necessary before any money of a municipality may be paid out. —Otherwise
stated, there must be a corresponding appropriation in the form of an ordinance duly passed by
the Sangguniang Bayan before any money of the municipality may be paid out. In the case at
bar, it has not been shown that the Sangguniang Bayan has passed an ordinance to this effect.
Same; Same; Procedure for enforcement of money judgment under Sec. 15, Rule 39, Rules of
Court, to be followed before public funds may be paid out. —Furthermore, Section 15, Rule 39 of
the New Rules of Court, outlines the procedure for the enforcement of money judgment: “(a) By
levying on all the property of the debtor, whether real or personal, not otherwise exempt from
execution, or only on such part of the property as is sufficient to satisfy the judgment and
accruing cost, if he has more than sufficient property for the purpose; (b) By selling the property
levied upon; (c) By paying the judgment-creditor so much of the proceeds as will satisfy the
judgment and accruing costs; and (d) By delivering to the judgment-debtor the excess, if any,
unless otherwise directed by judgment or order of the court.”
RELOVA, J.:
In Civil Case No. 604-B, entitled “Margarita D. Vda. de Imperio, et al. vs. Municipal Government
of San Miguel, Bulacan, et al.”, the then Court of First Instance of Bulacan, on April 28, 1978,
rendered judgment holding herein petitioner municipality liable to private respondents, as
follows:
“WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs and
against the defendant Municipal Government of San Miguel, Bulacan, represented by Mayor Mar
Marcelo G. Aure and its Municipal Treasurer:
“1.ordering the partial revocation of the Deed of Donation signed by the deceased Carlos
Imperio in favor of the Municipality of San Miguel, Bulacan, dated October 27, 1947 insofar
as Lots Nos. 1, 2, 3, 4 and 5, Block 11 of Subdivision Plan Psd-20831 are concerned, with an
aggregate total area of 4,646 square meters, which lots are among those covered and
described under TCT No. T-1831 of the Register of Deeds of Bulacan in the name of the
Municipal Government of San Miguel, Bulacan,
“2.ordering the defendant to execute the corresponding Deed of Reconveyance over the
aforementioned five lots in favor of the plaintiffs in the proportion of the undivided one-half
(½) share in the name of plaintiffs Margarita D. Vda. de Imperio, Adoracion, Rodolfo,
Conrado, Ernesto, Alfredo, Carlos, Jr. and Juan, all surnamed Imperio, and the remaining
undivided one-half (½) share in favor of plaintiff-spouses Marcelo E. Pineda and Lucila
Pongco;
“3.ordering the defendant municipality to pay to the plaintiffs in the proportion mentioned in
the immediately preceding paragraph the sum of P64,440.00 corresponding to the rentals it
has collected from the occupants for their use and occupation of the premises from 1970 up
to and including 1975, plus interest thereon at the legal rate from January 1970 until fully
paid;
“4.ordering the restoration of ownership and possession over the five lots in question in favor
of the plaintiffs in the same proportion aforementioned;
“5.ordering the defendant to pay the plaintiffs the sum of P3,000.00 for attorney’s fees; and
to pay the cost of suit.
“The counterclaim of the defendant is hereby ordered dismissed for lack of evidence
presented to substantiate the same.
“SO ORDERED.” (pp. 11-12, Rollo)
The foregoing judgment became final when herein petitioner’s appeal was dismissed due to its
failure to file the record on appeal on time. The dismissal was affirmed by the then Court of
Appeals in CA-G.R. No. SP-12118 and by this Court in G.R. No. 59938. Thereafter, herein private
respondents moved for issuance of a writ of execution for the satisfaction of the judgment.
Respondent judge, on July 27, 1982, issued an order, to wit:
“Considering that an entry of judgment had already been made on June 14, 1982 in G.R. No. L-
59938 and;
“Considering further that there is no opposition to plaintiffs’ motion for execution dated July 23,
1983;
“Let a writ of execution be so issued, as prayed for in the aforestated motion.” (p. 10, Rollo)
15
P R O P E R T Y No. 3 |
Petitioner, on July 30, 1982, filed a Motion to Quash the writ of execution on the ground that the “(a) No money shall be paid out of the treasury except in pursuance of a lawful appropriation
municipality’s property or funds are all public funds exempt from execution. The said motion to or other specific statutory authority.
quash was, however, denied by the respondent judge in an order dated August 23, 1982 and
Otherwise stated, there must be a corresponding appropriation in the form of an ordinance duly
the alias writ of execution stands in full force and effect.
passed by the Sangguniang Bayan before any money of the municipality may be paid out. In the
On September 13, 1982, respondent judge issued an order which in part, states: case at bar, it has not been shown that the Sangguniang Bayan has passed an ordinance to this
effect.
“It is clear and evident from the foregoing that defendant has more than enough funds to meet
its judgment obligation. Municipal Treasurer Miguel C. Roura of San Miguel, Bulacan and Furthermore, Section 15, Rule 39 of the New Rules of Court, outlines the procedure for the
Provincial Treasurer of Bulacan Agustin O. Talavera are therefor hereby ordered to comply with enforcement of money judgment:
the money judgment rendered by Judge Agustin C. Bagasao against said municipality. In like
manner, the municipal authorities of San Miguel, Bulacan are likewise ordered to desist from “(a)By levying on all the property of the debtor, whether real or personal, not otherwise
plaintiffs’ legal possession of the property already returned to plaintiffs by virtue of the alias writ exempt from execution, or only on such part of the property as is sufficient to satisfy the
of execution. judgment and accruing cost, if he has more than sufficient property for the purpose;
“Finally, defendants are hereby given an inextendible period of ten (10) days from receipt of a
copy of this order by the Office of the Provincial Fiscal of Bulacan within which to submit their “(b)By selling the property levied upon;
written compliance.” (p. 24, Rollo)
When the treasurers (provincial and municipal) failed to comply with the order of September 13, “(c)By paying the judgment-creditor so much of the proceeds as will satisfy the judgment
1982, respondent judge issued an order for their arrest and that they will be released only upon and accruing costs; and
compliance thereof. “(d) By delivering to the judgment-debtor the excess, if any, unless otherwise directed by
judgment or order of the court.”
Hence, the present petition on the issue whether the funds of the Municipality of San Miguel,
Bulacan, in the hands of the provincial and municipal treasurers of Bulacan and San Miguel, The foregoing has not been followed in the case at bar.
respectively, are public funds which are exempt from execution for the satisfaction of the money
judgment in Civil Case No. 604-B. ACCORDINGLY, the petition is granted and the order of respondent judge, dated July 27, 1982,
granting issuance of a writ of execution; the alias writ of execution, dated July 27, 1982; and the
Well settled is the rule that public funds are not subject to levy and execution. The reason for
order of respondent judge, dated September 13, 1982, directing the Provincial Treasurer of
this was explained in the case of Municipality of Paoay vs. Manaois, 86 Phil. 629“that they are
Bulacan and the Municipal Treasurer of San Miguel, Bulacan to comply with the money
held in trust for the people, intended and used for the accomplishment of the purposes for
judgments, are SET ASIDE; and respondents are hereby enjoined from implementing the writ of
which municipal corporations are created, and that to subject said properties and public funds to
execution.
execution would materially impede, even defeat and in some instances destroy said purpose.”
SO ORDERED.
And, in Tantoco vs. Municipal Council of Iloilo, 49 Phil. 52, it was held that “it is the settled
doctrine of the law that not only the public property but also the taxes and public revenues of
 
such corporations cannot be seized under execution against them, either in the treasury or when
Notes.—Possession of public lands, however long never confers upon the possession, unless
in transit to it. Judgments rendered for taxes, and the proceeds of such judgments in the hands
the occupant can prove occupation of the same under claim of ownership for the required period
of officers of the law, are not subject to execution unless so declared by statute.” Thus, it is
to constitute a grant from the State. (Republic vs. Vera, 120 SCRA 210.)
clear that all the funds of petitioner municipality in the possession of the Municipal Treasurer of
San Miguel, as well as those in the possession of the Provincial Treasurer of Bulacan, are also
Exception to rule that public lands may be acquired by prescription is not applicable in the
public funds and as such they are exempt from execution.
absence of conclusive showing of continuous possession and occupancy of public land under
Besides, Presidential Decree No. 477, known as “The Decree on Local Fiscal Administration”, claim of ownership. Presumptive grant from the State is not applicable as possession is not
Section 2 (a), provides: exclusive and notorious. (Municipality of Santiago, Isabela vs. Court of Appeals, 120 SCRA 734.)
“SEC. 2. Fundamental Principles.—Local government financial affairs, transactions, and
operations shall be governed by the fundamental principles set forth hereunder:
16
P R O P E R T Y No. 3 |
17
P R O P E R T Y No. 3 |
No. L-24440. March 28, 1968.
THE PROVINCE OF ZAMBOANGA DEL NORTE, plaintiff-appellee, vs.  CITY OF
ZAMBOANGA, SECRETARY OF FI-NANCE and COMMISSIONER OF INTERNAL
REVENUE, defendants-appellants.
Same; Properties; Classification under the Civil Code.  —Articles 423 and 424 of the Civil Code classify
property of provinces, cities, and municipalities into property for public use and patrimonial property.
Property for public use consists of provincial roads, city streets, municipal streets, the squares,
fountains, public waters, promenades, and public works for public service paid for by said provinces,
cities, or municipalities. All other property possessed by any of them is patrimonial and shall be
governed by this Code, without prejudice to the provisions of special laws.
Municipal corporations; Properties; Law on municipal corporation.—Under the principles constituting
the law of Municipal Corporations, all those of the 50 properties in question which are devoted to
public service are deemed public; the rest remain patrimonial . Und er t his n or m, to be consi dered
p it is enough that the property be held and devoted for governmental purposes like local
administration, public education, public health, etc.
Same; Same; Rep. Act 3039, validity of.—Republic Act 3039 which provides that all buildings,
properties and assets belonging to the former province of Zamboanga, and located within the City of
Zamboanga, are transferred to Zamboanga City free of charge, is valid insofar as it affects lots used
as capitol site, school sites and its grounds, hospital and leprosarium sites, and the high school
playground sites—a total of 24 lots—since these were held by the former Zamboanga province in its
governmental capacity they are, therefore, subject to the absolute control of Congress.
Lots adjoining public schools partake of the nature of the same. —The eight lots which are adjoining
each other, and in turn are between two lots wherein the Burleigh Schools, are built, constitute the
appurtenant grounds of the said Burleigh Schools, and partake of the nature of the same.
Same; Same; Buildings which were erected by the national government, using national fund, can
very well be disposed of by Congress in the same manner that it did with the lots in question. —
Buildings built on lots which are public in nature follow the classification of the lots on which they are
built. Moreover, said buildings, then located in the city, will not be for the exclusive use and benefit of
city residents for they could be availed of also by the provincial residents. The province then—and its
successors-in-interest—are not really deprived of the benefits thereof.
Same; Same; Same; Republic Act 3039; Effect on patrimonial project.—Republic Act 3039 cannot be
applied to deprive Zamboanga del Norte of its share in the value of the rest of the 26 lots which are
patrimonial properties since they are not being utilized for distinctly governmenta l purposes.
Moreover, the fact that they are registered strengthens the proposition that they are truly private in
nature.
Municipal Corporations; Properties; Principles under Law of Municipal Corporations considered
"special laws"—Under the provisions of Art. 424 of the Civil Code, the principles obtaining under the
law of Municipal Corporations can be considered as "special laws." Hence, the classification of
municipal property devoted for distinctly governmental purposes as public should prevail over the Civil
Code classification in this particular case.
Same; Action; Laches.—Defendants' claim that plaintiff and its predecessor-in-interest are guilty of
laches is without merit. Under Commonwealth Act 39, Sec. 50, the cause of action in favor of the
defunct Zamboanga Province arose only in 1949, after the Auditor General f ixed the value of the
properties in question. While in 1951, the Cabinet resolved to transfer said properties practically for
free to Zamboanga City, a reconsideration thereof was reasonably sought. In 1952, the old province
was dissolved. As successor-in-interest to more than half of the properties involved, Zamboanga del
Norte was able to get a reconsideration of the Cabinet Resolution in 1959. In fact, partial payments
were effected subsequently and it was only after the passage of Republic Act 3039 in- 1961 that the
present controversy arose. Plaintiff brought suit in 1962. All the foregoing, negative laches.
Same; Claim cannot be paid in lump sum. —Plaintiff's share, however, cannot be paid in lump sum,
except as to the P43,030.11 already returned to defendant City. The return of said amount to
defendant was without legal basis. Republic Act 3039 took effect only on June 17, 1961 after a partial
payment of P57,373.46 had already been made. Since the law did not provide for retroactivity, it
could not have validly affected a completed act. Hence, the amount of P43,030.11 should be
immediately returned by defendant City to plaintiff province The remaining balance, if any, in the
amount of plaintiff's 54.39% share in the 26 lots should then be paid by defendant City in the same
manner originally adopted by the Secretary of Finance and the Commissioner of Internal Revenue,
and not in lump sum. Plaintiff's prayer, particularly pars. 5 and 6, read together with pars. 10 and 11
of the first cause of action recited in the complaint clearly shows that the relief sought was merely the
continuance of the quarterly payment from the internal revenue allotments of defendant City. Art.
1169 of the Civil Code on reciprocal obligations invoked by plaintiff to justify lump sum payment is
inapplicable since there has been so far in legal contemplation no complete delivery of the lots in
question. The titles to the registered lots are not yet in the name of defendant Zamboanga City.
BENGZON, J.P., J.:
Prior to its incorporation as a chartered city, the Municipality of Zamboanga used to be the
provincial capital of the then Zamboanga Province. On October 12, 1936, Commonwealth Act 39
was approved converting the Municipality of Zamboanga into Zamboanga City. Sec. 50 of the Act
also provided that—
"Buildings and properties which the province shall abandon upon the transfer of the capital to
another place will be acquired and paid for by the City of Zamboanga at a price to be fixed by
the Auditor General."
The properties and buildings referred to consisted of 50 lots and some buildings constructed
thereon, located in the City of Zamboanga and covered individually by Torrens certificates of title
in the name of Zamboanga Province. As far as can be gleaned from the records, 1 said properties were being
utilized as follows—
The properties and buildings referred to consisted of 50 lots and some buildings constructed
thereon, located in the City of Zamboanga and covered individually by Torrens certificates of title
in the name of Zamboanga Province. As far as can be gleaned from the records, 1 said properties were being
utilized as follows—
The properties and buildings referred to consisted of 50 lots and some buildings constructed
thereon, located in the City of Zamboanga and covered individually by Torrens certificates of title
in the name of Zamboanga Province. As far as can be gleaned from the records, said properties
were being utilized as follows —
No. of Lots Use
18
P R O P E R T Y No. 3 |
1 ................................................ Capitol Site
3 ................................................ School Site
3 ................................................ Hospital Site
3 ................................................ Leprosarium
1 ................................................ Curuan School
1 ................................................ Trade School
2 ................................................ Burleigh School
2 ................................................ High School Playground
9 ................................................ Burleighs
1 ................................................ Hydro-Electric Site (Magay)
1 ................................................ San Roque
23 ................................................ vacant
It appears that in 1945, the capital of Zamboanga Province was transferred to Dipolog. 2 Subsequently,
or on
It appears that in 1945, the capital of Zamboanga Province was transferred to Dipolog.
Subsequently, or on June 16, 1948, Republic Act 286 was approved creating the municipality of
Molave and making it the capital of Zamboanga Province.
On May 26, 1949, the Appraisal Committee formed by the Auditor General, pursuant to
Commonwealth Act 39, fixed the value of the properties and buildings in question left by
Zamboanga Province in Zamboanga City at P1,294,-244.00. 3
On June 6, 1952, Republic Act 711 was approved dividing the province of Zamboanga into two
(2): Zamboanga del Norte and Zamboanga del Sur. As to how the assets and obligations of the
old province were to be divided between the two new ones, Sec. 6 of that law provided:
"Upon the approval of this Act, the funds, assets and other properties and the obligations of the
province of Zamboanga shall be divided equitably between the Province of Zamboanga. del
Norte and the Province of Zamboanga del Sur by the President of the Philippines, upon the
recommendation of the Auditor General."
Pursuant thereto, the Auditor General, on January 11, 1955, apportioned the assets and
obligations of the defunct Province of Zamboanga as follows: 54.39% for Zamboanga del Norte
and 45.61% for Zamboanga del Sur. Zamboanga del Norte therefore became entitled to 54.39%
of P1,294,244.00, the total value of the lots and buildings in question, or P704,220.05 payable
by Zamboanga City.
that Zamboanga del Norte had a vested right as owner (should be co-owner  pro-indiviso) of the
properties mentioned in Sec. 50 of Commonwealth Act 39, and is entitled to the price thereof,
payable by Zamboanga City. This ruling revoked the previous Cabinet Resolution of July 13,
1951 conveying all the said 50 lots and buildings thereon to Zamboanga City for P1.00, effective
as of 1945, when the provincial capital of the then Zamboanga Province was transferred to
Dipolog.
The Secretary of Finance then authorized the Commissioner of Internal Revenue to deduct an
amount equal to 25% of the regular internal revenue allotment for the City of Zamboanga for
the quarter ending March 31, 1960, then for the quarter ending June 30, 1960, and again for
the first quarter of the fiscal year 1960-1961. The deductions, all aggregating P57,373.46, was
credited to the province of Zamboanga del Norte, in partial payment of the P764,220.05 due it.
However, on June 17, 1961, Republic Act 3039 was approved amending Sec. 50 of
Commonwealth Act 39 by providing that —
All buildings, properties and assets belonging to the former province of Zamboanga and located
within the City of Zamboanga are hereby transferred, free of charge, in favor of the said City of
Zamboanga. (Stressed for emphasis).
Consequently, the Secretary of Finance, on July 12, 1961, ordered the Commissioner of Internal
Revenue to stop from effecting further payments to Zamboanga del Norte and to return to
Zamboanga City the sum of P57,373.46 taken from it out of the internal revenue allotment of
Zamboanga del Norte. Zamboanga City admits that since the enactment of Republic Act 3039,
P43,030.11 of the P57,373.46 has already been returned to it.
This constrained plaintiff-appellee Zamboanga del Norte to file on March 5, 1962, a complaint
entitled "Declaratory Relief with Preliminary Mandatory Injunction" in the Court of First Instance
of Zamboanga del Norte against defendants-appellants Zamboanga City, the Secretary of
Finance and the Commissioner of Internal Revenue. It was prayed that: (a) Republic Act 3039
be declared unconstitutional for depriving plaintiff province of property without due process and
just compensation; (b) Plaintiff's rights and obligations under said law be declared; (c) The
Secretary of Finance and the Internal Revenue Commissioner be enjoined from reimbursing the
sum of P57,373.46 to defendant City; and (d) The latter be ordered to continue paying the
balance of P704,220.05 in quarterly installments of 25% of its internal revenue allotments.
On June 4, 1962, the lower court ordered the issuance of preliminary injunction as prayed for.
After defendants filed their respective answers, trial was held. On August 12, 1963, judgment
was rendered, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered declaring Republic Act No. 3039 unconstitutional
insofar as it deprives plaintiff Zamboanga del Norte of its private properties, consisting of 50
parcels of land and the improvements thereon under certificates of title (Exhibits "A" to "A-49")
in the name of the defunct province of Zamboanga; ordering defendant City of Zamboanga to
pay to the plaintiff the sum of P704,220.05 payment thereof to be deducted from its regular
quarterly internal revenue allotment equivalent to 25% thereof every quarter until said amount
shall have been fully paid; ordering defendant Secretary of Finance to direct defendant
Commissioner of Internal Revenue to deduct 25% from the regular quarterly internal revenue
allotment for defendant City of Zamboanga and to remit the same to plaintiff Zamboanga del
Norte until said sum of P704,220.05 shall have been fully paid; ordering plaintiff Zamboanga del
19
P R O P E R T Y No. 3 |
Norte to execute through its proper officials the corresponding public instrument deeding to
defendant City of Zamboanga the 50 parcels of land and the improvements thereon under the
certificates of title (Exhibits "A" to "A-49") upon payment by the latter of the aforesaid sum of
P704,220.05 in full; dismissing the counterclaim of defendant City of Zamboanga; and declaring
permanent the preliminary mandatory injunction issued on June 8, 1962, pursuant to the order
of the Court dated June 4, 1962. No costs are assessed against the defendants.
It is SO ORDERED.
Subsequently, but prior to the perfection of defendants' appeal, plaintiff province filed a motion
to reconsider praying that Zamboanga City be ordered instead to pay the P704,220.05 in lump
sum  with 6% interest per annum. Over defendants' opposition, the lower court granted plaintiff
province's motion.
The defendants then brought the case before Us on appeal.
Brushing aside the procedural point concerning the property of declaratory relief filed in the
lower court on the assertion that the law had already been violated and that plaintiff sought to
give it coercive effect, since assuming the same to be true, the Rules anyway authorize the
conversion of the proceedings to an ordinary action, 5 We proceed to the more important and
principal question of the validity of Republic Act 3039.
The validity of the law ultimately depends on the nature of the 50 lots and buildings thereon in
question. For, the matter involved here is the extent of legislative control over the properties of
a municipal corporation, of which a province is one. The principle itself is simple: If the property
is owned by the municipality (meaning municipal corporation) in its public and governmental
capacity, the property is public and Congress has absolute control over it. But if the property is
owned in its private or proprietary capacity, then it is patrimonial and Congress has no absolute
control. The municipality cannot be deprived of it without due process and payment of just
compensation. 6 
The capacity in which the property is held is, however, dependent on the use to which it is
intended and devoted. Now, which of two norms, i.e., that of the Civil Code or that obtaining
under the law of Municipal Corporations, must be used in classifying the properties in question?
The Civil Code classification is embodied in its Arts. 423 and 424 which provide:
ART. 423. The property of provinces, cities, and municipalities is divided into property for public
use and patrimonial property.
ART. 424. Property for public use, in the provinces, cities, and municipalities, consists of the
provincial roads, city streets, municipal streets, the squares, fountains, public waters,
promenades, and public works for public service paid for by said provinces, cities, or
municipalities.
All other property possessed by any of them is patrimonial  and shall be governed by this Code,
without prejudice to the provisions of special laws. (Stressed for emphasis).
Applying the above cited norm, all the properties in question, except the two (2) lots used as
High School playgrounds, could be considered as patrimonial properties of the former
Zamboanga province. Even the capital site, the hospital and leprosarium sites, and the school
sites will be considered patrimonial for they are not for public use. They would fall under the
phrase "public works for public service" for it has been held that under the ejusdem generis rule,
such public works must be for  free and indiscriminate use by anyone , just like the preceding
enumerated properties in the first paragraph of Art 424.  7 The playgrounds, however, would fit
into this category.
This was the norm applied by the lower court. And it cannot be said that its actuation was
without jurisprudential precedent for in Municipality of Catbalogan v. Director of Lands , 8 and
in Municipality of Tacloban v. Director of Lands , 9 it was held that the capitol site and the school
sites in municipalities constitute their patrimonial properties. This result is understandable
because, unlike in the classification regarding State properties, properties for public service in
the municipalities are not classified as public. Assuming then the Civil Code classification to be
the chosen norm, the lower court must be affirmed except with regard to the two (2) lots used
as playgrounds.
On the other hand, applying the norm obtaining under the principles constituting the law of
Municipal Corporations, all those of the 50 properties in question which are devoted to public
service are deemed public; the rest remain patrimonial. Under this norm, to be considered
public, it is enough that the property be held and, devoted for governmental purposes like local
administration, public education, public health, etc. 10 
Supporting jurisprudence are found in the following cases: (1) HINUNANGAN V. DIRECTOR OF
LANDS, 11where it was stated that "... where the municipality has occupied lands distinctly for
public purposes, such as for the municipal court house, the public school, the public market, or
other necessary municipal building, we will, in the absence of proof to the contrary, presume a
grant from the States in favor of the municipality; but, as indicated by the wording, that rule
may be invoked only as to property which is used distinctly for public purposes...." (2) VIUDA DE
TANTOCO V. MUNICIPAL COUNCIL OF ILOILO 12 held that municipal properties necessary for
governmental purposes are public in nature. Thus, the auto trucks used by the municipality for
street sprinkling, the police patrol automobile, police stations and concrete structures with the
corresponding lots used as markets were declared exempt from execution and attachment since
they were not patrimonial properties. (3) MUNICIPALITY OF BATANGAS VS. CANTOS 13 held
squarely that a municipal lot which had always been devoted to school purposes is one
dedicated to public use and is not patrimonial property of a municipality.
20
P R O P E R T Y No. 3 |
Following this classification, Republic Act 3039 is valid insofar as it affects the lots used as funds. Hence, Congress could very well dispose of said buildings in the same manner that it did
capitol site, school sites and its grounds, hospital and leprosarium sites and the high school with the lots in question.
playground sites — a total of 24 lots — since these were held by the former Zamboanga           But even assuming that provincial funds were used, still the buildings constitute mere
province in its governmental capacity and therefore are subject to the absolute control of accessories to the lands, which are public in nature , and so, they follow the nature of said lands,
Congress. Said lots considered as public property are the following: i.e., public. Moreover, said buildings, though located in the city, will not be for the exclusive use
TCT Number Lot Number Use and benefit of city residents for they could be availed of also by the provincial residents. The
2200 ......................................  4-B ......................................  Capitol Site province then — and its successors-in-interest — are not really deprived of the benefits thereof.
2816 ......................................  149 ......................................  School Site
3281 ......................................  1224 ......................................  Hospital Site
          But Republic Act 3039 cannot be applied to deprive Zamboanga del Norte of its share in
3282 ......................................  1226 ......................................  Hospital Site
the value of the rest of the 26 remaining lots which are patrimonial properties since they are not
3283 ......................................  1225 ......................................  Hospital Site
being utilized for distinctly, governmental purposes. Said lots are:
3748 ......................................  434-A-1 ......................................  School Site
TCT NumberLot NumberU s e5577 ......................................177 ......................................Mydro,
5406 ......................................  171 ......................................  School Site
Magay13198 ......................................127-0 ......................................San
5564 ......................................  168 ......................................  High School Play-ground Roque5569 ......................................169 ......................................Burleigh 15 5558 .........................
5567 ......................................  157 & 158 ......................................  Trade School .............175 ......................................Vacant5559 ......................................188 .............................
5583 ......................................  167 ......................................  High School Play-ground ........."5560 ......................................183 ......................................"5561 ......................................
6181 ......................................  (O.C.T.) ......................................  Curuan School 186 ......................................"5563 ......................................191 ......................................"5566 ...
11942 ......................................  926 ......................................  Leprosarium ...................................176 ......................................"5568 ......................................179 ...............
11943 ......................................  927 ......................................  Leprosarium ......................."5574 ......................................196 ......................................"5575 ........................
11944 ......................................  925 ......................................  Leprosarium ..............181-A ......................................"5576 ......................................181-B ..............................
5557 ......................................  170 ......................................  Burleigh School ........"5578 ......................................182 ......................................"5579 ......................................1
5562 ......................................  180 ......................................  Burleigh School 97 ......................................"5580 ......................................195 ......................................"5581 .....
5565 ......................................  172-B ......................................  Burleigh .................................159-B ......................................"5582 ......................................194 ..............
5570 ......................................  171-A ......................................  Burleigh ........................"5584 ......................................190 ......................................"5588 .......................
5571 ......................................  172-C ......................................  Burleigh ...............184 ......................................"5589 ......................................187 ...................................
5572 ......................................  174 ......................................  Burleigh ..."5590 ......................................189 ......................................"5591 ......................................192 
5573 ......................................  178 ......................................  Burleigh ......................................"5592 ......................................193 ......................................"5593 .........
5585 ......................................  171-B ......................................  Burleigh .............................185 ......................................"7379 ......................................4147 ....................
5586 ......................................  173 ......................................  Burleigh .................."
5587 ......................................  172-A ......................................  Burleigh
Moreover, the fact that these 26 lots are  registered  strengthens the proposition that they are
  We noticed that the eight Burleigh lots above described are adjoining each other and in turn truly private in nature. On the other hand, that the 24 lots used for governmental purposes are
are between the two lots wherein the Burleigh schools are built, as per records appearing herein also registered is of no significance since registration cannot convert public property to
and in the Bureau of Lands. Hence, there is sufficient basis for holding that said eight lots private. 16 
constitute the appurtenant grounds of the Burleigh schools, and partake of the nature of the
same. We are more inclined to uphold this latter view. The controversy here is more along the domains
of the Law of Municipal Corporations — State vs. Province  — than along that of Civil Law.
Regarding the several buildings existing on the lots above-mentioned, the records do not Moreover, this Court is not inclined to hold that municipal property held and devoted to public
disclose whether they were constructed at the expense of the former Province of Zamboanga. service is in the same category as ordinary private property. The consequences are dire. As
Considering however the fact that said buildings must have been erected even before 1936 ordinary private properties, they can be levied upon and attached. They can even be acquired
when Commonwealth Act 39 was enacted and the further fact that provinces then had no power thru adverse possession — all these to the detriment of the local community. Lastly, the
to authorize construction of buildings such as those in the case at bar at their own expense, 14 it classification of properties other than those for public use in the municipalities as patrimonial
can be assumed that said buildings were erected by the National Government, using national under Art. 424 of the Civil Code — is "... without prejudice to the provisions of special laws." For
purpose of this article, the principles, obtaining under the Law of Municipal Corporations can be
21
P R O P E R T Y No. 3 |
considered as "special laws". Hence, the classification of municipal property devoted for formed by the Auditor General, by way of quarterly payments from the allotments of defendant
distinctly governmental purposes as public should prevail over the Civil Code classification in this City, in the manner originally adopted by the Secretary of Finance and the Commissioner of
particular case. Internal Revenue. No costs. So ordered.

Defendants' claim that plaintiff and its predecessor-in-interest are "guilty of laches is without Reyes, J.B.L., Actg. C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles and Fernando,
merit. Under Commonwealth Act 39, Sec. 50, the cause of action in favor of the defunct JJ., concur.
Zamboanga Province arose only in 1949 after the Auditor General fixed the value of the Concepcion, C.J., is on leave.
properties in question. While in 1951, the Cabinet resolved transfer said properties practically for
free to Zamboanga City, a reconsideration thereof was seasonably sought. In 1952, the old
province was dissolved. As successor-in-interest to more than half of the properties involved,
Zamboanga del Norte was able to get a reconsideration of the Cabinet Resolution in 1959. In
fact, partial payments were effected subsequently and it was only after the passage of Republic
Act 3039 in 1961 that the present controversy arose. Plaintiff brought suit in 1962. All the
foregoing, negative laches.

It results then that Zamboanga del Norte is still entitled to collect from the City of Zamboanga
the former's 54.39% share in the 26 properties which are patrimonial in nature, said share to
computed on the basis of the valuation of said 26 properties as contained in Resolution No. 7,
dated March 26, 1949, of the Appraisal Committee formed by the Auditor General.

Plaintiff's share, however, cannot be paid in lump sum, except as to the P43,030.11 already
returned to defendant City. The return of said amount to defendant was without legal basis.
Republic Act 3039 took effect only on June 17, 1961 after a partial payment of P57,373.46 had
already been made. Since the law did not provide for retroactivity, it could not have validly
affected a completed act. Hence, the amount of P43,030.11 should be immediately returned by
defendant City to plaintiff province. The remaining balance, if any, in the amount of plaintiff's
54.39% share in the 26 lots should then be paid by defendant City in the same manner originally
adopted by the Secretary of Finance and the Commissioner of Internal Revenue, and not in lump
sum. Plaintiff's prayer, particularly pars. 5 and 6, read together with pars. 10 and 11 of the first
cause of action recited in the complaint 17 clearly shows that the relief sought was merely the
continuance of the quarterly payments from the internal revenue allotments of defendant City.
Art. 1169 of the Civil Code on reciprocal obligations invoked by plaintiff to justify lump sum
payment is inapplicable since there has been so far in legal contemplation no complete delivery
of the lots in question. The titles to the registered lots are not yet in the name of defendant
Zamboanga City.

WHEREFORE, the decision appealed from is hereby set aside and another judgment is hereby
entered as follows:. (1) Defendant Zamboanga City is hereby ordered to return to plaintiff
Zamboanga del Norte in lump sum the amount of P43,030.11 which the former took back from
the latter out of the sum of P57,373.46 previously paid to the latter; and (2) Defendants are
hereby ordered to effect payments in favor of plaintiff of whatever balance remains of plaintiff's
54.39% share in the 26 patrimonial properties, after deducting therefrom the sum of
P57,373.46, on the basis of Resolution No. 7 dated March 26, 1949 of the Appraisal Committee
22
P R O P E R T Y No. 3 |
No. L-61311. September 21,1987. *
FELICIDAD VILLANUEVA, FERNANDO CAISIP, ANTONIO LIANG, FELINA MIRANDA,
RICARDO PUNO, FLORENCIO LAXA, and RENE OCAMPO, petitioners, vs. HON.
MARIANO CASTAÑEDA, JR., Presiding Judge of the Court of First Instance of
Pampanga, Branch III, VICENTE A. MACALINO, Officer-in-Charge, Office of the
Mayor, San Fernando, Pampanga, respondents.
Property; Place occupied by petitioner found to be a public plaza.— There is no question that the place
occupied by the peti tioners and from which they are sought to be evicted is a public plaza, as found
by the trial court in Civil Case No. 2040. This finding was made after consideration of the antecedent
facts as especially established by the testimony of former San Fernando Mayor Rodolfo Hizon, who
later became governor of Pampanga, that the National Planning Commission had reserved the area
for a public plaza as early as 1951. This intention was reiterated in 1964 through the adoption of
Resolution No. 29.
Same; Same; Lease; It is elementary that a public plaza is beyond the commerce of man, lease
thereon is null and void—A public plaza is beyond the commerce of man and so cannot be the subject
of lease or any other contractual undertaking. This is elementary. Indeed, this point was settled as
early as in Municipality of Cavite v. Rojas, decided in 1915, where the Court declared as null and void
the lease of a public plaza of the said municipality in favor of a private person.
Same; Same; Same; Same; Petitioners had no right to occupy the disputed premises by invoking
lease contracts.—Applying this wellsettled doctrine, we rule that the petitioners had no right in the
first place to occupy the disputed premises and cannot insist in remaining there now on the strength
of their alleged lease contracts. They should have realized and accepted this earlier, considering that
even before Civil Case No. 2040 was decided, the municipal council of San Fernando had already
adopted Resolution No. 29, series of 1964, declaring the area as the parking place and public plaza of
the municipality.
Same; Same; Same; Same; Same; Mayor has duty to clear the area and restore it as a parking place
and public plaza; No whimsical action was taken in the demolition of the stalls.— It is the decision in
Civil Case No. 2040 and the said resolution of the municipal council of San Fernando that respondent
Macalino was seeking to enforce when he ordered the demolition of the stalls constructed in the
disputed area. As officer-in-charge of the office of the mayor, he had the duty to clear the area and
restore it to its intended use as a parking place and public plaza of the municipality of San Fernando,
conformably to the aforementioned orders from the court and the council. It is, therefore, not correct
to say that he had acted without authority or taken the law into his hands in issuing his order. Neither
can it be said that he acted whimsically in exercising his authority for it has been established that he
directed the demolition of the stalls only after, upon his instructions, the municipal attorney had
conducted an investigation, to look into the complaint filed by the Association of Concerned Citizens
and Consumers of San Fernando. There is evidence that the petitioners were notified of this hearing,
which they chose to disregard. Photographs of the disputed area, which does look congested and
ugly, show that the complaint was valid and that the area really needed to be cleared, as
recommended by the municipal attorney. The Court observes that even without such investigation
and recommendation, the respondent mayor was justified in ordering the area cleared on the strength
alone of its status as a public plaza as declared by the judicial and legislative authorities. In calling
first for the investigation (which the petitioner saw fit to boycott), he was just scrupulously paying
deference to the requirements of due process, to remove all taint of arbitrariness in the action he was
called upon to take.
Same; Same; Rule that police power cannot be surrendered or bargained away through the medium
of a contract is settled—Even assuming a valid lease of the property in dispute, the resolution could
have effectively terminated the agreement for it is settled that the police power cannot be
surrendered or bargained away through the medium of a contract. In fact, every contract affecting
the public interest suffers a congenital infirmity in that it contains an implied reservation of the police
power as a postulate of the existing legal order. This power can be activated at any time to change
the provisions of the contract, or even abrogate it entirely, for the promotion or protection of the
general welfare. Such an act will not militate against the impairment clause, which is subject to and
limited by the paramount police power.
.CRUZ, J.:
There is in the vicinity of the public market of San Fernando, Pampanga, along Mercado Street,
a strip of land measuring 12 by 77 meters on which stands a conglomeration of vendors stalls
together forming what is commonly known as a talipapa. This is the subject of the herein
petition. The petitioners claim they have a right to remain in and conduct business in this area
by virtue of a previous authorization granted to them by the municipal government. The
respondents deny this and justify the demolition of their stalls as illegal constructions on public
property. At the petitioners' behest, we have issued a temporary restraining order to preserve
the status quo between the parties pending our decision.1 Now we shall rule on the merits.
This dispute goes back to November 7, 1961, when the municipal council of San Fernando
adopted Resolution No, 218 authorizing some 24 members of the Fernandino United Merchants
and Traders Association to construct permanent stalls and sell in the above-mentioned place. 2
The action was pro tested on November 10,1961, in Civil Case No. 2040, where the Court of
First Instance of Pampanga, Branch 2, issued a writ of preliminary injunction that prevented the
defendants from constracting the said stalls until final resolution of the controversy. 3 On January
18, 1964, while this case was pending, the municipal council of San Fernando adopted
Resolution No. 29, which declared the subject area as "the parking place and as the public plaza
of the municipality,"4 thereby impliedly revoking Resolution No, 218- series of 1961, Four years
later, on November 2, 1968, Judge Andres C. Aguilar decided the aforesaid case and held that
the land occupied by the petitioners, being public in nature, was beyond the commerce of man
and therefore could not be the subject of private occupancy. 5 The writ of preliminary injunction
was made permanent.6
The decision was apparently not enforced, for the petitioners were not evicted from the place; in
fact, according to them, they and the 128 other persons were in 1971 assigned specific areas or
space allotments therein for which they paid daily fees to the municipal government. 7 The
problem appears to have festered for some more years under a presumably uneasy truce among
the protagonists, none of whom made any move, for some reason that does not appear in the
record Then, on January 12, 1982. the Association of Concerned Citizens and Consumers of San
Fernando filed a petition for the immediate implementation of Resolution No. 29, to restore the
subject property "to its original and customary use as a public plaza." 8
23
P R O P E R T Y No. 3 |
Acting thereon after an investigation conducted by the municipal attorney, respondent Vicente
9
"According to article 344 of the Civil Code: 'Property for public use in provinces and in towns
A. Macalino, as officer-in-charge of the office of the mayor of San Fernando, issued on June 14, comprises the provincial and town roads, the squares, streets, fountains, and public waters, the
1982, a resolution requiring the municipal treasurer and the municipal engineer to demolish the promenades, and public works of general service supported by said towns or provinces.
stalls in the subject place beginning July 1,1982. 10 The reaction of the petitioners was to file a
"The said Plaza Soledad being a promenade for public use, the municipal council of Cavite could
petition for prohibition with the Court of First Instance of Pampanga, docketed as Civil Case No.
not in 1907 withdraw or exclude from public use a portion thereof in order to lease it for the sole
6470, on June 26,1982. The respondent judge denied the petition on July 19,1982," and the
benefit of the defendant Hilaria Rojas. In leasing a portion of said plaza OF public place to the
motion for reconsideration on August 5, 1982, 12 prompting the petitioners to come to this Court
defendant for private use the plaintiff municipality exceeded its authority in the exercise of its
on certiorari to challenge his decision.13
powers by executing a contract over a thing of which it could not dispose, nor is it empowered
As required, respondent Macalino filed his comment 14 on the petition, and the petitioners so to do.
countered with their reply. 15 In compliance with our resolution of February 2, 1983, the
"The Civil Code, article 1271, prescribes that everything which is not outside the commerce of
petitioners submitted their memorandum16 and respondent Macalino, for his part, asked that his
man may be the object of a contract, and plazas and streets are outside of this commerce, as
comment be considered his memorandum. 17 On July 28,1986, the new officer-in-charge of the
was decided by the supreme court of Spain in its decision of February 12, 1895, which says:
office of the mayor of San Fernando, Paterno S. Guevarra, was impleaded in lieu of Virgilio
'Communal things that cannot be sold because they are by their very nature outside of
Sanchez, who had himself earlier replaced the original respondent Macalino. 18
commerce are those for public use, such as the plazas, streets, common lands, rivers, fountains,
After considering the issues and the arguments raised by the parties in their respective etc.'
pleadings, we rule for the respondents. The petition must be dismissed.
"Therefore, it must be concluded that the contract, Exhibit C, whereby the municipality of Cavite
There is no question that the place occupied by the petitioners and from which they are sought leased to Hilaria Rojas a portion of the Plaza Soledad is null and void and of no force or effect,
to be evicted is a public plaza, as found by the trial court in Civil Case No. 2040. This f inding because it is contrary to the law and the thing leased cannot be the object of a contract."
was made after consideration of the antecedent facts as especially established by the testimony
In Muyot v. de la Fuente,24 it was held that the City of Manila could not lease a portion of a
of former San Fernando Mayor Rodolfo Hizon, who later became governor of Pampanga, that
public sidewalk on Plaza Sta. Cruz, being likewise beyond the commerce of man. Echoing Rojas,
the National Planning Commission had reserved the area for a public plaza as early as 1951. This
the decision said;
intention was reiterated in 1964 through the adoption of Resolution No. 29. 19
"Appelants claim that they had obtained permit from the government of the City of Manila, to
It does not appear that the decision in this case was appealed or has been reversed. In Civil
construct booths Nos. 1 and 2, along the premises in question, and for the use of spaces where
Case No. 6740, which is the subject of this petition, the respondent judge saw no reason to
the booths were constructed, they had paid and continued paying the corresponding rentals.
disturb the finding in Civil Case No. 2040 and indeed used it as a basis for his own decision
Granting this claim to be true, one should not entertain any doubt that such permit was not
sustaining the questioned order.20
legal, because the City of Manila does not have any power or authority at all to lease a portion
The basic contention of the petitioners is that the disputed area is under lease to them by virtue of a public sidewalk. The sidewalk in question, forming part of the public plaza of Sta. Cruz,
of contracts they had entered into with the municipal government, first in 1961 insofar as the could not be a proper subject matter of the contract, as it was not within the commerce of man
original occupants were concerned, and later with them and the other petitioners by virtue of (Article 1347, new Civil Code, and article 1271, old Civil Code). Any contract entered into by the
the space allocations made in their favor in 1971 for which they saw they are paying daily fees. 21 City of Manila in connection with the sidewalk, is ipso facto null and ultra vires. (Municipality of
The municipal government has denied making such agreements. In any case, they argue, since Cavite vs. Roxas, et al., 30 Phil. 603.) The sidewalk in question was intended for and was used
the fees were collected daily, the leases, assuming their validity, could be terminated at will, or by the public in going from one place to another. The streets and public places of the city shall
any day, as the claimed rentals indicated that the period of the leases was from day to day. 22 be kept free and dear for the use of the public, and the sidewalks and crossings for the
The parties belabor this argument needlessly. pedestrians, and the same shall only be used or occupied for other purposes as provided by
ordinance or regulation; x x x.' (Sec. 1119, Revised Ordinances of the City of Manila.) The
A public plaza is beyond the commerce of man and so cannot be the subject of lease or any
booths in question served as fruit stands for their owners and often, if not always, blocked the
other contractual undertaking. This is elementary. Indeed, this point was settled as early as in
free passage of pedestrians who had to take the plaza itself which used to be clogged with
Municipality of Cavite v. Rojas, 23 decided in 1915, where the Court declared as null and void the
vehicular traffic.''
lease of a public plaza of the said municipality in favor of a private person.
Exactly in point is Espiritu v. Municipal Council of Pozorrubio, 25 where the Supreme Court
Justice Torres said in that case:
declared:
24
P R O P E R T Y No. 3 |
"There is absolutely no question that the town plaza cannot be used for the construction of
market stalls, specially of residences, and that such structures constitute a nuisance subject to
abatement according to law. Town plazas are properties of public dominion, to be devoted to
public use and to be made available to the public in general. They are outside the commerce of
man and cannot be disposed of or even leased by the municipality to private parties"
Applying this well-settled doctrine, we rule that the petitioners had no right in the first place to
occupy the disputed premises and cannot insist in remaining there now on the strength of their
alleged lease contracts. They should have realized and accepted this earlier, considering that
even before Civil Case No. 2040 was decided, the municipal council of San Fernando had already
adopted Resolution No. 29, series of 1964, declaring the area as the parking place and public
plaza of the municipality.
It is the decision in Civil Case No. 2040 and the said resolution of the municipal council of San
Fernando that respondent Macalino was seeking to enforce when he ordered the demolition of
the stalls constructed in the disputed area. As officer-incharge of the office of the mayor, he had
the duty to clear the area and restore it to its intended use as a parking place and public plaza
of the municipality of San Fernando, conformably to the aforementioned orders from the court
and the council. It is, therefore, not correct to say that he had acted without authority or taken
the law into his hands in issuing his order.
Neither can it be said that he acted whimsically in exercising his authority for it has been
established that he directed the demolition of the stalls only after, upon his instructions, the
municipal attorney had conducted an investigation, to look into the complaint filed by the
Association of Concerned Citizens and Consumers of San Fernando. 26 There is evidence that the
petitioners were notified of this hearing, 27 which they chose to disregard. Photographs of the
disputed area,28 which does look congested and ugly, show that the complaint was valid and
that the area really needed to be cleared, as recommended by the municipal attorney.
The Court observes that even without such investigation and recommendation, the respondent
mayor was justified in ordering the area cleared on the strength alone of its status as a public
plaza as declared by the judicial and legislative authorities. In calling first for the investigation
(which the petitioner saw fit to boycott), he was just scrupulously paying deference to the
requirements of due process, to remove all taint of arbitrariness in the action he was called upon
to take.
Since the occupation of the place in question in 1961 by the original 24 stallholders (whose
number later ballooned to almost 200), it has deteriorated increasingly to the great prejudice of
the community in general. The proliferation of stalls therein, most of them makeshift and of
flammable materials, has converted it into a veritable fire trap, which, added to the fact that it
obstructs access to and from the public market itself, has seriously endangered public safety.
The filthy condition of the talipapa, where fish and other wet items are sold, has aggravated
health and sanitation problems, besides pervading the place with a foul odor that has spread
into the surrounding areas. The entire place is unsightly, to the dismay and embarrassment of
the inhabitants, who want it converted into a showcase of the town of which they can all be
proud. The vendors in the talipapa have also spilled into the street and obstruct the flow of
traffic, thereby impairing the convenience of motorists and pedestrians alike. The regular
stallholders in the public market, who pay substantial rentals to the municipality, are deprived of
a sizable volume of business from prospective customers who are intercepted by the talipapa
vendors before they can reach the market proper. On top of all these, the people are denied the
proper use of the place as a public plaza, where they may spend their leisure in a relaxed and
even beautiful environment and civic and' other communal activities of the town can be held.
The problems caused by the usurpation of the place by the petitioners are covered by the police
power as delegated to the municipality under the general welfare clause. 29 This authorizes the
municipal council "to enact such ordinances and make such regulations, not repugnant to law,
as may be necessary to carry into effect and discharge the powers and duties conferred upon it
by law and such as shall seem necessary and proper to provide for the health and safety,
promote the prosperity, improve the morals, peace, good order, comfort, and convenience of
the municipality and the inhabitants thereof, and for the protection of property therein." This
authority was validly exercised in this case through the adoption of Resolution No. 29, series of
1964, by the municipal council of San Fernando.
Even assuming a valid lease of the property in dispute, the resolution could have effectively
terminated the agreement for it is settled that the police power cannot be surrendered or
bargained away through the medium of a contract. 30 In fact, every contract affecting the public
interest suf fers a congenital infirmity in that it contains an implied reservation of the police
power as a postulate of the existing legal order. 31 This power can be activated at any time to
change the provisions of the contract, or even abrogate it entirely, for the promotion or
protection of the general welfare. Such an act will not militate against the impairment clause,
which is subject to and limited by the paramount police power. 32
We hold that the respondent judge did not commit grave abuse of discretion in denying the
petition for prohibition. On the contrary, he acted correctly in sustaining the right and
responsibility of the mayor to evict the petitioners from the disputed area and clear it of all the
structures illegally constructed therein.
The Court feels that it would have been far more amiable if the petitioners themselves,
recognizing their own civic duty, had at the outset desisted from their original stance and
withdrawn in good grace from the disputed area to permit its peaceful restoration as a public
plaza and parking place for the benefit of the whole municipality. They owned this little sacrifice
to the community in general, which has suffered all these many years because of their
intransigence. Regrettably, they have refused to recognize that in the truly democratic society,
the interests of the few should yield to those of the greater number in def erence to the
principles that the welfare of the people is the supreme law and overriding purpose. We do not
see any altruism here. The traditional ties of sharing are absent here. What we find, sad to say,
is a cynical disdaining of the spirit of "bayanihan," a selfish rejection of the cordial virtues of
"pakikisama" and "pagbibigayan" which are the hallmarks of our people.
WHEREFORE, the petition is DISMISSED. The decision dated July 19, 1982, and the order
dated August 5, 1982, are AFFIRMED. The temporary restraining order dated August 9, 1982, is
LIFTED. This decision is immediately executory. Costs against the petitioners.
25
P R O P E R T Y No. 3 |
SO ORDERED.
     
Notes.—Property already devoted to public use and public service, is outside the commerce
of man and could no longer be subject to private registration. A conveyance of public land in
excess of the Constitutional limitation is malum prohibitum only.
No. L-66575. September 30, 1986.*
ADRIANO MANECLANG, JULIETA, RAMONA, VICTOR, ANTONINA, LOURDES,
TEODORO and MYRNA, all surnamed MANECLANG, petitioners, vs. THE INTERMEDIATE
APPELLATE COURT and ALFREDO MAZA, CORLETO CASTRO, SALOME RODRIGUEZ,
EDUCARDO CUISON, FERNANDO ZARCILLA, MARIANO GABRIEL, NICOMEDES
CORDERO, CLETO PEDROZO, FELIX SALARY and JOSE PANLILIO, respondents.
Civil Law; Contracts; Compromise Agreement; Stipulations in agreement which partake of the nature
of an adjudication of ownership of the fishpond which was originally a creek, null and void, as said
creek is a property of the public domain not susceptible to private appropriation; Creek, concept of.—
The stipulations contained in the Compromise Agreement partake of the nature of an adjudication of
ownership in favor of herein petitioners of the fishpond in dispute, which, as clearly found by the
lower and appellate courts, was originally a creek forming a tributary of the Agno River. Considering
that as held in the case of Mercado vs. Municipal President of Macabebe, 59 Phil. 592 [1934], a creek,
defined as a recess or arm extending from a river and participating in the ebb and flow of the sea, is
a property belonging to the public domain which is not susceptible to private appropriation and
acquisitive prescription, and as a public water, it cannot be registered under the Torrens System in
the name of any individual [Diego v. Court of Appeals, 102 Phil. 494; Mangaldan v. Manaoag, 38 Phil.
455]; and considering further that neither the mere construction of irrigation dikes by the National
Irrigation Administration which prevented the water from flowing in and out of the subject fishpond,
nor its conversion into a fishpond, alter or change the nature of the creek as a property of the public
domain, the Court finds the Compromise Agreement null and void and of no legal effect, the same
being contrary to law and public policy.
Same; Same; Same; Finding that subject body of water is a creek belonging to the public domain, a
factual determination binding on the Supreme Court; Denial of due process, not a case of; Publication
of notice of public bidding suffices as a constructive notice to the whole world .—The finding that the
subject body of water is a creek belonging to the public domain is a factual determination binding
upon this Court. The Municipality of Bugallon, acting thru its dulyconstituted municipal council is
clothed with authority to pass, as it did the two resolutions dealing with its municipal waters, and it
cannot be said that petitioners were deprived of their right to due process as mere publication of t he
notice of the public bidding suffices as a constructive notice to the whole world.
FERNAN, J.:
Petitioners Adriano Maneclang, et. al. filed before the then Court of First Instance of Pangasinan,
Branch XI a complaint for quieting of title over a certain fishpond located within the four [4]
parcels of land belonging to them situated in Barrio Salomague, Bugallon, Pangasinan, and the
annulment of Resolutions Nos. 38 and 95 of the Municipal Council of Bugallon, Pangasinan. The
trial court dismissed the complaint in a decision dated August 15, 1975 upon a finding that the
body of water traversing the titled properties of petitioners is a creek constituting a tributary of
the Agno River; therefore public in nature and not subject to private appropriation. The lower
court likewise held that Resolution No. 38, ordering an ocular inspection of the Cayangan Creek
situated between Barrios Salomague Sur and Salomague Norte, and Resolution No. 95
authorizing public bidding for the lease of all municipal ferries and fisheries, including the
fishpond under consideration, were passed by respondents herein as members of the Municipal
Council of Bugallon, Pangasinan in the exercise of their legislative powers.
Petitioners appealed said decision to the Intermediate Appellate Court, which affirmed the same
on April 29, 1983. Hence, this petition for review on certiorari.
Acting on the petition, the Court required the respondents to comment thereon. However,
before respondents could do so, petitioners manifested that for lack of interest on the part of
respondent Alfredo Maza, the awardee in the public bidding of the fishpond, the parties desire to
amicably settle the case by submitting to the Court a Compromise Agreement praying that
judgment be rendered recognizing the ownership of petitioners over the land the body of water
found within their titled properties, stating therein, among other things, that “to pursue the
case, the same will not amount to any benefit of the parties, on the other hand it is to the
advantage and benefit of the municipality if the ownership of the land and the water found
therein belonging to petitioners be recognized in their favor as it is now clear that after the
National Irrigation Administration [NIA] had built the dike around the land, no water gets in or
out of the land.1
The stipulations contained in the Compromise Agreement partake of the nature of an
adjudication of ownership in favor of herein petitioners of the fishpond in dispute, which, as
clearly found by the lower and appellate courts, was originally a creek forming a tributary of the
Agno River. Considering that as held in the case of Mercado vs. Municipal President of
Macabebe, 59 Phil. 592 [1934], a creek, defined as a recess or arm extending from a river and
participating in the ebb and flow of the sea, is a property belonging to the public domain which
is not susceptible to private appropriation and acquisitive prescription, and as a public water, it
cannot be registered under the Torrens System in the name of any individual [Diego v. Court of
Appeals, 102 Phil. 494; Mangaldan v. Manaoag, 38 Phil. 455]; and considering further that
neither the mere construction of irrigation dikes by the National Irrigation Administration which
prevented the water from flow-ing in and out of the subject fishpond, nor its conversion into a
fishpond, alter or change the nature of the creek as a property of the public domain, the Court
finds the Compromise Agreement null and void and of no legal effect, the same being contrary
to law and public policy.
26
P R O P E R T Y No. 3 |

The finding that the subject body of water is a creek belonging to the public domain is a factual
determination binding upon this Court. The Municipality of Bugallon, acting thru its duly-
constituted municipal council is clothed with authority to pass, as it did the two resolutions
dealing with its municipal waters, and it cannot be said that petitioners were deprived of their
right to due process as mere publication of the notice of the public bidding suffices as a
constructive notice to the whole world.

IN VIEW OF THE FOREGOING, the Court Resolved to set aside the Compromise Agreement
and declare the same null and void for being contrary to law and public policy. The Court further
resolved to DISMISS the instant petition for lack of merit.
SO ORDERED.
    
Notes.—The law applicable to the lease of municipal fisheries is the provisions of Sections
67 and 69 of Act No. 4003. The Fisheries Act (Act No. 4003) authorizes the municipality to
grant, for purposes of profit, the exclusive privileges of erecting fish corrals or operating
fishponds within any definite portion or areas of the municipal waters for a period not exceeding
five years to the highest bidder in a pubic bidding held, where the call for bid has specified the
period of the lease. (San Buenaventura vs. Municipality of San Jose, Camarines Sur, 13 SCRA
90.)
27
P R O P E R T Y No. 3 |
No. L-57461. September 11, 1987. *
THE DIRECTOR OF LANDS, petitioner, vs. MANILA ELECTRIC COMPANY and HON.
RIZALINA BONIFACIO VERA, as Presiding Judge, Court of First Instance of Rizal,
Pasig, Branch XXIII, respondents.
Civil Law; Land Registration; Public Lands; A corporation may apply for registration of titles to public
land.—The Director of Lands interposed this petition raising the issue of whether or not a corporation
may apply for registration of title to land. After comments were filed by the respondents, the Court
gave the petition due course. The legal issue raised by the petitioner Director of Lands has been
squarely dealt with in two recent cases [The Director of Lands v. Intermediate Appellate Court and
Acme Plywood & Veneer Co., Inc., etc., No. L-73002 (December 29, 1986), 146 SCRA 509. The
Director of Lands v. Hon. Bengzon and Dynamarine Corporation, etc., No. 54045 (July 28, 1987)], and
resolved in the affirmative. There can be no different answer in the case at bar.
Same; Same; Same; Doctrine that open, exclusive and undisputed possession of alienable public land
for the period prescribed by law creates the legal fiction whereby the land ceases to be public land
and becomes private property. —In the Acme decision, this Court upheld the doctrine that "open,
exclusive and undisputed possession of alienable public land for the period prescribed by law creates
the legal fiction whereby the land, upon completion of the requisite period ipso jure and without the
need of judicial or other sanction, ceases to be public land and becomes private property."
Same; Same; Same; Constitutional Law; If the land was already private at the time Meralco bought it
from the seller, then the prohibition in the 1973 Constitution against corporations holding alienable
lands of the public domain except by lease does not apply. —Coming to the case at bar, if the land
was already private at the time Meralco bought it from Natividad, then the prohibition in the 1973
Constitution against corporations holding alienable lands of the public domain except by lease (1973
Const., Art. XIV, Sec. 11) does not apply.
Same; Same; Fact that the confirmation proceedings were instituted by a corporation is accidental
and does not affect the substance and merits of the right of ownership sought to be confirmed;
Where the sellers could have had their title confirmed, only a rigid subservience to the letter of the
law would deny the private corporation the right to register its property which was validly acquired .—
As ruled in the Acme case, the fact that the confirmation proceedings were instituted by a corporation
is simply another accidental circumstance, "productive of a defect hardly more than procedural and in
nowise affecting the substance and merits of the right of ownership sought to be confirmed in said
proceedings." Considering that it is not disputed that the Natividads could have had their title
confirmed, only a rigid subservience to the letter of the law would deny private respondent the right
to register its property which was validly acquired.
GUTIERREZ, JR., J., dissenting:
Civil Law; Land Registration; Public Lands; Sec. 3, Art. XII of the 1973 Constitution which
prohibits private corporations or associations from holding alienable lands of the public domain
except by lease is circumvented when corporations are allowed to apply for judicial confirmation
of imperfect titles to public lands. —lt is my view that Article XII, Section 3 of the Constitution
which prohibits private corporations or associations from holding alienable lands of the public
domain except by lease is circumvented when we allow corporations to apply for judicial
confirmation of imperfect titles to public land.
CORTES, J.:
This is an appeal by certiorari of a decision of the respondent Judge in Land Registration Case
No. N-10317, LRC Record No. N-54803 entitled "In Re: Application for Registration of Title,
Manila Electric Company, applicant," dated May 29, 1981.
The facts are not disputed. Manila Electric Company filed an amended application for registration
of a parcel of land located in Taguig, Metro Manila on December 4, 1979. On August 17, 1976,
applicant acquired the land applied for registration by purchase from Ricardo Natividad (Exhibit
E) who in turn acquired the same from his father Gregorio Natividad as evidenced by a Deed of
Original Absolute Sale executed on December 28, 1970 (Exhibit E). Applicant's predecessors-in-
interest have possessed the property under the concept of an owner for more than 30 years.
The property was declared for taxation purposes under the name of the applicant (Exhibit I) and
the taxes due thereon have been paid (Exhibits J and J-1).
On May 29, 1981 respondent Judge rendered a decision ordering the registration of the property
in the name of the private respondent. The Director of Lands interposed this petition raising the
issue of whether or not a corporation may apply for registration of title to land. After comments
were filed by the respondents, the Court gave the petition due course. The legal issue raised by
the petitioner Director of Lands has been squarely dealt with in two recent cases [The Director
of Lands v. Intermediate Appellate Court and Acme Plywood & Veneer Co., Inc., etc., No. L-
73002 (December 29, 1986), 146 SCRA 509. The Director of Lands v. Hon. Bengzon and
Dynamarine Corporation, etc., No. 54045 (July 28, 1987)], and resolved in the affirmative. There
can be no different answer in the case at bar.
In the Acme decision, this Court upheld the doctrine that "open, exclusive and undisputed
possession of alienable public land for the period prescribed by law creates the legal fiction
whereby the land, upon completion of the requisite period ipso jure and without the need of
judicial or other sanction, ceases to be public land and becomes private property."
As the Court said in that case:
Nothing can more clearly demonstrate the logical inevitability of considering possession of
public land which is of the character and duration prescribed by statute as the equivalent of
an express grant from the State than the dictum of the statute itself that the possessor(s) "x
x x shall be conclusively presumed to have performed all the conditions essential to a
Government grant and shall be entitled to a certificate of title x x x." No proof being
admissible to overcome a conclusive presumption, confirmation proceedings would in truth
be little more than a formality, at the most limited to ascertaining whether the possession
claimed is of the required character and length of time; and registration thereunder would
not confer title, but simply recognize a title already vested. The proceedings would not
originally convert the land from public to private land, but only confirm such a conversion
already affected (sic) from the moment the required period of possession became complete.
Coming to the case at bar, if the land was already private at the time Meralco bought it from
Natividad, then the prohibition in the 1973 Constitution against corporations holding alienable
lands of the public domain except by lease (1973 Const., Art. XIV, Sec. 11) does not apply.
28
P R O P E R T Y No. 3 |

Petitioner, however, contends that a corporation is not among those that may apply for
confirmation of title under Section 48 of Commonwealth Act No. 141, the Public Land Act.

As ruled in the Acme case, the fact that the confirmation proceedings were instituted by a
corporation is simply another accidental circumstance, "productive of a defect hardly more than
procedural and in nowise affecting the substance and merits of the right of ownership sought to
be conf irmed in said proceedings." Considering that it is not disputed that the Natividads could
have had their title confirmed, only a rigid subservience to the letter of the law would deny
private respondent the right to register its property which was validly acquired.

WHEREFORE, the petition is DENIED. The questioned decision of the respondent Judge is
AFFIRMED.
SO ORDERED.
     Fernan (Chairman), Feliciano and Bidin, JJ., concur.
     Gutierrez, Jr., J., please see dissent.

GUTIERREZ, JR., J.: DISSENTING OPINION

It is my view that Article XII, Section 3 of the Constitution which prohibits private corporations
or associations from holding alienable lands of the public domain except by lease is
circumvented when we allow corporations to apply for judicial confirmation of imperfect titles to
public land. I, therefore, reiterate my vote in Meralco v. Castro Bartolome, (114 SCRA 799),
Republic v. Villanueva and Iglesia ni Cristo (114 SCRA 875) and Director of Lands v.
Intermediate Appellate Court (146 SCRA 509), and accordingly, dissent from the majority
opinion in this case.
Petition denied. Decision affirmed.

Notes.—Exclusive supervision and control of disposition of public lands vested with a

Bureau of Lands. (De Guzman vs. Director of Lands, 121 SCRA 13).
29
P R O P E R T Y No. 3 |
G.R. No. 92013. July 25, 1990. *
SALVADOR H. LAUREL, petitioner, vs. RAMON GARCIA, as head of the Asset
Privatization Trust, RAUL MANGLAPUS, as Secretary of Foreign Affairs, and
CATALINO MACARAIG, as Executive Secretary, respondents.
G.R. No. 92047. July 25, 1990.*
DIONISIO S. OJEDA, petitioner, vs. EXECUTIVE SECRETARY MACARAIG, JR., ASSETS
PRIVATIZATION TRUST CHAIRMAN RAMON T. GARCIA, AMBASSADOR RAMON DEL ROSARIO,
et al., as members of the PRINCIPAL AND BIDDING COMMITTEES ON THE
UTILIZATION/DISPOSITION OF PHILIPPINE GOVERNMENT PROPERTIES IN JAPAN,
respondents.
Civil Law; Property; Roppongi property is of public dominion. —There can be no doubt that it is of
public dominion unless it is convincingly shown that the property has become patrimonial. This, the
respondents have failed to do.
Same; Same; Same; As property of public dominion, the Roppongi lot is outside the commerce of
man and can not be alienated. —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 appropriation.
Same; Same; Same; Roppongi property correctly classified under paragraph 2 of Article 420 of the
Civil Code as property belonging to the State and intended for some public service. —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.
Same; Same; Same; 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. —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.
Same; Same; Same; Same; 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. —The
respondents enumerate various pronouncements by concerned public officials insinuating a change of
intention. We emphasize, however, that 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. Lazaro, 166 SCRA 368
[1988]. Abandonment must be a certain and positive act based on correct legal premises.
Same; Same; Same; Same; A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not
relinquishment of the Roppongi property’s original purpose. —A mere transfer of the Philippine
Embassy to Nampeidai in 1976 is not relinquishment of the Roppongi property’s original purpose.
Even the failure by the government to repair the building in Roppongi is not abandonment since as
earlier stated, there simply was a shortage of government funds. 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.
Same; Same; Same; Same; Republic Act No. 6657 (the CARP Law) does not authorize the Executive
Department to sell the Roppongi property. —Section 63 (c) of Rep. Act No. 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.
Rep. Act No. 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 Executive Order No. 299. Obviously any property outside of
the commerce of man cannot be tapped as a source of funds.
Administrative Law; Political Law; President can not convey valuable real property of the government
on his or her own sole will; Conveyance must be authorized and approved by a law enacted by
Congress.—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.
Same; Same; Same; Resolution No. 55 of the Senate dated June 8, 1989 asking for the deferment of
the sale of the Roppongi property does not withdraw the property from public domain much less
authorize its sale.—Resolution No. 55 of the Senate dated June 8, 1989, asking for the deferment of
the sale of the Roppongi property does not withdraw the property from public domain much less
authorize its sale. It is a mere resolution; it is not a formal declaration abandoning the public
character of the Roppongi property. In fact, the Senate Committee on Foreign Relations is conducting
hearings on Senate Resolution No. 734 which raises serious policy considerations and calls for a fact-
finding investigation of the circumstances behind the decision to sell the Philippine government
properties in Japan.
CRUZ, J., Concurring
Property.—The sale of the property may be authorized only by Congress through a duly enacted
statute and there is no such law.
PADILLA, J., Concurring Statement
Property.—It is Congress which can decide and declare the conversion of Roppongi from a public
dominion property to a state patrimonial property. Congress has made no such decision or
declaration. It is clear that the President cannot sell or order the sale of Roppongi thru public
bidding or otherwise without a prior congressional approval, first, converting Roppongi from a
public dominion property to a State patrimonial property and second, authorizing the President
to sell the same.
FELICIANO, J., Dissenting
30
P R O P E R T Y No. 3 |
Property.—The only requirement which is legitimately imposable is that the intent to convert
must be reasonably clear from a consideration of the act or acts of the Executive Department or
of the Legislative Department which are said to have effected such conversion.
Same.—Assuming that the majority opinion is right in saying that Executive Order No. 296 is
insufficient to authorize the sale of the Roppongi property; it is here submitted with respect that
Executive Order No. 296 is more than sufficient to indicate an intention to convert the property
previously devoted to public service into patrimonial property that is capable of being sold or
otherwise dispose of.
SARMIENTO, J., Concurring:
Property; To turn public property to patrimonial, a legislative or executive declaration is
necessary, not were non-use thereof.—In holding that there is “a need for a law or formal
declaration to withdraw the Roppongi property from public domain to make it alienable and a
land for legislative authority to allow the sale of the property,” the majority lays stress to the
fact that: (1) An affirmative act—executive or legislative—is necessary to reclassify property of
the public dominion, and (2) a legislative decree is required to make it alienable. It also clears
the uncertainties brought about by earlier interpretations that the nature of property—whether
public or patrimonial—is predicated on the manner it is actually used, or not used, and in the
same breath, repudiates the Government’s position that the continuous non-use of “Roppongi”,
among other arguments, for “diplomatic purposes”, has turned it into State patrimonial property.
GUTIERREZ, JR., J.:
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 306
Roppongi, 5-Chome Minato-ku, Tokyo, Japan scheduled on February 21, 1990. We granted the
prayer for a temporary restraining order effective February 20, 1990. One of the petitioners (in
G.R. No. 92047) likewise prayes for a writ of mandamus 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.
The oral arguments in G.R. No. 92013, Laurel v. Garcia, et al. were heard by the Court on March
13, 1990. After G.R. No. 92047, Ojeda v. Secretary Macaraig, et al. was filed, the respondents
were required to file a comment by the Court’s resolution dated February 22, 1990. The two
petitions were consolidated on March 27, 1990 when the memoranda of the parties in the Laurel
case were deliberated upon.
The Court could not act on these cases immediately because the respondents filed a motion for
an extension of thirty (30) days to file comment in G.R. No. 92047, followed by a second motion
for an extension of another thirty (30) days which we granted on May 8, 1990, a third motion
for extension of time granted on May 24, 1990 and a fourth motion for extension of time which
we granted on June 5, 1990 but calling the attention of the respondents to the length of time
the petitions have been pending. After the comment was filed, the petitioner in G.R. No. 92047
asked for thirty (30) days to file a reply. We noted his motion and resolved to decide the two (2)
cases.
I
The subject property in this case is one of the four (4) properties in Japan acquired by the
Philippine government under the Reparations Agreement entered into with Japan on May 9,
1956, the other lots being:
(1)The Nampeidai Property at 11-24 Nampeidai-machi, Shibuya-ku, Tokyo which has an area
of approximately 2,489.96 square meters, and is at present the site of the Philippine Embassy
Chancery;
(2)The Kobe Commercial Property at 63 Naniwa-cho, Kobe, with an area of around 764.72
square meters and categorized as a commercial lot now being used as a warehouse and
parking lot for the consulate staff; and
(3)The Kobe Residential Property at 1-980-2 Obanoyamacho, Shinohara, Nada-ku, Kobe, a
residential lot which is now vacant.
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 twenty (20) years in accordance with annual schedules of procurements to be fixed by the
Philippine and Japanese governments (Article 2, Reparations Agreement). Rep. Act No. 1789,
the Reparations Law, prescribes the national policy on procurement and utilization of reparations
and development loans. The procurements are divided into those for use by the government
sector and those for private parties in projects as the then National Economic Council shall
determine. Those intended for the private sector shall be made available by sale to Filipino
citizens or to one hundred (100%) percent Filipino-owned entities in national development
projects.
The Roppongi property was acquired from the Japanese government under the Second Year
Schedule and listed under the heading “Government Sector”, through Reparations Contract No.
300 dated June 27, 1958. The Roppongi property consists of the land and building “for the
Chancery of the Philippine Embassy” (Annex M-D to Memorandum for Petitioner, p. 503). As
intended, it became the site of the Philippine Embassy until the latter was transferred to
Nampeidai on July 22, 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.
A proposal was presented to President Corazon C. Aquino by former Philippine Ambassador to
Japan, Carlos J. Valdez, to make the property the subject of a lease agreement with a Japanese
firm—Kajima Corporation—which shall construct two (2) buildings in Roppongi and one (1)
building in Nampeidai and renovate the present Philippine Chancery in Nampeidai. The
consideration of the construction would be the lease to the foreign corporation of one (1) of the
buildings to be constructed in Roppongi and the two (2) buildings in Nampeidai. The other
building in Roppongi shall then be used as the Philippine Embassy Chancery. At the end of the
lease period, all the three leased buildings shall be occupied and used by the Philippine
31
P R O P E R T Y No. 3 |
government. No change of ownership or title shall occur. (See Annex “B” to Reply to Comment) property is classified as one of public dominion, and not of private ownership under Article 420
The Philippine government retains the title all throughout the lease period and thereafter. of the Civil Code (See infra).
However, the government has not acted favorably on this proposal which is pending approval
The petitioner submits that the Roppongi property comes under “property intended for public
and ratification between the parties. Instead, on August 11, 1986, President Aquino created a
service” in paragraph 2 of the above provision. He states that being one of public dominion, no
committee to study the disposition/utilization of Philippine government properties in Tokyo and
ownership by any one can attach to it, not even by the State. The Roppongi and related
Kobe, Japan through Administrative Order No. 3, followed by Administrative Orders Numbered
properties were acquired for “sites for chancery, diplomatic, and consular quarters, buildings and
3-A, B, C and D.
other improvements” (Second Year Reparations Schedule). The petitioner states that they
continue to be intended for a necessary service. They are held by the State in anticipation of an
On July 25, 1987, the President issued Executie Order No. 296 entitling non-Filipino citizens or
opportune use. (Citing 3 Manresa 65-66). Hence, it cannot be appropriated, is outside the
entities to avail of reparations’ capital goods and services in the event of sale, lease or
commerce of man, or to put it in more simple terms, it cannot be alienated nor be the subject
disposition. The four properties in Japan including the Roppongi were specifically mentioned in
matter of contracts (Citing Municipality of Cavite v. Rojas, 30 Phil. 20 [1915]). Noting the non-
the first “Whereas” clause.
use of the Roppongi property at the moment, the petitioner avers that the same remains
Amidst opposition by various sectors, the Executive branch of the government has been property of public dominion so long as the government has not used it for other purposes nor
pushing, with great vigor, its decision to sell the reparations properties starting with the adopted any measure constituting a removal of its original purpose or use.
Roppongi lot. The property has twice been set for bidding at a minimum floor price of $225
The respondents, for their part, refute the petitioner’s contention by saying that the subject
million. The first bidding was a failure since only one bidder qualified. The second one, after
property is not governed by our Civil Code but by the laws of Japan where the property is
postponements, has not yet materialized. The last scheduled bidding on February 21, 1990 was
located. They rely upon the rule of lex situs which is used in determining the applicable law
restrained by his Court. Later, the rules on bidding were changed such that the $225 million
regarding the acquisition, transfer and devolution of the title to a property. They also invoke
floor price became merely a suggested floor price.
Opinion No. 21, Series of 1988, dated January 27, 1988 of the Secretary of Justice which used
The Court finds that each of the herein petitions raises distinct issues. The petitioner in G.R. No. the lex situs in explaining the inapplicability of Philippine law regarding a property situated in
92013 objects to the alienation of the Roppongi property to anyone while the petitioner in G.R. Japan.
No. 92047 adds as a principal objection the alleged unjustified bias of the Philippine government
The respondents add that even assuming for the sake of argument that the Civil Code is
in favor of selling the property to non-Filipino citizens and entities. These petitions have been
applicable, the Roppongi property has ceased to become property of public dominion. It has
consolidated and are resolved at the same time for the objective is the same—to stop the sale of
become patrimonial property because it has not been used for public service or for diplomatic
the Roppongi property.
purposes for over thirteen (13) years now (Citing Article 422, Civil Code) and because the
The petitioner in G.R. No. 92013 raises the following issues: intention by the Executive Department and the Congress to convert it to private use has been
(1)Can the Roppongi property and others of its kind be alienated by the Philippine manifested by overt acts, such as, among others: (1) the transfer of the Philippine Embassy to
Government?; and Nampeidai; (2) the issuance of administrative orders for the possibility of alienating the four
(2)Does the Chief Executive, her officers and agents, have the authority and jurisdiction, to government properties in Japan; (3) the issuance of Executive Order No. 296; (4) the enactment
sell the Roppongi property? by the Congress of Rep. Act No. 6657 [the Comprehensive Agrarian Reform Law] on June 10,
1988 which contains a provision stating that funds may be taken from the sale of Philippine
Petitioner Dionisio Ojeda in G.R. No. 92047, apart from questioning the authority of the
properties in foreign countries; (5) the holding of the public bidding of the Roppongi property
government to alienate the Roppongi property assails the constitutionality of Executive Order
but which failed; (6) the deferment by the Senate in Resolution No. 55 of the bidding to a future
No. 296 in making the property available for sale to nonFilipino citizens and entities. He also
date; thus an acknowledgment by the Senate of the government’s intention to remove the
questions the bidding procedures of the Committee on the Utilization or Disposition of Philippine
Roppongi property from the public service purpose; and (7) the resolution of this Court
Government Properties in Japan for being discriminatory against Filipino citizens and Filipino-
dismissing the petition in Ojeda v. Bidding Committee, et al., G.R. No. 87478 which sought to
owned entities by denying them the right to be informed about the bidding requirements.
enjoin the second bidding of the Roppongi property scheduled on March 30, 1989.
II
III
In G.R. No. 92013, petitioner Laurel asserts that the Roppongi property and the related lots
In G.R. No. 94047, petitioner Ojeda once more asks this Court to rule on the constitutionality of
were acquired as part of the reparations from the Japanese government for diplomatic and
Executive Order No. 296. He had earlier filed a petition in G.R. No. 87478 which the Court
consular use by the Philippine government. Vice-President Laurel states that the Roppongi
dismissed on August 1, 1989. He now avers that the executive order contravenes the
32
P R O P E R T Y No. 3 |
constitutional mandate to conserve and develop the national patrimony stated in the Preamble
of the 1987 Constitution. It also allegedly violates:
(1)The reservation of the ownership and acquisition of alienable lands of the public domain
to Filipino citizens. (Sections 2 and 3, Article XII, Constitution; Sections 22 and 23 of
Commonwealth Act 141).
(2)The preference for Filipino citizens in the grant of rights, privileges and concessions
covering the national economy and patrimony (Section 10, Article VI, Constitution);
(3) The protection given to Filipino enterprises against unfair competition and trade
practices;
(4)The guarantee of the right of the people to information on all matters of public concern
(Section 7, Article III, Constitution);
(5)The prohibition against the sale to non-Filipino citizens or entities not wholly owned by
Filipino citizens of capital goods received by the Philippines under the Reparations Act
(Sections 2 and 12 of Rep. Act No. 1789); and
(6)The declaration of the state policy of full public disclosure of all transactions involving
public interest (Section 28, Article II, Constitution).
Petitioner Ojeda warns that the use of public funds in the execution of an unconstitutional
executive order is a misapplication of public funds. He states that since the details of the bidding
for the Roppongi property were never publicly disclosed until February 15, 1990 (or a few days
before the scheduled bidding), the bidding guidelines are available only in Tokyo, and the
accomplishment of requirements and the selection of qualified bidders should be done in Tokyo,
interested Filipino citizens or entities owned by them did not have the chance to comply with
Purchase Offer Requirements on the Roppongi. Worse, the Roppongi shall be sold for a
minimum price of $225 million from which price capital gains tax under Japanese law of about
50 to 70% of the floor price would still be deducted.
IV
The petitioners and respondents in both cases do not dispute the fact that the Roppongi site and
the three related properties were acquired through reparations agreements, 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.
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.
There can be no doubt that it is of public dominion unless it is convincingly shown that the
property has become patrimonial. This, the respondents have failed to do.
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 appropriation. (Taken from 3 Manresa, 66-69; cited in
Tolentino, Commentaries on the Civil Code of the Philippines, 1963 Edition, Vol. II, p. 26).
The applicable provisions of the Civil Code are:
“ART. 419. Property is either of public dominion or of private ownership.
“ART. 420. The following things are property of public dominion:
“(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.
“ART. 421. All other property of the State, which is not of the character stated in the
preceding article, is patrimonial property.”
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.
Has the intention of the government regarding the use of the property been changed because
the lot has been idle for some years? Has it become patrimonial?
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]).
The respondents enumerate various pronouncements by concerned public officials insinuating a
change of intention. We emphasize, however, that 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.
Lazaro, 166 SCRA 368 [1988]). Abandonment must be a certain and positive act based on
correct legal premises.
A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not relinquishment of the
Roppongi property’s original purpose. Even the failure by the government to repair the building
in Roppongi is not abandonment since as earlier stated, there simply was a shortage of
government funds. 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.
Executive Order No. 296, though its title declares an “authority to sell”, does not have a
provision in its text expressly authorizing the sale of the four properties procured from Japan for
the government sector. The executive order does not declare that the properties lost their public
33
P R O P E R T Y No. 3 |
character. It merely intends to make the properties available to foreigners and not to Filipinos
alone in case of a sale, lease or other disposition. It merely eliminates the restriction under Rep.
Act No. 1789 that reparations goods may be sold only to Filipino citizens and one hundred
(100%) percent Filipino-owned entities. The text of Executive Order No. 296 provides:
“Section 1. The provisions of Republic Act No. 1789, as amended, and of other laws to
the contrary notwithstanding, the abovementioned properties can be made available for
sale, lease or any other manner of disposition to non-Filipino citizens or to entities
owned by non-Filipino citizens.”
Executive Order No. 296 is based on the wrong premise or assumption that the Roppongi and
the three other properties were earlier converted into alienable real properties. As earlier stated,
Rep. Act No. 1789 differentiates the procurements for the government sector and the private
sector (Sections 2 and 12, Rep. Act No. 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 Executive Order No. 296.
Section 63 (c) of Rep. Act No. 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. Rep Act No.
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 Executive Order No. 299. Obviously any property outside of
the commerce of man cannot be tapped as a source of funds.
The respondents try to get around the public dominion character of the Roppongi property by
insisting that Japanese law and not our Civil Code should apply.
It is exceedingly strange why our top government officials, of all people, should be the ones to
insist that in the sale of extremely valuable government property, Japanese law and not
Philippine law should prevail. The Japanese law—its coverage and effects, when enacted, and
exceptions to its provisions—is not presented to the Court. It is simply asserted that the lex loci
rei sitae or Japanese law should apply without stating what that law provides. It is assumed on
faith that Japanese law would allow the sale.
We see no reason why a conflict of law rule should 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 (See Salonga, Private International Law, 1981 ed., pp. 377-
383); 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 instant case, none of the above elements exists.
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.
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. We see no point in belaboring whether or not this opinion is
correct. Why should we discuss who can acquire the Roppongi lot when there is no showing that
it can be sold?
The subsequent approval on October 4, 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.
Assuming for the sake of argument, however, that the Roppongi property is no longer of public
dominion, there is another obstacle to its sale by the respondents.
There is no law authorizing its conveyance.
Section 79 (f) of the Revised Administrative Code of 1917 provides:
“Section 79 (f). Conveyances and contracts to which the Government is a party. —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 one hundred thousand pesos, 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.” (Italics supplied)
The requirement has been retained in Section 48, Book I of the Administrative Code of 1987
(Executive Order No. 292).
“SEC. 48. Official Authorized to Convey Real Property. —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.
34
P R O P E R T Y No. 3 |
“(2)For property belonging to the Republic of the Philippines but titled in the name of any The Roppongi property is not just like any piece of property. It was given to the Filipino people
political subdivision or of any corporate agency or instrumentality, by the executive head of in reparation for the lives and blood of Filipinos who died and suffered during the Japanese
the agency or instrumentality.” (Italics supplied) 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
It is not for the President to convey valuable real property of the government on his or her own
Tokyo properties are a monument to the bravery and sacrifice of the Filipino people in the face
sole will. Any such conveyance must be authorized and approved by a law enacted by the
of an invader; like the monuments of Rizal, Quezon, and other Filipino heroes, we do not expect
Congress. It requires executive and legislative concurrence.
economic or financial benefits from them. But who would think of selling these monuments?
Resolution No. 55 of the Senate dated June 8, 1989, asking for the deferment of the sale of the Filipino honor and national dignity dictate that we keep our properties in Japan as memorials to
Roppongi property does not withdraw the property from public domain much less authorize its the countless Filipinos who died and suffered. Even if we should become paupers we should not
sale. It is a mere resolution; it is not a formal declaration abandoning the public character of the think of selling them. For it would be as if we sold the lives and blood and tears of our
Roppongi property. In fact, the Senate Committee on Foreign Relations is conducting hearings countrymen.” (Rollo-G.R. No. 92013, p. 147)
on Senate Resolution No. 734 which raises serious policy considerations and calls for a fact- The petitioner in G.R. No. 92047 also states:
finding investigation of the circumstances behind the decision to sell the Philippine government
“Roppongi is no ordinary property. It is one ceded by the Japanese government in atonement
properties in Japan.
for its past belligerence, for the valiant sacrifice of life and limb and for deaths, physical
The resolution of this Court in Ojeda v. Bidding Committee, et al., supra, did not pass upon the dislocation and economic devastation the whole Filipino people endured in World War II.
constitutionality of Executive Order No. 296. Contrary to respondents’ assertion, we did not
“It is for what it stands for, and for what it could never bring back to life, that its significance
uphold the authority of the President to sell the Roppongi property. The Court stated that the
today remains undimmed, inspite of the lapse of 45 years since the war ended, inspite of the
constitutionality of the executive order was not the real issue and that resolving the
passage of 32 years since the property passed on to the Philippine government.
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 “Roppongi is a reminder that cannot—should not—be dissipated. x x x.”
the Roppongi property.” In emphasizing that “the decision of the Executive to dispose of the
It is indeed true that the Roppongi property is valuable not so much because of the inflated
Roppongi property to finance the CARP x x x cannot be questioned” in view of Section 63 (c) of
prices fetched by real property in Tokyo but more so because of its symbolic value to all Filipinos
Rep. Act No. 6657, the Court did not acknowledge the fact that the property became alienable
—veterans and civilians alike. Whether or not the Roppongi and related properties will eventually
nor did it indicate that the President was authorized to dispose of the Roppongi property. The
be sold is a policy determination where both the President and Congress must concur.
resolution should be read to mean that in case the Roppongi property is re-classified to be
Considering the properties’ importance and value, the laws on conversion and disposition of
patrimonial and alienable by authority of law, the proceeds of a sale may be used for national
property of public dominion must be faithfully followed.
economic development projects including the CARP. Moreover, the sale in 1989 did not
materialize. The petitions before us question the proposed 1990 sale of the Roppongi property. WHEREFORE, IN VIEW OF THE FOREGOING, the petitions are GRANTED. A writ of prohibition is
We are resolving the issues raised in these petitions, not the issues raised in 1989. issued enjoining the respondents from proceeding with the sale of the Roppongi property in
Tokyo, Japan. The February 20, 1990 Temporary Restraining Order is made PERMANENT.
Having declared a need for a law or formal declaration to withdraw the Roppongi property from
public domain to make it alienable and a need for legislative authority to allow the sale of the SO ORDERED.
property, we see no compelling reason to tackle the constitutional issues raised by petitioner      
Ojeda.
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]).
The petitioner in G.R. No. 92013 states why the Roppongi property should not be sold:
35
P R O P E R T Y No. 3 |
G.R. No. 97764. August 10, 1992. *
LEVY D. MACASIANO, Brigadier General/PNP Superintendent, Metropolitan Traffic
Command, petitioner, vs. HONORABLE ROBERTO C. DIOKNO, Presiding Judge, Branch
62, Regional Trial Court of Makati, Metro Manila, MUNICIPALITY OF PARAÑAQUE,
METRO MANILA, PALANYAG KILUSANG BAYAN FOR SERVICE, respondents.
Civil Law; Property; Properties of the local government which are devoted to public service are
deemed public and are under the absolute control of Congress. —Based on the foregoing, J.
Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena streets are local roads used for
public service and are therefore considered public properties of respondent municipality.
Properties of the local government which are devoted to public service are deemed public and
are under the absolute control of Congress (Province of Zamboanga del Norte v. City of
Zamboanga, L-24440, March 28, 1968, 22 SCRA 1334). Hence, local governments have no
authority whatsoever to control or regulate the use of public properties unless specific authority
is vested upon them by Congress.
Same; Same; Properties of public dominion devoted to public use and made available to the
public in general are outside the commerce of men and cannot be disposed of or leased by the
local government unit to private persons. —However, the aforestated legal provision which gives
authority to local government units to close roads and other similar public places should be read
and interpreted in accordance with basic principles already established by law. These basic
principles have the effect of limiting such authority of the province, city or municipality to close a
public street or thoroughfare. Article 424 of the Civil Code lays down the basic principle that
properties of public dominion devoted to public use and made available to the public in general
are outside the commerce of man and cannot be disposed of or leased by the local government
unit to private persons. Aside from the requirement of due process which should be complied
with before closing a road, street or park, the closure should be for the sole purpose of
withdrawing the road or other public property from public use when circumstances show that
such property is no longer intended or necessary for public use or public service. When it is
already withdrawn from public use, the property then becomes patrimonial property of the local
government unit concerned (Article 422, Civil Code; Cebu Oxygen, etc. et al. v. Bercilles, et al.,
G.R. No. L-40474, August 29, 1975, 66 SCRA 481). It is only then that the respondent
municipality can “use or convey them for any purpose for which other real property belonging to
the local unit concerned might be lawfully used or conveyed” in accordance with the last
sentence of Section 10, Chapter II of Blg. 337, known as Local Government Code.
Same; Same; Roads and streets which are available to the public in general and ordinarily used
for vehicular traffic are still considered public property devoted to public use. —However, those
roads and streets which are available to the public in general and ordinarily used for vehicular
traffic are still considered public property devoted to public use. In such case, the local
government has no power to use it for another purpose or to dispose of or lease it to private
persons.
Constitutional Law; Local Government Code; Batas Pambansa Blg. 337 known as Local
Government Code already repealed by Republic Act No. 7160 known as Local Government Code
of 1991.—The instant case as well as the Dacanay case, involves an ordinance which is void and
illegal for lack of basis and authority in laws applicable during its time. However, at this point,
We find it worthy to note that Batas Pambansa Blg. 337, known as Local Government Code, has
already been repealed by Republic Act No. 7160 known as Local Government Code of 1991
which took effect on January 1, 1992. Section 5(d) of the new Code provides that rights and
obligations existing on the date of effectivity of the new Code and arising out of contracts or any
other source of prestation involving a local government unit shall be governed by the original
terms and conditions of the said contracts or the law in force at the time such rights were
vested.
PETITION for certiorari to review the decision of the Regional Trial Court of Makati, Br. 62.
Diokno, J.
The facts are stated in the opinion of the Court.
     Ceferino, Padua Law Office for Palanyag Kilusang Bayan for service.
     Manuel de Guia for Municipality of Parañaque.
MEDIALDEA, J.:
This is a petition for certiorari under Rule 65 of the Rules of Court seeking the annulment of the
decision of the Regional Trial Court of Makati, Branch 62, which granted the writ of preliminary
injunction applied for by respondents Municipality of Parañaque and Palanyag Kilusang Bayan for
Service (Palanyag for brevity) against petitioner herein.
The antecedent facts are as follows:
On June 13, 1990, the respondent municipality passed Ordinance No. 86, Series of 1990 which
authorized the closure of J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena
Streets located at Baclaran, Parañaque, Metro Manila and the establishment of a flea market
thereon. The said ordinance was approved by the municipal council pursuant to MMC Ordinance
No. 2, Series of 1979, authorizing and regulating the use of certain city and/or municipal streets,
roads and open spaces within Metropolitan Manila as sites for flea market and/or vending areas,
under certain terms and conditions.
On July 20, 1990, the Metropolitan Manila Authority approved Ordinance No. 86, s. 1990 of the
municipal council of respondent municipality subject to the following conditions:
1.That the aforenamed streets are not used for vehicular traffic, and that the majority of the
residents do not oppose the establishment of the flea market/vending areas thereon;
2.That the 2-meter middle road to be used as flea market/vending area shall be marked
distinctly, and that the 2 meters on both sides of the road shall be used by pedestrians;
3.That the time during which the vending area is to be used shall be clearly designated;
4.That the use of the vending areas shall be temporary and shall be closed once the
reclaimed areas are developed and donated by the Public Estate Authority.
36
P R O P E R T Y No. 3 |
On June 20, 1990, the municipal council of Parañaque issued a resolution authorizing Parañaque
Mayor Walfrido N. Ferrer to enter into contract with any service cooperative for the
establishment, operation, maintenance and management of flea markets and/or vending areas.
On August 8, 1990, respondent municipality and respondent Palanyag, a service cooperative,
entered into an agreement whereby the latter shall operate, maintain and manage the flea
market in the aforementioned streets with the obligation to remit dues to the treasury of the
municipal government of Parañaque. Consequently, market stalls were put up by respondent
Palanyag on the said streets.
On September 13, 1990, petitioner Brig. Gen. Macasiano, PNP Superintendent of the
Metropolitan Traffic Command, ordered the destruction and confiscation of stalls along G.G. Cruz
and J. Gabriel St. in Baclaran. These stalls were later returned to respondent Palanyag.
On October 16, 1990, petitioner Brig. General Macasiano wrote a letter to respondent Palanyag
giving the latter ten (10) days to discontinue the flea market; otherwise, the market stalls shall
be dismantled.
Hence, on October 23, 1990, respondents municipality and Palanyag filed with the trial court a
joint petition for prohibition and mandamus with damages and prayer for preliminary injunction,
to which the petitioner filed his memorandum/opposition to the issuance of the writ of
preliminary injunction.
On October 24, 1990, the trial court issued a temporary restraining order to enjoin petitioner
from enforcing his letter-order of October 16, 1990 pending the hearing on the motion for writ
of preliminary injunction.
On December 17, 1990, the trial court issued an order upholding the validity of Ordinance No.
86 s. 1990 of the Municipality of Parañaque and enjoining petitioner Brig. Gen. Macasiano from
enforcing his letter-order against respondent Palanyag.
Hence, this petition was filed by the petitioner thru the Office of the Solicitor General alleging
grave abuse of discretion tantamount to lack or excess of jurisdiction on the part of the trial
judge in issuing the assailed order.
The sole issue to be resolved in this case is whether or not an ordinance or resolution issued by
the municipal council of Parañaque authorizing the lease and use of public streets or
thoroughfares as sites for flea markets is valid.
The Solicitor General, in behalf of petitioner, contends that municipal roads are used for public
service and are therefore public properties; that as such, they cannot be subject to private
appropriation or private contract by any person, even by the respondent Municipality of
Parañaque. Petitioner submits that a property already dedicated to public use cannot be used for
another public purpose and that absent a clear showing that the Municipality of Parañaque has
been granted by the legislature a specific authority to convert a property already in public use to
another public use, respondent municipality is, therefore, bereft of any authority to close
municipal roads for the establishment of a flea market. Petitioner also submits that assuming
that the respondent municipality is authorized to close streets, it failed to comply with the
conditions set forth by the Metropolitan Manila Authority for the approval of the ordinance
providing for the establishment of flea markets on public streets. Lastly, petitioner contends that
by allowing the municipal streets to be used by market vendors, the municipal council of
respondent municipality violated its duty under the Local Government Code to promote the
general welfare of the residents of the municipality.
In upholding the legality of the disputed ordinance, the trial court ruled:
“x x x that Chapter II Section 10 of the Local Government Code is a statutory grant of power
given to local government units, the Municipality of Parañaque as such, is empowered under
that law to close its roads, streets or alley subject to limitations stated therein (i.e., that it is
in accordance with existing laws and the provisions of this code).
“The actuation of the respondent Brig. Gen. Levi Macasiano, though apparently within its
power is in fact an encroachment of power legally vested to the municipality, precisely
because when the municipality enacted the ordinance in question —the authority of the
respondent as Police Superintendent ceases to be operative on the ground that the streets
covered by the ordinance ceases to be a public thoroughfare.” (pp. 33-34, Rollo)
We find the petition meritorious. In resolving the question of whether the disputed municipal
ordinance authorizing the flea market on the public streets is valid, it is necessary to examine
the laws in force during the time the said ordinance was enacted, namely, Batas Pambansa Blg.
337, otherwise known as Local Government Code, in connection with established principles
embodied in the Civil Code on property and settled jurisprudence on the matter.
The property of provinces, cities and municipalities is divided into property for public use and
patrimonial property (Art. 423, Civil Code). As to what consists of property for public use, Article
424 of Civil Code states:
“ART. 424. Property for public use, in the provinces, cities and municipalities, consists of
the provincial roads, city streets, the squares, fountains, public waters, promenades,
and public works for public service paid for by said provinces, cities or municipalities.
“All other property possessed by any of them is patrimonial and shall be governed by
this Code, without prejudice to the provisions of special laws.”
Based on the foregoing, J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena streets
are local roads used for public service and are therefore considered public properties of
respondent municipality. Properties of the local government which are devoted to public service
are deemed public and are under the absolute control of Congress (Province of Zamboanga del
Norte v. City of Zamboanga, L-24440, March 28, 1968, 22 SCRA 1334). Hence, local
governments have no authority whatsoever to control or regulate the use of public properties
37
P R O P E R T Y No. 3 |
unless specific authority is vested upon them by Congress. One such example of this authority
given by Congress to the local governments is the power to close roads as provided in Section
10, Chapter II of the Local Government Code, which states:
“SEC. 10. Closure of roads.—_A local government unit may likewise, through its head
acting pursuant to a resolution of its sangguniang and in accordance with existing law
and the provisions of this Code, close any barangay, municipal, city or provincial road,
street, alley, park or square. No such way or place or any part thereof shall be closed
without indemnifying any person prejudiced thereby. A property thus withdrawn from
public use may be used or conveyed for any purpose for which other real property
belonging to the local unit concerned might be lawfully used or conveyed.” (Emphasis
ours).
However, the aforestated legal provision which gives authority to local government units to close
roads and other similar public places should be read and interpreted in accordance with basic
principles already established by law. These basic principles have the effect of limiting such
authority of the province, city or municipality to close a public street or thoroughfare. Article 424
of the Civil Code lays down the basic principle that properties of public dominion devoted to
public use and made available to the public in general are outside the commerce of man and
cannot be disposed of or leased by the local government unit to private persons. Aside from the
requirement of due process which should be complied with before closing a road, street or park,
the closure should be for the sole purpose of withdrawing the road or other public property from
public use when circumstances show that such property is no longer intended or necessary for
public use or public service. When it is already withdrawn from public use, the property then
becomes patrimonial property of the local government unit concerned (Article 422, Civil Code;
Cebu Oxygen, etc. et al. v. Bercilles, et al., G.R. No. L-40474, August 29, 1975, 66 SCRA 481). It
is only then that the respondent municipality can “use or convey them for any purpose for which
other real property belonging to the local unit concerned might be lawfully used or conveyed” in
accordance with the last sentence of Section 10, Chapter II of Blg. 337, known as Local
Government Code. In one case, the City Council of Cebu, through a resolution, declared the
terminal road of M. Borces Street, Mabolo, Cebu City as an abandoned road, the same not being
included in the City Development Plan. Thereafter, the City Council passed another resolution
authorizing the sale of the said abandoned road through public bidding. We held therein that the
City of Cebu is empowered to close a city street and to vacate or withdraw the same from public
use. Such withdrawn portion becomes patrimonial property which can be the object of an
ordinary contract (Cebu Oxygen and Acetylene Co., Inc. v. Bercilles, et al., G.R. No. L-40474,
August 29, 1975, 66 SCRA 481). However, those roads and streets which are available to the
public in general and ordinarily used for vehicular traffic are still considered public property
devoted to public use. In such case, the local government has no power to use it for another
purpose or to dispose of or lease it to private persons. This limitation on the authority of the
local government over public properties has been discussed and settled by this Court en banc in
“Francisco V. Dacanay, petitioner v. Mayor Macario Asistio, Jr., et al., respondents, G.R. No.
93654, May 6, 1992.” This Court ruled:
“There is no doubt that the disputed areas from which the private respondents’ market
stalls are sought to be evicted are public streets, as found by the trial court in Civil Case
No. C-12921. A public street is property for public use hence outside the commerce of
man (Arts. 420, 424, Civil Code). Being outside the commerce of man, it may not be the
subject of lease or other contract (Villanueva, et al. v. Castañeda and Macalino, 15
SCRA 142 citing the Municipality of Cavite v. Rojas, 30 SCRA 602; Espiritu v. Municipal
Council of Pozorrubio, 102 Phil. 869; and Muyot v. De la Fuente, 48 O.G. 4860).
“As the stallholders pay fees to the City Government for the right to occupy portions of
the public street, the City Government, contrary to law, has been leasing portions of the
streets to them. Such leases or licenses are null and void for being contrary to law. The
right of the public to use the city streets may not be bargained away through contract.
The interests of a few should not prevail over the good of the greater number in the
community whose health, peace, safety, good order and general welfare, the
respondent city officials are under legal obligation to protect.
“The Executive Order issued by acting Mayor Robles authorizing the use of Heroes del
’96 Street as a vending area for stallholders who were granted licenses by the city
government contravenes the general law that reserves city streets and roads for public
use. Mayor Robles’ Executive Order may not infringe upon the vested right of the public
to use city streets for the purpose they were intended to serve: i.e., as arteries of travel
for vehicles and pedestrians.”
Even assuming, in gratia argumenti, that respondent municipality has the authority to pass the
disputed ordinance, the same cannot be validly implemented because it cannot be considered
approved by the Metropolitan Manila Authority due to non-compliance by respondent
municipality of the conditions imposed by the former for the approval of the ordinance, to wit:
1.That the aforenamed streets are not used for vehicular traffic, and that the majority of the
residents do(es) not oppose the establishment of the flea market/vending areas thereon;
2.That the 2-meter middle road to be used as flea market/ vending area shall be marked
distinctly, and that the 2 meters on both sides of the road shall be used by pedestrians;
3.That the time during which the vending area is to be used shall be clearly designated;
4.That the use of the vending areas shall be temporary and shall be closed once the
reclaimed areas are developed and donated by the Public Estate Authority. (p. 38, Rollo)
Respondent municipality has not shown any iota of proof that it has complied with the foregoing
conditions precedent to the approval of the ordinance. The allegations of respondent
municipality that the closed streets were not used for vehicular traffic and that the majority of
the residents do not oppose the establishment of a flea market on said streets are unsupported
by any evidence that will show that this first condition has been met. Likewise, the designation
by respondents of a time schedule during which the flea market shall operate is absent.
38
P R O P E R T Y No. 3 |
Further, it is of public notice that the streets along Baclaran area are congested with people,
houses and traffic brought about by the proliferation of vendors occupying the streets. To
license and allow the establishment of a flea market along J. Gabriel, G.G. Cruz, Bayanihan, Lt.
Garcia Extension and Opena streets in Baclaran would not help in solving the problem of
congestion. We take note of the other observations of the Solicitor General when he said:
“x x x. There have been many instances of emergencies and fires where ambulances
and fire engines, instead of using the roads for a more direct access to the fire area,
have to maneuver and look for other streets which are not occupied by stalls and
vendors thereby losing valuable time which could, otherwise, have been spent in saving
properties and lives.
“Along G.G. Cruz Street is a hospital, the St. Rita Hospital. However, its ambulances and
the people rushing their patients to the hospital cannot pass through G.G. Cruz because
of the stalls and the vendors. One can only imagine the tragedy of losing a life just
because of a few seconds delay brought about by the inaccessibility of the streets
leading to the hospital.
“The children, too, suffer. In view of the occupancy of the roads by stalls and vendors,
normal transportation flow is disrupted and school children have to get off at a distance
still far from their schools and walk, rain or shine.
“Indeed one can only imagine the garbage and litter left by vendors on the streets at
the end of the day. Needless to say, these cause further pollution, sickness and
deterioration of health of the residents therein.” (pp. 21-22, Rollo)
The instant case as well as the Dacanay case, involves an ordinance which is void and illegal for
lack of basis and authority in laws applicable during its time. However, at this point, We find it
worthy to note that Batas Pambansa Blg. 337, known as Local Government Code, has already
been repealed by Republic Act No. 7160 known as Local Government Code of 1991 which took
effect on January 1, 1992. Section 5(d) of the new Code provides that rights and obligations
existing on the date of effectivity of the new Code and arising out of contracts or any other
source of prestation involving a local government unit shall be governed by the original terms
and conditions of the said contracts or the law in force at the time such rights were vested.
ACCORDINGLY, the petition is GRANTED and the decision of the respondent Regional Trial
Court dated December 17, 1990 which granted the writ of preliminary injunction enjoining
petitioner as PNP Superintendent, Metropolitan Traffic Command from enforcing the demolition
of market stalls along J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena streets is
hereby REVERSED and SET ASIDE.
SO ORDERED.
     Narvasa (C.J.), Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Griño-Aquino, Regalado,
Davide, Jr., Romero, Nocon and Bellosillo, JJ., concur.
Petition granted; decision reversed and set aside.
Note.—_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 (Laurel vs. Garcia, 187 SCRA 797).

Respondents do not refute the truth of the foregoing findings and observations of petitioners.
Instead, respondents want this Court to focus its attention solely on the argument that the use
of public spaces for the establishment of a flea market is well within the powers granted by law
to a local government which should not be interfered with by the courts.

Verily, the powers of a local government unit are not absolute. They are subject to limitations
laid down by the Constitution and the laws such as our Civil Code. Moreover, the exercise of
such powers should be subservient to paramount considerations of health and well-being of the
members of the community. Every local government unit has the sworn obligation to enact
measures that will enhance the public health, safety and convenience, maintain peace and
order, and promote the general prosperity of the inhabitants of the local units. Based on this
objective, the local government should refrain from acting towards that which might prejudice or
adversely affect the general welfare.

As what we have said in the Dacanay case, the general public have a legal right to demand the
demolition of the illegally constructed stalls in public roads and streets and the officials of
respondent municipality have the corresponding duty arising from public office to clear the city
streets and restore them to their specific public purpose.
39
P R O P E R T Y No. 3 |
G.R. No. 133250. July 9, 2002.*
FRANCISCO I. CHAVEZ, petitioner, vs. PUBLIC ESTATES AUTHORITY and AMARI
COASTAL BAY DEVELOPMENT CORPORATION, respondents.
Actions: Moot and Academic Issues: The signing of the Amended Joint Venture Agreement (JVA) by
the Public Estates Authority (PEA) and Amari Coastal Bay and Development Corporation (AMARI)
cannot operate to moot the petition and divest the Court of its jurisdiction, as the prayer to enjoin the
signing of the Amended JVA on constitutional grounds necessarily includes preventing its
implementation if in the meantime PEA and AMARI have signed one in violation of the Constitution.
Even in cases where supervening events had made the cases moot, the Court did not hesitate to
resolve the legal or constitutional issues raised to formulate controlling principles to guide the bench,
bar, and the public.—We rule that the signing of the Amended JVA by PEA and AMARI and its
approval by the President cannot operate to moot the petition and divest the Court of its jurisdiction.
PEA and AMARI have still to implement the Amended JVA. The prayer to enjoin the signing of the
Amended JVA on constitutional grounds necessarily includes preventing its implementation if in the
meantime PEA and AMARI have signed one in violation of the Constitution. Petitioner’s principal basis
in assailing the renegotiation of the JVA is its violation of Section 3, Article XII of the Constitution,
which prohibits the government from alienating lands of the public domain to private corporations. If
the Amended JVA indeed violates the Constitution, it is the duty of the Court to enjoin its
implementation, and if already implemented, to annul the effects of such unconstitutional contract.
The Amended JVA is not an ordinary commercial contract but one which seeks to transfer title and
ownership to 367.5 hectares of reclaimed lands and submerged areas of Manila Bay to a single
private corporation. It now becomes more compelling for the Court to resolve the issue to insure the
government itself does not violate a provision of the Constitution intended to safeguard the national
patrimony. Supervening events, whether intended or accidental, cannot prevent the Court from
rendering a decision if there is a grave violation of the Constitution. In the instant case, if the
Amended JVA runs counter to the Constitution, the Court can still prevent the transfer of title and
ownership of alienable lands of the public domain in the name of AMARI. Even in cases where
supervening events had made the cases moot, the Court did not hesitate to resolve the legal or
constitutional issues raised to formulate controlling principles to guide the bench, bar, and the public.
Same: Same; The instant petition is a case of first impression since all previous decisions of the Court
involving Section 3, Article XII of the 1987 Constitution, or its counterpart provision in the 1973
Constitution, covered agricultural lands sold to private corporations which acquired the lands from
private parties, while in the instant case, a private corporation seeks to acquire from a public
corporation, reclaimed lands and submerged areas for non-agricultural purposes by purchase under
PD No. 1084 (charter of PEA) and Title II of CA No. 141 .—The instant petition is a case of first
impression. All previous decisions of the Court involving Section 3, Article XII of the 1987 Constitution,
or its counterpart provision in the 1973 Constitution, covered agricultural lands sold to private
corporations which acquired the lands from private parties. The transferors of the private corporations
claimed or could claim the right to judicial confirmation of their imperfect titles under Title II of
Commonwealth Act. 141 (“CA No. 141” for brevity). In the instant case, AMARI seeks to acquire from
PEA, a public corporation, reclaimed lands and submerged areas for nonagricultural purposes by
purchase under PD No. 1084 (charter of PEA) and Title II of CA No. 141. Certain undertakings by
AMARI under the Amended JVA constitute the consideration for the purchase. Neither AMARI nor PEA
can claim judicial confirmation of their titles because the lands covered by the Amended JVA are
newly reclaimed or still to be reclaimed. Judicial confirmation of imperfect title requires open,
continuous, exclusive and notorious occupation of agricultural lands of the public domain for at least
thirty years since June 12, 1945 or earlier. Besides, the deadline for filing applications for judicial
confirmation of imperfect title expired on December 31, 1987.
Same: Hierarchy of Courts; The principle of hierarchy of courts applies generally to cases involving
factual questions, not to those raising constitutional issues of transcendental importance to the public .
—PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief directly from the
Court. The principle of hierarchy of courts applies generally to cases involving factual questions. As it
is not a trier of facts, the Court cannot entertain cases involving factual issues. The instant case,
however, raises constitutional issues of transcendental importance to the public. The Court can
resolve this case without determining any factual issue related to the case. Also, the instant case is a
petition for mandamus which falls under the original jurisdiction of the Court under Section 5, Article
VIII of the Constitution. We resolve to exercise primary jurisdiction over the instant case.
Same; Same; Administrative Law; Exhaustion of Administrative Remedies; Right to Information;
Considering that PEA had an affirmative statutory duty to disclose to the public the terms and
conditions of the sale of its lands, and was even in breach of this legal duty, petitioner had the right
to seek direct judicial intervention .—The original JVA sought to dispose to AMARI public lands held by
PEA, a government corporation. Under Section 79 of the Government Auditing Code, the disposition of
government lands to private parties requires public bidding. PEA was under a positive legal duty to
disclose to the public the terms and conditions for the sale of its lands. The law obligated PEA to
make this public disclosure even without demand from petitioner or from anyone. PEA failed to make
this public disclosure because the original JVA, like the Amended JVA, was the result of a negotiated
contract, not of a public bidding. Considering that PEA had an affirmative statutory duty to make the
public disclosure,” and was even in breach of this legal duty, petitioner had the right to seek direct
judicial intervention.
Same; Same; Same; Same; Same; The principle of exhaustion of administrative remedies does not
apply when the issue involved is a purely legal or constitutional question .—Moreover, and this alone is
determinative of this issue, the principle of exhaustion of administrative remedies does not apply
when the issue, involved is a purely legal or constitutional question. The principal issue in the instant
case is the capacity of AMARI to acquire lands held by PEA in view of the constitutional ban
prohibiting the alienation of lands of the public domain to private corporations. We rule that the
principle of exhaustion of administrative remedies does not apply in the instant case.
40
P R O P E R T Y No. 3 |
Same; Parties; Taxpayer’s Suits: A citizen has standing to bring this taxpayer’s suit because the
petition seeks to compel PEA to comply with its constitutional duties; Where a petition for mandamus
involves the enforcement of constitutional rights—to information and to the equitable diffusion of
natural resources—matters of transcendental public importance, a citizen has the requisite locus
standi.—The petitioner has standing to bring this taxpayer’s suit because the petition seeks to compel
PEA to comply with its constitutional duties. There are two constitutional issues involved here. First is
the right of citizens to information on matters of public concern. Second is the application of a
constitutional provision intended to insure the equitable distribution of alienable lands of the public
domain among Filipino citizens. The thrust of the first issue is to compel PEA to disclose publicly
information on the sale of government lands worth billions of pesos, information which the
Constitution and statutory law mandate PEA to disclose. The thrust of the second issue is to prevent
PEA from alienating hundreds of hectares of alienable lands of the public domain in violation of the
Constitution, compelling PEA to comply with a constitutional duty to the nation. Moreover, the petition
raises matters of transcendental importance to the public. In Chavez v. PCGG, the Court upheld the
right of a citizen to bring a taxpayer’s suit on matters of transcendental importance to the public, thus
—* * * We rule that since the instant petition, brought by a citizen, involves the enforcement of
constitutional rights—to information and to the equitable diffusion of natural resources—matters of
transcendental public importance, the petitioner has the requisite locus standi.
Right to Information; The twin provisions of the Constitution—right to information on matters of
public concern and policy of full transparency—seek to promote transparency in policy-making and in
the operations of the government, as well as provide the people sufficient information to exercise
effectively other constitutional rights; An informed citizenry is essential to the existence and proper
functioning of any democracy.—These twin provisions of the Constitution seek to promote
transparency in policymaking and in the operations of the government, as well as provide the people
sufficient information to exercise effectively other constitutional rights. These twin provisions are
essential to the exercise of freedom of expression. If the government does not disclose its official
acts, transactions and decisions to citizens, whatever citizens say, even if expressed without any
restraint, will be speculative and amount to nothing. These twin provisions are also essential to hold
public officials “at all times x x x accountable to the people,” for unless citizens have the proper
information, they cannot hold public officials accountable for anything. Armed with the right
information, citizens can participate in public discussions leading to the formulation of government
policies and their effective implementation. An informed citizenry is essential to the existence and
proper functioning of any democracy.
Same; Bids and Bidding; While information on, on-going evaluation or review of bids or proposal
being undertaken by the bidding or review committee is not immediately accessible under the right to
information, once the committee makes its official recommendation, there arises a “definite
proposition” on the part of the government, and from this moment, the public’s right to information
attaches, and any citizen can access all the non-proprietary information leading to such definite
proposition.—We must first distinguish between information the law on public bidding requires PEA to
disclose publicly, and information the constitutional right to information requires PEA to release to the
public. Before the consummation of the contract, PEA must, on its own and without demand from
anyone, disclose to the public matters relating to the disposition of its property. These include the
size, location, technical description and nature of the property being disposed of the terms and
conditions of the disposition, the parties qualified to bid, the minimum price and similar information.
PEA must prepare all these data and disclose them to the public at the start of the disposition
process, long before the consummation of the contract, because the Government Auditing Code
requires public bidding. If PEA fails to make this disclosure, any citizen can demand from PEA this
information at any time during the bidding process. Information, however, on on-going evaluation or
review of bids or proposals being undertaken by the bidding or review committee is not immediately
accessible under the right to information. While the evaluation or review is still ongoing, there are no
“official acts, transactions, or decisions” on the bids or proposals. However, once the committee
makes its official recommendation, there arises a “definite proposition” on the part of the
government. From this moment, the public’s right to information attaches, and any citizen can access
all the non-proprietary information leading to such definite proposition.
Same; The commissioners of the 1986 Constitutional Commission understood that the right to
information contemplates inclusion of negotiations leading to the consummation of the transaction—
requiring a consummated contract will keep the public in the dark until the contract, which may be
grossly disadvantageous to the government or even illegal, becomes a fait accompli .—Contrary to
AMARI’s contention, the commissioners of the 1986 Constitutional Commission understood that the
right to information “contemplates inclusion of negotiations leading to the consummation of the
transaction.” Certainly, a consummated contract is not a requirement for the exercise of the right to
information. Otherwise, the people can never exercise the right if no contract is consummated, and if
one is consummated, it may be too late for the public to expose its defects. Requiring a consummated
contract will keep the public in the dark until the contract, which may be grossly disadvantageous to
the government or even illegal, becomes a fait accompli. This negates the State policy of full
transparency on matters of public concern, a situation which the framers of the Constitution could not
have intended. Such a requirement will prevent the citizenry from participating in the public discussion
of any proposed contract, effectively truncating a basic right enshrined in the Bill of Rights. We can
allow neither an emasculation of a constitutional right, nor a retreat by the State of its avowed “policy
of full disclosure of all its transactions involving public interest.”
Same; The right to information covers three categories of information which are “matters of public
concern,” namely, (1) official records, (2) documents and papers pertaining to official acts,
transactions and decisions, and (3) government research data used in formulating policies .—The right
covers three categories of information which are “matters of public concern,” namely: (1) official
records; (2) documents and papers pertaining to official acts, transactions and decisions; and (3)
government research data used in formulating policies. The first category refers to any document that
is part of the public records in the custody of government agencies or officials. The second category
refers to documents and papers recording, evidencing, establishing, confirming, supporting, justifying
or explaining official acts, transactions or decisions of government agencies or officials. The third
category refers to research data, whether raw, collated or processed, owned by the government and
used in formulating government policies.
Same; The information that a citizen may access on the renegotiation of the JVA includes evaluation
reports, recommendations, legal and expert opinions, minutes of meetings, terms of reference and
other documents attached to such reports or minutes, all relating to the JVA .—The information that
petitioner may access on the renegotiation of the JVA includes evaluation reports, recommendations,
legal and expert opinions, minutes of meetings, terms of reference and other documents attached to
such reports or minutes, all relating to the JVA. However, the right to information does not compel
PEA to prepare lists, abstracts, summaries and the like relating to the renegotiation of the JVA. The
right only affords access to records, documents and papers, which means the opportunity to inspect
and copy them. One who exercises the right must copy the records, documents and papers at his
41
P R O P E R T Y No. 3 |
expense. The exercise of the right is also subject to reasonable regulations to protect the integrity of
the public records and to minimize disruption to government operations, like rules specifying when
and how to conduct the inspection and copying.
Same; The right to information, however, does not extend to matters recognized as privileged
information under the separation of powers .—The right to information, however, does not extend to
matters recognized as privileged information under the separation of powers. The right does not also
apply to information on military and diplomatic secrets, information affecting national security, and
information on investigations of crimes by law enforcement agencies before the prosecution of the
accused, which courts have long recognized as confidential. The right may also be subject to other
limitations that Congress may impose by law.
Same; The constitutional right to information includes official information on on-going negotiations
before a final contract, which information, however, must constitute definite propositions by the
government and should not cover recognized exceptions like privileged information, military and
diplomatic secrets and similar matters affecting national security and public order .—We rule,
therefore, that the constitutional right to information includes official information on on-going
negotiations before a final contract. The information, however, must constitute definite propositions
by the government and should not cover recognized exceptions like privileged information, military
and diplomatic secrets and similar matters affecting national security and public order. Congress has
also prescribed other limitations on the right to information in several legislations.
National Economy and Patrimony; Regalian Doctrine; Foreshore and Submerged Areas; Reclamation
Projects; Words and Phrases; The ownership of lands reclaimed from foreshore and submerged areas
is rooted in the Regalian doctrine which holds that the State owns all lands and waters of the public
domain.—The ownership of lands reclaimed from foreshore and submerged areas is rooted in the
Regalian doctrine which holds that the State owns all lands and waters of the public domain. Upon
the Spanish conquest of the Philippines, ownership of all “lands, territories and possessions” in the
Philippines passed to the Spanish Crown. The King, as the sovereign ruler and representative of the
people, acquired and owned all lands and territories in the Philippines except those he disposed of by
grant or sale to private individuals.
Same; Same; Same; Same; After the effectivity of the 1935 Constitution, government reclaimed and
marshy disposable lands of the public domain continued to be only leased and not sold to private
parties. These lands remained sui generis, as the only alienable or disposable lands of the public
domain the government could not sell to private parties .—The State policy prohibiting the sale to
private parties of government reclaimed, foreshore and marshy alienable lands of the public domain,
first implemented in 1907 was thus reaffirmed in CA No. 141 after the 1935 Constitution took effect.
The prohibition on the sale of foreshore lands, however, became a constitutional edict under the 1935
Constitution. Foreshore lands became inalienable as natural resources of the State, unless reclaimed
by the government and classified as agricultural lands of the public domain, in which case they would
fall under the classification of government reclaimed lands. After the effectivity of the 1935
Constitution, government reclaimed and marshy disposable lands of the public domain continued to
be only leased and not sold to private parties. These lands remained sui generis, as the only alienable
or disposable lands of the public domain the government could not sell to private parties.
Same; Same; Same; Same; Until now, the only way the government can sell to private parties
government reclaimed and marshy disposable lands of the public domain is for the legislature to pass
a law authorizing such sale.—Since then and until now, the only way the government can sell to
private parties government reclaimed and marshy disposable lands of the public domain is for the
legislature to pass a law authorizing such sale. CA No. 141 does not authorize the President to
reclassify government reclaimed and marshy lands into other non-agricultural lands under Section 59
(d). Lands classified under Section 59 (d) are the only alienable or disposable lands for non-
agricultural purposes that the government could sell to private parties.
Same; Same; Same; Same; One reason for the congressional authority before lands under Section 59
of CA No. 141 previously transferred to government units or entities could be sold to private parties is
that Section 60 of CA No. 141 exempted government units and entities from the maximum area of
public lands that could be acquired from the State .—One reason for the congressional authority is that
Section 60 of CA No. 141 exempted government units and entities from the maximum area of public
lands that could be acquired from the State. These government units and entities should not just turn
around and sell these lands to private parties in violation of constitutional or statutory limitations.
Otherwise, the transfer of lands for non-agricultural purposes to government units and entities could
be used to circumvent constitutional limitations on ownership of alienable or disposable lands of the
public domain. In the same manner, such transfers could also be used to evade the statutory
prohibition in CA No. 141 on the sale of government reclaimed and marshy lands of the public domain
to private parties. Section 60 of CA No. 141 constitutes by operation of law a lien on these lands.
Same; Same; Same; Same; In order for PEA to sell its reclaimed foreshore and submerged alienable
lands of the public domain, there must be legislative authority empowering PEA to sell these lands,
though any legislative authority granted to PEA to sell its reclaimed alienable lands of the public
domain would be subject to the constitutional ban on private corporations from acquiring alienable
lands of the public domain, such legislative authority could only benefit private individuals .—In order
for PEA to sell its reclaimed foreshore and submerged alienable lands of the public domain, there
must be legislative authority empowering PEA to sell these lands. This legislative authority is
necessary in view of Section 60 of CA No. 141, which states—“Sec. 60. x x x; but the land so granted,
donated or transferred to a province, municipality, or branch or subdivision of the Government shall
not be alienated, encumbered or otherwise disposed of in a manner affecting its title, except when
authorized by Congress; x x x.” (Emphasis supplied) Without such legislative authority, PEA could not
sell but only lease its reclaimed foreshore and submerged alienable lands of the public domain.
Nevertheless, any legislative authority granted to PEA to sell its reclaimed alienable lands of the public
domain would be subject to the constitutional ban on private corporations from acquiring alienable
lands of the public domain. Hence, such legislative authority could only benefit private individuals.
Same; Same; Same; Same; The rationale behind the constitutional ban on corporations from
acquiring, except through lease, alienable lands of the public domain is not well understood; In actual
practice, the constitutional ban strengthens the constitutional limitation on individuals from acquiring
more than the allowed area of alienable lands of the public domain; The constitutional intent, under
the 1973 and 1987 Constitutions, is to transfer ownership of only a limited area of alienable land of
the public domain to a qualified individual .—The rationale behind the constitutional ban on
corporations from acquiring, except through lease, alienable lands of the public domain is not well
understood. * * * In actual practice, the constitutional ban strengthens the constitutional limitation on
individuals from acquiring more than the allowed area of alienable lands of the public domain.
Without the constitutional ban, individuals who already acquired the maximum area of alienable lands
of the public domain could easily set up corporations to acquire more alienable public lands. An
individual could own as many corporations as his means would allow him. An individual could even
42
P R O P E R T Y No. 3 |
hide his ownership of a corporation by putting his nominees as stockholders of the corporation. The
corporation is a convenient vehicle to circumvent the constitutional limitation on acquisition by
individuals of alienable lands of the public domain. The constitutional intent, under the 1973 and 1987
Constitutions, is to transfer ownership of only a limited area of alienable land of the public domain to
a qualified individual. This constitutional intent is safeguarded by the provision prohibiting
corporations from acquiring alienable lands of the public domain, since the vehicle to circumvent the
constitutional intent is removed. The available alienable public lands are gradually decreasing in the
face of an ever-growing population. The most effective way to insure faithful adherence to this
constitutional intent is to grant or sell alienable lands of the public domain only to individuals. This, it
would seem, is the practical benefit arising from the constitutional ban.
Same; Same; Same; Same; The mere reclamation of certain areas by PEA does not convert these
inalienable natural resources of the State into alienable or disposable lands of the public domain—
there must be a law or presidential proclamation officially classifying these reclaimed lands as
alienable or disposable and open to disposition or concession .—Under Section 2, Article XII of the
1987 Constitution, the foreshore and submerged areas of Manila Bay are part of the “lands of the
public domain, waters x x x and other natural resources” and consequently “owned by the State.” As
such, foreshore and submerged areas “shall not be alienated,” unless they are classified as
“agricultural lands” of the public domain. The mere reclamation of these areas by PEA does not
convert these inalienable natural resources of the State into alienable or disposable lands of the public
domain. There must be a law or presidential proclamation officially classifying these reclaimed lands
as alienable or disposable and open to disposition or concession. Moreover, these reclaimed lands
cannot be classified as alienable or disposable if the law has reserved them for some public or quasi-
public use.
Same; Same; Same; Same; PD No. 1085, coupled with President Aquino’s actual issuance of a special
patent covering the Freedom Islands, is equivalent to an official proclamation classifying the Freedom
Islands as alienable or disposable lands of the public domain, open to disposition or concession to
qualified parties.—PD No. 1085, issued on February 4, 1977, authorized the issuance of special land
patents for lands reclaimed by PEA from the foreshore or submerged areas of Manila Bay. On January
19, 1988 then President Corazon C. Aquino issued Special Patent No. 3517 in the name of PEA for the
157.84 hectares comprising the partially reclaimed Freedom Islands. Subsequently, on April 9, 1999
the Register of Deeds of the Municipality of Paranaque issued TCT Nos. 7309, 7311 and 7312 in the
name of PEA pursuant to Section 103 of PD No. 1529 authorizing the issuance of certificates of title
corresponding to land patents. To this day, these certificates of title are still in the name of PEA. PD
No. 1085, coupled with President Aquino’s actual issuance of a special patent covering the Freedom
Islands, is equivalent to an official proclamation classifying the Freedom Islands as alienable or
disposable lands of the public domain. PD No. 1085 and President Aquino’s issuance of a land patent
also constitute a declaration that the Freedom Islands are no longer needed for public service. The
Freedom Islands are thus alienable or disposable lands of the public domain, open to disposition or
concession to qualified parties.
Same; Same; Same; Same; Spanish Law of Waters of 1866; Under the Spanish Law of Waters, a
private person reclaiming from the sea without permission from the State could not acquire
ownership of the reclaimed land which would remain property of public dominion like the sea it
replaced.—Under Article 5 of the Spanish Law of Waters of 1866, private parties could reclaim from
the sea only with “proper permission” from the State. Private parties could own the reclaimed land
only if not “otherwise provided by the terms of the grant of authority.” This clearly meant that no one
could reclaim from sea without permission from the State because the sea is property of public
dominion. It also meant that the State could grant or withhold ownership of the reclaimed land
because any reclaimed land, like the sea from which it emerged, belonged to the State. Thus, a
private person reclaiming from the sea without permission from the State could not acquire ownership
of the reclaimed land which would remain property of public dominion like the sea it replaced. Article
5 of the Spanish Law of Waters of 1866 adopted the time-honored principle of land ownership that
“all lands that were not acquired from the government, either by purchase or by grant, belong to the
public domain.”
Same; Same; Same; Same; Same; Article 5 of the Spanish Law of Waters must be read together with
laws subsequently enacted on the disposition of public lands .—Article 5 of the Spanish Law of Waters
must be read together with laws subsequently enacted on the disposition of public lands. In
particular, CA No. 141 requires that lands of the public domain must first be classified as alienable or
disposable before the government can alienate them. These lands must not be reserved for public or
quasi-public purposes. Moreover, the contract between CDCP and the government was executed after
the effectivity of the 1973 Constitution which barred private corporations from acquiring any kind of
alienable land of the public domain. This contract could not have converted the Freedom Islands into
private lands of a private corporation.
Same; Same; Same; Same; There is no legislative or Presidential act classifying the additional 592.15
hectares submerged areas under the Amended JVA as alienable or disposable lands of the public
domain open to disposition—these areas form part of the public domain, and in their present state
are inalienable and outside the commerce of man.—The Amended JVA covers not only the Freedom
Islands, but also an additional 592.15 hectares which are still submerged and forming part of Manila
Bay. There is no legislative or Presidential act classifying these submerged areas as alienable or
disposable lands of the public domain open to disposition. These submerged areas are not covered by
any patent or certificate of title. There can be no dispute that these submerged areas form part of the
public domain, and in their present state are inalienable and outside the commerce of man. Until
reclaimed from the sea, these submerged areas are, under the Constitution, “waters x x x owned by
the State,” forming part of the public domain and consequently inalienable. Only when actually
reclaimed from the sea can these submerged areas be classified as public agricultural lands, which
under the Constitution are the only natural resources that the State may alienate. Once reclaimed and
transformed into public agricultural lands, the government may then officially classify these lands as
alienable or disposable lands open to disposition. Thereafter, the government may declare these lands
no longer needed for public service. Only then can these reclaimed lands be considered alienable or
disposable lands of the public domain and within the commerce of man.
Same: Same; Same; Same; Public Estates Authority; Under EO No. 525, in relation to PD No. 3-A and
PD No. 1084, PEA became the primary implementing agency of the National Government to reclaim
foreshore and submerged lands of the public domain .—Section 1 of Executive Order No. 525 provides
that PEA “shall be primarily responsible for integrating, directing, and coordinating all reclamation
projects for and on behalf of the National Government.” The same section also states that “[A]ll
reclamation projects shall be approved by the President upon recommendation of the PEA, and shall
be undertaken by the PEA or through a proper contract executed by it with any person or entity; x x
x.” Thus, under EO No. 525, in relation to PD No. 3-A and PD No. 1084, PEA became the primary
implementing agency of the National Government to reclaim foreshore and submerged lands of the
public domain. EO No. 525 recognized PEA as the government entity “to undertake the reclamation of
lands and ensure their maximum utilization in promoting public welfare and interests.” Since large
43
P R O P E R T Y No. 3 |
portions of these reclaimed lands would obviously be needed for public service, there must be a
formal declaration segregating reclaimed lands no longer needed for public service from those still
needed for public service.
Same; Same; Same; Same; Same; Section 3 of EO No. 525, by declaring that all lands reclaimed by
PEA “shall belong to or be owned by PEA could not automatically operate to classify inalienable lands
into alienable or disposable lands of the public domain .—Section 3 of EO No. 525, by declaring that all
lands reclaimed by PEA “shall belong to or be owned by the PEA could not automatically operate to
classify inalienable lands into alienable or disposable lands of the public domain. Otherwise, reclaimed
foreshore and submerged lands of the public domain would automatically become alienable once
reclaimed by PEA, whether or not classified as alienable or disposable.
Same; Same; Same; Same; Same; Department of Environment and Natural Resources; As manager,
conservator and overseer of the natural resources of the State, DENR exercises “supervision and
control over alienable and disposable public lands.” PEA needs authorization from DENR before PEA
can undertake reclamation in Manila Bay, or in any part of the country; DENR is vested with the
power to authorize the reclamation of areas under water, while PEA is vested with the power to
undertake the physical reclamation of areas under water, whether directly or through private
contractors.—As manager, conservator and overseer of the natural resources of the State, DENR
exercises “supervision and control over alienable and disposable public lands.” DENR also exercises
“exclusive jurisdiction on the management and disposition of all lands of the public domain.” Thus,
DENR decides whether areas under water, like foreshore or submerged areas of Manila Bay, should
be reclaimed or not. This means that PEA needs authorization from DENR before PEA can undertake
reclamation projects in Manila Bay, or in any part of the country. DENR also exercises exclusive
jurisdiction over the disposition of all lands of the public domain. Hence, DENR decides whether
reclaimed lands of PEA should be classified as alienable under Sections 6 and 7 of CA No. 141. Once
DENR decides that the reclaimed lands should be so classified, it then recommends to the President
the issuance of a proclamation classifying the lands as alienable or disposable lands of the public
domain open to disposition. We note that then DENR Secretary Fulgencio S. Factoran, Jr.
countersigned Special Patent No. 3517 in compliance with the Revised Administrative Code and
Sections 6 and 7 of CA No. 141. In short, DENR is vested with the power to authorize the reclamation
of areas under water, while PEA is vested with the power to undertake the physical reclamation of
areas under water, whether directly or through private contractors. DENR is also empowered to
classify lands of the public domain into alienable or disposable lands subject to the approval of the
President. On the other hand, PEA is tasked to develop, sell or lease the reclaimed alienable lands of
the public domain.
Same; Same; Same; Same; Same; Same; Absent two official acts—a classification that these lands
are alienable or disposable and open to disposition and a declaration that these lands are not needed
for public service, lands reclaimed by PEA remain inalienable lands of the public domain .—The mere
physical act of reclamation by PEA of foreshore or submerged areas does not make the reclaimed
lands alienable or disposable lands of the public domain, much less patrimonial lands of PEA.
Likewise, the mere transfer by the National Government of lands of the public domain to PEA does
not make the lands alienable or disposable lands of the public domain, much less patrimonial lands of
PEA. Absent two official acts—a classification that these lands are alienable or disposable and open to
disposition and a declaration that these lands are not needed for public service, lands reclaimed by
PEA remain inalienable lands of the public domain. Only such an official classification and formal
declaration can convert reclaimed lands into alienable or disposable lands of the public domain, open
to disposition under the Constitution, Title I and Title III of CA No. 141 and other applicable laws.
Same; Same; Same; Same; Same; The constitutional ban on private corporations from acquiring
alienable lands of the public domain does not apply to the sale of PEA’s patrimonial lands; While PEA
may sell its alienable or disposable lands of the public domain to private individuals, it cannot sell any
of its alienable or disposable lands of the public domain to private corporations .—PEA’s charter,
however, expressly tasks PEA “to develop, improve, acquire, administer, deal in, subdivide, dispose
lease and sell any and all kinds of lands x x x owned, managed, controlled and/or operated by the
government.” (Emphasis supplied) There is, therefore, legislative authority granted to PEA to sell its
lands, whether patrimonial or alienable lands of the public domain . PEA may sell to private parties its
patrimonial properties in accordance with the PEA charter free from constitutional limitations. The
constitutional ban on private corporations from acquiring alienable lands of the public domain does
not apply to the sale of PEA’s patrimonial lands. PEA may also sell its alienable or disposable lands of
the public domain to private individuals since, with the legislative authority, there is no longer any
statutory prohibition against such sales and the constitutional ban does not apply to individuals. PEA,
however, cannot sell any of its alienable or disposable lands of the public domain to private
corporations since Section 3, Article XII of the 1987 Constitution expressly prohibits such sales. The
legislative authority benefits only individuals. Private corporations remain barred from acquiring any
kind of alienable land of the public domain, including government reclaimed lands.
Same; Same; Same; Same; Same; The provision in PD No. 1085 stating that portions of the
reclaimed lands could be transferred by PEA to the “contractor or his assignees” would not apply to
private corporations but only to individuals because of the constitutional ban .—The provision in PD
No. 1085 stating that portions of the reclaimed lands could be transferred by PEA to the “contractor
or his assignees” (Emphasis supplied) would not apply to private corporations but only to individuals
because of the constitutional ban. Otherwise, the provisions of PD No. 1085 would violate both the
1973 and 1987 Constitutions.
Same; Same; Same; Same; Same; Bids and Bidding; EO No. 654, which authorized PEA “to determine
the kind and manner of payment for the transfer” of its assets and properties, does not exempt PEA
from the requirement of public auction, but merely authorizes PEA to decide the mode of payment,
whether in kind or in installment, but does not authorize PEA to dispense with public auction .—
Assuming the reclaimed lands of PEA are classified as alienable or disposable lands open to
disposition, and further declared no longer needed for public service, PEA would have to conduct a
public bidding in selling or leasing these lands. PEA must observe the provisions of Sections 63 and 67
of CA No. 141 requiring public auction, in the absence of a law exempting PEA from holding a public
auction. Special Patent No. 3517 expressly states that the patent is issued by authority of the
Constitution and PD No. 1084, “supplemented by Commonwealth Act No. 141, as amended.” This is
an acknowledgment that the provisions of CA No. 141 apply to the disposition of reclaimed alienable
lands of the public domain unless otherwise provided by law. Executive Order No. 654, which
authorizes PEA “to determine the kind and manner of payment for the transfer” of its assets and
properties, does not exempt PEA from the requirement of public auction. EO No. 654 merely
authorizes PEA to decide the mode of payment, whether in kind and in installment, but does not
authorize PEA to dispense with public auction.
Same; Same; Same; Same; Same; Same; At the public auction sale, only Philippine citizens are
qualified to bid for PEA’s reclaimed foreshore and submerged alienable lands of the public domain .—
At the public auction sale, only Philippine citizens are qualified to bid for PEA’s reclaimed foreshore
44
P R O P E R T Y No. 3 |
and submerged alienable lands of the public domain. Private corporations are barred from bidding at
the auction sale of any kind of alienable land of the public domain.
Same; Same; Same; Same; Same; Same; The failure of an earlier public bidding involving only
407.84 hectares, is not a valid justification for a subsequent negotiated sale of 750 hectares, almost
double the area publicly auctioned .—The original JVA dated April 25, 1995 covered not only the
Freedom Islands and the additional 250 hectares still to be reclaimed, it also granted an option to
AMARI to reclaim another 350 hectares. The original JVA, a negotiated contract, enlarged the
reclamation area to 750 hectares. The failure of public bidding on December 10, 1991, involving only
407.84 hectares, is not a valid justification for a negotiated sale of 750 hectares, almost double the
area publicly auctioned. Besides, the failure of public bidding happened on December 10, 1991, more
than three years before the signing of the original JVA on April 25, 1995. The economic situation in
the country had greatly improved during the intervening period.
Same; Same; Same; Same; BOT Law (RA No. 6957); Local Government Code; Under either the BOT
Law or the Local Government Code, the contractor or developer, if a corporate entity, can only be
paid with lease-holds on portions of the reclaimed land, and if the contractor or developer is an
individual, portions of the reclaimed land, not exceeding 12 hectares of non-agricultural lands, may
be conveyed to him in ownership .—Under either the BOT Law or the Local Government Code, the
contractor or developer, if a corporate entity, can only be paid with leaseholds on portions of the
reclaimed land. If the contractor or developer is an individual, portions of the reclaimed land, not
exceeding 12 hectares of nonagricultural lands, may be conveyed to him in ownership in view of the
legislative authority allowing such conveyance. This is the only way these provisions of the BOT Law
and the Local Government Code can avoid a direct collision with Section 3, Article XII of the 1987
Constitution.
Same; Same; Same; Same; Land Registration; Registration is not a mode of acquiring ownership but
is merely evidence of ownership previously conferred by any of the recognized modes of acquiring
ownership.—Registration of land under Act No. 496 or PD No. 1529 does not vest in the registrant
private or public ownership of the land. Registration is not a mode of acquiring ownership but is
merely evidence of ownership previously conferred by any of the recognized modes of acquiring
ownership. Registration does not give the registrant a better right than what the registrant had prior
to the registration. The registration of lands of the public domain under the Torrens system, by itself,
cannot convert public lands into private lands.
Same; Same; Same; Same; Same; Jurisprudence holding that upon the grant of the patent or
issuance of the certificate of title the alienable land of the public domain automatically becomes
private land cannot apply to government units and entities like PEA .—Jurisprudence holding that upon
the grant of the patent or issuance of the certificate of title the alienable land of the public domain
automatically becomes private land cannot apply to government units and entities like PEA. The
transfer of the Freedom Islands to PEA was made subject to the provisions of CA No. 141 as expressly
stated in Special Patent No. 3517 issued by then President Aquino, to wit: “NOW, THEREFORE, KNOW
YE, that by authority of the Constitution of the Philippines and in conformity with the provisions of
Presidential Decree No. 1084, supplemented by Commonwealth Act No. 141, as amended , there are
hereby granted and conveyed unto the Public Estates Authority the aforesaid tracts of land containing
a total area of one million nine hundred fifteen thousand eight hundred ninety four (1,915,894)
square meters; the technical description of which are hereto attached and made an integral part
hereof.”
Same; Same; Same; Same; The grant of legislative authority to sell public lands in accordance with
Section 60 of CA No. 141 does not automatically convert alienable lands of the public domain into
private or patrimonial lands—the alienable lands of the public domain must be transferred to qualified
private parties, or to government entities not tasked to dispose of public lands, before these lands
can become private or patrimonial lands .—Alienable lands of the public domain held by government
entities under section 60 of CA No. 141 remain public lands because they cannot be alienated or
encumbered unless Congress passes a law authorizing their disposition. Congress, however, cannot
authorize the sale to private corporations of reclaimed alienable lands of the public domain because of
the constitutional ban. Only individuals can benefit from such law. The grant of legislative authority to
sell public lands in accordance with Section 60 of CA No. 141 does not automatically convert alienable
lands of the public domain into private or patrimonial lands. The alienable lands of the public domain
must be transferred to qualified private parties, or to government entities not tasked to dispose of
public lands, before these lands can become private or patrimonial lands. Otherwise, the
constitutional ban will become illusory if Congress can declare lands of the public domain as private or
patrimonial lands in the hands of a government agency tasked to dispose of public lands. This will
allow private corporations to acquire directly from government agencies limitless areas of lands which,
prior to such law, are concededly public lands.
Same; Same; Same; Same; Public Estates Authority; As the central implementing agency tasked to
undertake reclamation projects nationwide, with authority to sell reclaimed lands, PEA took the place
of DENR as the government agency charged with leasing or selling reclaimed lands of the public
domain.—As the central implementing agency tasked to undertake reclamation projects nationwide,
with authority to sell reclaimed lands, PEA took the place of DENR as the government agency charged
with leasing or selling reclaimed lands of the public domain. The reclaimed lands being leased or sold
by PEA are not private lands, in the same manner that DENR, when it disposes of other alienable
lands, does not dispose of private lands but alienable lands of the public domain. Only when qualified
private parties acquire these lands will the lands become private lands. In the hands of the
government agency tasked and authorized to dispose of alienable of disposable lands of the public
domain, these lands are still public, not private lands.
Same; Same; Same; Same; Same; The mere fact that alienable lands of the public domain are
transferred to PEA and issued land patents or certificates of title in PEA’s name does not automatically
make such lands private—to allow vast areas of reclaimed lands of the public domain to be
transferred to PEA as private lands will sanction a gross violation of the constitutional ban on private
corporations from acquiring any kind of alienable land of the public domain .—PEA’s charter expressly
states that PEA “shall hold lands of the public domain” as well as “any and all kinds of lands.” PEA can
hold both lands of the public domain and private lands. Thus, the mere fact that alienable lands of the
public domain like the Freedom Islands are transferred to PEA and issued land patents or certificates
of title in PEA’s name does not automatically make such lands private. To allow vast areas of
reclaimed lands of the public domain to be transferred to PEA as private lands will sanction a gross
violation of the constitutional ban on private corporations from acquiring any kind of alienable land of
the public domain. PEA will simply turn around, as PEA has now done under the Amended JVA, and
transfer several hundreds of hectares of these reclaimed and still to be reclaimed lands to a single
private corporation in only one transaction. This scheme will effectively nullify the constitutional ban in
Section 3, Article XII of the 1987 Constitution which was intended to diffuse equitably the ownership
of alienable lands of the public domain among Filipinos, now numbering over 80 million strong.
45
P R O P E R T Y No. 3 |
Same; Same; Same; Same; Same; Whether the Amended JVA is a sale or a joint venture, the fact
remains that the Amended JVA required PEA to “cause the issuance and delivery of the certificates of
title conveying AMARI’s Land Share in the name of AMARI,” a stipulation contravening Section 3,
Article XII of the 1987 Constitution—the transfer of title and ownership to AMARI clearly means that
AMARI will “hold” the reclaimed lands other than by lease, and the transfer of title and ownership is a
“disposition” of the reclaimed lands, a transaction considered a sale or alienation under CA No. 141,
the Government Auditing Code, and Section 3, Article XII of the 1987 Constitution .—AMARI makes a
parting shot that the Amended JVA is not a sale to AMARI of the Freedom Islands or of the lands to
be reclaimed from submerged areas of Manila Bay. In the words of AMARI, the Amended JVA “is not
a sale but a joint venture with a stipulation for reimbursement of the original cost incurred by PEA for
the earlier reclamation and construction works performed by the CDCP under its 1973 contract with
the Republic.” Whether the Amended JVA is a sale or a joint venture, the fact remains that the
Amended JVA requires PEA to “cause the issuance and delivery of the certificates of title conveying
AMARI’s Land Share in the name of AMARI.” This stipulation still contravenes Section 3, Article XII of
the 1987 Constitution which provides that private corporations “shall not hold such alienable lands of
the public domain except by lease.” The transfer of title and ownership to AMARI clearly means that
AMARI will “hold” the reclaimed lands other than by lease. The transfer of title and ownership is a
“disposition” of the reclaimed lands, a transaction considered a sale or alienation under CA No. 141,
the Government Auditing Code, and Section 3, Article XII of the 1987 Constitution.
Same; Same; Same; Same; Historically, lands reclaimed by the government are sui generis, not
available for sale to private parties unlike other alienable public lands—reclaimed lands retain their
inherent potential as areas for public use or public service .—The Regalian doctrine is deeply implanted
in our legal system. Foreshore and submerged areas form part of the public domain and are
inalienable. Lands reclaimed from foreshore and submerged areas also form part of the public domain
and are also inalienable, unless converted pursuant to law into alienable or disposable lands of the
public domain. Historically, lands reclaimed by the government are sui generis, not available for sale
to private parties unlike other alienable public lands. Reclaimed lands retain their inherent potential as
areas for public use or public service. Alienable lands of the public domain, increasingly becoming
scarce natural resources, are to be distributed equitably among our ever-growing population. To
insure such equitable distribution, the 1973 and 1987 Constitutions have barred private corporations
from acquiring any kind of alienable land of the public domain. Those who attempt to dispose of
inalienable natural resources of the State, or seek to circumvent the constitutional ban on alienation
of lands of the public domain to private corporations, do so at their own risk.
CARPIO, J.:
This is an original Petition for Mandamus with prayer for a writ of preliminary injunction and a
temporary restraining order. The petition seeks to compel the Public Estates Authority (“PEA” for
brevity) to disclose all facts on PEA’s then on-going renegotiations with Amari Coastal Bay and
Development Corporation (“AMARI” for brevity) to reclaim portions of Manila Bay. The petition
further seeks to enjoin PEA from signing a new agreement with AMARI involving such
reclamation.
The Facts
On November 20, 1973, the government, through the Commissioner of Public Highways, signed
a contract with the Construction and Development Corporation of the Philippines (“CDCP” for
brevity) to reclaim certain foreshore and offshore areas of Manila Bay. The contract also
included the construction of Phases I and II of the Manila-Cavite Coastal Road. CDCP obligated
itself to carry out all the works in consideration of fifty percent of the total reclaimed land.
On February 4, 1977, then President Ferdinand E. Marcos issued Presidential Decree No. 1084
creating PEA. PD No. 1084 tasked PEA “to reclaim land, including foreshore and submerged
areas,” and “to develop, improve, acquire, x x x lease and sell any and all kinds of lands.” 1 On
the same date, then President Marcos issued Presidential Decree No. 1085 transferring to PEA
the “lands reclaimed in the foreshore and offshore of the Manila Bay” 2 under the Manila-Cavite
Coastal Road and Reclamation Project (MCCRRP).
On December 29, 1981, then President Marcos issued a memorandum directing PEA to amend
its contract with CDCP, so that “[A]ll future works in MCCRRP x x x shall be funded and owned
by PEA.” Accordingly, PEA and CDCP executed a Memorandum of Agreement dated December
29, 1981, which stated:
“(i) CDCP shall undertake all reclamation, construction, and such other works in the MCCRRP
as may be agreed upon by the parties, to be paid according to progress of works on a unit
price/lump sum basis for items of work to be agreed upon, subject to price escalation,
retention and other terms and conditions provided for in Presidential Decree No. 1594. All the
financing required for such works shall be provided by PEA.
(iii) x x x CDCP shall give up all its development rights and hereby agrees to cede and
transfer in favor of PEA, all of the rights, title, interest and participation of CDCP in and to all
the areas of land reclaimed by CDCP in the MCCRRP as of December 30, 1984 which have
not yet been sold, transferred or otherwise disposed of by CDCP as of said date, which areas
consist of approximately Ninety-Nine Thousand Four Hundred Seventy Three (99,473) square
meters in the Financial Center Area covered by land pledge No. 5 and approximately Three
Million Three Hundred Eighty Two Thousand Eight Hundred Eighty Eight (3,382,888) square
meters of reclaimed areas at varying elevations, above Mean Low Water Level located
outside the Financial Center Area and the First Neighborhood Unit.” 3
On January 19, 1988, then President Corazon C. Aquino issued Special Patent No. 3517,
granting and transferring to PEA “the parcels of land so reclaimed under the Manila-Cavite
Coastal Road and Reclamation Project (MCCRRP) containing a total area of one million nine
hundred fifteen thousand eight hundred ninety four (1,915,894) square meters.” Subsequently,
on April 9, 1988, the Register of Deeds of the Municipality of Parañaque issued Transfer
Certificates of Title Nos. 7309, 7311, and 7312, in the name of PEA, covering the three
reclaimed islands known as the “Freedom Islands” located at the southern portion of the Manila-
Cavite Coastal Road, Parañaque City. The Freedom Islands have a total land area of One Million
Five Hundred Seventy Eight Thousand Four Hundred and Forty One (1,578,441) square meters
or 157.841 hectares.
On April 25, 1995, PEA entered into a Joint Venture Agreement (“JVA” for brevity) with AMARI, a
private corporation, to develop the Freedom Islands. The JVA also required the reclamation of
an additional 250 hectares of submerged areas surrounding these islands to complete the
configuration in the Master Development Plan of the Southern Reclamation Project-MCCRRP.
PEA and AMARI entered into the JVA through negotiation without public bidding. 4 On April 28,
46
P R O P E R T Y No. 3 |
1995, the Board of Directors of PEA, in its Resolution No. 1245, confirmed the JVA. 5 On June 8,
1995, then President Fidel V. Ramos, through then Executive Secretary Ruben Torres, approved
the JVA.6
On November 29, 1996, then Senate President Ernesto Maceda delivered a privilege speech in
the Senate and denounced the JVA as the “grandmother of all scams.” As a result, the Senate
Committee on Government Corporations and Public Enterprises, and the Committee on
Accountability of Public Officers and Investigations, conducted a joint investigation. The Senate
Committees reported the results of their investigation in Senate Committee Report No. 560
dated September 16, 1997.7 Among the conclusions of their report are: (1) the reclaimed lands
PEA seeks to transfer to AMARI under the JVA are lands of the public domain which the
government has not classified as alienable lands and therefore PEA cannot alienate these lands;
(2) the certificates of title covering the Freedom Islands are thus void, and (3) the JVA itself is
illegal.
On December 5, 1997, then President Fidel V. Ramos issued Presidential Administrative Order
No. 365 creating a Legal Task Force to conduct a study on the legality of the JVA in view of
Senate Committee Report No. 560. The members of the Legal Task Force were the Secretary of
Justice,8 the Chief Presidential Legal Counsel, 9 and the Government Corporate Counsel. 10 The
Legal Task Force upheld the legality of the JVA, contrary to the conclusions reached by the
Senate Committees.11
On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published reports that there
were on-going renegotiations between PEA and AMARI under an order issued by then President
Fidel V. Ramos. According to these reports, PEA Director Nestor Kalaw, PEA Chairman Arsenio
Yulo and retired Navy Officer Sergio Cruz composed the negotiating panel of PEA.
On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for Prohibition with
Application for the Issuance of a Temporary Restraining Order and Preliminary Injunction
docketed as G.R. No. 132994 seeking to nullify the JVA. The Court dismissed the petition “for
unwarranted disregard of judicial hierarchy, without prejudice to the refiling of the case before
the proper court.”12
On April 27, 1998, petitioner Frank I. Chavez (“Petitioner” for brevity) as a taxpayer, filed the
instant Petition for Mandamus with Prayer for the Issuance of a Writ of Preliminary Injunction
and Temporary Restraining Order. Petitioner contends the government stands to lose billions of
pesos in the sale by PEA of the reclaimed lands to AMARI. Petitioner prays that PEA publicly
disclose the terms of any renegotiation of the JVA, invoking Section 28, Article II, and Section 7,
Article III, of the 1987 Constitution on the right of the people to information on matters of public
concern. Petitioner assails the sale to AMARI of lands of the public domain as a blatant violation
of Section 3, Article XII of the 1987 Constitution prohibiting the sale of alienable lands of the
public domain to private corporations. Finally, petitioner asserts that he seeks to enjoin the loss
of billions of pesos in properties of the State that are of public dominion.
After several motions for extension of time, 13 PEA and AMARI filed their Comments on October
19, 1998 and June 25, 1998, respectively. Meanwhile, on December 28, 1998, petitioner filed an
Omnibus Motion: (a) to require PEA to submit the terms of the renegotiated PEA-AMARI
contract; (b) for issuance of a temporary restraining order; and (c) to set the case for hearing
on oral argument. Petitioner filed a Reiterative Motion for Issuance of a TRO dated May 26,
1999, which the Court denied in a Resolution dated June 22, 1999.
In a Resolution dated March 23, 1999, the Court gave due course to the petition and required
the parties to file their respective memoranda.
On March 30, 1999, PEA and AMARI signed the Amended Joint Venture Agreement (“Amended
JVA,” for brevity). On May 28, 1999, the Office of the President under the administration of then
President Joseph E. Estrada approved the Amended JVA.
Due to the approval of the Amended JVA by the Office of the President, petitioner now prays
that on “constitutional and statutory grounds the renegotiated contract be declared null and
void.”14
The Issues
The issues raised by petitioner, PEA15 and AMARI16 are as follows:
I.WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE MOOT AND
ACADEMIC BECAUSE OF SUBSEQUENT EVENTS;
II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE THE PRINCIPLE
GOVERNING THE HIERARCHY OF COURTS;
III.WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF
ADMINISTRATIVE-REMEDIES;
IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT;
V.WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES OFFICIAL
INFORMATION ON ON-GOING NEGOTIATIONS BEFORE A FINAL AGREEMENT;
VI.WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE AGREEMENT FOR THE
TRANSFER TO AMARI OF CERTAIN LANDS, RECLAIMED AND STILL TO BE RECLAIMED,
VIOLATE THE 1987 CONSTITUTION; AND
VII.WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE OF WHETHER
THE AMENDED JOINT VENTURE AGREEMENT IS GROSSLY DISADVANTAGEOUS TO THE
GOVERNMENT.
The Court’s Ruling
First issue; whether the principal reliefs prayed for in the petition
are moot and academic because of subsequent events.
The petition prays that PEA publicly disclose the “terms and conditions of the on-going
negotiations for a new agreement.” The petition also prays that the Court enjoin PEA from
“privately entering into, perfecting and/or executing any new agreement with AMARI.”
PEA and AMARI claim the petition is now moot and academic because AMARI furnished
petitioner on June 21, 1999 a copy of the signed Amended-JVA containing the terms and
47
P R O P E R T Y No. 3 |
conditions agreed upon in the renegotiations. Thus, PEA has satisfied petitioner’s prayer for a
public disclosure of the renegotiations. Likewise, petitioner’s prayer to enjoin the signing of the
Amended JVA is now moot because PEA and AMARI have already signed the Amended JVA on
March 30, 1999. Moreover, the Office of the President has approved the Amended JVA on May
28, 1999.
Petitioner counters that PEA and AMARI cannot avoid the constitutional issue by simply fast-
tracking the signing and approval of the Amended JVA before the Court could act on the issue.
Presidential approval does not resolve the constitutional issue or remove it from the ambit of
judicial review.
We rule that the signing of the Amended JVA by PEA and AMARI and its approval by the
President cannot operate to moot the petition and divest the Court of its jurisdiction. PEA and
AMARI have still to implement the Amended JVA. The prayer to enjoin the signing of the
Amended JVA on constitutional grounds necessarily includes preventing its implementation if in
the meantime PEA and AMARI have signed one in violation of the Constitution. Petitioner’s
principal basis in assailing the renegotiation of the JVA is its violation of Section 3, Article XII of
the Constitution, which prohibits the government from alienating lands of the public domain to
private corporations. If the Amended JVA indeed violates the Constitution, it is the duty of the
Court to enjoin its implementation, and if already implemented, to annul the effects of such
unconstitutional contract.
The Amended JVA is not an ordinary commercial contract but one which seeks to transfer title
and ownership to 367.5 hectares of reclaimed lands and submerged areas of Manila Bay to a
single private corporation. It now becomes more compelling for the Court to resolve the issue to
insure the government itself does not violate a provision of the Constitution intended to
safeguard the national patrimony. Supervening events, whether intended or accidental, cannot
prevent the Court from rendering a decision if there is a grave violation of the Constitution. In
the instant case, if the Amended JVA runs counter to the Constitution, the Court can still prevent
the transfer of title and ownership of alienable lands of the public domain in the name of AMARI.
Even in cases where supervening events had made the cases moot, the Court did not hesitate to
resolve the legal or constitutional issues raised to formulate controlling principles to guide the
bench, bar, and the public.17
Also, the instant petition is a case of first impression. All previous decisions of the Court
involving Section 3, Article XII of the 1987 Constitution, or its counterpart provision in the 1973
Constitution,18 covered agricultural lands sold to private corporations which acquired the lands
from private parties. The transferors of the private corporations claimed or could claim the right
to judicial confirmation of their imperfect titles 19 under Title II of Commonwealth Act. 141 (“CA
No. 141” for brevity). In the instant case, AMARI seeks to acquire from PEA, a public
corporation, reclaimed lands and submerged areas for non-agricultural purposes by purchase
under PD No. 1084 (charter of PEA) and Title II of CA No. 141. Certain undertakings by AMARI
under the Amended JVA constitute the consideration for the purchase. Neither AMARI nor PEA
can claim judicial confirmation of their titles because the lands covered by the Amended JVA are
newly reclaimed or still to be reclaimed. Judicial confirmation of imperfect title requires open,
continuous, exclusive and notorious occupation of agricultural lands of the public domain for at
least thirty years since June 12, 1945 or earlier. Besides, the deadline for filing applications for
judicial confirmation of imperfect title expired on December 31, 1987. 20
Lastly, there is a need to resolve immediately the constitutional issue raised in this petition
because of the possible transfer at any time by PEA to AMARI of title and ownership to portions
of the reclaimed lands. Under the Amended JVA, PEA is obligated to transfer to AMARI the
latter’s seventy percent proportionate share in the reclaimed areas as the reclamation
progresses. The Amended JVA even allows AMARI to mortgage at any time the entire reclaimed
area to raise financing for the reclamation project. 21
Second issue: whether the petition merits dismissal for failing to
observe the principle governing the hierarchy of courts.
PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief directly from the
Court. The principle of hierarchy of courts applies generally to cases involving factual questions.
As it is not a trier of facts, the Court cannot entertain cases involving factual issues. The instant
case, however, raises constitutional issues of transcendental importance to the public. 22 The
Court can resolve this case without determining any factual issue related to the case. Also, the
instant case is a petition for mandamus which falls under the original jurisdiction of the Court
under Section 5, Article VIII of the Constitution. We resolve to exercise primary jurisdiction over
the instant case.
Third issue: whether the petition merits dismissal for non-
exhaustion of administrative remedies.
PEA faults petitioner for seeking judicial intervention in compelling PEA to disclose publicly
certain information without first asking PEA the needed information. PEA claims petitioner’s
direct resort to the Court violates the principle of exhaustion of administrative remedies. It also
violates the rule that mandamus may issue only if there is no other-plain, speedy and adequate
remedy in the ordinary course of law.
PEA distinguishes the instant case from Tañada v. Tuvera23 where the Court granted the petition
for mandamus even if the petitioners there did not initially demand from the Office of the
President the publication of the presidential decrees. PEA points out that in Tañada, the
Executive Department had an affirmative statutory duty under Article 2 of the Civil Code 24 and
Section 1 of Commonwealth Act No. 638 25 to publish the presidential decrees. There was,
therefore, no need for the petitioners in Tañada to make an initial demand from the Office of the
President. In the instant case, PEA claims it has no affirmative statutory duty to disclose publicly
information about its renegotiation of the JVA. Thus, PEA asserts that the Court must apply the
principle of exhaustion of administrative remedies to the instant case in view of the failure of
petitioner here to demand initially from PEA the needed information.
The original JVA sought to dispose to AMARI public lands held by PEA, a government
corporation. Under Section 79 of the Government Auditing Code, 26 the disposition of government
lands to private parties requires public bidding. PEA was under a positive legal duty to disclose
to the public the terms and conditions for the sale of its lands. The law obligated PEA to make
48
P R O P E R T Y No. 3 |
this public disclosure even without demand from petitioner or from anyone. PEA failed to make
this public disclosure because the original JVA, like the Amended JVA, was the result of a
negotiated contract, not of a public bidding. Considering that PEA had an affirmative statutory
duty to make the public disclosure,” and was even in breach of this legal duty, petitioner had the
right to seek direct judicial intervention.
Moreover, and this alone is determinative of this issue, the principle of exhaustion
administrative remedies does not apply when the issue, involved is a purely legal
constitutional question.27 The principal issue in the instant case is the capacity of AMARI
acquire lands held by PEA in view of the constitutional ban prohibiting the alienation of lands
the public domain to private corporations. We rule that the principle of exhaustion
administrative remedies does not apply in the instant case.
Fourth issue: whether petitioner has locus standi to bring this suit
PEA argues that petitioner has no standing to institute mandamus proceedings to enforce his
constitutional right to information without a showing that PEA refused to perform an affirmative
duty imposed on PEA by the Constitution. PEA also claims that petitioner has not shown that he
will suffer any concrete injury because of the signing or implementation of the Amended JVA.
Thus, there is no-actual controversy requiring the exercise of the power of judicial review.
The petitioner has standing to bring this taxpayer’s suit because the petition seeks to compel
PEA to comply with its constitutional duties. There are two constitutional issues involved here.
First is the right of citizens to information on matters of public concern. Second is the application
of a constitutional provision intended to insure the equitable distribution of alienable lands of the
public domain among Filipino citizens. The thrust of the first issue is to compel PEA to disclose
publicly information on the sale of government tends worth billions of pesos, information which
the Constitution and statutory law mandate PEA to disclose. The thrust of the second issue is to
prevent PEA from alienating hundreds of hectares of alienable lands of the public domain in
violation of the Constitution, compelling PEA to comply with a constitutional duty to the nation.
Moreover, the petition raises matters of transcendental importance to the public. In Chavez v.
PCGG,28 the Court upheld the right of a citizen to bring a taxpayer’s suit on matters of
transcendental importance to the public, thus—
“Besides, petitioner emphasizes, the matter of recovering the illgotten wealth of the Marcoses
is an issue of ‘transcendental importance to the public.’ He asserts that ordinary taxpayers
have a right to initiate and prosecute actions questioning the validity of acts or orders of
government agencies or instrumentalities, if the issues raised are of ‘paramount public
interest,’ and if they ‘immediately affect the social, economic and moral well being of the
people.’
Moreover, the mere fact that he is a citizen satisfies the requirement of personal interest, when
the proceeding involves the assertion of a public right, such as in this case. He invokes several
decisions of this Court which have set aside the procedural matter of locus standi, when the
subject of the case involved public interest.
In Tañada v. Tuvera, the Court asserted that when the issue concerns a public right and the
object of mandamus is to obtain the enforcement of a public duty, the people are regarded as
the real parties in interest; and because it is sufficient that petitioner is a citizen and as such is
interested in the execution of the laws, he need not show that he has any legal or special
interest in the result of the action. In the aforesaid case, the petitioners sought to enforce their
right to be informed on matters of public concern, a right then recognized in Section 6, Article IV
of
of the 1973 Constitution, in connection with the rule that laws in order to be valid and
or
enforceable must be published in the Official Gazette or otherwise effectively promulgated. In
to
ruling for the petitioners’ legal standing, the Court declared that the right they sought to be
of
enforced ‘is a public right recognized by no less than the fundamental law of the land.’
of
Legaspi v. Civil Service Commission, while reiterating Tañada, further declared that ‘when a
mandamus proceeding involves the assertion of a public right, the requirement of personal
interest is satisfied by the mere fact that petitioner is a citizen and, therefore, part of the general
‘public’ which possesses the right.’
Further, in Albano v. Reyes, we said that while expenditure of public funds may not have been
involved under the questioned contract for the development, management and operation of the
Manila International Container Terminal, ‘public interest [was] definitely involved considering the
important role [of the subject contract] ... in the economic development of the country and the
magnitude of the financial consideration involved.’ We concluded that, as a consequence, the
disclosure provision in the Constitution would constitute sufficient authority for upholding the
petitioner’s standing.
Similarly, the instant petition is anchored on the right of the people to information and access to
official records, documents and papers—a right guaranteed under Section 7, Article III of the
1987 Constitution. Petitioner, a former solicitor general, is a Filipino citizen. Because of the
satisfaction of the two basic requisites laid down by decisional law to sustain petitioner’s legal
standing, i.e. (1) the enforcement of a public right (2) espoused by a Filipino citizen, we rule
that the petition at bar should be allowed.”
We rule that since the instant petition, brought by a citizen, involves the enforcement of
constitutional rights—to information and to the equitable diffusion of natural resources—matters
of transcendental public importance, the petitioner has the requisite locus standi.
Fifth issue: whether the constitutional right to information
includes official information on on-going negotiations
before a final agreement.
Section 7, Article III of the Constitution explains the people’s right to information on matters of
public concern in this manner:
“Sec. 7. The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents, and papers pertaining to official acts,
transactions, or decisions, as well as to government research data used as basis for policy
development, shall be afforded the citizen, subject to such limitations as may be provided by
law.”
49
P R O P E R T Y No. 3 |
The State policy of full transparency in all transactions involving public interest reinforces the
people’s right to information on matters of public concern. This State policy is expressed in
Section 28, Article II of the Constitution, thus:
“Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and
implements a policy of full public disclosure of all its transactions involving public
interest.” (Emphasis supplied)
These twin provisions of the Constitution seek to promote transparency in policy-making and in
the operations of the government, as well as provide the people sufficient information to
exercise effectively other constitutional rights. These twin provisions are essential to the exercise
of freedom of expression. If the government does not disclose its official acts, transactions and
decisions to citizens, whatever citizens say, even if expressed without any restraint, will be
speculative and amount to nothing. These twin provisions are also essential to hold public
officials “at all times x x x accountable to the people,” 29 for unless citizens have the proper
information, they cannot hold public officials accountable for anything. Armed with the right
information, citizens can participate in public discussions leading to the formulation of
government policies and their effective implementation. An informed citizenry is essential to the
existence and proper functioning of any democracy. As explained by the Court in Valmonte v.
Belmonte, Jr.30—
“An essential element of these freedoms is to keep open a continuing dialogue or process of
communication between the government and the people. It is in the interest of the State that
the channels for free political discussion be maintained to the end that the government may
perceive and be responsive to the people’s will. Yet, this open dialogue can be effective only
to the extent that the citizenry is informed and thus able to formulate its will intelligently.
Only when the participants in the discussion are aware of the issues and have access to
information relating thereto can such bear fruit.”
PEA asserts, citing Chavez v. PCGG,31 that in cases of on-going negotiations the right to
information is limited to “definite propositions of the government.” PEA maintains the right does
not include access to “intra-agency or inter-agency recommendations or communications during
the stage when common assertions are still in the process of being formulated or are in the
‘exploratory stage’.”
Also, AMARI contends that petitioner cannot invoke the right at the pre-decisional stage or
before the closing of the transaction. To support its contention, AMARI cites the following
discussion in the 1986 Constitutional Commission:
“Mr. Suarez: And when we say ‘transactions’ which should be distinguished from contracts,
agreements, or treaties or whatever, does the Gentleman refer to the steps leading to the
consummation of the contract, or does he refer to the contract itself?
Mr. Ople: The ‘transactions’ used here, I suppose is generic and therefore, it can cover
both steps leading to a contract and already a consummated contract, Mr. Presiding
Officer.
Mr. Suarez: This contemplates inclusion of negotiations leading to the consummation of the
transaction.
Mr. Ople: Yes, subject only to reasonable safeguards on the national interest.
Mr. Suarez: Thank you.”32 (Emphasis supplied)
AMARI argues there must first be a consummated contract before petitioner can invoke the
right. Requiring government officials to reveal their deliberations at the pre-decisional stage will
degrade the quality of decision-making in government agencies. Government officials will
hesitate to express their real sentiments during deliberations if there is immediate public
dissemination of their discussions, putting them under all kinds of pressure before they decide.
We must first distinguish between information the law on public bidding requires PEA to disclose
publicly, and information the constitutional right to information requires PEA to release to the
public. Before the consummation of the contract, PEA must, on its own and without demand
from anyone, disclose to the public matters relating to the disposition of its property. These
include the size, location, technical description and nature of the property being disposed of the
terms and conditions of the disposition, the parties qualified to bid, the minimum price and
similar information. PEA must prepare all these data and disclose them to the public at the start
of the disposition process, long before the consummation of the contract, because the
Government Auditing Code requires public bidding. If PEA fails to make this disclosure, any
citizen can demand from PEA this information at any time during the bidding process.
Information, however, on on-going evaluation or review of bids or proposals being undertaken
by the bidding or review committee is not immediately accessible under the right to information.
While the evaluation or review is still on-going, there are no “official acts, transactions, or
decisions” on the bids or proposals. However, once the committee makes its official
recommendation, there arises a “definite proposition” on the part of the government. From this
moment, the public’s right to information attaches, and any citizen can access all the non-
proprietary information leading to such definite proposition. In Chavez v. PCGG,33 the Court ruled
as follows:
“Considering the intent of the framers of the Constitution, we believe that it is incumbent
upon the PCGG and its officers, as well as other government representatives, to disclose
sufficient public information on any proposed settlement they have decided to take up with
the ostensible owners and holders of ill-gotten wealth. Such information, though, must
pertain to definite propositions Of the government not necessarily to intraagency or inter-
agency recommendations or communications during the stage when common assertions are
still in the process of being formulated or are in the “exploratory” stage. There is need, of
course, to observe the same restrictions on disclosure of information in general, as discussed
earlier—such as on matters involving national security, diplomatic or foreign relations,
intelligence and other classified information.” (Emphasis supplied)
Contrary to AMARI’s contention, the commissioners of the 1986 Constitutional Commission
understood that the right to information “contemplates inclusion of negotiations leading to the
consummation of the transaction.” Certainly, a consummated contract is not a requirement for
50
P R O P E R T Y No. 3 |
the exercise of the right to information. Otherwise, the people can never exercise the right if no
contract is consummated, and if one is consummated, it may be too late for the public to expose
its defects.
Requiring a consummated contract will keep the public in the dark until the contract, which may
be grossly disadvantageous to the government or even illegal, becomes a fait accompli. This
negates the State policy of full transparency on matters of public concern, a situation which the
framers of the Constitution could not have intended. Such a requirement will prevent the
citizenry from participating in the public discussion of any proposed contract, effectively
truncating a basic right enshrined in the Bill of Rights. We can allow neither an emasculation of a
constitutional right, nor a retreat by the State of its avowed “policy of full disclosure of all its
transactions involving public interest.”
The right covers three categories of information which are “matters of public concern,” namely:
(1) official records; (2) documents and papers pertaining to official acts, transactions and
decisions; and (3) government research data used in formulating policies. The first category
refers to any document that is part of the public records in the custody of government agencies
or officials. The second category refers to documents and papers recording, evidencing,
establishing, confirming, supporting, justifying or explaining official acts, transactions or
decisions of government agencies or officials. The third category refers to research data,
whether raw, collated or processed, owned by the government and used in formulating
government policies.
The information that petitioner may access on the renegotiation of the JVA includes evaluation
reports, recommendations, legal and expert opinions, minutes of meetings, terms of reference
and other documents attached to such reports or minutes, all relating to the JVA. However, the
right to information does not compel PEA to prepare lists, abstracts, summaries and the like
relating to the renegotiation of the JVA. 34 The right only affords access to records, documents
and papers, which means the opportunity to inspect and copy them. One who exercises the right
must copy the records, documents and papers at his expense. The exercise of the right is also
subject to reasonable regulations to protect the integrity of the public records and to minimize
disruption to government operations, like rules specifying when and how to conduct the
inspection and copying.35
The right to information, however, does not extend to matters recognized as privileged
information under the separation of powers. 36 The right does not also apply to information on
military and diplomatic secrets, information affecting national security, and information on
investigations of crimes by law enforcement agencies before the prosecution of the accused,
which courts have long recognized as confidential. 37 The right may also be subject to other
limitations that Congress may impose by law.
There is no claim by PEA that the information demanded by petitioner is privileged information
rooted in the separation of powers. The information does not cover Presidential conversations,
correspondences, or discussions during closed-door Cabinet meetings which, like internal-
deliberations of the Supreme Court and other collegiate courts, or executive sessions of either
house of Congress,38 are recognized as confidential. This kind of information cannot be pried
open by a co-equal branch of government. A frank exchange of exploratory ideas and
assessments, free from the glare of publicity and pressure by interested parties, is essential to
protect the independence of decision-making of those tasked to exercise Presidential, Legislative
and Judicial power.39 This is not the situation in the instant case.
We rule, therefore, that the constitutional right to information includes official information on
on-going negotiations before a final contract. The information, however, must constitute definite
propositions by the government and should not cover recognized exceptions like privileged
information, military and diplomatic secrets and similar matters affecting national security and
public order.40 Congress has also prescribed other limitations on the right to information in
several legislations.41
Sixth issue: whether stipulations in the Amended JVA for the
transfer to AMARI of lands, reclaimed or to be reclaimed,
violate the Constitution.
The Regalian Doctrine
The ownership of lands reclaimed from foreshore and submerged areas is rooted in the Regalian
doctrine which holds that the State owns all lands and waters of the public domain. Upon the
Spanish conquest of the Philippines, ownership of all “lands, territories and possessions” in the
Philippines passed to the Spanish Crown. 42 The King, as the sovereign ruler and representative
of the people, acquired and owned all lands and territories in the Philippines except those he
disposed of by grant or sale to private individuals.
The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting, however, the
State, in lieu of the King, as the owner of all lands and waters of the public domain. The
Regalian doctrine is the foundation of the time-honored principle of land ownership that “all
lands that were not acquired from the Government, either by purchase or by grant, belong to
the public domain.”43 Article 339 of the Civil Code of 1889, which is now Article 420 of the Civil
Code of 1950, incorporated the Regalian doctrine.
Ownership and Disposition of Reclaimed Lands
The Spanish Law of Waters of 1866 was the first statutory law governing the ownership and
disposition of reclaimed lands in the Philippines. On May 18, 1907, the Philippine Commission
enacted Act No. 1654 which provided for the lease, but not the sale, of reclaimed lands of the
government to corporations and individuals. Later, on November 29, 1919, the Philippine
Legislature approved Act No. 2874, the Public Land Act, which authorized the lease, but not the
sale, of reclaimed lands of the government to corporations and individuals. On November 7,
1936, the National Assembly passed Commonwealth Act No. 141, also known as the Public Land
Act, which authorized the lease, but not the sale, of reclaimed lands of the government to
corporations and individuals. CA No. 141 continues to this day as the general law governing the
classification and disposition of lands of the public domain.
The Spanish Law of Waters of 1866 and the Civil Code of 1889
Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all waters within
the maritime zone of the Spanish territory belonged to the public domain for public use. 44 The
51
P R O P E R T Y No. 3 |
Spanish Law of Waters of 1866 allowed the reclamation of the sea under Article 5, which
Section 2. (a) The Secretary of the Interior shall cause all Government or public lands made
provided as follows:
or reclaimed by the Government by dredging or filling or otherwise to be divided into lots or
“Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, blocks, with the necessary streets and alleyways located thereon, and shall cause plats and
or by the provinces, pueblos or private persons, with proper permission, shall become the plans of such surveys to be prepared and filed with the Bureau of Lands.
property of the party constructing such works, unless otherwise provided by the terms of the
(b)Upon completion of such plats and plans the Governor-General shall give notice to the
grant of authority.”
public that such parts of the lands so made or reclaimed as are not needed for public
Under the Spanish Law of Waters, land reclaimed from the sea belonged to the party purposes will be leased for commercial and business purposes, x x x.
undertaking the reclamation, provided the government issued the necessary permit and did not
(e)The leases above provided for shall be disposed of to the highest and best bidder
reserve ownership of the reclaimed land to the State.
therefore, subject to such regulations and safeguards as the Governor-General may by
Article 339 of the Civil Code of 1889 defined property of public dominion as follows: executive order prescribe.” (Emphasis supplied)
“Art. 339. Property of public dominion is—
Act No. 1654 mandated that the government should retain title to all lands reclaimed by the
1.That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges
government. The Act also vested in the government control and disposition of foreshore lands.
constructed by the State, riverbanks, shores, roadsteads, and that of a similar character;
Private parties could lease lands reclaimed by the government only if these lands were no longer
2.That belonging exclusively to the State which, without being of general public use, is
needed for public purpose. Act No. 1654 mandated public bidding in the lease of government
employed in some public service, or in the development of the national wealth, such as walls,
reclaimed lands. Act No. 1654 made government reclaimed lands sui generis in that unlike other
fortresses, and other works for the defense of the territory, and mines, until granted to private
public lands which the government could sell to private parties, these reclaimed lands were
individuals.”
available only for lease to private parties.
Property devoted to public use referred to property open for use by the public. In contrast,
Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of 1866. Act No.
property devoted to public service referred to property used for some specific public service and
1654 did not prohibit private parties from reclaiming parts of the sea under Section 5 of the
open only to those authorized to use the property.
Spanish Law of Waters. Lands reclaimed from the sea by private parties with government
Property of public dominion referred not only to property devoted to public use, but also to permission remained private lands.
property not so used but employed to develop the national wealth. This class of property
Act No. 2874 of the Philippine Legislature
constituted property of public dominion although employed for some economic or commercial
On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public Land Act. 46
activity to increase the national wealth.
The salient provisions of Act No. 2874, on reclaimed lands, were as follows:
Article 341 of the Civil Code of 1889 governed the reclassification of property of public dominion
“Sec. 6. The Governor-General, upon the recommendation of the Secretary of Agriculture
into private property, to wit:
and Natural Resources, shall from time to time classify the lands of the public domain into —
“Art. 341. Property of public dominion, when no longer devoted to public use or to the (a)Alienable or disposable,
defense of the territory, shall become a part of the private property of the State.” (b)Timber, and
(c)Mineral lands, x x x.
This provision, however, was not self-executing. The legislature, or the executive department
pursuant to law, must declare the property no longer needed for public use or territorial defense
Sec. 7. For the purposes of the government and disposition of alienable or disposable public
before the government could lease or alienate the property to private parties. 45
lands, the Governor-General, upon recommendation by the Secretary of Agriculture and
Act No. 1654 of the Philippine Commission Natural Resources, shall from time to time declare what lands are open, to disposition or
On May 8, 1907, the Philippine Commission enacted Act No.1654 which regulated the lease of concession under this Act.”
reclaimed and foreshore lands.The salient provisions of this law were as follows:
Sec. 8. Only those lands shall be declared open to disposition or concession which have been
“Section 1. The control and disposition of the foreshore as defined in existing law, and the officially delimited or classified x x x.
title to all Government or public lands made or reclaimed by the Government by dredging or
Sec. 55. Any tract of land of the public domain which, being neither timber nor mineral land,
filling or otherwise throughout the Philippine Islands, shall be retained by the Government
shall be classified as suitable for residential purposes or for commercial, industrial, or other
without prejudice to vested rights and without prejudice to rights conceded to the City of
Manila in the Luneta Extension.
52
P R O P E R T Y No. 3 |
productive purposes other than agricultural purposes , and shall be open to disposition or
concession, shall be disposed of under the provisions of this chapter, and not otherwise.
Sec. 56. The lands disposable under this title shall be classified as follows:
(a)Lands reclaimed by the Government by dredging, filling, or other means;
(b)Foreshore;
(c)Marshy lands or lands covered with water bordering upon the shores or
banks of navigable lakes or rivers;
(d)Lands not included in any of the foregoing classes, x x x.
Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six shall be disposed
of to private parties by lease only and not otherwise, as soon as the Governor-General, upon
recommendation by the Secretary of Agriculture and Natural Resources, shall declare that
the same are not necessary for the public service and are open to disposition under this
chapter. The lands included in class (d) may be disposed of by sale or lease under the
provisions of this Act.” (Emphasis supplied)
Section 6 of Act No. 2874 authorized the Governor-General to “classify lands of the public
domain into x x x alienable or disposable” 47 lands. Section 7 of the Act empowered the
Governor-General to “declare what lands are open to disposition or concession.” Section 8 of the
Act limited alienable or disposable lands only to those lands which have been “officially delimited
and classified.”
Section 56 of Act No. 2874 stated that lands “disposable under this title 48 shall be classified” as
government reclaimed, foreshore and marshy lands, as well as other lands. All these lands,
however, must be suitable for residential, commercial, industrial or other productive non-
agricultural purposes. These provisions vested upon the Governor-General the power to classify
inalienable lands of the public domain into disposable lands of the public domain. These
provisions also empowered the Governor-General to classify further such disposable lands of the
public domain into government reclaimed, foreshore or marshy lands of the public domain, as
well as other non-agricultural lands.
Section 58 of Act No. 2874 categorically mandated that disposable lands of the public domain
classified as government reclaimed, foreshore and marshy lands “shall be disposed of to private
parties by lease only and not otherwise.” The Governor-General, before allowing the lease of
these lands to private parties, must formally declare that the lands were “not necessary for the
public service.” Act No. 2874 reiterated the State policy to lease and not to sell government
reclaimed, foreshore and marshy lands of the public domain, a policy first enunciated in 1907 in
Act No. 1654. Government reclaimed, foreshore and marshy lands remained sui generis, as the
only alienable or disposable lands of the public domain that the government could not sell to
private parties.
The rationale behind this State policy is obvious. Government reclaimed, foreshore and marshy
public lands for non-agricultural purposes retain their inherent potential as areas for public
service. This is the reason the government prohibited the sale, and only allowed the lease, of
these lands to private parties. The State always reserved these lands for some future public
service.
Act No. 2874 did not authorize the reclassification of government reclaimed, foreshore and
marshy lands into other nonagricultural lands under Section 56 (d). Lands falling under Section
56 (d) were the only lands for non-agricultural purposes the government could sell to private
parties. Thus, under Act No. 2874, the government could not sell government reclaimed,
foreshore and marshy lands to private parties, unless the legislature passed a law allowing their
sale.49
Act No. 2874 did not prohibit private parties from reclaiming parts of the sea pursuant to Section
5 of the Spanish Law of Waters of 1866. Lands reclaimed from the sea by private parties with
government permission remained private lands.
Dispositions under the 1935 Constitution
On May 14, 1935, the 1935 Constitution took effect upon its ratification by the Filipino people.
The 1935 Constitution, in adopting the Regalian doctrine, declared in Section 1, Article XIII, that
—
“Section 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals,
coal, petroleum, and other mineral oils, all forces of potential energy and other natural
resources of the Philippines belong to the State, and their disposition, exploitation,
development, or utilization shall be limited to citizens of the Philippines or to corporations or
associations at least sixty per centum of the capital of which is owned by such citizens,
subject to any existing right, grant, lease, or concession at the time of the inauguration of
the Government established under this Constitution. Natural resources, with the exception of
public agricultural land, shall not be alienated, and no license, concession, or lease for the
exploitation, development, or utilization of any of the natural resources shall be granted for a
period exceeding twenty-five years, renewable for another twenty-five years, except as to
water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases beneficial use may be the measure and limit of
the grant.” (Emphasis supplied)
The 1935 Constitution barred the alienation of all natural resources except public agricultural
lands, which were the only natural resources the State could alienate. Thus, foreshore lands,
considered part of the State’s natural resources, became inalienable by constitutional fiat,
available only for lease for 25 years, renewable for another 25 years. The government could
alienate foreshore lands only after these lands were reclaimed and classified as alienable
agricultural lands of the public domain. Government reclaimed and marshy lands of the public
domain, being neither timber nor mineral lands, fell under the classification of public agricultural
lands.50 However, government reclaimed and marshy lands, although subject to classification as
disposable public agricultural lands, could only be leased and not sold to private parties because
of Act No. 2874.
The prohibition on private parties from acquiring ownership of government reclaimed and
marshy lands of the public domain was only a statutory prohibition and the legislature could
therefore remove such prohibition. The 1935 Constitution did not prohibit individuals and
53
P R O P E R T Y No. 3 |
corporations from acquiring government reclaimed and marshy lands of the public domain that by this Act or any other valid law may be claimed, or which, having been reserved or
were classified as agricultural lands under existing public land laws. Section 2, Article XIII of the appropriated, have ceased to be so. x x x.”
1935 Constitution provided as follows:
Thus, before the government could alienate or dispose of lands of the public domain, the
“Section 2. No private corporation or association may acquire, lease, or hold public President must first officially classify these lands as alienable or disposable, and then declare
agricultural lands in excess of one thousand and twenty four hectares, nor may any them open to disposition or concession. There must be no law reserving these lands for public or
individual acquire such lands by purchase in excess of one hundred and forty hectares , or by quasi-public uses.
lease in excess of one thousand and twenty-four hectares, or by homestead in excess of
The salient provisions of CA No. 141, on government reclaimed, foreshore and marshy lands of
twenty-four hectares. Lands adapted to grazing, not exceeding two thousand hectares, may
the public domain, are as follows:
be leased to an individual, private corporation, or association.”
“Sec. 58. Any tract of land of the public domain which, being neither timber nor mineral
Still, after the effectivity of the 1935 Constitution, the legislature did not repeal Section 58 of Act
land, is intended to be used for residential purposes or for commercial, industrial, or other
No. 2874 to open for sale to private parties government reclaimed and marshy lands of the
productive purposes other than agricultural, and is open to disposition or concession, shall
public domain. On the contrary, the legislature continued the long established State policy of
be disposed of under the provisions of this chapter and not otherwise.
retaining for the government title and ownership of government reclaimed and marshy lands of
the public domain. Sec. 59. The lands disposable under this title shall be classified as follows:
(a)Lands reclaimed by the Government by dredging, filling, or other means;
Commonwealth Act No. 141 of the Philippine National Assembly
(b)Foreshore;
On November 7, 1936, the National Assembly approved Commonwealth Act No. 141, also known
(c)Marshy lands or lands covered with water bordering upon the shores or banks of
as the Public Land Act, which compiled the then existing laws on lands of the public domain. CA
navigable lakes or rivers;
No. 141, as amended, remains to this day the existing general law governing the classification
(d)Lands not included in any of the foregoing classes.
and disposition of lands of the public domain other than timber and mineral lands. 51
Sec. 60. Any tract of land comprised under this title may be leased or sold, as the case may
Section 6 of CA No. 141 empowers the President to classify lands of the public domain into
be, to any person, corporation, or association authorized to purchase or lease public lands
“alienable or disposable”52 lands of the public domain, which prior to such classification are
for agricultural purposes. x x x.
inalienable and outside the commerce of man. Section 7 of CA No. 141 authorizes the President
to “declare what lands are open to disposition or concession.” Section 8 of CA No. 141 states
Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine shall be
that the government can declare open for disposition or concession only lands that are “officially
disposed of to private parties by lease only and not otherwise , as soon as the President,
delimited and classified.” Sections 6, 7 and 8 of CA No. 141 read as follows:
upon recommendation by the Secretary of Agriculture, shall declare that the same are not
“Sec. 6. The President, upon the recommendation of the Secretary of Agriculture and necessary for the public service and are open to disposition under this chapter. The lands
Commerce, shall from time to time classify the lands of the public domain into — included in class (d) may be disposed of by sale or lease under the provisions of this Act .”
(a)Alienable or disposable,
Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution, Section 58 of
(b)Timber, and
Act No. 2874 prohibiting the sale of government reclaimed, foreshore and marshy disposable
(c)Mineral lands,
lands of the public domain. All these lands are intended for residential, commercial, industrial or
and may at any time and in like manner transfer such lands from one class to another, 53 for the other non-agricultural purposes. As before, Section 61 allowed only the lease of such lands to
purpose of their administration and disposition. private parties. The government could sell to private parties only lands falling under Section 59
(d) of CA No. 141, or those lands for nonagricultural purposes not classified as government
Sec. 7. For the purposes of the administration and disposition of alienable or disposable public
reclaimed, foreshore and marshy disposable lands of the public domain. Foreshore lands,
lands, the President, upon recommendation by the Secretary of Agriculture and Commerce, shall
however, became inalienable under the 1935 Constitution which only allowed the lease of these
from time to time declare what lands are open to disposition or concession under this Act.
lands to qualified private parties.
Sec. 8. Only those lands shall be declared open to disposition or concession which have been
Section 58 of CA No. 141 expressly states that disposable lands of the public domain tended for
officially delimited and classified and, when practicable, surveyed, and which have not been
residential, commercial, industrial or other productive purposes other than agricultural “shall be
reserved for public or quasi-public uses , nor appropriated by the Government, nor in any
disposed of under the provisions of this chapter and not otherwise.” Under Section 10 of CA No.
manner become private property, nor those on which a private right authorized and recognized
141, the term “disposition” includes lease of the land. Any disposition of government reclaimed,
54
P R O P E R T Y No. 3 |
foreshore and marshy disposable lands for non-agricultural purposes must comply with Chapter hectares: Provided, however, That this limitation shall not apply to grants, donations, or
IX, Title III of CA No. 141,54 unless a subsequent law amended or repealed these provisions. transfers made to a province, municipality or branch or subdivision of the Government for the
In his concurring opinion in the landmark case of Republic Real Estate Corporation v. Court of purposes deemed by said entities conducive to the public interest; but the land so granted,
Appeals,55 Justice Reynato S. Puno summarized succinctly the law on this matter, as follows: donated, or transferred to a province, municipality or branch or subdivision of the
Government shall not be alienated, encumbered, or otherwise disposed of in a manner
“Foreshore lands are lands of public dominion intended for public use. So too are lands
affecting its title, except when authorized by Congress: x x x.” (Emphasis supplied)
reclaimed by the government by dredging, filling, or other means. Act 1654 mandated that
the control and disposition of the foreshore and lands under water remained in the national The congressional authority required in Section 60 of CA No. 141 mirrors the legislative authority
government. Said law allowed only the ‘leasing’ of reclaimed land. The Public Land Acts of required in Section 56 of Act No. 2874.
1919 and 1936 also declared that the foreshore and lands reclaimed by the government were
One reason for the congressional authority is that Section 60 of CA No. 141 exempted
to be “disposed of to private parties by lease only and not otherwise.” Before leasing,
government units and entities from the maximum area of public lands that could be acquired
however, the Governor-General, upon recommendation of the Secretary of Agriculture and
from the State. These government units and entities should not just turn around and sell these
Natural Resources, had first to determine that the land reclaimed was not necessary for the
lands to private parties in violation of constitutional or statutory limitations. Otherwise, the
public service. This requisite must have been met before the land could be disposed of. But
transfer of lands for non-agricultural purposes to government units and entities could be used to
even then, the foreshore and lands under water were not to be alienated and sold to private
circumvent constitutional limitations on ownership of alienable or disposable lands of the public
parties. The disposition of the reclaimed land was only by lease. The land remained property
domain. In the same manner, such transfers could also be used to evade the statutory
of the State.” (Emphasis supplied)
prohibition in CA No. 141 on the sale of government reclaimed and marshy lands of the public
As observed by Justice Puno in his concurring opinion, “Commonwealth Act No. 141 has domain to private parties. Section 60 of CA No. 141 constitutes by operation of law a lien on
remained in effect at present.” these lands.57
The State policy prohibiting the sale to private parties of government reclaimed, foreshore and In case of sale or lease of disposable lands of the public domain falling under Section 59 of CA
marshy alienable lands of the public domain, first implemented in 1907 was thus reaffirmed in No. 141, Sections 63 and 67 require a public bidding. Sections 63 and 67 of CA No. 141 provide
CA No. 141 after the 1935 Constitution took effect. The prohibition on the sale of foreshore as follows:
lands, however, became a constitutional edict under the 1935 Constitution. Foreshore lands
“Sec. 63. Whenever it is decided that lands covered by this chapter are not needed for public
became inalienable as natural resources of the State, unless reclaimed by the government and
purposes, the Director of Lands shall ask the Secretary of Agriculture and Commerce (now the
classified as agricultural lands of the public domain, in which case they would fall under the
Secretary of Natural Resources) for authority to dispose of the same. Upon receipt of such
classification of government reclaimed lands.
authority, the Director of Lands shall give notice by public advertisement in the same manner
After the effectivity of the 1935 Constitution, government reclaimed and marshy disposable
as in the case of leases or sales of agricultural public land, x x x.
lands of the public domain continued to be only leased and not sold to private parties. 56 These
lands remained sui generis, as the only alienable or disposable lands of the public domain the
Sec. 67. The lease or sale shall be made by oral bidding; and adjudication shall be made to
government could not sell to private parties.
the highest bidder. x x x.” (Emphasis supplied)
Since then and until now, the only way the government can sell to private parties government
Thus, CA No. 141 mandates the Government to put to public auction all leases or sales of
reclaimed and marshy disposable lands of the public domain is for the legislature to pass a law
alienable or disposable lands of the public domain. 58
authorizing such sale. CA No. 141 does not authorize the President to reclassify government
reclaimed and marshy lands into other non-agricultural lands under Section 59 (d). Lands Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal Section 5 of the Spanish
classified under Section 59 (d) are the only alienable or disposable lands for nonagricultural Law of Waters of 1866. Private parties could still reclaim portions of the sea with government
purposes that the government could sell to private parties. permission. However, the reclaimed land could become private land only if classified as alienable
agricultural land of the public domain open to disposition under CA No. 141. The 1935
Moreover, Section 60 of CA No. 141 expressly requires congressional authority before lands
Constitution prohibited the alienation of all natural resources except public agricultural lands.
under Section 59 that the government previously transferred to government units or entities
could be sold to private parties. Section 60 of CA No. 141 declares that— The Civil Code of 1950
The Civil Code of 1950 readopted substantially the definition of property of public dominion
“Sec. 60. x x x The area so leased or sold shall be such as shall, in the judgment of the
found in the Civil Code of 1889. Articles 420 and 422 of the Civil Code of 1950 state that—
Secretary of Agriculture and Natural Resources, be reasonably necessary for the purposes for
which such sale or lease is requested, and shall not exceed one hundred and forty-four “Art. 420. The following things are property of public dominion:
55
P R O P E R T Y No. 3 |
(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.
Art. 422. Property of public dominion, when no longer intended for public use or for
public service, shall form part of the patrimonial property of the State.”
Again, the government must formally declare that the property of public dominion is no longer
needed for public use or public service, before the same could be classified as patrimonial
property of the State.59 In the case of government reclaimed and marshy lands of the public
domain, the declaration of their being disposable, as well as the manner of their disposition, is
governed by the applicable provisions of CA No. 141.
Like the Civil Code of 1889, the Civil Code of 1950 included as property of public dominion those
properties of the State which, without being for public use, are intended for public service or the
“development of the national wealth.” Thus, government reclaimed and marshy lands of the
State, even if not employed for public use or public service, if developed to enhance the national
wealth, are classified as property of public dominion.
Dispositions under the 1973 Constitution
The 1973 Constitution, which took effect on January 17, 1973, likewise adopted the Regalian
doctrine. Section 8, Article XIV of the 1973 Constitution stated that—
“Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral
oils, all forces of potential energy, fisheries, wildlife, and other natural resources of the
Philippines belong to the State. With the exception of agricultural, Industrial or commercial,
residential, and resettlement lands of the public domain, natural resources shall not be
alienated, and no license, concession, or lease for the exploration, development, exploitation,
or utilization of any of the natural resources shall be granted for a period exceeding twenty-
five years, renewable for not more than twenty-five years, except as to water rights for
irrigation, water supply, fisheries, or industrial uses other than the development of water
power, in which cases, beneficial use may be the measure and the limit of the grant.”
The 1973 Constitution prohibited the alienation of all natural resources with the exception of
“agricultural, industrial or commercial, residential, and resettlement lands of the public domain.”
In contrast, the 1935 Constitution barred the alienation of all natural resources except “public
agricultural lands.” However, the term “public agricultural lands” in the 1935 Constitution
encompassed industrial, commercial, residential and resettlement lands of the public domain. 60 If
the land of public domain were neither timber nor mineral land, it would fall under the
classification of agricultural land of the public domain. Both the 1935 and 1973 Constitution,
therefore, prohibited the alienation of all natural resources except agricultural lands of the public
domain.
The 1973 Constitution, however, limited the alienation of lands of the public domain to
individuals who were citizens of the Philippines. Private corporations, even if wholly owned by
Philippine citizens, were no longer allowed to acquire alienable lands of the public domain unlike
in the 1935 Constitution. Section 11, Article XIV of the 1973 Constitution declared that—
“Sec. 11. The Batasang Pambansa, taking into account conservation, ecological, and
development requirements of the natural resources, shall determine by law the size of land of
the public domain which may be developed, held or acquired by, or leased to, any qualified
individual, corporation, or association, and the conditions therefor. No private corporation or
association may hold alienable lands of the public domain except by lease not to exceed one
thousand hectares in area nor may any citizen hold such lands by lease in excess of five
hundred hectares or acquire by purchase, homestead or grant, in excess of twenty-four
hectares. No private corporation or association may hold by lease, concession, license or
permit, timber or forest lands and other timber or forest resources in excess of one hundred
thousand hectares. However, such area may be increased by the Batasang Pambansa upon
recommendation of the National Economic and Development Authority.” (Emphasis supplied)
Thus, under the 1973 Constitution, private corporations could hold alienable lands of the public
domain only through lease. Only individuals could now acquire alienable lands of the public
domain, and private corporations became absolutely barred from acquiring any kind of alienable
land of the public domain. The constitutional ban extended to all kinds of alienable lands of the
public domain, while the statutory ban under CA No. 141 applied only to government reclaimed,
foreshore and marshy alienable lands of the public domain.
PD No. 1084 Creating the Public Estates Authority
On February 4, 1977, then President Ferdinand Marcos issued Presidential Decree No. 1084
creating PEA, a wholly Government owned and controlled corporation with a special charter.
Sections 4 and 8 of PD No. 1084, vests PEA with the following purposes and powers:—
“Sec. 4. Purpose.—The Authority is hereby created for the following purposes:
(a)To reclaim land, including foreshore and submerged areas, by dredging,
filling or other means, or to acquire reclaimed land;
(b)To develop, improve, acquire, administer, deal in, subdivide, dispose, lease
and sell any and all kinds of lands, buildings, estates and other forms of real
property, owned, managed, controlled and/or operated by the government;
(c)To provide for, operate or administer such service as may be necessary for
the efficient, economical and beneficial utilization of the above properties.
Sec. 5. Powers and functions of the Authority .—The Authority shall, in carrying out the
purposes for which it is created, have the following powers and functions:
(a) To prescribe its by-laws.
(b) x x x
(c) (i)To hold lands of the public domain in excess of the area permitted to private
corporations by statute.
(d) (j)To reclaim lands and to construct work across, or otherwise, any stream,
watercourse, canal, ditch, flume x x x.
(e) x x x
56
P R O P E R T Y No. 3 |
(f) (o)To perform such acts and exercise such functions as may be necessary for alienable lands of the public domain except by lease, for a period not exceeding twenty-five
the attainment of the purposes and objectives herein specified.” years, renewable for not more than twenty-five years, and not to exceed one thousand
hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or
PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public acquire not more than twelve hectares thereof by purchase, homestead, or grant.
domain. Foreshore areas are those covered and uncovered by the ebb and flow of the tide. 61
Taking into account the requirements of conservation, ecology, and development, and subject
Submerged areas are those permanently under water regardless of the ebb and flow of the
to the requirements of agrarian reform, the Congress shall determine, by law, the size of lands
tide.62 Foreshore and submerged areas indisputably belong to the public domain 63 and are
of the public domain which may be acquired, developed, held, or leased and the conditions
inalienable unless reclaimed, classified as alienable lands open to disposition, and further
therefor.” (Emphasis supplied)
declared no longer needed for public service.
The 1987 Constitution continues the State policy in the 1973 Constitution banning private
The ban in the 1973 Constitution on private corporations from acquiring alienable lands of the
corporations from acquiring any kind of alienable land of the public domain. Like the 1973
public domain did not apply to PEA since it was then, and until today, a fully owned government
Constitution, the 1987 Constitution allows private corporations to hold alienable lands of the
corporation. The constitutional ban applied then, as it still applies now, only to “private
public domain only through lease. As in the 1935 and 1973 Constitutions, the general law
corporations and associations.” PD No. 1084 expressly empowers PEA “to hold lands of the
governing the lease to private corporations of reclaimed, foreshore and marshy alienable lands
public domain” even “in excess of the area permitted to private corporations by statute.” Thus,
of the public domain is still CA No. 141.
PEA can hold title to private lands, as well as title to lands of the public domain .
The Rationale behind the Constitutional Ban
In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the public
domain, there must be legislative authority empowering PEA to sell these lands. This legislative The rationale behind the constitutional ban on corporations from acquiring, except through
authority is necessary in view of Section 60 of CA No. 141, which states— lease, alienable lands of the public domain is not well understood. During the deliberations of
the 1986 Constitutional Commission, the commissioners probed the rationale behind this ban,
“Sec. 60. x x x; but the land so granted, donated or transferred to a province, municipality,
thus:
or branch or subdivision of the Government shall not be alienated, encumbered or otherwise
disposed of in a manner affecting its title, except when authorized by Congress; x x x.” “FR. BERNAS: Mr. Vice-President, my questions have reference to page 3, line 5 which says: “No
private corporation or association may hold alienable lands of the public domain except by
Without such legislative authority, PEA could not sell but only lease its reclaimed foreshore and
lease, not to exceed one thousand hectares in area.’ If we recall, this provision did not exist
submerged alienable lands of the public domain. Nevertheless, any legislative authority granted
under the 1935 Constitution, but this was introduced in the 1973 Constitution. In effect, it
to PEA to sell its reclaimed alienable lands of the public domain would be subject to the
prohibits private corporations from acquiring alienable public lands. But it has not been
constitutional ban on private corporations from acquiring alienable lands of the public domain.
very clear in jurisprudence what the reason for this is. In some of the cases decided in
Hence, such legislative authority could only benefit private individuals.
1982 and 1983, it was Indicated that the purpose of this is to prevent large landholdings. Is
Dispositions under the 1987 Constitution that the intent of this provision?
MR. VILLEGAS: I think that is the spirit of the provision.
The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted the Regalian
FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were instances where the
doctrine. The 1987 Constitution declares that all natural resources are “owned by the State,” and
Iglesia ni Cristo was not allowed to acquire a mere 313-square meter land where a chapel
except for alienable agricultural lands of the public domain, natural resources cannot be
stood because the Supreme Court said it would be in violation of this.” (Emphasis supplied)
alienated. Sections 2 and 3, Article XII of the 1987 Constitution state that—
“Section 2. All lands of the public domain, waters, minerals, coal, petroleum and other mineral In Ayog v. Cusi,64 the Court explained the rationale behind this constitutional ban in this way:
oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and
other natural resources are owned by the State. With the exception of agricultural lands, all “Indeed, one purpose of the constitutional prohibition against purchases of public
other natural resources shall not be alienated. The exploration, development, and utilization of agricultural lands by private corporations is to equitably diffuse land ownership or to
natural resources shall be under the full control and supervision of the State. x x x. encourage ‘owner-cultivatorship and the economic family-size farm’ and to prevent a
recurrence of cases like the instant case. Huge landholdings by corporations or private
Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral
persons had spawned social unrest.”
lands, and national parks. Agricultural lands of the public domain may be further classified, by
law according to the uses which they may be devoted. Alienable lands of the public domain However, if the constitutional intent is to prevent huge landholdings, the Constitution could have
shall be limited to agricultural lands. Private corporations or associations may not hold such simply limited the size of alienable lands of the public domain that corporations could acquire.
57
P R O P E R T Y No. 3 |
The Constitution could have followed the limitations on individuals, who could acquire not more
than 24 hectares of alienable lands of the public domain under the 1973 Constitution, and not
more than 12 hectares under the 1987 Constitution.
If the constitutional intent is to encourage economic family-size farms, placing the land in the
name of a corporation would be more effective in preventing the break-up of farmlands. If the
farmland is registered in the name of a corporation, upon the death of the owner, his heirs
would inherit shares in the corporation instead of subdivided parcels of the farmland. This would
prevent the continuing break-up of farmlands into smaller and smaller plots from one generation
to the next.
In actual practice, the constitutional ban strengthens the constitutional limitation on individuals
from acquiring more than the allowed area of alienable lands of the public domain. Without the
constitutional ban, individuals who already acquired the maximum area of alienable lands of the
public domain could easily set up corporations to acquire more alienable public lands. An
individual could own as many corporations as his means would allow him. An individual could
even hide his ownership of a corporation by putting his nominees as stockholders of the
corporation. The corporation is a convenient vehicle to circumvent the constitutional limitation
on acquisition by individuals of alienable lands of the public domain.
The constitutional intent, under the 1973 and 1987 Constitutions, is to transfer ownership of
only a limited area of alienable land of the public domain to a qualified individual. This
constitutional intent is safeguarded by the provision prohibiting corporations from acquiring
alienable lands of the public domain, since the vehicle to circumvent the constitutional intent is
removed. The available alienable public lands are gradually decreasing in the face of an ever-
growing population. The most effective way to insure faithful adherence to this constitutional
intent is to grant or sell alienable lands of the public domain only to individuals. This, it would
seem, is the practical benefit arising from the constitutional ban.
The Amended Joint Venture Agreement
The subject matter of the Amended JVA, as stated in its second Whereas clause, consists of
three properties, namely:
1.“[T]hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo
Boulevard in Paranaque and Las Pinas, Metro Manila, with a combined titled area of
1,578,441 square meters;”
2. “[A]nother area of 2,421,559 square meters contiguous to the three islands;” and
3.“[A]t AMARI’s option as approved by PEA, an additional 350 hectares more or less to
regularize the configuration of the reclaimed area.”65
PEA confirms that the Amended JVA involves “the development of the Freedom Islands and
further reclamation of about 250 hectares x x x,” plus an option “granted to AMARI to
subsequently reclaim another 350 hectares x x x.”66
In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of
the 750-hectare reclamation project have been reclaimed, and the rest of the 592.15 hectares
are still submerged areas forming part of Manila Bay.
Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00 for PEA’s
“actual cost” in partially reclaiming the Freedom Islands. AMARI will also complete, at its own
expense, the reclamation of the Freedom Islands. AMARI will further shoulder all the reclamation
costs of all the other areas, totaling 592.15 hectares, still to be reclaimed. AMARI and PEA will
share, in the proportion of 70 percent and 30 percent, respectively, the total net usable area
which is defined in the Amended JVA as the total reclaimed area less 30 percent earmarked for
common areas. Title to AMARI’s share in the net usable area, totaling 367.5 hectares, will be
issued in the name of AMARI. Section 5.2 (c) of the Amended JVA provides that—
“x x x, PEA shall have the duty to execute without delay the necessary deed of transfer or
conveyance of the title pertaining to AMARI’s Land share based on the Land Allocation Plan.
PEA, when requested in writing by AMARI, shall then cause the issuance and delivery of the
proper certificates of title covering AMARI’s Land Share in the name of AMARI, x x x; provided,
that if more than seventy percent (70%) of the titled area at any given time pertains to
AMARI, PEA shall deliver to AMARI only seventy percent (70%) of the titles pertaining to
AMARI, until such time when a corresponding proportionate area of additional land pertaining
to PEA has been titled.” (Emphasis supplied)
Indisputably, under the Amended JVA AMARI will acquire and own a maximum of 367.5
hectares of reclaimed land which will be titled in its name.
To implement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI joint venture
PEA’s statutory authority, rights and privileges to reclaim foreshore and submerged areas in
Manila Bay. Section 3.2.a of the Amended JVA states that—
“PEA hereby contributes to the joint venture its rights and privileges to perform Rawland
Reclamation and Horizontal Development as well as own the Reclamation Area, thereby
granting the Joint Venture the full and exclusive right, authority and privilege to undertake
the Project in accordance with the Master Development Plan.”
The Amended JVA is the product of a renegotiation of the original JVA dated April 25, 1995 and
its supplemental agreement dated August 9, 1995.
The Threshold Issue
The threshold issue is whether AMARI, a private corporation, can-acquire and own under the
Amended JVA 367.5 hectares of reclaimed foreshore and submerged areas in Manila Bay in view
of Sections 2 and 3, Article XII of the 1987 Constitution which state that:
“Section 2. All 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. With the exception of agricultural lands, all
other natural resources shall not be alienated . X x x.
58
P R O P E R T Y No. 3 |
Section 3. x x x Alienable lands of the public domain shall be limited to agricultural lands.
Private corporations or associations may not hold such alienable lands of the public domain
except by lease, x x x.” (Emphasis supplied)
Classification of Reclaimed Foreshore and Submerged Areas
PEA readily concedes that lands reclaimed from foreshore or submerged areas of Manila Bay are
alienable or disposable lands of the public domain. In its Memorandum, 67 PEA admits that—
“Under the Public Land Act (CA 141, as amended), reclaimed lands are classified as
alienable and disposable lands of the public domain :
‘Sec. 59. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the government by dredging, filling, or other means;
Likewise, the Legal Task Force68 constituted under Presidential Administrative Order No. 365
admitted in its Report and Recommendation to then President Fidel V. Ramos, “[R]eclaimed
lands are classified as alienable and disposable lands of the public do-main .”69 The Legal Task
Force concluded that—
“D. Conclusion
Reclaimed lands are lands of the public domain. However, by statutory authority, the
rights of ownership and disposition over reclaimed lands have been transferred to PEA,
by virtue of which PEA, as owner, may validly convey the same to any qualified person
without violating the Constitution or any statute.
The constitutional provision prohibiting private corporations from holding public land,
except by lease (Sec. 3, Art. XVII, 70 1987 Constitution), does not apply to reclaimed
lands whose ownership has passed on to PEA by statutory grant.”
Under Section 2, Article XII of the 1987 Constitution, the foreshore and submerged areas of
Manila Bay are part of the “lands of the public domain, waters x x x and other natural resources”
and consequently “owned by the State.” As such, foreshore and submerged areas “shall not be
alienated,” unless they are classified as “agricultural lands” of the public domain. The mere
reclamation of these areas by PEA does not convert these inalienable natural resources of the
State into alienable or disposable lands of the public domain. There must be a law or
presidential proclamation officially classifying these reclaimed lands as alienable or disposable
and open to disposition or concession. Moreover, these reclaimed lands cannot be classified as
alienable or disposable if the law has reserved them for some public or quasi-public use. 71
Section 8 of CA No. 141 provides that “only those lands shall be declared open to disposition or
concession which have been officially delimited and classified .”72 The President has the authority
to classify inalienable lands of the public domain into alienable or disposable lands of the public
domain, pursuant to Section 6 of CA No. 141. In Laurel vs. Garcia,73 the Executive Department
attempted to sell the Roppongi property in Tokyo, Japan, which was acquired by the Philippine
Government for use as the Chancery of the Philippine Embassy. Although the Chancery had
transferred to another location thirteen years earlier, the Court still ruled that, under Article
42274 of the Civil Code, a property of public dominion retains such character until formally
declared otherwise. The Court ruled that—
“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].”
PD No. 1085, issued on February 4, 1977, authorized the issuance of special land patents for
lands reclaimed by PEA from the foreshore or submerged areas of Manila Bay. On January 19,
1988 then President Corazon C. Aquino issued Special Patent No. 3517 in the name of PEA for
the 157.84 hectares comprising the partially reclaimed Freedom Islands. Subsequently, on April
9, 1999 the Register of Deeds of the Municipality of Paranaque issued TCT Nos. 7309, 7311 and
7312 in the name of PEA pursuant to Section 103 of PD No. 1529 authorizing the issuance of
certificates of title corresponding to land patents. To this day, these certificates of title are still in
the name of PEA.
PD No. 1085, coupled with President Aquino’s actual issuance of a special patent covering the
Freedom Islands, is equivalent to an official proclamation classifying the Freedom Islands as
alienable or disposable lands of the public domain. PD No. 1085 and President Aquino’s issuance
of a land patent also constitute a declaration that the Freedom Islands are no longer needed for
public service. The Freedom Islands are thus alienable or disposable lands of the public domain,
open to disposition or concession to qualified parties.
At the time then President Aquino issued Special Patent No. 3517, PEA had already reclaimed
the Freedom Islands although subsequently there were partial erosions on some areas. The
government had also completed the necessary surveys on these islands. Thus, the Freedom
Islands were no longer part of Manila Bay but part of the land mass. Section 3, Article XII of the
1987 Constitution classifies lands of the public domain into “agricultural, forest or timber,
mineral lands, and national parks.” Being neither timber, mineral, nor national park lands, the
reclaimed Freedom Islands necessarily fall under the classification of agricultural lands of the
public domain. Under the 1987 Constitution, agricultural lands of the public domain are the only
natural resources that the State may alienate to qualified private parties. All other natural
resources, such as the seas or bays, are “waters x x x owned by the State” forming part of the
public domain, and are inalienable pursuant to Section 2, Article XII of the 1987 Constitution.
AMARI claims that the Freedom Islands are private lands because CDCP, then a private
corporation, reclaimed the islands under a contract dated November 20, 1973 with the
Commissioner of Public Highways. AMARI, citing Article 5 of the Spanish Law of Waters of 1866,
argues that “if the ownership of reclaimed lands may be given to the party constructing the
works, then it cannot be said that reclaimed lands are lands of the public domain which the
State may not alienate.”75 Article 5 of the Spanish Law of Waters reads as follows:
59
P R O P E R T Y No. 3 |
“Article 5. Lands reclaimed from the sea in consequence of works constructed by the
State, or by the provinces, pueblos or private persons, with proper permission, shall
become the property of the party constructing such works, unless otherwise provided
by the terms of the grant of authority.” (Emphasis supplied)
Under Article 5 of the Spanish. Law of Waters of 1866, private parties could reclaim from the sea
only with “proper permission” from the State. Private parties could own the reclaimed land only
if not “otherwise provided by the terms of the grant of authority.” This clearly meant that no one
could reclaim from the sea without permission from the State because the sea is property of
public dominion. It also meant that the State could grant or withhold ownership of the reclaimed
land because any reclaimed land, like the sea from which it emerged, belonged to the State.
Thus, a private person reclaiming from the sea without permission from the State could not
acquire ownership of the reclaimed land which would remain property of public dominion like the
sea it replaced.76 Article 5 of the Spanish Law of Waters of 1866 adopted the time-honored
principle of land ownership that “all lands that were not acquired from the government, either by
purchase or by grant, belong to the public domain.” 77
Article 5 of the Spanish Law of Waters must be read together with laws subsequently enacted on
the disposition of public lands. In particular, CA No. 141 requires that lands of the public domain
must first be classified as alienable or disposable before the government can alienate them.
These lands must not be reserved for public or quasi-public purposes. 78 Moreover, the contract
between CDCP and the government was executed after the effectivity of the 1973 Constitution
which barred private corporations from acquiring any kind of alienable land of the public domain.
This contract could not have converted the Freedom Islands into private lands of a private
corporation.
Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws authorizing the
reclamation of areas under water and revested solely in the National Government the power to
reclaim lands. Section 1 of PD No. 3-A declared that—
“The provisions of any law to the contrary notwithstanding , the reclamation of areas
under water, whether foreshore or inland, shall be limited to the National Government
or any person authorized by it under a proper contract .
PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because reclamation of
areas under water could now be undertaken only by the National Government or by a person
contracted by the National Government. Private parties may reclaim from the sea only under a
contract with the National Government, and no longer by “grant or permission as provided in
Section 5 of the Spanish Law of Waters of 1866.
Executive Order No. 525, issued on February 14, 1979, designated PEA as the National
Government’s implementing arm to undertake “all reclamation projects of the government,”
which “shall be undertaken by the PEA or through a proper contract executed by it with any
person or entity.” Under such contract, a private party receives compensation for reclamation
services rendered to PEA. Payment to the contractor may be in cash, or in kind consisting of
portions of the reclaimed land, subject to the constitutional ban on private corporations from
acquiring alienable lands of the public domain. The reclaimed land can be used as payment in
kind only if the reclaimed land is first classified as alienable or disposable land open to
disposition, and then declared no longer needed for public service.
The Amended JVA covers not only the Freedom Islands,. but also an additional 592.15 hectares
which are still submerged and forming part of Manila Bay. There is no legislative or Presidential
act classifying these submerged areas as alienable or disposable lands of the public domain
open to disposition. These submerged areas are not covered by any patent or certificate of title.
There can be no dispute that these submerged areas form part of the public domain, and in
their present state are inalienable and outside the commerce of man. Until reclaimed from the
sea, these submerged areas are, under the Constitution, “waters x x x owned by the State,”
forming part of the public domain and consequently inalienable. Only when actually reclaimed
from the sea can these submerged areas be classified as public agricultural lands, which under
the Constitution are the only natural resources that the State may alienate. Once reclaimed and
transformed into public agricultural lands, the government may then officially classify these
lands as alienable or disposable lands open to disposition. Thereafter, the government may
declare these lands no longer needed for public service. Only then can these reclaimed lands be
considered alienable or disposable lands of the public domain and within the commerce of man.
The classification of PEA’s reclaimed foreshore and submerged lands into alienable or disposable
lands open to disposition is necessary because PEA is tasked under its charter to undertake
public services that require the use of lands of the public domain. Under Section 5 of PD No.
1084, the functions of PEA include the following: “[T]o own or operate railroads, tramways and
other kinds of land transportation, x x x; [T]o construct, maintain and operate such systems of
sanitary sewers as may be necessary; [T]o construct, maintain and operate such storm drains as
may be necessary.” PEA is empowered to issue “rules and regulations as may be necessary for
the proper use by private parties of any or all of the highways, roads, utilities, buildings and/or
any of its properties and to impose or collect fees or tolls for their use.” Thus, part of the
reclaimed foreshore and submerged lands held by the PEA would actually be needed for public
use or service since many of the functions imposed on PEA by its charter constitute essential
public services.
Moreover, Section 1 of Executive Order No. 525 provides that PEA “shall be primarily responsible
for integrating, directing, and coordinating all reclamation projects for and on behalf of the
National Government.” The same section also states that “[A]ll reclamation projects shall be
approved by the President upon recommendation of the PEA, and shall be undertaken by the
PEA or through a proper contract executed by it with any person or entity; x x x.” Thus, under
EO No. 525, in relation to PD No. 3-A and PD No. 1084, PEA became the primary implementing
agency of the National Government to reclaim foreshore and submerged lands of the public
domain. EO No. 525 recognized PEA as the government entity “to undertake the reclamation of
lands and ensure their maximum utilization in promoting public welfare and interests.”79 Since
large portions of these reclaimed lands would obviously be needed for public service, there must
be a formal declaration segregating reclaimed lands no longer needed for public service from
those still needed for public service.
60
P R O P E R T Y No. 3 |
Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA “shall belong to or be
owned by the PEA could not automatically operate to classify inalienable lands into alienable or
disposable lands of the public domain. Otherwise, reclaimed foreshore and submerged lands of
the public domain would automatically become alienable once reclaimed by PEA, whether or not
classified as alienable or disposable.
The Revised Administrative Code of 1987, a later law than either PD No. 1084 or EO No. 525,
vests in the Department of Environment and Natural Resources (“DENR” for brevity) the
following powers and functions:
“Sec. 4. Powers and Functions.—The Department shall:
(1)x x x
xxx
(4)Exercise supervision and control over forest lands, alienable and disposable public lands,
mineral resources and, in the process of exercising such control, impels appropriate taxes,
fees, charges, rentals and any such form of levy and collect such revenues for the
exploration, development, utilization or gathering of such resources; x x x
(14)Promulgate rules, regulations and guidelines on the issuance of licenses, permits,
concessions, lease agreements and such other privileges concerning the development,
exploration and utilization of the country’s marine, freshwater, and brackish water and over
all aquatic resources of the country and shall continue to oversee, supervise and police our
natural resources; cancel or cause to cancel such privileges upon failure, noncompliance or
violations of any regulation, order, and for all other causes which are in furtherance of the
conservation of natural resources and supportive of the national interest;
(15)Exercise exclusive jurisdiction on the management and disposition of all lands of the
public domain and serve as the sole agency responsible for classification , sub-classification,
surveying and titling of lands in consultation with appropriate agencies.” 80 (Emphasis
supplied)
As manager, conservator and overseer of the natural resources of the State, DENR exercises
“supervision and control over alienable and disposable public lands.” DENR also exercises
“exclusive jurisdiction on the management and disposition of all lands of the public domain.”
Thus, DENR decides whether areas under water, like foreshore or submerged areas of Manila
Bay, should be reclaimed or not. This means that PEA needs authorization from DENR before
PEA can undertake reclamation projects in Manila Bay, or in any part of the country.
DENR also exercises exclusive jurisdiction over the disposition of all lands of the public domain.
Hence, DENR decides whether reclaimed lands of PEA should be classified as alienable under
Sections 681 and 782 of CA No. 141. Once DENR decides that the reclaimed lands should be so
classified, it then recommends to the President the issuance of a proclamation classifying the
lands as alienable or disposable lands of the public domain open to disposition. We note that
then DENR Secretary Fulgencio S. Factoran, Jr. countersigned Special Patent No. 3517 in
compliance with the Revised Administrative Code and Sections 6 and 7 of CA No. 141.
In short, DENR is vested with the power to authorize the reclamation of areas under water,
while PEA is vested with the power to undertake the physical reclamation of areas under water,
whether directly or through private contractors. DENR is also empowered to classify lands of the
public domain into alienable or disposable lands subject to the approval of the President. On the
other hand, PEA is tasked to develop, sell or lease the reclaimed alienable lands of the public
domain. Clearly, the mere physical act of reclamation by PEA of foreshore or submerged areas
does not make the reclaimed lands alienable or disposable lands of the public domain, much less
patrimonial lands of PEA. Likewise, the mere transfer by the National Government of lands of the
public domain to PEA does not make the lands alienable or disposable lands of the public
domain, much less patrimonial lands of PEA.
Absent two official acts—a classification that these lands are alienable or disposable and open to
disposition and a declaration that these lands are not needed for public service, lands reclaimed
by PEA remain inalienable lands of the public domain. Only such an official classification and
formal declaration can convert reclaimed lands into alienable or disposable lands of the public
domain, open to disposition under the Constitution, Title I and Title III 83 of CA No. 141 and other
applicable laws.84
PEA’s Authority to Sell Reclaimed Lands
PEA, like the Legal Task Force, argues that as alienable or disposable lands of the public domain,
the reclaimed lands shall be disposed of in accordance with CA No. 141, the Public Land Act.
PEA, citing Section 60 of CA No. 141, admits that reclaimed lands transferred to a branch or
subdivision of the government “shall not be alienated, encumbered, or otherwise disposed of in
a manner affecting its title, except when authorized by Congress : x x x.”85 (Emphasis by PEA)
In Laurel vs. Garcia,86 the Court cited Section 48 of the Revised Administrative Code of 1987,
which states that—
“Sec. 48. Official Authorized to Convey Real Property .—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: x x x.”
Thus, the Court concluded that a law is needed to convey any real property belonging to the
Government. The Court declared that—
“It is not for the President to convey 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.” (Emphasis supplied)
PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority allowing PEA
to sell its reclaimed lands. PD No. 1085, issued on February 4, 1977, provides that—
“The land reclaimed in the foreshore and offshore area of Manila Bay pursuant to the
contract for the reclamation and construction of the Manila-Cavite Coastal Road Project
between the Republic of the Philippines and the Construction and Development
Corporation of the Philippines dated November 20, 1973 and/or any other contract or
reclamation covering the same area is hereby transferred, conveyed and assigned to
the ownership and administration of the Public Estates Authority established pursuant to
PD No. 1084; Provided, however, That the rights and interests of the Construction and
61
P R O P E R T Y No. 3 |
Development Corporation of the Philippines pursuant to the aforesaid contract shall be
recognized and respected.
Henceforth, the Public Estates Authority shall exercise the rights and assume the obligations of
the Republic of the Philippines (Department of Public Highways) arising from, or incident to, the
aforesaid contract between the Republic of the Philippines and the Construction and
Development Corporation of the Philippines.
In consideration of the foregoing transfer and assignment, the Public Estates Authority shall
issue in favor of the Republic of the Philippines the corresponding shares of stock in said entity
with an issued value of said shares of stock (which) shall be deemed fully paid and non-
assessable.
The Secretary of Public Highways and the General Manager of the Public Estates Authority shall
execute such contracts or agreements, including appropriate agreements with the Construction
and Development Corporation of the Philippines, as may be necessary to implement the above.
Special land patent/patents shall be issued by the Secretary of Natural Resources in
favor of the Public Estates Authority without prejudice to the subsequent transfer to the
contractor or his assignees of such portion or portions of the land reclaimed , to be
reclaimed as provided for in the abovementioned contract. On the basis of such
patents, the Land Registration Commission shall issue the corresponding certificate of
title.
On the other hand, Section 3 of EO No. 525, issued on February 14, 1979, provides that—
“Sec. 3. All lands reclaimed by PEA shall belong to or be owned by the PEA which shall
be responsible for its administration, development, utilization or disposition in
accordance with the provisions of Presidential Decree No. 1084. Any and all income that
the PEA may derive from the sale, lease or use of reclaimed lands shall be used in
accordance with the provisions of Presidential Decree No. 1084.”
There is no express authority under either PD No. 1085 or EO No. 525 for PEA to sell its
reclaimed lands. PD No. 1085 merely transferred “ownership and administration” of lands
reclaimed from Manila Bay to PEA, while EO No. 525 declared that lands reclaimed by PEA “shall
belong to or be owned by PEA.” EO No. 525 expressly states that PEA should dispose of its
reclaimed lands “in accordance with the provisions of Presidential Decree No. 1084,” the charter
of PEA.
PEA’s charter, however, expressly tasks PEA “to develop, improve, acquire, administer, deal in,
subdivide, dispose lease and sell any and all kinds of lands x x x owned, managed, controlled
and/or operated by the government.” 87 (Emphasis supplied) There is, therefore, legislative
authority granted to PEA to sell its lands, whether patrimonial or alienable lands of the public
domain. PEA may sell to private parties its patrimonial properties in accordance with the PEA
charter free from constitutional limitations. The constitutional ban on private corporations from
acquiring alienable lands of the public domain does not apply to the sale of PEA’s patrimonial
lands.
PEA may also sell its alienable or disposable lands of the public domain to private individuals
since, with the legislative authority, there is no longer any statutory prohibition against such
sales and the constitutional ban does not apply to individuals. PEA, however, cannot sell any of
its alienable or disposable lands of the public domain to private corporations since Section 3,
Article XII of the 1987 Constitution expressly prohibits such sales. The legislative authority
benefits only individuals. Private corporations remain barred from acquiring any kind of alienable
land of the public domain, including government reclaimed lands.
The provision in PD No. 1085 stating that portions of the reclaimed lands could be transferred by
PEA to the “contractor or his assignees” (Emphasis supplied) would not apply to private
corporations but only to individuals because of the constitutional ban. Otherwise, the provisions
of PD No. 1085 would violate both the 1973 and 1987 Constitutions.
The requirement of public auction in the sale of reclaimed lands
Assuming the reclaimed lands of PEA are classified as alienable or disposable lands open to
disposition, and further declared no longer needed for public service, PEA would have to conduct
a public bidding in selling or leasing these lands. PEA must observe the provisions of Sections 63
and 67 of CA No. 141 requiring public auction, in the absence of a law exempting PEA from
holding a public auction. 88 Special Patent No. 3517 expressly states that the patent is issued by
authority of the Constitution and PD No. 1084, “supplemented by Commonwealth Act No. 141,
as amended.” This is an acknowledgment that the provisions of CA No. 141 apply to the
disposition of reclaimed alienable lands of the public domain unless otherwise provided by law.
Executive Order No. 654,89 which authorizes PEA “to determine the kind and manner of payment
for the transfer” of its assets and properties, does not exempt PEA from the requirement of
public auction. EO No. 654 merely authorizes PEA to decide the mode of payment, whether in
kind and in installment, but does not authorize PEA to dispense with public auction.
Moreover, under Section 79 of PD No. 1445, otherwise known as the Government Auditing Code,
the government is required to sell valuable government property through public bidding. Section
79 of PD No. 1445 mandates that—
“Section 79. When government property has become unserviceable for any cause, or is no
longer needed, it shall, upon application of the officer accountable therefor, be inspected by
the head of the agency or his duly authorized representative in the presence of the auditor
concerned and, if found to be valueless or unsaleable, it may be destroyed in their presence.
If found to be valuable, it may be sold at public auction to the highest bidder under the
supervision of the proper committee on award or similar body in the presence of the auditor
concerned or other authorized representative of the Commission, after advertising by printed
notice in the Official Gazette, or for not less than three consecutive days in any newspaper of
general circulation, or where the value of the property does not warrant the expense of
publication, by notices posted for a like period in at least three public places in the locality
where the property is to be sold. In the event that the public auction fails, the property may
be sold at a private sale at such price as may be fixed by the same committee or body
concerned and approved by the Commission.”
62
P R O P E R T Y No. 3 |
It is only when the public auction fails that a negotiated sale is allowed, in which case the
Commission on Audit must approve the selling price. 90 The Commission on Audit implements
Section 79 of the Government Auditing Code through Circular No. 89-296 91 dated January 27,
1989. This circular emphasizes that government assets must be disposed of only through public
auction, and a negotiated sale can be resorted to only in case of “failure of public auction.”
At the public auction sale, only Philippine citizens are qualified to bid for PEA’s reclaimed
foreshore and submerged alienable lands of the public domain. Private corporations are barred
from bidding at the auction sale of any kind of alienable land of the public domain. PEA originally
scheduled a public bidding for the Freedom Islands on December 10, 1991. PEA imposed a
condition that the winning bidder should reclaim another 250 hectares of submerged areas to
regularize the shape of the Freedom Islands, under a 60-40 sharing of the additional reclaimed
areas in favor of the winning bidder. 92 No one, however, submitted a bid. On December 23,
1994, the Government Corporate Counsel advised PEA it could sell the Freedom Islands through
negotiation, without need of another public bidding, because of the failure of the public bidding
on December 10, 1991.93
However, the original JVA dated April 25, 1995 covered not only the Freedom Islands and the
additional 250 hectares still to be reclaimed, it also granted an option to AMARI to reclaim
another 350 hectares. The original JVA, a negotiated contract, enlarged the reclamation area to
750 hectares.94 The failure of public bidding on December 10, 1991, involving only 407.84
hectares,95 is not a valid justification for a negotiated sale of 750 hectares, almost double the
area publicly auctioned. Besides, the failure of public bidding happened on December 10, 1991,
more than three years before the signing of the original JVA on April 25, 1995. The economic
situation in the country had greatly improved during the intervening period.
Reclamation under the BOT Law and the Local Government Code
The constitutional prohibition in Section 3, Article XII of the 1987 Constitution is absolute and
clear: “Private corporations or associations may not hold such alienable lands of the public
domain except by lease, x x x.” Even Republic Act No. 6957 (“BOT Law,” for brevity), cited by
PEA and AMARI as legislative authority to sell reclaimed lands to private parties, recognizes the
constitutional ban. Section 6 of RA No. 6957 states—
“Sec. 6. Repayment Scheme.—For the financing, construction, operation and
maintenance of any infrastructure projects undertaken through the build-operate-and-
transfer arrangement or any of its variations pursuant to the provisions of this Act, the
project proponent x x x may likewise be repaid in the form of a share in the revenue of
the project or other non-monetary payments, such as, but not limited to, the grant of a
portion or percentage of the reclaimed land, subject to the constitutional requirements
with respect to the ownership of the land: x x x.” (Emphasis supplied)
A private corporation, even one that undertakes the physical reclamation of a government BOT
project, cannot acquire reclaimed alienable lands of the public domain in view of the
constitutional ban.
Section 302 of the Local Government Code, also mentioned by PEA and AMARI, authorizes local
governments in land reclamation projects to pay the contractor or developer in kind consisting of
a percentage of the reclaimed land, to wit:
“Section 302. Financing, Construction, Maintenance, Operation, and Management of
Infrastructure Projects by the Private Sector. x x x
In case of land reclamation or construction of industrial estates, the repayment plan
may consist of the grant of a portion or percentage of the reclaimed land or the
industrial estate constructed.”
Although Section 302 of the Local Government Code does not contain a proviso similar to that of
the BOT Law, the constitutional restrictions on land ownership automatically apply even though
not expressly mentioned in the Local Government Code.
Thus, under either the BOT Law or the Local Government Code, the contractor or developer, if a
corporate entity, can only be paid with leaseholds on portions of the reclaimed land. If the
contractor or developer is an individual, portions of the reclaimed land, not exceeding 12
hectares96 of non-agricultural lands, may be conveyed to him in ownership in view of the
legislative authority allowing such conveyance. This is the only way these provisions of the BOT
Law and the Local Government Code can avoid a direct collision with Section 3, Article XII of the
1987 Constitution.
Registration of lands of the public domain
Finally, PEA theorizes that the “act of conveying the ownership of the reclaimed lands to public
respondent PEA transformed such lands of the public domain to private lands.” This theory is
echoed by AMARI which maintains that the “issuance of the special patent leading to the
eventual issuance of title takes the subject land away from the land of public domain and
converts the property into patrimonial or private property.” In short, PEA and AMARI contend
that with the issuance of Special Patent No. 3517 and the corresponding certificates of titles, the
157.84 hectares comprising the Freedom Islands have become private lands of PEA. In support
of their theory, PEA and AMARI cite the following rulings of the Court:
1. Sumail v. Judge of CFI of Cotabato,97 where the Court held—
     “Once the patent was granted and the corresponding certificate of title was issued, the land
ceased to be part of the public domain and became private property over which the Director of
Lands has neither control nor jurisdiction.”
2. Lee Hong Hok v. David,98 where the Court declared—
     “After the registration and issuance of the certificate and duplicate certificate of title based
on a public land patent, the land covered thereby automatically comes under the operation of
Republic Act 496 subject to all the safeguards provided therein.”
3. Heirs of Gregorio Tengco v. Heirs of Jose Aliwalas,99 where the Court ruled—
     “While the Director of Lands has the power to review homestead patents, he may do so only
so long as the land remains part of the public domain and continues to be under his exclusive
control; but once the patent is registered and a certificate of title is issued, the land ceases to be
63
P R O P E R T Y No. 3 |
part of the public domain and becomes private property over which the Director of Lands has
neither control nor jurisdiction.”
4. Manalo v. Intermediate Appellate Court,100 where the Court held—
     “When the lots in dispute were certified as disposable on May 19, 1971, and free patents
were issued covering the same in favor of the private respondents, the said lots ceased to be
part of the public domain and, therefore, the Director of Lands lost jurisdiction over the same.”
5. Republic v. Court of Appeals,101 where the Court stated—
     “Proclamation No. 350, dated October 9, 1956, of President Magsaysay legally effected a
land grant to the Mindanao Medical Center, Bureau of Medical Services, Department of Health,’
of the whole lot, validly sufficient for initial registration under the Land Registration Act. Such
land grant is constitutive of a ‘fee simple’ title or absolute title in favor of petitioner Mindanao
Medical Center. Thus, Section 122 of the Act, which governs the registration of grants or patents
involving public lands, provides that ‘Whenever public lands in the Philippine Islands belonging
to the Government of the United States or to the Government of the Philippines are alienated,
granted or conveyed to persons or to public or private corporations, the same shall be brought
forthwith under the operation of this Act (Land Registration Act, Act 496) and shall become
registered lands.’ ”
The first four cases cited involve petitions to cancel the land patents and the corresponding
certificates of titles issued to private parties. These four cases, uniformly hold that the Director
of Lands has no jurisdiction over private lands or that upon issuance of the certificate of title the
land automatically comes under the Torrens System. The fifth case cited involves the registration
under the Torrens System of a 12.8-hectare” public land granted by the National Government to
Mindanao Medical Center, a government unit under the Department of Health. The National
Government transferred the 12.8-hectare public land to serve as the site for the hospital
buildings and other facilities of Mindanao Medical Center, which performed a public service. The
Court affirmed the registration of the 12.8-hectare public land in the name of Mindanao Medical
Center under Section 122 of Act No. 496. This fifth case is an example of a public land being
registered under Act No. 496 without the land losing its character as a property of public
dominion.
In the instant case, the only patent and certificates of title issued are those in the name of PEA,
a wholly government owned corporation performing public as well as proprietary functions. No
patent or certificate of title has been issued to any private party. No one is asking the Director of
Lands to cancel PEA’s patent or certificates of title. In fact, the thrust of the instant petition is
that PEA’s certificates of title should remain with PEA, and the land covered by these certificates,
being alienable lands of the public domain, should not be sold to a private corporation.
Registration of land under Act No. 496 or PD No. 1529 does not vest in the registrant private or
public ownership of the land. Registration is not a mode of acquiring ownership but is merely
evidence of ownership previously conferred by any of the recognized modes of acquiring
ownership. Registration does not give the registrant a better right than what the registrant had
prior to the registration.102 The registration of lands of the public domain under the Torrens
system, by itself, cannot convert public lands into private lands. 103
Jurisprudence holding that upon the grant of the patent or issuance of the certificate of title the
alienable land of the public domain automatically becomes private land cannot apply to
government units and entities like PEA. The transfer of the Freedom Islands to PEA was made
subject to the provisions of CA No. 141 as expressly stated in Special Patent No. 3517 issued by
then President Aquino, to wit:
“NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the Philippines and in
conformity with the provisions of Presidential Decree No. 1084, supplemented by
Commonwealth Act No. 141, as amended , there are hereby granted and conveyed unto the
Public Estates Authority the aforesaid tracts of land containing a total area of one million nine
hundred fifteen thousand eight hundred ninety four (1,915,894) square meters; the technical
description of which are hereto attached and made an integral part hereof.”
Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters not covered by PD
No. 1084. Section 60 of CA No. 141 prohibits, “except when authorized by Congress,” the sale of
alienable lands of the public domain that are transferred to government units or entities. Section
60 of CA No. 141 constitutes, under Section 44 of PD No. 1529, a “statutory lien affecting title”
of the registered land even if not annotated on the certificate of title. 104 Alienable lands of the
public domain held by government entities under section 60 of CA No. 141 remain public lands
because they cannot be alienated or encumbered unless Congress passes a law authorizing their
disposition. Congress, however, cannot authorize the sale to private corporations of reclaimed
alienable lands of the public domain because of the constitutional ban. Only individuals can
benefit from such law.
The grant of legislative authority to sell public lands in accordance with Section 60 of CA No. 141
does not automatically convent alienable lands of the public domain into private or patrimonial
lands. The alienable lands of the public domain must be transferred to qualified private parties,
or to government entities not tasked to dispose of public lands, before these lands can become
private or patrimonial lands. Otherwise, the constitutional ban will become illusory if Congress
can declare lands of the public domain as private or patrimonial lands in the hands of a
government agency tasked to dispose of public lands. This will allow private corporations to
acquire directly from government agencies limitless areas of lands which, prior to such law, are
concededly public lands.
Under EO No. 525, PEA became the central implementing agency of the National Government to
reclaim foreshore and submerged areas of the public domain. Thus, EO No. 525 declares that—
“EXECUTIVE ORDER NO. 525
Designating the Public Estates Authority as the Agency Primarily Responsible for all Reclamation
Projects
Whereas, there are several reclamation projects which are ongoing or being proposed to be
undertaken in various parts of the country which need to be evaluated for consistency with
national programs;
Whereas, there is a need to give further institutional support to the Government’s declared
policy to provide for a coordinated, economical and efficient reclamation of lands;
64
P R O P E R T Y No. 3 |
Whereas, Presidential Decree No. 3-A requires that all reclamation of areas shall be limited to
the National Government or any person authorized by it under proper contract;
Whereas, a central authority is needed to act on behalf of the National Government which
shall ensure a coordinated and integrated approach in the reclamation of lands;
Whereas, Presidential Decree No. 1084 creates the Public Estates Authority as a
government corporation to undertake reclamation of lands and ensure their maximum utilization
in promoting public welfare and interests; and
Whereas, Presidential Decree No. 1416 provides the President with continuing authority to
reorganize the national government including the transfer, abolition, or merger of functions and
offices.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the
powers vested in me by the Constitution and pursuant to Presidential Decree No. 1416, do
hereby order and direct the following:
Section 1. The Public Estates Authority (PEA) shall be primarily responsible for integrating,
directing, and coordinating all reclamation projects for and on behalf of the National
Government. All reclamation projects shall be approved by the President upon recommendation
of the PEA, and shall be undertaken by the PEA or through a proper contract executed by it with
any person or entity; Provided, that, reclamation projects of any national government agency or
entity authorized under its charter shall be undertaken in consultation with the PEA upon
approval of the President. x x x.”
As the central implementing agency tasked to undertake reclamation projects nationwide, with
authority to sell reclaimed lands, PEA took the place of DENR as the government agency
charged with leasing or selling reclaimed lands of the public domain. The reclaimed lands being
leased or sold by PEA are not private lands, in the same manner that DENR, when it disposes of
other alienable lands, does not dispose of private lands but alienable lands of the public domain.
Only when qualified private parties acquire these lands will the lands become private lands. In
the hands of the government agency tasked and authorized to dispose of alienable of disposable
lands of the public domain, these lands are still public, not private lands.
Furthermore, PEA’s charter expressly states that PEA “shall hold lands of the public domain” as
well as “any and all kinds of lands.” PEA can hold both lands of the public domain and private
lands. Thus, the mere fact that alienable lands of the public domain like the Freedom Islands are
transferred to PEA and issued land patents or certificates of title in PEA’s name does not
automatically make such lands private.
To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private
lands will sanction a gross violation of the constitutional ban on private corporations from
acquiring any kind of alienable land of the public domain. PEA will simply turn around, as PEA
has now done under the Amended JVA, and transfer several hundreds of hectares of these
reclaimed and still to be reclaimed lands to a single private corporation in only one transaction.
This scheme will effectively nullify the constitutional ban in Section 3, Article XII of the 1987
Constitution which was intended to diffuse equitably the ownership of alienable lands of the
public domain among Filipinos, now numbering over 80 million strong.
This scheme, if allowed, can even be applied to alienable agricultural lands of the public domain
since PEA can “acquire x x x any and all kinds of lands.” This will open the floodgates to
corporations and even individuals acquiring hundreds of hectares of alienable lands of the public
domain under the guise that in the hands of PEA these lands are private lands. This will result in
corporations amassing huge landholdings never before seen in this country—creating the very
evil that the constitutional ban was designed to prevent. This will completely reverse the clear
direction of constitutional development in this country. The 1935 Constitution allowed private
corporations to acquire not more than 1,024 hectares of public lands. 105 The 1973 Constitution
prohibited private corporations from acquiring any kind of public land, and the 1987 Constitution
has unequivocally reiterated this prohibition.
The contention of PEA and AMARI that public lands, once registered under Act No. 496 or PD
No. 1529, automatically become private lands is contrary to existing laws. Several laws authorize
lands of the public domain to be registered under the Torrens System or Act No. 496, now PD
No. 1529, without losing their character as public lands. Section 122 of Act No. 496, and Section
103 of PD No. 1529, respectively, provide as follows:
Act No. 496
“Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x x Government of
the Philippine Islands are alienated, granted, or conveyed to persons or the public or private
corporations, the same shall be brought forthwith under the operation of this Act and shall
become registered lands.”
PD No. 1529
“Sec. 103. Certificate of Title to Patents.—Whenever public land is by the Government alienated,
granted or conveyed to any person, the same shall be brought forthwith under the operation of
this Decree.” (Emphasis pplied)
Based on its legislative history, the phrase “conveyed to any person” in Section 103 of PD No.
1529 includes conveyances of public lands to public corporations.
Alienable lands of the public domain “granted, donated, or transferred to a province,
municipality, or branch or subdivision of the Government,” as provided in Section 60 of CA No.
141, may be registered under the Torrens System pursuant to Section 103 of PD No. 1529. Such
registration, however, is expressly subject to the condition in Section 60 of CA No. 141 that the
land “shall not be alienated, encumbered or otherwise disposed of in a manner affecting its title,
except when authorized by Congress.” This provision refers to government reclaimed, foreshore
and marshy lands of the public domain that have been titled but still cannot be alienated or
encumbered unless expressly authorized by Congress. The need for legislative authority
prevents the registered land of the public domain from becoming private land that can be
disposed of to qualified private parties.
The Revised Administrative Code of 1987 also recognizes that lands of the public domain may be
registered under the Torrens System. Section 48, Chapter 12, Book I of the Code states—
65
P R O P E R T Y No. 3 |
“Sec. 48. Official Authorized to Convey Real Property .—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)x x x
(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.” (Emphasis supplied)
Thus, private property purchased by the National Government for expansion of a public wharf
may be titled in the name of a government corporation regulating port operations in the country.
Private property purchased by the National Government for expansion of an airport may also be
titled in the name of the government agency tasked to administer the airport. Private property
donated to a municipality for use as a town plaza or public school site may likewise be titled in
the name of the municipality. 106 All these properties become properties of the public domain, and
if already registered under Act No. 496 or PD No. 1529, remain registered land. There is no
requirement or provision in any existing law for the deregistration of land from the Torrens
System.
Private lands taken by the Government for public use under its power of eminent domain
become unquestionably part of the public domain. Nevertheless, Section 85 of PD No. 1529
authorizes the Register of Deeds to issue in the name of the National Government new
certificates of title covering such expropriated lands. Section 85 of PD No. 1529 states—
“Sec. 85. Land taken by eminent domain .—Whenever any registered land, or interest therein,
is expropriated or taken by eminent domain, the National Government, province, city or
municipality, or any other agency or instrumentality exercising such right shall file for
registration in the proper Registry a certified copy of the judgment which shall state definitely
by an adequate description, the particular property or interest expropriated, the number of the
certificate of title, and the nature of the public use. A memorandum of the right or interest
taken shall be made on each certificate of title by the Register of Deeds, and where the fee
simple is taken, a new certificate shall be issued in favor of the National Government,
province, city, municipality, or any other agency or instrumentality exercising such right for the
land so taken. The legal expenses incident to the memorandum of registration or issuance of a
new certificate of title shall be for the account of the authority taking the land or interest
therein/”
Consequently, lands registered under Act No. 496 or PD No. 1529 are not exclusively private or
patrimonial lands. Lands of the public domain may also be registered pursuant to existing laws.
AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the Freedom
Islands or of the lands to be reclaimed from submerged areas of Manila Bay. In the words of
AMARI, the Amended JVA “is not a sale but a joint venture with a stipulation for reimbursement
of the original cost incurred by PEA for the earlier reclamation and construction works performed
by the CDCP under its 1973 contract with the Republic.” Whether the Amended JVA is a sale or
a joint venture, the fact remains that the Amended JVA requires PEA to “cause the issuance and
delivery of the certificates of title conveying AMARI’s Land Share in the name of AMARI.” 107
This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which provides
that private corporations “shall not hold such alienable lands of the public domain except by
lease.” The transfer of title and ownership to AMARI clearly means that AMARI will “hold” the
reclaimed lands other than by lease. The transfer of title and ownership is a “disposition” of the
reclaimed lands, a transaction considered a sale or alienation under CA No. 141, 108 the
Government Auditing Code,109 and Section 3, Article XII of the 1987 Constitution.
The Regalian doctrine is deeply implanted in our legal system. Foreshore and submerged areas
form part of the public domain and are inalienable. Lands reclaimed from foreshore and
submerged areas also form part of the public domain and are also inalienable, unless converted
pursuant to law into alienable or disposable lands of the public domain. Historically, lands
reclaimed by the government are sui generis, not available for sale to private parties unlike other
alienable public lands. Reclaimed lands retain their inherent potential as areas for public use or
public service. Alienable lands of the public domain, increasingly becoming scarce natural
resources, are to be distributed equitably among our evergrowing population. To insure such
equitable distribution, the 1973 and 1987 Constitutions have barred private corporations from
acquiring any kind of alienable land of the public domain. Those who attempt to dispose of
inalienable natural resources of the State, or seek to circumvent the constitutional ban on
alienation of lands of the public domain to private corporations, do so at their own risk.
We can now summarize our conclusions as follows:
1.The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by
certificates of title in the name of PEA, are alienable lands of the public domain. PEA may
lease these lands to private corporations but may not sell or transfer ownership of these lands
to private corporations. PEA may only sell these lands to Philippine citizens, subject to the
ownership limitations in the 1987 Constitution and existing laws.
2.The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources
of the public domain until classified as alienable or disposable lands open to disposition and
declared no longer needed for public service. The government can make such classification
and declaration only after PEA has reclaimed these submerged areas. Only then can these
lands qualify as agricultural lands of the public domain, which are the only natural resources
the government can alienate. In their present state, the 592.15 hectares of submerged areas
are inalienable and outside the commerce of man.
3.Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of
77.34 hectares110 of the Freedom Islands, such transfer is void for being contrary to Section 3,
Article XII of the 1987 Constitution which prohibits private corporations from acquiring any
kind of alienable land of the public domain.
4.Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares 111 of
still submerged areas of Manila Bay, such transfer is void for being contrary to Section 2,
Article XII of the 1987 Constitution which prohibits the alienation of natural resources other
than agricultural lands of the public domain. PEA may reclaim these submerged areas.
Thereafter, the government can classify the reclaimed lands as alienable or disposable, and
further declare them no longer needed for public service. Still, the transfer of such reclaimed
66
P R O P E R T Y No. 3 |
alienable lands of the public domain to AMARI will be void in view of Section 3, Article XII of
the 1987 Constitution which prohibits private corporations from acquiring any kind of
alienable land of the public domain.
Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987
Constitution. Under Article 1409 112 of the Civil Code, contracts whose “object or purpose is
contrary to law,” or whose “object is outside the commerce of men,” are “inexistent and void
from the beginning.” The Court must perform its duty to defend and uphold the Constitution,
and therefore declares the Amended JVA null and void ab initio.
Seventh issue: whether the Court is the proper forum to raise the issue of whether
the Amended JVA is grossly disadvantageous to the government.
Considering that the Amended JVA is null and void ab initio, there is no necessity to rule on this
last issue. Besides, the Court is not a trier of facts, and this last issue involves a determination of
factual matters.
WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari Coastal Bay
Development Corporation are PERMANENTLY ENJOINED from implementing the Amended Joint
Venture Agreement which is hereby declared NULL and VOID ab initio.
SO ORDERED.
Notes.—Before the Treaty of Paris on April 11, 1899, our lands, whether agricultural,
mineral or forest were under the exclusive patrimony and dominion of the Spanish Crown,
hence, private ownership of land could only be acquired through royal concessions. ( Palomo vs.
Court of Appeals, 266 SCRA 392 [1997]).
Only judicial review of decisions of administrative agencies made in the exercise of their
quasi-judicial function is subject to the exhaustion doctrine. ( Association of Philippine Coconut
Desiccators vs. Philippine Coconut Authority, 286 SCRA 109 [1998]).
The term “foreshore” refers to “that part of the land adjacent to the sea which is alternately
covered and left dry by the ordinary flow of the tides.” ( Republic vs. Court of Appeals, 299 SCRA
199 [1998])
G.R. No. 179987. September 3, 2013.*
HEIRS OF MARIO MALABANAN, (Represented by Sally A. Malabanan), petitioners, vs.
REPUBLIC OF THE PHILIPPINES, respondent.
Civil Law; Property; Public Dominion; Private Ownership; Land, which is an immovable
property, may be classified as either of public dominion or of private ownership. —Land, which is
an immovable property, may be classified as either of public dominion or of private ownership.
Land is considered of public dominion if it either: (a) is intended for public use; or (b) belongs to
the State, without being for public use, and is intended for some public service or for the
development of the national wealth. Land belonging to the State that is not of such character, or
although of such character but no longer intended for public use or for public service forms part
of the patrimonial property of the State. Land that is other than part of the patrimonial property
of the State, provinces, cities and municipalities is of private ownership if it belongs to a private
individual.
Same; Same; Same; Regalian Doctrine; Pursuant to the Regalian Doctrine (Jura Regalia),
a legal concept first introduced into the country from the West by Spain through the Laws of the
Indies and the Royal Cedulas, all lands of the public domain belong to the State. —Pursuant to
the Regalian Doctrine ( Jura Regalia), a legal concept first introduced into the country from the
West by Spain through the Laws of the Indies and the Royal Cedulas, all lands of the public
domain belong to the State. This means that the State is the source of any asserted right to
ownership of land, and is charged with the conservation of such patrimony. All lands not
appearing to be clearly under private ownership are presumed to belong to the State. Also,
public lands remain part of the inalienable land of the public domain unless the State is shown to
have reclassified or alienated them to private persons.
Same; Same; Same; Agricultural Lands; The 1987 Constitution adopted the classification under
the 1935 Constitution into agricultural, forest or timber, and mineral, but added national parks;
Under Section 2, Article XII of the 1987 Constitution, only agricultural lands of the public domain
may be alienated; all other natural resources may not be. —Whether or not land of the public
domain is alienable and disposable primarily rests on the classification of public lands made
under the Constitution. Under the 1935 Constitution, lands of the public domain were classified
into three, namely, agricultural, timber and mineral. Section 10, Article XIV of the 1973
Constitution classified lands of the public domain into seven, specifically, agricultural, industrial
or commercial, residential, resettlement, mineral, timber or forest, and grazing land, with the
reservation that the law might provide other classifications. The 1987 Constitution adopted the
classification under the 1935 Constitution into agricultural, forest or timber, and mineral, but
added national parks. Agricultural lands may be further classified by law according to the uses to
which they may be devoted. The identification of lands according to their legal classification is
done exclusively by and through a positive act of the Executive Department. Based on the
foregoing, the Constitution places a limit on the type of public land that may be alienated. Under
Section 2, Article XII of the 1987 Constitution, only agricultural lands of the public domain may
be alienated; all other natural resources may not be.
Same; Same; Alienable and Disposable Lands; Agricultural Lands; Alienable and disposable lands
of the State fall into two categories, to wit: (a) patrimonial lands of the State, or those classified
as lands of private ownership under Article 425 of the Civil Code, without limitation; and (b)
lands of the public domain, or the public lands as provided by the Constitution, but with the
limitation that the lands must only be agricultural. —Alienable and disposable lands of the State
fall into two categories, to wit: ( a) patrimonial lands of the State, or those classified as lands of
private ownership under Article 425 of the Civil Code, without limitation; and ( b) lands of the
public domain, or the public lands as provided by the Constitution, but with the limitation that
the lands must only be agricultural. Consequently, lands classified as forest or timber, mineral,
or national parks are not susceptible of alienation or disposition unless they are reclassified as
agricultural. A positive act of the Government is necessary to enable such reclassification, and
the exclusive prerogative to classify public lands under existing laws is vested in the Executive
Department, not in the courts. If, however, public land will be classified as neither agricultural,
67
P R O P E R T Y No. 3 |
forest or timber, mineral or national park, or when public land is no longer intended for public
service or for the development of the national wealth, thereby effectively removing the land
from the ambit of public dominion, a declaration of such conversion must be made in the form
of a law duly enacted by Congress or by a Presidential proclamation in cases where the
President is duly authorized by law to that effect. Thus, until the Executive Department exercises
its prerogative to classify or reclassify lands, or until Congress or the President declares that the
State no longer intends the land to be used for public service or for the development of national
wealth, the Regalian Doctrine is applicable.
Same; Same; Same; Same; Section 11 of the Public Land Act (CA No. 141) provides the
manner by which alienable and disposable lands of the public domain, i.e., agricultural lands,
can be disposed of.—Section 11 of the Public Land Act (CA No. 141) provides the manner by
which alienable and disposable lands of the public domain, i.e., agricultural lands, can be
disposed of, to wit: Section 11. Public lands suitable for agricultural purposes can be disposed of
only as follows, and not otherwise: (1) For homestead settlement; (2) By sale; (3) By lease; and
(4) By confirmation of imperfect or incomplete titles; (a) By judicial legalization; or (b) By
administrative legalization (free patent).
Same; Same; Same; Same; Absent proof that the land is already classified as agricultural land of
the public domain, the Regalian Doctrine applies, and overcomes the presumption that the land
is alienable and disposable as laid down in Section 48(b) of the Public Land Act. —Taking into
consideration that the Executive Department is vested with the authority to classify lands of the
public domain, Section 48(b) of the Public Land Act, in relation to Section 14(1) of the Property
Registration Decree, presupposes that the land subject of the application for registration must
have been already classified as agricultural land of the public domain in order for the provision
to apply. Thus, absent proof that the land is already classified as agricultural land of the public
domain, the Regalian Doctrine applies, and overcomes the presumption that the land is alienable
and disposable as laid down in Section 48(b) of the Public Land Act. However, emphasis is
placed on the requirement that the classification required by Section 48(b) of the Public Land Act
is classification or reclassification of a public land as agricultural.
Same; Same; Same; Same; Alienable public land held by a possessor, either personally or
through his predecessors-in-interest, openly, continuously and exclusively during the prescribed
statutory period is converted to private property by the mere lapse or completion of the period.
—An examination of Section 48(b) of the Public Land Act indicates that Congress prescribed no
requirement that the land subject of the registration should have been classified as agricultural
since June 12, 1945, or earlier. As such, the applicant’s imperfect or incomplete title is derived
only from possession and occupation since June 12, 1945, or earlier. This means that the
character of the property subject of the application as alienable and disposable agricultural land
of the public domain determines its eligibility for land registration, not the ownership or title over
it. Alienable public land held by a possessor, either personally or through his predecessors-in-
interest, openly, continuously and exclusively during the prescribed statutory period is converted
to private property by the mere lapse or completion of the period. In fact, by virtue of this
doctrine, corporations may now acquire lands of the public domain for as long as the lands were
already converted to private ownership, by operation of law, as a result of satisfying the
requisite period of possession prescribed by the Public Land Act. It is for this reason that the
property subject of the application of Malabanan need not be classified as alienable and
disposable agricultural land of the public domain for the entire duration of the requisite period of
possession.
Same; Same; Same; Same; Rules Relative to the Disposition of Public Land or Lands of the
Public Domain.—We now observe the following rules relative to the disposition of public land or
lands of the public domain, namely: (1) As a general rule and pursuant to the Regalian Doctrine,
all lands of the public domain belong to the State and are inalienable. Lands that are not clearly
under private ownership are also presumed to belong to the State and, therefore, may not be
alienated or disposed; (2) The following are excepted from the general rule, to wit: ( a)
Agricultural lands of the public domain are rendered alienable and disposable through any of the
exclusive modes enumerated under Section 11 of the Public Land Act. If the mode is judicial
confirmation of imperfect title under Section 48(b) of the Public Land Act, the agricultural land
subject of the application needs only to be classified as alienable and disposable as of the time
of the application, provided the applicant’s possession and occupation of the land dated back to
June 12, 1945, or earlier. Thereby, a conclusive presumption that the applicant has performed
all the conditions essential to a government grant arises, and the applicant becomes the owner
of the land by virtue of an imperfect or incomplete title. By legal fiction, the land has already
ceased to be part of the public domain and has become private property. ( b) Lands of the public
domain subsequently classified or declared as no longer intended for public use or for the
development of national wealth are removed from the sphere of public dominion and are
considered converted into patrimonial lands or lands of private ownership that may be alienated
or disposed through any of the modes of acquiring ownership under the Civil Code. If the mode
of acquisition is prescription, whether ordinary or extraordinary, proof that the land has been
already converted to private ownership prior to the requisite acquisitive prescriptive period is a
condition sine qua non in observance of the law (Article 1113, Civil Code) that property of the
State not patrimonial in character shall not be the object of prescription.
Brion, J., Separate Opinion:
Civil Law; Property; Public Land Act; View that Section 7 of the Public Land Act delegates
to the President the authority to administer and dispose of alienable public lands. —Section 7 of
the PLA delegates to the President the authority to administer and dispose of alienable public
lands. Section 8 sets out the public lands open to disposition or concession, and the requirement
that they should be officially delimited and classified and, when practicable, surveyed. Section
11, a very significant provision, states that — Section 11. Public lands suitable for agricultural
purposes can be disposed of only as follows, and not otherwise: (1) For homestead settlement
(2) By sale (3) By lease (4) By confirmation of imperfect or incomplete title: (a) By judicial
legalization (b) By administrative legalization (free patent).
Same; Same; Public Lands; View that the Constitution classifies public lands into agricultural,
mineral, timber lands and national parks. Of these, only agricultural lands can be alienated .—
68
P R O P E R T Y No. 3 |
The Constitution classifies public lands into agricultural, mineral, timber lands and national parks.
Of these, only agricultural lands can be alienated. Without the requisite classification, there can
be no basis to determine which lands of the public domain are alienable and which are not.
Hence, classification is a constitutionally-required step whose importance should be given full
legal recognition and effect . Otherwise stated, without classification into disposable agricultural
land, the land continues to form part of the mass of the public domain that, not being
agricultural, must be mineral, timber land or national parks that are completely inalienable and,
as such, cannot be possessed with legal effects. To recognize possession prior to any
classification is to do violence to the Regalian Doctrine; the ownership and control that the
Regalian Doctrine embodies will be less than full if the possession — that should be with the
State as owner, but is also elsewhere without any solid legal basis — can anyway be recognized.
Same; Same; Alienable and Disposable Lands; View that no imperfect title can be
confirmed over lands not yet classified as disposable or alienable because, in the absence of
such classification, the land remains unclassified public land that fully belongs to the State. —No
imperfect title can be confirmed over lands not yet classified as disposable or alienable because,
in the absence of such classification, the land remains unclassified public land that fully belongs
to the State. This is fully supported by Sections 6, 7, 8, 9, and 10 of the PLA. If the land is either
mineral, timber or national parks that cannot be alienated, it defies legal logic to recognize that
possession of these unclassified lands can produce legal effects.
Same; Same; Forest Lands; Revised Forestry Code (P.D. No. 705); View that P.D. No. 705
confirms that all lands of the public domain that remain unclassified are considered as forest
land. As forest land, these lands of the public domain cannot be alienated until they have been
reclassified as agricultural lands. —Parenthetically, PD No. 705 or the Revised Forestry Code
states that “Those [lands of public domain] still to be classified under the present system shall
continue to remain as part of the public forest.” It further declares that public forest covers “the
mass of lands of the public domain which has not been the subject of the present system of
classification for the determination of which lands are needed for forest purposes and which are
not.” Thus, PD No. 705 confirms that all lands of the public domain that remain unclassified are
considered as forest land. As forest land, these lands of the public domain cannot be alienated
until they have been reclassified as agricultural lands. For purposes of the present case, these
terms confirm the position that re/classification is essential at the time possession is acquired
under Section 48(b) of the PLA.
Same; Same; Regalian Doctrine; View that the Regalian Doctrine was incorporated in all
the Constitutions of the Philippines (1935, 1973 and 1987) and the statutes governing private
individuals’ land acquisition and registration. —The Regalian Doctrine was incorporated in all the
Constitutions of the Philippines (1935, 1973 and 1987) and the statutes governing private
individuals’ land acquisition and registration. In his Separate Opinion in Cruz v. Sec. of
Environment and Natural Resources, 347 SCRA 128 (2000), former Chief Justice Reynato S.
Puno made a brief yet informative historical discussion on how the Regalian Doctrine was
incorporated in our legal system, especially in all our past and present organic laws. His
historical disquisition was quoted in La Bugal-B’laan Tribal Association, Inc. v. Sec. Ramos , 421
SCRA 148 (2004), and the consolidated cases of The Secretary of the DENR et al. v. Yap and
Sacay et al. v. The Secretary of the DENR , 568 SCRA 164 (2008), which were also quoted in
Justice Lucas P. Bersamin’s Separate Opinion in his very brief discussion on how the doctrine
was carried over from our Spanish and American colonization up until our present legal system.
Same; Same; Alienable and Disposable Lands; Possession; View that prior to the
declaration of alienability, a land of the public domain cannot be appropriated; hence, any
claimed possession cannot have legal effects. —Possession is essentially a civil law term that can
best be understood in terms of the Civil Code in the absence of any specific definition in the PLA,
other than in terms of time of possession. Article 530 of the Civil Code provides that “ [o]nly
things and rights which are susceptible of being appropriated may be the object of possession .”
Prior to the declaration of alienability, a land of the public domain cannot be appropriated;
hence, any claimed possession cannot have legal effects. In fact, whether an application for
registration is filed before or after the declaration of alienability becomes immaterial if, in one as
in the other, no effective possession can be recognized prior to and within the proper period for
the declaration of alienability.
Separation of Powers; Statutes; View that if the Supreme Court believes that a law
already has absurd effects because of the passage of time, its role under the principle of
separation of powers is not to give the law an interpretation that is not there in order to avoid
the perceived absurdity.—If the Court believes that a law already has absurd effects because of
the passage of time, its role under the principle of separation of powers is not to give the law an
interpretation that is not there in order to avoid the perceived absurdity. If the Court does, it
thereby intrudes into the realm of policy — a role delegated by the Constitution to the
Legislature. If only for this reason, the Court should avoid expanding — through the present
ponencia and its cited cases — the plain meaning of Section 48(b) of the PLA, as amended by
PD No. 1073.
Same; Supreme Court; View that the Supreme Court should be very careful in delineating
the line between the constitutionally-allowed interpretation and the prohibited judicial
legislation, given the powers that the 1987 Constitution has entrusted to this Court. —In the
Philippines, a civil law country where the Constitution is very clear on the separation of powers
and the assignment of constitutional duties, I believe that this Court should be very careful in
delineating the line between the constitutionally-allowed interpretation and the prohibited
judicial legislation, given the powers that the 1987 Constitution has entrusted to this Court. As a
Court, we are given more powers than the U.S. Supreme Court; under Section 1, Article VIII of
the 1987 Constitution, we are supposed to act, as a matter of duty, on any grave abuse of
discretion that occurs anywhere in government. While broad, this power should nevertheless be
exercised with due respect for the separation of powers doctrine that underlies our Constitution.
Civil Law; Land Registration; View that the act of registration merely confirms that title already
exists in favor of the applicant. —The act of registration merely confirms that title already exists
in favor of the applicant. To require classification of the property only on application for
registration point would imply that during the process of acquisition of title (specifically, during
the period of possession prior to the application for registration), the property might not have
69
P R O P E R T Y No. 3 |
been alienable for being unclassified land (or a forest land under PD No. 705) of the public
domain. This claim totally contravenes the constitutional rule that only agricultural lands of the To prove that the property was an alienable and disposable land of the public domain,
public domain may be alienated. Malabanan presented during trial a certification dated June 11, 2001 issued by the Community
Environment and Natural Resources Office (CENRO) of the Department of Environment and
Leonen, J., Concurring and Dissenting Opinion: Natural Resources (DENR), which reads:
Civil Law; Property; Regalian Doctrine; View that our present Constitution does not
contain the term, “regalian doctrine.” —I do not agree that all lands not appearing to be clearly This is to certify that the parcel of land designated as Lot No. 9864 Cad 452-D, Silang Cadastre
within private ownership are presumed to belong to the State or that lands remain part of the as surveyed for Mr. Virgilio Velasco located at Barangay Tibig, Silang, Cavite containing an area
public domain if the State does not reclassify or alienate it to a private person. These of 249,734 sq. meters as shown and described on the Plan Ap-04-00952 is verified to be within
presumptions are expressions of the Regalian Doctrine. Our present Constitution does not the Alienable or Disposable land per Land Classification Map No. 3013 established under Project
contain the term, “regalian doctrine.” What we have is Article XII, Section 2, which provides: No. 20-A and approved as such under FAO 4-1656 on March 15, 1982. 2
Section 2. All 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 After trial, on December 3, 2002, the RTC rendered judgment granting Malabanan’s application
natural resources are owned by the State. With the exception of agricultural lands, all other for land registration, disposing thusly:
natural resources shall not be alienated x x x.
WHEREFORE, this Court hereby approves this application for registration and thus
places under the operation of Act 141, Act 496 and/or P.D. 1529, otherwise known as
Same; Same; View that there could be land, considered as property, where ownership
Property Registration Law, the lands described in Plan Csd-04-0173123-D, Lot 9864-A
has vested as a result of either possession or prescription, but still, as yet, undocumented. —
and containing an area of Seventy One Thousand Three Hundred Twenty Four (71,324)
Article III, Section 1 of the Constitution provides: Section 1. No person shall be deprived of life,
Square Meters, as supported by its technical description now forming part of the record
liberty or property without due process of law, nor shall any person be denied equal protection
of this case, in addition to other proofs adduced in the name of MARIO MALABANAN,
of the laws. This section protects all types of property. It does not limit its provisions to property
who is of legal age, Filipino, widower, and with residence at Munting Ilog, Silang,
that is already covered by a form of paper title. Verily, there could be land, considered as
Cavite.
property, where ownership has vested as a result of either possession or prescription, but still,
as yet, undocumented. The original majority’s opinion in this case presents some examples.
Once this Decision becomes final and executory, the corresponding decree of
registration shall forthwith issue.
RESOLUTION
SO ORDERED.3
BERSAMIN, J.:
For our consideration and resolution are the motions for reconsideration of the parties who both
The Office of the Solicitor General (OSG) appealed the judgment to the CA, arguing that
assail the decision promulgated on April 29, 2009, whereby we upheld the ruling of the Court of
Malabanan had failed to prove that the property belonged to the alienable and disposable land
Appeals (CA) denying the application of the petitioners for the registration of a parcel of land
of the public domain, and that the RTC erred in finding that he had been in possession of the
situated in Barangay Tibig, Silang, Cavite on the ground that they had not established by
property in the manner and for the length of time required by law for confirmation of imperfect
sufficient evidence their right to the registration in accordance with either Section 14(1) or
title.
Section 14(2) of Presidential Decree No. 1529 (Property Registration Decree).
On February 23, 2007, the CA promulgated its decision reversing the RTC and dismissing the
Antecedents
application for registration of Malabanan. Citing the ruling in Republic v. Herbieto (Herbieto) ,4
The property subject of the application for registration is a parcel of land situated in Barangay
the CA declared that under Section 14(1) of the Property Registration Decree, any period of
Tibig, Silang Cavite, more particularly identified as Lot 9864-A, Cad-452-D, with an area of
possession prior to the classification of the land as alienable and disposable was inconsequential
71,324-square meters. On February 20, 1998, applicant Mario Malabanan, who had purchased
and should be excluded from the computation of the period of possession. Noting that the
the property from Eduardo Velazco, filed an application for land registration covering the
CENRO-DENR certification stated that the property had been declared alienable and disposable
property in the Regional Trial Court (RTC) in Tagaytay City, Cavite, claiming that the property
only on March 15, 1982, Velazco’s possession prior to March 15, 1982 could not be tacked for
formed part of the alienable and disposable land of the public domain, and that he and his
purposes of computing Malabanan’s period of possession.
predecessors-in-interest had been in open, continuous, uninterrupted, public and adverse
possession and occupation of the land for more than 30 years, thereby entitling him to the
judicial confirmation of his title.1
70
P R O P E R T Y No. 3 |
Due to Malabanan’s intervening demise during the appeal in the CA, his heirs elevated the CA’s
decision of February 23, 2007 to this Court through a petition for review on certiorari.
The petitioners assert that the ruling in Republic v. Court of Appeals and Corazon Naguit 5
(Naguit) remains the controlling doctrine especially if the property involved is agricultural land.
In this regard, Naguit ruled that any possession of agricultural land prior to its declaration as
alienable and disposable could be counted in the reckoning of the period of possession to
perfect title under the Public Land Act (Commonwealth Act No. 141) and the Property
Registration Decree. They point out that the ruling in Herbieto, to the effect that the declaration
of the land subject of the application for registration as alienable and disposable should also
date back to June 12, 1945 or earlier, was a mere obiter dictum considering that the land
registration proceedings therein were in fact found and declared void ab initio for lack of
publication of the notice of initial hearing.
The petitioners also rely on the ruling in Republic v. T.A.N. Properties, Inc.6 to support their
argument that the property had been ipso jure converted into private property by reason of the
open, continuous, exclusive and notorious possession by their predecessors-in-interest of an
alienable land of the public domain for more than 30 years. According to them, what was
essential was that the property had been “converted” into private property through prescription
at the time of the application without regard to whether the property sought to be registered
was previously classified as agricultural land of the public domain.
 As earlier stated, we denied the petition for review on certiorari because Malabanan failed to
establish by sufficient evidence possession and occupation of the property on his part and on the
part of his predecessors-in interest since June 12, 1945, or earlier.
Petitioners’ Motion for Reconsideration
In their motion for reconsideration, the petitioners submit that the mere classification of the land
as alienable or disposable should be deemed sufficient to convert it into patrimonial property of
the State. Relying on the rulings in Spouses De Ocampo v. Arlos ,7 Menguito v. Republic8 and
Republic v. T.A.N. Properties, Inc.,9 they argue that the reclassification of the land as alienable
or disposable opened it to acquisitive prescription under the Civil Code; that Malabanan had
purchased the property from Eduardo Velazco believing in good faith that Velazco and his
predecessors-in-interest had been the real owners of the land with the right to validly transmit
title and ownership thereof; that consequently, the ten-year period prescribed by Article 1134 of
the Civil Code, in relation to Section 14(2) of the Property Registration Decree, applied in their
favor; and that when Malabanan filed the application for registration on February 20, 1998, he
had already been in possession of the land for almost 16 years reckoned from 1982, the time
when the land was declared alienable and disposable by the State.
The Republic’s Motion for Partial Reconsideration
The Republic seeks the partial reconsideration in order to obtain a clarification with reference to
the application of the rulings in Naguit and Herbieto.
Chiefly citing the dissents, the Republic contends that the decision has enlarged, by implication,
the interpretation of Section 14(1) of the Property Registration Decree through judicial
legislation. It reiterates its view that an applicant is entitled to registration only when the land
subject of the application had been declared alienable and disposable since June 12, 1945 or
earlier.
Ruling
We deny the motions for reconsideration.
In reviewing the assailed decision, we consider to be imperative to discuss the different
classifications of land in relation to the existing applicable land registration laws of the
Philippines.
Classifications of land according
to ownership
Land, which is an immovable property, 10 may be classified as either of public dominion or of
private ownership.11 Land is considered of public dominion if it either: (a) is intended for public
use; or (b) belongs to the State, without being for public use, and is intended for some public
service or for the development of the national wealth. 12 Land belonging to the State that is not
of such character, or although of such character but no longer intended for public use or for
public service forms part of the patrimonial property of the State. 13 Land that is other than part
of the patrimonial property of the State, provinces, cities and municipalities is of private
ownership if it belongs to a private individual.
Pursuant to the Regalian Doctrine ( Jura Regalia), a legal concept first introduced into the
country from the West by Spain through the Laws of the Indies and the Royal Cedulas,14 all
lands of the public domain belong to the State. 15 This means that the State is the source of any
asserted right to ownership of land, and is charged with the conservation of such patrimony. 16
All lands not appearing to be clearly under private ownership are presumed to belong to the
State. Also, public lands remain part of the inalienable land of the public domain unless the State
is shown to have reclassified or alienated them to private persons. 17
Classifications of public lands
according to alienability
Whether or not land of the public domain is alienable and disposable primarily rests on the
classification of public lands made under the Constitution. Under the 1935 Constitution, 18 lands
of the public domain were classified into three, namely, agricultural, timber and mineral. 19
Section 10, Article XIV of the 1973 Constitution classified lands of the public domain into seven,
specifically, agricultural, industrial or commercial, residential, resettlement, mineral, timber or
forest, and grazing land, with the reservation that the law might provide other classifications.
The 1987 Constitution adopted the classification under the 1935 Constitution into agricultural,
forest or timber, and mineral, but added national parks. 20 Agricultural lands may be further
classified by law according to the uses to which they may be devoted. 21 The identification of
71
P R O P E R T Y No. 3 |
lands according to their legal classification is done exclusively by and through a positive act of is located for confirmation of their claims and the issuance of a certificate of title thereafter,
the Executive Department.22 under the Land Registration Act, to wit:

Based on the foregoing, the Constitution places a limit on the type of public land that may be xxxx
alienated. Under Section 2, Article XII of the 1987 Constitution, only agricultural lands of the
public domain may be alienated; all other natural resources may not be. (b) Those who by themselves or through their predecessors-ininterest have been in
open, continuous, exclusive, and notorious possession and occupation of alienable and
Alienable and disposable lands of the State fall into two categories, to wit: ( a) patrimonial lands disposable lands of the public domain, under a bona fide claim of acquisition of
of the State, or those classified as lands of private ownership under Article 425 of the Civil ownership, since June 12, 1945, or earlier, immediately preceding the filing of the
Code,23 without limitation; and (b) lands of the public domain, or the public lands as provided by applications for confirmation of title, except when prevented by war or force majeure.
the Constitution, but with the limitation that the lands must only be agricultural. Consequently, These shall be conclusively presumed to have performed all the conditions essential to a
lands classified as forest or timber, mineral, or national parks are not susceptible of alienation or Government grant and shall be entitled to a certificate of title under the provisions of
disposition unless they are reclassified as agricultural. 24 A positive act of the Government is this chapter. (Bold emphasis supplied)
necessary to enable such reclassification, 25 and the exclusive prerogative to classify public lands
Note that Section 48(b) of the Public Land Act used the words “ lands of the public domain” or
under existing laws is vested in the Executive Department, not in the courts. 26 If, however,
“alienable and disposable lands of the public domain ” to clearly signify that lands otherwise
public land will be classified as neither agricultural, forest or timber, mineral or national park, or
classified, i.e., mineral, forest or timber, or national parks, and lands of patrimonial or private
when public land is no longer intended for public service or for the development of the national
ownership, are outside the coverage of the Public Land Act. What the law does not include, it
wealth, thereby effectively removing the land from the ambit of public dominion, a declaration of
excludes. The use of the descriptive phrase “ alienable and disposable” further limits the
such conversion must be made in the form of a law duly enacted by Congress or by a
coverage of Section 48(b) to only the agricultural lands of the public domain as set forth in
Presidential proclamation in cases where the President is duly authorized by law to that effect. 27
Article XII, Section 2 of the 1987 Constitution. Bearing in mind such limitations under the Public
Thus, until the Executive Department exercises its prerogative to classify or reclassify lands, or
Land Act, the applicant must satisfy the following requirements in order for his application to
until Congress or the President declares that the State no longer intends the land to be used for
come under Section 14(1) of the Property Registration Decree,28 to wit:
public service or for the development of national wealth, the Regalian Doctrine is applicable.
1. The applicant, by himself or through his predecessor-in-interest, has been in possession
Disposition of alienable public lands
and occupation of the property subject of the application;
Section 11 of the Public Land Act (CA No. 141) provides the manner by which alienable and
2. The possession and occupation must be open, continuous, exclusive, and notorious;
disposable lands of the public domain, i.e., agricultural lands, can be disposed of, to wit:
3. The possession and occupation must be under a bona fide claim of acquisition of
ownership;
Section 11. Public lands suitable for agricultural purposes can be disposed of only as
4. The possession and occupation must have taken place since June 12, 1945, or earlier; and
follows, and not otherwise:
5. The property subject of the application must be an agricultural land of the public domain.
(1) For homestead settlement;
 
(2) By sale;
Taking into consideration that the Executive Department is vested with the authority to classify
(3) By lease; and
lands of the public domain, Section 48(b) of the Public Land Act, in relation to Section 14(1) of
(4) By confirmation of imperfect or incomplete titles;
the Property Registration Decree, presupposes that the land subject of the application for
(a) By judicial legalization; or
registration must have been already classified as agricultural land of the public domain in order
(b) By administrative legalization (free patent).
for the provision to apply. Thus, absent proof that the land is already classified as agricultural
land of the public domain, the Regalian Doctrine applies, and overcomes the presumption that
The core of the controversy herein lies in the proper interpretation of Section 11(4), in relation
the land is alienable and disposable as laid down in Section 48(b) of the Public Land Act.
to Section 48(b) of the Public Land Act, which expressly requires possession by a Filipino citizen
However, emphasis is placed on the requirement that the classification required by Section 48(b)
of the land since June 12, 1945, or earlier, viz.:
of the Public Land Act is classification or reclassification of a public land as agricultural.
Section 48. The following-described citizens of the Philippines, occupying lands of the public
The dissent stresses that the classification or reclassification of the land as alienable and
domain or claiming to own any such lands or an interest therein, but whose titles have not been
disposable agricultural land should likewise have been made on June 12, 1945 or earlier,
perfected or completed, may apply to the Court of First Instance of the province where the land
72
P R O P E R T Y No. 3 |
because any possession of the land prior to such classification or reclassification produced no
legal effects. It observes that the fixed date of June 12, 1945 could not be minimized or glossed
over by mere judicial interpretation or by judicial social policy concerns, and insisted that the full
legislative intent be respected.
We find, however, that the choice of June 12, 1945 as the reckoning point of the requisite
possession and occupation was the sole prerogative of Congress, the determination of which
should best be left to the wisdom of the lawmakers. Except that said date qualified the period of
possession and occupation, no other legislative intent appears to be associated with the fixing of
the date of June 12, 1945. Accordingly, the Court should interpret only the plain and literal
meaning of the law as written by the legislators.
Moreover, an examination of Section 48(b) of the Public Land Act indicates that Congress
prescribed no requirement that the land subject of the registration should have been classified
as agricultural since June 12, 1945, or earlier. As such, the applicant’s imperfect or incomplete
title is derived only from possession and occupation since June 12, 1945, or earlier. This means
that the character of the property subject of the application as alienable and disposable
agricultural land of the public domain determines its eligibility for land registration, not the
ownership or title over it. Alienable public land held by a possessor, either personally or through
his predecessors-in-interest, openly, continuously and exclusively during the prescribed statutory
period is converted to private property by the mere lapse or completion of the period. 29 In fact,
by virtue of this doctrine, corporations may now acquire lands of the public domain for as long
as the lands were already converted to private ownership, by operation of law, as a result of
satisfying the requisite period of possession prescribed by the Public Land Act.30 It is for this
reason that the property subject of the application of Malabanan need not be classified as
alienable and disposable agricultural land of the public domain for the entire duration of the
requisite period of possession.
To be clear, then, the requirement that the land should have been classified as alienable and
disposable agricultural land at the time of the application for registration is necessary only to
dispute the presumption that the land is inalienable.
The declaration that land is alienable and disposable also serves to determine the point at which
prescription may run against the State. The imperfect or incomplete title being confirmed under
Section 48(b) of the Public Land Act is title that is acquired by reason of the applicant’s
possession and occupation of the alienable and disposable agricultural land of the public domain.
Where all the necessary requirements for a grant by the Government are complied with through
actual physical, open, continuous, exclusive and public possession of an alienable and disposable
land of the public domain, the possessor is deemed to have acquired by operation of law not
only a right to a grant, but a grant by the Government, because it is not necessary that a
certificate of title be issued in order that such a grant be sanctioned by the courts. 31
If one follows the dissent, the clear objective of the Public Land Act to adjudicate and quiet titles
to unregistered lands in favor of qualified Filipino citizens by reason of their occupation and
cultivation thereof for the number of years prescribed by law 32 will be defeated. Indeed, we
should always bear in mind that such objective still prevails, as a fairly recent legislative
development bears out, when Congress enacted legislation (Republic Act No. 10023) 33 in order
to liberalize stringent requirements and procedures in the adjudication of alienable public land to
qualified applicants, particularly residential lands, subject to area limitations. 34
On the other hand, if a public land is classified as no longer intended for public use or for
the development of national wealth by declaration of Congress or the President, thereby
converting such land into patrimonial or private land of the State, the applicable provision
concerning disposition and registration is no longer Section 48(b) of the Public Land Act but the
Civil Code, in conjunction with Section 14(2) of the Property Registration Decree.35 As such,
prescription can now run against the State.
To sum up, we now observe the following rules relative to the disposition of public land or
lands of the public domain, namely:
(1) As a general rule and pursuant to the Regalian Doctrine, all lands of the public domain
belong to the State and are inalienable. Lands that are not clearly under private ownership are
also presumed to belong to the State and, therefore, may not be alienated or disposed;
(2) The following are excepted from the general rule, to wit:
(a) Agricultural lands of the public domain are rendered alienable and disposable through any
of the exclusive modes enumerated under Section 11 of the Public Land Act. If the mode is
judicial confirmation of imperfect title under Section 48(b) of the Public Land Act, the agricultural
land subject of the application needs only to be classified as alienable and disposable as of the
time of the application, provided the applicant’s possession and occupation of the land dated
back to June 12, 1945, or earlier. Thereby, a conclusive presumption that the applicant has
performed all the conditions essential to a government grant arises, 36 and the applicant becomes
the owner of the land by virtue of an imperfect or incomplete title. By legal fiction, the land has
already ceased to be part of the public domain and has become private property. 37
(b) Lands of the public domain subsequently classified or declared as no longer intended for
public use or for the development of national wealth are removed from the sphere of public
dominion and are considered converted into patrimonial lands or lands of private ownership that
may be alienated or disposed through any of the modes of acquiring ownership under the Civil
Code. If the mode of acquisition is prescription, whether ordinary or extraordinary, proof that
the land has been already converted to private ownership prior to the requisite acquisitive
prescriptive period is a condition sine qua non in observance of the law (Article 1113, Civil Code)
that property of the State not patrimonial in character shall not be the object of prescription.
To reiterate, then, the petitioners failed to present sufficient evidence to establish that they and
their predecessors-in-interest had been in possession of the land since June 12, 1945. Without
satisfying the requisite character and period of possession — possession and occupation that is
open, continuous, exclusive, and notorious since June 12, 1945, or earlier — the land cannot be
73
P R O P E R T Y No. 3 |
considered ipso jure converted to private property even upon the subsequent declaration of it as
alienable and disposable. Prescription never began to run against the State, such that the land
has remained ineligible for registration under Section 14(1) of the Property Registration Decree.
Likewise, the land continues to be ineligible for land registration under Section 14(2) of the
Property Registration Decree unless Congress enacts a law or the President issues a
proclamation declaring the land as no longer intended for public service or for the development
of the national wealth.
WHEREFORE, the Court DENIES the petitioners’ Motion for Reconsideration and the
respondent’s Partial Motion for Reconsideration for their lack of merit.
SO ORDERED.
Sereno (CJ.), Carpio, Peralta, Del Castillo, Abad, Villarama, Jr., Perez, Mendoza, Reyes
and Perlas-Bernabe, JJ., concur.
Velasco, Jr., J., No part due to relationship to a party.
Leonardo-De Castro, J., I submitted my vote joining the Separate Opinion of Justice
Brion.
Brion, J., In the result: See Separate Opinion.
Leonen, J., See separate concurring and dissenting opinion.