Cases 22-29 Property

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-24440 June 30, 1969
THE PROVINCE OF ZAMBOANGA DEL NORTE, plaintiff-appellee,
vs.
CITY OF ZAMBOANGA, SECRETARY OF FINANCE AND COMMISSIONER OF INTERNAL
REVENUE,defendants-appellants.
RESOLUTION
REYES, J.B.L., J.:
Professing respect for the principles enunciated by this Court in its decision of 28 March 1968, in Case G. R. No. L-
24440, entitled Province of Zamboanga del Norte vs. City of Zamboanga, et al., 1 the appellant City seeks
reconsideration of our decision in so far as the latter declares that Republic Act 3039 is unconstitutional and void in
so far as the same seeks to deprive the Province of Zamboanga del Norte of its share in the 26 lots situated within
the City of Zamboanga, and hereinafter enumerated, without just compensation, for the reason that said 26 lots are
patrimonial property of the old Province of Zamboanga. Said 26 lots are declared in the main decision to be the
following:
Lot Number Use
TCT Number
5577 .......................... 177 .......................... Mydro, Magay
13198 ......................... 127-D .......................... San Roque
5569 .......................... 169 .......................... Burleigh2
5558 .......................... 175 .......................... Vacant
5559 .......................... 188 .......................... "
5560 .......................... 183 .......................... "
5561 .......................... 186 .......................... "
5563 .......................... 191 .......................... "
5566 .......................... 176 .......................... "
5568 .......................... 179 .......................... "
5574 .......................... 196 .......................... "
5575 .......................... 181-A ....................... "
5576 .......................... 181-B ....................... "
5578 .......................... 182 .......................... "
5579 .......................... 197 .......................... "
5580 .......................... 195 .......................... "
5581 .......................... 159-B ......................... "
5582 .......................... 194 .......................... "
5584 .......................... 190 .......................... "
5588 .......................... 184 .......................... "
5589 .......................... 187 .......................... "
5590 .......................... 189 .......................... "
5591 .......................... 192 .......................... "
5592 .......................... 193 .......................... "
5593 .......................... 185 .......................... "
7379 .......................... 4147 .......................... "
The movant City contends that the 26 lots aforestated were not patrimonial property of the former Province of
Zamboanga, for the reason that said 26 lots have always been used for public purposes, such as school sites,
playgrounds and athletic fields for schools.
To bolster its contention, the City of Zamboanga submitted photographs, plans and a sworn certification of its City
Engineer to the effect that:
(a) Twenty-one lots (Nos. 17, 177, 179, 181-A, 181-B, 182 to 197) are part and parcel of the Zamboanga Trade
School;
(b) Three lots (Nos. 169, 175 and 176) are part and parcel of the Zamboanga Normal College;
(c) Lot No. 127-D is the Pasonanca Elementary School;
(d) Lot No. 4147 is the Bolong Elementary School;
(e) Lot No. 159-B is part and parcel of the Baliwasan Elementary School.
PROPE RTY 1
Appellant City of Zamboanga, therefore, prays that the main decision be partly reconsidered and that all title to, and
ownership of, the 26 lots be declared to have been validly vested in said City free of charge by Republic Act No.
3039.
The motion for reconsideration is vigorously opposed by plaintiff-appellee Province of Zamboanga del Norte, which
contends that the evidence sought to be filed by the appellant City is not newly discovered evidence and is,
therefore, inadmissible at this stage of the proceedings. Alternatively, the appellee Province of Zamboanga contends
that the 26 lots are vacant, or that the buildings existing thereon were constructed in bad faith; and that the said
Province has additional evidence to show that most of these properties are not actually devoted to public use or
governmental purposes.1awphil.nt
Considering that both contending parties are actually subdivisions of one entity, the Republic of the Philippines, so
that public interest is involved and demands that the issues presented be determined speedily without regard to
technicalities, the Court resolved that, in the interest of justice and equity, its main decision and that of the court
below be reconsidered and set aside, in so far as they affect the twenty-six lots heretofore enumerated, and the
monetary indemnities awarded. Instead, the records are ordered remanded to the court of origin for a new trial,
wherein the parties shall be given opportunity to adduce and submit any evidence in their possession to show
whether or not the 26 lots aforesaid were or were not actually devoted to public use or governmental purposes prior
to the enactment of Republic Act No. 3039. Thereafter, the Court of First Instance shall decide the issues anew,
taking into account the evidence submitted by the parties and the principles of law laid down by this Supreme Court
in its main decision of the present case, dated 28 March 1968.
So ordered. No costs.
Concepcion, C.J., Makalintal, Zaldivar, Sanchez, Castro, Fernando, Capistrano, Teehankee and Barredo, JJ.,
concur.
Dizon, J., took no part.
PROPE RTY 2
Province of Zamboanga Del Norte vs City of Zamboanga 22 SCRA 1334
Facts
Prior to the incorporation as a chartered city, the Municipality of Zamboanga was the provincial capital of
Zamboanga Province. By virtue of Commonwealth Act 39, section 50 providing that the buildings and other
properties that the Province will abandon in view of itsconversion as Zamboanga City shall be paid for by the City of
Zamboanga at a price to be fixed by the Auditor General, the said properties consisting of 50 lots were identified and
the price were fixed thereof. An allotment for its payment was authorized by the BIR Commissioner. In June 17,
1961, RA 3039 was approved and it amended section 50 of the Commonwealth Act 39 providing that all buildings,
properties, and assets belonging to the Province of Zamboanga and located in the City of Zamboanga are
transferred free of charge in favor of the City of Zamboanga. The Province of Zamboanga del Norte filed a complaint
for declaratory relief with preliminary injunction contending that the RA 3039 is unconstitutional as it deprives
the Province of its properties without just compensation and due process.
Issue
Whether or not RA 3039 is unconstitutional?
Held
The court held that to resolve the issue it is important to identify the nature of the properties in dispute. The
properties that are devoted for public purpose are owned by the province in its governmental capacity. Those that
are not devoted for public use remain as patrimonial property of the Province. The RA 3039 is held valid in so far as
the properties that are devoted for public use or owned by the province in its governmental capacity and thus must
retain its public purpose. Hence these governmental properties need not be paid by the City of Zamboanga.
With respect to the patrimonial properties from the 50 lots in dispute, the RA 3039 cannot be applied in order to
deprive the province of its own patrimonial properties that are not devoted for public use. Hence the City of
Zamboanga shall pay just compensation to the Province of Zamboanga for these patrimonial properties.
PROPE RTY 3
Province of Zamboanga del Norte vs Zamboanga City22 SCRA 1334
Facts:Prior to its incorporation as a chartered city, the Municipality of Zamboanga used to be the provincial capital of
the then ZamboangaProvince.On October 12, 1936, Commonwealth Act 39 was approved converting the
Municipality of Zamboanga into ZamboangaCity. Sec. 50 of the Act also provided that

Buildingsand properties which the provinceshall abandon upon the transfer of the capital to another placewill be
acquired and paid forby the City of Zamboanga at a price to be fixed by the Auditor General.The properties and
buildings referred toconsisted of 50 lots and some buildingsconstructed thereon, located in the City of Zamboanga
and covered individually by Torrens certificates of title inthe name of Zamboanga Province.On June 6, 1952,
Republic Act 711 was approved dividing the province of Zamboanga intotwo (2): Zamboanga del Norte
andZamboanga del Sur. Properties and theobligations of the province of Zamboanga shall be divided equitably
between the Province of Zamboangadel Norte and the Province of Zamboanga del Sur by the President of the
Philippines,upon the recommendation of the Auditor General. However, on June 17, 1961, Republic Act3039was
approved amending Sec. 50 of Commonwealth Act 39 by providing that

all buildings, properties and assets belonging tothe former province of Zamboanga and locatedwithin the City of
Zamboanga are hereby transferred, free of charge, in favor of the said City of Zamboanga.Issue:WON Zamboanga
del Norte is deprived of its private properties without due process and justcompensation.Ruling:The fact that the 26
lots are registered strengthens the proposition that they are truly private innature. On the other hand, that the 24 lots
used for governmental purposes are also registeredis of no significance since registration cannot convert public
property to private. Applying, Art.424 of NCC, all the properties in question, except the two (2) lots used as High
School playgrounds, could be considered aspatrimonial properties of the formerZamboanga 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"
PROPE RTY 4
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-61311 September 2l, 1987
FELICIDAD VILLANUEVA, FERNANDO CAISIP, ANTONIO LIANG, FELINA MIRANDA, RICARDO PUNO,
FLORENCIO LAXA, and RENE OCAMPO, petitioners,
vs.
HON. MARIANO CASTAEDA, 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.
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 quobetween 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 stags and sell in the above-mentioned place. 2 The action was protested 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 constructing 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 G.R. 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
then 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
Acting thereon after an investigation conducted by the municipal attorney, 9 respondent Vicente A. Macalino, as
officer-in-charge of the office of the mayor of San Fernando, issued on June 14, 1982, a resolution requiring the
municipal treasurer and the municipal engineer to demolish the stalls in the subject place beginning July 1,
1982. 10 The reaction of the petitioners was to file a petition for prohibition with the Court of First Instance of
Pampanga, docketed as Civil Case No. 6470, on June 26, 1982. The respondent judge denied the petition on July
19, 1982, 11 and the motion for reconsideration on August 5, 1982, 12 prompting the petitioners to come to this
Court on certiorari to challenge his decision. 13
As required, respondent Macalino filed his comment 14 on the petition, and the petitioners countered with their
reply. 15 In compliance with our resolution of February 2, 1983, the petitioners submitted their memorandum 16and
respondent Macalino, for his part, asked that his comment be considered his memorandum. 17 On July 28, 1986, the
new officer-in-charge of the office of the mayor of San Fernando, Paterno S. Guevarra, was impleaded in lieu of
Virgilio Sanchez, who had himself earlier replaced the original respondent Macalino. 18
After considering the issues and the arguments raised by the parties in their respective pleadings, we rule for the
respondents. The petition must be dismissed.
There is no question that the place occupied by the petitioners 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. 19
It does not appear that the decision in this case was appealed or has been reversed. In Civil Case G.R. No. 6740,
which is the subject of this petition, the respondent judge saw no reason to disturb the finding in Civil Case No. 2040
and indeed used it as a basis for his own decision sustaining the questioned order. 20
The basic contention of the petitioners is that the disputed area is under lease to them by virtue of contracts they had
entered into with the municipal government, first in 1961 insofar as the original occupants were concerned, and later
with them and the other petitioners by virtue of the space allocations made in their favor in 1971 for which they saw
they are paying daily fees. 21 The municipal government has denied making such agreements. In any case, they
argue, since the fees were collected daily, the leases, assuming their validity, could be terminated at will, or any day,
as the claimed rentals indicated that the period of the leases was from day to day. 22
The parties belabor this argument needlessly.
PROPE RTY 5
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 vs.
Rojas, 23decided 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.
Justice Torres said in that case:
According to article 344 of the Civil Code: "Property for public use in provinces and in towns comprises the provincial
and town roads, the squares, streets, fountains, and public waters, the promenades, and public works of general
service supported by said towns or provinces.
The said Plaza Soledad being a promenade for public use, the municipal council of Cavite could not in 1907
withdraw or exclude from public use a portion thereof in order to lease it for the sole benefit of the defendant Hilaria
Rojas. In leasing a portion of said plaza or public place to the defendant for private use the plaintiff municipality
exceeded its authority in the exercise of its powers by executing a contract over a thing of which it could not dispose,
nor is it empowered so to do.
The Civil Code, article 1271, prescribes that everything which is not outside the commerce of man may be the object
of a contract, and plazas and streets are outside of this commerce, as was decided by the supreme court of Spain in
its decision of February 12, 1895, which says: "communal things that cannot be sold because they are by their very
nature outside of commerce are those for public use, such as the plazas, streets, common lands, rivers, fountains,
etc."
Therefore, it must be concluded that the contract, Exhibit C, whereby the municipality of Cavite leased to Hilaria
Rojas a portion of the Plaza Soledad is null and void and of no force or effect, because it is contrary to the law and
the thing leased cannot be the object of a was held that the City of contract.
In Muyot vs. de la Fuente, 24 it was held that the City of Manila could not lease a portion of a public sidewalk on
Plaza Sta. Cruz, being likewise beyond the commerce of man.
Echoing Rojas, the decision said:
Appellants claim that they had obtained permit from the present of the City of Manila, to connect booths Nos. 1 and
2, along the premises in question, and for the use of spaces where the booths were constructed, they had paid and
continued paying the corresponding rentals. Granting this claim to be true, one should not entertain any doubt that
such permit was not legal, because the City of Manila does not have any power or authority at all to lease a portion
of a public sidewalk. The sidewalk in question, forming part of the public plaza of Sta. Cruz, could not be a proper
subject matter of the contract, as it was not within the commerce of man (Article 1347, new Civil Code, and article
1271, old Civil Code). Any contract entered into by the City of Manila in connection with the sidewalk, is ipso
facto null and ultra vires. (Municipality of Cavite vs. Roxas, et a1, 30 Phil. 603.) The sidewalk in question was
intended for and was used by the public, in going from one place to another. "The streets and public places of the
city shall be kept free and clear for the use of the public, and the sidewalks and crossings for the pedestrians, and
the same shall only be used or occupied for other purpose as provided by ordinance or regulation; ..." (Sec. 1119,
Revised Ordinances of the City of Manila.) The booths in question served as fruit stands for their owners and often, if
not always, blocked the fire passage of pedestrians who had to take the plaza itself which used to be clogged with
vehicular traffic.
Exactly in point is Espiritu vs. Municipal Council of Pozorrubio, 25 where the Supreme Court declared:
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 common 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
municipalcouncil 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 stags 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. 26 There is
evidence that the petitioners were notified of this hearing, 27which 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 an taint of arbitrariness in the action
he was caged upon to take.
PROPE RTY 6
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
stags 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 casethrough 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 suffers 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 an 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 deference 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.
SO ORDERED.
Teehankee, C.J., Narvasa and Paras, JJ., concur.
VILLANUEVA V. CASTANEDA
154 SCRA 142
FACTS:
Petitioners claim the right to remain in and conduct business in the area (talipapa) by virtue of a previous
authorization granted to them by the municipal government. The respondents denied this and alleged that the
demolitions of the stalls were not illegal.
HELD:
A public plaza is beyond the commerce of man and so cannot be the subject of lease or any other
commercial undertaking.
PROPE RTY 7
Villanueva vs Castaneda 154 SCRA 142
Facts
Respondent Macalino, OIC of the Office of Mayor of San Fernando issued a resolution requiring the demolition of
stalls constructed on what the respondent claims to be a public land which is now proliferated with the vendors stalls
called talipapa. The petitioners contend that by virtue of the contract of lease issued to them by
the previous municipal council they have the right to stay and do business at the place in issue. Thus, the petitioners
filed a petition for prohibition with the Court of First Instance contending that they are protected by the lease contract.
Their petition was denied hence this action to the Supreme Court was filed for certiorari.
Issue
Whether or not the land in issue is a public land?

Whether or not the respondents act to order the demolition of the stalls amount to grave abuse of discretion and
whimsical?
Held
It was held by the Supreme Court that the land in issue is a public land.
In the year 1961, it appears that the municipal council of San Fernando adopted resolution no. 218 that authorized
vendors to construct permanent stalls on the land in issue by virtue of a contract of lease. The resolution was
opposed in a Civil Case no. 2040. In 1964, the municipal council of San Fernando adopted resolution no. 29
declaring the land as a parking space and a public plaza of the municipality which in effect impliedly revoked the
resolution no. 218. In the Civil Case no. 2040, it was held that a public plaza is beyond the commerce of men. The
decision was not appealed nor reversed hence the court finds no need to disturb the final adjudication of the Civil
Case 2040. It is settled therefore that the land where the stalls were constructed remains a public land. The
petitioners cannot claim the right to occupy the disputed premises by invoking lease contracts. Being an object
beyond the commerce of men, the land in dispute cannot be an object of a lease contract.
The respondent has the duty to restore the public land to what it is intended in nature and no whimsical action was
taken in ordering thedemolition of the stalls. It is an act within the scope of exercising police power and such police
power cannot be bargained away through a lease contract. Thus, the court ruled in favor of the respondent.
PROPE RTY 8
SUPREME COURT
Manila
SECOND DIVISION
G.R. 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.
Loreto Novisteros for petitioners.
Corleto R. Castro for respondents.
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 [41 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.
4551; 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.
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.
Feria (Chairman), Alampay, Gutierrez, Jr. and Paras, JJ., concur.
PROPE RTY 9
Property Case Digests
Maneclang v. Intermediate Appellate CourtFacts:
Adriano Maneclang in this case filed a complaint for

quieting of titleover a certain fishpond located within the 4 parcels of land belonging to them situated in
Pangasinan but the trial courtdismissed it by saying that the body of water is a creek constitutinga tributary to
Agno River
therefore public in nature and notsubject to private appropriation.
They appealed it to the IAC which affirmed theaforementioned decision. Hence, this review on certiorari.
However, after having been asked to comment to the case thereon,they manifested their lack of interest and the
parties to the case (thecomplainant and the awardee in the public bidding Maza) decided toamicably settle the case
saying that judgment be rendered and that thecourt recognize the ownership of the petitioners over the landthe body of
water found within their titled properties.
O
They say that there would be no benefit since the NIA already constructed a dike and no water now gets in and out
of theland.
Issue:
Whether or not the fishpond is public in nature.
Ratio:
Yes.
A creek is defined as a recess or arm extending from a river andparticipating in the ebb and flow of the sea.
o
It is a property belonging to the public domain and isnot susceptible to private appropriation andacquisitive
prescription.
o
The mere construction of the dikes by NIA nor its conversionto a fishpond altered or changed the nature of the creek
asproperty of the public domain.
The compromise agreement is null and void and of no legal effect because it is contrary to law and public policy.
PROPE RTY 10
SUPREME COURT
Manila
THIRD DIVISION
G.R. 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.
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 1) 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) "... shall be conclusively presumed to have performed all the conditions
essential to a Government grant and shall be entitled to a certificate of title .... " 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, See. 11) does not apply.
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 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.
WHEREFORE, the petition is DENIED. The questioned decision of the respondent Judge is AFFIRMED.
SO ORDERED.
Fernan (Chairman), Feliciano and Bidin JJ., concur.
eparate Opinions
GUTIERREZ, JR., J.:, dissenting.

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.
Separate Opinions
PROPE RTY 11
GUTIERREZ, JR., J.:, dissenting.
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.
PROPE RTY 12
SUPREME COURT
Manila
EN BANC
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 PETITION OF PHILIPPINE GOVERNMENT PROPERTIES IN
JAPAN, respondents.
Arturo M. Tolentino for petitioner in 92013.
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 inspire 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 Obanoyama-cho, 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
PROPE RTY 13
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 government. No change of ownership or title shall
occur. (See Annex "B" to Reply to Comment) The Philippine government retains the title all throughout the lease
period and thereafter. However, the government has not acted favorably on this proposal which is pending approval
and ratification between the parties. Instead, on August 11, 1986, President Aquino created a committee to study the
disposition/utilization of Philippine government properties in Tokyo and Kobe, Japan through Administrative Order
No. 3, followed by Administrative Orders Numbered 3-A, B, C and D.
On July 25, 1987, the President issued Executive Order No. 296 entitling non-Filipino citizens or entities to avail of
separations' capital goods and services in the event of sale, lease or disposition. The four properties in Japan
including the Roppongi were specifically mentioned in the first "Whereas" clause.
Amidst opposition by various sectors, the Executive branch of the government has been pushing, with great vigor, its
decision to sell the reparations properties starting with the Roppongi lot. The property has twice been set for bidding
at a minimum floor price of $225 million. The first bidding was a failure since only one bidder qualified. The second
one, after postponements, has not yet materialized. The last scheduled bidding on February 21, 1990 was restrained
by his Court. Later, the rules on bidding were changed such that the $225 million floor price became merely a
suggested floor price.
The Court finds that each of the herein petitions raises distinct issues. The petitioner in G.R. No. 92013 objects to the
alienation of the Roppongi property to anyone while the petitioner in G.R. No. 92047 adds as a principal objection the
alleged unjustified bias of the Philippine government in favor of selling the property to non-Filipino citizens and
entities. These petitions have been consolidated and are resolved at the same time for the objective is the same - to
stop the sale of the Roppongi property.
The petitioner in G.R. No. 92013 raises the following issues:
(1) Can the Roppongi property and others of its kind be alienated by the Philippine Government?; and
(2) Does the Chief Executive, her officers and agents, have the authority and jurisdiction, to sell the Roppongi
property?
Petitioner Dionisio Ojeda in G.R. No. 92047, apart from questioning the authority of the government to alienate the
Roppongi property assails the constitutionality of Executive Order No. 296 in making the property available for sale
to non-Filipino citizens and entities. He also questions the bidding procedures of the Committee on the Utilization or
Disposition of Philippine Government Properties in Japan for being discriminatory against Filipino citizens and
Filipino-owned entities by denying them the right to be informed about the bidding requirements.
II
In G.R. No. 92013, petitioner Laurel asserts that the Roppongi property and the related lots were acquired as part of
the reparations from the Japanese government for diplomatic and consular use by the Philippine government. Vice-
President Laurel states that the Roppongi property is classified as one of public dominion, and not of private
ownership under Article 420 of the Civil Code (See infra).
The petitioner submits that the Roppongi property comes under "property intended for public service" in paragraph 2
of the above provision. He states that being one of public dominion, no ownership by any one can attach to it, not
even by the State. The Roppongi and related properties were acquired for "sites for chancery, diplomatic, and
consular quarters, buildings and 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 opportune
use. (Citing 3 Manresa 65-66). Hence, it cannot be appropriated, is outside the commerce of man, or to put it in more
simple terms, it cannot be alienated nor be the subject matter of contracts (Citing Municipality of Cavite v. Rojas, 30
Phil. 20 [1915]). Noting the non-use of the Roppongi property at the moment, the petitioner avers that the same
remains property of public dominion so long as the government has not used it for other purposes nor adopted any
measure constituting a removal of its original purpose or use.
The respondents, for their part, refute the petitioner's contention by saying that the subject property is not governed
by our Civil Code but by the laws of Japan where the property is located. They rely upon the rule of lex situs which is
used in determining the applicable law regarding the acquisition, transfer and devolution of the title to a property.
They also invoke Opinion No. 21, Series of 1988, dated January 27, 1988 of the Secretary of Justice which used
the lex situs in explaining the inapplicability of Philippine law regarding a property situated in Japan.
The respondents add that even assuming for the sake of argument that the Civil Code is applicable, the Roppongi
property has ceased to become property of public dominion. It has become patrimonial property because it has not
been used for public service or for diplomatic purposes for over thirteen (13) years now (Citing Article 422, Civil
Code) and because the intention by the Executive Department and the Congress to convert it to private use has
been manifested by overt acts, such as, among others: (1) the transfer of the Philippine Embassy to Nampeidai (2)
the issuance of administrative orders for the possibility of alienating the four government properties in Japan; (3) the
issuance of Executive Order No. 296; (4) the enactment 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 properties in foreign countries; (5) the holding of the public bidding of the Roppongi property but which
failed; (6) the deferment by the Senate in Resolution No. 55 of the bidding to a future date; thus an acknowledgment
by the Senate of the government's intention to remove the Roppongi property from the public service purpose; and
(7) the resolution of this Court dismissing the petition in Ojeda v. Bidding Committee, et al., G.R. No. 87478 which
sought to enjoin the second bidding of the Roppongi property scheduled on March 30, 1989.
III
In G.R. No. 94047, petitioner Ojeda once more asks this Court to rule on the constitutionality of Executive Order No.
296. He had earlier filed a petition in G.R. No. 87478 which the Court dismissed on August 1, 1989. He now avers
PROPE RTY 14
that the executive order contravenes the 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).itc-asl
(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 III, 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 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 appropration. (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.
PROPE RTY 15
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 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 above-mentioned 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 provision 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 a ed 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 situsrule 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 capableof 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. (Emphasis 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:
PROPE RTY 16
(1) For property belonging to and titled in the name of the Republic of the Philippines, by the President, unless the
authority therefor is expressly vested by law in another officer.
(2) For property belonging to the Republic of the Philippines but titled in the name of any political subdivision or of
any corporate agency or instrumentality, by the executive head of the agency or instrumentality. (Emphasis supplied)
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.
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.
The resolution of this Court in Ojeda v. Bidding Committee, et al., supra, did not pass upon the constitutionality of
Executive Order No. 296. Contrary to respondents' assertion, we did not uphold the authority of the President to sell
the Roppongi property. The Court stated that the constitutionality of the executive order was not the real issue and
that resolving the constitutional question was "neither necessary nor finally determinative of the case." The Court
noted that "[W]hat petitioner ultimately questions is the use of the proceeds of the disposition of the Roppongi
property." In emphasizing that "the decision of the Executive to dispose of the Roppongi property to finance the
CARP ... cannot be questioned" in view of Section 63 (c) of Rep. Act No. 6657, the Court did not acknowledge the
fact that the property became alienable nor did it indicate that the President was authorized to dispose of the
Roppongi property. The resolution should be read to mean that in case the Roppongi property is re-classified to be
patrimonial and alienable by authority of law, the proceeds of a sale may be used for national economic development
projects including the CARP.
Moreover, the sale in 1989 did not materialize. The petitions before us question the proposed 1990 sale of the
Roppongi property. We are resolving the issues raised in these petitions, not the issues raised in 1989.
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 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:
The Roppongi property is not just like any piece of property. It was given to the Filipino people in reparation for the
lives and blood of Filipinos who died and suffered during the Japanese military occupation, for the suffering of
widows and orphans who lost their loved ones and kindred, for the homes and other properties lost by countless
Filipinos during the war. The Tokyo properties are a monument to the bravery and sacrifice of the Filipino people in
the face of an invader; like the monuments of Rizal, Quezon, and other Filipino heroes, we do not expect economic
or financial benefits from them. But who would think of selling these monuments? Filipino honor and national dignity
dictate that we keep our properties in Japan as memorials to the countless Filipinos who died and suffered. Even if
we should become paupers we should not think of selling them. For it would be as if we sold the lives and blood and
tears of our countrymen. (Rollo- G.R. No. 92013, p.147)
The petitioner in G.R. No. 92047 also states:
Roppongi is no ordinary property. It is one ceded by the Japanese government in atonement for its past belligerence
for the valiant sacrifice of life and limb and for deaths, physical dislocation and economic devastation the whole
Filipino people endured in World War II.
It is for what it stands for, and for what it could never bring back to life, that its significance today remains undimmed,
inspire of the lapse of 45 years since the war ended, inspire of the passage of 32 years since the property passed on
to the Philippine government.
Roppongi is a reminder that cannot should not be dissipated ... (Rollo-92047, p. 9)
It is indeed true that the Roppongi property is valuable not so much because of the inflated prices fetched by real
property in Tokyo but more so because of its symbolic value to all Filipinos veterans and civilians alike. Whether
or not the Roppongi and related properties will eventually be sold is a policy determination where both the President
and Congress must concur. Considering the properties' importance and value, the laws on conversion and
disposition of property of public dominion must be faithfully followed.
WHEREFORE, IN VIEW OF THE FOREGOING, the petitions are GRANTED. A writ of prohibition is 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.
SO ORDERED.
Melencio-Herrera, Paras, Bidin, Grio-Aquino and Regalado, JJ., concur.
Separate Opinions
PROPE RTY 17
CRUZ, J., concurring:
I concur completely with the excellent ponencia of Mr. Justice Gutierrez and will add the following observations only
for emphasis.
It is clear that the respondents have failed to show the President's legal authority to sell the Roppongi property.
When asked to do so at the hearing on these petitions, the Solicitor General was at best ambiguous, although I must
add in fairness that this was not his fault. The fact is that there is -no such authority. Legal expertise alone cannot
conjure that statutory permission out of thin air.
Exec. Order No. 296, which reads like so much legislative, double talk, does not contain such authority. Neither does
Rep. Act No. 6657, which simply allows the proceeds of the sale of our properties abroad to be used for the
comprehensive agrarian reform program. Senate Res. No. 55 was a mere request for the deferment of the
scheduled sale of tile Roppongi property, possibly to stop the transaction altogether; and ill any case it is not a law.
The sale of the said property may be authorized only by Congress through a duly enacted statute, and there is no
such law.
Once again, we have affirmed the principle that ours is a government of laws and not of men, where every public
official, from the lowest to the highest, can act only by virtue of a valid authorization. I am happy to note that in the
several cases where this Court has ruled against her, the President of the Philippines has submitted to this principle
with becoming grace.
PADILLA, J., concurring:

I concur in the decision penned by Mr. Justice Gutierrez, Jr., I only wish to make a few observations which could help
in further clarifying the issues.
Under our tripartite system of government ordained by the Constitution, it is Congress that lays down or determines
policies. The President executes such policies. The policies determined by Congress are embodied in legislative
enactments that have to be approved by the President to become law. The President, of course, recommends to
Congress the approval of policies but, in the final analysis, it is Congress that is the policy - determining branch of
government.
The judiciary interprets the laws and, in appropriate cases, determines whether the laws enacted by Congress and
approved by the President, and presidential acts implementing such laws, are in accordance with the Constitution.
The Roppongi property was acquired by the Philippine government pursuant to the reparations agreement between
the Philippine and Japanese governments. Under such agreement, this property was acquired by the Philippine
government for a specific purpose, namely, to serve as the site of the Philippine Embassy in Tokyo, Japan.
Consequently, Roppongi is a property of public dominion and intended for public service, squarely falling within that
class of property under Art. 420 of the Civil Code, which provides:
Art. 420. The following things are property of public dominion :
(1) ...
development of the national wealth. (339a)
Public dominion property intended for public service cannot be alienated unless the property is first transformed into
private property of the state otherwise known as patrimonial property of the state. 1The transformation of public
dominion property to state patrimonial property involves, to my mind, a policy decision. It is a policy decision because
the treatment of the property varies according to its classification. Consequently, 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.
Moreover, the sale of public property (once converted from public dominion to state patrimonial property) must be
approved by Congress, for this again is a matter of policy (i.e. to keep or dispose of the property). Sec. 48, Book 1 of
the Administrative Code of 1987 provides:
But the record is bare of any congressional decision or approval to sell Roppongi. The record is likewise bare of any
congressional authority extended to the President to sell Roppongi thru public bidding or otherwise.
It is therefore, 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.
ACCORDINGLY, my vote is to GRANT the petition and to make PERMANENT the temporary restraining order earlier
issued by this Court.
SARMIENTO, J., concurring:

The central question, as I see it, is whether or not the so-called "Roppongi property' has lost its nature as property of
public dominion, and hence, has become patrimonial property of the State. I understand that the parties are agreed
that it was property intended for "public service" within the contemplation of paragraph (2), of Article 430, of the Civil
Code, and accordingly, land of State dominion, and beyond human commerce. The lone issue is, in the light of
supervening developments, that is non-user thereof by the National Government (for diplomatic purposes) for the
PROPE RTY 18
last thirteen years; the issuance of Executive Order No. 296 making it available for sale to any interested buyer; the
promulgation of Republic Act No. 6657, the Comprehensive Agrarian Reform Law, making available for the
program's financing, State assets sold; the approval by the President of the recommendation of the investigating
committee formed to study the property's utilization; and the issuance of Resolution No. 55 of the Philippine Senate
requesting for the deferment of its disposition it, "Roppongi", is still property of the public dominion, and if it is not,
how it lost that character.
When land of the public dominion ceases to be one, or when the change takes place, is a question our courts have
debated early. In a 1906 decision, 1 it was held that property of the public dominion, a public plaza in this instance,
becomes patrimonial upon use thereof for purposes other than a plaza. In a later case, 2 this ruling was reiterated.
Likewise, it has been held that land, originally private property, has become of public dominion upon its donation to
the town and its conversion and use as a public plaza. 3 It is notable that under these three cases, the character of
the property, and any change occurring therein, depends on the actual use to which it is dedicated. 4
Much later, however, the Court held that "until a formal declaration on the part of the Government, through the
executive department or the Legislative, to the effect that the land . . . is no longer needed for [public] service- for
public use or for special industries, [it] continue[s] to be part of the public [dominion], not available for private
expropriation or ownership." 5 So also, it was ruled that a political subdivision (the City of Cebu in this case) alone
may declare (under its charter) a city road abandoned and thereafter, to dispose of it. 6
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" 7the 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.
I feel that this view corresponds to existing pronouncements of this Court, among other things, that: (1) Property is
presumed to be State property in the absence of any showing to the contrary; 8 (2) With respect to forest lands, the
same continue to be lands of the public dominion unless and until reclassified by the Executive Branch of the
Government; 9 and (3) All natural resources, under the Constitution, and subject to exceptional cases, belong to the
State. 10
I am elated that the Court has banished previous uncertainties.
FELICIANO, J., dissenting

With regret, I find myself unable to share the conclusions reached by Mr. Justice Hugo E. Gutierrez, Jr.
For purposes of this separate opinion, I assume that the piece of land located in 306 Roppongi, 5-Chome, Minato-ku
Tokyo, Japan (hereinafter referred to as the "Roppongi property") may be characterized as property of public
dominion, within the meaning of Article 420 (2) of the Civil Code:
[Property] which belong[s] to the State, without being for public use, and are intended for some public service -.
It might not be amiss however, to note that the appropriateness of trying to bring within the confines of the simple
threefold classification found in Article 420 of the Civil Code ("property for public use property "intended for some
public service" and property intended "for the development of the national wealth") all property owned by the
Republic of the Philippines whether found within the territorial boundaries of the Republic or located within the
territory of another sovereign State, is not self-evident. The first item of the classification property intended for public
use can scarcely be properly applied to property belonging to the Republic but found within the territory of another
State. The third item of the classification property intended for the development of the national wealth is illustrated, in
Article 339 of the Spanish Civil Code of 1889, by mines or mineral properties. Again, mineral lands owned by a
sovereign State are rarely, if ever, found within the territorial base of another sovereign State. The task of examining
in detail the applicability of the classification set out in Article 420 of our Civil Code to property that the Philippines
happens to own outside its own boundaries must, however, be left to academicians.
For present purposes, too, I agree that there is no question of conflict of laws that is, at the present time, before this
Court. The issues before us relate essentially to authority to sell the Roppongi property so far as Philippine law is
concerned.
The majority opinion raises two (2) issues: (a) whether or not the Roppongi property has been converted into
patrimonial property or property of the private domain of the State; and (b) assuming an affirmative answer to (a),
whether or not there is legal authority to dispose of the Roppongi property.
I
Addressing the first issue of conversion of property of public dominion intended for some public service, into property
of the private domain of the Republic, it should be noted that the Civil Code does not address the question
of who has authority to effect such conversion. Neither does the Civil Code set out or refer to any procedure for such
conversion.
Our case law, however, contains some fairly explicit pronouncements on this point, as Justice Sarmiento has pointed
out in his concurring opinion. In Ignacio v. Director of Lands (108 Phils. 335 [1960]), petitioner Ignacio argued that if
the land in question formed part of the public domain, the trial court should have declared the same no longer
necessary for public use or public purposes and which would, therefore, have become disposable and available for
private ownership. Mr. Justice Montemayor, speaking for the Court, said:
Article 4 of the Law of Waters of 1866 provides that when a portion of the shore is no longer washed by the waters of
the sea and is not necessary for purposes of public utility, or for the establishment of special industries, or for coast-
PROPE RTY 19
guard service, the government shall declare it to be the property of the owners of the estates adjacent thereto and as
an increment thereof. We believe that only the executive and possibly the legislative departments have the authority
and the power to make the declaration that any land so gained by the sea, is not necessary for purposes of public
utility, or for the establishment of special industries, or for coast-guard service. If no such declaration has been made
by said departments, the lot in question forms part of the public domain. (Natividad v. Director of Lands, supra.)
The reason for this pronouncement, according to this Tribunal in the case of Vicente Joven y Monteverde v. Director
of Lands, 93 Phil., 134 (cited in Velayo's Digest, Vol. 1, p. 52).
... is undoubtedly that the courts are neither primarily called upon, nor indeed in a position to determine whether any
public land are to be used for the purposes specified in Article 4 of the Law of Waters. Consequently, until a formal
declaration on the part of the Government, through the executive department or the Legislature, to the effect that the
land in question is no longer needed for coast-guard service, for public use or for special industries, they continue to
be part of the public domain not available for private appropriation or ownership.(108 Phil. at 338-339; emphasis
supplied)
Thus, under Ignacio, either the Executive Department or the Legislative Department may convert property of the
State of public dominion into patrimonial property of the State. No particular formula or procedure of conversion is
specified either in statute law or in case law. Article 422 of the Civil Code simply states 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". I respectfully submit, therefore, that the only requirement which is legitimately imposable is that the intent
to convert must be reasonably clear from a consideration of the acts or acts of the Executive Department or of the
Legislative Department which are said to have effected such conversion.
The same legal situation exists in respect of conversion of property of public dominion belonging to municipal
corporations, i.e., local governmental units, into patrimonial property of such entities. In CebuOxygen Acetylene v.
Bercilles (66 SCRA 481 [1975]), the City Council of Cebu by resolution declared a certain portion of an existing street
as an abandoned road, "the same not being included in the city development plan". Subsequently, by another
resolution, the City Council of Cebu authorized the acting City Mayor to sell the land through public bidding. Although
there was no formal and explicit declaration of conversion of property for public use into patrimonial property, the
Supreme Court said:
xxx xxx xxx
(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 of 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 registrable title over the lot in question. (66 SCRA at 484-; emphasis supplied)
Thus, again as pointed out by Sarmiento J., in his separate opinion, in the case of property owned by municipal
corporations simple non-use or the actual dedication of public property to some use other than "public use" or some
"public service", was sufficient legally to convert such property into patrimonial property (Municipality of Oas v. Roa, 7
Phil. 20 [1906]- Municipality of Hinunganan v. Director of Lands 24 Phil. 124 [1913]; Province of Zamboanga del
Norte v. City of Zamboanga, 22 SCRA 1334 (1968).
I would also add that such was the case not only in respect of' property of municipal corporations but also in respect
of property of the State itself. Manresa in commenting on Article 341 of the 1889 Spanish Civil Code which has been
carried over verbatim into our Civil Code by Article 422 thereof, wrote:
La dificultad mayor en todo esto estriba, naturalmente, en fijar el momento en que los bienes de dominio publico
dejan de serlo. Si la Administracion o la autoridad competente legislative realizan qun acto en virtud del cual cesa el
destino o uso publico de los bienes de que se trata naturalmente la dificultad queda desde el primer momento
resuelta. Hay un punto de partida cierto para iniciar las relaciones juridicas a que pudiera haber lugar Pero puede
ocurrir que no haya taldeclaracion expresa, legislativa or administrativa, y, sin embargo, cesar de hecho el destino
publico de los bienes; ahora bien, en este caso, y para los efectos juridicos que resultan de entrar la cosa en el
comercio de los hombres,' se entedera que se ha verificado la conversion de los bienes patrimoniales?
El citado tratadista Ricci opina, respecto del antiguo Codigo italiano, por la afirmativa, y por nuestra parte creemos
que tal debe ser la soluciion. El destino de las cosas no depende tanto de una declaracion expresa como del uso
publico de las mismas, y cuanda el uso publico cese con respecto de determinados bienes, cesa tambien su
situacion en el dominio publico. Si una fortaleza en ruina se abandona y no se repara, si un trozo de la via publica se
abandona tambien por constituir otro nuevo an mejores condiciones....ambos bienes cesan de estar Codigo, y leyes
especiales mas o memos administrativas. (3 Manresa, Comentarios al Codigo Civil Espanol, p. 128 [7a ed.; 1952)
(Emphasis supplied)
The majority opinion says that none of the executive acts pointed to by the Government purported, expressly or
definitely, to convert the Roppongi property into patrimonial property of the Republic. Assuming that to be the
case, it is respectfully submitted that cumulative effect of the executive acts here involved was to convert property
originally intended for and devoted to public service into patrimonial property of the State, that is, property
susceptible of disposition to and appropration by private persons. These executive acts, in their totality if not each
PROPE RTY 20
individual act, make crystal clear the intent of the Executive Department to effect such conversion. These executive
acts include:
(a) Administrative Order No. 3 dated 11 August 1985, which created a Committee to study the disposition/utilization
of the Government's property in Japan, The Committee was composed of officials of the Executive Department: the
Executive Secretary; the Philippine Ambassador to Japan; and representatives of the Department of Foreign Affairs
and the Asset Privatization Trust. On 19 September 1988, the Committee recommended to the President the sale of
one of the lots (the lot specifically in Roppongi) through public bidding. On 4 October 1988, the President approved
the recommendation of the Committee.
On 14 December 1988, the Philippine Government by diplomatic note informed the Japanese Ministry of Foreign
Affairs of the Republic's intention to dispose of the property in Roppongi. The Japanese Government through its
Ministry of Foreign Affairs replied that it interposed no objection to such disposition by the Republic. Subsequently,
the President and the Committee informed the leaders of the House of Representatives and of the Senate of the
Philippines of the proposed disposition of the Roppongi property.
(b) Executive Order No. 296, which was issued by the President on 25 July 1987. 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
disposed of
(c) Non-use of the Roppongi lot for fourteen (14) years for diplomatic or for any other public purposes. Assuming (but
only arguendo) that non-use does not, by itself, automatically convert the property into patrimonial property. I
respectfully urge that prolonged non-use, conjoined with the other factors here listed, was legally effective to convert
the lot in Roppongi into patrimonial property of the State. Actually, as already pointed out, case law involving property
of municipal corporations is to the effect that simple non-use or the actual dedication of public property to some use
other than public use or public service, was sufficient to convert such property into patrimonial property of the local
governmental entity concerned. Also as pointed out above, Manresa reached the same conclusion in respect of
conversion of property of the public domain of the State into property of the private domain of the State.
The majority opinion states that "abandonment cannot be inferred from the non-use alone especially if the non-use
was attributable not to the Government's own deliberate and indubitable will but to lack of financial support to repair
and improve the property" (Majority Opinion, p. 13). With respect, it may be stressed that there is no abandonment
involved here, certainly no abandonment of property or of property rights. What is involved is the charge of the
classification of the property from property of the public domain into property of the private domain of the State.
Moreover, if for fourteen (14) years, the Government did not see fit to appropriate whatever funds were necessary to
maintain the property in Roppongi in a condition suitable for diplomatic representation purposes, such circumstance
may, with equal logic, be construed as a manifestation of the crystalizing intent to change the character of the
property.
(d) On 30 March 1989, a public bidding was in fact held by the Executive Department for the sale of the lot in
Roppongi. The circumstance that this bidding was not successful certainly does not argue against an intent to
convert the property involved into property that is disposable by bidding.
The above set of events and circumstances makes no sense at all if it does not, as a whole, show at least the intent
on the part of the Executive Department (with the knowledge of the Legislative Department) to convert the property
involved into patrimonial property that is susceptible of being sold.
II
Having reached an affirmative answer in respect of the first issue, it is necessary to address the second issue of
whether or not there exists legal authority for the sale or disposition of the Roppongi property.
The majority opinion refers to Section 79(f) of the Revised Administrative Code of 1917 which reads as follows:
SEC. 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
signed by the President of the Philippines on behalf of the Government of the Philippines unless the authority
therefor be expressly vested by law in another officer. (Emphasis supplied)
The majority opinion then goes on to state that: "[T]he requirement has been retained in Section 4, Book I of the
Administrative Code of 1987 (Executive Order No. 292)" which reads:
Two points need to be made in this connection. Firstly, the requirement of obtaining specific approval of
Congress when the price of the real property being disposed of is in excess of One Hundred Thousand Pesos
(P100,000.00) under the Revised Administrative Code of 1917, has been deleted from Section 48 of the 1987
Administrative Code. What Section 48 of the present Administrative Code refers to isauthorization by law for the
conveyance. Section 48 does not purport to be itself a source of legal authority for conveyance of real property of the
PROPE RTY 21
Government. For Section 48 merely specifies the official authorized to execute and sign on behalf of the Government
the deed of conveyance in case of such a conveyance.
Secondly, examination of our statute books shows that authorization by law for disposition of real property of the
private domain of the Government, has been granted by Congress both in the form of (a) a general, standing
authorization for disposition of patrimonial property of the Government; and (b) specific legislation authorizing the
disposition of particular pieces of the Government's patrimonial property.
Standing legislative authority for the disposition of land of the private domain of the Philippines is provided by Act No.
3038, entitled "An Act Authorizing the Secretary of Agriculture and Natural Resources to Sell or Lease Land of the
Private Domain of the Government of the Philippine Islands (now Republic of the Philippines)", enacted on 9 March
1922. The full text of this statute is as follows:
Be it enacted by the Senate and House of Representatives of the Philippines in Legislature assembled and by the
authority of the same:
SECTION 1. The Secretary of Agriculture and Natural Resources (now Secretary of the Environment and Natural
Resources) is hereby authorized to sell or lease land of the private domain of the Government of the Philippine
Islands, or any part thereof, to such persons, corporations or associations as are, under the provisions of Act
Numbered Twenty-eight hundred and seventy-four, (now Commonwealth Act No. 141, as amended) known as the
Public Land Act, entitled to apply for the purchase or lease or agricultural public land.
SECTION 2. The sale of the land referred to in the preceding section shall, if such land is agricultural, be made in the
manner and subject to the limitations prescribed in chapters five and six, respectively, of said Public Land Act, and if
it be classified differently, in conformity with the provisions of chapter nine of said Act: Provided, however, That the
land necessary for the public service shall be exempt from the provisions of this Act.
SECTION 3. This Act shall take effect on its approval.
Approved, March 9, 1922. (Emphasis supplied)
Lest it be assumed that Act No. 3038 refers only to agricultural lands of the private domain of the State, it must be
noted that Chapter 9 of the old Public Land Act (Act No. 2874) is now Chapter 9 of the present Public Land Act
(Commonwealth Act No. 141, as amended) and that both statutes refer to: "any tract of land of the public domain
which being neither timber nor mineral land, is intended to be used forresidential purposes or for commercial or
industrial purposes other than agricultural" (Emphasis supplied).itc-asl In other words, the statute covers the sale
or lease or residential, commercial or industrial land of the private domain of the State.
Implementing regulations have been issued for the carrying out of the provisions of Act No. 3038. On 21 December
1954, the then Secretary of Agriculture and Natural Resources promulgated Lands Administrative Orders Nos. 7-6
and 7-7 which were entitled, respectively: "Supplementary Regulations Governing the Sale of the Lands of the
Private Domain of the Republic of the Philippines"; and "Supplementary Regulations Governing the Lease of Lands
of Private Domain of the Republic of the Philippines" (text in 51 O.G. 28-29 [1955]).
It is perhaps well to add that Act No. 3038, although now sixty-eight (68) years old, is still in effect and has not been
repealed. 1
Specific legislative authorization for disposition of particular patrimonial properties of the State is illustrated by certain
earlier statutes. The first of these was Act No. 1120, enacted on 26 April 1904, which provided for the disposition of
the friar lands, purchased by the Government from the Roman Catholic Church, to bona fide settlers and occupants
thereof or to other persons. In Jacinto v. Director of Lands(49 Phil. 853 [1926]), these friar lands were held to be
private and patrimonial properties of the State. Act No. 2360, enacted on -28 February 1914, authorized the sale of
the San Lazaro Estate located in the City of Manila, which had also been purchased by the Government from the
Roman Catholic Church. In January 1916, Act No. 2555 amended Act No. 2360 by including therein all lands and
buildings owned by the Hospital and the Foundation of San Lazaro theretofor leased by private persons, and which
were also acquired by the Philippine Government.
After the enactment in 1922 of Act No. 3038, there appears, to my knowledge, to be only one statute authorizing the
President to dispose of a specific piece of property. This statute is Republic Act No. 905, enacted on 20 June 1953,
which authorized the
President to sell an Identified parcel of land of the private domain of the National Government to the National Press
Club of the Philippines, and to other recognized national associations of professionals with academic standing, for
the nominal price of P1.00. It appears relevant to note that Republic Act No. 905 was not an outright disposition in
perpetuity of the property involved- it provided for reversion of the property to the National Government in case the
National Press Club stopped using it for its headquarters. What Republic Act No. 905 authorized was really
a donation, and not a sale.
The basic submission here made is that Act No. 3038 provides standing legislative authorization for disposition of the
Roppongi property which, in my view, has been converted into patrimonial property of the Republic. 2
To some, the submission that Act No. 3038 applies not only to lands of the private domain of the State located in the
Philippines but also to patrimonial property found outside the Philippines, may appear strange or unusual. I
respectfully submit that such position is not any more unusual or strange than the assumption that Article 420 of the
Civil Code applies not only to property of the Republic located within Philippine territory but also to property found
outside the boundaries of the Republic.
It remains to note that under the well-settled doctrine that heads of Executive Departments are alter egosof the
President (Villena v. Secretary of the Interior, 67 Phil. 451 [1939]), and in view of the constitutional power of control
exercised by the President over department heads (Article VII, Section 17,1987 Constitution), the President herself
may carry out the function or duty that is specifically lodged in the Secretary of the Department of Environment and
Natural Resources (Araneta v. Gatmaitan 101 Phil. 328 [1957]). At the very least, the President retains the power to
PROPE RTY 22
approve or disapprove the exercise of that function or duty when done by the Secretary of Environment and Natural
Resources.
It is hardly necessary to add that the foregoing analyses and submissions relate only to the austere question of
existence of legal power or authority. They have nothing to do with much debated questions of wisdom or propriety
or relative desirability either of the proposed disposition itself or of the proposed utilization of the anticipated
proceeds of the property involved. These latter types of considerations He within the sphere of responsibility of the
political departments of government the Executive and the Legislative authorities.
For all the foregoing, I vote to dismiss the Petitions for Prohibition in both G.R. Nos. 92013 and 92047.
Fernan, C.J., Narvasa, Gancayco, Cortes and Medialdea, JJ., concurring.
Separate Opinions
CRUZ, J., concurring:
I concur completely with the excellent ponencia of Mr. Justice Gutierrez and will add the following observations only
for emphasis.
It is clear that the respondents have failed to show the President's legal authority to sell the Roppongi property.
When asked to do so at the hearing on these petitions, the Solicitor General was at best ambiguous, although I must
add in fairness that this was not his fault. The fact is that there is -no such authority. Legal expertise alone cannot
conjure that statutory permission out of thin air.
Exec. Order No. 296, which reads like so much legislative, double talk, does not contain such authority. Neither does
Rep. Act No. 6657, which simply allows the proceeds of the sale of our properties abroad to be used for the
comprehensive agrarian reform program. Senate Res. No. 55 was a mere request for the deferment of the
scheduled sale of tile Roppongi property, possibly to stop the transaction altogether; and ill any case it is not a law.
The sale of the said property may be authorized only by Congress through a duly enacted statute, and there is no
such law.
Once again, we have affirmed the principle that ours is a government of laws and not of men, where every public
official, from the lowest to the highest, can act only by virtue of a valid authorization. I am happy to note that in the
several cases where this Court has ruled against her, the President of the Philippines has submitted to this principle
with becoming grace.
PADILLA, J., concurring:

I concur in the decision penned by Mr. Justice Gutierrez, Jr., I only wish to make a few observations which could help
in further clarifying the issues.
Under our tripartite system of government ordained by the Constitution, it is Congress that lays down or determines
policies. The President executes such policies. The policies determined by Congress are embodied in legislative
enactments that have to be approved by the President to become law. The President, of course, recommends to
Congress the approval of policies but, in the final analysis, it is Congress that is the policy - determining branch of
government.
The judiciary interprets the laws and, in appropriate cases, determines whether the laws enacted by Congress and
approved by the President, and presidential acts implementing such laws, are in accordance with the Constitution.
The Roppongi property was acquired by the Philippine government pursuant to the reparations agreement between
the Philippine and Japanese governments. Under such agreement, this property was acquired by the Philippine
government for a specific purpose, namely, to serve as the site of the Philippine Embassy in Tokyo, Japan.
Consequently, Roppongi is a property of public dominion and intended for public service, squarely falling within that
class of property under Art. 420 of the Civil Code, which provides:
Art. 420. The following things are property of public dominion :
(1) ...
development of the national wealth. (339a)
Public dominion property intended for public service cannot be alienated unless the property is first transformed into
private property of the state otherwise known as patrimonial property of the state. 1The transformation of public
dominion property to state patrimonial property involves, to my mind, a policy decision. It is a policy decision because
the treatment of the property varies according to its classification. Consequently, 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.
Moreover, the sale of public property (once converted from public dominion to state patrimonial property) must be
approved by Congress, for this again is a matter of policy (i.e. to keep or dispose of the property). Sec. 48, Book 1 of
the Administrative Code of 1987 provides:
But the record is bare of any congressional decision or approval to sell Roppongi. The record is likewise bare of any
congressional authority extended to the President to sell Roppongi thru public bidding or otherwise.
PROPE RTY 23
It is therefore, 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.
ACCORDINGLY, my vote is to GRANT the petition and to make PERMANENT the temporary restraining order earlier
issued by this Court.
SARMIENTO, J., concurring:

The central question, as I see it, is whether or not the so-called "Roppongi property' has lost its nature as property of
public dominion, and hence, has become patrimonial property of the State. I understand that the parties are agreed
that it was property intended for "public service" within the contemplation of paragraph (2), of Article 430, of the Civil
Code, and accordingly, land of State dominion, and beyond human commerce. The lone issue is, in the light of
supervening developments, that is non-user thereof by the National Government (for diplomatic purposes) for the
last thirteen years; the issuance of Executive Order No. 296 making it available for sale to any interested buyer; the
promulgation of Republic Act No. 6657, the Comprehensive Agrarian Reform Law, making available for the
program's financing, State assets sold; the approval by the President of the recommendation of the investigating
committee formed to study the property's utilization; and the issuance of Resolution No. 55 of the Philippine Senate
requesting for the deferment of its disposition it, "Roppongi", is still property of the public dominion, and if it is not,
how it lost that character.
When land of the public dominion ceases to be one, or when the change takes place, is a question our courts have
debated early. In a 1906 decision, 1 it was held that property of the public dominion, a public plaza in this instance,
becomes patrimonial upon use thereof for purposes other than a plaza. In a later case, 2 this ruling was reiterated.
Likewise, it has been held that land, originally private property, has become of public dominion upon its donation to
the town and its conversion and use as a public plaza. 3 It is notable that under these three cases, the character of
the property, and any change occurring therein, depends on the actual use to which it is dedicated. 4
Much later, however, the Court held that "until a formal declaration on the part of the Government, through the
executive department or the Legislative, to the effect that the land . . . is no longer needed for [public] service- for
public use or for special industries, [it] continue[s] to be part of the public [dominion], not available for private
expropriation or ownership." 5 So also, it was ruled that a political subdivision (the City of Cebu in this case) alone
may declare (under its charter) a city road abandoned and thereafter, to dispose of it. 6
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" 7the 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.
I feel that this view corresponds to existing pronouncements of this Court, among other things, that: (1) Property is
presumed to be State property in the absence of any showing to the contrary; 8 (2) With respect to forest lands, the
same continue to be lands of the public dominion unless and until reclassified by the Executive Branch of the
Government; 9 and (3) All natural resources, under the Constitution, and subject to exceptional cases, belong to the
State. 10
I am elated that the Court has banished previous uncertainties.
FELICIANO, J., dissenting

With regret, I find myself unable to share the conclusions reached by Mr. Justice Hugo E. Gutierrez, Jr.
For purposes of this separate opinion, I assume that the piece of land located in 306 Roppongi, 5-Chome, Minato-ku
Tokyo, Japan (hereinafter referred to as the "Roppongi property") may be characterized as property of public
dominion, within the meaning of Article 420 (2) of the Civil Code:
[Property] which belong[s] to the State, without being for public use, and are intended for some public service -.
It might not be amiss however, to note that the appropriateness of trying to bring within the confines of the simple
threefold classification found in Article 420 of the Civil Code ("property for public use property "intended for some
public service" and property intended "for the development of the national wealth") all property owned by the
Republic of the Philippines whether found within the territorial boundaries of the Republic or located within the
territory of another sovereign State, is not self-evident. The first item of the classification property intended for public
use can scarcely be properly applied to property belonging to the Republic but found within the territory of another
State. The third item of the classification property intended for the development of the national wealth is illustrated, in
Article 339 of the Spanish Civil Code of 1889, by mines or mineral properties. Again, mineral lands owned by a
sovereign State are rarely, if ever, found within the territorial base of another sovereign State. The task of examining
in detail the applicability of the classification set out in Article 420 of our Civil Code to property that the Philippines
happens to own outside its own boundaries must, however, be left to academicians.
For present purposes, too, I agree that there is no question of conflict of laws that is, at the present time, before this
Court. The issues before us relate essentially to authority to sell the Roppongi property so far as Philippine law is
concerned.
The majority opinion raises two (2) issues: (a) whether or not the Roppongi property has been converted into
patrimonial property or property of the private domain of the State; and (b) assuming an affirmative answer to (a),
whether or not there is legal authority to dispose of the Roppongi property.
PROPE RTY 24
I
Addressing the first issue of conversion of property of public dominion intended for some public service, into property
of the private domain of the Republic, it should be noted that the Civil Code does not address the question
of who has authority to effect such conversion. Neither does the Civil Code set out or refer to any procedure for such
conversion.
Our case law, however, contains some fairly explicit pronouncements on this point, as Justice Sarmiento has pointed
out in his concurring opinion. In Ignacio v. Director of Lands (108 Phils. 335 [1960]), petitioner Ignacio argued that if
the land in question formed part of the public domain, the trial court should have declared the same no longer
necessary for public use or public purposes and which would, therefore, have become disposable and available for
private ownership. Mr. Justice Montemayor, speaking for the Court, said:
Article 4 of the Law of Waters of 1866 provides that when a portion of the shore is no longer washed by the waters of
the sea and is not necessary for purposes of public utility, or for the establishment of special industries, or for coast-
guard service, the government shall declare it to be the property of the owners of the estates adjacent thereto and as
an increment thereof. We believe that only the executive and possibly the legislative departments have the authority
and the power to make the declaration that any land so gained by the sea, is not necessary for purposes of public
utility, or for the establishment of special industries, or for coast-guard service. If no such declaration has been made
by said departments, the lot in question forms part of the public domain. (Natividad v. Director of Lands, supra.)
The reason for this pronouncement, according to this Tribunal in the case of Vicente Joven y Monteverde v. Director
of Lands, 93 Phil., 134 (cited in Velayo's Digest, Vol. 1, p. 52).
... is undoubtedly that the courts are neither primarily called upon, nor indeed in a position to determine whether any
public land are to be used for the purposes specified in Article 4 of the Law of Waters. Consequently, until a formal
declaration on the part of the Government, through the executive department or the Legislature, to the effect that the
land in question is no longer needed for coast-guard service, for public use or for special industries, they continue to
be part of the public domain not available for private appropriation or ownership.(108 Phil. at 338-339; emphasis
supplied)
Thus, under Ignacio, either the Executive Department or the Legislative Department may convert property of the
State of public dominion into patrimonial property of the State. No particular formula or procedure of conversion is
specified either in statute law or in case law. Article 422 of the Civil Code simply states 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". I respectfully submit, therefore, that the only requirement which is legitimately imposable is that the intent
to convert must be reasonably clear from a consideration of the acts or acts of the Executive Department or of the
Legislative Department which are said to have effected such conversion.
The same legal situation exists in respect of conversion of property of public dominion belonging to municipal
corporations, i.e., local governmental units, into patrimonial property of such entities. In CebuOxygen Acetylene v.
Bercilles (66 SCRA 481 [1975]), the City Council of Cebu by resolution declared a certain portion of an existing street
as an abandoned road, "the same not being included in the city development plan". Subsequently, by another
resolution, the City Council of Cebu authorized the acting City Mayor to sell the land through public bidding. Although
there was no formal and explicit declaration of conversion of property for public use into patrimonial property, the
Supreme Court said:
xxx xxx xxx
(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 of 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 registrable title over the lot in question. (66 SCRA at 484-; emphasis supplied)
Thus, again as pointed out by Sarmiento J., in his separate opinion, in the case of property owned by municipal
corporations simple non-use or the actual dedication of public property to some use other than "public use" or some
"public service", was sufficient legally to convert such property into patrimonial property (Municipality of Oas v. Roa, 7
Phil. 20 [1906]- Municipality of Hinunganan v. Director of Lands 24 Phil. 124 [1913]; Province of Zamboanga del
Norte v. City of Zamboanga, 22 SCRA 1334 (1968).
I would also add that such was the case not only in respect of' property of municipal corporations but also in respect
of property of the State itself. Manresa in commenting on Article 341 of the 1889 Spanish Civil Code which has been
carried over verbatim into our Civil Code by Article 422 thereof, wrote:
La dificultad mayor en todo esto estriba, naturalmente, en fijar el momento en que los bienes de dominio publico
dejan de serlo. Si la Administracion o la autoridad competente legislative realizan qun acto en virtud del cual cesa el
destino o uso publico de los bienes de que se trata naturalmente la dificultad queda desde el primer momento
resuelta. Hay un punto de partida cierto para iniciar las relaciones juridicas a que pudiera haber lugar Pero puede
ocurrir que no haya taldeclaracion expresa, legislativa or administrativa, y, sin embargo, cesar de hecho el destino
publico de los bienes; ahora bien, en este caso, y para los efectos juridicos que resultan de entrar la cosa en el
comercio de los hombres,' se entedera que se ha verificado la conversion de los bienes patrimoniales?
PROPE RTY 25
El citado tratadista Ricci opina, respecto del antiguo Codigo italiano, por la afirmativa, y por nuestra parte creemos
que tal debe ser la soluciion. El destino de las cosas no depende tanto de una declaracion expresa como del uso
publico de las mismas, y cuanda el uso publico cese con respecto de determinados bienes, cesa tambien su
situacion en el dominio publico. Si una fortaleza en ruina se abandona y no se repara, si un trozo de la via publica se
abandona tambien por constituir otro nuevo an mejores condiciones....ambos bienes cesan de estar Codigo, y leyes
especiales mas o memos administrativas. (3 Manresa, Comentarios al Codigo Civil Espanol, p. 128 [7a ed.; 1952)
(Emphasis supplied)
The majority opinion says that none of the executive acts pointed to by the Government purported, expressly or
definitely, to convert the Roppongi property into patrimonial property of the Republic. Assuming that to be the
case, it is respectfully submitted that cumulative effect of the executive acts here involved was to convert property
originally intended for and devoted to public service into patrimonial property of the State, that is, property
susceptible of disposition to and appropration by private persons. These executive acts, in their totality if not each
individual act, make crystal clear the intent of the Executive Department to effect such conversion. These executive
acts include:
(a) Administrative Order No. 3 dated 11 August 1985, which created a Committee to study the disposition/utilization
of the Government's property in Japan, The Committee was composed of officials of the Executive Department: the
Executive Secretary; the Philippine Ambassador to Japan; and representatives of the Department of Foreign Affairs
and the Asset Privatization Trust. On 19 September 1988, the Committee recommended to the President the sale of
one of the lots (the lot specifically in Roppongi) through public bidding. On 4 October 1988, the President approved
the recommendation of the Committee.
On 14 December 1988, the Philippine Government by diplomatic note informed the Japanese Ministry of Foreign
Affairs of the Republic's intention to dispose of the property in Roppongi. The Japanese Government through its
Ministry of Foreign Affairs replied that it interposed no objection to such disposition by the Republic. Subsequently,
the President and the Committee informed the leaders of the House of Representatives and of the Senate of the
Philippines of the proposed disposition of the Roppongi property.
(b) Executive Order No. 296, which was issued by the President on 25 July 1987. 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
disposed of
(c) Non-use of the Roppongi lot for fourteen (14) years for diplomatic or for any other public purposes. Assuming (but
only arguendo) that non-use does not, by itself, automatically convert the property into patrimonial property. I
respectfully urge that prolonged non-use, conjoined with the other factors here listed, was legally effective to convert
the lot in Roppongi into patrimonial property of the State. Actually, as already pointed out, case law involving property
of municipal corporations is to the effect that simple non-use or the actual dedication of public property to some use
other than public use or public service, was sufficient to convert such property into patrimonial property of the local
governmental entity concerned. Also as pointed out above, Manresa reached the same conclusion in respect of
conversion of property of the public domain of the State into property of the private domain of the State.
The majority opinion states that "abandonment cannot be inferred from the non-use alone especially if the non-use
was attributable not to the Government's own deliberate and indubitable will but to lack of financial support to repair
and improve the property" (Majority Opinion, p. 13). With respect, it may be stressed that there is no abandonment
involved here, certainly no abandonment of property or of property rights. What is involved is the charge of the
classification of the property from property of the public domain into property of the private domain of the State.
Moreover, if for fourteen (14) years, the Government did not see fit to appropriate whatever funds were necessary to
maintain the property in Roppongi in a condition suitable for diplomatic representation purposes, such circumstance
may, with equal logic, be construed as a manifestation of the crystalizing intent to change the character of the
property.
(d) On 30 March 1989, a public bidding was in fact held by the Executive Department for the sale of the lot in
Roppongi. The circumstance that this bidding was not successful certainly does not argue against an intent to
convert the property involved into property that is disposable by bidding.
The above set of events and circumstances makes no sense at all if it does not, as a whole, show at least the intent
on the part of the Executive Department (with the knowledge of the Legislative Department) to convert the property
involved into patrimonial property that is susceptible of being sold.
II
Having reached an affirmative answer in respect of the first issue, it is necessary to address the second issue of
whether or not there exists legal authority for the sale or disposition of the Roppongi property.
The majority opinion refers to Section 79(f) of the Revised Administrative Code of 1917 which reads as follows:
SEC. 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
signed by the President of the Philippines on behalf of the Government of the Philippines unless the authority
therefor be expressly vested by law in another officer. (Emphasis supplied)
The majority opinion then goes on to state that: "[T]he requirement has been retained in Section 4, Book I of the
Administrative Code of 1987 (Executive Order No. 292)" which reads:
PROPE RTY 26
Two points need to be made in this connection. Firstly, the requirement of obtaining specific approval of
Congress when the price of the real property being disposed of is in excess of One Hundred Thousand Pesos
(P100,000.00) under the Revised Administrative Code of 1917, has been deleted from Section 48 of the 1987
Administrative Code. What Section 48 of the present Administrative Code refers to isauthorization by law for the
conveyance. Section 48 does not purport to be itself a source of legal authority for conveyance of real property of the
Government. For Section 48 merely specifies the official authorized to execute and sign on behalf of the Government
the deed of conveyance in case of such a conveyance.
Secondly, examination of our statute books shows that authorization by law for disposition of real property of the
private domain of the Government, has been granted by Congress both in the form of (a) a general, standing
authorization for disposition of patrimonial property of the Government; and (b) specific legislation authorizing the
disposition of particular pieces of the Government's patrimonial property.
Standing legislative authority for the disposition of land of the private domain of the Philippines is provided by Act No.
3038, entitled "An Act Authorizing the Secretary of Agriculture and Natural Resources to Sell or Lease Land of the
Private Domain of the Government of the Philippine Islands (now Republic of the Philippines)", enacted on 9 March
1922. The full text of this statute is as follows:
Be it enacted by the Senate and House of Representatives of the Philippines in Legislature assembled and by the
authority of the same:
SECTION 1. The Secretary of Agriculture and Natural Resources (now Secretary of the Environment and Natural
Resources) is hereby authorized to sell or lease land of the private domain of the Government of the Philippine
Islands, or any part thereof, to such persons, corporations or associations as are, under the provisions of Act
Numbered Twenty-eight hundred and seventy-four, (now Commonwealth Act No. 141, as amended) known as the
Public Land Act, entitled to apply for the purchase or lease or agricultural public land.
SECTION 2. The sale of the land referred to in the preceding section shall, if such land is agricultural, be made in the
manner and subject to the limitations prescribed in chapters five and six, respectively, of said Public Land Act, and if
it be classified differently, in conformity with the provisions of chapter nine of said Act: Provided, however, That the
land necessary for the public service shall be exempt from the provisions of this Act.
SECTION 3. This Act shall take effect on its approval.
Approved, March 9, 1922. (Emphasis supplied)
Lest it be assumed that Act No. 3038 refers only to agricultural lands of the private domain of the State, it must be
noted that Chapter 9 of the old Public Land Act (Act No. 2874) is now Chapter 9 of the present Public Land Act
(Commonwealth Act No. 141, as amended) and that both statutes refer to: "any tract of land of the public domain
which being neither timber nor mineral land, is intended to be used forresidential purposes or for commercial or
industrial purposes other than agricultural" (Emphasis supplied). In other words, the statute covers the sale or lease
or residential, commercial or industrial land of the private domain of the State.
Implementing regulations have been issued for the carrying out of the provisions of Act No. 3038. On 21 December
1954, the then Secretary of Agriculture and Natural Resources promulgated Lands Administrative Orders Nos. 7-6
and 7-7 which were entitled, respectively: "Supplementary Regulations Governing the Sale of the Lands of the
Private Domain of the Republic of the Philippines"; and "Supplementary Regulations Governing the Lease of Lands
of Private Domain of the Republic of the Philippines" (text in 51 O.G. 28-29 [1955]).
It is perhaps well to add that Act No. 3038, although now sixty-eight (68) years old, is still in effect and has not been
repealed. 1
Specific legislative authorization for disposition of particular patrimonial properties of the State is illustrated by certain
earlier statutes. The first of these was Act No. 1120, enacted on 26 April 1904, which provided for the disposition of
the friar lands, purchased by the Government from the Roman Catholic Church, to bona fide settlers and occupants
thereof or to other persons. In Jacinto v. Director of Lands(49 Phil. 853 [1926]), these friar lands were held to be
private and patrimonial properties of the State. Act No. 2360, enacted on -28 February 1914, authorized the sale of
the San Lazaro Estate located in the City of Manila, which had also been purchased by the Government from the
Roman Catholic Church. In January 1916, Act No. 2555 amended Act No. 2360 by including therein all lands and
buildings owned by the Hospital and the Foundation of San Lazaro theretofor leased by private persons, and which
were also acquired by the Philippine Government.
After the enactment in 1922 of Act No. 3038, there appears, to my knowledge, to be only one statute authorizing the
President to dispose of a specific piece of property. This statute is Republic Act No. 905, enacted on 20 June 1953,
which authorized the
President to sell an Identified parcel of land of the private domain of the National Government to the National Press
Club of the Philippines, and to other recognized national associations of professionals with academic standing, for
the nominal price of P1.00. It appears relevant to note that Republic Act No. 905 was not an outright disposition in
perpetuity of the property involved- it provided for reversion of the property to the National Government in case the
National Press Club stopped using it for its headquarters. What Republic Act No. 905 authorized was really
a donation, and not a sale.
PROPE RTY 27
The basic submission here made is that Act No. 3038 provides standing legislative authorization for disposition of the
Roppongi property which, in my view, has been converted into patrimonial property of the Republic. 2
To some, the submission that Act No. 3038 applies not only to lands of the private domain of the State located in the
Philippines but also to patrimonial property found outside the Philippines, may appear strange or unusual. I
respectfully submit that such position is not any more unusual or strange than the assumption that Article 420 of the
Civil Code applies not only to property of the Republic located within Philippine territory but also to property found
outside the boundaries of the Republic.
It remains to note that under the well-settled doctrine that heads of Executive Departments are alter egosof the
President (Villena v. Secretary of the Interior, 67 Phil. 451 [1939]), and in view of the constitutional power of control
exercised by the President over department heads (Article VII, Section 17,1987 Constitution), the President herself
may carry out the function or duty that is specifically lodged in the Secretary of the Department of Environment and
Natural Resources (Araneta v. Gatmaitan 101 Phil. 328 [1957]). At the very least, the President retains the power to
approve or disapprove the exercise of that function or duty when done by the Secretary of Environment and Natural
Resources.
It is hardly necessary to add that the foregoing analyses and submissions relate only to the austere question of
existence of legal power or authority. They have nothing to do with much debated questions of wisdom or propriety
or relative desirability either of the proposed disposition itself or of the proposed utilization of the anticipated
proceeds of the property involved. These latter types of considerations He within the sphere of responsibility of the
political departments of government the Executive and the Legislative authorities.
For all the foregoing, I vote to dismiss the Petitions for Prohibition in both G.R. Nos. 92013 and 92047.
Fernan, C.J., Narvasa, Gancayco, Cortes and Medialdea, JJ., concurring.
Footnotes
Padilla, J.
1 Art. 422 of the Civil Code provides:
"Property of public dominion, when no longer intended for public use or public service, shall form part of the
patrimonial property of the State. (341a)
Sarmiento, J.
1 Municipality of Oas v. Roa, 7 Phil. 20 (1906).
2 Municipality of Hinunangan v. Director of Lands, 24 Phil. 124 (11913). The property involved here was a fortress.
3 Harty v. Municipality of Victoria, 13 Phil. 152 (1909).
4 See also II TOLENTINO, CIVIL CODE OF THE PHILIPPINES 39 (1972 ed.), citing 3 Manresa III. See also
Province of Zamboanga del Norte v. City of Zamboanga, No. L-24440, March 28, 1968, 22 SCRA 1334.
5 Ignacio v. Director of Lands, 108 Phil. 335, 339 (1960).
6 Cebu Oxygen & Acetylene Co., Inc. vs. Bercilles, No. L-40474, August 29, 1975, 66 SCRA 481.
7 G.R. Nos. 92013 & 92047, 21.
8 Salas v. Jarencio, No. L-29788, August 30, 1972, 46 SCRA 734; Rabuco v. Villegas, No.
L-24916, February 28, 1974, 55 SCRA 658.
9 See Lianga Bay Logging Co., Inc. v. Lopez Enage, No. L-30637, July 16, 1987, 152 SCRA 80.
10 CONST., art. XII, sec. 2.
Feliciano, J.
1 We are orally advised by the Office of the Director of Lands that Act No. 3038 is very much in effect and that the
Bureau of Lands continues to date to act under it. See also, in this connection, Sections 2 and 4 of Republic Act No.
477, enacted 9 June 1950 and as last amended by B.P. Blg 233. This statute government the disposition of lands of
the public domain and of the private domain of the State, including lands previously vested in the United States Alien
Property Custodian and transferred to the Republic of the Philippines.
2 Since Act No. 3038 established certain qualifications for applicants for purchase or lease of land of private domain
of the government, it is relevant to note that Executive Order No. 296, promulgated at a time when the President was
still exercising legislative authority, provides as follows:
"Sec. 1. The provisions of Republic Act No. 1789, as amended, and of other laws, to the contrary notwithstanding,
the above mentioned properties can be made available for sale, lease or any other manner of disposition to non-
Filipino citizens." (Emphasis supplied)
PROPE RTY 28
LAUREL V. GARCIA
187 SCRA 797
FACTS:
The subject Roppongi property is one of the properties acquired by the Philippines from Japan pursuant to a
Reparations Agreement. The property is where the Philippine Embassy was once located, before it transferred to
the Nampeidai property. It was decided that the properties would be
available to sale or disposition. One of the first properties opened up for public auction was the Roppongi
property, despite numerous oppositions from different sectors.
HELD:
The Roppongi property was acquired together with the other properties through reparation agreements.
They were assigned to the government sector and that the Roppongi property was specifically designated
under the agreement to house the Philippine embassy.
It is of public dominion unless it is convincingly shown that the property has become patrimonial. The
respondents have failed to do so.
ownership is a special collective ownership for general use and payment, in application to the satisfaction of
collective needs, and resides in the social group. The purpose is not to serve the State as the juridical
person but the citizens; it is intended for the common and public welfare and cannot be the object of appropriation.
The fact that the Roppongi site has not been used for a long time for actual Embassy service doesnt automatically
convert it to patrimonial property. Any such conversion happens only if the property is withdrawn from public use.
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.
PROPE RTY 29
Laurel vs. Garcia
Salvador H. Laurel vs. Ramon Garcia, et. Al.
G. R. No. 92013. July 25, 1990.
Gutierrez, J.
Doctrine: 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.
Facts: The subject Roppongi property is one of the four properties in Japan acquired by the Philippine government
under the Reparations Agreement entered into with Japan on 9 May 1956, the other lots being the Nampeidai
Property (site of Philippine Embassy Chancery), the Kobe Commercial Property (Commercial lot used as warehouse
and parking lot of consulate staff), and the Kobe Residential Property (a vacant residential lot).
The properties and the capital goods and services procured from the Japanese government for national development
projects are part of the indemnification to the Filipino people for their losses in life and property and their suffering
during World War II.
The Reparations Agreement provides that reparations valued at $550 million would be payable in 20 years in
accordance with annual schedules of procurements to be fixed by the Philippine and Japanese governments (Article
2, Reparations Agreement).
The Roppongi property was acquired from the Japanese government under the Second Year Schedule and listed
under the heading Government Sector, through Reparations Contract 300 dated 27 June 1958. The Roponggi
property consists of the land and building for the Chancery of the Philippine Embassy. As intended, it became the
site of the Philippine Embassy until the latter was transferred to Nampeidai on 22 July 1976 when the Roppongi
building needed major repairs. Due to the failure of our government to provide necessary funds, the Roppongi
property has remained undeveloped since that time.
During the incumbency of President Aquino, a proposal was made by former Philippine Ambassador to Japan,
Carlos J. Valdez, to lease the subject property to Kajima Corporation, a Japanese firm, in exchange of the
construction of 2 buildings in Roppongi, 1 building in Nampeidai, and the renovation of the Philippine Chancery in
Nampeidai. The Government did not act favorably to said proposal, but instead, on 11 August 1986, President
Aquino created a committee to study the disposition or utilization of Philippine government properties in Tokyo and
Kobe though AO-3, and AO 3-A to 3-D. On 25 July 1987, the President issued EO 296 entitling non-Filipino citizens
or entities to avail of reparations capital goods and services in the event of sale, lease or disposition. The four
properties in Japan including the Roppongi were specifically mentioned in the first Whereas clause. Amidst
opposition by various sectors, the Executive branch of the government has been pushing, with great vigor, its
decision to sell the reparations properties starting with the Roppongi lot.
Two petitions for prohibition were filed seeking to enjoin respondents, their representatives and agents from
proceeding with the bidding for the sale of the 3,179 sq. m. of land at 306 Ropponggi, 5-Chome Minato-ku, Tokyo,
Japan scheduled on 21 February 1990; the temporary restaining order of which was granted by the court on 20
February 1990. In G.R. No. 92047, a writ of mandamus was prayed for to compel the respondents to fully disclose to
the public the basis of their decision to push through with the sale of the Roppongi property inspite of strong public
opposition and to explain the proceedings which effectively prevent the participation of Filipino citizens and entities in
the bidding process.
Issues: Can the Roppongi property and others of its kind be alienated by the Philippine Government?
Does the Chief Executive, her officers and agents, have the authority and jurisdiction, to sell the Roppongi property?
Held: No. The Roppongi property was acquired together with the other properties through reparation agreements.
They were assigned to the government sector and that the Roppongi property was specifically designated under the
agreement to house the Philippine embassy. It is of public dominion unless it is convincingly shown that the property
has become patrimonial. The respondents have failed to do so.
ownership is a special collective ownership for general use and payment, in application to the satisfaction of
collective needs, and resides in the social group. The purpose is not to serve the State as the juridical person but the
citizens; it is intended for the common and public welfare and cannot be the object of appropriation.
The fact that the Roppongi site has not been used for a long time for actual Embassy service doesnt automatically
convert it to patrimonial property. Any such conversion happens only if the property is withdrawn from public use. 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.
PROPE RTY 30
Laurel v. Garcia (G.R. No. 92013)
Ojeda v. Executive Secretary (G.R. No. 92047)
ROPPONGI PROPERTY
FACTS:
These two (2) petitions for prohibition seek to enjoin respondents from proceeding with the bidding for the sale of the
3,179 square meters of land at 306 Roppongi, 5-Chrome Minato-ku Tokyo, Japan. The latter case also, prays for a
writ of mandamus to fully disclose to the public the basis of their decision to push through with the sale of the
Roppongi property.
The Roppongi case is one of the four properties in Japan acquired by the Philippine government under the
Reparation Agreement entered into with Japan. The other three (3) properties include Nampeidai Property (present
site of the Philippine Embassy Chancery), Kobe Commercial Property (commercial lot being used as a warehouse
and parking lot for consulate staff) and Kobe Residential Property (resident lot which is now vacant).
The Reparations Agreement provides that reparations valued at $550M would be payable in twenty (20) years in
accordance with annual schedules of procurements to be fixed by the Philippine and Japanese governments. The
procurements are to be divided into government sector and those for private parties in projects, the latter shall be
made available only to Filipino citizens or to 100% Filipino-owned entities in national development projects.
The Roppongi property was acquired under the heading Government Sector for the Chancery of the Philippine
Embassy until the latter was transferred to Nampeida due to the need for major repairs. However, the Roppongi
property has remained underdeveloped since that time.
Although there was a proposal to lease the property with the provision to have buildings built at the expense of the
lessee, the same was not acted favorably upon by the government. Instead, President Aquino issued EO No. 296
entitling non-Filipino citizens or entities to avail of separations capital goods and services in the event of sale, lease
or dispositions. Thereafter, amidst the oppositions by various sectors, the Executive branch of the government
pushed for the sale of reparation properties, starting with the Roppongi lot. The property has twice been set for
bidding at a minimum floor price of $225M. The first was a failure, while the second has been postponed and later
restrained by the SC.
Amongst the arguments of the respondents is that the subject property is not governed by our Civil Code, but rather
by the laws of Japan where the property is located. They relied upon the rule of lex situs which is used in determining
the applicable law regarding the acquisition, transfer and devolution of the title to a property.
ISSUES:
1. Can the Roppongi property and others of its kind be alienated by the Philippine Government?
NO. There can be no doubt that the property is of public dominion and the respondents have failed to
show that it has become patrimonial.
The property is correctly classified under Art 420 of the Civil Code as property belonging to the State and
intended for some public service. The fact that it has not been used for actual Embassy service does not
automatically convert it to patrimonial property. Such conversion happens only if property is withdrawn from
public use, through an abandonment of the intention to use the Roppongi property for public service and to
make it patrimonial property. Abandonment must be a certain and positive act based on correct legal
premises.
The EO does not declare that the properties lost their public character, merely intending the properties to be
made available to foreigners and not to Filipinos alone, in case of sale, lease or other disposition.
Furthermore, it is based on the wrong premise that the Japan properties can be sold to end-users, when in
fact it cannot.
Neither does the CARP Law re-classify the properties into patrimonial properties, merely stating that sources
of funds for its implementation be sourced from proceeds of the disposition of the Government in foreign
countries, but not that the Roppongi property be withdrawn from being classified as a property of public
dominion.
CONFLICT OF LAW
Furthermore, the respondents argument that the Japanese law and not our Civil Code shall apply is
incorrect. There is no conflict of law in this situation. A conflict of law arises only when:
a. 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
PROPE RTY 31
interpretation and effect of a conveyance, are to be determined.
b. 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. Both elements does not exist in the case. The issues
are not concerned with the validity of ownership or title. There is no question that the property belongs to the
Philippines. The issue is the authority of the government officials to validly dispose of property belonging to
the state and the validity of the procedures adopted to effect the sale, which should be governed by
Philippine law The rule of lex situs does not apply.
2. Does the Chief Executive, her officers and agents, have the authority and jurisdiction, to sell the Roppongi
property?
NO. A law or a 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 property is needed. None has been enacted for
this purpose.
3. W/N EO No. 296 is constitutional?
The SC did not anymore pass upon its constitutionality.
PROPE RTY 32
SUPREME COURT
Manila
EN BANC
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 PARAAQUE, METRO MANILA, PALANYAG KILUSANG BAYAN FOR
SERVICE,respondents.
Ceferino, Padua Law Office for Palanyag Kilusang Bayan for service.
Manuel de Guia for Municipality of Paraaque.
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 Paraaque 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,
Paraaque, 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.
On June 20, 1990, the municipal council of Paraaque issued a resolution authorizing Paraaque 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 Paraaque. 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 Paraaque 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 Paraaque 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 Paraaque. 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
Paraaque has been granted by the legislature 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
PROPE RTY 33
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:
. . . that Chanter II Section 10 of the Local Government Code is a statutory grant of power given to local government
units, the Municipality of Paraaque 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).
xxx xxx xxx
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 an 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 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 of thereof shall be
close 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 passes 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 Macaria 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
PROPE RTY 34
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 others contract (Villanueva, et al. v. Castaeda 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.
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:
. . . 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)
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 toe
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.
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 Lode, 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
PROPE RTY 35
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 RESERVED and SET ASIDE.
SO ORDERED.
Narvasa, C.J., Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Regalado, Davide, Jr., Romero, Nocon
and Bellosillo, JJ., concur.
PROPE RTY 36
211 SCRA 464
G.R. No. 97764
August 10, 1992
Facts:
Respondent Municipality passed Ordinance No. 86 which authorized the closure of J.Gabriel, G.G. Cruz, Bayanihan,
Lt. Garcia Extension and Opena Streets and the establishment of a flea market thereon. This was passed pursuant
to MMC Ordinance No.2 and was approved by the Metropolitan Manila Authority on July 20, 1990.
On August 8, 1990, respondent municipality and Palanyag entered into a contract agreement whereby the latter shall
operate, maintain & manage the flea markets and/or vending areas in the aforementioned streets with the obligation
to remit dues to the treasury of the municipal government of Paraaque.
On September 13, 1990 Brig. Gen. Macasiano ordered the destruction and confiscation of stalls along G.G. Cruz &
Gabriel Street in Baclaran. He also wrote a letter to Palanyag ordering the destruction of the flea market.
Hence, respondent filed a joint petition praying for preliminary injunction. The trial court upheld the assailed
Ordinance and enjoined petitioner from enforcing his letter-order against Palanyag.
Issues:
WON an ordinance/resolution issued by the municipal council of Paraaque authorizing the lease & use of public
streets/thoroughfares as sites for the flea market is valid.
Held:
No.
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
devoted to public service are deemed public and are under the absolute control of Congress. Hence, local
governments have no authority to control/regulate the use of public properties unless specific authority is vested
upon them by Congress.
Sec. 10, Chapter II of the LGC should be read and interpreted in accordance with basic principles already
established by law.
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/necessary for public use/service. Once withdrawn, the
property then becomes patrimonial property of the LGU concerned and only then can said LGU use the property as
an object of an ordinary contract. Roads and streets available to the public and ordinarily used for vehicular traffic
are still considered public property devoted to public use. The LGU has no power to use it for another purpose or to
dispose of or lease it to private persons.
Also, the disputed ordinance cannot be validly implemented because it cant be considered approved by the
Metropolitan Manila Authority due to non-compliance with the conditions it imposed for the approval of said
ordinance.
The powers of an LGU are not absolute, but subject to the limitations laid down by the Constitution and laws such as
the Civil Code. Every LGU has the sworn obligation to enact measures that will enhance the public health, safety &
convenience, maintain peace & order and promiote the general prosperity of the inhanbitants pf the local units.
As in the Dacanay case, the general public have the right to demand the demolition of the illegally constructed stalls
in public roads & streets. The officials of the respondent municipality have the corresponding duty arising from public
office to clear the city streets and restore them to their specific public purpose.
The ordinance is void and illegal for lack of basis in authority in laws applicable during its time.
PROPE RTY 37
Macasiano v. DioknoFacts:
On 13 June 1990, the Municipality of Paranaque passed Ordinance 86, s. 1990 which authorized theclosure of J.
Gabrielle, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena Stre ets located
atBaclaran, Paraaque, Metro Manila and the establishment of a flea market thereon. The
saidordinance was approved by the municipal council pursuant to MCC Ordinance 2, s. 1979,
authorizinga n d r e g u l a t i n g t h e u s e o f c e r t a i n c i t y a n d / o r m u n i c i p a l s t r e e t s , r o a d s a n d o p e n s
p a c e s w i t h i n Metropolitan Manila as sites for flea market and/or vending areas, under certain terms and
conditions.On 20 July 1990, the Metropolitan Manila Authority approved Ordinance 86, s. 1990 of the
municipalcouncil subject to conditions. On 20 June 1990, the municipal council issued a resolution authorizingthe
Paraaque Mayor to enter into contract with any service cooperative for the establishment,operation,
maintenance and management of flea markets and/or vending areas. On 8 August 1990,the municipality and
Palanyag, a service cooperative, entered into an agreement whereby the latter shall operate, maintain and manage
the flea market with the obligation to remit dues to the treasury of the municipal government of Paraaque.
Consequently, market stalls were put up by Palanyag on thesaid streets. On 13 September 1990 Brig. Gen.
Macasiano, PNP Superintendent of the MetropolitanTraffic Command, ordered the destruction and confiscation of
stalls along G.G. Cruz and J. GabrielleSt. in Baclaran. These stalls were later returned to Palanyag. On 16 October
1990, Macasiano wrotea letter to Palanyag giving the latter 10 days to discontinue the flea market; otherwise, the
marketstalls shall be dismantled.On 23 October 1990, the municipality and Palanyag filed with the trial
court a joint petition for prohibition and mandamus with damages and prayer for preliminary
injunction. On 17 December 1990, the trial court issued an order upholding the validity of Ordinance 86 s. 1990
of the Municipalityof Paraaque and enjoining Macasiano from enforcing his letter-order against Palanyag. Hence,
apetition for certiorari under Rule 65 was filed by Macasiano thru the OSG.
Issue:
Whether or not an ordinance or resolution issued by the municipal council of Paraaque authorizingthe lease and use of public
streets or thoroughfares as sites for flea markets is valid?
Held:
The property of provinces, cities and municipalities is divided into property for public use
a n d patrimonial property (Art. 423, Civil Code). As to property for public use, Article 424 of Civil
Codeprovides that "property for public use, in the provinces, cities and municipalities, consists of
theprovincial 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 anyof them is
patrimonial and shall be governed by this Code, without prejudice to the provis ions of special laws." In
the present case, thus, J. Gabrielle G.G. Cruz, Bayanihan, Lt. Gacia Extension andOpena streets are local roads
used for public service and are therefore considered public propertiesof the municipality. Properties of the
local government which are devoted to public service aredeemed public and are under the absolute control
of Congress. Hence, local government have noauthority whatsoever to control or regulate the use of public
properties unless specific authority is vested upon them by Congress.
PROPE RTY 38
SUPREME COURT
Manila
EN BANC
G.R. No. 133250 July 9, 2002
FRANCISCO I. CHAVEZ, petitioner,
vs.
PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY DEVELOPMENT CORPORATION, respondents.
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.
xxx
(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, 1981 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 Paraaque 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, Paraaque 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, 1995, the Board of Directors of PEA, in its Resolution No. 1245, confirmed the JVA. 5On 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
PROPE RTY 39
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 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,
PROPE RTY 40
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 landssold 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 titles19 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 III 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 Taada 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 Taada, the Executive Department had an affirmative statutory duty under Article 2
of the Civil Code24 and Section 1 of Commonwealth Act No. 63825 to publish the presidential decrees. There was,
therefore, no need for the petitioners in Taada 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 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 of administrative remedies does
not apply when the issue involved is a purely legal or constitutional question.27 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.
Fourth issue: whether petitioner has locus standi to bring this suit
PROPE RTY 41
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 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,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 ill-gotten 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.
xxx
In Taada 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 the 1973
Constitution, in connection with the rule that laws in order to be valid and enforceable must be published in the
Official Gazette or otherwise effectively promulgated. In ruling for the petitioners' legal standing, the Court declared
that the right they sought to be enforced 'is a public right recognized by no less than the fundamental law of the land.'
Legaspi v. Civil Service Commission, while reiterating Taada, 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." (Emphasis supplied)
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
PROPE RTY 42
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 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. 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 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.1wphi1.nt
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 proposedcontract,
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."
PROPE RTY 43
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.39This 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.42The 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 Spanish Law of Waters of 1866 allowed the
reclamation of the sea under Article 5, which provided as follows:
"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."
Under the Spanish Law of Waters, land reclaimed from the sea belonged to the party undertaking the reclamation,
provided the government issued the necessary permit and did not reserve ownership of the reclaimed land to the
State.
PROPE RTY 44
Article 339 of the Civil Code of 1889 defined property of public dominion as follows:
"Art. 339. Property of public dominion 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;
2. That belonging exclusively to the State which, without being of general public use, is employed in some public
service, or in the development of the national wealth, such as walls, fortresses, and other works for the defense of
the territory, and mines, until granted to private individuals."
Property devoted to public use referred to property open for use by the public. In contrast, property devoted to public
service referred to property used for some specific public service and open only to those authorized to use the
property.
Property of public dominion referred not only to property devoted to public use, but also to property not so used but
employed to develop the national wealth. This class of property constituted property of public dominion although
employed for some economic or commercial activity to increase the national wealth.
Article 341 of the Civil Code of 1889 governed the re-classification of property of public dominion into private
property, to wit:
"Art. 341. Property of public dominion, when no longer devoted to public use or to the defense of the territory, shall
become a part of the private property of the State."
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 before the government could lease or
alienate the property to private parties.45
Act No. 1654 of the Philippine Commission
On May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated the lease of reclaimed and
foreshore lands. The salient provisions of this law were as follows:
"Section 1. The control and disposition of the foreshore as defined in existing law, and the title to all
Government or public lands made or reclaimed by the Government by dredging or filling or otherwise
throughout the Philippine Islands, shall be retained by the Government without prejudice to vested rights and
without prejudice to rights conceded to the City of Manila in the Luneta Extension.
Section 2. (a) The Secretary of the Interior shall cause all Government or public lands made or reclaimed by the
Government by dredging or filling or otherwise to be divided into lots or blocks, with the necessary streets and
alleyways located thereon, and shall cause plats and plans of such surveys to be prepared and filed with the Bureau
of Lands.
(b) Upon completion of such plats and plans the Governor-General shall give notice to the public that such
parts of the lands so made or reclaimed as are not needed for public purposes will be leased for commercial
and business purposes, x x x.
xxx
(e) The leases above provided for shall be disposed of to the highest and best bidder therefore, subject to
such regulations and safeguards as the Governor-General may by executive order prescribe." (Emphasis supplied)
Act No. 1654 mandated that the government should retain title to all lands reclaimed by the government. The
Act also vested in the government control and disposition of foreshore lands. Private parties could lease lands
reclaimed by the government only if these lands were no longer needed for public purpose. Act No. 1654
mandated public bidding in the lease of government reclaimed lands. Act No. 1654 made government reclaimed
lands sui generis in that unlike other public lands which the government could sell to private parties, these
reclaimed lands were available only for lease to private parties.
Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of 1866. Act No. 1654 did not prohibit
private parties from reclaiming parts of the sea under Section 5 of the Spanish Law of Waters. Lands reclaimed from
the sea by private parties with government permission remained private lands.
Act No. 2874 of the Philippine Legislature
On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public Land Act. 46 The salient
provisions of Act No. 2874, on reclaimed lands, were as follows:
"Sec. 6. The Governor-General, upon the recommendation of the Secretary of Agriculture and Natural
Resources, shall from time to time classify the lands of the public domain into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands, x x x.
Sec. 7. For the purposes of the government and disposition of alienable or disposable public lands, the Governor-
General, upon recommendation by the Secretary of Agriculture and Natural Resources, shall from time to
time declare what lands are open to disposition or concession under this Act."
Sec. 8. Only those lands shall be declared open to disposition or concession which have been officially
delimited or classified x x x.
xxx
Sec. 55. Any tract of land of the public domain which, being neither timber nor mineral land, shall be classified
as suitable for residential purposes or for commercial, industrial, or other 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;
PROPE RTY 45
(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 title48 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
non-agricultural 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 corporations from acquiring government reclaimed and marshy lands of
the public domain that were classified as agricultural lands under existing public land laws. Section 2, Article XIII of
the 1935 Constitution provided as follows:
PROPE RTY 46
"Section 2. No private corporation or association may acquire, lease, or hold public agricultural lands in
excess of one thousand and twenty four hectares, nor may any individual acquire such lands by purchase in
excess of one hundred and forty hectares, or by lease in excess of one thousand and twenty-four hectares,
or by homestead in excess of twenty-four hectares. Lands adapted to grazing, not exceeding two thousand hectares,
may be leased to an individual, private corporation, or association." (Emphasis supplied)
Still, after the effectivity of the 1935 Constitution, the legislature did not repeal Section 58 of Act No. 2874 to open for
sale to private parties government reclaimed and marshy lands of the public domain. On the contrary, the legislature
continued the long established State policy of retaining for the government title and ownership of government
reclaimed and marshy lands of the public domain.
Commonwealth Act No. 141 of the Philippine National Assembly
On November 7, 1936, the National Assembly approved Commonwealth Act No. 141, also known as the Public Land
Act, which compiled the then existing laws on lands of the public domain. CA No. 141, as amended, remains to this
day the existing general law governing the classification and disposition of lands of the public domain other than
timber and mineral lands.51
Section 6 of CA No. 141 empowers the President to classify lands of the public domain into "alienable or
disposable"52 lands of the public domain, which prior to such classification are 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 that the government can declare open for disposition or concession only
lands that are "officially delimited and classified." Sections 6, 7 and 8 of CA No. 141 read as follows:
"Sec. 6. The President, upon the recommendation of the Secretary of Agriculture and Commerce, shall from
time to time classify the lands of the public domain into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands,
and may at any time and in like manner transfer such lands from one class to another, 53 for the purpose of their
administration and disposition.
Sec. 7. For the purposes of the administration and disposition of alienable or disposable public lands, the President,
upon recommendation by the Secretary of Agriculture and Commerce, shall from time to time declare what
lands are open to disposition or concession under this Act.
Sec. 8. Only those lands shall be declared open to disposition or concession which have been officially
delimited and classified and, when practicable, surveyed, and which have not been reserved for public or
quasi-public uses, nor appropriated by the Government, nor in any manner become private property, nor those on
which a private right authorized and recognized by this Act or any other valid law may be claimed, or which, having
been reserved or appropriated, have ceased to be so. x x x."
Thus, before the government could alienate or dispose of lands of the public domain, the President must first
officially classify these lands as alienable or disposable, and then declare them open to disposition or concession.
There must be no law reserving these lands for public or quasi-public uses.
The salient provisions of CA No. 141, on government reclaimed, foreshore and marshy lands of the public domain,
are as follows:
"Sec. 58. Any tract of land of the public domain which, being neither timber nor mineral land, is intended to
be used for residential purposes or for commercial, industrial, or other productive purposes other than
agricultural, and is open to disposition or concession, shall be disposed of under the provisions of this
chapter and not otherwise.
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;
(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.
Sec. 60. Any tract of land comprised under this title may be leased or sold, as the case may be, to any person,
corporation, or association authorized to purchase or lease public lands for agricultural purposes. x x x.
Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine shall be disposed of to private
parties by lease only and not otherwise, as soon as the President, upon recommendation by the Secretary of
Agriculture, 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 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution, Section 58 of Act No. 2874
prohibiting the sale of government reclaimed, foreshore and marshy disposable lands of the public domain. All these
lands are intended for residential, commercial, industrial or other non-agricultural purposes. As before, Section 61
allowed only the lease of such lands to private parties. The government could sell to private parties only lands falling
under Section 59 (d) of CA No. 141, or those lands for non-agricultural purposes not classified as government
reclaimed, foreshore and marshy disposable lands of the public domain. Foreshore lands, however, became
inalienable under the 1935 Constitution which only allowed the lease of these lands to qualified private parties.
Section 58 of CA No. 141 expressly states that disposable lands of the public domain intended for residential,
commercial, industrial or other productive purposes other than agricultural "shall be disposed of under the
provisions of this chapter and not otherwise." Under Section 10 of CA No. 141, the term "disposition" includes
lease of the land. Any disposition of government reclaimed, foreshore and marshy disposable lands for non-
PROPE RTY 47
agricultural purposes must comply with Chapter IX, Title III of CA No. 141, 54 unless a subsequent law amended or
repealed these provisions.
In his concurring opinion in the landmark case of Republic Real Estate Corporation v. Court of Appeals,55Justice
Reynato S. Puno summarized succinctly the law on this matter, as follows:
"Foreshore lands are lands of public dominion intended for public use. So too are lands 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 government. Said law allowed only the 'leasing' of reclaimed land. The Public
Land Acts of 1919 and 1936 also declared that the foreshore and lands reclaimed by the government were to be
"disposed of to private parties by lease only and not otherwise." Before leasing, however, the Governor-General,
upon recommendation of the Secretary of Agriculture and Natural Resources, had first to determine that the land
reclaimed was not necessary for the public service. This requisite must have been met before the land could be
disposed of. But even then, the foreshore and lands under water were not to be alienated and sold to private
parties. The disposition of the reclaimed land was only by lease. The land remained property of the State."
(Emphasis supplied)
As observed by Justice Puno in his concurring opinion, "Commonwealth Act No. 141 has remained in effect at
present."
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.56 These lands remained sui generis, as the only
alienable or disposable lands of the public domain the government could not sell to private parties.
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.
Moreover, Section 60 of CA No. 141 expressly requires congressional authority before 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
"Sec. 60. x x x The area so leased or sold shall be such as shall, in the judgment of the 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 hectares: Provided, however, That this limitation shall not apply to grants,
donations, or transfers made to a province, municipality or branch or subdivision of the Government for the purposes
deemed by said entities conducive to the public interest;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)
The congressional authority required in Section 60 of CA No. 141 mirrors the legislative authority required in Section
56 of Act No. 2874.
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.57
In case of sale or lease of disposable lands of the public domain falling under Section 59 of CA No. 141, Sections 63
and 67 require a public bidding. Sections 63 and 67 of CA No. 141 provide as follows:
"Sec. 63. Whenever it is decided that lands covered by this chapter are not needed for public purposes, the Director
of Lands shall ask the Secretary of Agriculture and Commerce (now the Secretary of Natural Resources) for authority
to dispose of the same. Upon receipt of such authority, the Director of Lands shall give notice by public
advertisement in the same manner as in the case of leases or sales of agricultural public land, x x x.
Sec. 67. The lease or sale shall be made by oral bidding; and adjudication shall be made to the highest
bidder. x x x." (Emphasis supplied)
Thus, CA No. 141 mandates the Government to put to public auction all leases or sales of alienable or disposable
lands of the public domain.58
Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal Section 5 of the Spanish Law of Waters of
1866. Private parties could still reclaim portions of the sea with government permission. However, thereclaimed 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 Constitution prohibited the alienation of all natural resources except public
agricultural lands.
PROPE RTY 48
The Civil Code of 1950
The Civil Code of 1950 readopted substantially the definition of property of public dominion found in the Civil Code of
1889. Articles 420 and 422 of the Civil Code of 1950 state that
"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;
development of the national wealth.
x x x.
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.
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." (Emphasis supplied)
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 Constitutions, 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.
PROPE RTY 49
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.
xxx
(i) To hold lands of the public domain in excess of the area permitted to private corporations by statute.
(j) To reclaim lands and to construct work across, or otherwise, any stream, watercourse, canal, ditch, flume x x x.
xxx
(o) To perform such acts and exercise such functions as may be necessary for the attainment of the purposes and
objectives herein specified." (Emphasis supplied)
PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public domain. Foreshore areas
are those covered and uncovered by the ebb and flow of the tide.61 Submerged areas are those permanently under
water regardless of the ebb and flow of the tide.62 Foreshore and submerged areas indisputably belong to the public
domain63 and are inalienable unless reclaimed, classified as alienable lands open to disposition, and further declared
no longer needed for public service.
The ban in the 1973 Constitution on private corporations from acquiring alienable lands of the public domain did not
apply to PEA since it was then, and until today, a fully owned government corporation. The constitutional ban applied
then, as it still applies now, only to "private corporations and associations." PD No. 1084 expressly empowers PEA
"to hold lands of the public domain" even "in excess of the area permitted to private corporations by
statute." Thus, PEA can hold title to private lands, as well as title to lands of the public domain.
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.
The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted the Regalian doctrine. The 1987
Constitution declares that all natural resources are "owned by the State," and except for alienable agricultural lands
of the public domain, natural resources cannot be 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 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. The
exploration, development, and utilization of natural resources shall be under the full control and supervision of the
State. x x x.
Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral 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 shall be limited to agricultural lands. Private corporations
or associations may not hold such alienable lands of the public domain except by lease, for a period not
exceeding twenty-five 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 acquire not more
than twelve hectares thereof by purchase, homestead, or grant.
Taking into account the requirements of conservation, ecology, and development, and subject to the requirements of
agrarian reform, the Congress shall determine, by law, the size of lands of the public domain which may be acquired,
developed, held, or leased and the conditions therefor." (Emphasis supplied)
The 1987 Constitution continues the State policy in the 1973 Constitution banning private corporations
fromacquiring any kind of alienable land of the public domain. Like the 1973 Constitution, the 1987 Constitution
allows private corporations to hold alienable lands of the public domain only through lease. As in the 1935 and
1973 Constitutions, the general law governing the lease to private corporations of reclaimed, foreshore and marshy
alienable lands of the public domain is still CA No. 141.
The Rationale behind the Constitutional Ban
The rationale behind the constitutional ban on corporations from acquiring, except through 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, thus:
"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 lease, not to exceed
one thousand hectares in area.'
If we recall, this provision did not exist under the 1935 Constitution, but this was introduced in the 1973 Constitution.
In effect, it prohibits private corporations from acquiring alienable public lands. But it has not been very clear in
jurisprudence what the reason for this is. In some of the cases decided in 1982 and 1983, it was indicated that
the purpose of this is to prevent large landholdings. Is that the intent of this provision?
MR. VILLEGAS: I think that is the spirit of the provision.
PROPE RTY 50
FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were instances where the Iglesia ni Cristo
was not allowed to acquire a mere 313-square meter land where a chapel stood because the Supreme Court said it
would be in violation of this." (Emphasis supplied)
In Ayog v. Cusi,64 the Court explained the rationale behind this constitutional ban in this way:
"Indeed, one purpose of the constitutional prohibition against purchases of public agricultural lands by private
corporations is to equitably diffuse land ownership or to 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
persons had spawned social unrest."
However, if the constitutional intent is to prevent huge landholdings, the Constitution could have simply limited the
size of alienable lands of the public domain that corporations could acquire. 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."
PROPE RTY 51
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.
xxx
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;
x x x.'" (Emphasis supplied)
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 domain."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 42274of 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]." (Emphasis
supplied)
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
PROPE RTY 52
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:
"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. (Emphasis supplied)
x x x."
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
PROPE RTY 53
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.1wphi1.nt
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, impose 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;
xxx
(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, non-compliance 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 III83of
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,
PROPE RTY 54
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 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 or to be reclaimed as provided for in the above-mentioned contract.
On the basis of such patents, the Land Registration Commission shall issue the corresponding certificate of
title." (Emphasis supplied)
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 itspatrimonial
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
PROPE RTY 55
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."
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. 89-29691 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
xxx
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
PROPE RTY 56
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 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
titlesissued 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." (Emphasis supplied)
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
PROPE RTY 57
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 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.
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;
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.
PROPE RTY 58
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 supplied)
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
"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the Government is authorized by
(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 de-registration 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." (Emphasis supplied)
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
PROPE RTY 59
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.
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 hectares111 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 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
1409112 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.
Davide, Jr., C.J., Bellosillo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-
Gutierrez, Austria-Martinez, and Corona, JJ., concur.
PROPE RTY 60
CHAVEZ V. PUBLIC ESTATESAUTHORITY384 SCRA 152
FACTS:
President Marcos through a presidential decree created PEA, which wastasked with the development, improvement,
and acquisition, lease, andsale of all kinds of lands. The then president also transferred to PEA theforeshore and
offshore lands of Manila Bay under the Manila-Cavite CoastalRoad andReclamation Project.Thereafter, PEA was
granted patent to the reclaimed areas of land and then, years later, PEA entered into a JVA with AMARI for the
developmentof the Freedom Islands. These two entered into a joint venture in the absence of any public
bidding.Later, a privilege speech was given by Senator President Macedadenouncing the JVA as the grandmother of
all scams. An investigation wasconducted and it was concluded that the lands that PEA wasconveying toAMARI
were lands of the public domain; the certificates of title overtheFreedom Islands were void; and the JVA itself
was illegal. This promptedRamos to form an investigatory committee on the legality of the JVA.Petitioner now comes
and contends that the government stands to losebillions by the conveyance or sale of the reclaimed areas to
AMARI.He also asked for thefull disclosure of the renegotiations happeningbetween the parties.
ISSUE:
W/N stipulations in the amended JVA for the transfer to AMARI of the lands, reclaimed or to be reclaimed, violate the
Constitution.
HELD:
The ownership of lands reclaimed from foreshore and submerged areas isrooted in the Regalian doctrine, which
holds that the State owns all lands and waters of the public domain.
PROPE RTY 61
CHAVEZ V. PUBLIC ESTATE AUTHORITY
FACTS:
From the time of Marcos until Estrada, portions of Manila Bay were being reclaimed. A law was passed creating the
Public Estate Authority which was granted with the power to transfer reclaimed lands. Now in this case, PEA entered
into a Joint Venture Agreement with AMARI, a private corporation. Under the Joint Venture Agreement between
AMARI and PEA, several hectares of reclaimed lands comprising the Freedom Islands and several portions of
submerged areas of Manila Bay were going to be transferred to AMARI .
ISSUE:
Whether or not the stipulations in the Amended JVA for the transfer to AMARI of lands, reclaimed or to be reclaimed,
violate the Constitution
RULING: YES!
Under the Public Land Act (CA 141, as amended), reclaimed lands are classified as alienable and disposable lands
of the public domain Section 3 of the Constitution: 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
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. Clearly, the Amended JVA
violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution. Under Article 1409 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.
PROPE RTY 62
CHAVEZ V. PUBLIC ESTATES AUTHORITY
384 SCRA 152
FACTS:
President Marcos through a presidential decree created PEA, which was tasked with the development,
improvement, and acquisition, lease, and sale of all kinds of lands. The then president also transferred to PEA the
foreshore and offshore lands of Manila Bay under the Manila-Cavite Coastal
Road and Reclamation Project.
Thereafter, PEA was granted patent to the reclaimed areas of land and then, years later, PEA entered into a
JVA with AMARI for the development of the Freedom Islands. These two entered into a joint venture in the
absence of any public bidding.
Later, a privilege speech was given by Senator President Maceda denouncing the JVA as the
grandmother of all scams. An investigation was conducted and it was concluded that the lands that PEA was
conveying to AMARI were lands of the public domain; the certificates of title over the
Freedom Islands were void; and the JVA itself was illegal. This prompted Ramos to form an investigatory committee
on the legality of the JVA.
Petitioner now comes and contends that the government stands to lose billions by the conveyance or sale
of the reclaimed areas to AMARI. He also asked for the full disclosure of the renegotiations happening between
the parties.
ISSUE:
W/N stipulations in the amended JVA for the transfer to AMARI of the lands, reclaimed or to be reclaimed,
violate the Constitution.
HELD:
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 1987 Constitution recognizes the Regalian doctrine. It declares that all natural resources are owned by the
State and except for alienable agricultural lands of the public domain, natural resources cannot be
alienated.
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 area are still submerged areas forming part of Manila Bay. Further,
it is provided that AMARI will reimburse the actual costs in reclaiming the areas of land and it will shoulder the
other reclamation costs to be incurred.
The foreshore and submerged areas of Manila Bay are part of the lands of the public domain, waters and other
natural resources and consequently owned by the State. As such, foreshore and submerged areas shall not be
alienable unless they are classified as agricultural lands of the public domain. The mere reclamation of these
areas by the PEA doesnt convert these inalienable natural resources of the State into alienable and disposable
lands of the public domain. There must be a law or presidential
proclamation officially classifying these reclaimed lands as alienable and disposable if the law has reserved
them for some public or quasi-public use.
PROPE RTY 63
G.R. No. L-22006 July 28, 1975
BASILIO PEREZ and PETRA MONTALBO, petitioners, vs. NICOLAS MENDOZA, MARGARITA
MACALALAD and the HONORABLE COURT OF APPEALS,
MUNOZ PALMA, J.:
Civil Case 689 of the Court of First Instance of Batangas was an action to quiet title over a piece of
land filed on March 20, 1959, by spouses Basilio Perez and Petra Montalbo with spouses Nicolas
Mendoza and Margarita Macalalad as defendants. According to the complaint, the land in controversy
is located in barrio Dagatan, municipality of Taysan, Batangas, with an area of approximately 4,765
sq. meters, declared for taxation purposes in the name of the "Heirs of Estanislao Montalbo", and is
"bounded on the north by a school site, on the east by Calixto Flores, on the south by a creek, and on
the west by a creek and the land of Gregorio Mendoza." On the basis of evidence adduced by the
parties, the trial court then presided by Hon. Lorenzo Relova rendered judgment on February 19,
1962, dismissing the complaint and declaring the spouses Mendoza "to have a better right to the
property in question."1
Spouses Perez elevated the Relova decision to the Court of Appeals which, however, affirmed in
toto the findings of the court a quo, and declared that "upon the evidence it has been shown by a
great preponderance that the land in question belongs to the defendants."2
The case is now before Us on a petition for certiorari filed by spouses Perez.
The findings of fact both of the trial court and the Court of Appeals may be briefly summarized as
follows:
The litigated parcel of land was originally part of a bigger tract owned by Estanislao Montalbo. When
Estanislao died in 1918, his properties passed on to his children Petra, Felisa, and Pedro all surnamed
Montalbo, and because Pedro died single the two women remained as the only heirs. By mutual
agreement Petra and Felisa divided between themselves the lands of their father and the parcel of
which the litigated land was a part was assigned to Felisa. Sometime in 1922 Felisa exchanged the
above-mentioned parcel with a land belonging to her aunt. Andrea Montalbo, a sister of her father.
The reason for the exchange was that Andrea wanted to donate a piece of land to the municipality for
use as a school site and the land of Felisa was what the municipality preferred as it was adjacent to
other properties of the municipality. (Exh. 5 for defendants Mendoza) Upon her acquisition of Felisa's
aforementioned land, Andrea donated to the municipality the northern portion thereof which
constituted almost one-half of the entire parcel, and since then that portion was declared for taxation
purposes by the municipality together with its adjoining properties (Exhs. 6, 6-A, 6-B).1wph1.t In
1927 the remainder of the lot was given by Andrea Montalbo to her daughter Margarita Macalalad on
the occasion of her marriage to Nicolas Mendoza, and from the time of their marriage the couple
possessed the said property. That donation was confirmed subsequently in a public instrument dated
August 15, 1951 (Exh. 2 for the Mendozas). Nicolas Mendoza sought to transfer the tax declaration of
the property to his name and of his wife and for that purpose he submitted a deed of exchange of
property dated January 14, 1922, allegedly executed by Felisa Montalbo and Andrea Montalbo in the
presence of the municipal secretary Rafael Manahan (Exh. 5). When Basilio Perez came to know about
the supposed deed of exchange, he had it investigated and upon discovering that the signature of
Rafael Manahan appearing on the document was forged, he filed a criminal complaint before the
Fiscal's office which led to an accusation for falsification of private document against Andrea Montalbo
and Nicolas Mendoza. Only Nicolas Mendoza was arraigned and tried and was convicted by the Court
of First Instance of Batangas, but on appeal he was acquitted by the Court of Appeals for insufficiency
of evidence to show that he participated in affixing the signature of Rafael Manahan or that he was
aware of the falsity of the document in question when he presented it to the tax assessor's
office.3 Notwithstanding the forged signature of Rafael Manahan on the document Exhibit 5, there is
sufficient evidence to prove that an exchange of property did in fact occur in 1922 between Andrea
and Felisa Montalbo, and that Felisa's land passed on to Andrea who in turn gave part of it to the
municipality and part to her daughter, Margarita; hence, the decision in favor of the spouses
Mendoza.
On the other hand, petitioners contend that the disputed property was inherited by Petra and Felisa
Montalbo from their father Estanislao who died in 1918 and since that date the two sisters were in
possession of said land. In 1934 a deed of partition of the various properties of Estanislao was
PROPE RTY 64
executed between Petra and the heirs of Felisa, and the land in question was divided equally, between
them; among those who signed as witnesses to that agreement was Andrea Montalbo(Exh. D for
petitioners). In 1952 Felisa's husband, Jose Ortega, and children sold their one-half share to spouses
Petra Montalbo and Basilio Perez, now petitioners, but the deed of sale was lost a year after.
Sometime in 1946 petitioners leased the property to the Mendozas and when the lease expired in
1951 they demanded for the return of the land but the Mendozas refused and so petitioners had to
file an ejectment suit before the justice of the peace court of Taysan which was still pending at the
time of the trial of the civil case in 1960. (tsn. witness Basilio Perez, December 15, 1960, pp. 16-34)
For not giving credit to the foregoing evidence, petitioners now assail the adverse decision of
respondent court on four assigned errors.
1. Petitioners contend that respondent court erred in considering the criminal case for falsification res
adjudicata on the matter of ownership of the land in litigation when the "question of ownership was
not actually and directly in issue in the criminal case and the latter was not the proper vehicle for the
determination of the ownership of the land." (p. 9, petitioners brief) Petitioners refer to portions in
the decision of respondent court, viz:
The land in question, together with that portion that was acquired by the municipality of
Taysan, the identity of which is admitted by the parties, belonged to Felisa Montalbo, as
held in the decision of the Court of Appeals, thus "The said parcel of land previously
belonged to Felisa Montalbo (married to Jose Ortega), who inherited it from her
deceased father, the aforecited Estanislao Montalbo;", and the land in question was
donated propter nuptias by Andrea Montalbo to Margarita Macalalad and Nicolas
Mendoza, the defendants, (Margarita Macalalad is the daughter of Andrea Montalbo) on
the occasion of their marriage on February 27, 1927, as found and held in the decision of
the Court of Appeals, thus "and this land was acquired by the donor (Andrea
Montalbo) by means of a barter with her own parcel of land planted with bamboos and
mango trees"
Upon the basis of the findings of fact and conclusion arrived at in the decision of the
Court of Appeals, it clearly appears that although the document of exchange of the lands
was found to be falsified, nevertheless the Court found upon the facts as demonstrated
by the evidence that the land in question "previously belonged to Felisa Montalbo
(married to Jose Ortega), who inherited it from her deceased father, the aforesaid
Estanislao Montalbo ..."; that said land was donated propter nuptias by Andrea Montalbo
to the defendants on the occasion of their marriage on February 27, 1927; and that "this
land was acquired by the donor by means of a barter with her own parcel of land planted
with bamboos and mango trees". From the context of the decision the natural and logical
inference is that factually the exchange of the lands had been consummated.... (pp. 6-7,
CA decision at pp. 20-21, rollo; emphasis supplied to indicate disputed statements)
Undoubtedly, there is merit to the contention of petitioners that the pronouncements or findings of
fact made by the Court of Appeals in the criminal case concerning the possession and ownership of
the land now in litigation in the civil case, do not constitute the law on the matter and cannot be
taken or adopted as a basis for deciding the question of ownership of said land in this civil case. Since
there is no identity of parties in the two cases the petitioners here not being parties in the criminal
case and the object or subject matter in the criminal prosecution is different, the latter being
concerned with the guilt or innocence of accused Nicolas Mendoza for falsification of private
document, it follows that the judgment in the criminal action cannot be used as evidence in the civil
case where the issue is ownership of a piece of land. It is the rule that the plea of res
judicata generally cannot be interposed except where the parties, facts, and questions are the
same,4 hence, the judgment in a criminal case cannot be pleaded as res judicata in a civil action.5
But whatever error was committed by respondent court in this regard, the same is not sufficient to
nullify the appealed decision.
Analyzing the decision of respondent court. We see that the latter made its own appraisal and
evaluation of the evidence existing in the record relative to the possession and ownership of the land
in question. Thus it said that the conclusions arrived at by the Court of Appeals in the criminal case to
wit(1) that there was an exchange of lands consummated between Andrea and Felisa and (2) that the
exchanged land was later donated by Andrea to her daughter Margarita in 1927, "can hardly be
PROPE RTY 65
doubted if we take account of the undisputed fact that the defendants have been in possession of the
land since 1927, and the plaintiffs (meaning spouses Perez) have not attempted to
disturb defendants' possession of the land until 1952 when said plaintiffs filed an action of unlawful
detainer against the defendants." (p. 7 of appealed decision at p. 21, SC rollo; emphasis supplied)
Continuing, respondent court expounded:
Contrary to the allegation in the complaint "That plaintiffs were in possession of the
land prior and up to January, 1946, when the same was leased to the defendants ...",
and the testimony of Basilio Perez to the same tenor, the evidence has conclusively
shown that the defendants have been in continuous possession of the land since 1927 to
the present time, and they have built a house on the land in 1928 where they have
resided and lived to the present, as testified to by the defendant Mendoza, ....
The plaintiffs have contended, however, with the support of the testimony of Basilio
Perez, that the possession of the defendants since 1946 was that of a mere lessee of the
land. On this matter, the trial court said, "the records do not show any documentary
evidence to support such contention. Nor is any document, say receipts of payment of
rentals presented to bolster their theory. On the contrary their averment has been
strongly denied by the defendants and the records show that it was only in 1952 that a
civil action was instituted by the plaintiffs against the defendants in the Justice of the
Peace Court of Taysan, Batangas, for detainer and damages", and said allegation of
possession of the defendants as lessees of the land "is not supported by positive and
convincing evidence". We find no reason to disagree with the foregoing findings of fact
and conclusion of the trial court because the same is supported by the preponderance of
evidence, and the plaintiffs have not pointed to us any fact of significance or influence
which have been disregarded by the court, other than the testimony of Basilio Perez who
testified about the supposed contract of lease. (pp. 21-22, 23, ibid.; emphasis supplied)
Digging further into the evidence of herein petitioners, respondent court found for itself that the
agreement of partition dated May 27, 1934, Exhibit D, is not incontrovertible proof that in 1934 the
litigated property belonged in common to Petra and the heirs of Felisa Montalbo both of whom may
have been guided by the fact that the property was still declared for taxation purposes in the name of
Estanislao Montalbo, and that the document of partition "did not overcome the evidence on record
that Andrea Montalbo became the owner of the land, and that since 1927 the defendants have been
in continuous possession of the land, openly, adversely and in the concept of owners thereby
acquiring ownership of the land through acquisitive prescription." (p. 10 of CA decision at p. 24,
SC rollo)
Independently therefore of the pronouncements of the Court of Appeals in the criminal case,
respondent court examined the evidence in this civil case and made its own findings of fact on the
basis of which it affirmed the decision of the trial court.
We could have stopped here and resolved this petition under well-entrenched precepts in Philippine
jurisprudence that findings of fact of the Court of Appeals are as a rule conclusive and binding upon
this Court;6 nonetheless, to set our mind at rest that the conclusions of respondent court were not
grounded on speculation, surmises or conjectures,7 We went over the evidence before Us.
Certain salient facts strongly support the claim of respondents Mendoza over the property in dispute:
First, the northern boundary of the land in controversy is undisputably a school site which originally
was part of a bigger tract belonging to Estanislao Montalbo. This is admitted by petitioner Basilio
Perez who to a question propounded by his counsel, Atty. Panganiban, declared:
Mr. Panganiban: (Counsel of petitioners)
Q. According to these tax declarations which you said covers the land in
question, the boundaries on the north, school site; on the east, land of
Calixto Flores; on the south, estero; and on the west, estero and Gregoria
Mendoza, why is it that there is a discrepancy?
PROPE RTY 66
A. Because from the whole parcel of land a portion was taken for the school
site, and that which remains now is the land in question, sir. (tsn December
15, 1960, pp. 22-23)
No explanation however was offered by Perez as to how that portion became a school site. On the
other hand, there is evidence of respondent Mendoza that because Andrea Montalbo wanted to
donate a piece of land to be used as a school site and the municipality preferred the location of the
land inherited by Felisa from her father, the two women exchanged lands after which Andrea gave
one-half of the property to the municipality while the remaining portion which is the land now in
litigation was donated propter nuptias to her daughter Margarita way back in 1927. (tsn October 24,
1961, pp. 14-18) This donation of Andrea was not disproved by any evidence of petitioners. On the
part of respondents Mendoza, their documentary evidence, Exhibits 6, 6-A and 6-B, show that the
municipality of Taysan declared the donated property in its name as early as July, 1925, which
supports respondents' claim that the exchange of properties between Andrea and Felisa Montalbo
took place sometime in 1922.
Second, the provincial authorities authorities dealt with the Mendozas for the widening of the
provincial road which traverses the land in question. Nicolas Mendoza testified that the land covered
by the complaint actually consists of two lots which he described in his sketch, Exhibit 1, with letters
"A" and "B" respectively, separated by a provincial road leading to the municipality of Lobo; that lot
"A" which is the bigger parcel is the one donated to his wife, Margarita, by Andrea Montalbo on the
occasion of their marriage in 1927 (Exh. 2); while lot "B" was bought from Donata Mendoza in 1951
as shown by the deed of sale, Exhibit 7; that sometime in 1937-38, the province widened the
provincial road traversing the two lots, and he and his wife were approached by the provincial
authorities more particularly, Engineer Ramirez, for them to give without compensation from lot "A" a
stretch of land of one meter in width to widen said road, and they agreed. At that time Donata
Mendoza still owned lot "B" and she was also asked to give part of her land for the road but she was
paid for the value of the plants destroyed in the process.(tsn October 24, 1961, pp. 32-34) For his
part, petitioner Perez admitted during the cross-examination conducted by the opposite counsel, Atty.
Julio Enriquez, that the provincial authorities did not deal with him at all during the widening of that
particular road. (tsn September 25, 1961, p. 34) This is of marked significance, because if it were
true as claimed by petitioners that they were in possession of the property since the death of
Estanislao Montalbo in 1918 or even after the deed of partition in 1934, they would have been the
persons approached by the authorities for the widening of the road. The fact that the Mendozas were
the ones who gave away part of the land for the widening of the Lobo road shows that they were in
possession of the property and were living there at the time.
Third, respondents Mendoza have been in possession of the property since 1927 in concept of owners
thereof. We have the testimony of respondent Nicolas Mendoza that after the land was donated to his
wife in 1927 they built a house on it and lived there continuously, witness referring particularly to
what he described as lot "A" in his sketch Exhibit 1. (tsn October 24, 1961, pp. 7, .30-31)
Respondent's testimony was found both by the trial and appellate courts credible because (1)
petitioner Basilio Perez himself admitted during cross-examination that even before the last world war
the Mendozas had constructed a house on the land in litigation (tsn September 25, 1971, pp. 37-39;
see Exh. E-3) which admission disproves the allegation in the complaint and Perez' testimony that it
was only in 1946 when the Mendozas occupied the property as lessees; (2) the testimony of Nicolas
Mendoza was corroborated by witness Adriano Gonzales, a retired justice of the peace of Taysan,
Batangas, who declared that he knew the Mendozas since 1937 and he saw them living on the land in
question and they have not changed residence at all since he had known them (tsn December 6,
1961, pp. 5-6); and (3) the respondents Mendoza were the ones who were living on the property and
not the petitioners at the time the provincial government in 1937 widened the Lobo road which
crosses said land.
The court a quo and the respondent appellate court did not err when they upheld the claim of
ownership of the Mendozas principally on the ground that the latter were in actual possession of the
property since 1927 and were sought to be dispossessed by petitioners herein only in 1952 when an
ejectment suit was filed against them.
Possession is an indicium of ownership of the thing possessed and to the possessor goes the
presumption that he holds the thing under a claim of ownership.8 Article 433 of the Civil Code
provides that "(A)ctual possession under claim of ownership raises a disputable presumption of
ownership. The true owner must resort to judicial process for the recovery of the property." In Chan
PROPE RTY 67
vs. Court of Appeals, et al., L-27488, June 30, 1970, 33 SCRA 737, this Court upheld the finding of
the Court of Appeals that the litigated property belonged to the private respondents therein based on
their possession of the property, not only because such findings of fact of the appellate court are
conclusive and binding on this Court but because the conclusion is in accordance with Articles 433 and
531 of the Civil Code. 9
As we have here conflicting claims of possession by the parties over the land in controversy and
because the fact of possession cannot be recognized at the same time in two different personalities
except in cases of co-possession, the present possessor is to be preferred pursuant to Article 538 of
the Civil Code which We quote:
Possession as a fact cannot be recognized at the same time in two different personalities
except in the cases of co-possession. Should a question arise regarding the fact of
possession, the present possessor shall be preferred; if there are two possessors, the
one longer in possession; if the dates of the possession are the same, the one who
presents a title; and if all these conditions are equal, the thing shall be placed in judicial
deposit pending determination of its possession or ownership through proper
proceedings." 10
The pretension of petitioners that the possession of the Mendozas is that of a mere lessee was not
believed by the trial judge and the appellate court not only because of the absence of any written or
oral evidence on the matter other than the bare testimony of petitioner Basilio Perez, but also due to
the circumstances present in the case which We indicated and enumerated at pages 7 to 9 of this
decision. In fine, it is a fact that the Mendozas are presently in possession of the property and the
presumption of ownership in their favor has not been successfully rebutted by evidence that they are
mere lessees of the land in their possession as claimed by petitioners.
2. In their second assigned error, petitioners contend that respondent court should not have given
weight to the evidence of respondent Mendoza because the latter's Exhibit 5 was proven to be a
falsified document.
To recall, Exhibit 5 is the alleged deed of exchange or barter of lands between Andrea and Felisa
Montalbo dated January 14, 1922. On this point, petitioners overlook the fact that Exhibit 5 was made
the basis of a criminal accusation of falsification of private document solely on the allegation that the
signature of Rafael Manahan, the person before whom the parties to the document allegedly
appeared, was not his. There was no finding in that criminal case as per decision rendered therein
that the barter or exchange of lands between Andrea and Felisa Montalbo did not in effect take place.
On the contrary, what appears in said decision offered by petitioners as their Exhibit J are the
following findings of the Court of Appeals, viz: that the land donated by Andrea Montalbo to her
daughter Margarita Macalalad "was acquired by the donor by means of a barter with her own parcel of
land planted with bamboos and mango trees"; that while it is true that because of this presentation of
the falsified document appellant (now respondent Nicolas Mendoza) was able to secure the
declaration of the property donated in his name, no criminal liability should be imposed upon him in
the absence of any evidence that he presented said exhibit with the knowledge that it was forged
"especially if we take into consideration the fact that he and his wife were and are still in possession
of the land donated since 1927"; that in fact, the color and appearance of the document in question
show that it is not a new document but an old one thus confirming Mendoza's theory that it was
executed in or about the year 1922 as appearing in the document or five years before his marriage.
(pp. 1, 5, 6 of Exh. J, folder of exhibits) Thus, if the document Exhibit 5 was held to be forged, it was
simply because the municipal secretary, Rafael Manahan, did not sign it and not for any other reason.
What is material and relevant to the civil case is that both the trial court and respondent appellate
court found for a fact that there was an exchange of lands between Andrea and Felisa Montalbo on
the basis of evidence other than the disputed Exhibit 5. As to what the evidence is, has been
discussed above.
Petitioners cite Gonzales vs. Mauricio, 53 Phil. 728 where this Court stated inter alia that the
introduction of a forged instrument by a witness renders the testimony of the latter practically
worthless. That statement however is not applicable to the situation before Us because
in Gonzalez the particular document or receipt referred to was found to be entirely false as to its
contents, handwriting, and signature, whereas here all that was found to be false is the signature of a
witnessing official.
PROPE RTY 68
3. The last argument of petitioners is the object of the third assigned error. It is contended that the
appellate court erred in not giving effect to the deed of partition, Exhibit D, notwithstanding the fact
that the name of Andrea Montalbo appears in the document as one of the witnesses thereto.
Exhibit D appears to be a document dated May 27, 1934, wherein certain properties allegedly
belonging to Estanislao Montalbo were divided between Petra Montalbo and Jose Ortega, husband of
deceased Felisa Montalbo. Petitioner Basilio Perez declared that one of the parcels of land mentioned
in the document is the land now in litigation which is particularly marked as Exhibit D-1. He also
testified that Exhibit D was signed by him and his wife, Petra Montalbo, by Jose Ortega, husband of
deceased Felisa Montalbo, and thumbmarked by the latter's children all in his presence. (tsn
December 15,1960, pp. 19-24) Surprisingly, however, Basilio Perez did not at all mention during the
course of his testimony that the old woman, Andrea Montalbo, signed the deed of partition as a
witness. We have gone over the transcript of Basilio Perez' declaration on direct and cross-
examination (tsn December 15, 1960, pp. 15-34; September 25, 1961, pp. 3-40) and at no instance
did he ever state that Andrea Montalbo was present during the preparation of the document, that she
read or knew the contents thereof which by the way consists of six handwritten pages, and that she
signed her name on the document. It was incumbent upon petitioners to identify the signature of
Andrea Montalbo on the document if her signature was truly there. As a matter of fact, examining the
document Exhibit D We entertain doubts whether the name referred to by petitioners is "Andrea
Montalbo", for, as written, it also can read "Maria Montalbo". At any rate, whatever is the import of
said deed of partition, the same binds only the parties thereto but does not affect third persons such
as Andrea Montalbo or the herein Mendozas in the absence of proof that they participated in one way
or another in the preparation and execution of thedocument. As it is, Andrea Montalbo was a stranger
to that deed of partition and any recital therein concerning the property under litigation cannot be
used as evidence to prejudice her and her successors-in-interest or place her in estoppel as to her
claims over the property. Res inter alios acta alteri nocere non debet. A transaction between two
parties ought not to operate to the prejudice of a third person or stranger. 11
4. In the fourth assignment of error, petitioners claim that the appellate court should have rendered a
decision in their favor. That both the trial court and respondent appellate court have correctly
evaluated the evidence, has been clearly demonstrated by Us.
IN VIEW OF ALL THE ABOVE CONSIDERATIONS, We find no reversible error in the decision under
review and We AFFIRM the same with costs against petitioners.
So Ordered.
PROPE RTY 69

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Republic of the Philippines

Whether or not RA 3039 is unconstitutional?

Whether or not the land in issue is a public land?

Adriano Maneclang in this case filed a complaint for

Whether or not the fishpond is public in nature.

GUTIERREZ, JR., J.:, dissenting.

GUTIERREZ, JR., J.:

PADILLA, J., concurring:

SARMIENTO, J., concurring:

FELICIANO, J., dissenting

PADILLA, J., concurring:

SARMIENTO, J., concurring:

FELICIANO, J., dissenting

3. W/N EO No. 296 is constitutional?

The SC did not anymore pass upon its constitutionality.

G.R. No. 97764 August 10, 1992

MUNOZ PALMA, J.:

Mr. Panganiban: (Counsel of petitioners)

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