In view of the facts just stated, as proved by a preponderance of the evidence, the question arises:
A. G.R. No. L-28379 March 27, 1929
THE GOVERNMENT OF THE PHILIPPINE ISLANDS, applicant-appellant,
vs. CONSORCIA CABANGIS, ET AL., claimants-appellees.
VILLA-REAL, J.:
The Government of the Philippine Islands appeals to this court from the judgment of the Court of
First Instance of Manila in cadastral proceeding No. 373 of the Court of First Instance of Manila, G.
L. R. O. Cadastral Record No. 373, adjudicating the title and decreeing the registration of lots Nos.
36, 39 and 40, block 3055 of the cadastral survey of the City of Manila in favor of Consuelo,
Consorcia, Elvira and Tomas, surnamed Cabangis, in equal parts, and dismissing the claims
presented by the Government of the Philippine Islands and the City of Manila.
In support of its appeal, the appellant assigns the following alleged errors as committed by the trial
court in its judgment, to wit:
1. The lower court erred in not holding that the lots in question are of the public domain,
the same having been gained from the sea (Manila Bay) by accession, by fillings made by
the Bureau of Public Works and by the construction of the break-water (built by the Bureau
of Navigation) near the mouth of Vitas Estero.
2. The lower court erred in holding that the lots in question formed part of the big parcel of
land belonging to the spouses Maximo Cabangis and Tita Andres, and in holding that these
spouses and their successors in interest have been in continuous, public, peaceful and
uninterrupted possession of said lots up to the time this case came up.
3. The lower court erred in holding that said lots existed before, but that due to the current
of the Pasig River and to the action of the big waves in Manila Bay during the south-west
monsoons, the same disappeared.
4. The lower court erred in adjudicating the registration of the lands in question in the
name of the appellees, and in denying the appellant's motion for a new trial.
A preponderance of the evidence in the record which may properly be taken into consideration in
deciding the case, proves the following facts:
Lots 36, 39 and 40, block 3035 of cadastral proceeding No. 71 of the City of Manila, G. L. R. O.
Record No. 373, were formerly a part of a large parcel of land belonging to the predecessor of the
herein claimants and appellees. From the year 1896 said land began to wear away, due to the
action of the waves of Manila Bay, until the year 1901 when the said lots became completely
submerged in water in ordinary tides, and remained in such a state until 1912 when the
Government undertook the dredging of Vitas Estuary in order to facilitate navigation, depositing all
the sand and silt taken from the bed of the estuary on the low lands which were completely covered
with water, surrounding that belonging to the Philippine Manufacturing Company, thereby slowly
and gradually forming the lots, the subject matter of this proceeding.
Up to the month of February, 1927 nobody had declared lot 39 for the purposes of taxation, and it
was only in the year 1926 that Dr. Pedro Gil, in behalf of the claimants and appellees, declared lot
No. 40 for such purpose.
Who owns lots 36, 39 and 40 in question?
The claimants-appellees contend that inasmuch as the said lots once formed a part of a large parcel
of land belonging to their predecessors, whom they succeeded, and their immediate predecessor in
interest, Tomas Cabangis, having taken possession thereof as soon as they were reclaimed, giving
his permission to some fishermen to dry their fishing nets and deposit their bancas thereon, said
lots belong to them.
Article 339, subsection 1, of the Civil Code, reads:
Article 339. Property of public ownership is
1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, riverbanks, shorts, roadsteads, and that of a similar character.
xxx xxx xxx
Article 1, case 3, of the Law of Waters of August 3, 1866, provides as follows:
ARTICLE 1. The following are part of the national domain open to public use:
xxx xxx xxx
3. The Shores. By the shore is understood that space covered and uncovered by the
movement of the tide. Its interior or terrestrial limit is the line reached by the highest
equinoctial tides. Where the tides are not appreciable, the shore begins on the land side at
the line reached by the sea during ordinary storms or tempests.
In the case of Aragon vs. Insular Government (19 Phil., 223), with reference to article 339 of the
Civil Code just quoted, this court said:
We should not be understood, by this decision, to hold that in a case of gradual encroachment or
erosion by the ebb and flow of the tide, private property may not become 'property of public
ownership,' as defined in article 339 of the code, where it appears that the owner has to all intents
and purposes abandoned it and permitted it to be totally destroyed, so as to become a part of the
'playa' (shore of the seas), 'rada' (roadstead), or the like. . . .
In the Enciclopedia Juridica Espanola, volume XII, page 558, we read the following:
With relative frequency the opposite phenomenon occurs; that is, the sea advances and
private properties are permanently invaded by the waves, and in this case they become
part of the shore or beach. They then pass to the public domain, but the owner thus
dispossessed does not retain any right to the natural products resulting from their new
nature; it is a de facto case of eminent domain, and not subject to indemnity.
Now then , when said land was reclaimed, did the claimants-appellees or their predecessors recover
it as their original property?
As we have seen, the land belonging to the predecessors of the herein claimants-appellees began
to wear way in 1896, owing to the gradual erosion caused by the ebb and flow of the tide, until the
year 1901, when the waters of Manila Bay completely submerged a portion of it, included within lots
36, 39 and 40 here in question, remaining thus under water until reclaimed as a result of certain
work done by the Government in 1912. According to the above-cited authorities said portion of
1
land, that is, lots 36, 39 and 40, which was private property, became a part of the public domain.
The predecessors of the herein claimants-appellees could have protected their land by building a
retaining wall, with the consent of competent authority, in 1896 when the waters of the sea began
to wear it away, in accordance with the provisions of Article 29 of the aforecited Law of Waters of
August 3, 1866, and their failure to do so until 1901, when a portion of the same became
completely covered by said waters, remaining thus submerged until 1912, constitutes
abandonment.
Now then: The lots under discussion having been reclaimed from the seas as a result of certain
work done by the Government, to whom do they belong?
The answer to this question is found in article 5 of the aforementioned Law of Waters, which is as
follows:
ART. 5. Lands reclaimed from the sea in consequence of works constructed by the State, or
by the provinces, pueblos or private persons, with proper permission, shall become the
property of the party constructing such works, unless otherwise provided by the terms of
the grant of authority.
The fact that from 1912 some fishermen had been drying their fishing nets and depositing
their bancas on lots 36, 39 and 40, by permission of Tomas Cabangis, does not confer on the latter
or his successors the ownership of said lots, because, as they were converted into public land, no
private person could acquire title thereto except in the form and manner established by the law.
In the case of Buzon vs. Insular Government and City of Manila (13 Phil., 324), cited by the
claimants-appellees, this court, admitting the findings and holdings of the lower court, said the
following:
If we heed the parol evidence, we find that the seashore was formerly about one
hundred brazas distant from the land in question; that, in the course of time, and by the
removal of a considerable quantity of sand from the shore at the back of the land for the
use of the street car company in filling in Calle Cervantes, the sea water in ordinary tides
now covers part of the land described in the petition.
The fact that certain land, not the bed of a river or of the sea, is covered by sea water
during the period of ordinary high tide, is not a reason established by any law to cause the
loss thereof, especially when, as in the present case, it becomes covered by water owing to
circumstances entirely independent of the will of the owner.
In the case of Director of Lands vs. Aguilar (G.R. No. 22034),1 also cited by the claimants-appellees,
wherein the Government adduced no evidence in support of its contention, the lower court said in
part:
The contention of the claimants Cabangis is to the effect that said lots are a part of the
adjoining land adjudicated to their deceased father, Don Tomas Cabangis, which, for over
fifty years had belonged to their deceased grandmother, Tita Andres, and that, due to
certain improvements made in Manila Bay, the waters of the sea covered a large part of
the lots herein claimed.
The Government of the Philippine Islands also claims the ownership of said lots, because,
at ordinary high tide, they are covered by the sea.
Upon petition of the parties, the lower court made an ocular inspection of said lots on
September 12, 1923, and on said inspection found some light material houses built
thereon, and that on that occasion the waters of the sea did not reach the aforesaid lots.
From the evidence adduced at the trial of this cause, it may be inferred that Tita Andres,
during her lifetime was the owner of a rather large parcel of land which was adjudicated by
a decree to her son Tomas Cabangis; the lots now in question are contiguous to that land
and are covered by the waters of the sea at extraordinary high tide; some 50 years before
the sea did not reach said strip of land, and on it were constructed, for the most part, light
material houses, occupied by the tenants of Tita Andres, to whom they paid rent. Upon her
death, her son Tomas Cabangis succeeded to the possession, and his children succeeded
him, they being the present claimants, Consuelo, Jesus, Tomas, and Consorcia Cabangis.
The Government of the Philippine Islands did not adduce any evidence in support of its
contention, with the exception of registry record No. 8147, to show that the lots here in
question were not excluded from the application presented in said proceeding.
It will be seen that in the case of Buzon vs. Insular Government and City of Manila, cited above, the
rise of the waters of the sea that covered the lands there in dispute, was due not to the action of
the tide but to the fact that a large quantity of sand was taken from the sea at the side of said land
in order to fill in Cervantes Street, and this court properly held that because of this act, entirely
independent of the will of the owner of said land, the latter could not lose the ownership thereof,
and the mere fact that the waters of the sea covered it as a result of said act, is not sufficient to
convert it into public land, especially, as the land was high and appropriate for building purposes.
In the case of the Director of Lands vs. Aguilar also cited by the claimants-appellees, the Insular
Government did not present any evidence in support of its contention, thus leaving uncontradicted
the evidence adduced by the claimants Aguilar et al., as to the ownership, possession and
occupation of said lots.
In the instant case the evidence shows that from 1896, the waves of Manila Bay had been gradually
and constantly washing away the sand that formed the lots here in question, until 1901, when the
sea water completely covered them, and thus they remained until the year 1912. In the latter year
they were reclaimed from the sea by filling in with sand and silt extracted from the bed of Vitas
Estuary when the Government dredged said estuary in order to facilitate navigation. Neither the
herein claimants-appellees nor their predecessors did anything to prevent their destruction.
In conclusion, then, we hold that the lots in question having disappeared on account of the gradual
erosion due to the ebb and flow of the tide, and having remained in such a state until they were
reclaimed from the sea by the filling in done by the Government, they are public land. (Aragon vs.
Insular Government, 19 Phil., 223; Francisco vs. Government of the Philippine Islands, 28 Phil.,
505).
By virtue whereof, the judgment appealed from is reversed and lots Nos. 36, 39 and 40 of cadastral
proceeding No. 373 of the City of Manila are held to be public land belonging to the Government of
the United States under the administration and control of the Government of the Philippine Islands.
So ordered.
Johnson, Street, Malcolm, Ostrand, Johns and Romualdez, JJ., concur.
2
 B. G.R. No. L40474 August 29, 1975
CEBU OXYGEN & ACETYLENE CO., INC., petitioner,
vs.
HON. PASCUAL A. BERCILLES Presiding Judge, Branch XV, 14th Judicial District, and
JOSE L. ESPELETA, Assistant Provincial Fiscal, Province of Cebu, representing the
Solicitor General's Office and the Bureau of Lands, respondents.
Jose Antonio R Conde for petitioner.
Office of the Acting Solicitor General Hugo E. Gutierrez, Jr., Assistant Solicitor General Octavio R.
Ramirez and Trial Attorney David R. Hilario for respondents. .
CONCEPCION, Jr., J.:
This is a petition for the review of the order of the Court of First Instance of Cebu dismissing
petitioner's application for registration of title over a parcel of land situated in the City of Cebu.
The parcel of land sought to be registered was only a portion of M. Borces Street, Mabolo, Cebu
City. On September 23, 1968, the City Council of Cebu, through Resolution No. 2193, approved on
October 3, 1968, declared the terminal portion of M. Borces Street, Mabolo, Cebu City, as an
abandoned road, the same not being included in the City Development Plan. 1 Subsequently, on
December 19, 1968, the City Council of Cebu passed Resolution No. 2755, authorizing the Acting
City Mayor to sell the land through a public bidding.2 Pursuant thereto, the lot was awarded to the
herein petitioner being the highest bidder and on March 3, 1969, the City of Cebu, through the
Acting City Mayor, executed a deed of absolute sale to the herein petitioner for a total consideration
of P10,800.00.3 By virtue of the aforesaid deed of absolute sale, the petitioner filed an application
with the Court of First instance of Cebu to have its title to the land registered. 4
On June 26, 1974, the Assistant Provincial Fiscal of Cebu filed a motion to dismiss the application on
the ground that the property sought to be registered being a public road intended for public use is
considered part of the public domain and therefore outside the commerce of man. Consequently, it
cannot be subject to registration by any private individual. 5
After hearing the parties, on October 11, 1974 the trial court issued an order dismissing the
petitioner's application for registration of title.6 Hence, the instant petition for review.
For the resolution of this case, the petitioner poses the following questions:
(1) Does the City Charter of Cebu City (Republic Act No. 3857) under Section 31,
paragraph 34, give the City of Cebu the valid right to declare a road as
abandoned? and
(2) Does the declaration of the road, as abandoned, make it the patrimonial
property of the City of Cebu which may be the object of a common contract?
(1) The pertinent portions of the Revised Charter of Cebu City provides:
Section 31. Legislative Powers. Any provision of law and executive order to the
contrary notwithstanding, the City Council shall have the following legislative
powers:
xxx xxx xxx
(34) ...; to close any city road, street or alley, boulevard, avenue, park or square.
Property thus withdrawn from public servitude may be used or conveyed for any
purpose for which other real property belonging to the City may be lawfully used
or conveyed.
From the foregoing, it is undoubtedly clear that the City of Cebu is empowered to close a city road
or street. In the case of Favis vs. City of Baguio,7 where the power of the city Council of Baguio City
to close city streets and to vacate or withdraw the same from public use was similarly assailed, this
court said:
5. So it is, that appellant may not challenge the city council's act of withdrawing a
strip of Lapu-Lapu Street at its dead end from public use and converting the
remainder thereof into an alley. These are acts well within the ambit of the power
to close a city street. The city council, it would seem to us, is the authority
competent to determine whether or not a certain property is still necessary for
public use.
Such power to vacate a street or alley is discretionary. And the discretion will not
ordinarily be controlled or interfered with by the courts, absent a plain case of
abuse or fraud or collusion. Faithfulness to the public trust will be presumed. So
the fact that some private interests may be served incidentally will not invalidate
the vacation ordinance.
(2) Since that portion of the city street subject of petitioner's application for registration of title was
withdrawn from public use, it follows that such withdrawn portion becomes patrimonial property
which can be the object of an ordinary contract.
Article 422 of the Civil Code expressly provides that "Property of public dominion, when no longer
intended for public use or for public service, shall form part of the patrimonial property of the
State."
Besides, the Revised Charter of the City of Cebu heretofore quoted, in very clear and unequivocal
terms, states that: "Property thus withdrawn from public servitude may be used or conveyed for
any purpose for which other real property belonging to the City may be lawfully used or conveyed."
Accordingly, the withdrawal of the property in question from public use and its subsequent sale to
the petitioner is valid. Hence, the petitioner has a registerable title over the lot in question.
WHEREFORE, the order dated October 11, 1974, rendered by the respondent court in Land Reg.
Case No. N-948, LRC Rec. No. N-44531 is hereby set aside, and the respondent court is hereby
ordered to proceed with the hearing of the petitioner's application for registration of title.
SO ORDERED.
Makalintal, C.J, Fernando, Barredo and Aquino, JJ., concur.
3
 C. G.R. No. L-24950 March 25, 1926
VIUDA DE TAN TOCO, plaintiff-appellant,
vs.
THE MUNICIPAL COUNCIL OF ILOILO, defendant-appellee.
Arroyo & Evangelista for appellant.
Provincial Fiscal Borromeo Veloso for appelle.
VILLAMOR, J.:
It appears from the record that the widow of Tan Toco had sued the municipal council of Iloilo for
the amount of P42,966.40, being the purchase price of two strips of land, one on Calle J. M. Basa
consisting of 592 square meters, and the other on Calle Aldiguer consisting of 59 square meters,
which the municipality of Iloilo had appropriated for widening said street. The Court of First
Instance of Iloilo sentenced the said municipality to pay the plaintiff the amount so claimed, plus
the interest, and the said judgment was on appeal affirmed by this court.1
On account of lack of funds the municipality of Iloilo was unable to pay the said judgment,
wherefore plaintiff had a writ of execution issue against the property of the said municipality, by
virtue of which the sheriff attached two auto trucks used for street sprinkling, one police patrol
automobile, the police stations on Mabini street, and in Molo and Mandurriao and the concrete
structures, with the corresponding lots, used as markets by Iloilo, Molo, and Mandurriao.
After notice of the sale of said property had been made, and a few days before the sale, the
provincial fiscal of Iloilo filed a motion which the Court of First Instance praying that the attachment
on the said property be dissolved, that the said attachment be declared null and void as being
illegal and violative of the rights of the defendant municipality.
Plaintiffs counsel objected o the fiscal's motion but the court, by order of August 12, 1925, declared
the attachment levied upon the aforementioned property of the defendant municipality null and
void, thereby dissolving the said attachment.
From this order the plaintiff has appealed by bill of exceptions. The fundamental question raised by
appellant in her four assignments of error is whether or not the property levied upon is exempt
from execution.
The municipal law, section 2165 of the Administrative Code, provides that:
Municipalities are political bodies corporate, and as such are endowed with the faculties of
municipal corporations, to be exercised by and through their respective municipal
government in conformity with law.
It shall be competent for them, in their proper corporate name, to sue and be sued, to
contract and be contracted with, to acquire and hold real and personal property for
municipal purposes, and generally to exercise the powers hereinafter specified or otherwise
conferred upon them by law.
For the purposes of the matter here in question, the Administrative Code does not specify the kind
of property that a municipality may acquire. However, article 343 of the Civil Code divides the
property of provinces and towns (municipalities) into property for public use and patrimonial
property. According to article 344 of the same Code, provincial roads and foot-path, squares,
streets, fountains and public waters, drives and public improvements of general benefit built at the
expense of the said towns or provinces, are property for public use.
All other property possessed by the said towns and provinces is patrimonial and shall be subject to
the provisions of the Civil Code except as provided by special laws.
Commenting upon article 344, Mr. Manresa says that "In accordance with administrative legislation"
(Spanish) we must distinguish, as to the patrimonial property of the towns, "between that a
common benefit and that which is private property of the town. The first differs from property for
public use in that generally its enjoyment is less, as it is limited to neighbors or to a group or class
thereof; and, furthermore, such use, more or less general, is not intrinsic with this kind of property,
for by its very nature it may be enjoyed as though it were private property. The third group, that is,
private property, is used in the name of the town or province by the entities representing it and,
like and private property, giving a source of revenue."
Such distinction, however, is of little practical importance in this jurisdiction in view of the different
principles underlying the functions of a municipality under the American rule. Notwithstanding this,
we believe that the principle governing property of the public domain of the State is applicable to
property for public use of the municipalities as said municipal is similar in character. The principle is
that the property for public use of the State is not within the commerce of man and, consequently,
is inalienable and not subject to prescription. Likewise, property for public of the municipality is not
within the commerce of man so long as it is used by the public and, consequently, said property is
also inalienable.
The American Law is more explicit about this matter as expounded by Mcquilin in Municipal
Corporations, volume 3, paragraph 1160, where he says that:
States statutes often provide the court houses, jails and other buildings owned by
municipalities and the lots on which they stand shall be exempt from attachment and
execution. But independent of express statutory exemption, as a general proposition,
property, real and personal, held by municipal corporations, in trust for the benefit of their
inhabitants, and used for public purposes, is exempt.
For example, public buildings, school houses, streets, squares, parks, wharves, engines and
engine houses, and the like, are not subject to execution. So city waterworks, and a stock
of liquors carried in a town dispensary, are exempt. The reason for the exemption is
obvious. Municipal corporations are created for public purposes and for the good of the
citizens in their aggregate or public capacity. That they may properly discharge such public
functions corporate property and revenues are essential, and to deny them these means
the very purpose of their creation would be materially impeded, and in some instances
practically destroy it. Respecting this subject the Supreme Court of Louisiana remarked:
"On the first view of this question there is something very repugnant to the moral sense in
the idea that a municipal corporation should contract debts, and that, having no resources
but the taxes which are due to it, these should not be subjected by legal process to the
satisfaction of its creditors. This consideration, deduced from the principles of moral equity
has only given way to the more enlarged contemplation of the great and paramount
interests of public order and the principles of government."
It is generally held that property owned by a municipality, where not used for a public
purpose but for quasi private purposes, is subject to execution on a judgment against the
4
 municipality, and may be sold. This rule applies to shares of stock owned by a municipal
corporation, and the like. But the mere fact that corporate property held for public uses is
being temporarily used for private purposes does not make it subject execution.
If municipal property exempt from execution is destroyed, the insurance money stands in
lieu thereof and is also exempt.
The members or inhabitants of a municipal corporation proper are not personally liable for
the debts of the municipality, except that in the New England States the individual liability
of the inhabitant is generally maintained.
In Corpus Juris, vol 23, page 355, the following is found:
Where property of a municipal or other public corporation is sough to be subjected to
execution to satisfy judgments recovered against such corporation, the question as to
whether such property is leviable or not is to be determined by the usage and purposes for
which it is held. The rule is that property held for public uses, such as public buildings,
streets, squares parks, promenades, wharves, landing places fire engines, hose and hose
carriages, engine houses, public markets, hospitals, cemeteries, and generally everything
held for governmental purposes, is not subject to levy and sale under execution against
such corporation. The rule also applies to funds in the hands of a public officer. Likewise it
has been held that taxes due to a municipal corporation or country cannot be seized under
execution by a creditor of such corporation. But where a municipal corporation or country
owns in its proprietary, as distinguished from its public or governmental capacity, property
not useful or used for a public purpose but for quasi private purposes, the general rule is
that such property may be seized and sold under execution against the corporation,
precisely as similar property of individuals is seized and sold. But property held for public
purposes is not subject to execution merely because it is temporarily used for private
purposes, although if the public use is wholly abandoned it becomes subject to execution.
Whether or not property held as public property is necessary for the public use is a
political, rather than a judicial question.
In the case of City of New Orleans vs. Louisiana Construction Co., Ltd. (140 U. S., 654; 35 Law. ed.,
556), it was held that a wharf for unloading sugar and molasses, open to the public, was property
for the public use of the City of New Orleans and was not subject to attachment for the payment of
the debts of the said city.
In that case it was proven that the said wharf was a parcel of land adjacent to the Mississippi River
where all shipments of sugar and molasses taken to New Orleans were unloaded.
That city leased the said wharf to the Louisiana Construction Company, Ltd., in order that it might
erect warehouses so that the merchandise upon discharge might not be spoiled by the elements.
The said company was given the privilege of charging certain fees for storing merchandise in the
said warehouses and the public in general had the right to unload sugar and molasses there by
paying the required fees, 10 per cent of which was turned over to the city treasury.
The United States Supreme Court on an appeal held that the wharf was public property, that it
never ceased to be such in order to become private property of the city; wherefore the company
could not levy execution upon the wharf in order to collect the amount of the judgment rendered in
favor thereof.
In the case of Klein vs. City of New Orleans (98 U. S., 149; 25 Law. ed., 430), the Supreme Court of
the United States that a public wharf on the banks of the Mississippi River was public property and
not subject to execution for the payment of a debt of the City of New Orleans where said wharf was
located.
In this case a parcel of land adjacent to the Mississippi River, which formerly was the shore of the
river and which later enlarged itself by accession, was converted into a wharf by the city for public
use, who charged a certain fee for its use.
It was held that the land was public property as necessary as a public street and was not subject to
execution on account of the debts of the city. It was further held that the fees collected where also
exempt from execution because they were a part of the income of the city.
In the case of Tufexis vs. Olaguera and Municipal Council of Guinobatan (32 Phil., 654), the
question raised was whether for the payment of a debt to a third person by the concessionaire of a
public market, the said public market could be attached and sold at public auction. The Supreme
Court held that:
Even though a creditor is unquestionably entitled to recover out of his debtor's property,
yet when among such property there is included the special right granted by the
Government of usufruct in a building intended for a public service, and when this privilege
is closely related to a service of a public character, such right of the creditor to the
collection of a debt owed him by the debtor who enjoys the said special privilege of
usufruct in a public market is not absolute and may be exercised only through the action of
court of justice with respect to the profits or revenue obtained under the special right of
usufruct enjoyed by debtor.
The special concession of the right of usufruct in a public market cannot be attached like
any ordinary right, because that would be to permit a person who has contracted with the
state or with the administrative officials thereof to conduct and manage a service of a
public character, to be substituted, without the knowledge and consent of the
administrative authorities, by one who took no part in the contract, thus giving rise to the
possibility of the regular course of a public service being disturbed by the more or less legal
action of a grantee, to the prejudice of the state and the public interests.
The privilege or franchise granted to a private person to enjoy the usufruct of a public
market cannot lawfully be attached and sold, and a creditor of such person can recover his
debt only out of the income or revenue obtained by the debtor from the enjoyment or
usufruct of the said privilege, in the same manner that the rights of such creditors of a
railroad company can be exercised and their credit collected only out of the gross receipts
remaining after deduction has been made therefrom of the operating expenses of the road.
(Law of November 12, 1896, extended to the overseas provinces by the royal order of
August 3, 1886.)
For the reasons contained in the authorities above quoted we believe that this court would have
reached the same conclusion if the debtor had been municipality of Guinobatan and the public
market had been levied upon by virtue of the execution.
It is evident that the movable and immovable property of a municipality, necessary for
governmental purpose, may not be attached and sold for the payment of a judgment against the
5
municipality. The supreme reason for this rule is the character of the public use to which such kind
of property is devoted. The necessity for government service justifies that the property of public of
the municipality be exempt from execution just as it is necessary to exempt certain property of
private individuals in accordance with section 452 of the Code of Civil Procedure.
Even the municipal income, according to the above quoted authorities, is exempt from levy and
execution. In volume 1, page 467, Municipal Corporations by Dillon we find that:
Municipal corporations are instituted by the supreme authority of a state for the public
good. They exercise, by delegation from the legislature, a portion of the sovereign power.
The main object of their creation is to act as administrative agencies for the state, and to
provide for the police and local government of certain designated civil divisions of its
territory. To this end they are invested with certain governmental powers and charged with
civil, political, and municipal duties. To enable them beneficially to exercise these powers
and discharge these duties, they are clothed with the authority to raise revenues, chiefly by
taxation, and subordinately by other modes as by licenses, fines, and penalties. The
revenue of the public corporation is the essential means by which it is enabled to perform
its appointed work. Deprived of its regular and adequate supply of revenue, such a
corporation is practically destroyed and the ends of its erection thwarted. Based upon
considerations of this character, it is the settled doctrine of the law that only the public
property but also the taxes and public revenues of such corporations cannot be seized
under execution against them, either in the treasury or when in transit to it. Judgments
rendered for taxes, and the proceeds of such judgments in the hands of officers of the law,
are not subject to execution unless so declared by statute. The doctrine of the inviolability
of the public revenues by the creditor is maintained, although the corporation is in debt,
and has no means of payment but the taxes which it is authorized to collect.
Another error assigned by counsel for appellant is the holding of the court a quo that the proper
remedy for collecting the judgment in favor of the plaintiff was by way or mandamus.
While this question is not necessarily included in the one which is the subject of this appeal, yet we
believe that the holding of the court, assigned as error by appellant's counsel, is true when, after a
judgment is rendered against a municipality, it has no property subject to execution. This doctrine is
maintained by Dillon (Municipal Corporations, vol. 4, par. 1507, 5th ed.) based upon the decisions
of several States of the Union upholding the same principle and which are cited on page 2679 of
the aforesaid work. In this sense this assignment of error, we believe, is groundless.
By virtue of all the foregoing, the judgment appealed from should be and is hereby affirmed with
costs against the appellant. So ordered.
Avancea, C. J., Street, Malcolm, Ostrand, Johns, Romualdez and Villa-Real., JJ., concur.

6
 D. G.R. No. L-29788 August 30, 1972
RAFAEL S. SALAS, in his capacity as Executive Secretary; CONRADO F. ESTRELLA, in his
capacity as Governor of the Land Authority; and LORENZO GELLA, in his capacity as
Register of Deeds of Manila, petitioners-appellants,
vs.
HON. HILARION U. JARENCIO, as Presiding Judge of Branch XXIII, Court of First
Instance of Manila; ANTONIO J. VILLEGAS, in his capacity as Mayor of the City of
Manila; and the CITY OF MANILA, respondents-appellees.
Office of the Solicitor General Felix V. Makasiar, Assistant Solicitor-General Antonio A. Torres,
Solicitor Raul I. Goco and Magno B. Pablo & Cipriano A. Tan, Legal Staff, Land Authority for
petitioners-appellants.
Gregorio A. Ejercito and Felix C. Chavez for respondents-appellees.
ESGUERRA, J.:p
This is a petition for review of the decision of the Court of First Instance of Manila, Branch XXIII, in
Civil Case No. 67946, dated September 23, 1968, the dispositive portion of which is as follows:
WHEREFORE, the Court renders judgment declaring Republic Act No. 4118
unconstitutional and invalid in that it deprived the City of Manila of its property
without due process and payment of just compensation. Respondent Executive
Secretary and Governor of the Land Authority are hereby restrained and enjoined
from implementing the provisions of said law. Respondent Register of Deeds of the
City of Manila is ordered to cancel Transfer Certificate of Title No. 80876 which he
had issued in the name of the Land Tenure Administration and reinstate Transfer
Certificate of Title No. 22547 in the name of the City of Manila which he cancelled,
if that is feasible, or issue a new certificate of title for the same parcel of land in
the name of the City of Manila.1
The facts necessary for a clear understanding of this case are as follows:
On February 24, 1919, the 4th Branch of the Court of First Instance of Manila, acting as a land
registration court, rendered judgment in Case No. 18, G.L.R.O. Record No. 111, declaring the City
of Manila the owner in fee simple of a parcel of land known as Lot No. 1, Block 557 of the Cadastral
Survey of the City of Mani1a, containing an area of 9,689.8 square meters, more or less. Pursuant
to said judgment the Register of Deeds of Manila on August 21, 1920, issued in favor of the City of
Manila, Original Certificate of Title No. 4329 covering the aforementioned parcel of land. On various
dates in 1924, the City of Manila sold portions of the aforementioned parcel of land in favor of Pura
Villanueva. As a consequence of the transactions Original Certificate of Title No. 4329 was cancelled
and transfer certificates of title were issued in favor of Pura Villanueva for the portions purchased
by her. When the last sale to Pura Villanueva was effected on August 22, 1924, Transfer Certificate
of Title No. 21974 in the name of the City of Manila was cancelled and in lieu thereof Transfer
Certificate of Title (TCT) No. 22547 covering the residue thereof known as Lot 1-B-2-B of Block 557,
with an area of 7,490.10 square meters, was issued in the name of the City of Manila.
On September 21, 1960, the Municipal Board of Manila, presided by then Vice-Mayor Antono J.
Villegas, adopted a resolution requesting His Excellency, the President of the Philippines to consider
the feasibility of declaring the City property bounded by Florida, San Andres, and Nebraska Streets,
under Transfer Certificate of Title Nos. 25545 and 22547, containing a total area of 7,450 square
meters as a patrimonial property of the City of Manila for the purpose of reselling these lots to the
actual occupants thereof.2
The said resolution of the Municipil Board of the City of Manila was officially transmitted to the
President of the Philippines by then Vice-Mayor Antonio J. Villegas on September 21, 1960, with the
information that the same resolution was, on the same date, transmitted to the Senate and House
of Representatives of the Congress of the Philippines.3
During the First Session of the Fifth Congress of the Philippines, House Bill No. 191 was filed in the
House of Representatives by then Congressman Bartolome Cabangbang seeking to declare the
property in question as patrimonial property of the City of Manila, and for other purposes. The
explanatory note of the Bill gave the grounds for its enactment, to wit:
In the particular case of the property subject of this bill, the City of Manila does
not seem to have use thereof as a public communal property. As a matter of fact,
a resolution was adopted by the Municipal Board of Manila at its regular session
held on September 21, 1960, to request the feasibility of declaring the city
property bounded by Florida, San Andres and Nebraska Streets as a patrimonial
property of the City of Manila for the purpose of reselling these lots to the actual
occupants thereof. Therefore, it will be to the best interest of society that the said
property be used in one way or another. Since this property has been occupied for
a long time by the present occupants thereof and since said occupants have
expressed their willingness to buy the said property, it is but proper that the same
be sold to them.4
Subsequently, a revised version of the Bill was introduced in the House of Representatives by
Congressmen Manuel Cases, Antonio Raquiza and Nicanor Yiguez as House Bill No. 1453, with the
following explanatory note:
The accompanying bill seeks to convert one (1) parcel of land in the district of
Malate, which is reserved as communal property into a disposable or alienable
property of the State and to provide its subdivision and sale to bona fide
occupants or tenants.
This parcel of land in question was originally an aggregate part of a piece of land
with an area of 9,689.8 square meters, more or less. ... On September 21, 1960,
the Municipal Board of Manila in its regular session unanimously adopted a
resolution requesting the President of the Philippines and Congress of the
Philippines the feasibility of declaring this property into disposable or alienable
property of the State. There is therefore a precedent that this parcel of land could
be subdivided and sold to bona fide occupants. This parcel of land will not serve
any useful public project because it is bounded on all sides by private properties
which were formerly parts of this lot in question.
Approval of this bill will implement the policy of the Administration of land for the
landless and the Fifth Declaration of Principles of the Constitution, which states
7
 that the promotion of Social Justice to insure the well-being and economic security
of all people should be the concern of the State. We are ready and willing to enact
legislation promoting the social and economic well-being of the people whenever
an opportunity for enacting such kind of legislation arises.
In view of the foregoing consideration and to insure fairness and justice to the present bona fide
occupants thereof, approval of this Bill is strongly urged.5
The Bill having been passed by the House of Representatives, the same was thereafter sent to the
Senate where it was thoroughly discussed, as evidenced by the Congressional Records for May 20,
1964, pertinent portion of which is as follows:
SENATOR FERNANDEZ: Mr. President, it will be re called that when the late Mayor
Lacson was still alive, we approved a similar bill. But afterwards, the late Mayor
Lacson came here and protested against the approval, and the approval was
reconsidered. May I know whether the defect in the bill which we approved, has
already been eliminated in this present bill?
SENATOR TOLENTINO: I understand Mr. President, that that has already been
eliminated and that is why the City of Manila has no more objection to this bill.
SENATOR FERNANDEZ: Mr. President, in view of that manifestation and
considering that Mayor Villegas and Congressman Albert of the Fourth District of
Manila are in favor of the bill. I would not want to pretend to know more what is
good for the City of Manila.
SENATOR TOLENTINO: Mr. President, there being no objection, I move that we
approve this bill on second reading.
PRESIDENT PRO-TEMPORE: The biII is approved on second reading after several
Senetors said aye and nobody said nay.
The bill was passed by the Senate, approved by the President on June 20, 1964, and became
Republic Act No. 4118. It reads as follows:
Lot I-B-2-B of Block 557 of the cadastral survey of the City of Manila, situated in
the District of Malate, City of Manila, which is reserved as communal property, is
hereby converted into disposal or alienable land of the State, to be placed under
the disposal of the Land Tenure Administration. The Land Tenure Administration
shall subdivide the property into small lots, none of which shall exceed one
hundred and twenty square meters in area and sell the same on installment basis
to the tenants or bona fide occupants thereof and to individuals, in the order
mentioned: Provided, That no down payment shall be required of tenants or bona
fide occupants who cannot afford to pay such down payment: Provided, further,
That no person can purchase more than one lot: Provided, furthermore, That if the
tenant or bona fide occupant of any given lot is not able to purchase the same, he
shall be given a lease from month to month until such time that he is able to
purchase the lot: Provided, still further, That in the event of lease the rentals
which may be charged shall not exceed eight per cent per annum of the assessed
value of the property leased: And provided, finally, That in fixing the price of each
lot, which shall not exceed twenty pesos per square meter, the cost of subdivision
and survey shall not be included.
Sec. 2. Upon approval of this Act no ejectment proceedings against any tenant or
bona fide occupant of the above lots shall be instituted and any ejectment
proceedings pending in court against any such tenant or bona fide occupant shall
be dismissed upon motion of the defendant: Provided, That any demolition order
directed against any tenant or bona fide occupant shall be lifted.
Sec. 3. Upon approval of this Act, if the tenant or bona fide occupant is in arrears
in the payment of any rentals, the amount legally due shall be liquidated and shall
be payable in twenty-four equal monthly installments from the date of liquidation.
Sec. 4. No property acquired by virtue of this Act shall be transferred, sold,
mortgaged, or otherwise disposed of within a period of five years from the date
full ownership thereof has been vested in the purchaser without the consent of the
Land Tenure Administration.
Sec. 5. In the event of the death of the purchaser prior to the complete payment
of the price of the lot purchased by him, his widow and children shall succeed in all
his rights and obligations with respect to his lot.
Sec. 6. The Chairman of the Land Tenure Administration shall implement and issue
such rules and regulations as may be necessary to carry out the provisions of this
Act.
Sec. 7. The sum of one hundred fifty thousand pesos is appropriated out of any
funds in the National Treasury not otherwise appropriated, to carry out the
purposes of this Act.
Sec. 8. All laws or parts of laws inconsistent with this Act are repealed or modified
accordingly.
Sec. 9. This Act shall take effect upon its approval.
Approved, June 20, 1964.
To implement the provisions of Republic Act No. 4118, and pursuant to the request of the
occupants of the property involved, then Deputy Governor Jose V. Yap of the Land Authority (which
succeeded the Land Tenure Administration) addressed a letter, dated February 18, 1965, to Mayor
Antonio Villegas, furnishing him with a copy of the proposed subdivision plan of said lot as prepared
for the Republic of the Philippines for resale of the subdivision lots by the Land Authority to bona
fide applicants.6
On March 2, 1965, the City Mayor of Manila, through his Executive and Technical Adviser,
acknowledged receipt of the proposed subdivision plan of the property in question and informed the
Land Authority that his office would interpose no objection to the implementation of said law,
provided that its provisions be strictly complied with.7
With the above-mentioned written conformity of the City of Manila for the implementation of
Republic Act No. 4118, the Land Authority, thru then Deputy Governor Jose V. Yap, requested the
City Treasurer of Manila, thru the City Mayor, for the surrender and delivery to the former of the
8
owner's duplicate of Transfer Certificate of Title No. 22547 in order to obtain title thereto in the
name of the Land Authority. The request was duly granted with the knowledge and consent of the
Office of the City Mayor.8
With the presentation of Transfer Certificate of Title No. 22547, which had been yielded as above
stated by the, City authorities to the Land Authority, Transfer Certificate of Title (T.C.T. No. 22547)
was cancelled by the Register of Deeds of Manila and in lieu thereof Transfer Certificate of Title No.
80876 was issued in the name of the Land Tenure Administration (now Land Authority) pursuant to
the provisions of Republic Act No.
4118.9
But due to reasons which do not appear in the record, the City of Manila made a complete turn-
about, for on December 20, 1966, Antonio J. Villegas, in his capacity as the City Mayor of Manila
and the City of Manila as a duly organized public corporation, brought an action for injunction
and/or prohibition with preliminary injunction to restrain, prohibit and enjoin the herein appellants,
particularly the Governor of the Land Authority and the Register of Deeds of Manila, from further
implementing Republic Act No. 4118, and praying for the declaration of Republic Act No. 4118 as
unconstitutional.
With the foregoing antecedent facts, which are all contained in the partial stipulation of facts
submitted to the trial court and approved by respondent Judge, the parties waived the presentation
of further evidence and submitted the case for decision. On September 23, 1968, judgment was
rendered by the trial court declaring Republic Act No. 4118 unconstitutional and invalid on the
ground that it deprived the City of Manila of its property without due process of law and payment of
just compensation. The respondents were ordered to undo all that had been done to carry out the
provisions of said Act and were restrained from further implementing the same.
Two issues are presented for determination, on the resolution of which the decision in this case
hinges, to wit:
I. Is the property involved private or patrimonial property of the City of Manila?
II. Is Republic Act No. 4118 valid and not repugnant to the Constitution?
I.
As regards the first issue, appellants maintain that the land involved is a communal land or "legua
comunal" which is a portion of the public domain owned by the State; that it came into existence as
such when the City of Manila, or any pueblo or town in the Philippines for that matter, was founded
under the laws of Spain, the former sovereign; that upon the establishment of a pueblo, the
administrative authority was required to allot and set aside portions of the public domain for a
public plaza, a church site, a site for public buildings, lands to serve as common pastures and for
streets and roads; that in assigning these lands some lots were earmarked for strictly public
purposes, and ownership of these lots (for public purposes) immediately passed to the new
municipality; that in the case of common lands or "legua comunal", there was no such immediate
acquisition of ownership by the pueblo, and the land though administered thereby, did not
automatically become its property in the absence of an express grant from the Central Government,
and that the reason for this arrangement is that this class of land was not absolutely needed for the
discharge of the municipality's governmental functions.
It is argued that the parcel of land involved herein has not been used by the City of Manila for any
public purpose and had not been officially earmarked as a site for the erection of some public
buildings; that this circumstance confirms the fact that it was originally "communal" land alloted to
the City of Manila by the Central Government not because it was needed in connection with its
organization as a municipality but simply for the common use of its inhabitants; that the present
City of Manila as successor of the Ayuntamiento de Manila under the former Spanish sovereign
merely enjoys the usufruct over said land, and its exercise of acts of ownership by selling parts
thereof did not necessarily convert the land into a patrimonial property of the City of Manila nor
divest the State of its paramount title.
Appellants further argue that a municipal corporation, like a city is a governmental agent of the
State with authority to govern a limited portion of its territory or to administer purely local affairs in
a given political subdivision, and the extent of its authority is strictly delimited by the grant of power
conferred by the State; that Congress has the exclusive power to create, change or destroy
municipal corporations; that even if We admit that legislative control over municipal corporations is
not absolute and even if it is true that the City of Manila has a registered title over the property in
question, the mere transfer of such land by an act of the legislature from one class of public land to
another, without compensation, does not invade the vested rights of the City.
Appellants finally argue that Republic Act No. 4118 has treated the land involved as one reserved
for communal use, and this classification is conclusive upon the courts; that if the City of Manila
feels that this is wrong and its interests have been thereby prejudiced, the matter should be
brought to the attention of Congress for correction; and that since Congress, in the exercise of its
wide discretionary powers has seen fit to classify the land in question as communal, the Courts
certainly owe it to a coordinate branch of the Government to respect such determination and should
not interfere with the enforcement of the law.
Upon the other hand, appellees argue by simply quoting portions of the appealed decision of the
trial court, which read thus:
The respondents (petitioners-appellants herein) contend, among other defenses,
that the property in question is communal property. This contention is, however,
disproved by Original Certificate of Title No. 4329 issued on August 21, 1920 in
favor of the City of Manila after the land in question was registered in the City's
favor. The Torrens Title expressly states that the City of Manila was the owner in
'fee simple' of the said land. Under Sec. 38 of the Land Registration Act, as
amended, the decree of confirmation and registration in favor of the City of Manila
... shall be conclusive upon and against all persons including the Insular
Government and all the branches there ... There is nothing in the said certificate of
title indicating that the land was 'communal' land as contended by the
respondents. The erroneous assumption by the Municipal Board of Manila that the
land in question was communal land did not make it so. The Municipal Board had
no authority to do that.
The respondents, however, contend that Congress had the power and authority to
declare that the land in question was 'communal' land and the courts have no
power or authority to make a contrary finding. This contention is not entirely
correct or accurate. Congress has the power to classify 'land of the public domain',
transfer them from one classification to another and declare them disposable or
9
 not. Such power does not, however, extend to properties which are owned by
cities, provinces and municipalities in their 'patrimonial' capacity.
Art. 324 of the Civil Code provides that properties of provinces, cities and
municipalities are divided into properties for public use and patrimonial property.
Art. 424 of the same code provides that properties for public use consist of
provincial roads, city streets, municipal streets, the squares, fountains, public
waters, promenades and public works for public service paid for by said province,
cities or municipalities. All other property possessed by any of them is patrimonial.
Tested by this criterion the Court finds and holds that the land in question is
patrimonial property of the City of Manila.
Respondents contend that Congress has declared the land in question to be
'communal' and, therefore, such designation is conclusive upon the courts. The
Courts holds otherwise. When a statute is assailed as unconstitutional the Courts
have the power and authority to inquire into the question and pass upon it. This
has long ago been settled in Marbury vs. Madison, 2 L. ed. 60, when the United
States Supreme Court speaking thru Chief Justice Marshall held:
... If an act of the legislature, repugnant to the constitution, is
void, does it, notwithstanding its validity, bind the courts, and
oblige them to give effect? It is emphatically the province and
duty of the judicial department to say what the law is ... So if a
law be in opposition to the constitution; if both the law and the
constitution apply to a particular case, so that the court must
either decide that case conformable to the constitution,
disregarding the law, the court must determine which of these
conflicting rules governs the case. This is of the very essence of
unconstitutional judicial duty.
Appellees finally concluded that when the courts declare a law unconstitutional it does not mean
that the judicial power is superior to the legislative power. It simply means that the power of the
people is superior to both and that when the will of the legislature, declared in statutes, stands in
opposition to that of the people, declared in the Constitution, the judges ought to be governed by
the Constitution rather than by the statutes.
There is one outstanding factor that should be borne in mind in resolving the character of the land
involved, and it is that the City of Manila, although declared by the Cadastral Court as owner in fee
simple, has not shown by any shred of evidence in what manner it acquired said land as its private
or patrimonial property. It is true that the City of Manila as well as its predecessor, the
Ayuntamiento de Manila, could validly acquire property in its corporate or private capacity, following
the accepted doctrine on the dual character public and private of a municipal corporation. And
when it acquires property in its private capacity, it acts like an ordinary person capable of entering
into contracts or making transactions for the transmission of title or other real rights. When it
comes to acquisition of land, it must have done so under any of the modes established by law for
the acquisition of ownership and other real rights. In the absence of a title deed to any land claimed
by the City of Manila as its own, showing that it was acquired with its private or corporate funds,
the presumption is that such land came from the State upon the creation of the municipality (Unson
vs. Lacson, et al., 100 Phil. 695). Originally the municipality owned no patrimonial property except
those that were granted by the State not for its public but for private use. Other properties it owns
are acquired in the course of the exercise of its corporate powers as a juridical entity to which
category a municipal corporation pertains.
Communal lands or "legua comunal" came into existence when a town or pueblo was established in
this country under the laws of Spain (Law VII, Title III, Book VI, Recopilacion de las Leyes de
Indios). The municipalities of the Philippines were not entitled, as a matter of right, to any part of
the public domain for use as communal lands. The Spanish law provided that the usufruct of a
portion of the public domain adjoining municipal territory might be granted by the Government for
communal purposes, upon proper petition, but, until granted, no rights therein passed to the
municipalities, and, in any event, the ultimate title remained in the sovereign (City of Manila vs.
Insular Government, 10 Phil. 327).
For the establishment, then, of new pueblos the administrative authority of the
province, in representation of the Governor General, designated the territory for
their location and extension and the metes and bounds of the same; and before
alloting the lands among the new settlers, a special demarcation was made of the
places which were to serve as the public square of the pueblo, for the erection of
the church, and as sites for the public buildings, among others, the municipal
building or the casa real, as well as of the lands whick were to constitute the
common pastures, and propios of the municipality and the streets and roads which
were to intersect the new town were laid out, ... . (Municipality of Catbalogan vs.
Director of Lands, 17 Phil. 216, 220) (Emphasis supplied)
It may, therefore, be laid down as a general rule that regardless of the source or classification of
land in the possession of a municipality, excepting those acquired with its own funds in its private or
corporate capacity, such property is held in trust for the State for the benefit of its inhabitants,
whether it be for governmental or proprietary purposes. It holds such lands subject to the
paramount power of the legislature to dispose of the same, for after all it owes its creation to it as
an agent for the performance of a part of its public work, the municipality being but a subdivision or
instrumentality thereof for purposes of local administration. Accordingly, the legal situation is the
same as if the State itself holds the property and puts it to a different use (2 McQuilin,Municipal
Corporations, 3rd Ed., p. 197, citing Monagham vs. Armatage, 218 Minn. 27, 15 N. W. 2nd 241).
True it is that the legislative control over a municipal corporation is not absolute even when it
comes to its property devoted to public use, for such control must not be exercised to the extent of
depriving persons of their property or rights without due process of law, or in a manner impairing
the obligations of contracts. Nevertheless, when it comes to property of the municipality which it did
not acquire in its private or corporate capacity with its own funds, the legislature can transfer its
administration and disposition to an agency of the National Government to be disposed of according
to its discretion. Here it did so in obedience to the constitutional mandate of promoting social
justice to insure the well-being and economic security of the people.
It has been held that a statute authorizing the transfer of a Municipal airport to an Airport
Commission created by the legislature, even without compensation to the city, was not violative of
the due process clause of the American Federal Constitution. The Supreme Court of Minnessota
in Monagham vs. Armatage, supra, said:
10
 ... The case is controlled by the further rule that the legislature, having plenary
control of the local municipality, of its creation and of all its affairs, has the right to
authorize or direct the expenditures of money in its treasury, though raised, for a
particular purpose, for any legitimate municipal purpose, or to order and direct a
distribution thereof upon a division of the territory into separate municipalities ... .
The local municipality has no such vested right in or to its public funds, like that
which the Constitution protects in the individual as precludes legislative
interferences. People vs. Power, 25 Ill. 187; State Board (of Education) vs. City, 56
Miss. 518. As remarked by the supreme court of Maryland in Mayor vs. Sehner, 37
Md. 180: "It is of the essence of such a corporation, that the government has the
sole right as trustee of the public interest, at its own good will and pleasure, to
inspect, regulate, control, and direct the corporation, its funds, and franchises."
We therefore hold that c.500, in authorizing the transfer of the use and possession
of the municipal airport to the commission without compensation to the city or to
the park board, does not violate the Fourteenth Amendment to the Constitution of
the United States.
The Congress has dealt with the land involved as one reserved for communal use (terreno
comunal). The act of classifying State property calls for the exercise of wide discretionary legislative
power and it should not be interfered with by the courts.
This brings Us to the second question as regards the validity of Republic Act No. 4118, viewed in
the light of Article III, Sections 1, subsection (1) and (2) of the Constitution which ordain that no
person shall be deprived of his property without due process of law and that no private property
shall be taken for public use without just compensation.
II .
The trial court declared Republic Act No. 4118 unconstitutional for allegedly depriving the City of
Manila of its property without due process of law and without payment of just compensation. It is
now well established that the presumption is always in favor of the constitutionality of a law (U S.
vs. Ten Yu, 24 Phil. 1; Go Ching, et al. vs. Dinglasan, et al., 45 O.G. No. 2, pp. 703, 705). To
declare a law unconstitutional, the repugnancy of that law to the Constitution must be clear and
unequivocal, for even if a law is aimed at the attainment of some public good, no infringement of
constitutional rights is allowed. To strike down a law there must be a clear showing that what the
fundamental law condemns or prohibits, the statute allows it to be done (Morfe vs. Mutuc, et al.,
G.R. No. L-20387, Jan. 31, 1968; 22 SCRA 424). That situation does not obtain in this case as the
law assailed does not in any manner trench upon the constitution as will hereafter be shown.
Republic Act No. 4118 was intended to implement the social justice policy of the Constitution and
the Government program of "Land for the Landless". The explanatory note of House Bill No. 1453
which became Republic Act No. 4118, reads in part as follows:
Approval of this bill will implement the policy of the administration of "land for the
landless" and the Fifth Declaration of Principles of the Constitution which states
that "the promotion of social justice to insure the well-being and economic security
of all people should be the concern of the State." We are ready and willing to
enact legislation promoting the social and economic well-being of the people
whenever an opportunity for enacting such kind of legislation arises.
The respondent Court held that Republic Act No. 4118, "by converting the land in question which
is the patrimonial property of the City of Manila into disposable alienable land of the State and
placing it under the disposal of the Land Tenure Administration violates the provisions of Article
III (Secs. 1 and 2) of the Constitution which ordain that "private property shall not be taken for
public use without just compensation, and that no person shall be deprived of life, liberty or
property without due process of law". In support thereof reliance is placed on the ruling in Province
of Zamboanga del Norte vs. City of Zamboanga, G.R. No. 2440, March 28, 1968; 22 SCRA 1334,
which holds that Congress cannot deprive a municipality of its private or patrimonial property
without due process of law and without payment of just compensation since it has no absolute
control thereof. There is no quarrel over this rule if it is undisputed that the property sought to be
taken is in reality a private or patrimonial property of the municipality or city. But it would be simply
begging the question to classify the land in question as such. The property, as has been previously
shown, was not acquired by the City of Manila with its own funds in its private or proprietary
capacity. That it has in its name a registered title is not questioned, but this title should be deemed
to be held in trust for the State as the land covered thereby was part of the territory of the City of
Manila granted by the sovereign upon its creation. That the National Government, through the
Director of Lands, represented by the Solicitor General, in the cadastral proceedings did not contest
the claim of the City of Manila that the land is its property, does not detract from its character as
State property and in no way divests the legislature of its power to deal with it as such, the state
not being bound by the mistakes and/or negligence of its officers.
One decisive fact that should be noted is that the City of Manila expressly recognized the
paramount title of the State over said land when by its resolution of September 20, 1960, the
Municipal Board, presided by then Vice-Mayor Antonio Villegas, requested "His Excellency the
President of the Philippines to consider the feasibility of declaring the city property bounded by
Florida, San Andres and Nebraska Streets, under Transfer Certificate of Title Nos. 25545 and 25547,
containing an area of 7,450 square meters, as patrimonial property of the City of Manila for the
purpose of reselling these lots to the actual occupants thereof." (See Annex E, Partial Stipulation of
Facts, Civil Case No. 67945, CFI, Manila, p. 121, Record of the Case) [Emphasis Supplied]
The alleged patrimonial character of the land under the ownership of the City of Manila is totally
belied by the City's own official act, which is fatal to its claim since the Congress did not do as
bidden. If it were its patrimonial property why should the City of Manila be requesting the President
to make representation to the legislature to declare it as such so it can be disposed of in favor of
the actual occupants? There could be no more blatant recognition of the fact that said land belongs
to the State and was simply granted in usufruct to the City of Manila for municipal purposes. But
since the City did not actually use said land for any recognized public purpose and allowed it to
remain idle and unoccupied for a long time until it was overrun by squatters, no presumption of
State grant of ownership in favor of the City of Manila may be acquiesced in to justify the claim that
it is its own private or patrimonial property (Municipality of Tigbauan vs. Director of Lands, 35 Phil.
798; City of Manila vs. Insular Government, 10 Phil. 327; Municipality of Luzuriaga vs. Director of
Lands, 24 Phil. 193). The conclusion of the respondent court that Republic Act No. 4118 converted
a patrimonial property of the City of Manila into a parcel of disposable land of the State and took it
away from the City without compensation is, therefore, unfounded. In the last analysis the land in
question pertains to the State and the City of Manila merely acted as trustee for the benefit of the
people therein for whom the State can legislate in the exercise of its legitimate powers.
11
Republic Act No. 4118 was never intended to expropriate the property involved but merely to
confirm its character as communal land of the State and to make it available for disposition by the
National Government: And this was done at the instance or upon the request of the City of Manila
itself. The subdivision of the land and conveyance of the resulting subdivision lots to the occupants
by Congressional authorization does not operate as an exercise of the power of eminent domain
without just compensation in violation of Section 1, subsection (2), Article III of the Constitution,
but simply as a manifestation of its right and power to deal with state property.
It should be emphasized that the law assailed was enacted upon formal written petition of the
Municipal Board of Manila in the form of a legally approved resolution. The certificate of title over
the property in the name of the City of Manila was accordingly cancelled and another issued to the
Land Tenure Administration after the voluntary surrender of the City's duplicate certificate of title by
the City Treasurer with the knowledge and consent of the City Mayor. To implement the provisions
of Republic Act No. 4118, the then Deputy Governor of the Land Authority sent a letter, dated
February 18, 1965, to the City Mayor furnishing him with a copy of the "proposed subdivision plan
of the said lot as prepared for the Republic of the Philippines for subdivision and resale by the Land
Authority to bona fide applicants." On March 2, 1965, the Mayor of Manila, through his Executive
and Technical Adviser, acknowledged receipt of the subdivision plan and informed the Land
Authority that his Office "will interpose no objection to the implementation of said law provided that
its provisions are strictly complied with." The foregoing sequence of events, clearly indicate a
pattern of regularity and observance of due process in the reversion of the property to the National
Government. All such acts were done in recognition by the City of Manila of the right and power of
the Congress to dispose of the land involved.
Consequently, the City of Manila was not deprived of anything it owns, either under the due process
clause or under the eminent domain provisions of the Constitution. If it failed to get from the
Congress the concession it sought of having the land involved given to it as its patrimonial property,
the Courts possess no power to grant that relief. Republic Act No. 4118 does not, therefore, suffer
from any constitutional infirmity.
WHEREFORE, the appealed decision is hereby reversed, and petitioners shall proceed with the free
and untrammeled implementation of Republic Act No. 4118 without any obstacle from the
respondents. Without costs.
Concepcion, C.J., Makalintal, Zaldivar, Castro, Fernando, Teehankee and Antonio, JJ., concur.
Barredo and Makasiar, JJ., took no part.

12
 E. G.R. No. L-61744 June 25, 1984
MUNICIPALITY OF SAN MIGUEL, BULACAN, petitioner,
vs.
HONORABLE OSCAR C. FERNANDEZ, in his capacity as the Presiding Judge, Branch IV,
Baliuag, Bulacan, The PROVINCIAL SHERIFF of Bulacan, MARGARITA D. VDA. DE
IMPERIO, ADORACION IMPERIO, RODOLFO IMPERIO, CONRADO IMPERIO, ERNESTO
IMPERIO, ALFREDO IMPERIO, CARLOS IMPERIO, JR., JUAN IMPERIO and SPOUSES
MARCELO PINEDA and LUCILA PONGCO, respondents.
Pascual C. Liatchko for petitioner.
The Solicitor General and Marcelo Pineda for respondents.
RELOVA, J.:
In Civil Case No. 604-B, entitled "Margarita D. Vda. de Imperio, et al. vs. Municipal Government of
San Miguel, Bulacan, et al.", the then Court of First Instance of Bulacan, on April 28, 1978, rendered
judgment holding herein petitioner municipality liable to private respondents, as follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the
plaintiffs and against the defendant Municipal Government of San Miguel Bulacan,
represented by Mayor Mar Marcelo G. Aure and its Municipal Treasurer:
1. ordering the partial revocation of the Deed of Donation signed by the deceased
Carlos Imperio in favor of the Municipality of San Miguel Bulacan, dated October
27, 1947 insofar as Lots Nos. 1, 2, 3, 4 and 5, Block 11 of Subdivision Plan Psd-
20831 are concerned, with an aggregate total area of 4,646 square meters, which
lots are among those covered and described under TCT No. T-1831 of the Register
of Deeds of Bulacan in the name of the Municipal Government of San Miguel
Bulacan,
2. ordering the defendant to execute the corresponding Deed of Reconveyance
over the aforementioned five lots in favor of the plaintiffs in the proportion of the
undivided one-half () share in the name of plaintiffs Margarita D. Vda. de
Imperio, Adoracion, Rodolfo, Conrado, Ernesto, Alfredo, Carlos, Jr. and Juan, all
surnamed Imperio, and the remaining undivided one-half () share in favor of
plaintiffs uses Marcelo E. Pineda and Lucila Pongco;
3. ordering the defendant municipality to pay to the plaintiffs in the proportion
mentioned in the immediately preceding paragraph the sum of P64,440.00
corresponding to the rentals it has collected from the occupants for their use and
occupation of the premises from 1970 up to and including 1975, plus interest
thereon at the legal rate from January 1970 until fully paid;
4. ordering the restoration of ownership and possession over the five lots in
question in favor of the plaintiffs in the same proportion aforementioned;
5. ordering the defendant to pay the plaintiffs the sum of P3,000.00 for attomey's
fees; and to pay the cost of suit.
The counterclaim of the defendant is hereby ordered dismissed for lack of
evidence presented to substantiate the same.
SO ORDERED. (pp. 11-12, Rollo)
The foregoing judgment became final when herein petitioner's appeal was dismissed due to its
failure to file the record on appeal on time. The dismissal was affirmed by the then Court of Appeals
in CA-G.R. No. SP-12118 and by this Court in G.R. No. 59938. Thereafter, herein private
respondents moved for issuance of a writ of execution for the satisfaction of the judgment.
Respondent judge, on July 27, 1982, issued an order, to wit:
Considering that an entry of judgment had already been made on June 14, 1982 in
G. R. No. L-59938 and;
Considering further that there is no opposition to plaintiffs' motion for execution
dated July 23, 1983;
Let a writ of execution be so issued, as prayed for in the aforestated motion. (p.
10, Rollo)
Petitioner, on July 30, 1982, filed a Motion to Quash the writ of execution on the ground that the
municipality's property or funds are all public funds exempt from execution. The said motion to
quash was, however, denied by the respondent judge in an order dated August 23, 1982 and the
alias writ of execution stands in full force and effect.
On September 13, 1982, respondent judge issued an order which in part, states:
It is clear and evident from the foregoing that defendant has more than enough
funds to meet its judgment obligation. Municipal Treasurer Miguel C, Roura of San
Miguel, Bulacan and Provincial Treasurer of Bulacan Agustin O. Talavera are
therefor hereby ordered to comply with the money judgment rendered by Judge
Agustin C. Bagasao against said municipality. In like manner, the municipal
authorities of San Miguel, Bulacan are likewise ordered to desist from plaintiffs'
legal possession of the property already returned to plaintiffs by virtue of the alias
writ of execution.
Finally, defendants are hereby given an inextendible period of ten (10) days from
receipt of a copy of this order by the Office of the Provincial Fiscal of Bulacan
within which to submit their written compliance, (p. 24, Rollo)
When the treasurers (provincial and municipal) failed to comply with the order of September 13,
1982, respondent judge issued an order for their arrest and that they will be release only upon
compliance thereof.
Hence, the present petition on the issue whether the funds of the Municipality of San Miguel,
Bulacan, in the hands of the provincial and municipal treasurers of Bulacan and San Miguel,
respectively, are public funds which are exempt from execution for the satisfaction of the money
judgment in Civil Case No. 604-B.
Well settled is the rule that public funds are not subject to levy and execution. The reason for this
was explained in the case of Municipality of Paoay vs. Manaois, 86 Phil. 629 "that they are held in
trust for the people, intended and used for the accomplishment of the purposes for which municipal
13
corporations are created, and that to subject said properties and public funds to execution would Teehankee (Chairman), Melencio-Herrera, Plana, Gutierrez, Jr., and De la Fuente, JJ,. concur.
materially impede, even defeat and in some instances destroy said purpose." And, in Tantoco vs.
Municipal Council of Iloilo, 49 Phil. 52, it was held that "it is the settled doctrine of the law that not
only the public property but also the taxes and public revenues of such corporations Cannot be
seized under execution against them, either in the treasury or when in transit to it. Judgments
rendered for taxes, and the proceeds of such judgments in the hands of officers of the law, are not
subject to execution unless so declared by statute." Thus, it is clear that all the funds of petitioner
municipality in the possession of the Municipal Treasurer of San Miguel, as well as those in the
possession of the Provincial Treasurer of Bulacan, are also public funds and as such they are
exempt from execution.
Besides, Presidential Decree No. 477, known as "The Decree on Local Fiscal Administration", Section
2 (a), provides:
SEC. 2. Fundamental Principles. Local government financial affairs, transactions,
and operations shall be governed by the fundamental principles set forth
hereunder:
(a) No money shall be paid out of the treasury except in pursuance of a lawful
appropriation or other specific statutory authority.
xxx xxx xxx
Otherwise stated, there must be a corresponding appropriation in the form of an ordinance duly
passed by the Sangguniang Bayan before any money of the municipality may be paid out. In the
case at bar, it has not been shown that the Sangguniang Bayan has passed an ordinance to this
effect.
Furthermore, Section 15, Rule 39 of the New Rules of Court, outlines the procedure for the
enforcement of money judgment:
(a) By levying on all the property of the debtor, whether real or personal, not
otherwise exempt from execution, or only on such part of the property as is
sufficient to satisfy the judgment and accruing cost, if he has more than sufficient
property for the purpose;
(b) By selling the property levied upon;
(c) By paying the judgment-creditor so much of the proceeds as will satisfy the
judgment and accruing costs; and
(d) By delivering to the judgment-debtor the excess, if any, unless otherwise,
directed by judgment or order of the court.
The foregoing has not been followed in the case at bar.
ACCORDINGLY, the petition is granted and the order of respondent judge, dated July 27, 1982,
granting issuance of a writ of execution; the alias writ of execution, dated July 27, 1982; and the
order of respondent judge, dated September 13, 1982, directing the Provincial Treasurer of Bulacan
and the Municipal Treasurer of San Miguel, Bulacan to comply with the money judgments, are SET
ASIDE; and respondents are hereby enjoined from implementing the writ of execution.
SO ORDERED.
14
 F. G.R. No. L-24440 March 28, 1968
THE PROVINCE OF ZAMBOANGA DEL NORTE, plaintiff-appellee,
vs.
CITY OF ZAMBOANGA, SECRETARY OF FINANCE and COMMISSIONER OF INTERNAL
REVENUE,defendants-appellants.
Fortugaleza, Lood, Sarmiento, M. T. Yap & Associates for plaintiff-appellee.
Office of the Solicitor General for defendants-appellants.
BENGZON, J.P., J.:
Prior to its incorporation as a chartered city, the Municipality of Zamboanga used to be the
provincial capital of the then Zamboanga Province. On October 12, 1936, Commonwealth Act 39
was approved converting the Municipality of Zamboanga into Zamboanga City. Sec. 50 of the Act
also provided that
Buildings and properties which the province shall abandon upon the transfer of the
capital to another place will be acquired and paid for by the City of Zamboanga at a price
to be fixed by the Auditor General.
The properties and buildings referred to consisted of 50 lots and some buildings constructed
thereon, located in the City of Zamboanga and covered individually by Torrens certificates of title in
the name of Zamboanga Province. As far as can be gleaned from the records, 1 said properties were
being utilized as follows
No. of Lots Use
1 ................................................ Capitol Site
3 ................................................ School Site
3 ................................................ Hospital Site
3 ................................................ Leprosarium
1 ................................................ Curuan School
1 ................................................ Trade School
2 ................................................ Burleigh School
2 ................................................ High School Playground
9 ................................................ Burleighs
1 ................................................ Hydro-Electric Site (Magay)
1 ................................................ San Roque
23 ................................................ vacant
It appears that in 1945, the capital of Zamboanga Province was transferred to
Dipolog. 2 Subsequently, or on June 16, 1948, Republic Act 286 was approved creating the
municipality of Molave and making it the capital of Zamboanga Province.
On May 26, 1949, the Appraisal Committee formed by the Auditor General, pursuant to
Commonwealth Act 39, fixed the value of the properties and buildings in question left by
Zamboanga Province in Zamboanga City at P1,294,244.00. 3
On June 6, 1952, Republic Act 711 was approved dividing the province of Zamboanga into
two (2): Zamboanga del Norte and Zamboanga del Sur. As to how the assets and obligations of the
old province were to be divided between the two new ones, Sec. 6 of that law provided:
Upon the approval of this Act, the funds, assets and other properties and the
obligations of the province of Zamboanga shall be divided equitably between the Province
of Zamboanga del Norte and the Province of Zamboanga del Sur by the President of the
Philippines, upon the recommendation of the Auditor General.
Pursuant thereto, the Auditor General, on January 11, 1955, apportioned the assets and
obligations of the defunct Province of Zamboanga as follows: 54.39% for Zamboanga del Norte and
45.61% for Zamboanga del Sur. Zamboanga del Norte therefore became entitled to 54.39% of
P1,294,244.00, the total value of the lots and buildings in question, or P704,220.05 payable by
Zamboanga City.
On March 17, 1959, the Executive Secretary, by order of the President, issued a
ruling 4 holding that Zamboanga del Norte had a vested right as owner (should be co-owner pro-
indiviso) of the properties mentioned in Sec. 50 of Commonwealth Act 39, and is entitled to the
price thereof, payable by Zamboanga City. This ruling revoked the previous Cabinet Resolution of
July 13, 1951 conveying all the said 50 lots and buildings thereon to Zamboanga City for P1.00,
effective as of 1945, when the provincial capital of the then Zamboanga Province was transferred to
Dipolog.
The Secretary of Finance then authorized the Commissioner of Internal Revenue to deduct
an amount equal to 25% of the regular internal revenue allotment for the City of Zamboanga for
the quarter ending March 31, 1960, then for the quarter ending June 30, 1960, and again for the
first quarter of the fiscal year 1960-1961. The deductions, all aggregating P57,373.46, was credited
to the province of Zamboanga del Norte, in partial payment of the P764,220.05 due it.
However, on June 17, 1961, Republic Act 3039 was approved amending Sec. 50 of
Commonwealth Act 39 by providing that
All buildings, properties and assets belonging to the former province of Zamboanga
and located within the City of Zamboanga are hereby transferred, free of charge, in favor
of the said City of Zamboanga. (Stressed for emphasis).
Consequently, the Secretary of Finance, on July 12, 1961, ordered the Commissioner of
Internal Revenue to stop from effecting further payments to Zamboanga del Norte and to return to
Zamboanga City the sum of P57,373.46 taken from it out of the internal revenue allotment of
Zamboanga del Norte. Zamboanga City admits that since the enactment of Republic Act 3039,
P43,030.11 of the P57,373.46 has already been returned to it.
15
 This constrained plaintiff-appellee Zamboanga del Norte to file on March 5, 1962, a
complaint entitled "Declaratory Relief with Preliminary Mandatory Injunction" in the Court of First
Instance of Zamboanga del Norte against defendants-appellants Zamboanga City, the Secretary of
Finance and the Commissioner of Internal Revenue. It was prayed that: (a) Republic Act 3039 be
declared unconstitutional for depriving plaintiff province of property without due process and just
compensation; (b) Plaintiff's rights and obligations under said law be declared; (c) The Secretary of
Finance and the Internal Revenue Commissioner be enjoined from reimbursing the sum of
P57,373.46 to defendant City; and (d) The latter be ordered to continue paying the balance of
P704,220.05 in quarterly installments of 25% of its internal revenue allotments.
On June 4, 1962, the lower court ordered the issuance of preliminary injunction as prayed
for. After defendants filed their respective answers, trial was held. On August 12, 1963, judgment
was rendered, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered declaring Republic Act No. 3039
unconstitutional insofar as it deprives plaintiff Zamboanga del Norte of its private
properties, consisting of 50 parcels of land and the improvements thereon under
certificates of title (Exhibits "A" to "A-49") in the name of the defunct province of
Zamboanga; ordering defendant City of Zamboanga to pay to the plaintiff the sum of
P704,220.05 payment thereof to be deducted from its regular quarterly internal revenue
allotment equivalent to 25% thereof every quarter until said amount shall have been fully
paid; ordering defendant Secretary of Finance to direct defendant Commissioner of Internal
Revenue to deduct 25% from the regular quarterly internal revenue allotment for
defendant City of Zamboanga and to remit the same to plaintiff Zamboanga del Norte until
said sum of P704,220.05 shall have been fully paid; ordering plaintiff Zamboanga del Norte
to execute through its proper officials the corresponding public instrument deeding to
defendant City of Zamboanga the 50 parcels of land and the improvements thereon under
the certificates of title (Exhibits "A" to "A-49") upon payment by the latter of the aforesaid
sum of P704,220.05 in full; dismissing the counterclaim of defendant City of Zamboanga;
and declaring permanent the preliminary mandatory injunction issued on June 8, 1962,
pursuant to the order of the Court dated June 4, 1962. No costs are assessed against the
defendants.
It is SO ORDERED.
Subsequently, but prior to the perfection of defendants' appeal, plaintiff province filed a
motion to reconsider praying that Zamboanga City be ordered instead to pay the P704,220.05 in
lump sum with 6% interest per annum. Over defendants' opposition, the lower court granted
plaintiff province's motion.
The defendants then brought the case before Us on appeal.
Brushing aside the procedural point concerning the property of declaratory relief filed in the
lower court on the assertion that the law had already been violated and that plaintiff sought to give
it coercive effect, since assuming the same to be true, the Rules anyway authorize the conversion
of the proceedings to an ordinary action, 5 We proceed to the more important and principal question
of the validity of Republic Act 3039.
The validity of the law ultimately depends on the nature of the 50 lots and buildings thereon
in question. For, the matter involved here is the extent of legislative control over the properties of a
municipal corporation, of which a province is one. The principle itself is simple: If the property is
owned by the municipality (meaning municipal corporation) in its public and governmental capacity,
the property is public and Congress has absolute control over it. But if the property is owned in its
private or proprietary capacity, then it is patrimonial and Congress has no absolute control. The
municipality cannot be deprived of it without due process and payment of just compensation. 6
The capacity in which the property is held is, however, dependent on the use to which it is
intended and devoted. Now, which of two norms, i.e., that of the Civil Code or that obtaining under
the law of Municipal Corporations, must be used in classifying the properties in question?
The Civil Code classification is embodied in its Arts. 423 and 424 which provide:1wph1.t
ART. 423. The property of provinces, cities, and municipalities is divided into
property for public use and patrimonial property.
ART. 424. Property for public use, in the provinces, cities, and municipalities,
consists of the provincial roads, city streets, municipal streets, the squares, fountains,
public waters, promenades, and public works for public service paid for by said provinces,
cities, or municipalities.
All other property possessed by any of them is patrimonial and shall be governed by this
Code, without prejudice to the provisions of special laws. (Stressed for emphasis).
Applying the above cited norm, all the properties in question, except the two (2) lots used as
High School playgrounds, could be considered as patrimonial properties of the former Zamboanga
province. Even the capital site, the hospital and leprosarium sites, and the school sites will be
considered patrimonial for they are not for public use. They would fall under the phrase "public
works for public service" for it has been held that under the ejusdem generis rule, such public works
must be for free and indiscriminate use by anyone, just like the preceding enumerated properties in
the first paragraph of Art 424. 7 The playgrounds, however, would fit into this category.
This was the norm applied by the lower court. And it cannot be said that its actuation was
without jurisprudential precedent for in Municipality of Catbalogan v. Director of Lands , 8 and
in Municipality of Tacloban v. Director of Lands, 9 it was held that the capitol site and the school
sites in municipalities constitute their patrimonial properties. This result is understandable because,
unlike in the classification regarding State properties, properties for public service in the
municipalities are not classified as public. Assuming then the Civil Code classification to be the
chosen norm, the lower court must be affirmed except with regard to the two (2) lots used as
playgrounds.
On the other hand, applying the norm obtaining under the principles constituting the law of
Municipal Corporations, all those of the 50 properties in question which are devoted to public
service are deemed public; the rest remain patrimonial. Under this norm, to be considered public, it
is enough that the property be held and, devoted for governmental purposes like local
administration, public education, public health, etc. 10
Supporting jurisprudence are found in the following cases: (1) HINUNANGAN V. DIRECTOR
OF LANDS, 11where it was stated that "... where the municipality has occupied lands distinctly for
public purposes, such as for the municipal court house, the public school, the public market, or
other necessary municipal building, we will, in the absence of proof to the contrary, presume a
grant from the States in favor of the municipality; but, as indicated by the wording, that rule may
16
be invoked only as to property which is used distinctly for public purposes...." (2) VIUDA DE
TANTOCO V. MUNICIPAL COUNCIL OF ILOILO 12 held that municipal properties necessary for 5562 ...................................... 180 ...................................... Burleigh School
governmental purposes are public in nature. Thus, the auto trucks used by the municipality for
5565 ...................................... 172-B ...................................... Burleigh
street sprinkling, the police patrol automobile, police stations and concrete structures with the
corresponding lots used as markets were declared exempt from execution and attachment since 5570 ...................................... 171-A ...................................... Burleigh
they were not patrimonial properties. (3) MUNICIPALITY OF BATANGAS VS. CANTOS 13 held
squarely that a municipal lot which had always been devoted to school purposes is one dedicated to 5571 ...................................... 172-C ...................................... Burleigh
public use and is not patrimonial property of a municipality.
5572 ...................................... 174 ...................................... Burleigh
Following this classification, Republic Act 3039 is valid insofar as it affects the lots used as
capitol site, school sites and its grounds, hospital and leprosarium sites and the high school 5573 ...................................... 178 ...................................... Burleigh
playground sites a total of 24 lots since these were held by the former Zamboanga province in
its governmental capacity and therefore are subject to the absolute control of Congress. Said lots 5585 ...................................... 171-B ...................................... Burleigh
considered as public property are the following:
5586 ...................................... 173 ...................................... Burleigh
TCT
Lot Number Use 5587 ...................................... 172-A ...................................... Burleigh
Number

2200 ...................................... 4-B ...................................... Capitol Site We noticed that the eight Burleigh lots above described are adjoining each other and in turn
are between the two lots wherein the Burleigh schools are built, as per records appearing herein
2816 ...................................... 149 ...................................... School Site and in the Bureau of Lands. Hence, there is sufficient basis for holding that said eight lots constitute
the appurtenant grounds of the Burleigh schools, and partake of the nature of the same.
3281 ...................................... 1224 ...................................... Hospital Site
Regarding the several buildings existing on the lots above-mentioned, the records do not
3282 ...................................... 1226 ...................................... Hospital Site disclose whether they were constructed at the expense of the former Province of Zamboanga.
Considering however the fact that said buildings must have been erected even before 1936 when
3283 ...................................... 1225 ...................................... Hospital Site Commonwealth Act 39 was enacted and the further fact that provinces then had no power to
authorize construction of buildings such as those in the case at bar at their own expense, 14 it can
3748 ...................................... 434-A-1 ...................................... School Site be assumed that said buildings were erected by the National Government, using national funds.
Hence, Congress could very well dispose of said buildings in the same manner that it did with the
5406 ...................................... 171 ...................................... School Site
lots in question.
High School Play- But even assuming that provincial funds were used, still the buildings constitute mere
5564 ...................................... 168 ......................................
ground accessories to the lands, which are public in nature, and so, they follow the nature of said lands,
i.e., public. Moreover, said buildings, though located in the city, will not be for the exclusive use and
157 & benefit of city residents for they could be availed of also by the provincial residents. The province
5567 ...................................... ...................................... Trade School
158 then and its successors-in-interest are not really deprived of the benefits thereof.
High School Play- But Republic Act 3039 cannot be applied to deprive Zamboanga del Norte of its share in the
5583 ...................................... 167 ......................................
ground value of the rest of the 26 remaining lots which are patrimonial properties since they are not being
utilized for distinctly, governmental purposes. Said lots are:
6181 ...................................... (O.C.T.) ...................................... Curuan School
TCT Number Lot Number Use
11942 ...................................... 926 ...................................... Leprosarium
5577 ...................................... 177 ...................................... Mydro, Magay
11943 ...................................... 927 ...................................... Leprosarium
13198 ...................................... 127-0 ...................................... San Roque
11944 ...................................... 925 ...................................... Leprosarium
5569 ...................................... 169 ...................................... Burleigh 15
5557 ...................................... 170 ...................................... Burleigh School

17
 We are more inclined to uphold this latter view. The controversy here is more along the
5558 ...................................... 175 ...................................... Vacant domains of the Law of Municipal Corporations State vs. Province than along that of Civil Law.
Moreover, this Court is not inclined to hold that municipal property held and devoted to public
5559 ...................................... 188 ...................................... "
service is in the same category as ordinary private property. The consequences are dire. As ordinary
5560 ...................................... 183 ...................................... " private properties, they can be levied upon and attached. They can even be acquired thru adverse
possession all these to the detriment of the local community. Lastly, the classification of
5561 ...................................... 186 ...................................... " properties other than those for public use in the municipalities as patrimonial under Art. 424 of the
Civil Code is "... without prejudice to the provisions of special laws." For purpose of this article,
5563 ...................................... 191 ...................................... " the principles, obtaining under the Law of Municipal Corporations can be considered as "special
laws". Hence, the classification of municipal property devoted for distinctly governmental purposes
5566 ...................................... 176 ...................................... "
as public should prevail over the Civil Code classification in this particular case.
5568 ...................................... 179 ...................................... " Defendants' claim that plaintiff and its predecessor-in-interest are "guilty of laches is without
merit. Under Commonwealth Act 39, Sec. 50, the cause of action in favor of the defunct
5574 ...................................... 196 ...................................... " Zamboanga Province arose only in 1949 after the Auditor General fixed the value of the properties
5575 ...................................... 181-A ...................................... " in question. While in 1951, the Cabinet resolved transfer said properties practically for free to
Zamboanga City, a reconsideration thereof was seasonably sought. In 1952, the old province was
5576 ...................................... 181-B ...................................... " dissolved. As successor-in-interest to more than half of the properties involved, Zamboanga del
Norte was able to get a reconsideration of the Cabinet Resolution in 1959. In fact, partial payments
5578 ...................................... 182 ...................................... " were effected subsequently and it was only after the passage of Republic Act 3039 in 1961 that the
present controversy arose. Plaintiff brought suit in 1962. All the foregoing, negative laches.
5579 ...................................... 197 ...................................... "
It results then that Zamboanga del Norte is still entitled to collect from the City of
5580 ...................................... 195 ...................................... " Zamboanga the former's 54.39% share in the 26 properties which are patrimonial in nature, said
share to computed on the basis of the valuation of said 26 properties as contained in Resolution No.
5581 ...................................... 159-B ...................................... " 7, dated March 26, 1949, of the Appraisal Committee formed by the Auditor General.
5582 ...................................... 194 ...................................... " Plaintiff's share, however, cannot be paid in lump sum, except as to the P43,030.11 already
returned to defendant City. The return of said amount to defendant was without legal basis.
5584 ...................................... 190 ...................................... " Republic Act 3039 took effect only on June 17, 1961 after a partial payment of P57,373.46 had
already been made. Since the law did not provide for retroactivity, it could not have validly affected
5588 ...................................... 184 ...................................... " a completed act. Hence, the amount of P43,030.11 should be immediately returned by defendant
City to plaintiff province. The remaining balance, if any, in the amount of plaintiff's 54.39% share in
5589 ...................................... 187 ...................................... "
the 26 lots should then be paid by defendant City in the same manner originally adopted by the
5590 ...................................... 189 ...................................... " Secretary of Finance and the Commissioner of Internal Revenue, and not in lump sum. Plaintiff's
prayer, particularly pars. 5 and 6, read together with pars. 10 and 11 of the first cause of action
5591 ...................................... 192 ...................................... " recited in the complaint 17clearly shows that the relief sought was merely the continuance of the
quarterly payments from the internal revenue allotments of defendant City. Art. 1169 of the Civil
5592 ...................................... 193 ...................................... " Code on reciprocal obligations invoked by plaintiff to justify lump sum payment is inapplicable since
there has been so far in legal contemplation no complete delivery of the lots in question. The titles
5593 ...................................... 185 ...................................... "
to the registered lots are not yet in the name of defendant Zamboanga City.
7379 ...................................... 4147 ...................................... " WHEREFORE, the decision appealed from is hereby set aside and another judgment is
hereby entered as follows:.
Moreover, the fact that these 26 lots are registered strengthens the proposition that they are
truly private in nature. On the other hand, that the 24 lots used for governmental purposes are also (1) Defendant Zamboanga City is hereby ordered to return to plaintiff Zamboanga del Norte
registered is of no significance since registration cannot convert public property to private. 16 in lump sum the amount of P43,030.11 which the former took back from the latter out of the sum
of P57,373.46 previously paid to the latter; and

18
 (2) Defendants are hereby ordered to effect payments in favor of plaintiff of whatever
balance remains of plaintiff's 54.39% share in the 26 patrimonial properties, after deducting
therefrom the sum of P57,373.46, on the basis of Resolution No. 7 dated March 26, 1949 of the
Appraisal Committee formed by the Auditor General, by way of quarterly payments from the
allotments of defendant City, in the manner originally adopted by the Secretary of Finance and the
Commissioner of Internal Revenue. No costs. So ordered.
Reyes, J.B.L., Actg. C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ.,
concur.
Concepcion, C.J., is on leave.

19
 G. 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 quo between the
parties pending our decision. 1 Now we shall rule on the merits.
This dispute goes back to November 7, 1961, when the municipal council of San Fernando adopted
Resolution No. 218 authorizing some 24 members of the Fernandino United Merchants and Traders
Association to construct permanent 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. 10The 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 16 and 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.
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
20
 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.
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
21
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.

22
 H. G.R. No. L-66575 September 30, 1986 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.
ADRIANO MANECLANG, JULIETA, RAMONA, VICTOR, ANTONINA, LOURDES, TEODORO
Manaoag, 38 Phil. 4551; and considering further that neither the mere construction of irrigation
and MYRNA, all surnamed MANECLANG, petitioners,
dikes by the National Irrigation Administration which prevented the water from flowing in and out of
vs.
the subject fishpond, nor its conversion into a fishpond, alter or change the nature of the creek as a
THE INTERMEDIATE APPELLATE COURT and ALFREDO MAZA, CORLETO CASTRO,
property of the public domain, the Court finds the Compromise Agreement null and void and of no
SALOME RODRIGUEZ, EDUCARDO CUISON, FERNANDO ZARCILLA, MARIANO GABRIEL,
legal effect, the same being contrary to law and public policy.
NICOMEDES CORDERO, CLETO PEDROZO, FELIX SALARY and JOSE
PANLILIO, respondents. 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
Loreto Novisteros for petitioners.
municipal council is clothed with authority to pass, as it did the two resolutions dealing with its
Corleto R. Castro for respondents. 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.
FERNAN, J.:
IN VIEW OF THE FOREGOING, the Court Resolved to set aside the Compromise Agreement and
Petitioners Adriano Maneclang, et. al. filed before the then Court of First Instance of Pangasinan, declare the same null and void for being contrary to law and public policy. The Court further
Branch XI a complaint for quieting of title over a certain fishpond located within the four [41 parcels resolved to DISMISS the instant petition for lack of merit.
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
23
 I. G.R. No. L-57461 September 11, 1987 not originallyconvert the land from public to private land, but only confirm such a
conversion already affected (sic) from the moment the required period of
THE DIRECTOR OF LANDS, petitioner,
possession became complete.
vs.
MANILA ELECTRIC COMPANY and HON. RIZALINA BONIFACIO VERA, as Presiding Coming to the case at bar, if the land was already private at the time Meralco bought it from
Judge, Court of First Instance of Rizal, Pasig, Branch XXIII, respondents. 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
CORTES, J.:
confirmation of title under Section 48 of Commonwealth Act No. 141, the Public Land Act.
This is an appeal by certiorari of a decision of the respondent Judge in Land Registration Case No.
As ruled in the Acme case, the fact that the confirmation proceedings were instituted by a
N-10317 LRC Record No. N-54803 entitled "In Re: Application for Registration of Title, Manila
corporation is simply another accidental circumstance, "productive of a defect hardly more than
Electric Company, applicant," dated May 29, 1981.
procedural and in nowise affecting the substance and merits of the right of ownership sought to be
The facts are not disputed. Manila Electric Company filed an amended application for registration of confirmed in said proceedings." Considering that it is not disputed that the Natividads could have
a parcel of land located in Taguig, Metro Manila on December 4, 1979. On August 17, 1976, had their title confirmed, only a rigid subservience to the letter of the law would deny private
applicant acquired the land applied for registration by purchase from Ricardo Natividad (Exhibit E) respondent the right to register its property which was validly acquired.
who in turn acquired the same from his father Gregorio Natividad as evidenced by a Deed of
WHEREFORE, the petition is DENIED. The questioned decision of the respondent Judge is
Original Absolute Sale executed on December 28, 1970 (Exhibit E). Applicant's predecessors-in-
AFFIRMED.
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 SO ORDERED.
taxes due thereon have been paid (Exhibits J and J-1).
Fernan (Chairman), Feliciano and Bidin JJ., concur.
On May 29, 1981 respondent Judge rendered a decision ordering the registration of the property in
Separate Opinions
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 GUTIERREZ, JR., J.:, dissenting.
filed by the respondents, the Court gave the petition due course. The legal issue raised by the
It is my view that Article XII, Section 3 of the Constitution which prohibits private corporations or
petitioner Director of Lands has been squarely dealt with in two recent cases (The Director of Lands
associations from holding alienable lands of the public domain except by lease is circumvented
v. Intermediate Appellate Court and Acme Plywood & Veneer Co., Inc., etc., No. L-73002
when we allow corporations to apply for judicial confirmation of imperfect titles to public land. I,
(December 29, 1986), 146 SCRA 509. The Director of Lands v. Hon. Bengzon and Dynamarine
therefore, reiterate my vote in Meralco v. Castro Bartolome, (114 SCRA 799), Republic v. Villanueva
Corporation, etc., No. 54045 (July 28, 1987)], and resolved in the affirmative. There can be no
different answer in the case at bar.
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.
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 Separate Opinions
sanction, ceases to be public land and becomes private property.
GUTIERREZ, JR., J.:, dissenting.
As the Court said in that case:
It is my view that Article XII, Section 3 of the Constitution which prohibits private corporations or
Nothing can more clearly demonstrate the logical inevitability of considering associations from holding alienable lands of the public domain except by lease is circumvented
possession of public land which is of the character and duration prescribed by when we allow corporations to apply for judicial confirmation of imperfect titles to public land. I,
statute as the equivalent of an express grant from the State than the dictum of the therefore, reiterate my vote in Meralco v. Castro Bartolome, (114 SCRA 799), Republic v. Villanueva
statute itself that the possessor(s) "... shall be conclusively presumed to have and Iglesia ni Cristo (114 SCRA 875) and Director of Lands v. Intermediate Appellate Court (146
performed all the conditions essential to a Government grant and shall be entitled SCRA 509), and accordingly, dissent from the majority opinion in this case.
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
24
 J. 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 disposition/utilization of Philippine government properties in Tokyo and Kobe, Japan through
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 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
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.
25
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 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
26
(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 definiteAbandonment cannot be inferred from the non-use alone specially if the
non-use was attributable not to the government's own deliberate and indubitable will but to a lack
of financial support to repair and improve the property (See Heirs of Felino Santiago v. Lazaro, 166
SCRA 368 [1988]). Abandonment must be a certain and positive act based on correct legal
premises.
A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not relinquishment of the
Roppongi property's original purpose. Even the failure by the government to repair the building in
Roppongi is not abandonment since as earlier stated, there simply was a shortage of government
funds. The recent Administrative Orders authorizing a study of the status and conditions of
government properties in Japan were merely directives for investigation but did not in any way
signify a clear intention to dispose of the properties.
Executive Order No. 296, though its title declares an "authority to sell", does not have a provision in
its text expressly authorizing the sale of the four properties procured from Japan for the
government sector. The executive order does not declare that the properties lost their public
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
27
are alienable and not to those reserved for public use or service. Rep Act No. 6657, therefore, does Section 79 (f) of the Revised Administrative Code of 1917 provides
not authorize the Executive Department to sell the Roppongi property. It merely enumerates
Section 79 (f ) Conveyances and contracts to which the Government is a party.
possible sources of future funding to augment (as and when needed) the Agrarian Reform Fund
In cases in which the Government of the Republic of the Philippines is a party to
created under Executive Order No. 299. Obviously any property outside of the commerce of man
any deed or other instrument conveying the title to real estate or to any other
cannot be tapped as a source of funds.
property the value of which is in excess of one hundred thousand pesos, the
The respondents try to get around the public dominion character of the Roppongi property by respective Department Secretary shall prepare the necessary papers which,
insisting that Japanese law and not our Civil Code should apply. 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
It is exceedingly strange why our top government officials, of all people, should be the ones to
be executed and signed by the President of the Philippines on behalf of the
insist that in the sale of extremely valuable government property, Japanese law and not Philippine
Government of the Philippines unless the Government of the Philippines unless the
law should prevail. The Japanese law - its coverage and effects, when enacted, and exceptions to
authority therefor be expressly vested by law in another officer. (Emphasis
its provision is not presented to the Court It is simply asserted that the lex loci rei sitae or
supplied)
Japanese law should apply without stating what that law provides. It is a ed on faith that Japanese
law would allow the sale. The requirement has been retained in Section 48, Book I of the Administrative Code of 1987
(Executive Order No. 292).
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 SEC. 48. Official Authorized to Convey Real Property. Whenever real property of
immovable, such that the capacity to take and transfer immovables, the formalities of conveyance, the Government is authorized by law to be conveyed, the deed of conveyance shall
the essential validity and effect of the transfer, or the interpretation and effect of a conveyance, are be executed in behalf of the government by the following:
to be determined (See Salonga, Private International Law, 1981 ed., pp. 377-383); and (2) A
(1) For property belonging to and titled in the name of the Republic of the
foreign law on land ownership and its conveyance is asserted to conflict with a domestic law on the
Philippines, by the President, unless the authority therefor is expressly vested by
same matters. Hence, the need to determine which law should apply.
law in another officer.
In the instant case, none of the above elements exists.
(2) For property belonging to the Republic of the Philippines but titled in the name
The issues are not concerned with validity of ownership or title. There is no question that the of any political subdivision or of any corporate agency or instrumentality, by the
property belongs to the Philippines. The issue is the authority of the respondent officials to validly executive head of the agency or instrumentality. (Emphasis supplied)
dispose of property belonging to the State. And the validity of the procedures adopted to effect its
It is not for the President to convey valuable real property of the government on his or her own sole
sale. This is governed by Philippine Law. The rule of lex situs does not apply.
will. Any such conveyance must be authorized and approved by a law enacted by the Congress. It
The assertion that the opinion of the Secretary of Justice sheds light on the relevance of the lex requires executive and legislative concurrence.
situs rule is misplaced. The opinion does not tackle the alienability of the real properties procured
Resolution No. 55 of the Senate dated June 8, 1989, asking for the deferment of the sale of the
through reparations nor the existence in what body of the authority to sell them. In discussing who
Roppongi property does not withdraw the property from public domain much less authorize its sale.
are capable of acquiring the lots, the Secretary merely explains that it is the foreign law which
It is a mere resolution; it is not a formal declaration abandoning the public character of the
should determine who can acquire the properties so that the constitutional limitation on acquisition
Roppongi property. In fact, the Senate Committee on Foreign Relations is conducting hearings on
of lands of the public domain to Filipino citizens and entities wholly owned by Filipinos is
Senate Resolution No. 734 which raises serious policy considerations and calls for a fact-finding
inapplicable. We see no point in belaboring whether or not this opinion is correct. Why should we
investigation of the circumstances behind the decision to sell the Philippine government properties
discuss who can acquire the Roppongi lot when there is no showing that it can be sold?
in Japan.
The subsequent approval on October 4, 1988 by President Aquino of the recommendation by the
The resolution of this Court in Ojeda v. Bidding Committee, et al., supra, did not pass upon the
investigating committee to sell the Roppongi property was premature or, at the very least,
constitutionality of Executive Order No. 296. Contrary to respondents' assertion, we did not uphold
conditioned on a valid change in the public character of the Roppongi property. Moreover, the
the authority of the President to sell the Roppongi property. The Court stated that the
approval does not have the force and effect of law since the President already lost her legislative
constitutionality of the executive order was not the real issue and that resolving the constitutional
powers. The Congress had already convened for more than a year.
question was "neither necessary nor finally determinative of the case." The Court noted that
Assuming for the sake of argument, however, that the Roppongi property is no longer of public "[W]hat petitioner ultimately questions is the use of the proceeds of the disposition of the Roppongi
dominion, there is another obstacle to its sale by the respondents. 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
There is no law authorizing its conveyance.
did not acknowledge the fact that the property became alienable nor did it indicate that the

28
President was authorized to dispose of the Roppongi property. The resolution should be read to It is indeed true that the Roppongi property is valuable not so much because of the inflated prices
mean that in case the Roppongi property is re-classified to be patrimonial and alienable by authority fetched by real property in Tokyo but more so because of its symbolic value to all Filipinos
of law, the proceeds of a sale may be used for national economic development projects including veterans and civilians alike. Whether or not the Roppongi and related properties will eventually be
the CARP. 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
Moreover, the sale in 1989 did not materialize. The petitions before us question the proposed 1990
dominion must be faithfully followed.
sale of the Roppongi property. We are resolving the issues raised in these petitions, not the issues
raised in 1989. 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,
Having declared a need for a law or formal declaration to withdraw the Roppongi property from
Japan. The February 20, 1990 Temporary Restraining Order is made PERMANENT.
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. SO ORDERED.
The Court does not ordinarily pass upon constitutional questions unless these questions are Melencio-Herrera, Paras, Bidin, Grio-Aquino and Regalado, JJ., concur.
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)

29
 K. 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 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:
30
 . . . 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 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
31
 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 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.
32
 L. [G.R. No. 133250. July 9, 2002]
FRANCISCO I. CHAVEZ, petitioner, vs. PUBLIC ESTATES AUTHORITY and AMARI
COASTAL BAY DEVELOPMENT CORPORATION, respondents.
DECISION
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 PEAs 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. [5] On June 8, 1995, then President
Fidel V. Ramos, through then Executive Secretary Ruben Torres, approved the JVA. [6]
On November 29, 1996, then Senate President Ernesto Maceda delivered a privilege speech in
the Senate and denounced the JVA as the grandmother of all scams. As a result, the Senate
Committee on Government Corporations and Public Enterprises, and the Committee on
Accountability of Public Officers and Investigations, conducted a joint investigation. The Senate
Committees reported the results of their investigation in Senate Committee Report No. 560 dated
September 16, 1997.[7] Among the conclusions of their report are: (1) the reclaimed lands PEA
seeks to transfer to AMARI under the JVA are lands of the public domain which the government has
not classified as alienable lands and therefore PEA cannot alienate these lands; (2) the certificates
of title covering the Freedom Islands are thus void, and (3) the JVA itself is illegal.
On December 5, 1997, then President Fidel V. Ramos issued Presidential Administrative Order
No. 365 creating a Legal Task Force to conduct a study on the legality of the JVA in view of Senate
Committee Report No. 560. The members of the Legal Task Force were the Secretary of
Justice,[8] the Chief Presidential Legal Counsel,[9] and the Government Corporate Counsel.[10] The
Legal Task Force upheld the legality of the JVA, contrary to the conclusions reached by the Senate
Committees.[11]
On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published reports that there
were on-going renegotiations between PEA and AMARI under an order issued by then President
Fidel V. Ramos. According to these reports, PEA Director Nestor Kalaw, PEA Chairman Arsenio Yulo
and retired Navy Officer Sergio Cruz composed the negotiating panel of PEA.
On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for Prohibition with
Application for the Issuance of a Temporary Restraining Order and Preliminary Injunction docketed
as G.R. No. 132994 seeking to nullify the JVA. The Court dismissed the petition for unwarranted
disregard of judicial hierarchy, without prejudice to the refiling of the case before the proper
court.[12]
On April 27, 1998, petitioner Frank I. Chavez (Petitioner for brevity) as a taxpayer, filed the
instant Petition for Mandamus with Prayer for the Issuance of a Writ of Preliminary Injunction and
Temporary Restraining Order. Petitioner contends the government stands to lose billions of pesos in
33
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, PEA [15]
and AMARI[16] 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 Courts 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 petitioners prayer for a public disclosure
of the renegotiations. Likewise, petitioners 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. Petitioners principal basis in
assailing the renegotiation of the JVA is its violation of Section 3, Article XII of the Constitution,
which prohibits the government from alienating lands of the public domain to private
corporations. If the Amended JVA indeed violates the Constitution, it is the duty of the Court to
enjoin its implementation, and if already implemented, to annul the effects of such unconstitutional
contract.
The Amended JVA is not an ordinary commercial contract but one which seeks to transfer
title and ownership to 367.5 hectares of reclaimed lands and submerged areas of
Manila Bay to a single private corporation . It now becomes more compelling for the Court to
resolve the issue to insure the government itself does not violate a provision of the Constitution
intended to safeguard the national patrimony. Supervening events, whether intended or accidental,
cannot prevent the Court from rendering a decision if there is a grave violation of the Constitution.
In the instant case, if the Amended JVA runs counter to the Constitution, the Court can still prevent
the transfer of title and ownership of alienable lands of the public domain in the name of
AMARI. Even in cases where supervening events had made the cases moot, the Court did not
hesitate to resolve the legal or constitutional issues raised to formulate controlling principles to
guide the bench, bar, and the public.[17]
Also, the instant petition is a case of first impression. All previous decisions of the Court
involving Section 3, Article XII of the 1987 Constitution, or its counterpart provision in the 1973
Constitution,[18] covered agricultural lands sold to private corporations which acquired the lands
from private parties. The transferors of the private corporations claimed or could claim the right
to judicial confirmation of their imperfect titles[19] under Title II of Commonwealth Act. 141
(CA No. 141 for brevity). In the instant case, AMARI seeks to acquire from PEA, a public
corporation, reclaimed lands and submerged areas for non-agricultural purposes
34
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 latters
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 originaljurisdiction 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 petitioners 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. Tuvera where the Court granted the
[23]
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 Code[24] and Section 1
of Commonwealth Act No. 638[25] to publish the presidential decrees. There was, therefore, no need
for the petitioners in 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]2 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
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 taxpayers 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 taxpayers 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
35
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 peoples 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
peoples right to information on matters of public concern. This State policy is expressed in Section
28, Article II of the Constitution, thus:
Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements
a policy of full public disclosure of all its transactions involving public interest . (Emphasis
supplied)
These twin provisions of the Constitution seek to promote transparency in policy-making and
in the operations of the government, as well as provide the people sufficient information to exercise
effectively other constitutional rights. These twin provisions are essential to the exercise of freedom
of expression. If the government does not disclose its official acts, transactions and decisions to
citizens, whatever citizens say, even if expressed without any restraint, will be speculative and
amount to nothing. These twin provisions are also essential to hold public officials at all times x x x
accountable to the people,[29] for unless citizens have the proper information, they cannot hold
public officials accountable for anything. Armed with the right information, citizens can participate in
public discussions leading to the formulation of government policies and their effective
implementation. An informed citizenry is essential to the existence and proper functioning of any
democracy. As explained by the Court in Valmonte v. Belmonte, Jr.[30]
An essential element of these freedoms is to keep open a continuing dialogue or process of
communication between the government and the people. It is in the interest of the State that the
channels for free political discussion be maintained to the end that the government may perceive
and be responsive to the peoples 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
36
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 publics 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 AMARIs contention, the commissioners of the 1986 Constitutional Commission
understood that the right to information contemplates inclusion of negotiations leading to
the consummation of the transaction. Certainly, a consummated contract is not a requirement
for the exercise of the right to information. Otherwise, the people can never exercise the right if no
contract is consummated, and if one is consummated, it may be too late for the public to expose its
defects.
Requiring a consummated contract will keep the public in the dark until the contract, which
may be grossly disadvantageous to the government or even illegal, becomes a fait accompli.This
negates the State policy of full transparency on matters of public concern, a situation which the
framers of the Constitution could not have intended. Such a requirement will prevent the citizenry
from participating in the public discussion of any proposed contract, effectively truncating a basic
right enshrined in the Bill of Rights. We can allow neither an emasculation of a constitutional right,
nor a retreat by the State of its avowed policy of full disclosure of all its transactions involving public
interest.
The right covers three categories of information which are matters of public concern, namely:
(1) official records; (2) documents and papers pertaining to official acts, transactions and decisions;
and (3) government research data used in formulating policies. The first category refers to any
document that is part of the public records in the custody of government agencies or officials. The
second category refers to documents and papers recording, evidencing, establishing, confirming,
supporting, justifying or explaining official acts, transactions or decisions of government agencies or
officials. The third category refers to research data, whether raw, collated or processed, owned by
the government and used in formulating government policies.
The information that petitioner may access on the renegotiation of the JVA includes evaluation
reports, recommendations, legal and expert opinions, minutes of meetings, terms of reference and
other documents attached to such reports or minutes, all relating to the JVA. However, the right to
information does not compel PEA to prepare lists, abstracts, summaries and the like relating to the
renegotiation of the JVA.[34] The right only affords access to records, documents and papers, which
means the opportunity to inspect and copy them. One who exercises the right must copy the
records, documents and papers at his expense. The exercise of the right is also subject to
reasonable regulations to protect the integrity of the public records and to minimize disruption to
government operations, like rules specifying when and how to conduct the inspection and
copying.[35]
The right to information, however, does not extend to matters recognized as privileged
information under the separation of powers.[36] The right does not also apply to information on
military and diplomatic secrets, information affecting national security, and information on
investigations of crimes by law enforcement agencies before the prosecution of the accused, which
courts have long recognized as confidential.[37] The right may also be subject to other limitations
that Congress may impose by law.
There is no claim by PEA that the information demanded by petitioner is privileged information
rooted in the separation of powers. The information does not cover Presidential conversations,
correspondences, or discussions during closed-door Cabinet meetings which, like internal
deliberations of the Supreme Court and other collegiate courts, or executive sessions of either
house of Congress,[38] are recognized as confidential. This kind of information cannot be pried open
by a co-equal branch of government. A frank exchange of exploratory ideas and assessments, free
from the glare of publicity and pressure by interested parties, is essential to protect the
independence of decision-making of those tasked to exercise Presidential, Legislative and Judicial
power.[39] This is not the situation in the instant case.
We rule, therefore, that the constitutional right to information includes official information
on on-going negotiations before a final contract. The information, however, must constitute
definite propositions by the government and should not cover recognized exceptions like privileged
information, military and diplomatic secrets and similar matters affecting national security and
public order.[40] Congress has also prescribed other limitations on the right to information in several
legislations.[41]
Sixth issue: whether stipulations in the Amended JVA for the transfer to AMARI of
lands, reclaimed or to be reclaimed, violate the Constitution.
37
The Regalian Doctrine
The ownership of lands reclaimed from foreshore and submerged areas is rooted in the
Regalian doctrine which holds that the State owns all lands and waters of the public domain.Upon
the Spanish conquest of the Philippines, ownership of all lands, territories and possessions in the
Philippines passed to the Spanish Crown.[42] The King, as the sovereign ruler and representative of
the people, acquired and owned all lands and territories in the Philippines except those he disposed
of by grant or sale to private individuals.
The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting, however,
the State, in lieu of the King, as the owner of all lands and waters of the public domain.The
Regalian doctrine is the foundation of the time-honored principle of land ownership that all lands
that were not acquired from the Government, either by purchase or by grant, belong to the public
domain.[43] Article 339 of the Civil Code of 1889, which is now Article 420 of the Civil Code of 1950,
incorporated the Regalian doctrine.
Ownership and Disposition of Reclaimed Lands
The Spanish Law of Waters of 1866 was the first statutory law governing the ownership and
disposition of reclaimed lands in the Philippines. On May 18, 1907, the Philippine Commission
enacted Act No. 1654 which provided for the lease, but not the sale, of reclaimed lands of
the government to corporations and individuals . Later, on November 29, 1919, the Philippine
Legislature approved Act No. 2874, the Public Land Act, which authorized the lease, but not the
sale, of reclaimed lands of the government to corporations and individuals . On November
7, 1936, the National Assembly passed Commonwealth Act No. 141, also known as the Public Land
Act, which authorized the lease, but not the sale, of reclaimed lands of the government to
corporations and individuals. CA No. 141 continues to this day as the general law governing the
classification and disposition of lands of the public domain.
The Spanish Law of Waters of 1866 and the Civil Code of 1889
Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all waters within
the maritime zone of the Spanish territory belonged to the public domain for public use. [44] The
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.
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
38
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;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores or banks of
navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
x x x.
Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six shall be
disposed of to private parties by lease only and not otherwise, as soon as the Governor-
General, upon recommendation by the Secretary of Agriculture and Natural
Resources, shall declare that the same are not necessary for the public service and are
open to disposition under this chapter. The lands included in class (d) may be disposed of
by sale or lease under the provisions of this Act. (Emphasis supplied)
Section 6 of Act No. 2874 authorized the Governor-General to classify lands of the public
domain into x x x alienable or disposable[47] lands. Section 7 of the Act empowered the Governor-
General to declare what lands are open to disposition or concession. Section 8 of the Act limited
alienable or disposable lands only to those lands which have been officially delimited and classified.
Section 56 of Act No. 2874 stated that lands disposable under this title [48] shall be classified as
government reclaimed, foreshore and marshy lands, as well as other lands. All these lands,
however, must be suitable for residential, commercial, industrial or other productive non-
agricultural purposes. These provisions vested upon the Governor-General the power to classify
inalienable lands of the public domain into disposable lands of the public domain. These provisions
also empowered the Governor-General to classify further such disposable lands of the public domain
into government reclaimed, foreshore or marshy lands of the public domain, as well as other non-
agricultural lands.
Section 58 of Act No. 2874 categorically mandated that disposable lands of the public domain
classified as government reclaimed, foreshore and marshy lands shall be disposed of to private
parties by lease only and not otherwise. The Governor-General, before allowing the lease of
these lands to private parties, must formally declare that the lands were not necessary for the
public service. Act No. 2874 reiterated the State policy to lease and not to sell government
reclaimed, foreshore and marshy lands of the public domain, a policy first enunciated in 1907 in Act
No. 1654. Government reclaimed, foreshore and marshy lands remained sui generis, as the only
alienable or disposable lands of the public domain that the government could not sell to private
parties.
The rationale behind this State policy is obvious. Government reclaimed, foreshore and marshy
public lands for non-agricultural purposes retain their inherent potential as areas for public
service. This is the reason the government prohibited the sale, and only allowed the lease, of these
lands to private parties. The State always reserved these lands for some future public service.
Act No. 2874 did not authorize the reclassification of government reclaimed, foreshore and
marshy lands into other 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
39
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 States 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:
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.
40
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-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,[55] Justice 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
41
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, the reclaimed land could become private land only if
classified as alienable agricultural land of the public domain open to disposition under CA
No. 141. The 1935 Constitution prohibited the alienation of all natural resources except public
agricultural lands.
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;
(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.
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.
Dispositions under the 1973 Constitution
The 1973 Constitution, which took effect on January 17, 1973, likewise adopted the Regalian
doctrine. Section 8, Article XIV of the 1973 Constitution stated that
Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all
forces of potential energy, fisheries, wildlife, and other natural resources of the Philippines belong
to the State. With the exception of agricultural, industrial or commercial, residential, and
resettlement lands of the public domain, natural resources shall not be alienated, and no
license, concession, or lease for the exploration, development, exploitation, or utilization of any of
the natural resources shall be granted for a period exceeding twenty-five years, renewable for not
more than twenty-five years, except as to water rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water power, in which cases, beneficial use may be
the measure and the limit of the grant. (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:
42
Sec. 4. Purpose. The Authority is hereby created for the following purposes:
(a) To reclaim land, including foreshore and submerged areas, by dredging,
filling or other means, or to acquire reclaimed land;
(b) To develop, improve, acquire, administer, deal in, subdivide, dispose, lease and sell
any and all kinds of lands, buildings, estates and other forms of real property, owned,
managed, controlled and/or operated by the government;
(c) To provide for, operate or administer such service as may be necessary for the efficient,
economical and beneficial utilization of the above properties.
Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying out the purposes for
which it is created, have the following powers and functions:
(a)To prescribe its by-laws.
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 domain [63] 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.
Dispositions under the 1987 Constitution
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 from acquiring 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.
43
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.
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 AMARIs 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 PEAs
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 AMARIs 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 AMARIs 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 AMARIs 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 PEAs 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.
44
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 Force[68] 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
422[74] of the Civil Code, a property of public dominion retains such character until formally
declared otherwise. The Court ruled that
The fact that the Roppongi site has not been used for a long time for actual Embassy service does
not automatically convert it to patrimonial property. Any such conversion happens only if the
property is withdrawn from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481
[1975]. A property continues to be part of the public domain, not available for private
appropriation or ownership until there is a formal declaration on the part of the
government to withdraw it from being such (Ignacio v. Director of Lands, 108 Phil. 335
[1960]. (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 Aquinos 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 Aquinos issuance of
a land patent also constitute a declaration that the Freedom Islands are no longer needed for public
service. The Freedom Islands are thus alienable or disposable lands of the public domain,
open to disposition or concession to qualified parties.
At the time then President Aquino issued Special Patent No. 3517, PEA had already reclaimed
the Freedom Islands although subsequently there were partial erosions on some areas. The
government had also completed the necessary surveys on these islands. Thus, the Freedom Islands
were no longer part of Manila Bay but part of the land mass. Section 3, Article XII of the 1987
Constitution classifies lands of the public domain into agricultural, forest or timber, mineral lands,
and national parks. Being neither timber, mineral, nor national park lands, the reclaimed Freedom
Islands necessarily fall under the classification of agricultural lands of the public domain. Under the
1987 Constitution, agricultural lands of the public domain are the only natural resources that the
State may alienate to qualified private parties. All other natural resources, such as the seas or bays,
45
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
Governments 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 PEAs reclaimed foreshore and submerged lands into alienable or
disposable lands open to disposition is necessary because PEA is tasked under its charter to
undertake public services that require the use of lands of the public domain. Under Section 5 of PD
No. 1084, the functions of PEA include the following: [T]o own or operate railroads, tramways and
other kinds of land transportation, x x x; [T]o construct, maintain and operate such systems of
sanitary sewers as may be necessary; [T]o construct, maintain and operate such storm drains as
may be necessary. PEA is empowered to issue rules and regulations as may be necessary for the
proper use by private parties of any or all of the highways, roads, utilities, buildings and/or
any of its properties and to impose or collect fees or tolls for their use. Thus, part of the
reclaimed foreshore and submerged lands held by the PEA would actually be needed for public use
or service since many of the functions imposed on PEA by its charter constitute essential public
services.
Moreover, Section 1 of Executive Order No. 525 provides that PEA shall be primarily
responsible for integrating, directing, and coordinating all reclamation projects for and on behalf of
the National Government. The same section also states that [A]ll reclamation projects shall be
approved by the President upon recommendation of the PEA, and shall be undertaken by the PEA
or through a proper contract executed by it with any person or entity; x x x. Thus, under EO No.
525, in relation to PD No. 3-A and PD No.1084, PEA became the primary implementing agency of
the National Government to reclaim foreshore and submerged lands of the public domain. EO No.
525 recognized PEA as the government entity to undertake the reclamation of lands and ensure
their maximum utilization in promoting public welfare and interests.[79] Since large portions of
these reclaimed lands would obviously be needed for public service, there must be a formal
46
declaration segregating reclaimed lands no longer needed for public service from those still needed
for public service.
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 countrys 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 6[81] and 7[82] of CA No. 141. Once DENR decides that the reclaimed lands should be
so classified, it then recommends to the President the issuance of a proclamation classifying the
lands as alienable or disposable lands of the public domain open to disposition. We note that then
DENR Secretary Fulgencio S. Factoran, Jr. countersigned Special Patent No. 3517 in compliance
with the Revised Administrative Code and Sections 6 and 7 of CA No. 141.
In short, DENR is vested with the power to authorize the reclamation of areas under water,
while PEA is vested with the power to undertake the physical reclamation of areas under water,
whether directly or through private contractors. DENR is also empowered to classify lands of the
public domain into alienable or disposable lands subject to the approval of the President. On the
other hand, PEA is tasked to develop, sell or lease the reclaimed alienable lands of the public
domain.
Clearly, the mere physical act of reclamation by PEA of foreshore or submerged areas does not
make the reclaimed lands alienable or disposable lands of the public domain, much less patrimonial
lands of PEA. Likewise, the mere transfer by the National Government of lands of the public domain
to PEA does not make the lands alienable or disposable lands of the public domain, much less
patrimonial lands of PEA.
Absent two official acts a classification that these lands are alienable or disposable and open to
disposition and a declaration that these lands are not needed for public service, lands reclaimed by
PEA remain inalienable lands of the public domain. Only such an official classification and formal
declaration can convert reclaimed lands into alienable or disposable lands of the public domain,
open to disposition under the Constitution, Title I and Title III[83] of CA No. 141 and other applicable
laws.[84]
PEAs Authority to Sell Reclaimed Lands
PEA, like the Legal Task Force, argues that as alienable or disposable lands of the public
domain, the reclaimed lands shall be disposed of in accordance with CA No. 141, the Public Land
Act. PEA, citing Section 60 of CA No. 141, admits that reclaimed lands transferred to a branch or
subdivision of the government shall not be alienated, encumbered, or otherwise disposed of in a
manner affecting its title, except when authorized by Congress: x x x.[85] (Emphasis by PEA)
In Laurel vs. Garcia,[86] the Court cited Section 48 of the Revised Administrative Code of
1987, which states that
Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the Government
is authorized by law to be conveyed, the deed of conveyance shall be executed in behalf of the
government by the following: x x x.
Thus, the Court concluded that a law is needed to convey any real property belonging to the
Government. The Court declared that -
It is not for the President to convey real property of the government on his or her own sole
will. Any such conveyance must be authorized and approved by a law enacted by the
Congress. It requires executive and legislative concurrence. (Emphasis supplied)
PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority allowing
PEA to sell its reclaimed lands. PD No. 1085, issued on February 4, 1977, provides that
The land reclaimed in the foreshore and offshore area of Manila Bay pursuant to the
contract for the reclamation and construction of the Manila-Cavite Coastal Road Project between the
Republic of the Philippines and the Construction and Development Corporation of the Philippines
dated November 20, 1973 and/or any other contract or reclamation covering the same area is
47
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.
PEAs charter, however, expressly tasks PEA to develop, improve, acquire, administer, deal in,
subdivide, dispose, lease and sell any and all kinds of lands x x x owned, managed, controlled
and/or operated by the government.[87] (Emphasis supplied) There is, therefore, legislative
authority granted to PEA to sell its lands, whether patrimonial or alienable lands of the
public domain. PEA may sell to private parties its patrimonial properties in accordance with the
PEA charter free from constitutional limitations. The constitutional ban on private corporations from
acquiring alienable lands of the public domain does not apply to the sale of PEAs patrimonial lands.
PEA may also sell its alienable or disposable lands of the public domain to private
individuals since, with the legislative authority, there is no longer any statutory prohibition against
such sales and the constitutional ban does not apply to individuals. PEA, however, cannot
sell any of its alienable or disposable lands of the public domain to private corporations since
Section 3, Article XII of the 1987 Constitution expressly prohibits such sales. The legislative
authority benefits only individuals. Private corporations remain barred from acquiring any kind of
alienable land of the public domain, including government reclaimed lands.
The provision in PD No. 1085 stating that portions of the reclaimed lands could be transferred
by PEA to the contractor or his assignees (Emphasis supplied) would not apply to private
corporations but only to individuals because of the constitutional ban. Otherwise, the provisions of
PD No. 1085 would violate both the 1973 and 1987 Constitutions.
The requirement of public auction in the sale of reclaimed lands
Assuming the reclaimed lands of PEA are classified as alienable or disposable lands open to
disposition, and further declared no longer needed for public service, PEA would have to conduct a
public bidding in selling or leasing these lands. PEA must observe the provisions of Sections 63 and
67 of CA No. 141 requiring public auction, in the absence of a law exempting PEA from holding a
public auction.[88] Special Patent No. 3517 expressly states that the patent is issued by authority of
the Constitution and PD No. 1084, supplemented by Commonwealth Act No. 141, as amended. This
is an acknowledgment that the provisions of CA No. 141 apply to the disposition of reclaimed
alienable lands of the public domain unless otherwise provided by law. Executive Order No.
654,[89] which authorizes PEA to determine the kind and manner of payment for the transfer of its
assets and properties, does not exempt PEA from the requirement of public auction. EO No. 654
merely authorizes PEA to decide the mode of payment, whether in kind and in installment, but does
not authorize PEA to dispense with public auction.
Moreover, under Section 79 of PD No. 1445, otherwise known as the Government Auditing
Code, the government is required to sell valuable government property through public
bidding. Section 79 of PD No. 1445 mandates that
Section 79. When government property has become unserviceable for any cause, or is no
longer needed, it shall, upon application of the officer accountable therefor, be inspected by the
head of the agency or his duly authorized representative in the presence of the auditor concerned
and, if found to be valueless or unsaleable, it may be destroyed in their presence. If found to be
valuable, it may be sold at public auction to the highest bidder under the supervision of the
proper committee on award or similar body in the presence of the auditor concerned or other
authorized representative of the Commission, after advertising by printed notice in the
Official Gazette, or for not less than three consecutive days in any newspaper of general
circulation, or where the value of the property does not warrant the expense of publication, by
notices posted for a like period in at least three public places in the locality where the property is to
be sold. In the event that the public auction fails, the property may be sold at a private
sale at such price as may be fixed by the same committee or body concerned and
approved by the Commission.
It is only when the public auction fails that a negotiated sale is allowed, in which case the
Commission on Audit must approve the selling price.[90] The Commission on Audit implements
Section 79 of the Government Auditing Code through Circular No. 89-296[91] dated January 27,
1989. This circular emphasizes that government assets must be disposed of only through public
auction, and a negotiated sale can be resorted to only in case of failure of public auction.
48
 At the public auction sale, only Philippine citizens are qualified to bid for PEAs 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
hectares[96] of non-agricultural lands, may be conveyed to him in ownership in view of the legislative
authority allowing such conveyance. This is the only way these provisions of the BOT Law and the
Local Government Code can avoid a direct collision with Section 3, Article XII of the 1987
Constitution.
Registration of lands of the public domain
Finally, PEA theorizes that the act of conveying the ownership of the reclaimed lands to public
respondent PEA transformed such lands of the public domain to private lands. This theory is echoed
by AMARI which maintains that the issuance of the special patent leading to the eventual issuance
of title takes the subject land away from the land of public domain and converts the property into
patrimonial or private property. In short, PEA and AMARI contend that with the issuance of Special
Patent No. 3517 and the corresponding certificates of titles, the 157.84 hectares comprising the
Freedom Islands have become private lands of PEA. In support of their theory, PEA and AMARI cite
the following rulings of the Court:
1. Sumail v. Judge of CFI of Cotabato,[97] where the Court held
Once the patent was granted and the corresponding certificate of title was issued, the
land ceased to be part of the public domain and became private property over which
the Director of Lands has neither control nor jurisdiction.
2. Lee Hong Hok v. David,[98] where the Court declared -
After the registration and issuance of the certificate and duplicate certificate of title
based on a public land patent, the land covered thereby automatically comes under
the operation of Republic Act 496 subject to all the safeguards provided therein.
3. Heirs of Gregorio Tengco v. Heirs of Jose Aliwalas,[99] where the Court ruled -
While the Director of Lands has the power to review homestead patents, he may do
so only so long as the land remains part of the public domain and continues to be
under his exclusive control; but once the patent is registered and a certificate of title
is issued, the land ceases to be 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.
49
 5.Republic v. Court of Appeals,[101] where the Court stated
Proclamation No. 350, dated October 9, 1956, of President Magsaysay legally effected
a land grant to the Mindanao Medical Center, Bureau of Medical Services, Department
of Health, of the whole lot, validly sufficient for initial registration under the Land
Registration Act. Such land grant is constitutive of a fee simple title or absolute title in
favor of petitioner Mindanao Medical Center.Thus, Section 122 of the Act, which
governs the registration of grants or patents involving public lands, provides that
Whenever public lands in the Philippine Islands belonging to the Government of the
United States or to the Government of the Philippines are alienated, granted or
conveyed to persons or to public or private corporations, the same shall be brought
forthwith under the operation of this Act (Land Registration Act, Act 496) and shall
become registered lands.
The first four cases cited involve petitions to cancel the land patents and the corresponding
certificates of titles issued to private parties. These four cases uniformly hold that the Director of
Lands has no jurisdiction over private lands or that upon issuance of the certificate of title the land
automatically comes under the Torrens System. The fifth case cited involves the registration under
the Torrens System of a 12.8-hectare public land granted by the National Government to Mindanao
Medical Center, a government unit under the Department of Health. The National Government
transferred the 12.8-hectare public land to serve as the site for the hospital buildings and other
facilities of Mindanao Medical Center, which performed a public service. The Court affirmed the
registration of the 12.8-hectare public land in the name of Mindanao Medical Center under Section
122 of Act No. 496. This fifth case is an example of a public land being registered under Act No.
496 without the land losing its character as a property of public dominion.
In the instant case, the only patent and certificates of title issued are those in the name of
PEA, a wholly government owned corporation performing public as well as proprietary functions. No
patent or certificate of title has been issued to any private party. No one is asking the Director of
Lands to cancel PEAs patent or certificates of title. In fact, the thrust of the instant petition is that
PEAs 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 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 Governments 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
50
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.
xxx.
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, PEAs 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 PEAs name does not
automatically make such lands private.
To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private
lands will sanction a gross violation of the constitutional ban on private corporations from acquiring
any kind of alienable land of the public domain. PEA will simply turn around, as PEA has now
done under the Amended JVA, and transfer several hundreds of hectares of these reclaimed and
still to be reclaimed lands to a single private corporation in only one transaction. This scheme will
effectively nullify the constitutional ban in Section 3, Article XII of the 1987 Constitution which was
intended to diffuse equitably the ownership of alienable lands of the public domain among Filipinos,
now numbering over 80 million strong.
This scheme, if allowed, can even be applied to alienable agricultural lands of the public
domain since PEA can acquire x x x any and all kinds of lands. This will open the floodgates to
corporations and even individuals acquiring hundreds of hectares of alienable lands of the public
domain under the guise that in the hands of PEA these lands are private lands. This will result in
corporations amassing huge landholdings never before seen in this country - creating the very evil
that the constitutional ban was designed to prevent. This will completely reverse the clear direction
of constitutional development in this country. The 1935 Constitution allowed private corporations to
acquire not more than 1,024 hectares of public lands.[105] The 1973 Constitution prohibited private
corporations from acquiring any kind of public land, and the 1987 Constitution has unequivocally
reiterated this prohibition.
The contention of PEA and AMARI that public lands, once registered under Act No. 496 or PD
No. 1529, automatically become private lands is contrary to existing laws. Several laws authorize
lands of the public domain to be registered under the Torrens System or Act No. 496, now PD No.
1529, without losing their character as public lands. Section 122 of Act No. 496, and Section 103 of
PD No. 1529, respectively, provide as follows:
Act No. 496
Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x x Government of the
Philippine Islands are alienated, granted, or conveyed to persons or the public or private
corporations, the same shall be brought forthwith under the operation of this Act and shall
become registered lands.
PD No. 1529
Sec. 103. Certificate of Title to Patents. Whenever public land is by the Government alienated,
granted or conveyed to any person, the same shall be brought forthwith under the operation of
this Decree. (Emphasis 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 law to be conveyed, the deed of conveyance shall be executed in behalf of the
government by the following:
(1) x x x
(2) For property belonging to the Republic of the Philippines, but titled in the name of
any political subdivision or of any corporate agency or instrumentality, by the executive
head of the agency or instrumentality. (Emphasis supplied)
Thus, private property purchased by the National Government for expansion of a public wharf may
be titled in the name of a government corporation regulating port operations in the country. Private
property purchased by the National Government for expansion of an airport may also be titled in
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the name of the government agency tasked to administer the airport.Private property donated to a the 1973 and 1987 Constitutions have barred private corporations from acquiring any kind of
municipality for use as a town plaza or public school site may likewise be titled in the name of the alienable land of the public domain. Those who attempt to dispose of inalienable natural resources
municipality.[106] All these properties become properties of the public domain, and if already of the State, or seek to circumvent the constitutional ban on alienation of lands of the public
registered under Act No. 496 or PD No. 1529, remain registered land. There is no requirement or domain to private corporations, do so at their own risk.
provision in any existing law for the de-registration of land from the Torrens System.
We can now summarize our conclusions as follows:
Private lands taken by the Government for public use under its power of eminent domain
1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered
become unquestionably part of the public domain. Nevertheless, Section 85 of PD No. 1529
by certificates of title in the name of PEA, are alienable lands of the public
authorizes the Register of Deeds to issue in the name of the National Government new certificates
domain. PEA may lease these lands to private corporations but may not sell or
of title covering such expropriated lands. Section 85 of PD No. 1529 states
transfer ownership of these lands to private corporations. PEA may only sell these
Sec. 85. Land taken by eminent domain. Whenever any registered land, or interest therein, is lands to Philippine citizens, subject to the ownership limitations in the 1987
expropriated or taken by eminent domain, the National Government, province, city or municipality, Constitution and existing laws.
or any other agency or instrumentality exercising such right shall file for registration in the proper
2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural
Registry a certified copy of the judgment which shall state definitely by an adequate description, the
resources of the public domain until classified as alienable or disposable lands open to
particular property or interest expropriated, the number of the certificate of title, and the nature of
disposition and declared no longer needed for public service. The government can
the public use. A memorandum of the right or interest taken shall be made on each certificate of
make such classification and declaration only after PEA has reclaimed these
title by the Register of Deeds, and where the fee simple is taken, a new certificate shall be
submerged areas. Only then can these lands qualify as agricultural lands of the public
issued in favor of the National Government, province, city, municipality, or any other
domain, which are the only natural resources the government can alienate. In their
agency or instrumentality exercising such right for the land so taken. The legal expenses incident to
present state, the 592.15 hectares of submerged areas are inalienable and outside
the memorandum of registration or issuance of a new certificate of title shall be for the account of
the commerce of man.
the authority taking the land or interest therein. (Emphasis supplied)
3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership
Consequently, lands registered under Act No. 496 or PD No. 1529 are not exclusively private or
of 77.34 hectares[110] of the Freedom Islands, such transfer is void for being contrary
patrimonial lands. Lands of the public domain may also be registered pursuant to existing laws.
to Section 3, Article XII of the 1987 Constitution which prohibits private corporations
AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the Freedom from acquiring any kind of alienable land of the public domain.
Islands or of the lands to be reclaimed from submerged areas of Manila Bay. In the words of
4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156
AMARI, the Amended JVA is not a sale but a joint venture with a stipulation for reimbursement of
hectares[111] of still submerged areas of Manila Bay, such transfer is void for being
the original cost incurred by PEA for the earlier reclamation and construction works performed by
contrary to Section 2, Article XII of the 1987 Constitution which prohibits the
the CDCP under its 1973 contract with the Republic. Whether the Amended JVA is a sale or a joint
alienation of natural resources other than agricultural lands of the public domain. PEA
venture, the fact remains that the Amended JVA requires PEA to cause the issuance and delivery of
may reclaim these submerged areas. Thereafter, the government can classify the
the certificates of title conveying AMARIs Land Share in the name of AMARI. [107]
reclaimed lands as alienable or disposable, and further declare them no longer needed
This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which provides for public service. Still, the transfer of such reclaimed alienable lands of the public
that private corporations shall not hold such alienable lands of the public domain except by domain to AMARI will be void in view of Section 3, Article XII of the 1987 Constitution
lease. The transfer of title and ownership to AMARI clearly means that AMARI will hold the which prohibits private corporations from acquiring any kind of alienable land of the
reclaimed lands other than by lease. The transfer of title and ownership is a disposition of the public domain.
reclaimed lands, a transaction considered a sale or alienation under CA No. 141, [108] the
Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987
Government Auditing Code,[109] and Section 3, Article XII of the 1987 Constitution.
Constitution. Under Article 1409[112] of the Civil Code, contracts whose object or purpose is contrary
The Regalian doctrine is deeply implanted in our legal system. Foreshore and submerged areas to law, or whose object is outside the commerce of men, are inexistent and void from the
form part of the public domain and are inalienable. Lands reclaimed from foreshore and submerged beginning. The Court must perform its duty to defend and uphold the Constitution, and therefore
areas also form part of the public domain and are also inalienable, unless converted pursuant to law declares the Amended JVA null and void ab initio.
into alienable or disposable lands of the public domain. Historically, lands reclaimed by the
Seventh issue: whether the Court is the proper forum to raise the issue of whether the
government are sui generis, not available for sale to private parties unlike other alienable public
Amended JVA is grossly disadvantageous to the government.
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,

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 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.

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