G.R. No.

L-28379 March 27, 1929

THE GOVERNMENT OF THE PHILIPPINE ISLANDS, applicant-appellant,

vs.
CONSORCIA CABANGIS, ET AL., claimants-appellees.

Attorney-General Jaranilla for appellant.

Abad Santos, Camus & Delgado for 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.

In view of the facts just stated, as proved by a preponderance of the evidence, the question arises:
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 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.

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.

Footnotes

1 Annex A, p. 11, rollo.

2 Annex B, p. 12, rollo.

3 Annex C, p. 13, rollo.

4 Annex D, p. 15, rollo.

5 Annex E. p. 18, rollo.

6 Annex F. P. 20, rollo.

7 G.R. No. L-29910, April 25, 1969; SCRA 1060.

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
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 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.

Avanceña, C. J., Street, Malcolm, Ostrand, Johns, Romualdez and Villa-Real., JJ., concur.

Footnotes

1 R. G. No. L-22617, promulgated November 28, 1924, not reported.

FIRST DIVISION

[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, v. 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.

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.

SYLLABUS

1. POLITICAL LAW; MUNICIPAL CORPORATIONS; POWER OF THE CITY OF MANILA AS A MUNICIPAL

CORPORATION; ACQUISITION OF PROPERTY IN PRIVATE CAPACITY. — The City of 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.

2. ID.; ID.; ID.; ID.; IF THERE IS NO SHOWING THAT LAND WAS ACQUIRED WITH PRIVATE FUNDS,
PRESUMPTION IS THAT STATE IS SOURCE. — 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.

3. ID.; ID.; CLASSIFICATION OF PROPERTY IN ITS POSSESSION. — 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.

4. ID.; ID.; ID.; CONCEPT OF LEGUA COMUNAL EXPLAINED. — Comunal lands or "legua comunal" came into
existence when a town or pueblo was established in this country under the laws of Spain. 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 right therein passed to the municipalities, and. in any event, the ultimate title remained in
the Sovereign.

5. ID.; ID.; ID.; GENERAL RULE ON THE NATURE OF THE POSSESSION OF LAND BY THE MUNICIPAL
CORPORATION. — It may be laid down as a general rule that regardless of the source or classification of
land in the possession of a municipality, excepting those acquired with its own funds in its private or
corporate capacity, such property is held 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.

6. ID.; ID.; ID.; LEGISLATIVE CONTROL OVER PROPERTY OF MUNICIPAL CORPORATION; POWER OF
LEGISLATURE OVER LANDS HELD BY MUNICIPALITY IN TRUST FOR THE STATE. — 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.

7. ID.; ID.; ID.; LEGISLATIVE HAS WIDE DISCRETIONARY POWERS IN CLASSIFYING STATE PROPERTY. —
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.

8. ID.; ID.; ID.; PROPERTY IN CASE AT BAR IS HELD IN TRUST FOR THE STATE. — The property subject of
the litigation in the case at bar was shown not to have been 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.

9. ID.; ID.; ID.; ALLEGED PATRIMONIAL CHARACTER OF LAND IN INSTANT CASE DISPROVED BY CITY’S
OFFICIAL ACT. — 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.

10. STATUTES; PRESUMPTION IS ALWAYS IN FAVOR OF CONSTITUTIONALITY OF A STATUTE. — It is now

well established that the presumption is always in favor of the constitutionality of a law. To declare a law
unconstitutional, the repugnancy of that law to the Constitution must be clear and unequivocal for even if a
law is aimed at the attainment of some public good, no infringement of constitutional rights is allowed. To
strike down a law there must be a clear showing that what the fundamental law condemns or prohibits, the
statute allows it to be done.

11. ID., REPUBLIC ACT 4118 DOES NOT OPERATE AS AN EXERCISE OF THE POWER OF EMINENT DOMAIN
WITHOUT JUST COMPENSATION. — Republic Act 4118 which "seeks to convert one parcel of land in the
district of Malate, Manila, which is reserved as communal property into disposable or alienable property of
the State and to provide its subdivision and sale to bona fide occupants or tenants," 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 111 of the
Constitution, but simply as a manifestation of its right and power to deal with state property.

12. ID.; ID.; NO VIOLATION OF DUE PROCESS CLAUSE IN THE ENACTMENT OF THE STATUTE. — 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 indicates 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.

DECISION

ESGUERRA, J.:

This is a petition for review of the decision of the Court of First Instance of Manila, Branch XXIII, in Civil
Case No. 67946, dated September 23, 1968, the dispositive portion of which is as follows: jgc:c han robles. com.ph

"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: chan rob1es v irt ual 1aw l ibra ry

On February 24, 1919, the 4th Branch of the Court of First Instance of Manila, acting as a land registration
court, rendered judgment in Case No. 18, G.L.R.O. Record No. 111, declaring the City of Manila the owner in
fee simple of a parcel of land known as Lot No. 1, Block 557 of the Cadastral Survey of the City of Manila,
containing an area of 9,689.8 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 (T.C.T.) 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 Antonio J. Villegas,
adopted a resolution requesting His Excellency, the President of the Philippines to consider the feasibility of
declaring the City property bounded by Florida, San Andres, and Nebraska Streets, under Transfer
Certificate of Title Nos. 25545 and 22547, containing a total area of 7,450 square meters as a patrimonial
property of the City of Manila for the purpose of reselling these lots to the actual occupants thereof. 2

The said resolution of the Municipal Board of the City of Manila was officially transmitted to the President of
the Philippines by then Vice-Mayor Antonio J. Villegas on September 21, 1960, with the information that the
same resolution was, on the same date, transmitted to the Senate and House of Representatives of the
Congress of the Philippines. 3

During the First Session of the Fifth Congress of the Philippines, House Bill No. 191 was filed in the House of
Representatives by then Congressman Bartolome Cabangbang seeking to declare the property in question as
patrimonial property of the City of Manila, and for other purposes. The explanatory note of the Bill gave the
grounds for its enactment, to wit: jgc:chan rob les.com. ph

"In the particular case of the property subject of this bill, the City of Manila does not seem to have use
thereof as a public communal property. As a matter of fact, a resolution was adopted by the Municipal Board
of Manila at its regular session held on September 21, 1960, to request the feasibility of declaring the city
property bounded by Florida, San Andres and Nebraska Streets as a patrimonial property of the City of
Manila for the purpose of reselling these lots to the actual occupants thereof. Therefore, it will be to the best
interest of society that the said property be used in one way or another. Since this property has been
occupied for a long time by the present occupants thereof and since said occupants have expressed their
willingness to buy the said property, it is but proper that the same be sold to them." 4

Subsequently, a revised version of the Bill was introduced in the House of Representatives by Congressmen
Manuel Cases, Antonio Raquiza and Nicanor Yñiguez as House Bill No. 1453, with the following explanatory
note:jgc:chan roble s.com.p h

"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 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: jgc:chan roble s.com.p h

"SENATOR FERNANDEZ: Mr. President, it will be recalled that when the late Mayor Lacson was still alive, we
approved a similar bill. But afterwards, the late Mayor Lacson came here and protested against the approval,
and the approval was reconsidered. May I know whether the defect in the bill which we approved, has
already been eliminated in this present bill?
"SENATOR TOLENTINO: I understand Mr. President, that has already been eliminated, and that is why the
City of Manila has no more objection to this bill.

"SENATOR FERNANDEZ: Mr. President, in view of that manifestation and considering that Mayor Villegas and
Congressman Albert of the Fourth District of Manila are in favor of the bill. I would not want to pretend to
know more what is good for the City of Manila.

"SENATOR TOLENTINO: Mr. President, there being no objection, I move that we approve this bill on second
reading.

"PRESIDENT PRO-TEMPORE: The bill is approved on second reading after several Senators said aye and
nobody said nay." cralaw virt ua1aw li bra ry

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: chan rob1es v irt ual 1aw li bra ry

Lot 1-B-2-B op 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." cralaw virtua 1aw lib rary

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 Laud Authority, thru then Deputy Governor Jose V. Yap, requested the City Treasurer of
Manila, thru the City Mayor, for the surrender and delivery to the former of the owner’s duplicate of Transfer
Certificate of Title No. 22547 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:chan rob1e s vi rtual 1aw lib rary

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?

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 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: jgc:chanrob les.co m.ph

"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 . . . is nothing in the said certificate of title indicating that
the land was ‘communal’ land as contended by the respondents. The erroneous assumption by the Municipal
Board of Manila that the land in question was communal land did not make it so. The Municipal Board had no
authority to do that.

"The respondents, however, contend that Congress had the power and authority to declare that the land in
question was ‘communal’ land and the courts have no power or authority to make a contrary finding. This
contention is not entirely correct or accurate. Congress has the power to classify ‘land of the public domain’,
transfer them from one classification to another and declare them disposable or not. Such power does not,
however, extend to properties which are owned by cities, provinces and municipalities in their ‘patrimonial’
capacity.

"Art. 324 of the Civil Code provides that properties of provinces, cities and municipalities are divided into
properties for public use and patrimonial property Art. 424 of the same code provides that properties for
public use consist of provincial roads, city streets, municipal streets, the squares, fountains, public waters,
promenades and public works for public service paid for by said province, cities or municipalities. All other
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 v. Madison, 2 L. ed. 60, when the United States Supreme Court
speaking thru Chief Justice Marshall held: chan rob1e s virtual 1aw l ibra ry

‘. . . 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
v. 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 v. 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 cites for
the public buildings, among others, the municipal building or the case real, as well as of the lands which
were to constitute the common pastures, and propios of the municipality and the streets and roads which
were to intersect the new town were laid out, . . ." (Municipality of Catbalogan v. 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 Mc Quilin, Municipal Corporations, 3rd Ed., p. 197, citing Monagham v. 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 lights 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 v. Armatage,
supra, said:jgc:chanrob les.co m.ph
". . . 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 v. Power, 25 Ill. 187; State Board (of
Education) v. City, 56 Miss. 518. As remarked by the supreme court of Maryland in Mayor v. 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." cralaw virt ua1aw lib rary

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. v. Ten Yu, 24 Phil, 1; Go
Ching, Et. Al. v. 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 v. 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: jgc:chan robles. com.ph

"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 v. 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 time 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 v. Director of
Lands, 35 Phil. 798; City of Manila v. Insular Government, 10 Phil. 327; Municipality of Luzuriaga v. Director
of Lands, 24 Phil. 193). The conclusion of the respondent court that Republic Act No. 4118 converted a
patrimonial property of the City of Manila into a parcel of disposable land of the State and took it away from
the City without compensation is, therefore, unfounded. In the last analysis the land in question pertains to
the State and the City of Manila merely acted as trustee for the benefit of the people therein for whom the
State can legislate in the exercise of its legitimate powers.

Republic Act No. 4118 was never intended to expropriate the property involved but merely to confirm its
character as communal land of the State and to make it available for disposition by the National
Government: And this was done at the instance or upon the request of the City of Manila itself. The
subdivision of the land and conveyance of the resulting subdivision lots to the occupants by Congressional
authorization does not operate as an exercise of the power of eminent domain without just compensation in
violation of Section 1, subsection (2), Article III of the Constitution, but simply as a manifestation of its right
and power to deal with state property.

It should be emphasized that the law assailed was enacted upon formal written petition of the Municipal
Board 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., did not take part.

[G.R. No. L-61744. June 25, 1984.]

MUNICIPALITY OF SAN MIGUEL, BULACAN, Petitioner, v. 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.

SYLLABUS

1. ADMINISTRATIVE LAW; MUNICIPAL CORPORATIONS; PUBLIC FUNDS, NOT SUBJECT TO LEVY AND
EXECUTION. — In Tantoco v. 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."cralaw virtua 1aw lib rary

2. ID.; ID.; ID.; RATIONALE. — 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 v. Manaois, 86 Phil. 629
"that they are held in trust for the people, intended and used for the accomplishment of the purposes for
which municipal corporations are created, and that to subject said properties and public funds to execution
would materially impede, even defeat and in some instances destroy said purpose." cralaw virtua 1aw lib rary

3. ID.; ID.; ID.; CASE AT BAR. — 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, there
must be, pursuant to Section 2(a) of Presidential Decree No. 477, known as "The Decree on Local Fiscal
Administration," 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, the procedure outlined by
Section 15, Rule 39 of the New Rules of Court has not been followed.

DECISION

RELOVA, J.:

In Civil Case No. 604-B, entitled "Margarita D. Vda. de Imperio, Et. Al. v. 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: jgc:chanro bles. com.ph

"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: jgc:chan rob les.com. ph

"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; chanroblesvi rt uallawl ibra ry

"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 (1/2) 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 (1/2) share in favor of plaintiff-spouses Marcelo
E. Pineda and Lucila Pongco;

"3. ordering the defendant municipality to pay to the plaintiffs on the proportion mentioned in the
immediately preceding paragraph the sum of P64,440.00 corresponding to the rentals it has collected from
the occupants for their use and occupation of the premises from 1970 up to and including 1975, plus
interest thereon at the legal rate from January 1970 until fully paid;

"4. ordering the restoration of ownership and possession over the five lots in question in favor of the
plaintiffs in the same proportion aforementioned;

"5. ordering the defendant to pay the plaintiffs the sum of P3,000.00 for attorney’s fees; and to pay the cost
of suit.

"The counterclaim of the defendant is hereby ordered dismissed for lack of evidence presented to
substantiate the same.

"SO ORDERED." (pp. 11-12, Rollo)

The foregoing judgment became final when herein petitioner’s appeal was dismissed due to its failure to file
the record on appeal on time. The dismissal was affirmed by the then Court of Appeals in CA-G.R. No. SP-
12118 and by this Court in G.R. No. 59938. Thereafter, herein private respondents moved for issuance of a
writ of execution for the satisfaction of the judgment. Respondent judge, on July 27, 1982, issued an order,
to wit:
jgc:chan roble s.com. ph

"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) c hanrobles. com.ph : vi rtua l law lib rary

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: jgc:chanrob les.com. ph

"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 released only upon compliance
thereof.chanroblesv irt ualawli bra ry

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 v. Manaois, 86 Phil. 629 "that they are held in trust for the
people, intended and used for the accomplishment of the purposes for which municipal corporations are
created, and that to subject said properties and public funds to execution would materially impede, even
defeat and in some instances destroy said purpose." And, in Tantoco v. 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: jg c:chan roble s.com.p h

"SECTION 2. Fundamental Principles. — Local government financial affairs, transactions, and operations
shall be governed by the fundamental principles set forth hereunder: jgc:c hanro bles. com.ph

"(a) No money shall be paid out of the treasury except in pursuance of a lawful appropriation or other
specific statutory authority.

x x x

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: jgc:chan roble s.com.p h

"(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." cralaw virtua1aw l ibra ry

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. chanroblesv irt uallawl ibra ry

SO ORDERED.

Teehankee, Melencio-Herrera, Plana, Gutierrez, Jr. and De la Fuente, JJ., concur.

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.

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: 1äw phï1.ñët

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, 11 where it was stated that "... where the municipality has occupied lands distinctly for
public purposes, such as for the municipal court house, the public school, the public market, or other
necessary municipal building, we will, in the absence of proof to the contrary, presume a grant from
the States in favor of the municipality; but, as indicated by the wording, that rule may be invoked only
as to property which is used distinctly for public purposes...." (2) VIUDA DE TANTOCO V.
MUNICIPAL COUNCIL OF ILOILO 12 held that municipal properties necessary for governmental
purposes are public in nature. Thus, the auto trucks used by the municipality for street sprinkling, the
police patrol automobile, police stations and concrete structures with the corresponding lots used as
markets were declared exempt from execution and attachment since they were not patrimonial
properties. (3) MUNICIPALITY OF BATANGAS VS. CANTOS 13 held squarely that a municipal lot
which had always been devoted to school purposes is one dedicated to public use and is not
patrimonial property of a municipality.

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
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
considered as public property are the following:

TCT
Lot Number Use
Number
2200 ...................................... 4-B ...................................... Capitol Site
2816 ...................................... 149 ...................................... School Site
3281 ...................................... 1224 ...................................... Hospital Site
3282 ...................................... 1226 ...................................... Hospital Site
3283 ...................................... 1225 ...................................... Hospital Site
3748 ...................................... 434-A-1 ...................................... School Site
5406 ...................................... 171 ...................................... School Site
High School Play-
5564 ...................................... 168 ......................................
ground
157 &
5567 ...................................... ...................................... Trade School
158
High School Play-
5583 ...................................... 167 ......................................
ground
6181 ...................................... (O.C.T.) ...................................... Curuan School
11942 ...................................... 926 ...................................... Leprosarium
11943 ...................................... 927 ...................................... Leprosarium
11944 ...................................... 925 ...................................... Leprosarium
5557 ...................................... 170 ...................................... Burleigh School
5562 ...................................... 180 ...................................... Burleigh School
5565 ...................................... 172-B ...................................... Burleigh
5570 ...................................... 171-A ...................................... Burleigh
5571 ...................................... 172-C ...................................... Burleigh
5572 ...................................... 174 ...................................... Burleigh
5573 ...................................... 178 ...................................... Burleigh
5585 ...................................... 171-B ...................................... Burleigh
5586 ...................................... 173 ...................................... Burleigh
5587 ...................................... 172-A ...................................... Burleigh

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 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.

Regarding the several buildings existing on the lots above-mentioned, the records do not
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
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 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 lots in
question.
 But even assuming that provincial funds were used, still the buildings constitute mere
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
benefit of city residents for they could be availed of also by the provincial residents. The province
then — and its successors-in-interest — are not really deprived of the benefits thereof.

But Republic Act 3039 cannot be applied to deprive Zamboanga del Norte of its share in the
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:

TCT Number Lot Number Use

5577 ...................................... 177 ...................................... Mydro, Magay
13198 ...................................... 127-0 ...................................... San Roque
5569 ...................................... 169 ...................................... Burleigh 15
5558 ...................................... 175 ...................................... Vacant
5559 ...................................... 188 ...................................... "
5560 ...................................... 183 ...................................... "
5561 ...................................... 186 ...................................... "
5563 ...................................... 191 ...................................... "
5566 ...................................... 176 ...................................... "
5568 ...................................... 179 ...................................... "
5574 ...................................... 196 ...................................... "
5575 ...................................... 181-A ...................................... "
5576 ...................................... 181-B ...................................... "
5578 ...................................... 182 ...................................... "
5579 ...................................... 197 ...................................... "
5580 ...................................... 195 ...................................... "
5581 ...................................... 159-B ...................................... "
5582 ...................................... 194 ...................................... "
5584 ...................................... 190 ...................................... "
5588 ...................................... 184 ...................................... "
5589 ...................................... 187 ...................................... "
5590 ...................................... 189 ...................................... "
5591 ...................................... 192 ...................................... "
5592 ...................................... 193 ...................................... "
5593 ...................................... 185 ...................................... "
7379 ...................................... 4147 ...................................... "

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
registered is of no significance since registration cannot convert public property to private. 16

We are more inclined to uphold this latter view. The controversy here is more along the
domains of the Law of Municipal Corporations — State vs. Province — than along that of Civil Law.
Moreover, this Court is not inclined to hold that municipal property held and devoted to public service
is in the same category as ordinary private property. The consequences are dire. As ordinary 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
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, the
principles, obtaining under the Law of Municipal Corporations can be considered as "special laws".
Hence, the classification of municipal property devoted for distinctly governmental purposes as
public should prevail over the Civil Code classification in this particular case.

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

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

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

WHEREFORE, the decision appealed from is hereby set aside and another judgment is
hereby entered as follows:.

(1) Defendant Zamboanga City is hereby ordered to return to plaintiff Zamboanga del Norte in
lump sum the amount of P43,030.11 which the former took back from the latter out of the sum of
P57,373.46 previously paid to the latter; and

(2) Defendants are hereby ordered to effect payments in favor of plaintiff of whatever balance
remains of plaintiff's 54.39% share in the 26 patrimonial properties, after deducting therefrom the
sum of P57,373.46, on the basis of Resolution No. 7 dated March 26, 1949 of the Appraisal
Committee 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.

G.R. No. 73002 December 29, 1986

THE DIRECTOR OF LANDS, petitioner,

vs.
INTERMEDIATE APPELLATE COURT and ACME PLYWOOD & VENEER CO. INC.,
ETC., respondents.

D. Nacion Law Office for private respondent.

NARVASA, J.:

The Director of Lands has brought this appeal by certiorari from a judgment of the Intermediate
Appellate Court affirming a decision of the Court of First Instance of Isabela, which ordered
registration in favor of Acme Plywood & Veneer Co., Inc. of five parcels of land measuring 481, 390
square meters, more or less, acquired by it from Mariano and Acer Infiel, members of the Dumagat
tribe.

The registration proceedings were for confirmation of title under Section 48 of Commonwealth Act
No. 141 (The Public Land Act). as amended: and the appealed judgment sums up the findings of the
trial court in said proceedings in this wise:

1. That Acme Plywood & Veneer Co. Inc., represented by Mr. Rodolfo Nazario is a
corporation duly organized in accordance with the laws of the Republic of the Philippines and
registered with the Securities and Exchange Commission on December 23, 1959;

2. That Acme Plywood & Veneer Co. Inc., represented by Mr. Rodolfo Nazario can acquire
real properties pursuant to the provisions of the Articles of Incorporation particularly on the
provision of its secondary purposes (paragraph (9), Exhibit 'M-l');

3. That the land subject of the Land Registration proceeding was ancestrally acquired by
Acme Plywood & Veneer Co., Inc., on October 29, 1962, from Mariano Infiel and Acer Infiel,
both members of the Dumagat tribe and as such are cultural minorities;

4. That the constitution of the Republic of the Philippines of 1935 is applicable as the sale
took place on October 29, 1962;

5. That the possession of the Infiels over the land relinquished or sold to Acme Plywood &
Veneer Co., Inc., dates back before the Philippines was discovered by Magellan as the
ancestors of the Infiels have possessed and occupied the land from generation to generation
until the same came into the possession of Mariano Infiel and Acer Infiel;

6. That the possession of the applicant Acme Plywood & Veneer Co., Inc., is continuous,
adverse and public from 1962 to the present and tacking the possession of the Infiels who
 were granted from whom the applicant bought said land on October 29, 1962, hence the
possession is already considered from time immemorial.

7. That the land sought to be registered is a private land pursuant to the provisions of
Republic Act No. 3872 granting absolute ownership to members of the non-Christian Tribes
on land occupied by them or their ancestral lands, whether with the alienable or disposable
public land or within the public domain;

8. That applicant Acme Plywood & Veneer Co. Inc., has introduced more than Forty-Five
Million (P45,000,000.00) Pesos worth of improvements, said improvements were seen by the
Court during its ocular investigation of the land sought to be registered on September 18,
1982;

9. That the ownership and possession of the land sought to be registered by the applicant
was duly recognized by the government when the Municipal Officials of Maconacon, Isabela,
have negotiated for the donation of the townsite from Acme Plywood & Veneer Co., Inc., and
this negotiation came to reality when the Board of Directors of the Acme Plywood & Veneer
Co., Inc., had donated a part of the land bought by the Company from the Infiels for the
townsite of Maconacon Isabela (Exh. 'N') on November 15, 1979, and which donation was
accepted by the Municipal Government of Maconacon, Isabela (Exh. 'N-l'), during their
special session on November 22, 1979.

The Director of Lands takes no issue with any of these findings except as to the applicability of the
1935 Constitution to the matter at hand. Concerning this, he asserts that, the registration
proceedings have been commenced only on July 17, 1981, or long after the 1973 Constitution had
gone into effect, the latter is the correctly applicable law; and since section 11 of its Article XIV
prohibits private corporations or associations from holding alienable lands of the public domain,
except by lease not to exceed 1,000 hectares (a prohibition not found in the 1935 Constitution which
was in force in 1962 when Acme purchased the lands in question from the Infiels), it was reversible
error to decree registration in favor of Acme Section 48, paragraphs (b) and (c), of Commonwealth
Act No. 141, as amended, reads:

SEC. 48. The following described citizens of the Philippines, occupying lands of the public
domain or claiming to own any such lands or an interest therein, but whose titles have not
been perfected or completed, may apply to the Court of First Instance of the province where
the land is located for confirmation of their claims, and the issuance of a certificate of title
therefor, under the Land Registration Act, to wit:

xxx xxx xxx

(b) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of agricultural lands of the
public domain, under a bona fide claim of acquisition or ownership, for at least thirty years
immediately preceding the filing of the application for confirmation of title except when
prevented by war or force majeure. These shall be conclusively presumed to have performed
all the conditions essential to a Government grant and shall be entitled to a certificate of title
under the provisions of this chapter.

(c) Members of the National Cultural minorities who by themselves or through their
predecessors-in-interest have been in open. continuous, exclusive and notorious possession
and occupation of lands of the public domain suitable to agriculture, whether disposable or
 not, under a bona fide claim of ownership for at least 30 years shall be entitled to the rights
granted in subsection (b) hereof.

The Petition for Review does not dispute-indeed, in view of the quoted findings of the trial court
which were cited and affirmed by the Intermediate Appellate Court, it can no longer controvert before
this Court-the fact that Mariano and Acer Infiel, from whom Acme purchased the lands in question on
October 29, 1962, are members of the national cultural minorities who had, by themselves and
through their progenitors, possessed and occupied those lands since time immemorial, or for more
than the required 30-year period and were, by reason thereof, entitled to exercise the right granted in
Section 48 of the Public Land Act to have their title judicially confirmed. Nor is there any pretension
that Acme, as the successor-in-interest of the Infiels, is disqualified to acquire and register
ownership of said lands under any provisions of the 1973 Constitution other than Section 11 of its
Article XIV already referred to.

Given the foregoing, the question before this Court is whether or not the title that the Infiels had
transferred to Acme in 1962 could be confirmed in favor of the latter in proceedings instituted by it in
1981 when the 1973 Constitution was already in effect, having in mind the prohibition therein against
private corporations holding lands of the public domain except in lease not exceeding 1,000
hectares.

The question turns upon a determination of the character of the lands at the time of institution of the
registration proceedings in 1981. If they were then still part of the public domain, it must be
answered in the negative. If, on the other hand, they were then already private lands, the
constitutional prohibition against their acquisition by private corporations or associations obviously
does not apply.

In this regard, attention has been invited to Manila Electric Company vs. Castro-Bartolome, et
al, 1 where a similar set of facts prevailed. In that case, Manila Electric Company, a domestic
corporation more than 60% of the capital stock of which is Filipino-owned, had purchased in 1947
two lots in Tanay, Rizal from the Piguing spouses. The lots had been possessed by the vendors and,
before them, by their predecessor-in-interest, Olimpia Ramos, since prior to the outbreak of the
Pacific War in 1941. On December 1, 1976, Meralco applied to the Court of First Instance of Rizal,
Makati Branch, for confirmation of title to said lots. The court, assuming that the lots were public
land, dismissed the application on the ground that Meralco, a juridical person, was not qualified to
apply for registration under Section 48(b) of the Public Land Act which allows only Filipino citizens or
natural persons to apply for judicial confirmation of imperfect titles to public land. Meralco appealed,
and a majority of this Court upheld the dismissal. It was held that:

..., the said land is still public land. It would cease to be public land only upon the issuance of
the certificate of title to any Filipino citizen claiming it under section 48(b). Because it is still
public land and the Meralco, as a juridical person, is disqualified to apply for its registration
under section 48(b), Meralco's application cannot be given due course or has to be
dismissed.

Finally, it may be observed that the constitutional prohibition makes no distinction between
(on the one hand) alienable agricultural public lands as to which no occupant has an
imperfect title and (on the other hand) alienable lands of the public domain as to which an
occupant has on imperfect title subject to judicial confirmation.

Since section 11 of Article XIV does not distinguish, we should not make any distinction or
qualification. The prohibition applies to alienable public lands as to which a Torrens title may
 be secured under section 48(b). The proceeding under section 48(b) 'presupposes that the
land is public' (Mindanao vs. Director of Lands, L-19535, July 30, 1967, 20 SCRA 641, 644).

The present Chief Justice entered a vigorous dissent, tracing the line of cases beginning
with Carino in 1909 2 thru Susi in 1925 3 down to Herico in 1980, 4 which developed, affirmed and
reaffirmed the doctrine that open, exclusive and undisputed possession of alienable public land for
the period prescribed by law creates the legal fiction whereby the land, upon completion of the
requisite period ipso jure and without the need of judicial or other sanction, ceases to be public land
and becomes private property. That said dissent expressed what is the better — and, indeed, the
correct, view-becomes evident from a consideration of some of the principal rulings cited therein,

The main theme was given birth, so to speak, in Carino involving the Decree/Regulations of June 25,
1880 for adjustment of royal lands wrongfully occupied by private individuals in the Philippine
Islands. It was ruled that:

It is true that the language of articles 4 and 5 5 attributes title to those 'who may prove'
possession for the necessary time and we do not overlook the argument that this means may
prove in registration proceedings. It may be that an English conveyancer would have
recommended an application under the foregoing decree, but certainly it was not calculated
to convey to the mind of an Igorot chief the notion that ancient family possessions were in
danger, if he had read every word of it. The words 'may prove' (acrediten) as well or better, in
view of the other provisions, might be taken to mean when called upon to do so in any
litigation. There are indications that registration was expected from all but none sufficient to
show that, for want of it, ownership actually gained would be lost. The effect of the proof,
wherever made, was not to confer title, but simply to establish it, as already conferred by the
decree, if not by earlier law. ...

That ruling assumed a more doctrinal character because expressed in more categorical language,
in Susi:

.... In favor of Valentin Susi, there is, moreover, the presumption juris et de jure established
in paragraph (b) of section 45 of Act No. 2874, amending Act No. 926, that all the necessary
requirements for a grant by the Government were complied with, for he has been in actual
and physical possession, personally and through his predecessors, of an agricultural land of
the public domain openly, continuously, exclusively and publicly since July 26, 1984, with a
right to a certificate of title to said land under the provisions of Chapter VIII of said Act. So
that when Angela Razon applied for the grant in her favor, Valentin Susi had already
acquired, by operation of law not only a right to a grant, but a grant of the Government, for it
is not necessary that a certificate of title should be issued in order that said grant may be
sanctioned by the courts, an application therefore is sufficient, under the provisions of
section 47 of Act No. 2874. If by a legal fiction, Valentin Susi had acquired the land in
question by a grant of the State, it had already ceased to be of the public domain and had
become private property, at least by presumption, of Valentin Susi, beyond the control of the
Director of Lands. Consequently, in selling the land in question of Angela Razon, the Director
of Lands disposed of a land over which he had no longer any title or control, and the sale
thus made was void and of no effect, and Angela Razon did not thereby acquire any right. 6

Succeeding cases, of which only some need be mentioned, likeof Lacaste vs. Director of
Lands, 7 Mesina vs. Vda. de Sonza, 8 Manarpac vs. Cabanatuan, 9 Miguel vs. Court of
Appeals 10 and Herico vs. Dar, supra, by invoking and affirming the Susi doctrine have firmly rooted it
in jurisprudence.
Herico, in particular, appears to be squarely affirmative: 11

.... Secondly, under the provisions of Republic Act No. 1942, which the respondent Court
held to be inapplicable to the petitioner's case, with the latter's proven occupation and
cultivation for more than 30 years since 1914, by himself and by his predecessors-in-
interest, title over the land has vested on petitioner so as to segregate the land from the
mass of public land. Thereafter, it is no longer disposable under the Public Land Act as by
free patent. ....

xxx xxx xxx

As interpreted in several cases, when the conditions as specified in the foregoing provision
are complied with, the possessor is deemed to have acquired, by operation of law, a right to
a grant, a government grant, without the necessity of a certificate of title being issued. The
land, therefore, ceases to be of the public domain and beyond the authority of the Director of
Lands to dispose of. The application for confirmation is mere formality, the lack of which
does not affect the legal sufficiency of the title as would be evidenced by the patent and the
Torrens title to be issued upon the strength of said patent. 12

Nothing can more clearly demonstrate the logical inevitability of considering possession of public
land which is of the character and duration prescribed by statute as the equivalent of an express
grant from the State than the dictum of the statute itself 13 that the possessor(s) "... shall be
conclusively presumed to have performed all the conditions essential to a Government grant and
shall be entitled to a certificate of title .... " No proof being admissible to overcome a conclusive
presumption, confirmation proceedings would, in truth be little more than a formality, at the most
limited to ascertaining whether the possession claimed is of the required character and length of
time; and registration thereunder would not confer title, but simply recognize a title already vested.
The proceedings would not originally convert the land from public to private land, but only confirm
such a conversion already affected by operation of law from the moment the required period of
possession became complete. As was so well put in Carino, "... (T)here are indications that
registration was expected from all, but none sufficient to show that, for want of it, ownership actually
gained would be lost. The effect of the proof, wherever made, was not to confer title, but simply to
establish it, as already conferred by the decree, if not by earlier law."

If it is accepted-as it must be-that the land was already private land to which the Infiels had a legally
sufficient and transferable title on October 29, 1962 when Acme acquired it from said owners, it must
also be conceded that Acme had a perfect right to make such acquisition, there being nothing in the
1935 Constitution then in force (or, for that matter, in the 1973 Constitution which came into effect
later) prohibiting corporations from acquiring and owning private lands.

Even on the proposition that the land remained technically "public" land, despite immemorial
possession of the Infiels and their ancestors, until title in their favor was actually confirmed in
appropriate proceedings under the Public Land Act, there can be no serious question of Acmes right
to acquire the land at the time it did, there also being nothing in the 1935 Constitution that might be
construed to prohibit corporations from purchasing or acquiring interests in public land to which the
vendor had already acquired that type of so-called "incomplete" or "imperfect" title. The only
limitation then extant was that corporations could not acquire, hold or lease public agricultural lands
in excess of 1,024 hectares. The purely accidental circumstance that confirmation proceedings were
brought under the aegis of the 1973 Constitution which forbids corporations from owning lands of the
public domain cannot defeat a right already vested before that law came into effect, or invalidate
transactions then perfectly valid and proper. This Court has already held, in analogous
circumstances, that the Constitution cannot impair vested rights.
 We hold that the said constitutional prohibition 14 has no retroactive application to the sales
application of Binan Development Co., Inc. because it had already acquired a vested right to
the land applied for at the time the 1973 Constitution took effect.

That vested right has to be respected. It could not be abrogated by the new Constitution.
Section 2, Article XIII of the 1935 Constitution allows private corporations to purchase public
agricultural lands not exceeding one thousand and twenty-four hectares. Petitioner'
prohibition action is barred by the doctrine of vested rights in constitutional law.

xxx xxx xxx

The due process clause prohibits the annihilation of vested rights. 'A state may not impair
vested rights by legislative enactment, by the enactment or by the subsequent repeal of a
municipal ordinance, or by a change in the constitution of the State, except in a legitimate
exercise of the police power'(16 C.J.S. 1177-78).

xxx xxx xxx

In the instant case, it is incontestable that prior to the effectivity of the 1973 Constitution the
right of the corporation to purchase the land in question had become fixed and established
and was no longer open to doubt or controversy.

Its compliance with the requirements of the Public Land Law for the issuance of a patent had
the effect of segregating the said land from the public domain. The corporation's right to
obtain a patent for the land is protected by law. It cannot be deprived of that right without due
process (Director of Lands vs. CA, 123 Phil. 919). 15<äre|| anº• 1àw>

The fact, therefore, that the confirmation proceedings were instituted by Acme in its own name must
be regarded as simply another accidental circumstance, productive of a defect hardly more than
procedural and in nowise affecting the substance and merits of the right of ownership sought to be
confirmed in said proceedings, there being no doubt of Acme's entitlement to the land. As it is
unquestionable that in the light of the undisputed facts, the Infiels, under either the 1935 or the 1973
Constitution, could have had title in themselves confirmed and registered, only a rigid subservience
to the letter of the law would deny the same benefit to their lawful successor-in-interest by valid
conveyance which violates no constitutional mandate.

The Court, in the light of the foregoing, is of the view, and so holds, that the majority ruling
in Meralco must be reconsidered and no longer deemed to be binding precedent. The correct rule,
as enunciated in the line of cases already referred to, is that alienable public land held by a
possessor, personally or through his predecessors-in-interest, openly, continuously and exclusively
for the prescribed statutory period (30 years under The Public Land Act, as amended) is converted
to private property by the mere lapse or completion of said period, ipso jure. Following that rule and
on the basis of the undisputed facts, the land subject of this appeal was already private property at
the time it was acquired from the Infiels by Acme. Acme thereby acquired a registrable title, there
being at the time no prohibition against said corporation's holding or owning private land. The
objection that, as a juridical person, Acme is not qualified to apply for judicial confirmation of title
under section 48(b) of the Public Land Act is technical, rather than substantial and, again, finds its
answer in the dissent in Meralco:

6. To uphold respondent judge's denial of Meralco's application on the technicality that the
Public Land Act allows only citizens of the Philippines who are natural persons to apply for
confirmation of their title would be impractical and would just give rise to multiplicity of court
 actions. Assuming that there was a technical error not having filed the application for
registration in the name of the Piguing spouses as the original owners and vendors, still it is
conceded that there is no prohibition against their sale of the land to the applicant Meralco
and neither is there any prohibition against the application being refiled with retroactive effect
in the name of the original owners and vendors (as such natural persons) with the end result
of their application being granted, because of their indisputable acquisition of ownership by
operation of law and the conclusive presumption therein provided in their favor. It should not
be necessary to go through all the rituals at the great cost of refiling of all such applications
in their names and adding to the overcrowded court dockets when the Court can after all
these years dispose of it here and now. (See Francisco vs. City of Davao)

The ends of justice would best be served, therefore, by considering the applications for
confirmation as amended to conform to the evidence, i.e. as filed in the names of the original
persons who as natural persons are duly qualified to apply for formal confirmation of the title
that they had acquired by conclusive presumption and mandate of the Public Land Act and
who thereafter duly sold to the herein corporations (both admittedly Filipino corporations duly
qualified to hold and own private lands) and granting the applications for confirmation of title
to the private lands so acquired and sold or exchanged.

There is also nothing to prevent Acme from reconveying the lands to the Infiels and the latter from
themselves applying for confirmation of title and, after issuance of the certificate/s of title in their
names, deeding the lands back to Acme. But this would be merely indulging in empty charades,
whereas the same result is more efficaciously and speedily obtained, with no prejudice to anyone, by
a liberal application of the rule on amendment to conform to the evidence suggested in the dissent
in Meralco.

While this opinion seemingly reverses an earlier ruling of comparatively recent vintage, in a real
sense, it breaks no precedent, but only reaffirms and re-established, as it were, doctrines the
soundness of which has passed the test of searching examination and inquiry in many past cases.
Indeed, it is worth noting that the majority opinion, as well as the concurring opinions of Chief Justice
Fernando and Justice Abad Santos, in Meralco rested chiefly on the proposition that the petitioner
therein, a juridical person, was disqualified from applying for confirmation of an imperfect title to
public land under Section 48(b) of the Public Land Act. Reference to the 1973 Constitution and its
Article XIV, Section 11, was only tangential limited to a brief paragraph in the main opinion, and may,
in that context, be considered as essentially obiter. Meralco, in short, decided no constitutional
question.

WHEREFORE, there being no reversible error in the appealed judgment of the Intermediate
Appellate Court, the same is hereby affirmed, without costs in this instance.

SO ORDERED.

Feria, Yap, Fernan, Alampay, Cruz, Paras and Feliciano, JJ., concur.