You are on page 1of 7

GR No.

127882 January 27, 2004
La Bugal-B’Laan Tribal Association, Inc. v. Victor
Ramos

Facts
President Corazon Aquino issued Executive Order
(EO) 279, as part of her interim legislative power
which authorizes the DENR Secretary to accept,
consider and evaluate proposals from foreign-
owned corporations or foreign investors for
contracts or agreements involving either technical
or financial assistance for large-scale exploration,
development, and utilization of minerals, which,
upon appropriate recommendation of the
Secretary, the she may execute with the foreign
proponent.

President Fidel Ramos approved RA 7942 known as
the Mining Act to "govern the exploration,
development, utilization and processing of all
mineral resources. Shortly, after its effectivity, the
President entered into a Financial and Technical
Assistance Agreement (FTAA) with Western Mining
Corporation Philippines (WMCP) which is owned by
WMC Resources International Pty., Ltd. (The latter
is a wholly owned subsidiary of Western Mining
Corporation Holdings Limited, a publicly listed
major Australian mining and exploration
company.), covering 99, 387 hectares of land in
South Cotabato, Sultan Kuradat, Davao del Sur and
North Cotabato.

Then DENR Secretary Victor O. Ramos issued DENR
Administrative Order (DAO) No. 95-23, s. 1995,
known as the Implementing Rules and Regulations
of the said RA 7942 which was later repealed by
DAO No. 96-40, s. 1996.

Counsels for petitioners sent a letter to the DENR
Secretary demanding that the DENR stop the
implementation of the said law and its
implementing rules giving the DENR fifteen days
from receipt to act thereon. The DENR, however,
has yet to respond or act on petitioner’s letter.

The petitioners filed the present petition for
prohibition and mandamus, with a prayer for a
temporary restraining order alleging that at the
time of the filing of the petition, 100 FTAA
applications has already been filed, covering an
area of 8.4 million hectares, 64 of the application
are by fully foreign-owned corporations, and at
least one by a fully foreign-owned mining company
over offshore areas.

They are questioning the effectivity of EO 279
which says that the effectivity of the said
presidential issuance is contrary to what is
provided in EO 200 which says laws are effective
after fifteen (15) days following its publication.

Given this, the power of that issuance has ceased
to exist because prior to the lapse of the 15-day
period Congress has convened making the powers
to legislate by the President ceased to exist. The
FTAA issued by the President with WMC, the
original company before it was called WMCP.

They also claim that the DENR Secretary acted
without or in excess of jurisdiction on the ground
of the issuance of DAO No. 96-40 regulations of RA
7942, which the latter is unconstitutional for it:
a.) allows fully foreign-owned corporations to
explore, develop, utilize and exploit mineral
resources in a manner contrary to Sec. 2, par.
4, Art. XII of the Constitution;
b.) allows the taking of private property without
the determination of public use and for just
compensation;
c.) violates Sec. 1, Art. III of the Constitution;
d.) allows enjoyment by foreign citizens as well as
fully foreign owned corporations of the
nation’s marine wealth contrary to Sec. 2, par.
2 of Art. XII of the Constitution;
e.) allows priority to foreign and fully foreign
owned corporations in the exploration,
development and utilization of mineral
resources contrary to Art. XII of the
Constitution;
f.) allows the inequitable sharing of wealth
contrary to Sec. 1, par. 1. and Sec. 2, par. 4 of
Art. XII of the Constitution. Moreover, in
recommending approval of and implementing
the FTAA between the President and WMCP
because the same is illegal and
unconstitutional.

They pray that the Court issue an order: a.)
permanently enjoining the respondents from
acting on any application for FTAAs; b.) declaring
RA 7942 as unconstitutional and null and void; c.)
declaring the IRR contained in DAO 96-40 and all
other similar administrative issuances as
unconstitutional and null and void; and d.)
cancelling the FTAA issued to WMCP as
unconstitutional, illegal and null and void.

Respondents argued that the EO 279 is
constitutional according to the ruling in Miners
Association of the Philippines vs. Factoran. They
further argues that the first three requisites to
warrant judicial review in this case are not present
such as absence of actual controversy and legal
standing of the petitioners and the question is not
raised at the earliest opportunity.

On the issue of the constitutionality of the DAO 96-
40, respondents insisted that “agreements
involving technical or financial assistance” is just
another term for service contracts as reflected in
the deliberations of the Constitutional Commission
preparing the draft of the 1987 Constitution.

Issues
Procedural Issue
Is there a violation on the rule of hierarchy of
courts against the petitioners?

Substantive Issue
1. Is the petition a justiciable question given that
the petition was raised after two years of the
execution of the FTAA?
2. When did EO 279 become effective, as provided
in the presidential issuance itself or as provided
in EO 200?
3. Is RA 7942 constitutional?
4. Is DAO 96-40 valid?
5. Is the WMCP FTAA valid?

Rulings According to the Cited Issues
Procedural Issue
Although the Supreme Court has concurrent
jurisdiction with the Regional

Trial Courts and the Court of Appeals to issue writs
of certiorari, prohibition, mandamus, quo
warranto, habeas corpus and injunction, such
concurrence does not give a party unrestricted
freedom of choice of court forum. It is allowed to
directly file the petition in the Supreme Court
where the redress desired cannot be obtained in
the appropriate courts or where exceptional and
compelling circumstances justify such invocation as
held in People vs. Cuaresma.

The issues raised constitute exceptional and
compelling circumstances to justify the direct
petition. The Court has the discretion to take
cognizance of a suit which does not satisfy the
requirements of an actual or legal standing when
paramount importance to the public interest is
involved. Thus, the Court may brush aside
technicalities of procedure.

Substantive Issues
1. The issue is justiciable on the ground that this
requisite should not be taken to mean that the
question of constitutionality must be raised
immediately after the execution of the state
action complained of. That the question of
constitutionality has not been raised before is
not a valid reason for refusing to allow it to be
raised later. A contrary rule would mean that a
law, otherwise unconstitutional, would lapse
into constitutionality by the mere failure of the
proper party to promptly file a case to challenge
the same.
2. Nothing in EO 200 which prevents a law from
taking effects on a date other than-even before-
the 15-day period after its publication. Where a
law provides for its own date of effectivity, such
date prevails over that prescribed by said
issuance. It is the very essence of the phrase
“unless it is otherwise provided” Sec. 1 of EO
200, therefore, applies only when a statute does
not provide for its own date of effectivity.

What is mandatory under EO 200 and what due
process requires is the publication of the law for
without such notice and publication, there
would be no basis for the application of the
maxim “ignorantia legis n*eminem+ excusat” It is
clear that EO 279 was published in the Official
Gazette on August 3, 1987. The said effectivity
took place after the convening of the first
Congress is irrelevant. At the time President
Aquino issued EO 279 on July 25, 1987, she was
still validly exercising legislative powers under
the Provisional Constitution. The ruling in Miners
Association of the Philippines is not applicable
since the question raised in the said case was the
unconstitutionality of the DAO 57 and 82 which
were pursuant to EO 279.

3. As to the third, fourth and last issues, the ruling
are consolidated given the relation of the said
issuances. The national patrimony or our natural
resources are exclusively reserved for the
Filipino people. No alien must be allowed to
enjoy, exploit and develop our natural resources.
As a matter of fact, that principle proceeds from
the fact that our natural resources are gifts from
God to the Filipino people and it would be a
breach of that special blessing from God if we
will allow aliens to exploit our natural resources.

The phrase “management or other forms of
assistance” in the 1973 Constitution was deleted
in the 1987 Constitution, which allows only
“technical or financial assistance.” Casus omisus
pro omisso habendus est. A person, object or
thing omitted from an enumeration must be
held to have been omitted intentionally. The
management or operation of mining activities by
foreign contractors, which is the primary feature
of service contracts, was precisely the evil that
the drafters of the 1987 Constitution sought to
eradicate.

To uphold respondents' theory would reduce the
latter to a mere euphemism for the former and
render the change in phraseology meaningless. It
is apparent that service contracts are not
allowed in the 1987 Constitution.

There can be little doubt that the WMCP FTAA
itself is a service contract. Section 1.3 of the
WMCP FTAA grants WMCP "the exclusive right
to explore, exploit, utilize [,] process and dispose
of all Minerals products and by-products thereof
that may be produced from the Contract Area."

While WMCP invokes the Agreement on the
Promotion and Protection of Investments
between the Philippine and Australian
Governments, the annulment of the FTAA would
not be a violation of the principle pacta sunt
servanda since the decision forms part of the
legal system of the Philippines.

Disposition
WHEREFORE, the petition is GRANTED. The Court
hereby declares unconstitutional and void:
(1) The following provisions of Republic Act
No. 7942:
(a) The proviso in Section 3 (aq),
(b) Section 23,
(c) Section 33 to 41,
(d) Section 56,
(e) The second and third paragraphs of
Section 81, and
(f) Section 90.

4. All provisions of Department of Environment and
Natural Resources Administrative Order 96-40, s.
1996 which are not in conformity with this
Decision, and
5. The Financial and Technical Assistance
Agreement between the Government of the
Republic of the Philippines and WMC Philippines,
Inc.

CHAVEZ V. PUBLIC ESTATES AUTHORITY
384 SCRA 152

FACTS:
President Marcos through a presidential decree
created PEA, which was tasked with the
development, improvement, and acquisition,
lease, and sale of all kinds of lands. The then
president also transferred to PEA the foreshore and
offshore lands of Manila Bay under the Manila-
Cavite Coastal Road and Reclamation Project.

Thereafter, PEA was granted patent to the
reclaimed areas of land and then, years later,
PEA entered into a JVA with AMARI for the
development of the Freedom Islands. These two
entered into a joint venture in the absence of any
public bidding.

Later, a privilege speech was given by
Senator President Maceda denouncing the JVA
as the grandmother of all scams.

An investigation was conducted and it was
concluded that the lands that PEA was conveying
to AMARI were lands of the public domain; the
certificates of title over the Freedom Islands
were void; and the JVA itself was illegal. This
prompted Ramos to form an investigatory
committee on the legality of the JVA.

Petitioner now comes and contends that the
government stands to lose billions by the
conveyance or sale of the reclaimed areas to
AMARI. He also asked for the full disclosure of the
renegotiations happening between the parties.

ISSUE:
Whether or not stipulations in the amended JVA
for the transfer to AMARI of the lands, eclaimed
or to be reclaimed, violate the Constitution.

HELD:
The ownership of lands reclaimed from foreshore
and submerged areas is rooted in the Regalian
doctrine, which holds that the State owns all lands
and waters of the public domain.

The 1987 Constitution recognizes the Regalian
doctrine. It declares that all natural resources are
owned by the State and except for alienable
agricultural lands of the public domain, natural
resources cannot be alienated.

The Amended JVA covers a reclamation area of 750
hectares. Only 157.84 hectares of the 750 hectare
reclamation project have been reclaimed, and the
rest of the area are still submerged areas forming
part of Manila Bay. Further, it is provided that
AMARI will reimburse the actual costs in
reclaiming the areas of land and it will shoulder the
other reclamation costs to be incurred.

The foreshore and submerged areas of Manila Bay
are part of the lands of the public domain, waters
and other natural resources and consequently
owned by the State.

As such, foreshore and submerged areas shall not
be alienable unless they are classified as
agricultural lands of the public domain. The
mere reclamation of these areas by the PEA
doesn’t convert these inalienable natural
resources of the State into alienable and
disposable lands of the public domain.

There must be a law or presidential proclamation
officially classifying these reclaimed lands as
alienable and disposable if the law has reserved
them for some public or quasi-public use.

Francisco I. Chavez vs. Public Estate Authority and
Amari Coastal Bay Development Corporation
G.R. No. 133250. May 6, 2003
Carpio, J.

Doctrine:
In the hands of the government agency tasked and
authorized to dispose of alienable or disposable
lands of the public domain, these lands are still
public, not private lands.

Facts:
On November 20, 1973, the government, through
the Commissioner of Public Highways, signed a
contract with the Construction and Development
Corporation of the Philippines (CDCP) to reclaim
certain foreshore and offshore areas of Manila Bay.
The contract also included the construction of
Phases I and II of the Manila-Cavite Coastal Road.
CDCP obligated itself to carry out all the works in
consideration of fifty percent of the total reclaimed
land.

On February 4, 1977, then President Ferdinand E.
Marcos issued Presidential Decree No. 1084
creating PEA. PD No. 1084 tasked PEA “to reclaim
land, including foreshore and submerged areas,”
and “to develop, improve, acquire, x x x lease and
sell any and all kinds of lands.” On the same date,
then President Marcos issued Presidential Decree
No. 1085 transferring to PEA the “lands reclaimed
in the foreshore and offshore of the Manila Bay”
under the Manila-Cavite Coastal Road and
Reclamation Project (MCCRRP).

On January 19, 1988, then President Corazon C.
Aquino issued Special Patent No. 3517, granting
and transferring to PEA “the parcels of land so
reclaimed under the Manila-Cavite Coastal Road
and Reclamation Project. On April 9, 1988, the
Register of Deeds issued TCT Nos. 7309, 7311, and
7312, in the name of PEA, covering the three
reclaimed islands known as the “Freedom Islands”
located at the southern portion of the Manila-
Cavite Coastal Road, Parañaque City.
On April 25, 1995, PEA entered into a Joint Venture
Agreement with AMARI, a private corporation, to
develop the Freedom Islands.

Petitioner assails the sale to AMARI of lands of the
public domain as a blatant violation of Section 3,
Article XII of the 1987 Constitution prohibiting the
sale of alienable lands of the public domain to
private corporations.

On March 30, 1999, PEA and AMARI signed the
Amended Joint Venture Agreement. On May 28,
1999, the Office of the President under the
administration of then President Joseph E. Estrada
approved the Amended JVA.

Several motions for reconsideration of the
Supreme Court’s July 9, 2002 decision which
declared the amended JVA null and void ab initio
were filed. The conclusions of said decision were
summarized by the Court as follows:

The 157.84 hectares of reclaimed lands comprising
the Freedom Islands, now covered by certificates of
title in the name of PEA, are alienable lands of the
public domain. PEA may lease these lands to
private corporations but may not sell or transfer
ownership of these lands to private corporations.
PEA may only sell these lands to Philippine citizens,
subject to the ownership limitations in the 1987
Constitution and existing laws.

The 592.15 hectares of submerged areas of Manila
Bay remain inalienable natural resources of the
public domain until classified as alienable or
disposable lands open to disposition and declared
no longer needed for public service. The
government can make such classification and
declaration only after PEA has reclaimed these
submerged areas. Only then can these lands qualify
as agricultural lands of the public domain, which
are the only natural resources the government can
alienate. In their present state, the 592.15 hectares
of submerged areas are inalienable and outside the
commerce of man.

Since the Amended JVA seeks to transfer to AMARI,
a private corporation, ownership of 77.34 hectares
of the Freedom Islands, such transfer is void for
being contrary to Section 3, Article XII of the 1987
Constitution which prohibits private corporations
from acquiring any kind of alienable land of the
public domain.

Since the Amended JVA also seeks to transfer to
AMARI ownership of 290.156 hectares of still
submerged areas of Manila Bay, such transfer is
void for being contrary to Section 2, Article XII of
the 1987 Constitution which prohibits the
alienation of natural resources other than
agricultural lands of the public domain. PEA may
reclaim these submerged areas. Thereafter, the
government can classify the reclaimed lands as
alienable or disposable, and further declare them
no longer needed for public service.

Still, the transfer of such reclaimed alienable lands
of the public domain to AMARI will be void in view
of Section 3, Article XII of the 1987 Constitution
which prohibits private corporations from acquiring
any kind of alienable land of the public domain.

Issue:
Whether or not the July 9, 2002 ruling of the
Supreme Court should be reversed.

Held:
No. Amari cannot claim good faith because even
before Amari signed the Amended JVA on March
30, 1999, petitioner had already filed the instant
case on April 27, 1998 questioning precisely the
qualification of Amari to acquire the Freedom
Islands. Even before the filing of this petition, two
Senate Committees had already approved on
September 16, 1997 Senate Committee Report No.
560 which concluded that the Freedom Islands are
inalienable lands of the public domain.

Thus, Amari signed the Amended JVA knowing and
assuming all the attendant risks, including the
annulment of the Amended JVA. Amari has also not
paid to PEA the full reimbursement cost incurred
by PEA in reclaiming the Freedom Islands.
Moreover, Amari does not claim to have even
initiated the reclamation of the 592.15 hectares of
submerged areas covered in the Amended JVA, or
to have started to construct any permanent
infrastructure on the Freedom Islands.

In short, Amari does not claim to have introduced
any physical improvement or development on the
reclamation project that is the subject of the
Amended JVA.

PEA cannot claim that it is “similarly situated” as
the Bases Conversion Development Authority
(BCDA) which under R.A. No. 7227 is tasked to sell
portions of the Metro Manila military camps and
other military reservations is incorrect.

PEA took the place of DENR as the government
agency charged with leasing or selling reclaimed
lands of the public domain. The reclaimed lands
being leased or sold by PEA are not private lands, in
the same manner that DENR, when it disposes of
other alienable lands, does not dispose of private
lands but alienable lands of the public domain.
Only when qualified private parties acquire these
lands will the lands become private lands. In the
hands of the government agency tasked and
authorized to dispose of alienable or disposable
lands of the public domain, these lands are still
public, not private lands.

To allow vast areas of reclaimed lands of the public
domain to be transferred to PEA as private lands
will sanction a gross violation of the constitutional
ban on private corporations from acquiring any
kind of alienable land of the public domain.

PEA will simply turn around and transfer several
hundreds of hectares of these reclaimed and still to
be reclaimed lands to a single private corporation
in only one transaction. This scheme will effectively
nullify the constitutional ban in Section 3, Article XII
of the 1987 Constitution.
Usero v Court of Appeals, G.R. No. 152115, 26
January 2005. Corona (J.)

Facts:
This is a consolidated petition assailing the decision
of the Court of Appeals (CA). Petitioners and the
private respondent are registered owners of
neighboring parcels of land wherein between the
lots is a low-level strip of land with stagnant body
of water. Whenever there is a storm or heavy rain,
the water therein would flood thereby causing
damage to houses of the Polinars prompting them
to build a concrete wall on the bank of the strip of
land about 3meters from their house and
riprapped the soil in that portion.

The Useros claimed ownership of the strip,
demanded the halt of the construction but the
Polinars never heeded believing that the strip is
part of a creek. However, the Polinars offered to
pay for the land. As the parties still failed to settle,
both filed separate complaints for forcible entry.
The Municipal Trial Court ruled in favor of the
petitioner, while the regional trial court reversed
and ordered the dismissal of the complaint and
confirmed the existence of the creek between the
lots.

Issue: Whether or not the disputed strip of land is
part of the creek hence part of public domain

Ruling:
Art. 420 of the Philippine New Civil Code provides
for properties which are part of public domain. A
creek is included in the phrase "and others of
similar character". A creek, which refers to a recess
or arm of a river is a property belonging to the
public domain, therefore not susceptible of private
ownership. Being public water, it cannot be
registered under the Torrens system under the
name of any individual.






Vda. De Tantoco v. Muncipal Council of Iloilo [G.R.
No. 24950. March 25, 1926.]
En Banc, Villamor (J): 7 concur

Facts:
The widow of Tan Toco 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 sq. m., and the other on
Calle Aldiguer consisting of 59 sq. m., which the
municipality of Iloilo had appropriated for widening
said street.

The CFI Iloilo sentenced the said municipality to
pay the Tantoco the amount so claimed, plus the
interest.

Said judgment was appealed, and was affirmed by
the Supreme Court.

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 with the CFI
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 municipality.

By order of 12 August 1925, the Court declared the
attachment levied upon the aforementioned
property of the municipality null and void, thereby
dissolving the said attachment. From this order
Tantoco has appealed by bill of exceptions.

The Supreme Court affirmed the judgment
appealed from with costs against Tantoco.
1. Municipalities’ capacity to sue and to be sued;
Capacity to acquire property 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.” The Administrative Code does not specify
the kind of property that a municipality may
acquire.

2. Property of provinces and municipalities Article
343 of the Civil Code divides the property of
provinces and (municipalities) into property for
public use and patrimonial property. According
to article 344 of the 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 provision of the Civil Code except as
provided by special laws.

3. Distinction according to Manresa; of little
practical importance in view of different
principles under American Rule Commenting
upon article 344, Manresa says that “In
accordance with administrative legislation”
(Spanish) we must distinguish, as to the
patrimonial property of the towns, “between
that of common benefit and that which is private
property of the town.

The first differs from property for public use in
that generally its enjoyment is less, as it is
limited to neighbors or to a group or class
thereof; and furthermore, such use, more or less
general, is not intrinsic with this kind of
property, for by its very nature it may be
enjoyed as though it were private property.

The third group, that is, private property, is used in
the name of the town or province by the entities
representing it and, like any private property,
giving a source of revenue.” Such distinction,
however, is of little practical importance in this
jurisdiction in view of the different principles
underlying the functions of a municipality under
the American rule.

4. Property of public domain applies to municipal
property for public use; both not within the
commerce of man The principle governing property
of the public domain of the State is applicable to
property for public use of the municipalities as said
municipal property is similar in character. The
principle is that the property for public use of the
State is not within the commerce of man and,
consequently, is unalienable and not subject to
prescription. Likewise, property for public use of
the municipality is not within the commerce of
man so long as it is used by the public and,
consequently, said property is also inalienable.

5. US Law and Jurisprudence: Municipal properties for
public use, but not properties for quasi-private
purposes, exempted from attachment and
execution As expounded by McQuillin in Municipal
Corporations (Vol. 3, par.1160): State statutes
often provide that court houses, jails 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. 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. 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.

Thus, it is generally held that property owned by a
municipality, where not used for a public purpose
but for quasi private purposes, is subject to
execution on a judgment against the municipality,
and may be sold. This rule applies to shares of
stock owned by a municipal corporation and the
like. But the mere fact that corporate property held
for public uses is being temporarily used for private
purposes does not make it subject to execution.

As stated in Corpus Juris (Vol. 23, p. 355), “the rule
is that property held for public uses, such as public
buildings, streets, squares, parks, promenades,
wharves landing places, fire engines, hose and hose
carriages. engine houses, public markets, hospitals,
cemeteries, and generally everything held for
governmental purposes, is not subject to levy and
sale under execution against such corporation. The
rule also applies to funds in the hands of a public
officer. Likewise it has been held that taxes due to
a municipal corporation or county cannot be seized
under execution by a creditor of such corporation.
But where a municipal corporation or county owns
in its proprietary, as distinguished from its public or
governmental capacity, property not useful or used
for a public purpose but for quasi private purposes,
the general rule is that such property may be
seized and sold under execution against the
corporation, precisely as similar property of
individuals is seized and sold.

But property held for public purposes is not subject
to execution merely because it is temporarily used
for private purposes, although if the public use is
wholly abandoned it becomes subject to execution.
Whether or not property held as public property is
necessary for the public use is a political, rather
than a judicial question. Where property of a
municipal or other public corporation is sought to
be subjected to execution to satisfy judgments
recovered against such corporation, the question
as to whether such property is leviable or not is to
be determined by the usage and purposes for
which it is held.”

6. US Law and Jurisprudence: Insurance money
derived from destroyed municipal property
exempt from execution likewise exempted If
municipal property exempt from execution is
destroyed, the insurance money stands in lieu
thereof and is also exempt (McQuillin).
7. US Law and Jurisprudence: Members or
inhabitants not personally liable for debts of the
municipality.

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 (McQuillin).

8. US Jurisprudence: Wharf a property for public
use and not subject to attachment In 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 Klein vs. City of New Orleans (98 U S.,
149; 25 Law. ed., 430), it was held that a public
wharf on the banks of the Mississippi River was
public property and not subject to execution for
the payment of a debt of the City of New Orleans
where said wharf was located. It was held that
land was public property as necessary as a public
street and was not subject to execution on
account of the debts of the city. It was further
held that the fees collected were also exempt
from execution because they were a part of the
income of the city.

9. Tufexis v. Olaguera; Special concession of the right
to usufruct in a public market cannot be attached
like any ordinary right

It was held in Tufexis v. Olaguera, where the public
market had been levied upon by virtue of the
execution arising from the debt of the municipality
of Guinobatan, 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 a 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 to 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 the
creditors of a railroad company can be exercised
and their creditors collected only out of the gross
receipts remaining after deduction has been made
therefrom of the operating expenses of the road. “

10. Character of property for public use basis why
property of a municipality necessary for
governmental purposes may not be attached

The movable and immovable property of a
municipality, necessary for governmental
purposes, may not be attached and sold for the
payment of a judgment against the municipality.
The supreme reason 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 use of the
municipality be exempt from execution just as it
is necessary to exempt certain property of
private individuals in accordance with section
452 of the Code of Civil Procedure.

11. Municipal income exempt from levy and
execution Even the municipal income is exempt
from levy and execution. In Municipal
Corporations by Dillon (Vol. 1, p. 467), it was
stated that “municipal corporations are
instituted by the supreme authority of a state for
the public good. They exercise, by delegation
from the legislature, a portion of the sovereign
power.

The main object of their creation is to act as
administrative agencies for the state, and to
provide for the police and local government of
certain designated civil divisions of its territory.
To this end they are invested with certain
governmental powers and charged with civil,
political, and municipal duties. To enable them
beneficially to exercise these powers and
discharge these duties, they are clothed with the
authority to raise revenues, chiefly by taxation,
and subordinately by other modes, as by
licenses, fines, and penalties. The revenue of the
public corporation is the essential means by
which it is enabled to perform its appointed
work.

Deprived of its regular and adequate supply of
revenue, such a corporation is practically
destroyed, and the ends of its erection thwarted.
Based upon considerations of this character, it is
the settled doctrine of the law that not only the
public-property but also the taxes and public
revenues of such corporations cannot be seized
under execution against them, either in the
treasury or when in transit to it. 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”.

Province of Zamboanga del Norte v. City of
Zamboanga
G.R. No. L-24440, March 28, 1968, 22 SCRA
1334Bengzon, J.P., J.

FACTS:
On June 6, 1952, Republic Act 711 was approved
dividing the province of Zamboanga into two (2):
Zamboanga del Norte and Zamboanga del Sur.
Republic Act3039 was approved 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.”

Plaintiff-appellee Zamboanga Del Norte filed a
complaint 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 Republic Act 3039 be declared
unconstitutional for depriving plaintiff province of
property without due process and just
compensation. Included in the properties were the
capital site and capitol building, certain school
sites, hospital and leprosarium sites, and high
school playground.

ISSUE:
Whether or not the properties mentioned are
properties for public use or patrimonial.

HELD:
The subject properties are properties for public
use.
The validity of the law ultimately depends on the
nature of the lots and buildings in question.

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.

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. 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, 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.

Salas vs. Jarencio
(1972) Ponente: Esguerra, J.Legal

Doctrine:
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 in habitants,
whether it be for governmental or proprietary
purposes

Facts:
February 24, 1919—the 4th Branch of the Court of
First Instance of Manila, acting as a land
registration court, rendered judgment in Case No.
18, G.L.R.O. Record No. 111, declaring the City of
Manila the owner in fee simple of a parcel of land
known as Lot No. 1, Block 557 of the Cadastral
Survey of the City of Mani1a, containing an area of
9,689.8 square meters, more or less.

August 21, 1920 –Title No. 4329 issued on 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 September
20, 1960—the Municipal Board, presided by then
Vice-Mayor Antonio Villegas, requested "His
Excellency the President of the Philippines to
consider the feasibility of declaring the city
property bounded by Florida, San Andres and
Nebraska Streets, under Transfer Certificate of Title
Nos. 25545 and 25547, containing an area of 7,450
square meters, as patrimonial property of the City
of Manila for the purpose of reselling these lots to
the actual occupants thereof.

The said resolution of the Municipal Board of the
City of Manila was officially transmitted to the
President of the Philippines the following day, to
which a copy was furnished to the Senate and
House of Representatives of the Congress of the
Philippines.

June 20, 1964—RA 4118 was passed by the Senate
and approved by the President pursuant to the
request. Such bill was enacted for social justice
purposes, that they be sold to their currently
landless occupants.

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.

Issues
1. Is the property involved private or patrimonial
property of the City of Manila? NO, it is the
property of the State.
2. Is Republic Act No. 4118 valid and not
repugnant to the Constitution? YES, it is valid.
RULING:

Ratio:
1. Is the property involved private or
patrimonial property of the City of Manila?
NO, it is the property of the State.

The rule is that 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 he 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.

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.

The presumption is that such land came from
the State upon the creation of the
municipality. 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

Therefore, 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.

2. Is Republic Act No. 4118 valid and not
repugnant to the Constitution? YES, it is valid.

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.

Cebu v. Bercilles , 66 SCRA 481

FACTS:
In 1968, a terminal portion of a street in Cebu was
excluded in the city’s development plan hence the
council declared it as abandoned and was
subsequently opened for public bidding. Cebu
Oxygen was the highest bidder @P10, 800.00.

Cebu Oxygen applied for the land’s registration
before CFI Cebu but the provincial fiscal denied it,
so did the court later, alleging that the road is part
of the public domain hence beyond the commerce
of man.

ISSUE:
Whether or not Cebu Oxygen can validly own said
land.

HELD:
Yes. Under Cebu’s Charter (RA 3857), the city
council “may 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.” Since that portion of the city street
subject of Cebu Oxygen’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.”

Municipality of San Miguel, Bulacan v. Fernandez
No. L-61744 June 25, 1984

FACTS:
In Civil Case No. 604-B, entitled "Margarita D. Vda.
De Imperio, et al. v. Municipal Government of San
Miguel, Bulacan, et al." dated April 28, 1978, under
presiding Judge Oscar C. Fernandez, rendered
judgment in favour of the plaintiffs and against the
defendant Municipal Government of San Miguel,
Bulacan, represented by Mayor Mar Marcelo G.
Aure and its Municipal Treasurer.

The court ordered the defendant municipality to
pay the plaintiffs the sum of Php64, 440.00
corresponding to the rentals collected from the
tenants from 1970 up to and including 1975 plus
interest thereon at the legal rate from January
1970 until fully paid. In addition to this, the
defendant municipality must pay the plaintiffs the
sum of Php3, 000.00 for attorney's fees and to pay
the cost of suit.

Thereafter, the private respondents moved for
issuance of the writ of execution for the
satisfaction of the said judgment, however,
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 was then denied by the
respondent judge in an order dated August 23,
1982 and the writ of execution still stands in full
force and effect.
ISSUE:
Whether or not the funds of the Municipality of
San Miguel, Bulacan, in the possession 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.

HELD:
Yes, all the funds of the municipality in the
possession of the Municipal Treasurer of San
Miguel and of Bulacan, are public funds which are
exempt from execution as stated under
Presidential Decree No. 477, "The Decree on Local
Fiscal Administration", Section 2, paragraph (a):
No money shall be paid out of the treasury except
in pursuance of a lawful appropriation or other
specific statutory authority.

Furthermore, there must be an ordinance duly
passed by the Sangguniang Bayan containing the
corresponding appropriation for the funds before
any money of the municipality may be paid out.

Unlike the State which has the immunity of not
being sued without its consent, A municipal
corporation is an example of an incorporated
agency which has a charter of its own that grants
them the competence to sue and be sued.

However, municipal government is generally not
liable for torts committed during the discharge of
its governmental functions. It can be held liable
only if it has been proven that they were acting in a
proprietary function. Failing to do this, the claimant
cannot recover.

Government v. Cabangis
53 Phil. 112

FACTS:
In 1986, A owned a parcel of land, but because of
the action of the waves of Manila Bay, part of said
land was gradually submerged in the sea. It
remained submerged until 1912 when the
government decided to make the necessary
dredging to reclaim the land from the sea. As soon
as the land had been recovered A took possession
of it.

ISSUE:
To which does the ownership of the reclaimed land
belong to?

HELD:
The government owns the reclaimed land in the
sense that it has become property of public
dominion, because in letting it remained
submerged, A may be said to have abandoned the
same.

Having become part of the sea or the seashore, it
became property for public use. When the
government took steps to make it land again, its
status as public dominion remained unchanged;
therefore, A is not entitled to the land