Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 76714 June 2, 1994

SALUD TEODORO VDA. DE PEREZ, petitioner,
vs.
HON. ZOTICO A. TOLETE in his capacity as Presiding Judge, Branch 18, RTC,
Bulacan, respondent.
Natividad T. Perez for petitioner.
Benedicto T. Librojo for private respondents.

QUIASON, J.:
This is a petition for certiorari under Rule 65 of the Revised Rules of Court to set aside the Order
dated November 19, 1986 of the Regional Trial Court, Branch 18, Bulacan presided by respondent
Judge Zotico A. Tolete, in Special Proceedings No. 1793-M.
We grant the petition.
II
Dr. Jose F. Cunanan and his wife, Dr. Evelyn Perez-Cunanan, who became American citizens,
established a successful medical practice in New York, U.S.A. The Cunanans lived at No. 2896
Citation Drive, Pompey, Syracuse, New York, with their children, Jocelyn, 18; Jacqueline, 16; and
Josephine, 14.
On August 23, 1979, Dr. Cunanan executed a last will and testament, bequeathing to his wife "all the
remainder" of his real and personal property at the time of his death "wheresoever situated" (Rollo,
p. 35). In the event he would survive his wife, he bequeathed all his property to his children and
grandchildren with Dr. Rafael G. Cunanan, Jr. as trustee. He appointed his wife as executrix of his
last will and testament and Dr. Rafael G. Cunanan, Jr. as substitute executor. Article VIII of his will
states:
If my wife, EVELYN PEREZ-CUNANAN, and I shall die under such circumstances
that there is not sufficient evidence to determine the order of our deaths, then it shall
be presumed that I predeceased her, and my estate shall be administered and
distributed, in all respects, in accordance with such presumption (Rollo, p. 41).
Four days later, on August 27, Dr. Evelyn P. Cunanan executed her own last will and testament
containing the same provisions as that of the will of her husband. Article VIII of her will states:

If my husband, JOSE F. CUNANAN, and I shall die under such circumstances that
there is not sufficient evidence to determine the order of our deaths, then it shall be
presumed that he predeceased me, and my estate shall be administered and
distributed in all respects, in accordance with such presumption. (Rollo, p. 31).
On January 9, 1982, Dr. Cunanan and his entire family perished when they were trapped by fire that
gutted their home. Thereafter, Dr. Rafael G. Cunanan, Jr. as trustee and substitute executor of the
two wills, filed separate proceedings for the probate thereof with the Surrogate Court of the County
of Onondaga, New York. On April 7, these two wills were admitted to probate and letters
testamentary were issued in his favor.
On February 21, 1983, Salud Teodoro Perez, the mother of Dr. Evelyn P. Cunanan, and petitioner
herein, filed with the Regional P. Cunanan, and petitioner herein, filed with the Regional Trial Court,
Malolos, Bulacan a petition for the reprobate of the two bills ancillary to the probate proceedings in
New York. She also asked that she be appointed the special administratrix of the estate of the
deceased couple consisting primarily of a farm land in San Miguel, Bulacan.
On March 9, the Regional Trial Court, Branch 16, Malolos, Bulacan, presided by Judge Gualberto J.
de la Llana, issued an order, directing the issuance of letters of special administration in favor of
petitioner upon her filing of a P10,000.00 bond. The following day, petitioner posted the bond and
took her oath as special administration.
As her first act of administration, petitioner filed a motion, praying that the Philippine Life Insurance
Company be directed to deliver the proceeds in the amount of P50,000.00 of the life insurance policy
taken by Dr. Jose F. Cunanan with Dr. Evelyn Perez-Cunanan and their daughter Jocelyn as
beneficiaries. The trial court granted the motion.
Counsel for the Philippine American Life Insurance Company then filed a manifestation, stating that
said company then filed a manifestation, stating that said company had delivered to petitioner the
amount of P49,765.85, representing the proceeds of the life insurance policy of Dr. Jose F. Cunanan.
In a motion dated May 19, 1983, petitioner asked that Dr. Rafael Cunanan, Sr. be ordered to deliver
to her a Philippine Trust Company passbook with P25,594.00 in savings deposit, and the Family
Savings Bank time deposit certificates in the total amount of P12,412.52.
On May 31, Atty. Federico Alday filed a notice of appearance as counsel for the heirs of Dr. Jose F.
Cunanan, namely, Dr. Rafael Cunanan, Sr., Priscilla Cunanan Bautista, Lydia Cunanan Ignacio,
Felipe F. Cunanan and Loreto Cunanan Concepcion (Cunanan heirs). He also manifested that
before receiving petitioner's motion of May 19, 1983, his clients were unaware of the filing of the
testate estate case and therefore, "in the interest of simple fair play," they should be notified of the
proceedings (Records, p. 110). He prayed for deferment of the hearing on the motions of May 19,
1983.
Petitioner then filed a counter manifestation dated June 13, 1983, asserting: (1) that the "Cunanan
collaterals are neither heirs nor creditors of the late Dr. Jose F. Cunanan" and therefore, they had
"no legal or proprietary interests to protect" and "no right to intervene"; (2) that the wills of Dr. Jose F.
Cunanan and Dr. Evelyn Perez-Cunanan, being American citizens, were executed in accordance
with the solemnities and formalities of New York laws, and produced "effects in this jurisdiction in
accordance with Art. 16 in relation to Art. 816 of the Civil Code"; (3) that under Article VIII of the two
wills, it was presumed that the husband predeceased the wife; and (4) that "the Cunanan collaterals
are neither distributees, legatees or beneficiaries, much less, heirs as heirship is only by institution"
under a will or by operation of the law of New York (Records, pp. 112-113).

On June 23, the probate court granted petitioner's motion of May 19, 1983. However, on July 21, the
Cunanan heirs filed a motion to nullify the proceedings and to set aside the appointment of, or to
disqualify, petitioner as special administratrix of the estates of Dr. Jose F. Cunanan and Dr. Evelyn
Perez-Cunanan. The motion stated: (1) that being the "brothers and sisters and the legal and
surviving heirs" of Dr. Jose F. Cunanan, they had been "deliberately excluded" in the petition for the
probate of the separate wills of the Cunanan spouses thereby misleading the Bulacan court to
believe that petitioner was the sole heir of the spouses; that such "misrepresentation" deprived them
of their right to "due process in violation of Section 4, Rule 76 of the Revised Rules of Court; (2) that
Dr. Rafael G. Cunanan, Jr., the executor of the estate of the Cunanan spouses, was likewise not
notified of the hearings in the Bulacan court; (3) that the "misrepresentation and concealment
committed by" petitioner rendered her unfit to be a special administratrix; (4) that Dr. Rafael G.
Cunanan, Jr. had, by virtue of a verified power of attorney, authorized his father,
Dr. Rafael Cunanan, Sr., to be his attorney-in-fact; and (5) that Dr. Rafael Cunanan, Sr. is qualified to
be a regular administrator "as practically all of the subject estate in the Philippines belongs to their
brother, Dr. Jose F. Cunanan" (Records, pp. 118-122). Hence, they prayed: (1) that the proceedings
in the case be declared null and void; (2) that the appointment of petitioner as special administratrix
be set aside; and (3) that Dr. Rafael Cunanan, Sr. be appointed the regular administrator of the
estate of the deceased spouses.
Thereafter, the Cunanan heirs filed a motion requiring petitioner to submit an inventory or accounting
of all monies received by her in trust for the estate.
In her opposition, petitioner asserted: (1) that she was the "sole and only heir" of her daughter, Dr.
Evelyn Perez-Cunanan to the exclusion of the "Cunanan collaterals"; hence they were complete
strangers to the proceedings and were not entitled to notice; (2) that she could not have "concealed"
the name and address of Dr. Rafael G. Cunanan, Jr. because his name was prominently mentioned
not only in the two wills but also in the decrees of the American surrogate court; (3) that the rule
applicable to the case is Rule 77, not Rule 76, because it involved the allowance of wills proved
outside of the Philippines and that nowhere in Section 2 of Rule 77 is there a mention of notice being
given to the executor who, by the same provision, should himself file the necessary ancillary
proceedings in this country; (4) that even if the Bulacan estate came from the "capital" of Dr. Jose F.
Cunanan, he had willed all his worldly goods to his wife and nothing to his brothers and sisters; and
(5) that Dr. Rafael G. Cunanan, Jr. had unlawfully disbursed $215,000.00 to the Cunanan heirs,
misappropriated $15,000.00 for himself and irregularly assigned assets of the estates to his
American lawyer (Records, pp. 151-160).
In their reply, the Cunanan heirs stressed that on November 24, 1982, petitioner and the Cunanan
heirs had entered into an agreement in the United States "to settle and divide equally the estates,"
and that under Section 2 of Rule 77 the "court shall fix a time and place for the hearing and cause
notice thereof to be given as in case of an original will presented for allowance" (Records, pp. 184185).
Petitioner asked that Dr. Rafael G. Cunanan, Jr. be cited for contempt of court for failure to comply
with the Order of June 23, 1983 and for appropriating money of the estate for his own benefit. She
also alleged that she had impugned the agreement of November 24, 1982 before the Surrogate
Court of Onondaga, New York which rendered a decision on April 13, 1983, finding that "all assets
are payable to Dr. Evelyn P. Cunanans executor to be then distributed pursuant to EPTL4-1.1 subd
[a] par [4]" (Rollo, p. 52).
On their part, the Cunanan heirs replied that petitioner was estopped from claiming that they were
heirs by the agreement to divide equally the estates. They asserted that by virtue of Section 2 of
Rule 77 of the Rules of Court, the provisions of Sections 3, 4 and 5 of Rule 76 on the requirement of

notice to all heirs, executors, devisees and legatees must be complied with. They reiterated their
prayer: (1) that the proceedings in the case be nullified; (2) that petitioner be disqualified as special
administratrix; (3) that she be ordered to submit an inventory of all goods, chattels and monies which
she had received and to surrender the same to the court; and (4) that Dr. Rafael Cunanan, Sr. be
appointed the regular administrator.
Petitioner filed a rejoinder, stating that in violation of the April 13, 1983 decision of the American
court Dr. Rafael G. Cunanan, Jr. made "unauthorized disbursements from the estates as early as
July 7, 1982" (Records, p. 231). Thereafter, petitioner moved for the suspension of the proceedings
as she had "to attend to the settlement proceedings" of the estate of the Cunanan spouses in New
York (Records, p. 242). The Cunanans heirs opposed this motion and filed a manifestation, stating
that petitioner had received $215,000.00 "from the Surrogates Court as part of legacy" based on the
aforesaid agreement of November 24, 1982 (Records, p. 248).
On February 21, 1984, Judge de la Llana issued an order, disallowing the reprobate of the two wills,
recalling the appointment of petitioner as special administratrix, requiring the submission of petitioner
of an inventory of the property received by her as special administratrix and declaring all pending
incidents moot and academic. Judge de la Llana reasoned out that petitioner failed to prove the law
of New York on procedure and allowance of wills and the court had no way of telling whether the
wills were executed in accordance with the law of New York. In the absence of such evidence, the
presumption is that the law of succession of the foreign country is the same as the law of the
Philippines. However, he noted, that there were only two witnesses to the wills of the Cunanan
spouses and the Philippine law requires three witnesses and that the wills were not signed on each
and every page, a requirement of the Philippine law.
On August 27, 1985, petitioner filed a motion for reconsideration of the Order dated February 21,
1984, where she had sufficiently proven the applicable laws of New York governing the execution of
last wills and testaments.
On the same day, Judge de la Llana issued another order, denying the motion of petitioner for the
suspension of the proceedings but gave her 15 days upon arrival in the country within which to act
on the other order issued that same day. Contending that the second portion of the second order left
its finality to the discretion of counsel for petitioner, the Cunanans filed a motion for the
reconsideration of the objectionable portion of the said order so that it would conform with the
pertinent provisions of the Judiciary Reorganization Act of 1980 and the Interim Rules of Court.
On April 30, 1985, the respondent Judge of Branch 18 of the Regional Trial Court, Malolos, to which
the reprobate case was reassigned, issued an order stating that "(W)hen the last will and testament .
. . was denied probate," the case was terminated and therefore all orders theretofore issued should
be given finality. The same Order amended the February 21, 1984 Order by requiring petitioner to
turn over to the estate the inventoried property. It considered the proceedings for all intents and
purposes, closed (Records,
p. 302).
On August 12, petitioner filed a motion to resume proceedings on account of the final settlement and
termination of the probate cases in New York. Three days later, petitioner filed a motion praying for
the reconsideration of the Order of April 30, 1985 on the strength of the February 21, 1984 Order
granting her a period of 15 days upon arrival in the country within which to act on the denial of
probate of the wills of the Cunanan spouses. On August 19, respondent Judge granted the motion
and reconsidered the Order of April 30, 1985.

On August 29, counsel for petitioner, who happens to be her daughter, Natividad, filed a motion
praying that since petitioner was ailing in Fort Lee, New Jersey, U.S.A. and therefore incapacitated
to act as special administratrix, she (the counsel) should be named substitute special administratrix.
She also filed a motion for the reconsideration of the Order of February 21, 1984, denying probate to
the wills of the Cunanan spouses, alleging that respondent Judge "failed to appreciate the significant
probative value of the exhibits . . . which all refer to the offer and admission to probate of the last
wills of the Cunanan spouses including all procedures undertaken and decrees issued in connection
with the said probate" (Records, pp. 313-323).
Thereafter, the Cunanans heirs filed a motion for reconsideration of the Order of August 19, 1985,
alleging lack of notice to their counsel.
On March 31, 1986, respondent Judge to which the case was reassigned denied the motion for
reconsideration holding that the documents submitted by petitioner proved "that the wills of the
testator domiciled abroad were properly executed, genuine and sufficient to possess real and
personal property; that letters testamentary were issued; and that proceedings were held on a
foreign tribunal and proofs taken by a competent judge who inquired into all the facts and
circumstances and being satisfied with his findings issued a decree admitting to probate the wills in
question." However, respondent Judge said that the documents did not establish the law of New
York on the procedure and allowance of wills (Records, p. 381).
On April 9, 1986, petitioner filed a motion to allow her to present further evidence on the foreign law.
After the hearing of the motion on April 25, 1986, respondent Judge issued an order wherein he
conceded that insufficiency of evidence to prove the foreign law was not a fatal defect and was
curable by adducing additional evidence. He granted petitioner 45 days to submit the evidence to
that effect.
However, without waiting for petitioner to adduce the additional evidence, respondent Judge ruled in
his order dated June 20, 1986 that he found "no compelling reason to disturb its ruling of March 31,
1986" but allowed petitioner to "file anew the appropriate probate proceedings for each of the
testator" (Records, p. 391).
The Order dated June 20, 1986 prompted petitioner to file a second motion for reconsideration
stating that she was "ready to submit further evidence on the law obtaining in the State of New York"
and praying that she be granted "the opportunity to present evidence on what the law of the State of
New York has on the probate and allowance of wills" (Records, p. 393).
On July 18, respondent Judge denied the motion holding that to allow the probate of two wills in a
single proceeding "would be a departure from the typical and established mode of probate where
one petition takes care of one will." He pointed out that even in New York "where the wills in question
were first submitted for probate, they were dealt with in separate proceedings" (Records, p. 395).
On August 13, 1986, petitioner filed a motion for the reconsideration of the Order of July 18, 1986,
citing Section 3, Rule 2 of the Rules of Court, which provides that no party may institute more than
one suit for a single cause of action. She pointed out that separate proceedings for the wills of the
spouses which contain basically the same provisions as they even named each other as a
beneficiary in their respective wills, would go against "the grain of inexpensive, just and speedy
determination of the proceedings" (Records, pp. 405-407).
On September 11, 1986, petitioner filed a supplement to the motion for reconsideration,
citing Benigno v. De La Pea, 57 Phil. 305 (1932) (Records,
p. 411), but respondent Judge found that this pleading had been filed out of time and that the

adverse party had not been furnished with a copy thereof. In her compliance, petitioner stated that
she had furnished a copy of the motion to the counsel of the Cunanan heirs and reiterated her
motion for a "final ruling on her supplemental motion" (Records, p. 421).
On November 19, respondent Judge issued an order, denying the motion for reconsideration filed by
petitioner on the grounds that "the probate of separate wills of two or more different persons even if
they are husband and wife cannot be undertaken in a single petition" (Records, pp. 376-378).
Hence, petitioner instituted the instant petition, arguing that the evidence offered at the hearing of
April 11, 1983 sufficiently proved the laws of the State of New York on the allowance of wills, and that
the separate wills of the Cunanan spouses need not be probated in separate proceedings.
II
Petitioner contends that the following pieces of evidence she had submitted before respondent
Judge are sufficient to warrant the allowance of the wills:
(a) two certificates of authentication of the respective wills of Evelyn and Jose by the
Consulate General of the Philippines (Exhs. "F" and "G");
(b) two certifications from the Secretary of State of New York and Custodian of the
Great Seal on the facts that Judge Bernard L. Reagan is the Surrogate of the
Country of Onondaga which is a court of record, that his signature and seal of office
are genuine, and that the Surrogate is duly authorized to grant copy of the respective
wills of Evelyn and Jose
(Exhs. "F-1" and "G-1");
(c) two certificates of Judge Reagan and Chief Clerk Donald E. Moore stating that
they have in their records and files the said wills which were recorded on April 7,
1982 (Exhs. "F-2" and "G-2");
(d) the respective wills of Evelyn and Jose (Exhs. "F-3", "F-6" and Exh. "G-3" "G6");
(e) certificates of Judge Reagan and the Chief Clerk certifying to the genuineness
and authenticity of the exemplified copies of the two wills (Exhs. "F-7" and "F-7");
(f) two certificates of authentication from the Consulate General of the Philippines in
New York (Exh. "H" and "F").
(g) certifications from the Secretary of State that Judge Reagan is duly authorized to
grant exemplified copies of the decree of probate, letters testamentary and all
proceedings had and proofs duly taken
(Exhs. "H-1" and "I-1");
(h) certificates of Judge Reagan and the Chief Clerk that letters testamentary were
issued to Rafael G. Cunanan (Exhs. "H-2" and "I-2");
(i) certification to the effect that it was during the term of Judge Reagan that a decree
admitting the wills to probate had been issued and appointing Rafael G. Cunanan as

alternate executor (Exhs. "H-3" and

"I-10");
(j) the decrees on probate of the two wills specifying that proceedings were held and
proofs duly taken (Exhs. "H-4" and "I-5");
(k) decrees on probate of the two wills stating that they were properly executed,
genuine and valid and that the said instruments were admitted to probate and
established as wills valid to pass real and personal property (Exhs. "H-5" and "I-5");
and
(l) certificates of Judge Reagan and the Chief Clerk on the genuineness and
authenticity of each others signatures in the exemplified copies of the decrees of
probate, letters testamentary and proceedings held in their court (Exhs. "H-6" and "I6") (Rollo, pp. 13-16).
Petitioner adds that the wills had been admitted to probate in the Surrogate Courts Decision of April
13, 1983 and that the proceedings were terminated on November 29, 1984.
The respective wills of the Cunanan spouses, who were American citizens, will only be effective in
this country upon compliance with the following provision of the Civil Code of the Philippines:
Art. 816. The will of an alien who is abroad produces effect in the Philippines if made
with the formalities prescribed by the law of the place in which he resides, or
according to the formalities observed in his country, or in conformity with those which
this Code prescribes.
Thus, proof that both wills conform with the formalities prescribed by New York laws or by Philippine
laws is imperative.
The evidence necessary for the reprobate or allowance of wills which have been probated outside of
the Philippines are as follows: (1) the due execution of the will in accordance with the foreign laws;
(2) the testator has his domicile in the foreign country and not in the Philippines; (3) the will has been
admitted to probate in such country; (4) the fact that the foreign tribunal is a probate court, and (5)
the laws of a foreign country on procedure and allowance of wills (III Moran Commentaries on the
Rules of Court, 1970 ed., pp. 419-429; Suntay v. Suntay, 95 Phil. 500 [1954]; Fluemer v. Hix, 54 Phil.
610 [1930]). Except for the first and last requirements, the petitioner submitted all the needed
evidence.
The necessity of presenting evidence on the foreign laws upon which the probate in the foreign
country is based is impelled by the fact that our courts cannot take judicial notice of them (Philippine
Commercial and Industrial Bank v. Escolin, 56 SCRA 266 [1974]).
Petitioner must have perceived this omission as in fact she moved for more time to submit the
pertinent procedural and substantive New York laws but which request respondent Judge just
glossed over. While the probate of a will is a special proceeding wherein courts should relax the
rules on evidence, the goal is to receive the best evidence of which the matter is susceptible before
a purported will is probated or denied probate (Vda. de Ramos v. Court of Appeals, 81 SCRA 393
[1978]).

There is merit in petitioners insistence that the separate wills of the Cunanan spouses should be
probated jointly. Respondent Judges view that the Rules on allowance of wills is couched in singular
terms and therefore should be interpreted to mean that there should be separate probate
proceedings for the wills of the Cunanan spouses is too literal and simplistic an approach. Such view
overlooks the provisions of Section 2, Rule 1 of the Revised Rules of Court, which advise that the
rules shall be "liberally construed in order to promote their object and to assist the parties in
obtaining just, speedy, and inexpensive determination of every action and proceeding."
A literal application of the Rules should be avoided if they would only result in the delay in the
administration of justice (Acain v. Intermediate Appellate Court, 155 SCRA 100 [1987]; Roberts v.
Leonidas, 129 SCRA 33 [1984]).
What the law expressly prohibits is the making of joint wills either for the testators reciprocal benefit
or for the benefit of a third person (Civil Code of the Philippines, Article 818). In the case at bench,
the Cunanan spouses executed separate wills. Since the two wills contain essentially the same
provisions and pertain to property which in all probability are conjugal in nature, practical
considerations dictate their joint probate. As this Court has held a number of times, it will always
strive to settle the entire controversy in a single proceeding leaving no root or branch to bear the
seeds of future litigation (Motoomull v. Dela Paz, 187 SCRA 743 [1990]).
This petition cannot be completely resolved without touching on a very glaring fact petitioner has
always considered herself the sole heir of
Dr. Evelyn Perez Cunanan and because she does not consider herself an heir of Dr. Jose F.
Cunanan, she noticeably failed to notify his heirs of the filing of the proceedings. Thus, even in the
instant petition, she only impleaded respondent Judge, forgetting that a judge whose order is being
assailed is merely a nominal or formal party (Calderon v. Solicitor General, 215 SCRA 876 [1992]).
The rule that the court having jurisdiction over the reprobate of a will shall "cause notice thereof to be
given as in case of an original will presented for allowance" (Revised Rules of Court, Rule 27,
Section 2) means that with regard to notices, the will probated abroad should be treated as if it were
an "original will" or a will that is presented for probate for the first time. Accordingly, compliance with
Sections 3 and 4 of Rule 76, which require publication and notice by mail or personally to the "known
heirs, legatees, and devisees of the testator resident in the Philippines" and to the executor, if he is
not the petitioner, are required.
The brothers and sisters of Dr. Jose F. Cunanan, contrary to petitioner's claim, are entitled to notices
of the time and place for proving the wills. Under Section 4 of Rule 76 of the Revised Rules of Court,
the "court shall also cause copies of the notice of the time and place fixed for proving the will to be
addressed to the designated or other known heirs, legatees, and devisees of the testator, . . . "
WHEREFORE, the questioned Order is SET ASIDE. Respondent Judge shall allow petitioner
reasonable time within which to submit evidence needed for the joint probate of the wills of the
Cunanan spouses and see to it that the brothers and sisters of Dr. Jose F. Cunanan are given all
notices and copies of all pleadings pertinent to the probate proceedings.
SO ORDERED.
Davide, Jr., Bellosillo and Kapunan, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-23678

June 6, 1967

TESTATE ESTATE OF AMOS G. BELLIS, deceased.

PEOPLE'S BANK and TRUST COMPANY, executor.
MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS, oppositors-appellants,
vs.
EDWARD A. BELLIS, ET AL., heirs-appellees.
Vicente R. Macasaet and Jose D. Villena for oppositors appellants.
Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A. Bellis, et al.
Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.
J. R. Balonkita for appellee People's Bank & Trust Company.
Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.
BENGZON, J.P., J.:
This is a direct appeal to Us, upon a question purely of law, from an order of the Court of First
Instance of Manila dated April 30, 1964, approving the project of partition filed by the executor in
Civil Case No. 37089 therein.
1wph1.t

The facts of the case are as follows:

Amos G. Bellis, born in Texas, was "a citizen of the State of Texas and of the United States." By his
first wife, Mary E. Mallen, whom he divorced, he had five legitimate children: Edward A. Bellis,
George Bellis (who pre-deceased him in infancy), Henry A. Bellis, Alexander Bellis and Anna Bellis
Allsman; by his second wife, Violet Kennedy, who survived him, he had three legitimate children:
Edwin G. Bellis, Walter S. Bellis and Dorothy Bellis; and finally, he had three illegitimate children:
Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis.
On August 5, 1952, Amos G. Bellis executed a will in the Philippines, in which he directed that after
all taxes, obligations, and expenses of administration are paid for, his distributable estate should be
divided, in trust, in the following order and manner: (a) $240,000.00 to his first wife, Mary E. Mallen;
(b) P120,000.00 to his three illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis, Miriam
Palma Bellis, or P40,000.00 each and (c) after the foregoing two items have been satisfied, the
remainder shall go to his seven surviving children by his first and second wives, namely: Edward A.
Bellis, Henry A. Bellis, Alexander Bellis and Anna Bellis Allsman, Edwin G. Bellis, Walter S. Bellis,
and Dorothy E. Bellis, in equal shares.
1wph1.t

Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of San Antonio, Texas, U.S.A. His
will was admitted to probate in the Court of First Instance of Manila on September 15, 1958.
The People's Bank and Trust Company, as executor of the will, paid all the bequests therein
including the amount of $240,000.00 in the form of shares of stock to Mary E. Mallen and to the
three (3) illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis, various
amounts totalling P40,000.00 each in satisfaction of their respective legacies, or a total of

P120,000.00, which it released from time to time according as the lower court approved and allowed
the various motions or petitions filed by the latter three requesting partial advances on account of
their respective legacies.
On January 8, 1964, preparatory to closing its administration, the executor submitted and filed its
"Executor's Final Account, Report of Administration and Project of Partition" wherein it reported, inter
alia, the satisfaction of the legacy of Mary E. Mallen by the delivery to her of shares of stock
amounting to $240,000.00, and the legacies of Amos Bellis, Jr., Maria Cristina Bellis and Miriam
Palma Bellis in the amount of P40,000.00 each or a total of P120,000.00. In the project of partition,
the executor pursuant to the "Twelfth" clause of the testator's Last Will and Testament divided
the residuary estate into seven equal portions for the benefit of the testator's seven legitimate
children by his first and second marriages.
On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis filed their respective oppositions
to the project of partition on the ground that they were deprived of their legitimes as illegitimate
children and, therefore, compulsory heirs of the deceased.
Amos Bellis, Jr. interposed no opposition despite notice to him, proof of service of which is
evidenced by the registry receipt submitted on April 27, 1964 by the executor.1
After the parties filed their respective memoranda and other pertinent pleadings, the lower court, on
April 30, 1964, issued an order overruling the oppositions and approving the executor's final account,
report and administration and project of partition. Relying upon Art. 16 of the Civil Code, it applied
the national law of the decedent, which in this case is Texas law, which did not provide for legitimes.
Their respective motions for reconsideration having been denied by the lower court on June 11,
1964, oppositors-appellants appealed to this Court to raise the issue of which law must apply
Texas law or Philippine law.
In this regard, the parties do not submit the case on, nor even discuss, the doctrine of renvoi, applied
by this Court in Aznar v. Christensen Garcia, L-16749, January 31, 1963. Said doctrine is usually
pertinent where the decedent is a national of one country, and a domicile of another. In the present
case, it is not disputed that the decedent was both a national of Texas and a domicile thereof at the
time of his death.2 So that even assuming Texas has a conflict of law rule providing that the
domiciliary system (law of the domicile) should govern, the same would not result in a reference
back (renvoi) to Philippine law, but would still refer to Texas law. Nonetheless, if Texas has a conflicts
rule adopting the situs theory (lex rei sitae) calling for the application of the law of the place where
the properties are situated, renvoi would arise, since the properties here involved are found in the
Philippines. In the absence, however, of proof as to the conflict of law rule of Texas, it should not be
presumed different from ours.3 Appellants' position is therefore not rested on the doctrine of renvoi.
As stated, they never invoked nor even mentioned it in their arguments. Rather, they argue that their
case falls under the circumstances mentioned in the third paragraph of Article 17 in relation to Article
16 of the Civil Code.
Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national law of the decedent,
in intestate or testamentary successions, with regard to four items: (a) the order of succession; (b)
the amount of successional rights; (e) the intrinsic validity of the provisions of the will; and (d) the
capacity to succeed. They provide that
ART. 16. Real property as well as personal property is subject to the law of the country
where it is situated.

However, intestate and testamentary successions, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may he the nature of the property and
regardless of the country wherein said property may be found.
ART. 1039. Capacity to succeed is governed by the law of the nation of the decedent.
Appellants would however counter that Art. 17, paragraph three, of the Civil Code, stating that
Prohibitive laws concerning persons, their acts or property, and those which have for their
object public order, public policy and good customs shall not be rendered ineffective by laws
or judgments promulgated, or by determinations or conventions agreed upon in a foreign
country.
prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted. This is not correct.
Precisely, Congressdeleted the phrase, "notwithstanding the provisions of this and the next
preceding article" when they incorporated Art. 11 of the old Civil Code as Art. 17 of the new Civil
Code, while reproducing without substantial change the second paragraph of Art. 10 of the old Civil
Code as Art. 16 in the new. It must have been their purpose to make the second paragraph of Art. 16
a specific provision in itself which must be applied in testate and intestate succession. As further
indication of this legislative intent, Congress added a new provision, under Art. 1039, which decrees
that capacity to succeed is to be governed by the national law of the decedent.
It is therefore evident that whatever public policy or good customs may be involved in our System of
legitimes, Congress has not intended to extend the same to the succession of foreign nationals. For
it has specifically chosen to leave, inter alia, the amount of successional rights, to the decedent's
national law. Specific provisions must prevail over general ones.
Appellants would also point out that the decedent executed two wills one to govern his Texas
estate and the other his Philippine estate arguing from this that he intended Philippine law to
govern his Philippine estate. Assuming that such was the decedent's intention in executing a
separate Philippine will, it would not alter the law, for as this Court ruled in Miciano v. Brimo, 50 Phil.
867, 870, a provision in a foreigner's will to the effect that his properties shall be distributed in
accordance with Philippine law and not with his national law, is illegal and void, for his national law
cannot be ignored in regard to those matters that Article 10 now Article 16 of the Civil Code
states said national law should govern.
The parties admit that the decedent, Amos G. Bellis, was a citizen of the State of Texas, U.S.A., and
that under the laws of Texas, there are no forced heirs or legitimes. Accordingly, since the intrinsic
validity of the provision of the will and the amount of successional rights are to be determined under
Texas law, the Philippine law on legitimes cannot be applied to the testacy of Amos G. Bellis.
Wherefore, the order of the probate court is hereby affirmed in toto, with costs against appellants. So
ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar, Sanchez and Castro, JJ.,
concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 92013 July 25, 1990
SALVADOR H. LAUREL, petitioner,
vs.
RAMON GARCIA, as head of the Asset Privatization Trust, RAUL MANGLAPUS, as Secretary
of Foreign Affairs, and CATALINO MACARAIG, as Executive Secretary, respondents.
G.R. No. 92047 July 25, 1990
DIONISIO S. OJEDA, petitioner,
vs.
EXECUTIVE SECRETARY MACARAIG, JR., ASSETS PRIVATIZATION TRUST CHAIRMAN
RAMON T. GARCIA, AMBASSADOR RAMON DEL ROSARIO, et al., as members of the
PRINCIPAL AND BIDDING COMMITTEES ON THE UTILIZATION/DISPOSITION PETITION OF
PHILIPPINE GOVERNMENT PROPERTIES IN JAPAN, respondents.
Arturo M. Tolentino for petitioner in 92013.

GUTIERREZ, JR., J.:

These are two petitions for prohibition seeking to enjoin respondents, their representatives
and agents from proceeding with the bidding for the sale of the 3,179 square meters of land
at 306 Roppongi, 5-Chome Minato-ku Tokyo, Japan scheduled on February 21, 1990. We
granted the prayer for a temporary restraining order effective February 20, 1990. One of the
petitioners (in G.R. No. 92047) likewise prayes for a writ of mandamus to compel the
respondents to fully disclose to the public the basis of their decision to push through with
the sale of the Roppongi property inspire of strong public opposition and to explain the
proceedings which effectively prevent the participation of Filipino citizens and entities in the
bidding process.
The oral arguments in G.R. No. 92013, Laurel v. Garcia, et al. were heard by the Court on
March 13, 1990. After G.R. No. 92047, Ojeda v. Secretary Macaraig, et al. was filed, the
respondents were required to file a comment by the Court's resolution dated February 22,
1990. The two petitions were consolidated on March 27, 1990 when the memoranda of the
parties in the Laurel case were deliberated upon.
The Court could not act on these cases immediately because the respondents filed a motion
for an extension of thirty (30) days to file comment in G.R. No. 92047, followed by a second
motion for an extension of another thirty (30) days which we granted on May 8, 1990, a third
motion for extension of time granted on May 24, 1990 and a fourth motion for extension of
time which we granted on June 5, 1990 but calling the attention of the respondents to the
length of time the petitions have been pending. After the comment was filed, the petitioner in

G.R. No. 92047 asked for thirty (30) days to file a reply. We noted his motion and resolved to
decide the two (2) cases.
I
The subject property in this case is one of the four (4) properties in Japan acquired by the
Philippine government under the Reparations Agreement entered into with Japan on May 9,
1956, the other lots being:
(1) The Nampeidai Property at 11-24 Nampeidai-machi, Shibuya-ku, Tokyo which has an area
of approximately 2,489.96 square meters, and is at present the site of the Philippine Embassy
Chancery;
(2) The Kobe Commercial Property at 63 Naniwa-cho, Kobe, with an area of around 764.72
square meters and categorized as a commercial lot now being used as a warehouse and
parking lot for the consulate staff; and
(3) The Kobe Residential Property at 1-980-2 Obanoyama-cho, Shinohara, Nada-ku, Kobe, a
residential lot which is now vacant.
The properties and the capital goods and services procured from the Japanese government
for national development projects are part of the indemnification to the Filipino people for
their losses in life and property and their suffering during World War II.
The Reparations Agreement provides that reparations valued at $550 million would be
payable in twenty (20) years in accordance with annual schedules of procurements to be
fixed by the Philippine and Japanese governments (Article 2, Reparations Agreement). Rep.
Act No. 1789, the Reparations Law, prescribes the national policy on procurement and
utilization of reparations and development loans. The procurements are divided into those for
use by the government sector and those for private parties in projects as the then National
Economic Council shall determine. Those intended for the private sector shall be made
available by sale to Filipino citizens or to one hundred (100%) percent Filipino-owned entities
in national development projects.
The Roppongi property was acquired from the Japanese government under the Second Year
Schedule and listed under the heading "Government Sector", through Reparations Contract
No. 300 dated June 27, 1958. The Roppongi property consists of the land and building "for
the Chancery of the Philippine Embassy" (Annex M-D to Memorandum for Petitioner, p. 503).
As intended, it became the site of the Philippine Embassy until the latter was transferred to
Nampeidai on July 22, 1976 when the Roppongi building needed major repairs. Due to the
failure of our government to provide necessary funds, the Roppongi property has remained
undeveloped since that time.
A proposal was presented to President Corazon C. Aquino by former Philippine Ambassador
to Japan, Carlos J. Valdez, to make the property the subject of a lease agreement with a
Japanese firm - Kajima Corporation which shall construct two (2) buildings in Roppongi
and one (1) building in Nampeidai and renovate the present Philippine Chancery in
Nampeidai. The consideration of the construction would be the lease to the foreign
corporation of one (1) of the buildings to be constructed in Roppongi and the two (2)
buildings in Nampeidai. The other building in Roppongi shall then be used as the Philippine
Embassy Chancery. At the end of the lease period, all the three leased buildings shall be
occupied and used by the Philippine government. No change of ownership or title shall

occur. (See Annex "B" to Reply to Comment) The Philippine government retains the title all
throughout the lease period and thereafter. However, the government has not acted favorably
on this proposal which is pending approval and ratification between the parties. Instead, on
August 11, 1986, President Aquino created a committee to study the disposition/utilization of
Philippine government properties in Tokyo and Kobe, Japan through Administrative Order
No. 3, followed by Administrative Orders Numbered 3-A, B, C and D.
On July 25, 1987, the President issued Executive Order No. 296 entitling non-Filipino citizens
or entities to avail of separations' capital goods and services in the event of sale, lease or
disposition. The four properties in Japan including the Roppongi were specifically mentioned
in the first "Whereas" clause.
Amidst opposition by various sectors, the Executive branch of the government has been
pushing, with great vigor, its decision to sell the reparations properties starting with the
Roppongi lot. The property has twice been set for bidding at a minimum floor price of $225
million. The first bidding was a failure since only one bidder qualified. The second one, after
postponements, has not yet materialized. The last scheduled bidding on February 21, 1990
was restrained by his Court. Later, the rules on bidding were changed such that the $225
million floor price became merely a suggested floor price.
The Court finds that each of the herein petitions raises distinct issues. The petitioner in G.R.
No. 92013 objects to the alienation of the Roppongi property to anyone while the petitioner in
G.R. No. 92047 adds as a principal objection the alleged unjustified bias of the Philippine
government in favor of selling the property to non-Filipino citizens and entities. These
petitions have been consolidated and are resolved at the same time for the objective is the
same - to stop the sale of the Roppongi property.
The petitioner in G.R. No. 92013 raises the following issues:
(1) Can the Roppongi property and others of its kind be alienated by the Philippine
Government?; and
(2) Does the Chief Executive, her officers and agents, have the authority and jurisdiction, to
sell the Roppongi property?
Petitioner Dionisio Ojeda in G.R. No. 92047, apart from questioning the authority of the
government to alienate the Roppongi property assails the constitutionality of Executive
Order No. 296 in making the property available for sale to non-Filipino citizens and entities.
He also questions the bidding procedures of the Committee on the Utilization or Disposition
of Philippine Government Properties in Japan for being discriminatory against Filipino
citizens and Filipino-owned entities by denying them the right to be informed about the
bidding requirements.
II
In G.R. No. 92013, petitioner Laurel asserts that the Roppongi property and the related lots
were acquired as part of the reparations from the Japanese government for diplomatic and
consular use by the Philippine government. Vice-President Laurel states that the Roppongi
property is classified as one of public dominion, and not of private ownership under Article
420 of the Civil Code (See infra).

The petitioner submits that the Roppongi property comes under "property intended for public
service" in paragraph 2 of the above provision. He states that being one of public dominion,
no ownership by any one can attach to it, not even by the State. The Roppongi and related
properties were acquired for "sites for chancery, diplomatic, and consular quarters, buildings
and other improvements" (Second Year Reparations Schedule). The petitioner states that
they continue to be intended for a necessary service. They are held by the State in
anticipation of an opportune use. (Citing 3 Manresa 65-66). Hence, it cannot be appropriated,
is outside the commerce of man, or to put it in more simple terms, it cannot be alienated nor
be the subject matter of contracts (Citing Municipality of Cavite v. Rojas, 30 Phil. 20 [1915]).
Noting the non-use of the Roppongi property at the moment, the petitioner avers that the
same remains property of public dominion so long as the government has not used it for
other purposes nor adopted any measure constituting a removal of its original purpose or
use.
The respondents, for their part, refute the petitioner's contention by saying that the subject
property is not governed by our Civil Code but by the laws of Japan where the property is
located. They rely upon the rule of lex situs which is used in determining the applicable law
regarding the acquisition, transfer and devolution of the title to a property. They also invoke
Opinion No. 21, Series of 1988, dated January 27, 1988 of the Secretary of Justice which used
the lex situs in explaining the inapplicability of Philippine law regarding a property situated in
Japan.
The respondents add that even assuming for the sake of argument that the Civil Code is
applicable, the Roppongi property has ceased to become property of public dominion. It has
become patrimonial property because it has not been used for public service or for
diplomatic purposes for over thirteen (13) years now (Citing Article 422, Civil Code) and
because the intention by the Executive Department and the Congress to convert it to private
use has been manifested by overt acts, such as, among others: (1) the transfer of the
Philippine Embassy to Nampeidai (2) the issuance of administrative orders for the possibility
of alienating the four government properties in Japan; (3) the issuance of Executive Order
No. 296; (4) the enactment by the Congress of Rep. Act No. 6657 [the Comprehensive
Agrarian Reform Law] on June 10, 1988 which contains a provision stating that funds may be
taken from the sale of Philippine properties in foreign countries; (5) the holding of the public
bidding of the Roppongi property but which failed; (6) the deferment by the Senate in
Resolution No. 55 of the bidding to a future date; thus an acknowledgment by the Senate of
the government's intention to remove the Roppongi property from the public service
purpose; and (7) the resolution of this Court dismissing the petition in Ojeda v. Bidding
Committee, et al., G.R. No. 87478 which sought to enjoin the second bidding of the Roppongi
property scheduled on March 30, 1989.
III
In G.R. No. 94047, petitioner Ojeda once more asks this Court to rule on the constitutionality
of Executive Order No. 296. He had earlier filed a petition in G.R. No. 87478 which the Court
dismissed on August 1, 1989. He now avers that the executive order contravenes the
constitutional mandate to conserve and develop the national patrimony stated in the
Preamble of the 1987 Constitution. It also allegedly violates:
(1) The reservation of the ownership and acquisition of alienable lands of the public domain
to Filipino citizens. (Sections 2 and 3, Article XII, Constitution; Sections 22 and 23 of
Commonwealth Act 141).
itc-asl

(2) The preference for Filipino citizens in the grant of rights, privileges and concessions
covering the national economy and patrimony (Section 10, Article VI, Constitution);
(3) The protection given to Filipino enterprises against unfair competition and trade
practices;
(4) The guarantee of the right of the people to information on all matters of public concern
(Section 7, Article III, Constitution);
(5) The prohibition against the sale to non-Filipino citizens or entities not wholly owned by
Filipino citizens of capital goods received by the Philippines under the Reparations Act
(Sections 2 and 12 of Rep. Act No. 1789); and
(6) The declaration of the state policy of full public disclosure of all transactions involving
public interest (Section 28, Article III, Constitution).
Petitioner Ojeda warns that the use of public funds in the execution of an unconstitutional
executive order is a misapplication of public funds He states that since the details of the
bidding for the Roppongi property were never publicly disclosed until February 15, 1990 (or a
few days before the scheduled bidding), the bidding guidelines are available only in Tokyo,
and the accomplishment of requirements and the selection of qualified bidders should be
done in Tokyo, interested Filipino citizens or entities owned by them did not have the chance
to comply with Purchase Offer Requirements on the Roppongi. Worse, the Roppongi shall be
sold for a minimum price of $225 million from which price capital gains tax under Japanese
law of about 50 to 70% of the floor price would still be deducted.
IV
The petitioners and respondents in both cases do not dispute the fact that the Roppongi site
and the three related properties were through reparations agreements, that these were
assigned to the government sector and that the Roppongi property itself was specifically
designated under the Reparations Agreement to house the Philippine Embassy.
The nature of the Roppongi lot as property for public service is expressly spelled out. It is
dictated by the terms of the Reparations Agreement and the corresponding contract of
procurement which bind both the Philippine government and the Japanese government.
There can be no doubt that it is of public dominion unless it is convincingly shown that the
property has become patrimonial. This, the respondents have failed to do.
As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot
be alienated. Its ownership is a special collective ownership for general use and enjoyment,
an application to the satisfaction of collective needs, and resides in the social group. The
purpose is not to serve the State as a juridical person, but the citizens; it is intended for the
common and public welfare and cannot be the object of appropration. (Taken from 3 Manresa,
66-69; cited in Tolentino, Commentaries on the Civil Code of the Philippines, 1963 Edition,
Vol. II, p. 26).
The applicable provisions of the Civil Code are:
ART. 419. Property is either of public dominion or of private ownership.

ART. 420. The following things are property of public dominion

(1) Those intended for public use, such as roads, canals, rivers, torrents, ports
and bridges constructed by the State, banks shores roadsteads, and others of
similar character;
(2) Those which belong to the State, without being for public use, and are
intended for some public service or for the development of the national wealth.
ART. 421. All other property of the State, which is not of the character stated in
the preceding article, is patrimonial property.
The Roppongi property is correctly classified under paragraph 2 of Article 420 of the Civil
Code as property belonging to the State and intended for some public service.
Has the intention of the government regarding the use of the property been changed because
the lot has been Idle for some years? Has it become patrimonial?
The fact that the Roppongi site has not been used for a long time for actual Embassy service
does not automatically convert it to patrimonial property. Any such conversion happens only
if the property is withdrawn from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66
SCRA 481 [1975]). A property continues to be part of the public domain, not available for
private appropriation or ownership until there is a formal declaration on the part of the
government to withdraw it from being such (Ignacio v. Director of Lands, 108 Phil. 335 [1960]).
The respondents enumerate various pronouncements by concerned public officials
insinuating a change of intention. We emphasize, however, that an abandonment of the
intention to use the Roppongi property for public service and to make it patrimonial property
under Article 422 of the Civil Code must be definite Abandonment cannot be inferred from the
non-use alone specially if the non-use was attributable not to the government's own
deliberate and indubitable will but to a lack of financial support to repair and improve the
property (See Heirs of Felino Santiago v. Lazaro, 166 SCRA 368 [1988]). Abandonment must
be a certain and positive act based on correct legal premises.
A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not relinquishment of the
Roppongi property's original purpose. Even the failure by the government to repair the
building in Roppongi is not abandonment since as earlier stated, there simply was a shortage
of government funds. The recent Administrative Orders authorizing a study of the status and
conditions of government properties in Japan were merely directives for investigation but did
not in any way signify a clear intention to dispose of the properties.
Executive Order No. 296, though its title declares an "authority to sell", does not have a
provision in its text expressly authorizing the sale of the four properties procured from Japan
for the government sector. The executive order does not declare that the properties lost their
public character. It merely intends to make the properties available to foreigners and not to
Filipinos alone in case of a sale, lease or other disposition. It merely eliminates the restriction
under Rep. Act No. 1789 that reparations goods may be sold only to Filipino citizens and one
hundred (100%) percent Filipino-owned entities. The text of Executive Order No. 296
provides:

Section 1. The provisions of Republic Act No. 1789, as amended, and of other
laws to the contrary notwithstanding, the above-mentioned properties can be
made available for sale, lease or any other manner of disposition to nonFilipino citizens or to entities owned by non-Filipino citizens.
Executive Order No. 296 is based on the wrong premise or assumption that the Roppongi and
the three other properties were earlier converted into alienable real properties. As earlier
stated, Rep. Act No. 1789 differentiates the procurements for the government sector and the
private sector (Sections 2 and 12, Rep. Act No. 1789). Only the private sector properties can
be sold to end-users who must be Filipinos or entities owned by Filipinos. It is this nationality
provision which was amended by Executive Order No. 296.
Section 63 (c) of Rep. Act No. 6657 (the CARP Law) which provides as one of the sources of
funds for its implementation, the proceeds of the disposition of the properties of the
Government in foreign countries, did not withdraw the Roppongi property from being
classified as one of public dominion when it mentions Philippine properties abroad. Section
63 (c) refers to properties which are alienable and not to those reserved for public use or
service. Rep Act No. 6657, therefore, does not authorize the Executive Department to sell the
Roppongi property. It merely enumerates possible sources of future funding to augment (as
and when needed) the Agrarian Reform Fund created under Executive Order No. 299.
Obviously any property outside of the commerce of man cannot be tapped as a source of
funds.
The respondents try to get around the public dominion character of the Roppongi property by
insisting that Japanese law and not our Civil Code should apply.
It is exceedingly strange why our top government officials, of all people, should be the ones
to insist that in the sale of extremely valuable government property, Japanese law and not
Philippine law should prevail. The Japanese law - its coverage and effects, when enacted,
and exceptions to its provision is not presented to the Court It is simply asserted that
the lex loci rei sitae or Japanese law should apply without stating what that law provides. It is
a ed on faith that Japanese law would allow the sale.
We see no reason why a conflict of law rule should apply when no conflict of law situation
exists. A conflict of law situation arises only when: (1) There is a dispute over the title or
ownership of an immovable, such that the capacity to take and transfer immovables, the
formalities of conveyance, the essential validity and effect of the transfer, or the
interpretation and effect of a conveyance, are to be determined (See Salonga, Private
International Law, 1981 ed., pp. 377-383); and (2) A foreign law on land ownership and its
conveyance is asserted to conflict with a domestic law on the same matters. Hence, the need
to determine which law should apply.
In the instant case, none of the above elements exists.
The issues are not concerned with validity of ownership or title. There is no question that the
property belongs to the Philippines. The issue is the authority of the respondent officials to
validly dispose of property belonging to the State. And the validity of the procedures adopted
to effect its sale. This is governed by Philippine Law. The rule of lex situs does not apply.
The assertion that the opinion of the Secretary of Justice sheds light on the relevance of
the lex situsrule is misplaced. The opinion does not tackle the alienability of the real
properties procured through reparations nor the existence in what body of the authority to

sell them. In discussing who are capableof acquiring the lots, the Secretary merely explains
that it is the foreign law which should determine who can acquire the properties so that the
constitutional limitation on acquisition of lands of the public domain to Filipino citizens and
entities wholly owned by Filipinos is inapplicable. We see no point in belaboring whether or
not this opinion is correct. Why should we discuss who can acquire the Roppongi lot when
there is no showing that it can be sold?
The subsequent approval on October 4, 1988 by President Aquino of the recommendation by
the investigating committee to sell the Roppongi property was premature or, at the very least,
conditioned on a valid change in the public character of the Roppongi property. Moreover, the
approval does not have the force and effect of law since the President already lost her
legislative powers. The Congress had already convened for more than a year.
Assuming for the sake of argument, however, that the Roppongi property is no longer of
public dominion, there is another obstacle to its sale by the respondents.
There is no law authorizing its conveyance.
Section 79 (f) of the Revised Administrative Code of 1917 provides
Section 79 (f ) Conveyances and contracts to which the Government is a party.
In cases in which the Government of the Republic of the Philippines is a
party to any deed or other instrument conveying the title to real estate or to
any other property the value of which is in excess of one hundred thousand
pesos, the respective Department Secretary shall prepare the necessary
papers which, together with the proper recommendations, shall be submitted
to the Congress of the Philippines for approval by the same. Such deed,
instrument, or contract shall be executed and signed by the President of the
Philippines on behalf of the Government of the Philippines unless the
Government of the Philippines unless the authority therefor be expressly
vested by law in another officer. (Emphasis supplied)
The requirement has been retained in Section 48, Book I of the Administrative Code of 1987
(Executive Order No. 292).
SEC. 48. Official Authorized to Convey Real Property. Whenever real
property of the Government is authorized by law to be conveyed, the deed of
conveyance shall be executed in behalf of the government by the following:
(1) For property belonging to and titled in the name of the Republic of the
Philippines, by the President, unless the authority therefor is expressly vested
by law in another officer.
(2) For property belonging to the Republic of the Philippines but titled in the
name of any political subdivision or of any corporate agency or
instrumentality, by the executive head of the agency or instrumentality.
(Emphasis supplied)
It is not for the President to convey valuable real property of the government on his or her
own sole will. Any such conveyance must be authorized and approved by a law enacted by
the Congress. It requires executive and legislative concurrence.

Resolution No. 55 of the Senate dated June 8, 1989, asking for the deferment of the sale of
the Roppongi property does not withdraw the property from public domain much less
authorize its sale. It is a mere resolution; it is not a formal declaration abandoning the public
character of the Roppongi property. In fact, the Senate Committee on Foreign Relations is
conducting hearings on Senate Resolution No. 734 which raises serious policy
considerations and calls for a fact-finding investigation of the circumstances behind the
decision to sell the Philippine government properties in Japan.
The resolution of this Court in Ojeda v. Bidding Committee, et al., supra, did not pass upon
the constitutionality of Executive Order No. 296. Contrary to respondents' assertion, we did
not uphold the authority of the President to sell the Roppongi property. The Court stated that
the constitutionality of the executive order was not the real issue and that resolving the
constitutional question was "neither necessary nor finally determinative of the case." The
Court noted that "[W]hat petitioner ultimately questions is the use of the proceeds of the
disposition of the Roppongi property." In emphasizing that "the decision of the Executive to
dispose of the Roppongi property to finance the CARP ... cannot be questioned" in view of
Section 63 (c) of Rep. Act No. 6657, the Court did not acknowledge the fact that the property
became alienable nor did it indicate that the President was authorized to dispose of the
Roppongi property. The resolution should be read to mean that in case the Roppongi
property is re-classified to be patrimonial and alienable by authority of law, the proceeds of a
sale may be used for national economic development projects including the CARP.
Moreover, the sale in 1989 did not materialize. The petitions before us question the proposed
1990 sale of the Roppongi property. We are resolving the issues raised in these petitions, not
the issues raised in 1989.
Having declared a need for a law or formal declaration to withdraw the Roppongi property
from public domain to make it alienable and a need for legislative authority to allow the sale
of the property, we see no compelling reason to tackle the constitutional issues raised by
petitioner Ojeda.
The Court does not ordinarily pass upon constitutional questions unless these questions are
properly raised in appropriate cases and their resolution is necessary for the determination
of the case (People v. Vera, 65 Phil. 56 [1937]). The Court will not pass upon a constitutional
question although properly presented by the record if the case can be disposed of on some
other ground such as the application of a statute or general law (Siler v. Louisville and
Nashville R. Co., 213 U.S. 175, [1909], Railroad Commission v. Pullman Co., 312 U.S. 496
[1941]).
The petitioner in G.R. No. 92013 states why the Roppongi property should not be sold:
The Roppongi property is not just like any piece of property. It was given to the
Filipino people in reparation for the lives and blood of Filipinos who died and
suffered during the Japanese military occupation, for the suffering of widows
and orphans who lost their loved ones and kindred, for the homes and other
properties lost by countless Filipinos during the war. The Tokyo properties are
a monument to the bravery and sacrifice of the Filipino people in the face of an
invader; like the monuments of Rizal, Quezon, and other Filipino heroes, we do
not expect economic or financial benefits from them. But who would think of
selling these monuments? Filipino honor and national dignity dictate that we
keep our properties in Japan as memorials to the countless Filipinos who died
and suffered. Even if we should become paupers we should not think of selling

them. For it would be as if we sold the lives and blood and tears of our
countrymen. (Rollo- G.R. No. 92013, p.147)
The petitioner in G.R. No. 92047 also states:
Roppongi is no ordinary property. It is one ceded by the Japanese government
in atonement for its past belligerence for the valiant sacrifice of life and limb
and for deaths, physical dislocation and economic devastation the whole
Filipino people endured in World War II.
It is for what it stands for, and for what it could never bring back to life, that its
significance today remains undimmed, inspire of the lapse of 45 years since
the war ended, inspire of the passage of 32 years since the property passed on
to the Philippine government.
Roppongi is a reminder that cannot should not be dissipated ... (Rollo92047, p. 9)
It is indeed true that the Roppongi property is valuable not so much because of the inflated
prices fetched by real property in Tokyo but more so because of its symbolic value to all
Filipinos veterans and civilians alike. Whether or not the Roppongi and related properties
will eventually be sold is a policy determination where both the President and Congress must
concur. Considering the properties' importance and value, the laws on conversion and
disposition of property of public dominion must be faithfully followed.
WHEREFORE, IN VIEW OF THE FOREGOING, the petitions are GRANTED. A writ of
prohibition is issued enjoining the respondents from proceeding with the sale of the
Roppongi property in Tokyo, Japan. The February 20, 1990 Temporary Restraining Order is
made PERMANENT.
SO ORDERED.
Melencio-Herrera, Paras, Bidin, Grio-Aquino and Regalado, JJ., concur.

Separate Opinions

CRUZ, J., concurring:

I concur completely with the excellent ponencia of Mr. Justice Gutierrez and will add the
following observations only for emphasis.
It is clear that the respondents have failed to show the President's legal authority to sell the
Roppongi property. When asked to do so at the hearing on these petitions, the Solicitor
General was at best ambiguous, although I must add in fairness that this was not his fault.

The fact is that there is -no such authority. Legal expertise alone cannot conjure that
statutory permission out of thin air.
Exec. Order No. 296, which reads like so much legislative, double talk, does not contain such
authority. Neither does Rep. Act No. 6657, which simply allows the proceeds of the sale of our
properties abroad to be used for the comprehensive agrarian reform program. Senate Res.
No. 55 was a mere request for the deferment of the scheduled sale of tile Roppongi property,
possibly to stop the transaction altogether; and ill any case it is not a law. The sale of the
said property may be authorized only by Congress through a duly enacted statute, and there
is no such law.
Once again, we have affirmed the principle that ours is a government of laws and not of men,
where every public official, from the lowest to the highest, can act only by virtue of a valid
authorization. I am happy to note that in the several cases where this Court has ruled against
her, the President of the Philippines has submitted to this principle with becoming grace.

PADILLA, J., concurring:

I concur in the decision penned by Mr. Justice Gutierrez, Jr., I only wish to make a few
observations which could help in further clarifying the issues.
Under our tripartite system of government ordained by the Constitution, it is Congress that
lays down or determines policies. The President executes such policies. The policies
determined by Congress are embodied in legislative enactments that have to be approved by
the President to become law. The President, of course, recommends to Congress the
approval of policies but, in the final analysis, it is Congress that is the policy - determining
branch of government.
The judiciary interprets the laws and, in appropriate cases, determines whether the laws
enacted by Congress and approved by the President, and presidential acts implementing
such laws, are in accordance with the Constitution.
The Roppongi property was acquired by the Philippine government pursuant to the
reparations agreement between the Philippine and Japanese governments. Under such
agreement, this property was acquired by the Philippine government for a specific purpose,
namely, to serve as the site of the Philippine Embassy in Tokyo, Japan. Consequently,
Roppongi is a property of public dominion and intended for public service, squarely falling
within that class of property under Art. 420 of the Civil Code, which provides:
Art. 420. The following things are property of public dominion :
(1) ...
(2) Those which belong to the State, without being for public use, and are
intended for some public service or for the development of the national wealth.
(339a)
Public dominion property intended for public service cannot be alienated unless the property
is first transformed into private property of the state otherwise known as patrimonial property

of the state. 1 The transformation of public dominion property to state patrimonial property
involves, to my mind, a policy decision. It is a policy decision because the treatment of the
property varies according to its classification. Consequently, it is Congress which can decide and
declare the conversion of Roppongi from a public dominion property to a state patrimonial
property. Congress has made no such decision or declaration.
Moreover, the sale of public property (once converted from public dominion to state
patrimonial property) must be approved by Congress, for this again is a matter of policy (i.e.
to keep or dispose of the property). Sec. 48, Book 1 of the Administrative Code of 1987
provides:
SEC. 48. Official Authorized to Convey Real Property. Whenever real
property of the Government is authorized by law to be conveyed, the deed of
conveyance shall be executed in behalf of the government by the following:
(1) For property belonging to and titled in the name of the
Republic of the Philippines, by the President, unless the
authority therefor is expressly vested by law in another officer.
(2) For property belonging to the Republic of the Philippines but
titled in the name of any political subdivision or of any corporate
agency or instrumentality, by the executive head of the agency
or instrumentality. (Emphasis supplied)
But the record is bare of any congressional decision or approval to sell Roppongi. The record
is likewise bare of any congressional authority extended to the President to sell Roppongi
thru public bidding or otherwise.
It is therefore, clear that the President cannot sell or order the sale of Roppongi thru public
bidding or otherwise without a prior congressional approval, first, converting Roppongi from
a public dominion property to a state patrimonial property, and, second, authorizing the
President to sell the same.
ACCORDINGLY, my vote is to GRANT the petition and to make PERMANENT the temporary
restraining order earlier issued by this Court.

SARMIENTO, J., concurring:

The central question, as I see it, is whether or not the so-called "Roppongi property' has lost
its nature as property of public dominion, and hence, has become patrimonial property of the
State. I understand that the parties are agreed that it was property intended for "public
service" within the contemplation of paragraph (2), of Article 430, of the Civil Code, and
accordingly, land of State dominion, and beyond human commerce. The lone issue is, in the
light of supervening developments, that is non-user thereof by the National Government (for
diplomatic purposes) for the last thirteen years; the issuance of Executive Order No. 296
making it available for sale to any interested buyer; the promulgation of Republic Act No.
6657, the Comprehensive Agrarian Reform Law, making available for the program's financing,
State assets sold; the approval by the President of the recommendation of the investigating
committee formed to study the property's utilization; and the issuance of Resolution No. 55

of the Philippine Senate requesting for the deferment of its disposition it, "Roppongi", is still
property of the public dominion, and if it is not, how it lost that character.
When land of the public dominion ceases to be one, or when the change takes place, is a
question our courts have debated early. In a 1906 decision, 1 it was held that property of the
public dominion, a public plaza in this instance, becomes patrimonial upon use thereof for
purposes other than a plaza. In a later case, 2 this ruling was reiterated. Likewise, it has been held
that land, originally private property, has become of public dominion upon its donation to the
town and its conversion and use as a public plaza. 3 It is notable that under these three cases, the
character of the property, and any change occurring therein, depends on the actual use to which it
is dedicated. 4
Much later, however, the Court held that "until a formal declaration on the part of the
Government, through the executive department or the Legislative, to the effect that the
land . . . is no longer needed for [public] service- for public use or for special industries, [it]
continue[s] to be part of the public [dominion], not available for private expropriation or
ownership." 5 So also, it was ruled that a political subdivision (the City of Cebu in this case) alone
may declare (under its charter) a city road abandoned and thereafter, to dispose of it. 6
In holding that there is "a need for a law or formal declaration to withdraw the Roppongi
property from public domain to make it alienable and a land for legislative authority to allow
the sale of the property" 7the majority lays stress to the fact that: (1) An affirmative act
executive or legislative is necessary to reclassify property of the public dominion, and (2) a
legislative decree is required to make it alienable. It also clears the uncertainties brought about by
earlier interpretations that the nature of property-whether public or patrimonial is predicated on
the manner it is actually used, or not used, and in the same breath, repudiates the Government's
position that the continuous non-use of "Roppongi", among other arguments, for "diplomatic
purposes", has turned it into State patrimonial property.
I feel that this view corresponds to existing pronouncements of this Court, among other
things, that: (1) Property is presumed to be State property in the absence of any showing to
the contrary; 8 (2) With respect to forest lands, the same continue to be lands of the public
dominion unless and until reclassified by the Executive Branch of the Government; 9 and (3) All
natural resources, under the Constitution, and subject to exceptional cases, belong to the State. 10
I am elated that the Court has banished previous uncertainties.

FELICIANO, J., dissenting

With regret, I find myself unable to share the conclusions reached by Mr. Justice Hugo E.
Gutierrez, Jr.
For purposes of this separate opinion, I assume that the piece of land located in 306
Roppongi, 5-Chome, Minato-ku Tokyo, Japan (hereinafter referred to as the "Roppongi
property") may be characterized as property of public dominion, within the meaning of Article
420 (2) of the Civil Code:
[Property] which belong[s] to the State, without being for public use, and are
intended for some public service -.

It might not be amiss however, to note that the appropriateness of trying to bring within the
confines of the simple threefold classification found in Article 420 of the Civil Code ("property
for public use property "intended for some public service" and property intended "for the
development of the national wealth") all property owned by the Republic of the Philippines
whether found within the territorial boundaries of the Republic or located within the territory
of another sovereign State, is not self-evident. The first item of the classification property
intended for public use can scarcely be properly applied to property belonging to the
Republic but found within the territory of another State. The third item of the classification
property intended for the development of the national wealth is illustrated, in Article 339 of
the Spanish Civil Code of 1889, by mines or mineral properties. Again, mineral lands owned
by a sovereign State are rarely, if ever, found within the territorial base of another sovereign
State. The task of examining in detail the applicability of the classification set out in Article
420 of our Civil Code to property that the Philippines happens to own outside its own
boundaries must, however, be left to academicians.
For present purposes, too, I agree that there is no question of conflict of laws that is, at the
present time, before this Court. The issues before us relate essentially to authority to sell the
Roppongi property so far as Philippine law is concerned.
The majority opinion raises two (2) issues: (a) whether or not the Roppongi property has
been converted into patrimonial property or property of the private domain of the State; and
(b) assuming an affirmative answer to (a), whether or not there is legal authority to dispose of
the Roppongi property.
I
Addressing the first issue of conversion of property of public dominion intended for some
public service, into property of the private domain of the Republic, it should be noted that the
Civil Code does not address the question of who has authority to effect such conversion.
Neither does the Civil Code set out or refer to any procedure for such conversion.
Our case law, however, contains some fairly explicit pronouncements on this point, as
Justice Sarmiento has pointed out in his concurring opinion. In Ignacio v. Director of
Lands (108 Phils. 335 [1960]), petitioner Ignacio argued that if the land in question formed
part of the public domain, the trial court should have declared the same no longer necessary
for public use or public purposes and which would, therefore, have become disposable and
available for private ownership. Mr. Justice Montemayor, speaking for the Court, said:
Article 4 of the Law of Waters of 1866 provides that when a portion of the shore
is no longer washed by the waters of the sea and is not necessary for
purposes of public utility, or for the establishment of special industries, or for
coast-guard service, the government shall declare it to be the property of the
owners of the estates adjacent thereto and as an increment thereof. We believe
that only the executive and possibly the legislative departments have the
authority and the power to make the declaration that any land so gained by the
sea, is not necessary for purposes of public utility, or for the establishment of
special industries, or for coast-guard service. If no such declaration has been
made by said departments, the lot in question forms part of the public domain.
(Natividad v. Director of Lands, supra.)

The reason for this pronouncement, according to this Tribunal in the case of
Vicente Joven y Monteverde v. Director of Lands, 93 Phil., 134 (cited in Velayo's
Digest, Vol. 1, p. 52).
... is undoubtedly that the courts are neither primarily called upon, nor indeed
in a position to determine whether any public land are to be used for the
purposes specified in Article 4 of the Law of Waters. Consequently, until
a formal declaration on the part of the Government, through the executive
department or the Legislature, to the effect that the land in question is no
longer needed for coast-guard service, for public use or for special industries,
they continue to be part of the public domain not available for private
appropriation or ownership.(108 Phil. at 338-339; emphasis supplied)
Thus, under Ignacio, either the Executive Department or the Legislative Department may
convert property of the State of public dominion into patrimonial property of the State. No
particular formula or procedure of conversion is specified either in statute law or in case law.
Article 422 of the Civil Code simply states that: "Property of public dominion, when no longer
intended for public use or for public service, shall form part of the patrimonial property of the
State". I respectfully submit, therefore, that the only requirement which is legitimately
imposable is that the intent to convert must be reasonably clear from a consideration of the
acts or acts of the Executive Department or of the Legislative Department which are said to
have effected such conversion.
The same legal situation exists in respect of conversion of property of public dominion
belonging to municipal corporations, i.e., local governmental units, into patrimonial property
of such entities. In CebuOxygen Acetylene v. Bercilles (66 SCRA 481 [1975]), the City Council
of Cebu by resolution declared a certain portion of an existing street as an abandoned road,
"the same not being included in the city development plan". Subsequently, by another
resolution, the City Council of Cebu authorized the acting City Mayor to sell the land through
public bidding. Although there was no formal and explicit declaration of conversion of
property for public use into patrimonial property, the Supreme Court said:
xxx xxx xxx
(2) Since that portion of the city street subject of petitioner's application for
registration of title was withdrawn from public use, it follows that such
withdrawn portion becomes patrimonial property which can be the object of an
ordinary contract.
Article 422 of the Civil Code expressly provides that "Property of public
dominion, when no longer intended for public use of for public service, shall
form part of the patrimonial property of the State."
Besides, the Revised Charter of the City of Cebu heretofore quoted, in very
clear and unequivocal terms, states that "Property thus withdrawn from public
servitude may be used or conveyed for any purpose for which other real
property belonging to the City may be lawfully used or conveyed."
Accordingly, the withdrawal of the property in question from public use and its
subsequent sale to the petitioner is valid. Hence, the petitioner has a
registrable title over the lot in question. (66 SCRA at 484-; emphasis supplied)

Thus, again as pointed out by Sarmiento J., in his separate opinion, in the case of property
owned by municipal corporations simple non-use or the actual dedication of public property
to some use other than "public use" or some "public service", was sufficient legally to
convert such property into patrimonial property (Municipality of Oas v. Roa, 7 Phil. 20 [1906]Municipality of Hinunganan v. Director of Lands 24 Phil. 124 [1913]; Province of Zamboanga
del Norte v. City of Zamboanga, 22 SCRA 1334 (1968).
I would also add that such was the case not only in respect of' property of municipal
corporations but also in respect of property of the State itself. Manresa in commenting on
Article 341 of the 1889 Spanish Civil Code which has been carried over verbatim into our Civil
Code by Article 422 thereof, wrote:
La dificultad mayor en todo esto estriba, naturalmente, en fijar el momento en
que los bienes de dominio publico dejan de serlo. Si la Administracion o la
autoridad competente legislative realizan qun acto en virtud del cual cesa el
destino o uso publico de los bienes de que se trata naturalmente la dificultad
queda desde el primer momento resuelta. Hay un punto de partida cierto para
iniciar las relaciones juridicas a que pudiera haber lugar Pero puede ocurrir
que no haya taldeclaracion expresa, legislativa or administrativa, y, sin
embargo, cesar de hecho el destino publico de los bienes; ahora bien, en este
caso, y para los efectos juridicos que resultan de entrar la cosa en el comercio
de los hombres,' se entedera que se ha verificado la conversion de los bienes
patrimoniales?
El citado tratadista Ricci opina, respecto del antiguo Codigo italiano, por la
afirmativa, y por nuestra parte creemos que tal debe ser la soluciion. El
destino de las cosas no depende tanto de una declaracion expresa como del
uso publico de las mismas, y cuanda el uso publico cese con respecto de
determinados bienes, cesa tambien su situacion en el dominio publico. Si una
fortaleza en ruina se abandona y no se repara, si un trozo de la via publica se
abandona tambien por constituir otro nuevo an mejores condiciones....ambos
bienes cesan de estar Codigo, y leyes especiales mas o memos
administrativas. (3 Manresa, Comentarios al Codigo Civil Espanol, p. 128 [7a
ed.; 1952) (Emphasis supplied)
The majority opinion says that none of the executive acts pointed to by the Government
purported, expressly or definitely, to convert the Roppongi property into patrimonial property
of the Republic. Assuming that to be the case, it is respectfully submitted that cumulative
effect of the executive acts here involved was to convert property originally intended for and
devoted to public service into patrimonial property of the State, that is, property susceptible
of disposition to and appropration by private persons. These executive acts, in their totality if
not each individual act, make crystal clear the intent of the Executive Department to effect
such conversion. These executive acts include:
(a) Administrative Order No. 3 dated 11 August 1985, which created a Committee to study the
disposition/utilization of the Government's property in Japan, The Committee was composed
of officials of the Executive Department: the Executive Secretary; the Philippine Ambassador
to Japan; and representatives of the Department of Foreign Affairs and the Asset
Privatization Trust. On 19 September 1988, the Committee recommended to the President the
sale of one of the lots (the lot specifically in Roppongi) through public bidding. On 4 October
1988, the President approved the recommendation of the Committee.

On 14 December 1988, the Philippine Government by diplomatic note informed the Japanese
Ministry of Foreign Affairs of the Republic's intention to dispose of the property in Roppongi.
The Japanese Government through its Ministry of Foreign Affairs replied that it interposed no
objection to such disposition by the Republic. Subsequently, the President and the
Committee informed the leaders of the House of Representatives and of the Senate of the
Philippines of the proposed disposition of the Roppongi property.
(b) Executive Order No. 296, which was issued by the President on 25 July 1987. Assuming
that the majority opinion is right in saying that Executive Order No. 296 is insufficient
to authorize the sale of the Roppongi property, it is here submitted with respect that
Executive Order No. 296 is more than sufficient to indicate an intention to convert the
property previously devoted to public service into patrimonial property that is capable of
being sold or otherwise disposed of
(c) Non-use of the Roppongi lot for fourteen (14) years for diplomatic or for any other public
purposes. Assuming (but only arguendo) that non-use does not, by itself, automatically
convert the property into patrimonial property. I respectfully urge that prolonged nonuse, conjoined with the other factors here listed, was legally effective to convert the lot in
Roppongi into patrimonial property of the State. Actually, as already pointed out, case law
involving property of municipal corporations is to the effect that simple non-use or the actual
dedication of public property to some use other than public use or public service, was
sufficient to convert such property into patrimonial property of the local governmental entity
concerned. Also as pointed out above, Manresa reached the same conclusion in respect of
conversion of property of the public domain of the State into property of the private domain
of the State.
The majority opinion states that "abandonment cannot be inferred from the non-use alone
especially if the non-use was attributable not to the Government's own deliberate and
indubitable will but to lack of financial support to repair and improve the property" (Majority
Opinion, p. 13). With respect, it may be stressed that there is no abandonment involved here,
certainly no abandonment of property or of property rights. What is involved is the charge of
the classification of the property from property of the public domain into property of the
private domain of the State. Moreover, if for fourteen (14) years, the Government did not see
fit to appropriate whatever funds were necessary to maintain the property in Roppongi in a
condition suitable for diplomatic representation purposes, such circumstance may, with
equal logic, be construed as a manifestation of the crystalizing intent to change the character
of the property.
(d) On 30 March 1989, a public bidding was in fact held by the Executive Department for the
sale of the lot in Roppongi. The circumstance that this bidding was not successful certainly
does not argue against an intent to convert the property involved into property that is
disposable by bidding.
The above set of events and circumstances makes no sense at all if it does not, as a whole,
show at least the intent on the part of the Executive Department (with the knowledge of the
Legislative Department) to convert the property involved into patrimonial property that is
susceptible of being sold.
II

Having reached an affirmative answer in respect of the first issue, it is necessary to address
the second issue of whether or not there exists legal authority for the sale or disposition of
the Roppongi property.
The majority opinion refers to Section 79(f) of the Revised Administrative Code of 1917 which
reads as follows:
SEC. 79 (f). Conveyances and contracts to which the Government is a party.
In cases in which the Government of the Republic of the Philippines is a party
to any deed or other instrument conveying the title to real estate or to any
other property the value of which is in excess of one hundred thousand pesos,
the respective Department Secretary shall prepare the necessary papers
which, together with the proper recommendations, shall be submitted to the
Congress of the Philippines for approval by the same. Such deed, instrument,
or contract shall be executed and signed by the President of the Philippines on
behalf of the Government of the Philippines unless the authority therefor be
expressly vested by law in another officer. (Emphasis supplied)
The majority opinion then goes on to state that: "[T]he requirement has been retained in
Section 4, Book I of the Administrative Code of 1987 (Executive Order No. 292)" which reads:
SEC. 48. Official Authorized to Convey Real Property. Whenever real
property of the Government is authorized by law to be conveyed, the deed of
conveyance shall be executed in behalf of the government by the following:
(1) For property belonging to and titled in the name of the Republic of the
Philippines, by the President, unless the authority therefor is expressly vested
by law in another officer.
(2) For property belonging to the Republic of the Philippines but titled in the
name of any political subdivision or of any corporate agency or
instrumentality, by the executive head of the agency or instrumentality.
(Emphasis supplied)
Two points need to be made in this connection. Firstly, the requirement of obtaining specific
approval of Congress when the price of the real property being disposed of is in excess of
One Hundred Thousand Pesos (P100,000.00) under the Revised Administrative Code of 1917,
has been deleted from Section 48 of the 1987 Administrative Code. What Section 48 of the
present Administrative Code refers to isauthorization by law for the conveyance. Section 48
does not purport to be itself a source of legal authority for conveyance of real property of the
Government. For Section 48 merely specifies the official authorized to execute and sign on
behalf of the Government the deed of conveyance in case of such a conveyance.
Secondly, examination of our statute books shows that authorization by law for disposition of
real property of the private domain of the Government, has been granted by Congress both in
the form of (a) a general, standing authorization for disposition of patrimonial property of the
Government; and (b) specific legislation authorizing the disposition of particular pieces of
the Government's patrimonial property.
Standing legislative authority for the disposition of land of the private domain of the
Philippines is provided by Act No. 3038, entitled "An Act Authorizing the Secretary of
Agriculture and Natural Resources to Sell or Lease Land of the Private Domain of the

Government of the Philippine Islands (now Republic of the Philippines)", enacted on 9 March
1922. The full text of this statute is as follows:
Be it enacted by the Senate and House of Representatives of the Philippines in
Legislature assembled and by the authority of the same:
SECTION 1. The Secretary of Agriculture and Natural Resources (now
Secretary of the Environment and Natural Resources) is hereby authorized to
sell or lease land of the private domain of the Government of the Philippine
Islands, or any part thereof, to such persons, corporations or associations as
are, under the provisions of Act Numbered Twenty-eight hundred and seventyfour, (now Commonwealth Act No. 141, as amended) known as the Public Land
Act, entitled to apply for the purchase or lease or agricultural public land.
SECTION 2. The sale of the land referred to in the preceding section shall, if
such land is agricultural, be made in the manner and subject to the limitations
prescribed in chapters five and six, respectively, of said Public Land Act, and if
it be classified differently, in conformity with the provisions of chapter nine of
said Act: Provided, however, That the land necessary for the public service
shall be exempt from the provisions of this Act.
SECTION 3. This Act shall take effect on its approval.
Approved, March 9, 1922. (Emphasis supplied)
Lest it be assumed that Act No. 3038 refers only to agricultural lands of the private domain of
the State, it must be noted that Chapter 9 of the old Public Land Act (Act No. 2874) is now
Chapter 9 of the present Public Land Act (Commonwealth Act No. 141, as amended) and that
both statutes refer to: "any tract of land of the public domain which being neither timber nor
mineral land, is intended to be used forresidential purposes or for commercial or industrial
purposes other than agricultural" (Emphasis supplied). In other words, the statute covers the
sale or lease or residential, commercial or industrial land of the private domain of the State.
itc-asl

Implementing regulations have been issued for the carrying out of the provisions of Act No.
3038. On 21 December 1954, the then Secretary of Agriculture and Natural Resources
promulgated Lands Administrative Orders Nos. 7-6 and 7-7 which were entitled, respectively:
"Supplementary Regulations Governing the Sale of the Lands of the Private Domain of the
Republic of the Philippines"; and "Supplementary Regulations Governing the Lease of Lands
of Private Domain of the Republic of the Philippines" (text in 51 O.G. 28-29 [1955]).
It is perhaps well to add that Act No. 3038, although now sixty-eight (68) years old, is still in
effect and has not been repealed. 1
Specific legislative authorization for disposition of particular patrimonial properties of the
State is illustrated by certain earlier statutes. The first of these was Act No. 1120, enacted on
26 April 1904, which provided for the disposition of the friar lands, purchased by the
Government from the Roman Catholic Church, to bona fide settlers and occupants thereof or
to other persons. In Jacinto v. Director of Lands(49 Phil. 853 [1926]), these friar lands were
held to be private and patrimonial properties of the State. Act No. 2360, enacted on -28
February 1914, authorized the sale of the San Lazaro Estate located in the City of Manila,
which had also been purchased by the Government from the Roman Catholic Church. In
January 1916, Act No. 2555 amended Act No. 2360 by including therein all lands and

buildings owned by the Hospital and the Foundation of San Lazaro theretofor leased by
private persons, and which were also acquired by the Philippine Government.
After the enactment in 1922 of Act No. 3038, there appears, to my knowledge, to be only one
statute authorizing the President to dispose of a specific piece of property. This statute is
Republic Act No. 905, enacted on 20 June 1953, which authorized the
President to sell an Identified parcel of land of the private domain of the National Government
to the National Press Club of the Philippines, and to other recognized national associations
of professionals with academic standing, for the nominal price of P1.00. It appears relevant to
note that Republic Act No. 905 was not an outright disposition in perpetuity of the property
involved- it provided for reversion of the property to the National Government in case the
National Press Club stopped using it for its headquarters. What Republic Act No. 905
authorized was really a donation, and not a sale.
The basic submission here made is that Act No. 3038 provides standing legislative
authorization for disposition of the Roppongi property which, in my view, has been converted
into patrimonial property of the Republic. 2
To some, the submission that Act No. 3038 applies not only to lands of the private domain of
the State located in the Philippines but also to patrimonial property found outside the
Philippines, may appear strange or unusual. I respectfully submit that such position is not
any more unusual or strange than the assumption that Article 420 of the Civil Code applies
not only to property of the Republic located within Philippine territory but also to property
found outside the boundaries of the Republic.
It remains to note that under the well-settled doctrine that heads of Executive Departments
are alter egosof the President (Villena v. Secretary of the Interior, 67 Phil. 451 [1939]), and in
view of the constitutional power of control exercised by the President over department heads
(Article VII, Section 17,1987 Constitution), the President herself may carry out the function or
duty that is specifically lodged in the Secretary of the Department of Environment and Natural
Resources (Araneta v. Gatmaitan 101 Phil. 328 [1957]). At the very least, the President retains
the power to approve or disapprove the exercise of that function or duty when done by the
Secretary of Environment and Natural Resources.
It is hardly necessary to add that the foregoing analyses and submissions relate only to the
austere question of existence of legal power or authority. They have nothing to do with much
debated questions of wisdom or propriety or relative desirability either of the proposed
disposition itself or of the proposed utilization of the anticipated proceeds of the property
involved. These latter types of considerations He within the sphere of responsibility of the
political departments of government the Executive and the Legislative authorities.
For all the foregoing, I vote to dismiss the Petitions for Prohibition in both G.R. Nos. 92013
and 92047.
Fernan, C.J., Narvasa, Gancayco, Cortes and Medialdea, JJ., concurring.

Separate Opinions
CRUZ, J., concurring:
I concur completely with the excellent ponencia of Mr. Justice Gutierrez and will add the
following observations only for emphasis.
It is clear that the respondents have failed to show the President's legal authority to sell the
Roppongi property. When asked to do so at the hearing on these petitions, the Solicitor
General was at best ambiguous, although I must add in fairness that this was not his fault.
The fact is that there is -no such authority. Legal expertise alone cannot conjure that
statutory permission out of thin air.
Exec. Order No. 296, which reads like so much legislative, double talk, does not contain such
authority. Neither does Rep. Act No. 6657, which simply allows the proceeds of the sale of our
properties abroad to be used for the comprehensive agrarian reform program. Senate Res.
No. 55 was a mere request for the deferment of the scheduled sale of tile Roppongi property,
possibly to stop the transaction altogether; and ill any case it is not a law. The sale of the
said property may be authorized only by Congress through a duly enacted statute, and there
is no such law.
Once again, we have affirmed the principle that ours is a government of laws and not of men,
where every public official, from the lowest to the highest, can act only by virtue of a valid
authorization. I am happy to note that in the several cases where this Court has ruled against
her, the President of the Philippines has submitted to this principle with becoming grace.

PADILLA, J., concurring:

I concur in the decision penned by Mr. Justice Gutierrez, Jr., I only wish to make a few
observations which could help in further clarifying the issues.
Under our tripartite system of government ordained by the Constitution, it is Congress that
lays down or determines policies. The President executes such policies. The policies
determined by Congress are embodied in legislative enactments that have to be approved by
the President to become law. The President, of course, recommends to Congress the
approval of policies but, in the final analysis, it is Congress that is the policy - determining
branch of government.
The judiciary interprets the laws and, in appropriate cases, determines whether the laws
enacted by Congress and approved by the President, and presidential acts implementing
such laws, are in accordance with the Constitution.
The Roppongi property was acquired by the Philippine government pursuant to the
reparations agreement between the Philippine and Japanese governments. Under such
agreement, this property was acquired by the Philippine government for a specific purpose,
namely, to serve as the site of the Philippine Embassy in Tokyo, Japan. Consequently,
Roppongi is a property of public dominion and intended for public service, squarely falling
within that class of property under Art. 420 of the Civil Code, which provides:

Art. 420. The following things are property of public dominion :

(1) ...
(2) Those which belong to the State, without being for public use, and are
intended for some public service or for the development of the national wealth.
(339a)
Public dominion property intended for public service cannot be alienated unless the property
is first transformed into private property of the state otherwise known as patrimonial property
of the state. 1 The transformation of public dominion property to state patrimonial property
involves, to my mind, a policy decision. It is a policy decision because the treatment of the
property varies according to its classification. Consequently, it is Congress which can decide and
declare the conversion of Roppongi from a public dominion property to a state patrimonial
property. Congress has made no such decision or declaration.
Moreover, the sale of public property (once converted from public dominion to state
patrimonial property) must be approved by Congress, for this again is a matter of policy (i.e.
to keep or dispose of the property). Sec. 48, Book 1 of the Administrative Code of 1987
provides:
SEC. 48. Official Authorized to Convey Real Property. Whenever real
property of the Government is authorized by law to be conveyed, the deed of
conveyance shall be executed in behalf of the government by the following:
(1) For property belonging to and titled in the name of the
Republic of the Philippines, by the President, unless the
authority therefor is expressly vested by law in another officer.
(2) For property belonging to the Republic of the Philippines but
titled in the name of any political subdivision or of any corporate
agency or instrumentality, by the executive head of the agency
or instrumentality. (Emphasis supplied)
But the record is bare of any congressional decision or approval to sell Roppongi. The record
is likewise bare of any congressional authority extended to the President to sell Roppongi
thru public bidding or otherwise.
It is therefore, clear that the President cannot sell or order the sale of Roppongi thru public
bidding or otherwise without a prior congressional approval, first, converting Roppongi from
a public dominion property to a state patrimonial property, and, second, authorizing the
President to sell the same.
ACCORDINGLY, my vote is to GRANT the petition and to make PERMANENT the temporary
restraining order earlier issued by this Court.

SARMIENTO, J., concurring:

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

FELICIANO, J., dissenting

With regret, I find myself unable to share the conclusions reached by Mr. Justice Hugo E.
Gutierrez, Jr.
For purposes of this separate opinion, I assume that the piece of land located in 306
Roppongi, 5-Chome, Minato-ku Tokyo, Japan (hereinafter referred to as the "Roppongi
property") may be characterized as property of public dominion, within the meaning of Article
420 (2) of the Civil Code:
[Property] which belong[s] to the State, without being for public use, and are
intended for some public service -.
It might not be amiss however, to note that the appropriateness of trying to bring within the
confines of the simple threefold classification found in Article 420 of the Civil Code ("property
for public use property "intended for some public service" and property intended "for the
development of the national wealth") all property owned by the Republic of the Philippines
whether found within the territorial boundaries of the Republic or located within the territory
of another sovereign State, is not self-evident. The first item of the classification property
intended for public use can scarcely be properly applied to property belonging to the
Republic but found within the territory of another State. The third item of the classification
property intended for the development of the national wealth is illustrated, in Article 339 of
the Spanish Civil Code of 1889, by mines or mineral properties. Again, mineral lands owned
by a sovereign State are rarely, if ever, found within the territorial base of another sovereign
State. The task of examining in detail the applicability of the classification set out in Article
420 of our Civil Code to property that the Philippines happens to own outside its own
boundaries must, however, be left to academicians.
For present purposes, too, I agree that there is no question of conflict of laws that is, at the
present time, before this Court. The issues before us relate essentially to authority to sell the
Roppongi property so far as Philippine law is concerned.
The majority opinion raises two (2) issues: (a) whether or not the Roppongi property has
been converted into patrimonial property or property of the private domain of the State; and
(b) assuming an affirmative answer to (a), whether or not there is legal authority to dispose of
the Roppongi property.
I
Addressing the first issue of conversion of property of public dominion intended for some
public service, into property of the private domain of the Republic, it should be noted that the
Civil Code does not address the question of who has authority to effect such conversion.
Neither does the Civil Code set out or refer to any procedure for such conversion.
Our case law, however, contains some fairly explicit pronouncements on this point, as
Justice Sarmiento has pointed out in his concurring opinion. In Ignacio v. Director of
Lands (108 Phils. 335 [1960]), petitioner Ignacio argued that if the land in question formed
part of the public domain, the trial court should have declared the same no longer necessary
for public use or public purposes and which would, therefore, have become disposable and
available for private ownership. Mr. Justice Montemayor, speaking for the Court, said:
Article 4 of the Law of Waters of 1866 provides that when a portion of the shore
is no longer washed by the waters of the sea and is not necessary for
purposes of public utility, or for the establishment of special industries, or for

coast-guard service, the government shall declare it to be the property of the

owners of the estates adjacent thereto and as an increment thereof. We believe
that only the executive and possibly the legislative departments have the
authority and the power to make the declaration that any land so gained by the
sea, is not necessary for purposes of public utility, or for the establishment of
special industries, or for coast-guard service. If no such declaration has been
made by said departments, the lot in question forms part of the public domain.
(Natividad v. Director of Lands, supra.)
The reason for this pronouncement, according to this Tribunal in the case of
Vicente Joven y Monteverde v. Director of Lands, 93 Phil., 134 (cited in Velayo's
Digest, Vol. 1, p. 52).
... is undoubtedly that the courts are neither primarily called upon, nor indeed
in a position to determine whether any public land are to be used for the
purposes specified in Article 4 of the Law of Waters. Consequently, until
a formal declaration on the part of the Government, through the executive
department or the Legislature, to the effect that the land in question is no
longer needed for coast-guard service, for public use or for special industries,
they continue to be part of the public domain not available for private
appropriation or ownership.(108 Phil. at 338-339; emphasis supplied)
Thus, under Ignacio, either the Executive Department or the Legislative Department may
convert property of the State of public dominion into patrimonial property of the State. No
particular formula or procedure of conversion is specified either in statute law or in case law.
Article 422 of the Civil Code simply states that: "Property of public dominion, when no longer
intended for public use or for public service, shall form part of the patrimonial property of the
State". I respectfully submit, therefore, that the only requirement which is legitimately
imposable is that the intent to convert must be reasonably clear from a consideration of the
acts or acts of the Executive Department or of the Legislative Department which are said to
have effected such conversion.
The same legal situation exists in respect of conversion of property of public dominion
belonging to municipal corporations, i.e., local governmental units, into patrimonial property
of such entities. In CebuOxygen Acetylene v. Bercilles (66 SCRA 481 [1975]), the City Council
of Cebu by resolution declared a certain portion of an existing street as an abandoned road,
"the same not being included in the city development plan". Subsequently, by another
resolution, the City Council of Cebu authorized the acting City Mayor to sell the land through
public bidding. Although there was no formal and explicit declaration of conversion of
property for public use into patrimonial property, the Supreme Court said:
xxx xxx xxx
(2) Since that portion of the city street subject of petitioner's application for
registration of title was withdrawn from public use, it follows that such
withdrawn portion becomes patrimonial property which can be the object of an
ordinary contract.
Article 422 of the Civil Code expressly provides that "Property of public
dominion, when no longer intended for public use of for public service, shall
form part of the patrimonial property of the State."

Besides, the Revised Charter of the City of Cebu heretofore quoted, in very
clear and unequivocal terms, states that "Property thus withdrawn from public
servitude may be used or conveyed for any purpose for which other real
property belonging to the City may be lawfully used or conveyed."
Accordingly, the withdrawal of the property in question from public use and its
subsequent sale to the petitioner is valid. Hence, the petitioner has a
registrable title over the lot in question. (66 SCRA at 484-; emphasis supplied)
Thus, again as pointed out by Sarmiento J., in his separate opinion, in the case of property
owned by municipal corporations simple non-use or the actual dedication of public property
to some use other than "public use" or some "public service", was sufficient legally to
convert such property into patrimonial property (Municipality of Oas v. Roa, 7 Phil. 20 [1906]Municipality of Hinunganan v. Director of Lands 24 Phil. 124 [1913]; Province of Zamboanga
del Norte v. City of Zamboanga, 22 SCRA 1334 (1968).
I would also add that such was the case not only in respect of' property of municipal
corporations but also in respect of property of the State itself. Manresa in commenting on
Article 341 of the 1889 Spanish Civil Code which has been carried over verbatim into our Civil
Code by Article 422 thereof, wrote:
La dificultad mayor en todo esto estriba, naturalmente, en fijar el momento en
que los bienes de dominio publico dejan de serlo. Si la Administracion o la
autoridad competente legislative realizan qun acto en virtud del cual cesa el
destino o uso publico de los bienes de que se trata naturalmente la dificultad
queda desde el primer momento resuelta. Hay un punto de partida cierto para
iniciar las relaciones juridicas a que pudiera haber lugar Pero puede ocurrir
que no haya taldeclaracion expresa, legislativa or administrativa, y, sin
embargo, cesar de hecho el destino publico de los bienes; ahora bien, en este
caso, y para los efectos juridicos que resultan de entrar la cosa en el comercio
de los hombres,' se entedera que se ha verificado la conversion de los bienes
patrimoniales?
El citado tratadista Ricci opina, respecto del antiguo Codigo italiano, por la
afirmativa, y por nuestra parte creemos que tal debe ser la soluciion. El
destino de las cosas no depende tanto de una declaracion expresa como del
uso publico de las mismas, y cuanda el uso publico cese con respecto de
determinados bienes, cesa tambien su situacion en el dominio publico. Si una
fortaleza en ruina se abandona y no se repara, si un trozo de la via publica se
abandona tambien por constituir otro nuevo an mejores condiciones....ambos
bienes cesan de estar Codigo, y leyes especiales mas o memos
administrativas. (3 Manresa, Comentarios al Codigo Civil Espanol, p. 128 [7a
ed.; 1952) (Emphasis supplied)
The majority opinion says that none of the executive acts pointed to by the Government
purported, expressly or definitely, to convert the Roppongi property into patrimonial property
of the Republic. Assuming that to be the case, it is respectfully submitted that cumulative
effect of the executive acts here involved was to convert property originally intended for and
devoted to public service into patrimonial property of the State, that is, property susceptible
of disposition to and appropration by private persons. These executive acts, in their totality if
not each individual act, make crystal clear the intent of the Executive Department to effect
such conversion. These executive acts include:

(a) Administrative Order No. 3 dated 11 August 1985, which created a Committee to study the
disposition/utilization of the Government's property in Japan, The Committee was composed
of officials of the Executive Department: the Executive Secretary; the Philippine Ambassador
to Japan; and representatives of the Department of Foreign Affairs and the Asset
Privatization Trust. On 19 September 1988, the Committee recommended to the President the
sale of one of the lots (the lot specifically in Roppongi) through public bidding. On 4 October
1988, the President approved the recommendation of the Committee.
On 14 December 1988, the Philippine Government by diplomatic note informed the Japanese
Ministry of Foreign Affairs of the Republic's intention to dispose of the property in Roppongi.
The Japanese Government through its Ministry of Foreign Affairs replied that it interposed no
objection to such disposition by the Republic. Subsequently, the President and the
Committee informed the leaders of the House of Representatives and of the Senate of the
Philippines of the proposed disposition of the Roppongi property.
(b) Executive Order No. 296, which was issued by the President on 25 July 1987. Assuming
that the majority opinion is right in saying that Executive Order No. 296 is insufficient
to authorize the sale of the Roppongi property, it is here submitted with respect that
Executive Order No. 296 is more than sufficient to indicate an intention to convert the
property previously devoted to public service into patrimonial property that is capable of
being sold or otherwise disposed of
(c) Non-use of the Roppongi lot for fourteen (14) years for diplomatic or for any other public
purposes. Assuming (but only arguendo) that non-use does not, by itself, automatically
convert the property into patrimonial property. I respectfully urge that prolonged nonuse, conjoined with the other factors here listed, was legally effective to convert the lot in
Roppongi into patrimonial property of the State. Actually, as already pointed out, case law
involving property of municipal corporations is to the effect that simple non-use or the actual
dedication of public property to some use other than public use or public service, was
sufficient to convert such property into patrimonial property of the local governmental entity
concerned. Also as pointed out above, Manresa reached the same conclusion in respect of
conversion of property of the public domain of the State into property of the private domain
of the State.
The majority opinion states that "abandonment cannot be inferred from the non-use alone
especially if the non-use was attributable not to the Government's own deliberate and
indubitable will but to lack of financial support to repair and improve the property" (Majority
Opinion, p. 13). With respect, it may be stressed that there is no abandonment involved here,
certainly no abandonment of property or of property rights. What is involved is the charge of
the classification of the property from property of the public domain into property of the
private domain of the State. Moreover, if for fourteen (14) years, the Government did not see
fit to appropriate whatever funds were necessary to maintain the property in Roppongi in a
condition suitable for diplomatic representation purposes, such circumstance may, with
equal logic, be construed as a manifestation of the crystalizing intent to change the character
of the property.
(d) On 30 March 1989, a public bidding was in fact held by the Executive Department for the
sale of the lot in Roppongi. The circumstance that this bidding was not successful certainly
does not argue against an intent to convert the property involved into property that is
disposable by bidding.

The above set of events and circumstances makes no sense at all if it does not, as a whole,
show at least the intent on the part of the Executive Department (with the knowledge of the
Legislative Department) to convert the property involved into patrimonial property that is
susceptible of being sold.
II
Having reached an affirmative answer in respect of the first issue, it is necessary to address
the second issue of whether or not there exists legal authority for the sale or disposition of
the Roppongi property.
The majority opinion refers to Section 79(f) of the Revised Administrative Code of 1917 which
reads as follows:
SEC. 79 (f). Conveyances and contracts to which the Government is a party.
In cases in which the Government of the Republic of the Philippines is a party
to any deed or other instrument conveying the title to real estate or to any
other property the value of which is in excess of one hundred thousand pesos,
the respective Department Secretary shall prepare the necessary papers
which, together with the proper recommendations, shall be submitted to the
Congress of the Philippines for approval by the same. Such deed, instrument,
or contract shall be executed and signed by the President of the Philippines on
behalf of the Government of the Philippines unless the authority therefor be
expressly vested by law in another officer. (Emphasis supplied)
The majority opinion then goes on to state that: "[T]he requirement has been retained in
Section 4, Book I of the Administrative Code of 1987 (Executive Order No. 292)" which reads:
SEC. 48. Official Authorized to Convey Real Property. Whenever real
property of the Government is authorized by law to be conveyed, the deed of
conveyance shall be executed in behalf of the government by the following:
(1) For property belonging to and titled in the name of the Republic of the
Philippines, by the President, unless the authority therefor is expressly vested
by law in another officer.
(2) For property belonging to the Republic of the Philippines but titled in the
name of any political subdivision or of any corporate agency or
instrumentality, by the executive head of the agency or instrumentality.
(Emphasis supplied)
Two points need to be made in this connection. Firstly, the requirement of obtaining specific
approval of Congress when the price of the real property being disposed of is in excess of
One Hundred Thousand Pesos (P100,000.00) under the Revised Administrative Code of 1917,
has been deleted from Section 48 of the 1987 Administrative Code. What Section 48 of the
present Administrative Code refers to isauthorization by law for the conveyance. Section 48
does not purport to be itself a source of legal authority for conveyance of real property of the
Government. For Section 48 merely specifies the official authorized to execute and sign on
behalf of the Government the deed of conveyance in case of such a conveyance.

Secondly, examination of our statute books shows that authorization by law for disposition of
real property of the private domain of the Government, has been granted by Congress both in
the form of (a) a general, standing authorization for disposition of patrimonial property of the
Government; and (b) specific legislation authorizing the disposition of particular pieces of
the Government's patrimonial property.
Standing legislative authority for the disposition of land of the private domain of the
Philippines is provided by Act No. 3038, entitled "An Act Authorizing the Secretary of
Agriculture and Natural Resources to Sell or Lease Land of the Private Domain of the
Government of the Philippine Islands (now Republic of the Philippines)", enacted on 9 March
1922. The full text of this statute is as follows:
Be it enacted by the Senate and House of Representatives of the Philippines in
Legislature assembled and by the authority of the same:
SECTION 1. The Secretary of Agriculture and Natural Resources (now
Secretary of the Environment and Natural Resources) is hereby authorized to
sell or lease land of the private domain of the Government of the Philippine
Islands, or any part thereof, to such persons, corporations or associations as
are, under the provisions of Act Numbered Twenty-eight hundred and seventyfour, (now Commonwealth Act No. 141, as amended) known as the Public Land
Act, entitled to apply for the purchase or lease or agricultural public land.
SECTION 2. The sale of the land referred to in the preceding section shall, if
such land is agricultural, be made in the manner and subject to the limitations
prescribed in chapters five and six, respectively, of said Public Land Act, and if
it be classified differently, in conformity with the provisions of chapter nine of
said Act: Provided, however, That the land necessary for the public service
shall be exempt from the provisions of this Act.
SECTION 3. This Act shall take effect on its approval.
Approved, March 9, 1922. (Emphasis supplied)
Lest it be assumed that Act No. 3038 refers only to agricultural lands of the private domain of
the State, it must be noted that Chapter 9 of the old Public Land Act (Act No. 2874) is now
Chapter 9 of the present Public Land Act (Commonwealth Act No. 141, as amended) and that
both statutes refer to: "any tract of land of the public domain which being neither timber nor
mineral land, is intended to be used forresidential purposes or for commercial or industrial
purposes other than agricultural" (Emphasis supplied). In other words, the statute covers the
sale or lease or residential, commercial or industrial land of the private domain of the State.
Implementing regulations have been issued for the carrying out of the provisions of Act No.
3038. On 21 December 1954, the then Secretary of Agriculture and Natural Resources
promulgated Lands Administrative Orders Nos. 7-6 and 7-7 which were entitled, respectively:
"Supplementary Regulations Governing the Sale of the Lands of the Private Domain of the
Republic of the Philippines"; and "Supplementary Regulations Governing the Lease of Lands
of Private Domain of the Republic of the Philippines" (text in 51 O.G. 28-29 [1955]).
It is perhaps well to add that Act No. 3038, although now sixty-eight (68) years old, is still in
effect and has not been repealed. 1

Specific legislative authorization for disposition of particular patrimonial properties of the

State is illustrated by certain earlier statutes. The first of these was Act No. 1120, enacted on
26 April 1904, which provided for the disposition of the friar lands, purchased by the
Government from the Roman Catholic Church, to bona fide settlers and occupants thereof or
to other persons. In Jacinto v. Director of Lands(49 Phil. 853 [1926]), these friar lands were
held to be private and patrimonial properties of the State. Act No. 2360, enacted on -28
February 1914, authorized the sale of the San Lazaro Estate located in the City of Manila,
which had also been purchased by the Government from the Roman Catholic Church. In
January 1916, Act No. 2555 amended Act No. 2360 by including therein all lands and
buildings owned by the Hospital and the Foundation of San Lazaro theretofor leased by
private persons, and which were also acquired by the Philippine Government.
After the enactment in 1922 of Act No. 3038, there appears, to my knowledge, to be only one
statute authorizing the President to dispose of a specific piece of property. This statute is
Republic Act No. 905, enacted on 20 June 1953, which authorized the
President to sell an Identified parcel of land of the private domain of the National Government
to the National Press Club of the Philippines, and to other recognized national associations
of professionals with academic standing, for the nominal price of P1.00. It appears relevant to
note that Republic Act No. 905 was not an outright disposition in perpetuity of the property
involved- it provided for reversion of the property to the National Government in case the
National Press Club stopped using it for its headquarters. What Republic Act No. 905
authorized was really a donation, and not a sale.
The basic submission here made is that Act No. 3038 provides standing legislative
authorization for disposition of the Roppongi property which, in my view, has been converted
into patrimonial property of the Republic. 2
To some, the submission that Act No. 3038 applies not only to lands of the private domain of
the State located in the Philippines but also to patrimonial property found outside the
Philippines, may appear strange or unusual. I respectfully submit that such position is not
any more unusual or strange than the assumption that Article 420 of the Civil Code applies
not only to property of the Republic located within Philippine territory but also to property
found outside the boundaries of the Republic.
It remains to note that under the well-settled doctrine that heads of Executive Departments
are alter egosof the President (Villena v. Secretary of the Interior, 67 Phil. 451 [1939]), and in
view of the constitutional power of control exercised by the President over department heads
(Article VII, Section 17,1987 Constitution), the President herself may carry out the function or
duty that is specifically lodged in the Secretary of the Department of Environment and Natural
Resources (Araneta v. Gatmaitan 101 Phil. 328 [1957]). At the very least, the President retains
the power to approve or disapprove the exercise of that function or duty when done by the
Secretary of Environment and Natural Resources.
It is hardly necessary to add that the foregoing analyses and submissions relate only to the
austere question of existence of legal power or authority. They have nothing to do with much
debated questions of wisdom or propriety or relative desirability either of the proposed
disposition itself or of the proposed utilization of the anticipated proceeds of the property
involved. These latter types of considerations He within the sphere of responsibility of the
political departments of government the Executive and the Legislative authorities.

For all the foregoing, I vote to dismiss the Petitions for Prohibition in both G.R. Nos. 92013
and 92047.
Fernan, C.J., Narvasa, Gancayco, Cortes and Medialdea, JJ., concurring.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-33048 April 16, 1982
EPIFANIA SARSOSA VDA. DE BARSOBIA and PACITA W. VALLAR, petitioners,
vs.
VICTORIANO T. CUENCO, respondent.

MELENCIO-HERRERA, J.:
Sought to be reviewed herein is the judgment dated August 18, 1970, of the Court of
Appeals, 1 rendered in CA-G.R. No. 41318-R, entitled "Victoriano T. Cuenco, Plaintiff-appellant, vs.
Epifania Sarsosa Vda. de Barsobia and Pacita W. Vallar, Defendants- appellees, " declaring Victoriano T.
Cuenco (now the respondent) as the absolute owner of the coconut land in question.
The lot in controversy is a one-half portion (on the northern side) of two adjoining parcels of coconut
land located at Barrio Mancapagao, Sagay, Camiguin, Misamis Oriental (now Camiguin province),
with an area of 29,150 square meters, more or less. 2
The entire land was owned previously by a certain Leocadia Balisado, who had sold it to the
spouses Patricio Barsobia (now deceased) and Epifania Sarsosa, one of the petitioners herein. They
are Filipino citizens.
On September 5, 1936, Epifania Sarsosa then a widow, sold the land in controversy to a Chinese,
Ong King Po, for the sum of P1,050.00 (Exhibit "B"). Ong King Po took actual possession and
enjoyed the fruits thereof.
On August 5, 1961, Ong King Po sold the litigated property to Victoriano T. Cuenco (respondent
herein), a naturalized Filipino, for the sum of P5,000.00 (Exhibit "A"). Respondent immediately took
actual possession and harvested the fruits therefrom.
On March 6, 1962, Epifania "usurped" the controverted property, and on July 26, 1962, Epifania
(through her only daughter and child, Emeteria Barsobia), sold a one-half (1/2) portion of the land in
question to Pacita W. Vallar, the other petitioner herein (Exhibit "2"). Epifania claimed that it was not
her intention to sell the land to Ong King Po and that she signed the document of sale merely to
evidence her indebtedness to the latter in the amount of P1,050.00. Epifania has been in possession
ever since except for the portion sold to the other petitioner Pacita.

On September 19, 1962, respondent filed a Forcible Entry case against Epifania before the
Municipal Court of Sagay, Camiguin. The case was dismissed for lack of jurisdiction since, as the
laws then stood, the question of possession could not be properly determined without first settling
that of ownership.
On December 27, 1966, respondent instituted before the Court of First Instance of Misamis Oriental
a Complaint for recovery of possession and ownership of the litigated land, against Epifania and
Pacita Vallar (hereinafter referred to simply as petitioners).
In their Answer below, petitioners insisted that they were the owners and possessors of the litigated
land; that its sale to Ong King Po, a Chinese, was inexistent and/or void ab initio; and that the deed
of sale between them was only an evidence of Epifania's indebtedness to Ong King Po.
The trial Court rendered judgment:
1. Dismissing the complaint with costs against plaintiff (respondent herein).
2. Declaring the two Deeds of Sale, Exhibits A and B, respectively, inexistent and
void from the beginning; and
3. Declaring defendant Pacita W. Vallar as the lawful owner and possessor of the
portion of land she bought from Emeteria Barsobia (pp. 57, 67, Record.) 3
On appeal, the Court of Appeals reversed the aforementioned Decision and decreed instead that
respondent was the owner of the litigated property, thus:
xxx xxx xxx
In view of all the foregoing considerations, the judgment appealed from is hereby
reversed. In lieu thereof, we render judgment:
(a) Declaring the plaintiff-appellant Victoriano T. Cuenco the absolute owner of the
land in question, with the right of possession thereof;
(b) Ordering the defendants-appellees to restore the possession of said land to the
plaintiff;
(c) Dismissing the defendants' counterclaim;
(d) Condemning the defendants to pay to the plaintiff the sum of
P10,000.00 representing the latter's share from the sale of copra which he failed to
receive since March, 1962 when he was deprived of his possession over the land,
and which defendants illegally appropriated it to their own use and benefit, plus legal
interest from the filing of the complaint until fully paid; plus P2,000.00 representing
expenses and attorney's fees;
(e) Sentencing the defendants to pay the costs.
SO ORDERED. 4

Following the denial of their Motion for Reconsideration, petitioners filed the instant Petition for
Review on certiorari with this Court on January 21, 1971. Petitioners claim that the Court of Appeals
erred:
I. ... when it reversed the judgment of the trial court declaring petitioner Pacita W.
Vallar as the lawful possessor and owner of the portion of land she purchased from
Emeteria Barsobia, not a party to this case, there being no evidence against her.
II ... when it included petitioner Pacita W. Vallar to pay P10,000.00, with legal interest
from the filing of the complaint, representing respondent's share in the harvest and to
pay the costs, there being no evidence against her.
III. ... when it condemned petitioners to pay P2,000.00 representing expenses and
attorney's fees, there being no factual, legal and equitable justification.
IV. ... in not applying the rule on pari delicto to the facts of the case or the doctrine
enunciated ... in the case of Philippine Banking Corporation vs. Lui She, L-17587,
September 12, 1967, to ... Petitioner Epifania Sarsosa Vda. de Barsobia.
V. ... in denying, for lack of sufficient merits, petitioners' motion for rehearing or
reconsideration of its decision. 5
As the facts stand, a parcel of coconut land was sold by its Filipino owner, petitioner Epifania, to a
Chinese, Ong King Po, and by the latter to a naturalized Filipino, respondent herein. In the
meantime, the Filipino owner had unilaterally repudiated the sale she had made to the Chinese and
had resold the property to another Filipino. The basic issue is: Who is the rightful owner of the
property?
There should be no question that the sale of the land in question in 1936 by Epifania to Ong King Po
was inexistent and void from the beginning (Art. 1409 [7], Civil Code) 6 because it was a contract
executed against the mandatory provision of the 1935 Constitution, which is an expression of public policy
to conserve lands for the Filipinos. Said provision reads:
Save in cases of hereditary succession, no private agricultural land shall be
transferred or assigned except to individuals, corporations, or associations, qualified
to acquire or hold lands of the public domain. 7
Had this been a suit between Epifania and Ong King Po, she could have been declared entitled to
the litigated land on the basis, as claimed, of the ruling in Philippine Banking Corporation vs. Lui
She, 8 reading:
... For another thing, and this is not only cogent but also important. Article 1416 of the
Civil Code provides as an exception to the rule on pari delicto that when the
agreement is not illegal per se but is merely prohibited, and the prohibition by the law
is designed for the protection of the plaintiff, he may, if public policy is thereby
enhanced, recover what he has sold or delivered. ...
But the factual set-up has changed. The litigated property is now in the hands of a naturalized
Filipino. It is no longer owned by a disqualified vendee. Respondent, as a naturalized citizen, was
constitutionally qualified to own the subject property. There would be no more public policy to be

served in allowing petitioner Epifania to recover the land as it is already in the hands of a qualified
person. Applying by analogy the ruling of this Court in Vasquez vs. Giap and Li Seng Giap & Sons: 9
... if the ban on aliens from acquiring not only agricultural but also urban lands, as
construed by this Court in the Krivenko case, is to preserve the nation's lands for
future generations of Filipinos, that aim or purpose would not be thwarted but
achieved by making lawful the acquisition of real estate by aliens who became
Filipino citizens by naturalization.
While, strictly speaking, Ong King Po, private respondent's vendor, had no rights of ownership to
transmit, it is likewise inescapable that petitioner Epifania had slept on her rights for 26 years from
1936 to 1962. By her long inaction or inexcusable neglect, she should be held barred from asserting
her claim to the litigated property (Sotto vs. Teves, 86 SCRA 157 [1978]).
Laches has been defined as the failure or neglect, for an unreasonable and
unexplained length of time, to do that which by exercising due diligence could or
should have been done earlier; it is negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to assert it either
has abandoned it or declined to assert it. (Tijam, et al. vs. Sibonghanoy, et al., No. L21450, April 15, 1968, 23 SCRA 29, 35). (cited in Sotto vs. Teves, 86 SCRA 154
[1978]).
Respondent, therefore, must be declared to be the rightful owner of the property.
The award of actual damages in respondent's favor of P10,000.00, as well as of attorney's fees and
expenses of litigation of P2,000.00, is justified. Respondent was deprived of the possession of his
land and the enjoyment of its fruits from March, 1962. The Court of Appeals fixed respondent's share
of the sale of copra at P10,000.00 for eight years at four (4) harvests a year. The accuracy of this
finding has not been disputed.
However, we find merit in the assigned error that petitioner, Pacita Vallar, should not be held also
liable for actual damages to respondent. In the absence of contrary proof, she, too, must be
considered as a vendee in good faith of petitioner Epifania.
The award of attorney's fees and litigation expenses in the sum of P2,000.00 in respondent's favor is
in order considering that both petitioners compelled respondent to litigate for the protection of his
interests. Moreover, the amount is reasonable. 10
WHEREFORE, except for that portion holding petitioner, Pacita W. Vallar, also liable for damages of
P10,000.00, the appealed judgment is hereby affirmed.
Costs against petitioners.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 74833

January 21, 1991

THOMAS C. CHEESMAN, petitioner,

vs.
INTERMEDIATE APPELLATE COURT and ESTELITA PADILLA, respondents.
Estanislao L. Cesa, Jr. for petitioner.
Benjamin I. Fernandez for private respondent.

NARVASA, J.:
This appeal concerns the attempt by an American citizen (petitioner Thomas Cheesman) to annul
for lack of consent on his part the sale by his Filipino wife (Criselda) of a residential lot and
building to Estelita Padilla, also a Filipino.
Thomas Cheesman and Criselda P. Cheesman were married on December 4, 1970 but have been
separated since February 15,1981.
1

On June 4, 1974, a "Deed of Sale and Transfer of Possessory Rights" was executed by Armando
Altares conveying a parcel of unregistered land and the house thereon (at No. 7 Neptune Street,
Gordon Heights, Olongapo City) in favor of "Criselda P. Cheesman, of legal age, Filipino citizen,
married to Thomas Cheesman, and residing at Lot No. 1, Blk. 8, Filtration Road, Sta. Rita, Olongapo
City . . ." Thomas Cheesman, although aware of the deed, did not object to the transfer being made
only to his wife.
2

Thereafterand again with the knowledge of Thomas Cheesman and also without any protest by
himtax declarations for the property purchased were issued in the name only of Criselda
Cheesman and Criselda assumed exclusive management and administration of said property,
leasing it to tenants.
4

On July 1, 1981, Criselda Cheesman sold the property to Estelita M. Padilla, without the knowledge
or consent of Thomas Cheesman. The deed described Criselda as being" . . . of legal age, married
to an American citizen,. . ."
5

Thirty days later, or on July 31, 1981, Thomas Cheesman brought suit in the Court of First Instance
at Olongapo City against his wife, Criselda, and Estelita Padilla, praying for the annulment of the
sale on the ground that the transaction had been executed without his knowledge and consent. An
answer was filed in the names of both defendants, alleging that (1) the property sold was
paraphernal, having been purchased by Criselda with funds exclusively belonging to her ("her own
separate money"); (2) Thomas Cheesman, being an American, was disqualified to have any interest
or right of ownership in the land; and (3) Estelita Padilla was a buyer in good faith.
7

During the pre-trial conference, the parties agreed upon certain facts which were subsequently set
out in a pre-trial Order dated October 22, 1981, as follows:
9

1. Both parties recognize the existence of the Deed of Sale over the residential house
located at No. 7 Granada St., Gordon Heights, Olongapo City, which was acquired from

Armando Altares on June 4, 1974 and sold by defendant Criselda Cheesman to Estelita
Padilla on July 12, 1981; and
2. That the transaction regarding the transfer of their property took place during the existence
of their marriage as the couple were married on December 4, 1970 and the questioned
property was acquired sometime on June 4,1974.
The action resulted in a judgment dated June 24, 1982, declaring void ab initio the sale executed
by Criselda Cheesman in favor of Estelita M. Padilla, and ordering the delivery of the property to
Thomas Cheesman as administrator of the conjugal partnership property, and the payment to him of
P5,000.00 as attorney's fees and expenses of litigation.
10

11

The judgment was however set aside as regards Estelita Padilla on a petition for relief filed by the
latter, grounded on "fraud, mistake and/or excusable negligence" which had seriously impaired her
right to present her case adequately. "After the petition for relief from judgment was given due
course," according to petitioner, "a new judge presided over the case."
12

13

Estelita Padilla filed a supplemental pleading on December 20, 1982 as her own answer to the
complaint, and a motion for summary judgment on May 17, 1983. Although there was initial
opposition by Thomas Cheesman to the motion, the parties ultimately agreed on the rendition by the
court of a summary judgment after entering into a stipulation of facts, at the hearing of the motion on
June 21, 1983, the stipulation being of the following tenor:
14

(1) that the property in question was bought during the existence of the marriage between
the plaintiff and the defendant Criselda P. Cheesman;
(2) that the property bought during the marriage was registered in the name of Criselda
Cheesman and that the Deed of Sale and Transfer of Possessory Rights executed by the
former owner-vendor Armando Altares in favor of Criselda Cheesman made no mention of
the plaintiff;
(3) that the property, subject of the proceedings, was sold by defendant Criselda Cheesman
in favor of the other defendant Estelita M. Padilla, without the written consent of the plaintiff.
Obviously upon the theory that no genuine issue existed any longer and there was hence no need of
a trial, the parties having in fact submitted, as also stipulated, their respective memoranda each
praying for a favorable verdict, the Trial Court rendered a "Summary Judgment" dated August 3,
1982 declaring "the sale executed by . . . Criselda Cheesman in favor of . . . Estelita Padilla to be
valid," dismissing Thomas Cheesman's complaint and ordering him "to immediately turn over the
possession of the house and lot subject of . . . (the) case to . . . Estelita Padilla . . ."
15

16

The Trial Court found that

1) the evidence on record satisfactorily overcame the disputable presumption in Article 160
of the Civil Codethat all property of the marriage belongs to the conjugal partnership
"unless it be proved that it pertains exclusively to the husband or to the wife"and that the
immovable in question was in truth Criselda's paraphernal property;
2) that moreover, said legal presumption in Article 160 could not apply "inasmuch as the
husband-plaintiff is an American citizen and therefore disqualified under the Constitution to
acquire and own real properties; and

3) that the exercise by Criselda of exclusive acts of dominion with the knowledge of her
husband "had led . . . Estelita Padilla to believe that the properties were the exclusive
properties of Criselda Cheesman and on the faith of such a belief she bought the properties
from her and for value," and therefore, Thomas Cheesman was, under Article 1473 of the
Civil Code, estopped to impugn the transfer to Estelita Padilla.
Thomas Cheesman appealed to the Intermediate Appellate Court. There he assailed the Trial Court
acts (1) of granting Estelita Padilla's petition for relief, and its resolution of matters not subject of said
petition; (2) of declaring valid the sale to Estelita Padilla despite the lack of consent thereto by him,
and the presumption of the conjugal character of the property in question pursuant to Article 160 of
the Civil Code; (3) of disregarding the judgment of June 24, 1982 which, not having been set aside
as against Criselda Cheesman, continued to be binding on her; and (4) of making findings of fact not
supported by evidence. All of these contentions were found to be without merit by the Appellate
Tribunal which, on January 7, 1986, promulgated a decision (erroneously denominated,
"Report") affirming the "Summary Judgment complained of," "having found no reversible error"
therein.
17

Once more, Thomas Cheesman availed of the remedy of appeal, this time to this Court. Here, he
argues that it was reversible error for the Intermediate Appellate Court
1) to find that the presumption that the property in question is conjugal in accordance with Article 160
had been satisfactorily overcome by Estelita Padilla;
18

2) to rule that Estelita Padilla was a purchaser of said property in good faith, it appearing:
a) that the deed by which the property was conveyed to Criselda Cheesman
described her as "married to Thomas C. Cheesman," as well as the deed by which
the property was later conveyed to Estelita Padilla by Criselda Cheesman also
described her as "married to an American citizen," and both said descriptions had
thus "placed Estelita on knowledge of the conjugal nature of the property;" and
b) that furthermore, Estelita had admitted to stating in the deed by which she
acquired the property a price much lower than that actually paid "in order to avoid
payment of more obligation to the government;"
19

3) to decline to declare that the evidence did not warrant the grant of Estelita Padilla's petition for
relief on the ground of "fraud, mistake and/or excusable negligence;"
20

4) to hold that Thomas Cheesman had waived his objection to Estelita's petition for relief by failing to
appeal from the order granting the same;
5) to accord to Estelita Padilla a relief other than that she had specifically prayed for in her petition
for relief, ie., "the restoration of the purchase price which Estelita allegedly paid to Criselda;" and
21

6) to fail to declare that Thomas Cheesman's citizenship is not a bar to his action to recover the lot
and house for the conjugal partnership.
22

Such conclusions as that (1) fraud, mistake or excusable negligence existed in the premises
justifying relief to Estelita Padilla under Rule 38 of the Rules of Court, or (2) that Criselda Cheesman
had used money she had brought into her marriage to Thomas Cheesman to purchase the lot and
house in question, or (3) that Estelita Padilla believed in good faith that Criselda Cheesman was the

exclusive owner of the property that she (Estelita) intended to and did in fact buyderived from the
evidence adduced by the parties, the facts set out in the pleadings or otherwise appearing on record
are conclusions or findings of fact. As distinguished from a question of lawwhich exists "when
the doubt or difference arises as to what the law is on a certain state of facts" "there is a question
of fact when the doubt or difference arises as to the truth or the falsehood of alleged facts;" or when
the "query necessarily invites calibration of the whole evidence considering mainly the credibility of
witnesses, existence and relevancy of specific surrounding circumstances, their relation; to each
other and to the whole and the probabilities of the situation."
23

24

Now, it is axiomatic that only questions of law, distinctly set forth, may be raised in a petition for the
review oncertiorari of a decision of the Court of Appeals presented to this Court. As everyone
knows or ought to know, the appellate jurisdiction of this Court is limited to reviewing errors of law,
accepting as conclusive the factual findings of the lower court upon its own assessment of the
evidence. The creation of the Court of Appeals was precisely intended to take away from the
Supreme Court the work of examining the evidence, and confine its task to the determination of
questions which do not call for the reading and study of transcripts containing the testimony of
witnesses. The rule of conclusiveness of the factual findings or conclusions of the Court of Appeals
is, to be sure, subject to certain exceptions, none of which however obtains in the case at bar.
25

26

27

28

It is noteworthy that both the Trial Court and the Intermediate Appellate Court reached the same
conclusions on the three (3) factual matters above set forth, after assessment of the evidence and
determination of the probative value thereof. Both Courts found that the facts on record adequately
proved fraud, mistake or excusable negligence by which Estelita Padilla's rights had been
substantially impaired; that the funds used by Criselda Cheesman was money she had earned and
saved prior to her marriage to Thomas Cheesman, and that Estelita Padilla did believe in good faith
that Criselda Cheesman was the sole owner of the property in question. Consequently, these
determinations of fact will not be here disturbed, this Court having been cited to no reason for doing
so.
These considerations dispose of the first three (3) points that petitioner Cheesman seeks to make in
his appeal. They also make unnecessary an extended discussion of the other issues raised by him.
As to them, it should suffice to restate certain fundamental propositions.
1wphi1

An order of a Court of First Instance (now Regional Trial Court) granting a petition for relief under
Rule 38 is interlocutory and is not appealable. Hence, the failure of the party who opposed the
petition to appeal from said order, or his participation in the proceedings subsequently had, cannot
be construed as a waiver of his objection to the petition for relief so as to preclude his raising the
same question on appeal from the judgment on the merits of the main case. Such a party need not
repeat his objections to the petition for relief, or perform any act thereafter (e.g., take formal
exception) in order to preserve his right to question the same eventually, on appeal, it being sufficient
for this purpose that he has made of record "the action which he desires the court to take or his
objection to the action of the court and his grounds therefor."
29

Again, the prayer in a petition for relief from judgment under Rule 38 is not necessarily the same
prayer in the petitioner's complaint, answer or other basic pleading. This should be obvious. Equally
obvious is that once a petition for relief is granted and the judgment subject thereof set aside, and
further proceedings are thereafter had, the Court in its judgment on the merits may properly grant
the relief sought in the petitioner's basic pleadings, although different from that stated in his petition
for relief.
Finally, the fundamental law prohibits the sale to aliens of residential land. Section 14, Article XIV of
the 1973 Constitution ordains that, "Save in cases of hereditary succession, no private land shall be

transferred or conveyed except to individuals, corporations, or associations qualified to acquire or

hold lands of the public domain." Petitioner Thomas Cheesman was, of course, charged with
knowledge of this prohibition. Thus, assuming that it was his intention that the lot in question be
purchased by him and his wife, he acquired no right whatever over the property by virtue of that
purchase; and in attempting to acquire a right or interest in land, vicariously and clandestinely, he
knowingly violated the Constitution; the sale as to him was null and void. In any event, he had and
has no capacity or personality to question the subsequent sale of the same property by his wife on
the theory that in so doing he is merely exercising the prerogative of a husband in respect of
conjugal property. To sustain such a theory would permit indirect controversion of the constitutional
prohibition. If the property were to be declared conjugal, this would accord to the alien husband a not
insubstantial interest and right over land, as he would then have a decisive vote as to its transfer or
disposition. This is a right that the Constitution does not permit him to have.
30

31

As already observed, the finding that his wife had used her own money to purchase the property
cannot, and will not, at this stage of the proceedings be reviewed and overturned. But even if it were
a fact that said wife had used conjugal funds to make the acquisition, the considerations just set out
militate, on high constitutional grounds, against his recovering and holding the property so acquired
or any part thereof. And whether in such an event, he may recover from his wife any share of the
money used for the purchase or charge her with unauthorized disposition or expenditure of conjugal
funds is not now inquired into; that would be, in the premises, a purely academic exercise. An
equally decisive consideration is that Estelita Padilla is a purchaser in good faith, both the Trial Court
and the Appellate Court having found that Cheesman's own conduct had led her to believe the
property to be exclusive property of the latter's wife, freely disposable by her without his consent or
intervention. An innocent buyer for value, she is entitled to the protection of the law in her purchase,
particularly as against Cheesman, who would assert rights to the property denied him by both letter
and spirit of the Constitution itself.
WHEREFORE, the appealed decision is AFFIRMED, with costs against petitioner.
SO ORDERED.
Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-29663 August 20, 1990
GREGORIO LLANTINO and BELINDA LLANTINO assisted by husband Napoleon Barba,
plaintiffs-appellants,
vs.
CO LIONG CHONG alias JUAN MOLINA, defendant-appellee.
Delfin de Vera for plaintiffs-appellants.
Antonio G. Sosito for defendant-appellee.

PARAS, J.:
This is an appeal perfected before the effectivity of Republic Act 5440, from the decision

* of the Court of
First Instance of Catanduanes in Civil Case No. 611, to quiet title with damages, entitled Gregorio Llantino, et al. vs. Cong Liong Chong alias
Juan Molina, dismissing the complaint and declaring that the contract of lease entered into between the plaintiffs and the defendant valid and
in accordance with law.

The facts of the case as summarized by the trial court are as follows:
Plaintiffs (petitioners herein) aver that they are the owners of a commercial-residential land situated
in the municipality of Virac, Catanduanes, described in paragraph 2 of the complaint, which
sometime in 1954 they leased to the defendant (private respondent) who was then a Chinese
national and went by the name of Co Liong Chong for a period of thirteen (13) years for the sum of
P6,150.00 for the whole period. The defendant was placed in possession of the property but
knowing that the period of the least would end with the year 1967, petitioners requested private
respondent for a conference but the latter did not honor the request and instead he informed the
petitioners that he had already constructed a commercial building on the land worth P50,000.00; that
the lease contract was for a period of sixty (60) years, counted from 1954; and that he is already a
Filipino citizen. The claim of Chong came as a surprise to the Llantinos because they did not
remember having agreed to a sixty-year lease agreement as that would virtually make Chong the
owner of the realty which, as a Chinese national, he had no right to own and neither could he have
acquired such ownership after naturalization subsequent to 1954. On December 16, 1967, in order
to avoid a court litigation the Llantinos once more invited Chong to a conference about the matter but
again Chong ignored the invitation. (Rollo, p. 48; Appellant's Brief, p. 12)
Hence, on January 10, 1968, the Llantinos filed their complaint to quiet title with damages before the
Court of First Instance of Catanduanes (Rollo, p. 12; Record on Appeal, pp. 1-4).
After Chong has filed an answer to the complaint and the Llantinos their reply, (Rollo, p. 12; Record
on Appeal, pp. 9-10) the trial court set the case for pre-trial and trial for April 2, 1968 (Rollo, p. 12;
Record on Appeal, pp. 10-11).
At the pre-trial, both parties agreed upon the identity of the land as described in the complaint. It was
mutually admitted that the defendants original name was Co Liong Chong who was then a Chinese
national in 1954, when he approached the plaintiffs and offered to lease the land in question. It was
also admitted by the counsel for the defendant that prior to the filing of the case, the plaintiffs have in
fact invited the defendant to a conference about the matter (Rollo, p. 12; Record on Appeal; p. 14).
Chong's counsel produced the carbon original of the contract of lease entered into between Chong
and the Llantinos and the existence of the contract of lease as a public instrument was admitted
(Rollo, p. 12; Record on Appeal, pp. 14-15).
It was also admitted that Chong had in fact constructed a building of strong materials on the land
worth P40,000.00 (Rollo, p. 12; Record on Appeal, p. 15); that Chong has become a naturalized
Filipino citizen in 1961 and that his name is no longer Co Liong Chong but Juan Molina (Rollo, p. 12;
Record on Appeal, p. 15).
On May 17, 1968, the trial court rendered a Decision the dispositive portion of which reads:
WHEREFORE, in view of the foregoing considerations, the Court finds the contract
of lease entered into between the plaintiffs and the defendant on October 5, 1954,

valid and in accordance with law and the complaint is dismissed with costs against
the plaintiffs.
The Court, however, feels that there is no sufficient ground to award moral damages
or attorney's fees as claimed by the defendant because the Court is fairly convinced
that the institution of the suit sprung from an honest conviction on the part of the
plaintiffs that on account of the period fixed in the contract of lease and the fact that
the defendant was a Chinese national at the time of its celebration constituted valid
grounds for annulment.
SO ORDERED. (Rollo, p. 12; Record on Appeal, p. 24).
From this judgment, plaintiffs appealed directly to this Court on a pure question of law (Rollo, p. 12;
Record on Appeal, pp. 24-25).
The plaintiffs-appellants filed their brief on May 26, 1969 (Rollo, p. 48). The defendant-appellee filed
his corresponding brief on July 22, 1969 (Rollo, p. 59).
The appellants raised the following assignment of errors:
I
THE LOWER COURT ERRED IN DECLARING THE CONTRACT ENTERED INTO BY AND
BETWEEN THE APPELLANTS AND THE DEFENDANTS ON OCTOBER 5, 1954 VALID.
II
THE LOWER COURT ERRED IN REFUSING TO DECLARE THAT CONTRACT NOT A LEASE.
Stripping the case of irrelevant allegations, the pivotal issue in this case is whether or not the
contract of lease entered into by and between the petitioners including Virgilio Llantino now
deceased and private respondent on October 5, 1954 for a period of sixty (60) years is valid.
Petitioners contend that when the contract which is sought to be declared void was entered into by
and between the parties, private respondent was still a Chinese national (Rollo, p. 48; Appellants'
Brief, p. 2). However, petitioners also stated that they do not dispute the right of private respondent
to hold the landholding in dispute under a contract of lease but they cannot fathom how Congress
could have thought of a lease contract which shall be for an indefinite period and yet say that the
period to be valid should not exceed 99 years (Rollo, p. 48; Appellant's Brief, p. 4; Article 1643 of the
New Civil Code of the Philippines).
On the other hand, private respondent argued that even though he was still an alien when he
entered into the contract of lease (on October 5, 1954), he was not prohibited by law to do so. In
fact, prior to his becoming a naturalized Filipino citizen in 1961, the appellants did not question his
right to enter into that contract so that the parties are in pari delicto. He constructed a building on the
property worth P40,000.00 and prays that he be awarded P30,000.00 for moral damages and
P2,000.00 for Attorney's fees. (Rollo, p. 48; Appellant's Brief, p. 2).
The position of private respondent is well taken.

The lower court correctly ruled that the defendant-appellee Chong had at the time of the execution of
the contract, the right to hold by lease the property involved in the case although at the time of the
execution of the contract, he was still a Chinese national (Rollo, p. 59; Appellee's Brief, pp. 10-11).
In the present case, it has been established that there is only one contract and there is no option to
buy the leased property in favor of Chong. There is nothing in the record, either in the lease contract
or in the complaint itself, to indicate any scheme to circumvent the constitutional prohibition. On the
contrary, the Llantinos themselves admit openly that right from the start and before entering into the
contract, Chong had merely asked them for a lease of the premises to which they agreed. Admittedly
under the terms of the contract there is nothing to prevent the Llantinos from disposing of their title to
the land to any qualified party but subject to the rights of the lessee Chong. Neither is there under
the terms of the said contract to indicate that the ownership of the Llantinos of the leased premises
has been virtually transferred to the lessee (Rollo, p. 59; Appellee's Brief, p. 14).
Under the circumstances, a lease to an alien for a reasonable period is valid. So is an option giving
an alien the right to buy real property on condition that he is granted Philippine citizenship. Aliens are
not completely excluded by the Constitution from use of lands for residential purposes. Since their
residence in the Philippines is temporary, they may be granted temporary rights such as a lease
contract which is not forbidden by the Constitution. Should they desire to remain here forever and
share our fortune and misfortune, Filipino citizenship is not impossible to acquire (Philippine Banking
Corporation vs. Lui She, 21 SCRA 52 [1967], citing Krivenko vs. Register of Deeds, 79 Phil. 461
[1947]).
The only instance where a contract of lease may be considered invalid is, if there are circumstances
attendant to its execution, which are used as a scheme to circumvent the constitutional prohibition.
If an alien is given not only a lease of, but also an option to buy, a piece of land, by virtue of which
the Filipino owner cannot sell or otherwise dispose of his property, this to last for 50 years, then it
becomes clear that the arrangement is a virtual transfer of ownership whereby the owner divests
himself in stages not only of the right to enjoy the land (jus possidendi, jus utendi, jus fruendi, and
jus abutendi) rights, the sum of which make up ownership. It is just as if today the possession is
transferred, tomorrow the use, the next day the disposition, and so on, until ultimately all the rights of
which ownership is made up are consolidated in an alien (Philippine Banking Corporation vs. Lui
She, 21 SCRA 52 [1967]).
Coming back to the case at bar, even assuming, arguendo, that the subject contract is prohibited,
the same can no longer be questioned presently upon the acquisition by the private respondent of
Filipino citizenship. It was held that sale of a residential land to an alien which is now in the hands of
a naturalized Filipino citizen is valid (De Castro vs. Tan, 129 SCRA 85 [1984]).
A contract is the law between the contracting parties, and when there is nothing in it which is
contrary to law, morals, good customs, public policy or public order, the validity of the contract must
be sustained (Marimperio Compania Naviera, S.A. vs. Court of Appeals, 156 SCRA 358 [1987]).
The issue of the nature of the contract in the case at bar was never raised in the basic pleadings or
in the pre-trial (Rollo, p. 59-1; Appellee's Brief, p. 22).
It is too late to raise an issue on appeal in the Supreme Court when it has not been raised in the
lower court (Espadera vs. Court of Appeals, 165 SCRA 364 [1988]).

Moreover, contracts which are not ambiguous are to be interpreted according to their literal meaning
and should not be interpreted beyond their obvious intendment (Plastic Town Center Corporation vs.
NLRC, 172 SCRA 580 [1989]; Herrera vs. Petrophil Corp., 146 SCRA 385 [1986]).
PREMISES CONSIDERED, the decision appealed from is hereby AFFIRMED with costs against the
plaintiffs-appellants.
SO ORDERED.
Melencio-Herrera (Chairperson), Padilla and Regalado, JJ., concur.
Sarmiento, J., is on leave.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. 101949 December 1, 1994

THE HOLY SEE, petitioner,
vs.
THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of the Regional Trial Court of
Makati, Branch 61 and STARBRIGHT SALES ENTERPRISES, INC., respondents.
Padilla Law Office for petitioner.
Siguion Reyna, Montecillo & Ongsiako for private respondent.

QUIASON, J.:
This is a petition for certiorari under Rule 65 of the Revised Rules of Court to reverse and set aside
the Orders dated June 20, 1991 and September 19, 1991 of the Regional Trial Court, Branch 61,
Makati, Metro Manila in Civil Case No. 90-183.
The Order dated June 20, 1991 denied the motion of petitioner to dismiss the complaint in Civil Case
No. 90-183, while the Order dated September 19, 1991 denied the motion for reconsideration of the
June 20,1991 Order.
Petitioner is the Holy See who exercises sovereignty over the Vatican City in Rome, Italy, and is
represented in the Philippines by the Papal Nuncio.
Private respondent, Starbright Sales Enterprises, Inc., is a domestic corporation engaged in the real
estate business.

This petition arose from a controversy over a parcel of land consisting of 6,000 square meters (Lot 5A, Transfer Certificate of Title No. 390440) located in the Municipality of Paraaque, Metro Manila
and registered in the name of petitioner.
Said Lot 5-A is contiguous to Lots 5-B and 5-D which are covered by Transfer Certificates of Title
Nos. 271108 and 265388 respectively and registered in the name of the Philippine Realty
Corporation (PRC).
The three lots were sold to Ramon Licup, through Msgr. Domingo A. Cirilos, Jr., acting as agent to
the sellers. Later, Licup assigned his rights to the sale to private respondent.
In view of the refusal of the squatters to vacate the lots sold to private respondent, a dispute arose
as to who of the parties has the responsibility of evicting and clearing the land of squatters.
Complicating the relations of the parties was the sale by petitioner of Lot 5-A to Tropicana Properties
and Development Corporation (Tropicana).
I
On January 23, 1990, private respondent filed a complaint with the Regional Trial Court, Branch 61,
Makati, Metro Manila for annulment of the sale of the three parcels of land, and specific performance
and damages against petitioner, represented by the Papal Nuncio, and three other defendants:
namely, Msgr. Domingo A. Cirilos, Jr., the PRC and Tropicana (Civil Case No.
90-183).
The complaint alleged that: (1) on April 17, 1988, Msgr. Cirilos, Jr., on behalf of petitioner and the
PRC, agreed to sell to Ramon Licup Lots 5-A, 5-B and 5-D at the price of P1,240.00 per square
meters; (2) the agreement to sell was made on the condition that earnest money of P100,000.00 be
paid by Licup to the sellers, and that the sellers clear the said lots of squatters who were then
occupying the same; (3) Licup paid the earnest money to Msgr. Cirilos; (4) in the same month, Licup
assigned his rights over the property to private respondent and informed the sellers of the said
assignment; (5) thereafter, private respondent demanded from Msgr. Cirilos that the sellers fulfill
their undertaking and clear the property of squatters; however, Msgr. Cirilos informed private
respondent of the squatters' refusal to vacate the lots, proposing instead either that private
respondent undertake the eviction or that the earnest money be returned to the latter; (6) private
respondent counterproposed that if it would undertake the eviction of the squatters, the purchase
price of the lots should be reduced from P1,240.00 to P1,150.00 per square meter; (7) Msgr. Cirilos
returned the earnest money of P100,000.00 and wrote private respondent giving it seven days from
receipt of the letter to pay the original purchase price in cash; (8) private respondent sent the earnest
money back to the sellers, but later discovered that on March 30, 1989, petitioner and the PRC,
without notice to private respondent, sold the lots to Tropicana, as evidenced by two separate Deeds
of Sale, one over Lot 5-A, and another over Lots 5-B and 5-D; and that the sellers' transfer certificate
of title over the lots were cancelled, transferred and registered in the name of Tropicana; (9)
Tropicana induced petitioner and the PRC to sell the lots to it and thus enriched itself at the expense
of private respondent; (10) private respondent demanded the rescission of the sale to Tropicana and
the reconveyance of the lots, to no avail; and (11) private respondent is willing and able to comply
with the terms of the contract to sell and has actually made plans to develop the lots into a
townhouse project, but in view of the sellers' breach, it lost profits of not less than P30,000.000.00.
Private respondent thus prayed for: (1) the annulment of the Deeds of Sale between petitioner and
the PRC on the one hand, and Tropicana on the other; (2) the reconveyance of the lots in question;
(3) specific performance of the agreement to sell between it and the owners of the lots; and (4)
damages.

On June 8, 1990, petitioner and Msgr. Cirilos separately moved to dismiss the complaint
petitioner for lack of jurisdiction based on sovereign immunity from suit, and Msgr. Cirilos for being
an improper party. An opposition to the motion was filed by private respondent.
On June 20, 1991, the trial court issued an order denying, among others, petitioner's motion to
dismiss after finding that petitioner "shed off [its] sovereign immunity by entering into the business
contract in question" (Rollo, pp. 20-21).
On July 12, 1991, petitioner moved for reconsideration of the order. On August 30, 1991, petitioner
filed a "Motion for a Hearing for the Sole Purpose of Establishing Factual Allegation for claim of
Immunity as a Jurisdictional Defense." So as to facilitate the determination of its defense of
sovereign immunity, petitioner prayed that a hearing be conducted to allow it to establish certain
facts upon which the said defense is based. Private respondent opposed this motion as well as the
motion for reconsideration.
On October 1, 1991, the trial court issued an order deferring the resolution on the motion for
reconsideration until after trial on the merits and directing petitioner to file its answer (Rollo, p. 22).
Petitioner forthwith elevated the matter to us. In its petition, petitioner invokes the privilege of
sovereign immunity only on its own behalf and on behalf of its official representative, the Papal
Nuncio.
On December 9, 1991, a Motion for Intervention was filed before us by the Department of Foreign
Affairs, claiming that it has a legal interest in the outcome of the case as regards the diplomatic
immunity of petitioner, and that it "adopts by reference, the allegations contained in the petition of the
Holy See insofar as they refer to arguments relative to its claim of sovereign immunity from suit"
(Rollo, p. 87).
Private respondent opposed the intervention of the Department of Foreign Affairs. In compliance with
the resolution of this Court, both parties and the Department of Foreign Affairs submitted their
respective memoranda.
II
A preliminary matter to be threshed out is the procedural issue of whether the petition
for certiorari under Rule 65 of the Revised Rules of Court can be availed of to question the order
denying petitioner's motion to dismiss. The general rule is that an order denying a motion to dismiss
is not reviewable by the appellate courts, the remedy of the movant being to file his answer and to
proceed with the hearing before the trial court. But the general rule admits of exceptions, and one of
these is when it is very clear in the records that the trial court has no alternative but to dismiss the
complaint (Philippine National Bank v. Florendo, 206 SCRA 582 [1992]; Zagada v. Civil Service
Commission, 216 SCRA 114 [1992]. In such a case, it would be a sheer waste of time and energy to
require the parties to undergo the rigors of a trial.
The other procedural question raised by private respondent is the personality or legal interest of the
Department of Foreign Affairs to intervene in the case in behalf of the Holy See (Rollo, pp. 186-190).
In Public International Law, when a state or international agency wishes to plead sovereign or
diplomatic immunity in a foreign court, it requests the Foreign Office of the state where it is sued to
convey to the court that said defendant is entitled to immunity.

In the United States, the procedure followed is the process of "suggestion," where the foreign state
or the international organization sued in an American court requests the Secretary of State to make
a determination as to whether it is entitled to immunity. If the Secretary of State finds that the
defendant is immune from suit, he, in turn, asks the Attorney General to submit to the court a
"suggestion" that the defendant is entitled to immunity. In England, a similar procedure is followed,
only the Foreign Office issues a certification to that effect instead of submitting a "suggestion"
(O'Connell, I International Law 130 [1965]; Note: Immunity from Suit of Foreign Sovereign
Instrumentalities and Obligations, 50 Yale Law Journal 1088 [1941]).
In the Philippines, the practice is for the foreign government or the international organization to first
secure an executive endorsement of its claim of sovereign or diplomatic immunity. But how the
Philippine Foreign Office conveys its endorsement to the courts varies. In International Catholic
Migration Commission v. Calleja, 190 SCRA 130 (1990), the Secretary of Foreign Affairs just sent a
letter directly to the Secretary of Labor and Employment, informing the latter that the respondentemployer could not be sued because it enjoyed diplomatic immunity. In World Health Organization v.
Aquino, 48 SCRA 242 (1972), the Secretary of Foreign Affairs sent the trial court a telegram to that
effect. In Baer v. Tizon, 57 SCRA 1 (1974), the U.S. Embassy asked the Secretary of Foreign Affairs
to request the Solicitor General to make, in behalf of the Commander of the United States Naval
Base at Olongapo City, Zambales, a "suggestion" to respondent Judge. The Solicitor General
embodied the "suggestion" in a Manifestation and Memorandum as amicus curiae.
In the case at bench, the Department of Foreign Affairs, through the Office of Legal Affairs moved
with this Court to be allowed to intervene on the side of petitioner. The Court allowed the said
Department to file its memorandum in support of petitioner's claim of sovereign immunity.
In some cases, the defense of sovereign immunity was submitted directly to the local courts by the
respondents through their private counsels (Raquiza v. Bradford, 75 Phil. 50 [1945]; Miquiabas v.
Philippine-Ryukyus Command, 80 Phil. 262 [1948]; United States of America v. Guinto, 182 SCRA
644 [1990] and companion cases). In cases where the foreign states bypass the Foreign Office, the
courts can inquire into the facts and make their own determination as to the nature of the acts and
transactions involved.
III
The burden of the petition is that respondent trial court has no jurisdiction over petitioner, being a
foreign state enjoying sovereign immunity. On the other hand, private respondent insists that the
doctrine of non-suability is not anymore absolute and that petitioner has divested itself of such a
cloak when, of its own free will, it entered into a commercial transaction for the sale of a parcel of
land located in the Philippines.
A. The Holy See
Before we determine the issue of petitioner's non-suability, a brief look into its status as a sovereign
state is in order.
Before the annexation of the Papal States by Italy in 1870, the Pope was the monarch and he, as
the Holy See, was considered a subject of International Law. With the loss of the Papal States and
the limitation of the territory under the Holy See to an area of 108.7 acres, the position of the Holy
See in International Law became controversial (Salonga and Yap, Public International Law 36-37
[1992]).

In 1929, Italy and the Holy See entered into the Lateran Treaty, where Italy recognized the exclusive
dominion and sovereign jurisdiction of the Holy See over the Vatican City. It also recognized the right
of the Holy See to receive foreign diplomats, to send its own diplomats to foreign countries, and to
enter into treaties according to International Law (Garcia, Questions and Problems In International
Law, Public and Private 81 [1948]).
The Lateran Treaty established the statehood of the Vatican City "for the purpose of assuring to the
Holy See absolute and visible independence and of guaranteeing to it indisputable sovereignty also
in the field of international relations" (O'Connell, I International Law 311 [1965]).
In view of the wordings of the Lateran Treaty, it is difficult to determine whether the statehood is
vested in the Holy See or in the Vatican City. Some writers even suggested that the treaty created
two international persons the Holy See and Vatican City (Salonga and Yap, supra, 37).
The Vatican City fits into none of the established categories of states, and the attribution to it of
"sovereignty" must be made in a sense different from that in which it is applied to other states
(Fenwick, International Law 124-125 [1948]; Cruz, International Law 37 [1991]). In a community of
national states, the Vatican City represents an entity organized not for political but for ecclesiastical
purposes and international objects. Despite its size and object, the Vatican City has an independent
government of its own, with the Pope, who is also head of the Roman Catholic Church, as the Holy
See or Head of State, in conformity with its traditions, and the demands of its mission in the world.
Indeed, the world-wide interests and activities of the Vatican City are such as to make it in a sense
an "international state" (Fenwick, supra., 125; Kelsen, Principles of International Law 160 [1956]).
One authority wrote that the recognition of the Vatican City as a state has significant implication
that it is possible for any entity pursuing objects essentially different from those pursued by states to
be invested with international personality (Kunz, The Status of the Holy See in International Law, 46
The American Journal of International Law 308 [1952]).
Inasmuch as the Pope prefers to conduct foreign relations and enter into transactions as the Holy
See and not in the name of the Vatican City, one can conclude that in the Pope's own view, it is the
Holy See that is the international person.
The Republic of the Philippines has accorded the Holy See the status of a foreign sovereign. The
Holy See, through its Ambassador, the Papal Nuncio, has had diplomatic representations with the
Philippine government since 1957 (Rollo, p. 87). This appears to be the universal practice in
international relations.
B. Sovereign Immunity
As expressed in Section 2 of Article II of the 1987 Constitution, we have adopted the generally
accepted principles of International Law. Even without this affirmation, such principles of
International Law are deemed incorporated as part of the law of the land as a condition and
consequence of our admission in the society of nations (United States of America v. Guinto, 182
SCRA 644 [1990]).
There are two conflicting concepts of sovereign immunity, each widely held and firmly established.
According to the classical or absolute theory, a sovereign cannot, without its consent, be made a
respondent in the courts of another sovereign. According to the newer or restrictive theory, the
immunity of the sovereign is recognized only with regard to public acts or acts jure imperii of a state,
but not with regard to private acts or acts jure gestionis

(United States of America v. Ruiz, 136 SCRA 487 [1987]; Coquia and Defensor-Santiago, Public
International Law 194 [1984]).
Some states passed legislation to serve as guidelines for the executive or judicial determination
when an act may be considered as jure gestionis. The United States passed the Foreign Sovereign
Immunities Act of 1976, which defines a commercial activity as "either a regular course of
commercial conduct or a particular commercial transaction or act." Furthermore, the law declared
that the "commercial character of the activity shall be determined by reference to the nature of the
course of conduct or particular transaction or act, rather than by reference to its purpose." The
Canadian Parliament enacted in 1982 an Act to Provide For State Immunity in Canadian Courts. The
Act defines a "commercial activity" as any particular transaction, act or conduct or any regular
course of conduct that by reason of its nature, is of a "commercial character."
The restrictive theory, which is intended to be a solution to the host of problems involving the issue
of sovereign immunity, has created problems of its own. Legal treatises and the decisions in
countries which follow the restrictive theory have difficulty in characterizing whether a contract of a
sovereign state with a private party is an act jure gestionis or an act jure imperii.
The restrictive theory came about because of the entry of sovereign states into purely commercial
activities remotely connected with the discharge of governmental functions. This is particularly true
with respect to the Communist states which took control of nationalized business activities and
international trading.
This Court has considered the following transactions by a foreign state with private parties as
acts jure imperii: (1) the lease by a foreign government of apartment buildings for use of its military
officers (Syquia v. Lopez, 84 Phil. 312 [1949]; (2) the conduct of public bidding for the repair of a
wharf at a United States Naval Station (United States of America v. Ruiz, supra.); and (3) the change
of employment status of base employees (Sanders v. Veridiano, 162 SCRA 88 [1988]).
On the other hand, this Court has considered the following transactions by a foreign state with
private parties as acts jure gestionis: (1) the hiring of a cook in the recreation center, consisting of
three restaurants, a cafeteria, a bakery, a store, and a coffee and pastry shop at the John Hay Air
Station in Baguio City, to cater to American servicemen and the general public (United States of
America v. Rodrigo, 182 SCRA 644 [1990]); and (2) the bidding for the operation of barber shops in
Clark Air Base in Angeles City (United States of America v. Guinto, 182 SCRA 644 [1990]). The
operation of the restaurants and other facilities open to the general public is undoubtedly for profit as
a commercial and not a governmental activity. By entering into the employment contract with the
cook in the discharge of its proprietary function, the United States government impliedly divested
itself of its sovereign immunity from suit.
In the absence of legislation defining what activities and transactions shall be considered
"commercial" and as constituting acts jure gestionis, we have to come out with our own guidelines,
tentative they may be.
Certainly, the mere entering into a contract by a foreign state with a private party cannot be the
ultimate test. Such an act can only be the start of the inquiry. The logical question is whether the
foreign state is engaged in the activity in the regular course of business. If the foreign state is not
engaged regularly in a business or trade, the particular act or transaction must then be tested by its
nature. If the act is in pursuit of a sovereign activity, or an incident thereof, then it is an act jure
imperii, especially when it is not undertaken for gain or profit.
As held in United States of America v. Guinto, (supra):

There is no question that the United States of America, like any other state, will be
deemed to have impliedly waived its non-suability if it has entered into a contract in
its proprietary or private capacity. It is only when the contract involves its sovereign
or governmental capacity that no such waiver may be implied.
In the case at bench, if petitioner has bought and sold lands in the ordinary course of a real estate
business, surely the said transaction can be categorized as an act jure gestionis. However, petitioner
has denied that the acquisition and subsequent disposal of Lot 5-A were made for profit but claimed
that it acquired said property for the site of its mission or the Apostolic Nunciature in the Philippines.
Private respondent failed to dispute said claim.
Lot 5-A was acquired by petitioner as a donation from the Archdiocese of Manila. The donation was
made not for commercial purpose, but for the use of petitioner to construct thereon the official place
of residence of the Papal Nuncio. The right of a foreign sovereign to acquire property, real or
personal, in a receiving state, necessary for the creation and maintenance of its diplomatic mission,
is recognized in the 1961 Vienna Convention on Diplomatic Relations (Arts. 20-22). This treaty was
concurred in by the Philippine Senate and entered into force in the Philippines on November 15,
1965.
In Article 31(a) of the Convention, a diplomatic envoy is granted immunity from the civil and
administrative jurisdiction of the receiving state over any real action relating to private immovable
property situated in the territory of the receiving state which the envoy holds on behalf of the sending
state for the purposes of the mission. If this immunity is provided for a diplomatic envoy, with all the
more reason should immunity be recognized as regards the sovereign itself, which in this case is the
Holy See.
The decision to transfer the property and the subsequent disposal thereof are likewise clothed with a
governmental character. Petitioner did not sell Lot
5-A for profit or gain. It merely wanted to dispose off the same because the squatters living thereon
made it almost impossible for petitioner to use it for the purpose of the donation. The fact that
squatters have occupied and are still occupying the lot, and that they stubbornly refuse to leave the
premises, has been admitted by private respondent in its complaint (Rollo, pp. 26, 27).
The issue of petitioner's non-suability can be determined by the trial court without going to trial in the
light of the pleadings, particularly the admission of private respondent. Besides, the privilege of
sovereign immunity in this case was sufficiently established by the Memorandum and Certification of
the Department of Foreign Affairs. As the department tasked with the conduct of the Philippines'
foreign relations (Administrative Code of 1987, Book IV, Title I, Sec. 3), the Department of Foreign
Affairs has formally intervened in this case and officially certified that the Embassy of the Holy See is
a duly accredited diplomatic mission to the Republic of the Philippines exempt from local jurisdiction
and entitled to all the rights, privileges and immunities of a diplomatic mission or embassy in this
country (Rollo, pp. 156-157). The determination of the executive arm of government that a state or
instrumentality is entitled to sovereign or diplomatic immunity is a political question that is conclusive
upon the courts (International Catholic Migration Commission v. Calleja, 190 SCRA 130 [1990]).
Where the plea of immunity is recognized and affirmed by the executive branch, it is the duty of the
courts to accept this claim so as not to embarrass the executive arm of the government in
conducting the country's foreign relations (World Health Organization v. Aquino, 48 SCRA 242
[1972]). As in International Catholic Migration Commission and in World Health Organization, we
abide by the certification of the Department of Foreign Affairs.
Ordinarily, the procedure would be to remand the case and order the trial court to conduct a hearing
to establish the facts alleged by petitioner in its motion. In view of said certification, such procedure

would however be pointless and unduly circuitous (Ortigas & Co. Ltd. Partnership v. Judge Tirso
Velasco, G.R. No. 109645, July 25, 1994).
IV
Private respondent is not left without any legal remedy for the redress of its grievances. Under both
Public International Law and Transnational Law, a person who feels aggrieved by the acts of a
foreign sovereign can ask his own government to espouse his cause through diplomatic channels.
Private respondent can ask the Philippine government, through the Foreign Office, to espouse its
claims against the Holy See. Its first task is to persuade the Philippine government to take up with
the Holy See the validity of its claims. Of course, the Foreign Office shall first make a determination
of the impact of its espousal on the relations between the Philippine government and the Holy See
(Young, Remedies of Private Claimants Against Foreign States, Selected Readings on Protection by
Law of Private Foreign Investments 905, 919 [1964]). Once the Philippine government decides to
espouse the claim, the latter ceases to be a private cause.
According to the Permanent Court of International Justice, the forerunner of the International Court
of Justice:
By taking up the case of one of its subjects and by reporting to diplomatic action or
international judicial proceedings on his behalf, a State is in reality asserting its own
rights its right to ensure, in the person of its subjects, respect for the rules of
international law (The Mavrommatis Palestine Concessions, 1 Hudson, World Court
Reports 293, 302 [1924]).
WHEREFORE, the petition for certiorari is GRANTED and the complaint in Civil Case No. 90-183
against petitioner is DISMISSED.
SO ORDERED.