LAND BANK OF THE PHILIPPINES vs. EDUARDO M.

CACAYURAN
G.R. No. 191667 | 17 April 2013
Puerto, Karlo Alexie C.

FACTS:

The Sangguniang Bayan of Agoo, La Union passed several resolutions for the implementation of
the multi-phased redevelopment plan of the Agoo Town Plaza. The Sangguniang Bayan further
passed resolutions allowing Mayor Eriguel to contract loans with Land Bank of the Philippines. As
security for the loans obtained from Land Bank, the Municipal Government mortgaged the
southeast portion of the lot where the town plaza is located.

Several residents, represented by Cacayuran, said that the town plaza is a property of public
dominion, and therefore cannot be used as collaterals for the loans.

In an attempt to cure the defect of the mortgage on the town plaza lot, the Municipality passed
an ordinance converting the same into patrimonial property of the Municipality.

ISSUE:

Whether or not the town plaza is a property of public dominion

RULING:

Yes, the public plaza is a property of public dominion.

The town plaza is one of those properties owned by the municipalities, cities and provinces that
are for public use, as provided for by Articles 423-424:

ARTICLE 423. The property of provinces, cities, and municipalities is divided into property
for public use and patrimonial property.

ARTICLE 424. Property for public use, in the provinces, cities, and municipalities,
consist of the provincial roads, city streets, municipal streets, the squares, fountains,
public waters, promenades, and public works for public service paid for by said provinces,
cities, or municipalities.

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The Supreme Court emphasized that since the town plaza is a property of public dominion, it is
outside the commerce of men, and therefore cannot be a subject of appropriation by
the State or private persons.

Moreover, the Court stressed that the Municipal Ordinance did not effectively convert the town
plaza lot to patrimonial property. It is only the national government, through the President or by
legislation of Congress, that can expressly grant the conversion of properties of public domain
into patrimonial properties of the State. The grant should come after such property was classified
as agricultural land and declared as alienable and disposable.