Page |1
PROPERTY CASES: CLASSIFICATION OF PROPERTY
16
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

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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
Page |2
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

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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
Page |3
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).i•t•c-aüsl
(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

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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:
Page |4
ART. 419. Property is either of
public dominion or of private
ownership.
ART. 420. The following things
are property of public dominion
(1) Those intended for public
use, such as roads, canals,
rivers, torrents, ports and
bridges constructed by the State,
banks shores roadsteads, and
others of similar character;
(2) Those which belong to the
State, without being for public
use, and are intended for some
public service or for the
development of the national
wealth.
ART. 421. All other property of
the State, which is not of the
character stated in the preceding
article, is patrimonial property.
The Roppongi property is correctly classified
under paragraph 2 of Article 420 of the Civil
Code as property belonging to the State and
intended for some public service.
Has the intention of the government regarding
the use of the property been changed because
the lot has been Idle for some years? Has it
become patrimonial?
The fact that the Roppongi site has not been
used for a long time for actual Embassy
service does not automatically convert it to
patrimonial property. Any such conversion
happens only if the property is withdrawn
from public use (Cebu Oxygen and Acetylene
Co. v. Bercilles, 66 SCRA 481 [1975]). A
property continues to be part of the public
domain, not available for private appropriation
or ownership until there is a formal
declaration on the part of the government to
withdraw it from being such (Ignacio v.
Director of Lands, 108 Phil. 335 [1960]).
The respondents enumerate various
pronouncements by concerned public officials
insinuating a change of intention. We
emphasize, however, that an abandonment of
the intention to use the Roppongi property for
public service and to make it patrimonial
property under Article 422 of the Civil
Code must be definiteAbandonment cannot be
inferred from the non-use alone specially if the
non-use was attributable not to the
government's own deliberate and indubitable
will but to a lack of financial support to repair

PROPERTY CASES: CLASSIFICATION OF PROPERTY
and improve the property (See Heirs of Felino
Santiago v. Lazaro, 166 SCRA 368 [1988]).
Abandonment must be a certain and positive
act based on correct legal premises.
A mere transfer of the Philippine Embassy to
Nampeidai in 1976 is not relinquishment of
the Roppongi property's original purpose.
Even the failure by the government to repair
the building in Roppongi is not abandonment
since as earlier stated, there simply was a
shortage of government funds. The recent
Administrative Orders authorizing a study of
the status and conditions of government
properties in Japan were merely directives for
investigation but did not in any way signify a
clear intention to dispose of the properties.
Executive Order No. 296, though its title
declares an "authority to sell", does not have a
provision in its text expressly authorizing the
sale of the four properties procured from
Japan for the government sector. The
executive order does not declare that the
properties lost their public character. It merely
intends to make the properties available to
foreigners and not to Filipinos alone in case of
a sale, lease or other disposition. It merely
eliminates the restriction under Rep. Act No.
1789 that reparations goods may be sold only
to Filipino citizens and one hundred (100%)
percent Filipino-owned entities. The text of
Executive Order No. 296 provides:
Section 1. The provisions of
Republic Act No. 1789, as
amended, and of other laws to
the contrary notwithstanding,
the above-mentioned properties
can be made available for sale,
lease or any other manner of
disposition to non-Filipino
citizens or to entities owned by
non-Filipino citizens.
Executive Order No. 296 is based on the
wrong premise or assumption that the
Roppongi and the three other properties were
earlier converted into alienable real properties.
As earlier stated, Rep. Act No. 1789
differentiates the procurements for the
government sector and the private sector
(Sections 2 and 12, Rep. Act No. 1789). Only
the private sector properties can be sold to
end-users who must be Filipinos or entities
owned by Filipinos. It is this nationality
provision which was amended by Executive
Order No. 296.
Section 63 (c) of Rep. Act No. 6657 (the CARP
Law) which provides as one of the sources of
funds for its implementation, the proceeds of
Page |5
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

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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 situs rule 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 capable of
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
Page |6
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

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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
Page |7
suffered during the Japanese
military occupation, for the
suffering of widows and orphans
who lost their loved ones and
kindred, for the homes and other
properties lost by countless
Filipinos during the war. The
Tokyo properties are a
monument to the bravery and
sacrifice of the Filipino people in
the face of an invader; like the
monuments of Rizal, Quezon,
and other Filipino heroes, we do
not expect economic or financial
benefits from them. But who
would think of selling these
monuments? Filipino honor and
national dignity dictate that we
keep our properties in Japan as
memorials to the countless
Filipinos who died and suffered.
Even if we should become
paupers we should not think of
selling them. For it would be as if
we sold the lives and blood and
tears of our countrymen. (Rollo-
G.R. No. 92013, p.147)
The petitioner in G.R. No. 92047 also states:
Roppongi is no ordinary
property. It is one ceded by the
Japanese government in
atonement for its past
belligerence for the valiant
sacrifice of life and limb and for
deaths, physical dislocation and
economic devastation the whole
Filipino people endured in World
War II.
It is for what it stands for, and
for what it could never bring
back to life, that its significance
today remains undimmed,
inspire of the lapse of 45 years
since the war ended, inspire of
the passage of 32 years since the
property passed on to the
Philippine government.
Roppongi is a reminder that
cannot — should not — be
dissipated ... (Rollo-92047, p. 9)
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

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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, Griño-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
Page |8
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 CASES: CLASSIFICATION OF PROPERTY
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
Page |9
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

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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" 7 the 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
P a g e | 10
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

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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
P a g e | 11
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 Cebu Oxygen 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

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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
P a g e | 12
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

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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 non-use, 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
P a g e | 13
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

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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 is authorization
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.
P a g e | 14
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 seventy-four, (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.

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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 for residential purposes or
for commercial or industrial purposes other
than agricultural" (Emphasis supplied).i•t•c-
aüsl 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
P a g e | 15
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 egos of 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.

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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
P a g e | 16
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

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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.
P a g e | 17
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

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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" 7 the 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
P a g e | 18
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

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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
P a g e | 19
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 Cebu Oxygen 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.

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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
P a g e | 20
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

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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 non-use, 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
P a g e | 21
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

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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 is authorization
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
P a g e | 22
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 seventy-four, (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.

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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 for residential 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.
P a g e | 23
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 egos of 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

PROPERTY CASES: CLASSIFICATION OF PROPERTY
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.
EN BANC
17
G.R. No. L-24950 March 25, 1926
VIUDA DE TAN TOCO, plaintiff-appellant,
vs.
THE MUNICIPAL COUNCIL OF
ILOILO, defendant-appellee.
Arroyo & Evangelista for appellant.
Provincial Fiscal Borromeo Veloso for appelle.
VILLAMOR, J.:
It appears from the record that the widow of
Tan Toco had sued the municipal council of
Iloilo for the amount of P42,966.40, being the
purchase price of two strips of land, one on
Calle J. M. Basa consisting of 592 square
meters, and the other on Calle Aldiguer
consisting of 59 square meters, which the
municipality of Iloilo had appropriated for
widening said street. The Court of First
Instance of Iloilo sentenced the said
municipality to pay the plaintiff the amount so
claimed, plus the interest, and the said
judgment was on appeal affirmed by this
court.1
On account of lack of funds the municipality
of Iloilo was unable to pay the said judgment,
wherefore plaintiff had a writ of execution
issue against the property of the said
municipality, by virtue of which the sheriff
attached two auto trucks used for street
sprinkling, one police patrol automobile, the
police stations on Mabini street, and in Molo
and Mandurriao and the concrete structures,
with the corresponding lots, used as markets
by Iloilo, Molo, and Mandurriao.
After notice of the sale of said property had
been made, and a few days before the sale, the
provincial fiscal of Iloilo filed a motion which
P a g e | 24
the Court of First Instance praying that the
attachment on the said property be dissolved,
that the said attachment be declared null and
void as being illegal and violative of the rights
of the defendant municipality.
Plaintiffs counsel objected o the fiscal's motion
but the court, by order of August 12, 1925,
declared the attachment levied upon the
aforementioned property of the defendant
municipality null and void, thereby dissolving
the said attachment.
From this order the plaintiff has appealed by
bill of exceptions. The fundamental question
raised by appellant in her four assignments of
error is whether or not the property levied
upon is exempt from execution.
The municipal law, section 2165 of the
Administrative Code, provides that:
Municipalities are political bodies
corporate, and as such are endowed
with the faculties of municipal
corporations, to be exercised by and
through their respective municipal
government in conformity with law.
It shall be competent for them, in their
proper corporate name, to sue and be
sued, to contract and be contracted
with, to acquire and hold real and
personal property for municipal
purposes, and generally to exercise the
powers hereinafter specified or
otherwise conferred upon them by law.
For the purposes of the matter here in
question, the Administrative Code does not
specify the kind of property that a
municipality may acquire. However, article
343 of the Civil Code divides the property of
provinces and towns (municipalities) into
property for public use and patrimonial
property. According to article 344 of the same
Code, provincial roads and foot-path, squares,
streets, fountains and public waters, drives
and public improvements of general benefit
built at the expense of the said towns or
provinces, are property for public use.
All other property possessed by the said towns
and provinces is patrimonial and shall be
subject to the provisions of the Civil Code
except as provided by special laws.
Commenting upon article 344, Mr. Manresa
says that "In accordance with administrative
legislation" (Spanish) we must distinguish, as
to the patrimonial property of the towns,
"between that a common benefit and that

PROPERTY CASES: CLASSIFICATION OF PROPERTY
which is private property of the town. The first
differs from property for public use in that
generally its enjoyment is less, as it is limited
to neighbors or to a group or class thereof;
and, furthermore, such use, more or less
general, is not intrinsic with this kind of
property, for by its very nature it may be
enjoyed as though it were private property.
The third group, that is, private property, is
used in the name of the town or province by
the entities representing it and, like and
private property, giving a source of revenue."
Such distinction, however, is of little practical
importance in this jurisdiction in view of the
different principles underlying the functions of
a municipality under the American rule.
Notwithstanding this, we believe that the
principle governing property of the public
domain of the State is applicable to property
for public use of the municipalities as said
municipal is similar in character. The
principle is that the property for public use of
the State is not within the commerce of man
and, consequently, is inalienable and not
subject to prescription. Likewise, property for
public of the municipality is not within the
commerce of man so long as it is used by the
public and, consequently, said property is also
inalienable.
The American Law is more explicit about this
matter as expounded by Mcquilin in Municipal
Corporations, volume 3, paragraph 1160,
where he says that:
States statutes often provide the court
houses, jails and other buildings owned
by municipalities and the lots on which
they stand shall be exempt from
attachment and execution. But
independent of express statutory
exemption, as a general proposition,
property, real and personal, held by
municipal corporations, in trust for the
benefit of their inhabitants, and used
for public purposes, is exempt.
For example, public buildings, school
houses, streets, squares, parks,
wharves, engines and engine houses,
and the like, are not subject to
execution. So city waterworks, and a
stock of liquors carried in a town
dispensary, are exempt. The reason for
the exemption is obvious. Municipal
corporations are created for public
purposes and for the good of the
citizens in their aggregate or public
capacity. That they may properly
discharge such public functions
corporate property and revenues are
P a g e | 25
essential, and to deny them these
means the very purpose of their
creation would be materially impeded,
and in some instances practically
destroy it. Respecting this subject the
Supreme Court of Louisiana remarked:
"On the first view of this question there
is something very repugnant to the
moral sense in the idea that a
municipal corporation should contract
debts, and that, having no resources
but the taxes which are due to it, these
should not be subjected by legal
process to the satisfaction of its
creditors. This consideration, deduced
from the principles of moral equity has
only given way to the more enlarged
contemplation of the great and
paramount interests of public order
and the principles of government."
It is generally held that property owned
by a municipality, where not used for a
public purpose but for quasi private
purposes, is subject to execution on a
judgment against the municipality, and
may be sold. This rule applies to shares
of stock owned by a municipal
corporation, and the like. But the mere
fact that corporate property held for
public uses is being temporarily used
for private purposes does not make it
subject execution.
If municipal property exempt from
execution is destroyed, the insurance
money stands in lieu thereof and is also
exempt.
The members or inhabitants of a
municipal corporation proper are not
personally liable for the debts of the
municipality, except that in the New
England States the individual liability
of the inhabitant is generally
maintained.
In Corpus Juris, vol 23, page 355, the
following is found:
Where property of a municipal or other
public corporation is sough to be
subjected to execution to satisfy
judgments recovered against such
corporation, the question as to whether
such property is leviable or not is to be
determined by the usage and purposes
for which it is held. The rule is that
property held for public uses, such as
public buildings, streets, squares
parks, promenades, wharves, landing
places fire engines, hose and hose

PROPERTY CASES: CLASSIFICATION OF PROPERTY
carriages, engine houses, public
markets, hospitals, cemeteries, and
generally everything held for
governmental purposes, is not subject
to levy and sale under execution
against such corporation. The rule also
applies to funds in the hands of a
public officer. Likewise it has been held
that taxes due to a municipal
corporation or country cannot be seized
under execution by a creditor of such
corporation. But where a municipal
corporation or country owns in its
proprietary, as distinguished from its
public or governmental capacity,
property not useful or used for a public
purpose but for quasi private purposes,
the general rule is that such property
may be seized and sold under execution
against the corporation, precisely as
similar property of individuals is seized
and sold. But property held for public
purposes is not subject to execution
merely because it is temporarily used
for private purposes, although if the
public use is wholly abandoned it
becomes subject to execution. Whether
or not property held as public property
is necessary for the public use is a
political, rather than a judicial
question.
In the case of City of New Orleans vs.
Louisiana Construction Co., Ltd. (140 U. S.,
654; 35 Law. ed., 556), it was held that a
wharf for unloading sugar and molasses, open
to the public, was property for the public use
of the City of New Orleans and was not subject
to attachment for the payment of the debts of
the said city.
In that case it was proven that the said wharf
was a parcel of land adjacent to the
Mississippi River where all shipments of sugar
and molasses taken to New Orleans were
unloaded.
That city leased the said wharf to the
Louisiana Construction Company, Ltd., in
order that it might erect warehouses so that
the merchandise upon discharge might not be
spoiled by the elements. The said company
was given the privilege of charging certain fees
for storing merchandise in the said
warehouses and the public in general had the
right to unload sugar and molasses there by
paying the required fees, 10 per cent of which
was turned over to the city treasury.
The United States Supreme Court on an
appeal held that the wharf was public
property, that it never ceased to be such in
P a g e | 26
order to become private property of the city;
wherefore the company could not levy
execution upon the wharf in order to collect
the amount of the judgment rendered in favor
thereof.
In the case of Klein vs. City of New Orleans (98
U. S., 149; 25 Law. ed., 430), the Supreme
Court of the United States that a public wharf
on the banks of the Mississippi River was
public property and not subject to execution
for the payment of a debt of the City of New
Orleans where said wharf was located.
In this case a parcel of land adjacent to the
Mississippi River, which formerly was the
shore of the river and which later enlarged
itself by accession, was converted into a wharf
by the city for public use, who charged a
certain fee for its use.
It was held that the land was public property
as necessary as a public street and was not
subject to execution on account of the debts of
the city. It was further held that the fees
collected where also exempt from execution
because they were a part of the income of the
city.
In the case of Tufexis vs. Olaguera and
Municipal Council of Guinobatan (32 Phil.,
654), the question raised was whether for the
payment of a debt to a third person by the
concessionaire of a public market, the said
public market could be attached and sold at
public auction. The Supreme Court held that:
Even though a creditor is
unquestionably entitled to recover out
of his debtor's property, yet when
among such property there is included
the special right granted by the
Government of usufruct in a building
intended for a public service, and when
this privilege is closely related to a
service of a public character, such right
of the creditor to the collection of a debt
owed him by the debtor who enjoys the
said special privilege of usufruct in a
public market is not absolute and may
be exercised only through the action of
court of justice with respect to the
profits or revenue obtained under the
special right of usufruct enjoyed by
debtor.
The special concession of the right of
usufruct in a public market cannot be
attached like any ordinary right,
because that would be to permit a
person who has contracted with the
state or with the administrative officials

PROPERTY CASES: CLASSIFICATION OF PROPERTY
thereof to conduct and manage a
service of a public character, to be
substituted, without the knowledge and
consent of the administrative
authorities, by one who took no part in
the contract, thus giving rise to the
possibility of the regular course of a
public service being disturbed by the
more or less legal action of a grantee, to
the prejudice of the state and the public
interests.
The privilege or franchise granted to a
private person to enjoy the usufruct of
a public market cannot lawfully be
attached and sold, and a creditor of
such person can recover his debt only
out of the income or revenue obtained
by the debtor from the enjoyment or
usufruct of the said privilege, in the
same manner that the rights of such
creditors of a railroad company can be
exercised and their credit collected only
out of the gross receipts remaining after
deduction has been made therefrom of
the operating expenses of the road.
(Law of November 12, 1896, extended to
the overseas provinces by the royal
order of August 3, 1886.)
For the reasons contained in the authorities
above quoted we believe that this court would
have reached the same conclusion if the
debtor had been municipality of Guinobatan
and the public market had been levied upon
by virtue of the execution.
It is evident that the movable and immovable
property of a municipality, necessary for
governmental purpose, may not be attached
and sold for the payment of a judgment
against the municipality. The supreme reason
for this rule is the character of the public use
to which such kind of property is devoted. The
necessity for government service justifies that
the property of public of the municipality be
exempt from execution just as it is necessary
to exempt certain property of private
individuals in accordance with section 452 of
the Code of Civil Procedure.
Even the municipal income, according to the
above quoted authorities, is exempt from levy
and execution. In volume 1, page 467,
Municipal Corporations by Dillon we find that:
Municipal corporations are instituted
by the supreme authority of a state for
the public good. They exercise, by
delegation from the legislature, a
portion of the sovereign power. The
main object of their creation is to act as
P a g e | 27
administrative agencies for the state,
and to provide for the police and local
government of certain designated civil
divisions of its territory. To this end
they are invested with certain
governmental powers and charged with
civil, political, and municipal duties. To
enable them beneficially to exercise
these powers and discharge these
duties, they are clothed with the
authority to raise revenues, chiefly by
taxation, and subordinately by other
modes as by licenses, fines, and
penalties. The revenue of the public
corporation is the essential means by
which it is enabled to perform its
appointed work. Deprived of its regular
and adequate supply of revenue, such a
corporation is practically destroyed and
the ends of its erection thwarted. Based
upon considerations of this character,
it is the settled doctrine of the law that
only the public property but also the
taxes and public revenues of such
corporations cannot be seized under
execution against them, either in the
treasury or when in transit to it.
Judgments rendered for taxes, and the
proceeds of such judgments in the
hands of officers of the law, are not
subject to execution unless so declared
by statute. The doctrine of the
inviolability of the public revenues by
the creditor is maintained, although the
corporation is in debt, and has no
means of payment but the taxes which
it is authorized to collect.
Another error assigned by counsel for
appellant is the holding of the court a quo that
the proper remedy for collecting the judgment
in favor of the plaintiff was by way or
mandamus.
While this question is not necessarily included
in the one which is the subject of this appeal,
yet we believe that the holding of the court,
assigned as error by appellant's counsel, is
true when, after a judgment is rendered
against a municipality, it has no property
subject to execution. This doctrine is
maintained by Dillon (Municipal Corporations,
vol. 4, par. 1507, 5th ed.) based upon the
decisions of several States of the Union
upholding the same principle and which are
cited on page 2679 of the aforesaid work. In
this sense this assignment of error, we believe,
is groundless.
By virtue of all the foregoing, the judgment
appealed from should be and is hereby

PROPERTY CASES: CLASSIFICATION OF PROPERTY
affirmed with costs against the appellant. So
ordered.
Avanceña, C. J., Street, Malcolm, Ostrand,
Johns, Romualdez and Villa-Real., JJ.,
concur.
18 EN BANC
G.R. No. L-24440 March 28, 1968
THE PROVINCE OF ZAMBOANGA DEL
NORTE, plaintiff-appellee,
vs.
CITY OF ZAMBOANGA, SECRETARY OF
FINANCE and COMMISSIONER OF
INTERNAL REVENUE,defendants-
appellants.
Fortugaleza, Lood, Sarmiento, M. T. Yap &
Associates for plaintiff-appellee.
Office of the Solicitor General for
defendants-appellants.
BENGZON, J.P., J.:
Prior to its incorporation as a chartered
city, the Municipality of Zamboanga used to
be the provincial capital of the then
Zamboanga Province. On October 12, 1936,
Commonwealth Act 39 was approved
converting the Municipality of Zamboanga into
Zamboanga City. Sec. 50 of the Act also
provided that —
Buildings and properties which
the province shall abandon upon the
transfer of the capital to another place
will be acquired and paid for by the City
of Zamboanga at a price to be fixed by
the Auditor General.
The properties and buildings referred to
consisted of 50 lots and some buildings
constructed thereon, located in the City of
Zamboanga and covered individually by
Torrens certificates of title in the name of
Zamboanga Province. As far as can be gleaned
from the records, 1 said properties were being
utilized as follows —
No.
of Use
Lots
................................................
1 and obligations of the defunct Province of
Capitol Site
................................................
3
School Site
P a g e | 28
................................................
3
Hospital Site
................................................
3
Leprosarium
................................................
1
Curuan School
................................................
1
Trade School
................................................
2
Burleigh School
................................................
2
High School Playground
................................................
9
Burleighs
................................................
1
Hydro-Electric Site (Magay)
................................................
1
San Roque
................................................
23
vacant
It appears that in 1945, the capital of
Zamboanga Province was transferred to
Dipolog. 2 Subsequently, or on June 16, 1948,
Republic Act 286 was approved creating the
municipality of Molave and making it the
capital of Zamboanga Province.
On May 26, 1949, the Appraisal
Committee formed by the Auditor General,
pursuant to Commonwealth Act 39, fixed the
value of the properties and buildings in
question left by Zamboanga Province in
Zamboanga City at P1,294,244.00. 3
On June 6, 1952, Republic Act 711 was
approved dividing the province of Zamboanga
into two (2): Zamboanga del Norte and
Zamboanga del Sur. As to how the assets and
obligations of the old province were to be
divided between the two new ones, Sec. 6 of
that law provided:
Upon the approval of this Act,
the funds, assets and other properties
and the obligations of the province of
Zamboanga shall be divided equitably
between the Province of Zamboanga del
Norte and the Province of Zamboanga
del Sur by the President of the
Philippines, upon the recommendation
of the Auditor General.
Pursuant thereto, the Auditor General,
on January 11, 1955, apportioned the assets
Zamboanga as follows: 54.39% for Zamboanga
del Norte and 45.61% for Zamboanga del Sur.
Zamboanga del Norte therefore became
entitled to 54.39% of P1,294,244.00, the total

PROPERTY CASES: CLASSIFICATION OF PROPERTY
value of the lots and buildings in question, or
P704,220.05 payable by Zamboanga City.
On March 17, 1959, the Executive
Secretary, by order of the President, issued a
ruling 4 holding that Zamboanga del Norte had
a vested right as owner (should be co-
owner pro-indiviso) of the properties
mentioned in Sec. 50 of Commonwealth Act
39, and is entitled to the price thereof, payable
by Zamboanga City. This ruling revoked the
previous Cabinet Resolution of July 13, 1951
conveying all the said 50 lots and buildings
thereon to Zamboanga City for P1.00, effective
as of 1945, when the provincial capital of the
then Zamboanga Province was transferred to
Dipolog.
The Secretary of Finance then
authorized the Commissioner of Internal
Revenue to deduct an amount equal to 25% of
the regular internal revenue allotment for the
City of Zamboanga for the quarter ending
March 31, 1960, then for the quarter ending
June 30, 1960, and again for the first quarter
of the fiscal year 1960-1961. The deductions,
all aggregating P57,373.46, was credited to
the province of Zamboanga del Norte, in
partial payment of the P764,220.05 due it.
However, on June 17, 1961, Republic
Act 3039 was approved amending Sec. 50 of
Commonwealth Act 39 by providing that —
All buildings, properties and
assets belonging to the former province
of Zamboanga and located within the
City of Zamboanga are hereby
transferred, free of charge, in favor of
the said City of Zamboanga. (Stressed
for emphasis).
Consequently, the Secretary of Finance,
on July 12, 1961, ordered the Commissioner
of Internal Revenue to stop from effecting
further payments to Zamboanga del Norte and
to return to Zamboanga City the sum of
P57,373.46 taken from it out of the internal
revenue allotment of Zamboanga del Norte.
Zamboanga City admits that since the
enactment of Republic Act 3039, P43,030.11
of the P57,373.46 has already been returned
to it.
This constrained plaintiff-appellee
Zamboanga del Norte to file on March 5, 1962,
a complaint entitled "Declaratory Relief with
Preliminary Mandatory Injunction" in the
Court of First Instance of Zamboanga del
Norte against defendants-appellants
Zamboanga City, the Secretary of Finance and
the Commissioner of Internal Revenue. It was
P a g e | 29
prayed that: (a) Republic Act 3039 be declared
unconstitutional for depriving plaintiff
province of property without due process and
just compensation; (b) Plaintiff's rights and
obligations under said law be declared; (c) The
Secretary of Finance and the Internal Revenue
Commissioner be enjoined from reimbursing
the sum of P57,373.46 to defendant City; and
(d) The latter be ordered to continue paying
the balance of P704,220.05 in quarterly
installments of 25% of its internal revenue
allotments.
On June 4, 1962, the lower court
ordered the issuance of preliminary injunction
as prayed for. After defendants filed their
respective answers, trial was held. On August
12, 1963, judgment was rendered, the
dispositive portion of which reads:
WHEREFORE, judgment is
hereby rendered declaring Republic Act
No. 3039 unconstitutional insofar as it
deprives plaintiff Zamboanga del Norte
of its private properties, consisting of
50 parcels of land and the
improvements thereon under
certificates of title (Exhibits "A" to "A-
49") in the name of the defunct
province of Zamboanga; ordering
defendant City of Zamboanga to pay to
the plaintiff the sum of P704,220.05
payment thereof to be deducted from its
regular quarterly internal revenue
allotment equivalent to 25% thereof
every quarter until said amount shall
have been fully paid; ordering
defendant Secretary of Finance to direct
defendant Commissioner of Internal
Revenue to deduct 25% from the
regular quarterly internal revenue
allotment for defendant City of
Zamboanga and to remit the same to
plaintiff Zamboanga del Norte until said
sum of P704,220.05 shall have been
fully paid; ordering plaintiff Zamboanga
del Norte to execute through its proper
officials the corresponding public
instrument deeding to defendant City of
Zamboanga the 50 parcels of land and
the improvements thereon under the
certificates of title (Exhibits "A" to "A-
49") upon payment by the latter of the
aforesaid sum of P704,220.05 in full;
dismissing the counterclaim of
defendant City of Zamboanga; and
declaring permanent the preliminary
mandatory injunction issued on June
8, 1962, pursuant to the order of the
Court dated June 4, 1962. No costs are
assessed against the defendants.

PROPERTY CASES: CLASSIFICATION OF PROPERTY
It is SO ORDERED.
Subsequently, but prior to the
perfection of defendants' appeal, plaintiff
province filed a motion to reconsider praying
that Zamboanga City be ordered instead to
pay the P704,220.05 in lump sum with 6%
interest per annum. Over defendants'
opposition, the lower court granted plaintiff
province's motion.
The defendants then brought the case
before Us on appeal.
Brushing aside the procedural point
concerning the property of declaratory relief
filed in the lower court on the assertion that
the law had already been violated and that
plaintiff sought to give it coercive effect, since
assuming the same to be true, the Rules
anyway authorize the conversion of the
proceedings to an ordinary action, 5 We
proceed to the more important and principal
question of the validity of Republic Act 3039.
The validity of the law ultimately
depends on the nature of the 50 lots and
buildings thereon in question. For, the matter
involved here is the extent of legislative control
over the properties of a municipal corporation,
of which a province is one. The principle itself
is simple: If the property is owned by the
municipality (meaning municipal corporation)
in its public and governmental capacity, the
property is public and Congress has absolute
control over it. But if the property is owned in
its private or proprietary capacity, then it is
patrimonial and Congress has no absolute
control. The municipality cannot be deprived
of it without due process and payment of just
compensation. 6
The capacity in which the property is
held is, however, dependent on the use to
which it is intended and devoted. Now, which
of two norms, i.e., that of the Civil Code or
that obtaining under the law of Municipal
Corporations, must be used in classifying the
properties in question?
The Civil Code classification is
embodied in its Arts. 423 and 424 which
provide:1äwphï1.ñët
ART. 423. The property of
provinces, cities, and municipalities is
divided into property for public use and
patrimonial property.
ART. 424. Property for public
use, in the provinces, cities, and
municipalities, consists of the
P a g e | 30
provincial roads, city streets, municipal
streets, the squares, fountains, public
waters, promenades, and public works
for public service paid for by said
provinces, cities, or municipalities.
All other property possessed by any of
them is patrimonial and shall be
governed by this Code, without
prejudice to the provisions of special
laws. (Stressed for emphasis).
Applying the above cited norm, all the
properties in question, except the two (2) lots
used as High School playgrounds, could be
considered as patrimonial properties of the
former Zamboanga province. Even the capital
site, the hospital and leprosarium sites, and
the school sites will be considered patrimonial
for they are not for public use. They would fall
under the phrase "public works for public
service" for it has been held that under
the ejusdem generis rule, such public works
must be for free and indiscriminate use by
anyone, just like the preceding enumerated
properties in the first paragraph of Art
424. 7 The playgrounds, however, would fit
into this category.
This was the norm applied by the lower
court. And it cannot be said that its actuation
was without jurisprudential precedent for
in Municipality of Catbalogan v. Director of
Lands, 8 and in Municipality of Tacloban v.
Director of Lands, 9 it was held that the capitol
site and the school sites in municipalities
constitute their patrimonial properties. This
result is understandable because, unlike in
the classification regarding State properties,
properties for public service in the
municipalities are not classified as public.
Assuming then the Civil Code classification to
be the chosen norm, the lower court must be
affirmed except with regard to the two (2) lots
used as playgrounds.
On the other hand, applying the norm
obtaining under the principles constituting
the law of Municipal Corporations, all those of
the 50 properties in question which are
devoted to public service are deemed public;
the rest remain patrimonial. Under this norm,
to be considered public, it is enough that the
property be held and, devoted for
governmental purposes like local
administration, public education, public
health, etc. 10
Supporting jurisprudence are found in
the following cases: (1) HINUNANGAN V.
DIRECTOR OF LANDS, 11where it was stated
that "... where the municipality has occupied
 P a g e | 31
PROPERTY CASES: CLASSIFICATION OF PROPERTY

lands distinctly for public purposes, such as .................. .................. Scho

for the municipal court house, the public 540 17
.................. .................. ol
school, the public market, or other necessary 6 1
.. .. Site
municipal building, we will, in the absence of High
proof to the contrary, presume a grant from Scho
the States in favor of the municipality; but, as .................. ..................
556 16 ol
indicated by the wording, that rule may be .................. ..................
4 8 Play-
invoked only as to property which is used .. ..
groun
distinctly for public purposes...." (2) VIUDA d
DE TANTOCO V. MUNICIPAL COUNCIL OF
ILOILO 12 held that municipal properties 15
.................. .................. Trade
necessary for governmental purposes are 556 7&
.................. .................. Scho
public in nature. Thus, the auto trucks used 7 15
.. .. ol
by the municipality for street sprinkling, the 8
police patrol automobile, police stations and High
concrete structures with the corresponding Scho
.................. ..................
lots used as markets were declared exempt 558 16 ol
.................. ..................
from execution and attachment since they 3 7 Play-
.. ..
were not patrimonial properties. (3) groun
MUNICIPALITY OF BATANGAS VS. d
CANTOS 13 held squarely that a municipal lot Curu
.................. (O. ..................
which had always been devoted to school 618 an
.................. C.T ..................
purposes is one dedicated to public use and is 1 Scho
.. .) ..
not patrimonial property of a municipality. ol
.................. .................. Lepro
Following this classification, Republic 119 92
.................. .................. sariu
Act 3039 is valid insofar as it affects the lots 42 6
.. .. m
used as capitol site, school sites and its .................. .................. Lepro
grounds, hospital and leprosarium sites and 119 92
.................. .................. sariu
the high school playground sites — a total of 43 7
.. .. m
24 lots — since these were held by the former
Zamboanga province in its governmental .................. .................. Lepro
119 92
capacity and therefore are subject to the .................. .................. sariu
44 5
absolute control of Congress. Said lots .. .. m
considered as public property are the Burle
.................. ..................
following: 555 17 igh
.................. ..................
7 0 Scho
.. ..
TC ol
T Burle
.................. ..................
Nu Lot Number Use 556 18 igh
.................. ..................
mb 2 0 Scho
.. ..
er ol
.................. .................. Capit .................. ..................
220 556 17 Burle
.................. 4-B .................. ol .................. ..................
0 5 2-B igh
.. .. Site .. ..
.................. .................. Scho .................. ..................
281 14 557 17 Burle
.................. .................. ol .................. ..................
6 9 0 1-A igh
.. .. Site .. ..
.................. .................. Hospi .................. ..................
328 12 557 17 Burle
.................. .................. tal .................. ..................
1 24 1 2-C igh
.. .. Site .. ..
.................. .................. Hospi .................. ..................
328 12 557 17 Burle
.................. .................. tal .................. ..................
2 26 2 4 igh
.. .. Site .. ..
.................. .................. Hospi .................. ..................
328 12 557 17 Burle
.................. .................. tal .................. ..................
3 25 3 8 igh
.. .. Site .. ..
.................. 43 .................. Scho .................. ..................
374 558 17 Burle
.................. 4- .................. ol .................. ..................
8 5 1-B igh
.. A-1 .. Site .. ..
 P a g e | 32
PROPERTY CASES: CLASSIFICATION OF PROPERTY

.................. .................. 13 12 San

558 17 Burle ................... ...................
.................. .................. 19 7- Roqu
6 3 igh ................... ...................
.. .. 8 0 e
.................. .................. 55 ................... 16 ................... Burle
558 17 Burle
.................. .................. 69 ................... 9 ................... igh 15
7 2-A igh
.. .. 55 ................... 17 ................... Vaca
58 ................... 5 ................... nt
We noticed that the eight Burleigh lots 55 ................... 18 ...................
above described are adjoining each other and "
59 ................... 8 ...................
in turn are between the two lots wherein the
55 ................... 18 ...................
Burleigh schools are built, as per records "
60 ................... 3 ...................
appearing herein and in the Bureau of Lands.
Hence, there is sufficient basis for holding 55 ................... 18 ...................
"
that said eight lots constitute the appurtenant 61 ................... 6 ...................
grounds of the Burleigh schools, and partake 55 ................... 19 ...................
"
of the nature of the same. 63 ................... 1 ...................
55 ................... 17 ...................
"
Regarding the several buildings existing 66 ................... 6 ...................
on the lots above-mentioned, the records do 55 ................... 17 ...................
not disclose whether they were constructed at "
68 ................... 9 ...................
the expense of the former Province of
55 ................... 19 ...................
Zamboanga. Considering however the fact that "
74 ................... 6 ...................
said buildings must have been erected even
before 1936 when Commonwealth Act 39 was 18
55 ................... ...................
enacted and the further fact that provinces 1- "
75 ................... ...................
then had no power to authorize construction A
of buildings such as those in the case at 18
55 ................... ...................
bar at their own expense, 14 it can be assumed 1- "
76 ................... ...................
that said buildings were erected by the B
National Government, using national funds. 55 ................... 18 ...................
Hence, Congress could very well dispose of "
78 ................... 2 ...................
said buildings in the same manner that it did
55 ................... 19 ...................
with the lots in question. "
79 ................... 7 ...................
But even assuming that provincial 55 ................... 19 ...................
"
funds were used, still the buildings constitute 80 ................... 5 ...................
mere accessories to the lands, which are 15
55 ................... ...................
public in nature, and so, they follow the 9- "
81 ................... ...................
nature of said lands, i.e., public. Moreover, B
said buildings, though located in the city, will 55 ................... 19 ...................
"
not be for the exclusive use and benefit of city 82 ................... 4 ...................
residents for they could be availed of also by 55 ................... 19 ...................
the provincial residents. The province then — "
84 ................... 0 ...................
and its successors-in-interest — are not really
55 ................... 18 ...................
deprived of the benefits thereof. "
88 ................... 4 ...................
But Republic Act 3039 cannot be 55 ................... 18 ...................
"
applied to deprive Zamboanga del Norte of its 89 ................... 7 ...................
share in the value of the rest of the 26 55 ................... 18 ...................
"
remaining lots which are patrimonial 90 ................... 9 ...................
properties since they are not being utilized for 55 ................... 19 ...................
distinctly, governmental purposes. Said lots "
91 ................... 2 ...................
are: 55 ................... 19 ...................
"
92 ................... 3 ...................
TCT Number Lot Number Use 55 ................... 18 ...................
Mydr "
93 ................... 5 ...................
55 ................... 17 ................... o, 73 ................... 41 ...................
77 ................... 7 ................... Maga "
79 ................... 47 ...................
y
Moreover, the fact that these 26 lots
are registered strengthens the proposition that

PROPERTY CASES: CLASSIFICATION OF PROPERTY
they are truly private in nature. On the other
hand, that the 24 lots used for governmental
purposes are also registered is of no
significance since registration cannot convert
public property to private. 16
We are more inclined to uphold this
latter view. The controversy here is more along
the domains of the Law of Municipal
Corporations — State vs. Province — than
along that of Civil Law. Moreover, this Court is
not inclined to hold that municipal property
held and devoted to public service is in the
same category as ordinary private property.
The consequences are dire. As ordinary
private properties, they can be levied upon
and attached. They can even be acquired thru
adverse possession — all these to the
detriment of the local community. Lastly, the
classification of properties other than those for
public use in the municipalities as patrimonial
under Art. 424 of the Civil Code — is "...
without prejudice to the provisions of special
laws." For purpose of this article, the
principles, obtaining under the Law of
Municipal Corporations can be considered as
"special laws". Hence, the classification of
municipal property devoted for distinctly
governmental purposes as public should
prevail over the Civil Code classification in this
particular case.
Defendants' claim that plaintiff and its
predecessor-in-interest are "guilty of laches is
without merit. Under Commonwealth Act 39,
Sec. 50, the cause of action in favor of the
defunct Zamboanga Province arose only in
1949 after the Auditor General fixed the value
of the properties in question. While in 1951,
the Cabinet resolved transfer said properties
practically for free to Zamboanga City, a
reconsideration thereof was seasonably
sought. In 1952, the old province was
dissolved. As successor-in-interest to more
than half of the properties involved,
Zamboanga del Norte was able to get a
reconsideration of the Cabinet Resolution in
1959. In fact, partial payments were effected
subsequently and it was only after the
passage of Republic Act 3039 in 1961 that the
present controversy arose. Plaintiff brought
suit in 1962. All the foregoing, negative
laches.
It results then that Zamboanga del
Norte is still entitled to collect from the City of
Zamboanga the former's 54.39% share in the
26 properties which are patrimonial in nature,
said share to computed on the basis of the
valuation of said 26 properties as contained in
Resolution No. 7, dated March 26, 1949, of
P a g e | 33
the Appraisal Committee formed by the
Auditor General.
Plaintiff's share, however, cannot be
paid in lump sum, except as to the
P43,030.11 already returned to defendant
City. The return of said amount to defendant
was without legal basis. Republic Act 3039
took effect only on June 17, 1961 after a
partial payment of P57,373.46 had already
been made. Since the law did not provide for
retroactivity, it could not have validly affected
a completed act. Hence, the amount of
P43,030.11 should be immediately returned
by defendant City to plaintiff province. The
remaining balance, if any, in the amount of
plaintiff's 54.39% share in the 26 lots should
then be paid by defendant City in the same
manner originally adopted by the Secretary of
Finance and the Commissioner of Internal
Revenue, and not in lump sum. Plaintiff's
prayer, particularly pars. 5 and 6, read
together with pars. 10 and 11 of the first
cause of action recited in the
complaint 17clearly shows that the relief
sought was merely the continuance of the
quarterly payments from the internal revenue
allotments of defendant City. Art. 1169 of the
Civil Code on reciprocal obligations invoked by
plaintiff to justify lump sum payment is
inapplicable since there has been so far in
legal contemplation no complete delivery of
the lots in question. The titles to the registered
lots are not yet in the name of defendant
Zamboanga City.
WHEREFORE, the decision appealed
from is hereby set aside and another judgment
is hereby entered as follows:.
(1) Defendant Zamboanga City is hereby
ordered to return to plaintiff Zamboanga del
Norte in lump sum the amount of P43,030.11
which the former took back from the latter out
of the sum of P57,373.46 previously paid to
the latter; and
(2) Defendants are hereby ordered to
effect payments in favor of plaintiff of whatever
balance remains of plaintiff's 54.39% share in
the 26 patrimonial properties, after deducting
therefrom the sum of P57,373.46, on the basis
of Resolution No. 7 dated March 26, 1949 of
the Appraisal Committee formed by the
Auditor General, by way of quarterly payments
from the allotments of defendant City, in the
manner originally adopted by the Secretary of
Finance and the Commissioner of Internal
Revenue. No costs. So ordered.
Reyes, J.B.L., Actg. C.J., Dizon, Makalintal,
Zaldivar, Sanchez, Castro, Angeles and

PROPERTY CASES: CLASSIFICATION OF PROPERTY
Fernando, JJ., concur.
Concepcion, C.J., is on leave.
EN BANC
19
G.R. No. L-29788 August 30, 1972
RAFAEL S. SALAS, in his capacity as
Executive Secretary; CONRADO F.
ESTRELLA, in his capacity as Governor of
the Land Authority; and LORENZO GELLA,
in his capacity as Register of Deeds of
Manila, petitioners-appellants,
vs.
HON. HILARION U. JARENCIO, as Presiding
Judge of Branch XXIII, Court of First
Instance of Manila; ANTONIO J. VILLEGAS,
in his capacity as Mayor of the City of
Manila; and the CITY OF
MANILA, respondents-appellees.
Office of the Solicitor General Felix V.
Makasiar, Assistant Solicitor-General Antonio
A. Torres, Solicitor Raul I. Goco and Magno B.
Pablo & Cipriano A. Tan, Legal Staff, Land
Authority for petitioners-appellants.
Gregorio A. Ejercito and Felix C. Chavez for
respondents-appellees.
ESGUERRA, J.:p
This is a petition for review of the decision of
the Court of First Instance of Manila, Branch
XXIII, in Civil Case No. 67946, dated
September 23, 1968, the dispositive portion of
which is as follows:
WHEREFORE, the Court renders
judgment declaring Republic Act
No. 4118 unconstitutional and
invalid in that it deprived the
City of Manila of its property
without due process and
payment of just compensation.
Respondent Executive Secretary
and Governor of the Land
Authority are hereby restrained
and enjoined from implementing
the provisions of said law.
Respondent Register of Deeds of
the City of Manila is ordered to
cancel Transfer Certificate of
Title No. 80876 which he had
issued in the name of the Land
Tenure Administration and
reinstate Transfer Certificate of
Title No. 22547 in the name of
P a g e | 34
the City of Manila which he
cancelled, if that is feasible, or
issue a new certificate of title for
the same parcel of land in the
name of the City of Manila.1
The facts necessary for a clear understanding
of this case are as follows:
On February 24, 1919, the 4th Branch of the
Court of First Instance of Manila, acting as a
land registration court, rendered judgment in
Case No. 18, G.L.R.O. Record No. 111,
declaring the City of Manila the owner in fee
simple of a parcel of land known as Lot No. 1,
Block 557 of the Cadastral Survey of the City
of Mani1a, containing an area of 9,689.8
square meters, more or less. Pursuant to said
judgment the Register of Deeds of Manila on
August 21, 1920, issued in favor of the City of
Manila, Original Certificate of Title No. 4329
covering the aforementioned parcel of land.
On various dates in 1924, the City of Manila
sold portions of the aforementioned parcel of
land in favor of Pura Villanueva. As a
consequence of the transactions Original
Certificate of Title No. 4329 was cancelled and
transfer certificates of title were issued in
favor of Pura Villanueva for the portions
purchased by her. When the last sale to Pura
Villanueva was effected on August 22, 1924,
Transfer Certificate of Title No. 21974 in the
name of the City of Manila was cancelled and
in lieu thereof Transfer Certificate of Title
(TCT) No. 22547 covering the residue thereof
known as Lot 1-B-2-B of Block 557, with an
area of 7,490.10 square meters, was issued in
the name of the City of Manila.
On September 21, 1960, the Municipal Board
of Manila, presided by then Vice-Mayor
Antono J. Villegas, adopted a resolution
requesting His Excellency, the President of the
Philippines to consider the feasibility of
declaring the City property bounded by
Florida, San Andres, and Nebraska Streets,
under Transfer Certificate of Title Nos. 25545
and 22547, containing a total area of 7,450
square meters as a patrimonial property of the
City of Manila for the purpose of reselling
these lots to the actual occupants thereof.2
The said resolution of the Municipil Board of
the City of Manila was officially transmitted to
the President of the Philippines by then Vice-
Mayor Antonio J. Villegas on September 21,
1960, with the information that the same
resolution was, on the same date, transmitted
to the Senate and House of Representatives of
the Congress of the Philippines.3

PROPERTY CASES: CLASSIFICATION OF PROPERTY
During the First Session of the Fifth Congress
of the Philippines, House Bill No. 191 was filed
in the House of Representatives by then
Congressman Bartolome Cabangbang seeking
to declare the property in question as
patrimonial property of the City of Manila, and
for other purposes. The explanatory note of
the Bill gave the grounds for its enactment, to
wit:
In the particular case of the
property subject of this bill, the
City of Manila does not seem to
have use thereof as a public
communal property. As a matter
of fact, a resolution was adopted
by the Municipal Board of Manila
at its regular session held on
September 21, 1960, to request
the feasibility of declaring the
city property bounded by Florida,
San Andres and Nebraska
Streets as a patrimonial
property of the City of Manila for
the purpose of reselling these
lots to the actual occupants
thereof. Therefore, it will be to
the best interest of society that
the said property be used in one
way or another. Since this
property has been occupied for a
long time by the present
occupants thereof and since said
occupants have expressed their
willingness to buy the said
property, it is but proper that the
same be sold to them.4
Subsequently, a revised version of the Bill was
introduced in the House of Representatives by
Congressmen Manuel Cases, Antonio Raquiza
and Nicanor Yñiguez as House Bill No. 1453,
with the following explanatory note:
The accompanying bill seeks to
convert one (1) parcel of land in
the district of Malate, which is
reserved as communal property
into a disposable or alienable
property of the State and to
provide its subdivision and sale
to bona fide occupants or
tenants.
This parcel of land in question
was originally an aggregate part
of a piece of land with an area of
9,689.8 square meters, more or
less. ... On September 21, 1960,
the Municipal Board of Manila in
its regular session unanimously
adopted a resolution requesting
P a g e | 35
the President of the Philippines
and Congress of the Philippines
the feasibility of declaring this
property into disposable or
alienable property of the State.
There is therefore a precedent
that this parcel of land could be
subdivided and sold to bona fide
occupants. This parcel of land
will not serve any useful public
project because it is bounded on
all sides by private properties
which were formerly parts of this
lot in question.
Approval of this bill will
implement the policy of the
Administration of land for the
landless and the Fifth
Declaration of Principles of the
Constitution, which states that
the promotion of Social Justice
to insure the well-being and
economic security of all people
should be the concern of the
State. We are ready and willing
to enact legislation promoting
the social and economic well-
being of the people whenever an
opportunity for enacting such
kind of legislation arises.
In view of the foregoing consideration and to
insure fairness and justice to the present bona
fide occupants thereof, approval of this Bill is
strongly urged.5
The Bill having been passed by the House of
Representatives, the same was thereafter sent
to the Senate where it was thoroughly
discussed, as evidenced by the Congressional
Records for May 20, 1964, pertinent portion of
which is as follows:
SENATOR FERNANDEZ: Mr.
President, it will be re called that
when the late Mayor Lacson was
still alive, we approved a similar
bill. But afterwards, the late
Mayor Lacson came here and
protested against the approval,
and the approval was
reconsidered. May I know
whether the defect in the bill
which we approved, has already
been eliminated in this present
bill?
SENATOR TOLENTINO: I
understand Mr. President, that
that has already been eliminated
and that is why the City of

PROPERTY CASES: CLASSIFICATION OF PROPERTY
Manila has no more objection to
this bill.
SENATOR FERNANDEZ: Mr.
President, in view of that
manifestation and considering
that Mayor Villegas and
Congressman Albert of the
Fourth District of Manila are in
favor of the bill. I would not want
to pretend to know more what is
good for the City of Manila.
SENATOR TOLENTINO: Mr.
President, there being no
objection, I move that we
approve this bill on second
reading.
PRESIDENT PRO-TEMPORE: The
biII is approved on second
reading after several Senetors
said aye and nobody said nay.
The bill was passed by the Senate, approved
by the President on June 20, 1964, and
became Republic Act No. 4118. It reads as
follows:
Lot I-B-2-B of Block 557 of the
cadastral survey of the City of
Manila, situated in the District of
Malate, City of Manila, which is
reserved as communal property,
is hereby converted into disposal
or alienable land of the State, to
be placed under the disposal of
the Land Tenure Administration.
The Land Tenure Administration
shall subdivide the property into
small lots, none of which shall
exceed one hundred and twenty
square meters in area and sell
the same on installment basis to
the tenants or bona fide
occupants thereof and to
individuals, in the order
mentioned: Provided, That no
down payment shall be required
of tenants or bona
fide occupants who cannot afford
to pay such down
payment: Provided, further, That
no person can purchase more
than one lot: Provided,
furthermore, That if the tenant
or bona fide occupant of any
given lot is not able to purchase
the same, he shall be given a
lease from month to month until
such time that he is able to
purchase the lot: Provided, still
P a g e | 36
further, That in the event of lease
the rentals which may be
charged shall not exceed eight
per cent per annum of the
assessed value of the property
leased: And provided, finally,
That in fixing the price of each
lot, which shall not exceed
twenty pesos per square meter,
the cost of subdivision and
survey shall not be included.
Sec. 2. Upon approval of this Act
no ejectment proceedings against
any tenant or bona fide occupant
of the above lots shall be
instituted and any ejectment
proceedings pending in court
against any such tenant or bona
fide occupant shall be dismissed
upon motion of the defendant:
Provided, That any demolition
order directed against any tenant
or bona fide occupant shall be
lifted.
Sec. 3. Upon approval of this Act,
if the tenant or bona
fide occupant is in arrears in the
payment of any rentals, the
amount legally due shall be
liquidated and shall be payable
in twenty-four equal monthly
installments from the date of
liquidation.
Sec. 4. No property acquired by
virtue of this Act shall be
transferred, sold, mortgaged, or
otherwise disposed of within a
period of five years from the date
full ownership thereof has been
vested in the purchaser without
the consent of the Land Tenure
Administration.
Sec. 5. In the event of the death
of the purchaser prior to the
complete payment of the price of
the lot purchased by him, his
widow and children shall
succeed in all his rights and
obligations with respect to his
lot.
Sec. 6. The Chairman of the
Land Tenure Administration
shall implement and issue such
rules and regulations as may be
necessary to carry out the
provisions of this Act.

PROPERTY CASES: CLASSIFICATION OF PROPERTY
Sec. 7. The sum of one hundred
fifty thousand pesos is
appropriated out of any funds in
the National Treasury not
otherwise appropriated, to carry
out the purposes of this Act.
Sec. 8. All laws or parts of laws
inconsistent with this Act are
repealed or modified accordingly.
Sec. 9. This Act shall take effect
upon its approval.
Approved, June 20, 1964.
To implement the provisions of Republic Act
No. 4118, and pursuant to the request of the
occupants of the property involved, then
Deputy Governor Jose V. Yap of the Land
Authority (which succeeded the Land Tenure
Administration) addressed a letter, dated
February 18, 1965, to Mayor Antonio Villegas,
furnishing him with a copy of the proposed
subdivision plan of said lot as prepared for the
Republic of the Philippines for resale of the
subdivision lots by the Land Authority to bona
fide applicants.6
On March 2, 1965, the City Mayor of Manila,
through his Executive and Technical Adviser,
acknowledged receipt of the proposed
subdivision plan of the property in question
and informed the Land Authority that his
office would interpose no objection to the
implementation of said law, provided that its
provisions be strictly complied with.7
With the above-mentioned written conformity
of the City of Manila for the implementation of
Republic Act No. 4118, the Land Authority,
thru then Deputy Governor Jose V. Yap,
requested the City Treasurer of Manila, thru
the City Mayor, for the surrender and delivery
to the former of the owner's duplicate of
Transfer Certificate of Title No. 22547 in order
to obtain title thereto in the name of the Land
Authority. The request was duly granted with
the knowledge and consent of the Office of the
City Mayor.8
With the presentation of Transfer Certificate of
Title No. 22547, which had been yielded as
above stated by the, City authorities to the
Land Authority, Transfer Certificate of Title
(T.C.T. No. 22547) was cancelled by the
Register of Deeds of Manila and in lieu thereof
Transfer Certificate of Title No. 80876 was
issued in the name of the Land Tenure
Administration (now Land Authority) pursuant
to the provisions of Republic Act No.
4118.9
P a g e | 37
But due to reasons which do not appear in the
record, the City of Manila made a complete
turn-about, for on December 20, 1966,
Antonio J. Villegas, in his capacity as the City
Mayor of Manila and the City of Manila as a
duly organized public corporation, brought an
action for injunction and/or prohibition with
preliminary injunction to restrain, prohibit
and enjoin the herein appellants, particularly
the Governor of the Land Authority and the
Register of Deeds of Manila, from further
implementing Republic Act No. 4118, and
praying for the declaration of Republic Act No.
4118 as unconstitutional.
With the foregoing antecedent facts, which are
all contained in the partial stipulation of facts
submitted to the trial court and approved by
respondent Judge, the parties waived the
presentation of further evidence and
submitted the case for decision. On September
23, 1968, judgment was rendered by the trial
court declaring Republic Act No. 4118
unconstitutional and invalid on the ground
that it deprived the City of Manila of its
property without due process of law and
payment of just compensation. The
respondents were ordered to undo all that had
been done to carry out the provisions of said
Act and were restrained from further
implementing the same.
Two issues are presented for determination,
on the resolution of which the decision in this
case hinges, to wit:
I. Is the property involved private
or patrimonial property of the
City of Manila?
II. Is Republic Act No. 4118 valid
and not repugnant to the
Constitution?
I.
As regards the first issue, appellants maintain
that the land involved is a communal land or
"legua comunal" which is a portion of the
public domain owned by the State; that it
came into existence as such when the City of
Manila, or any pueblo or town in the
Philippines for that matter, was founded
under the laws of Spain, the former sovereign;
that upon the establishment of a pueblo, the
administrative authority was required to allot
and set aside portions of the public domain for
a public plaza, a church site, a site for public
buildings, lands to serve as common pastures
and for streets and roads; that in assigning
these lands some lots were earmarked for
strictly public purposes, and ownership of

PROPERTY CASES: CLASSIFICATION OF PROPERTY
these lots (for public purposes) immediately
passed to the new municipality; that in the
case of common lands or "legua comunal",
there was no such immediate acquisition of
ownership by the pueblo, and the land though
administered thereby, did not automatically
become its property in the absence of an
express grant from the Central Government,
and that the reason for this arrangement is
that this class of land was not absolutely
needed for the discharge of the municipality's
governmental functions.
It is argued that the parcel of land involved
herein has not been used by the City of Manila
for any public purpose and had not been
officially earmarked as a site for the erection
of some public buildings; that this
circumstance confirms the fact that it was
originally "communal" land alloted to the City
of Manila by the Central Government not
because it was needed in connection with its
organization as a municipality but simply for
the common use of its inhabitants; that the
present City of Manila as successor of the
Ayuntamiento de Manila under the former
Spanish sovereign merely enjoys the usufruct
over said land, and its exercise of acts of
ownership by selling parts thereof did not
necessarily convert the land into a patrimonial
property of the City of Manila nor divest the
State of its paramount title.
Appellants further argue that a municipal
corporation, like a city is a governmental
agent of the State with authority to govern a
limited portion of its territory or to administer
purely local affairs in a given political
subdivision, and the extent of its authority is
strictly delimited by the grant of power
conferred by the State; that Congress has the
exclusive power to create, change or destroy
municipal corporations; that even if We admit
that legislative control over municipal
corporations is not absolute and even if it is
true that the City of Manila has a registered
title over the property in question, the mere
transfer of such land by an act of the
legislature from one class of public land to
another, without compensation, does not
invade the vested rights of the City.
Appellants finally argue that Republic Act No.
4118 has treated the land involved as one
reserved for communal use, and this
classification is conclusive upon the courts;
that if the City of Manila feels that this is
wrong and its interests have been thereby
prejudiced, the matter should be brought to
the attention of Congress for correction; and
that since Congress, in the exercise of its wide
discretionary powers has seen fit to classify
P a g e | 38
the land in question as communal, the Courts
certainly owe it to a coordinate branch of the
Government to respect such determination
and should not interfere with the enforcement
of the law.
Upon the other hand, appellees argue by
simply quoting portions of the appealed
decision of the trial court, which read thus:
The respondents (petitioners-
appellants herein) contend,
among other defenses, that the
property in question is
communal property. This
contention is, however, disproved
by Original Certificate of Title No.
4329 issued on August 21, 1920
in favor of the City of Manila
after the land in question was
registered in the City's favor. The
Torrens Title expressly states
that the City of Manila was the
owner in 'fee simple' of the said
land. Under Sec. 38 of the Land
Registration Act, as amended,
the decree of confirmation and
registration in favor of the City of
Manila ... shall be conclusive
upon and against all persons
including the Insular
Government and all the
branches there ... There is
nothing in the said certificate of
title indicating that the land was
'communal' land as contended
by the respondents. The
erroneous assumption by the
Municipal Board of Manila that
the land in question was
communal land did not make it
so. The Municipal Board had no
authority to do that.
The respondents, however,
contend that Congress had the
power and authority to declare
that the land in question was
'communal' land and the courts
have no power or authority to
make a contrary finding. This
contention is not entirely correct
or accurate. Congress has the
power to classify 'land of the
public domain', transfer them
from one classification to
another and declare them
disposable or not. Such power
does not, however, extend to
properties which are owned by
cities, provinces and

PROPERTY CASES: CLASSIFICATION OF PROPERTY
municipalities in their
'patrimonial' capacity.
Art. 324 of the Civil Code
provides that properties of
provinces, cities and
municipalities are divided into
properties for public use and
patrimonial property. Art. 424 of
the same code provides that
properties for public use consist
of provincial roads, city streets,
municipal streets, the squares,
fountains, public waters,
promenades and public works
for public service paid for by said
province, cities or municipalities.
All other property possessed by
any of them is patrimonial.
Tested by this criterion the Court
finds and holds that the land in
question is patrimonial property
of the City of Manila.
Respondents contend that
Congress has declared the land
in question to be 'communal'
and, therefore, such designation
is conclusive upon the courts.
The Courts holds otherwise.
When a statute is assailed as
unconstitutional the Courts have
the power and authority to
inquire into the question and
pass upon it. This has long ago
been settled in Marbury vs.
Madison, 2 L. ed. 60, when the
United States Supreme Court
speaking thru Chief Justice
Marshall held:
... If an act of the
legislature,
repugnant to the
constitution, is
void, does it,
notwithstanding its
validity, bind the
courts, and oblige
them to give effect?
It is emphatically
the province and
duty of the judicial
department to say
what the law is ...
So if a law be in
opposition to the
constitution; if both
the law and the
constitution apply
to a particular case,
so that the court
P a g e | 39
must either decide
that case
conformable to the
constitution,
disregarding the
law, the court must
determine which of
these conflicting
rules governs the
case. This is of the
very essence of
unconstitutional
judicial duty.
Appellees finally concluded that when the
courts declare a law unconstitutional it does
not mean that the judicial power is superior to
the legislative power. It simply means that the
power of the people is superior to both and
that when the will of the legislature, declared
in statutes, stands in opposition to that of the
people, declared in the Constitution, the
judges ought to be governed by the
Constitution rather than by the statutes.
There is one outstanding factor that should be
borne in mind in resolving the character of the
land involved, and it is that the City of Manila,
although declared by the Cadastral Court as
owner in fee simple, has not shown by any
shred of evidence in what manner it acquired
said land as its private or patrimonial
property. It is true that the City of Manila as
well as its predecessor, the Ayuntamiento de
Manila, could validly acquire property in its
corporate or private capacity, following the
accepted doctrine on the dual character —
public and private — of a municipal
corporation. And when it acquires property in
its private capacity, it acts like an ordinary
person capable of entering into contracts or
making transactions for the transmission of
title or other real rights. When it comes to
acquisition of land, it must have done so
under any of the modes established by law for
the acquisition of ownership and other real
rights. In the absence of a title deed to any
land claimed by the City of Manila as its own,
showing that it was acquired with its private
or corporate funds, the presumption is that
such land came from the State upon the
creation of the municipality (Unson vs.
Lacson, et al., 100 Phil. 695). Originally the
municipality owned no patrimonial property
except those that were granted by the State
not for its public but for private use. Other
properties it owns are acquired in the course
of the exercise of its corporate powers as a
juridical entity to which category a municipal
corporation pertains.

PROPERTY CASES: CLASSIFICATION OF PROPERTY
Communal lands or "legua comunal" came
into existence when a town or pueblo was
established in this country under the laws of
Spain (Law VII, Title III, Book VI, Recopilacion
de las Leyes de Indios). The municipalities of
the Philippines were not entitled, as a matter
of right, to any part of the public domain for
use as communal lands. The Spanish law
provided that the usufruct of a portion of the
public domain adjoining municipal territory
might be granted by the Government for
communal purposes, upon proper petition,
but, until granted, no rights therein passed to
the municipalities, and, in any event, the
ultimate title remained in the sovereign (City
of Manila vs. Insular Government, 10 Phil.
327).
For the establishment, then, of
new pueblos the administrative
authority of the province, in
representation of the Governor
General, designated the territory
for their location and extension
and the metes and bounds of the
same; and before alloting the
lands among the new settlers, a
special demarcation was made of
the places which were to serve as
the public square of the pueblo,
for the erection of the church,
and as sites for the public
buildings, among others, the
municipal building or the casa
real, as well as of the lands
whick were to constitute the
common pastures, and propios
of the municipality and the
streets and roads which were to
intersect the new town were laid
out, ... . (Municipality of
Catbalogan vs. Director of Lands,
17 Phil. 216, 220) (Emphasis
supplied)
It may, therefore, be laid down as a general
rule that regardless of the source or
classification of land in the possession of a
municipality, excepting those acquired with its
own funds in its private or corporate capacity,
such property is held in trust for the State for
the benefit of its inhabitants, whether it be for
governmental or proprietary purposes. It holds
such lands subject to the paramount power of
the legislature to dispose of the same, for after
all it owes its creation to it as an agent for the
performance of a part of its public work, the
municipality being but a subdivision or
instrumentality thereof for purposes of local
administration. Accordingly, the legal
situation is the same as if the State itself
holds the property and puts it to a different
use (2 McQuilin,Municipal Corporations, 3rd
P a g e | 40
Ed., p. 197, citing Monagham vs. Armatage,
218 Minn. 27, 15 N. W. 2nd 241).
True it is that the legislative control over a
municipal corporation is not absolute even
when it comes to its property devoted to public
use, for such control must not be exercised to
the extent of depriving persons of their
property or rights without due process of law,
or in a manner impairing the obligations of
contracts. Nevertheless, when it comes to
property of the municipality which it did not
acquire in its private or corporate capacity
with its own funds, the legislature can
transfer its administration and disposition to
an agency of the National Government to be
disposed of according to its discretion. Here it
did so in obedience to the constitutional
mandate of promoting social justice to insure
the well-being and economic security of the
people.
It has been held that a statute authorizing the
transfer of a Municipal airport to an Airport
Commission created by the legislature, even
without compensation to the city, was not
violative of the due process clause of the
American Federal Constitution. The Supreme
Court of Minnessota in Monagham vs.
Armatage, supra, said:
... The case is controlled by the
further rule that the legislature,
having plenary control of the
local municipality, of its creation
and of all its affairs, has the
right to authorize or direct the
expenditures of money in its
treasury, though raised, for a
particular purpose, for any
legitimate municipal purpose, or
to order and direct a distribution
thereof upon a division of the
territory into separate
municipalities ... . The local
municipality has no such vested
right in or to its public funds,
like that which the Constitution
protects in the individual as
precludes legislative
interferences. People vs. Power,
25 Ill. 187; State Board (of
Education) vs. City, 56 Miss.
518. As remarked by the
supreme court of Maryland
in Mayor vs. Sehner, 37 Md. 180:
"It is of the essence of such a
corporation, that the government
has the sole right as trustee of
the public interest, at its own
good will and pleasure, to
inspect, regulate, control, and

PROPERTY CASES: CLASSIFICATION OF PROPERTY
direct the corporation, its funds,
and franchises."
We therefore hold that c.500, in
authorizing the transfer of the
use and possession of the
municipal airport to the
commission without
compensation to the city or to
the park board, does not violate
the Fourteenth Amendment to
the Constitution of the United
States.
The Congress has dealt with the land involved
as one reserved for communal use (terreno
comunal). The act of classifying State property
calls for the exercise of wide discretionary
legislative power and it should not be
interfered with by the courts.
This brings Us to the second question as
regards the validity of Republic Act No. 4118,
viewed in the light of Article III, Sections 1,
subsection (1) and (2) of the Constitution
which ordain that no person shall be deprived
of his property without due process of law and
that no private property shall be taken for
public use without just compensation.
II .
The trial court declared Republic Act No. 4118
unconstitutional for allegedly depriving the
City of Manila of its property without due
process of law and without payment of just
compensation. It is now well established that
the presumption is always in favor of the
constitutionality of a law (U S. vs. Ten Yu, 24
Phil. 1; Go Ching, et al. vs. Dinglasan, et al.,
45 O.G. No. 2, pp. 703, 705). To declare a law
unconstitutional, the repugnancy of that law
to the Constitution must be clear and
unequivocal, for even if a law is aimed at the
attainment of some public good, no
infringement of constitutional rights is
allowed. To strike down a law there must be a
clear showing that what the fundamental law
condemns or prohibits, the statute allows it to
be done (Morfe vs. Mutuc, et al., G.R. No. L-
20387, Jan. 31, 1968; 22 SCRA 424). That
situation does not obtain in this case as the
law assailed does not in any manner trench
upon the constitution as will hereafter be
shown. Republic Act No. 4118 was intended to
implement the social justice policy of the
Constitution and the Government program of
"Land for the Landless". The explanatory note
of House Bill No. 1453 which became Republic
Act No. 4118, reads in part as follows:
P a g e | 41
Approval of this bill will
implement the policy of the
administration of "land for the
landless" and the Fifth
Declaration of Principles of the
Constitution which states that
"the promotion of social justice
to insure the well-being and
economic security of all people
should be the concern of the
State." We are ready and willing
to enact legislation promoting
the social and economic well-
being of the people whenever an
opportunity for enacting such
kind of legislation arises.
The respondent Court held that Republic Act
No. 4118, "by converting the land in question
— which is the patrimonial property of the
City of Manila into disposable alienable land of
the State and placing it under the disposal of
the Land Tenure Administration — violates
the provisions of Article III (Secs. 1 and 2) of
the Constitution which ordain that "private
property shall not be taken for public use
without just compensation, and that no
person shall be deprived of life, liberty or
property without due process of law". In
support thereof reliance is placed on the
ruling in Province of Zamboanga del Norte vs.
City of Zamboanga, G.R. No. 2440, March 28,
1968; 22 SCRA 1334, which holds that
Congress cannot deprive a municipality of its
private or patrimonial property without due
process of law and without payment of just
compensation since it has no absolute control
thereof. There is no quarrel over this rule if it
is undisputed that the property sought to be
taken is in reality a private or patrimonial
property of the municipality or city. But it
would be simply begging the question to
classify the land in question as such. The
property, as has been previously shown, was
not acquired by the City of Manila with its
own funds in its private or proprietary
capacity. That it has in its name a registered
title is not questioned, but this title should be
deemed to be held in trust for the State as the
land covered thereby was part of the territory
of the City of Manila granted by the sovereign
upon its creation. That the National
Government, through the Director of Lands,
represented by the Solicitor General, in the
cadastral proceedings did not contest the
claim of the City of Manila that the land is its
property, does not detract from its character
as State property and in no way divests the
legislature of its power to deal with it as such,
the state not being bound by the mistakes
and/or negligence of its officers.

PROPERTY CASES: CLASSIFICATION OF PROPERTY
One decisive fact that should be noted is that
the City of Manila expressly recognized the
paramount title of the State over said land
when by its resolution of September 20, 1960,
the Municipal Board, presided by then Vice-
Mayor Antonio Villegas, requested "His
Excellency the President of the Philippines to
consider the feasibility of declaring the city
property bounded by Florida, San Andres and
Nebraska Streets, under Transfer Certificate of
Title Nos. 25545 and 25547, containing an
area of 7,450 square meters, as patrimonial
property of the City of Manila for the purpose
of reselling these lots to the actual occupants
thereof." (See Annex E, Partial Stipulation of
Facts, Civil Case No. 67945, CFI, Manila, p.
121, Record of the Case) [Emphasis Supplied]
The alleged patrimonial character of the land
under the ownership of the City of Manila is
totally belied by the City's own official act,
which is fatal to its claim since the Congress
did not do as bidden. If it were its patrimonial
property why should the City of Manila be
requesting the President to make
representation to the legislature to declare it
as such so it can be disposed of in favor of the
actual occupants? There could be no more
blatant recognition of the fact that said land
belongs to the State and was simply granted
in usufruct to the City of Manila for municipal
purposes. But since the City did not actually
use said land for any recognized public
purpose and allowed it to remain idle and
unoccupied for a long time until it was
overrun by squatters, no presumption of State
grant of ownership in favor of the City of
Manila may be acquiesced in to justify the
claim that it is its own private or patrimonial
property (Municipality of Tigbauan vs. Director
of Lands, 35 Phil. 798; City of Manila vs.
Insular Government, 10 Phil. 327;
Municipality of Luzuriaga vs. Director of
Lands, 24 Phil. 193). The conclusion of the
respondent court that Republic Act No. 4118
converted a patrimonial property of the City of
Manila into a parcel of disposable land of the
State and took it away from the City without
compensation is, therefore, unfounded. In the
last analysis the land in question pertains to
the State and the City of Manila merely acted
as trustee for the benefit of the people therein
for whom the State can legislate in the
exercise of its legitimate powers.
Republic Act No. 4118 was never intended to
expropriate the property involved but merely
to confirm its character as communal land of
the State and to make it available for
disposition by the National Government: And
this was done at the instance or upon the
request of the City of Manila itself. The
subdivision of the land and conveyance of the
P a g e | 42
resulting subdivision lots to the occupants by
Congressional authorization does not operate
as an exercise of the power of eminent domain
without just compensation in violation of
Section 1, subsection (2), Article III of the
Constitution, but simply as a manifestation of
its right and power to deal with state property.
It should be emphasized that the law assailed
was enacted upon formal written petition of
the Municipal Board of Manila in the form of a
legally approved resolution. The certificate of
title over the property in the name of the City
of Manila was accordingly cancelled and
another issued to the Land Tenure
Administration after the voluntary surrender
of the City's duplicate certificate of title by the
City Treasurer with the knowledge and
consent of the City Mayor. To implement the
provisions of Republic Act No. 4118, the then
Deputy Governor of the Land Authority sent a
letter, dated February 18, 1965, to the City
Mayor furnishing him with a copy of the
"proposed subdivision plan of the said lot as
prepared for the Republic of the Philippines
for subdivision and resale by the Land
Authority to bona fide applicants." On March
2, 1965, the Mayor of Manila, through his
Executive and Technical Adviser,
acknowledged receipt of the subdivision plan
and informed the Land Authority that his
Office "will interpose no objection to the
implementation of said law provided that its
provisions are strictly complied with." The
foregoing sequence of events, clearly indicate a
pattern of regularity and observance of due
process in the reversion of the property to the
National Government. All such acts were done
in recognition by the City of Manila of the
right and power of the Congress to dispose of
the land involved.
Consequently, the City of Manila was not
deprived of anything it owns, either under the
due process clause or under the eminent
domain provisions of the Constitution. If it
failed to get from the Congress the concession
it sought of having the land involved given to
it as its patrimonial property, the Courts
possess no power to grant that relief. Republic
Act No. 4118 does not, therefore, suffer from
any constitutional infirmity.
WHEREFORE, the appealed decision is hereby
reversed, and petitioners shall proceed with
the free and untrammeled implementation of
Republic Act No. 4118 without any obstacle
from the respondents. Without costs.
Concepcion, C.J., Makalintal, Zaldivar,
Castro, Fernando, Teehankee and Antonio,
JJ., concur.

PROPERTY CASES: CLASSIFICATION OF PROPERTY
Barredo and Makasiar, JJ., took no part.
SECOND DIVISION
20
G.R. No. L40474 August 29, 1975
CEBU OXYGEN & ACETYLENE CO.,
INC., petitioner,
vs.
HON. PASCUAL A. BERCILLES Presiding
Judge, Branch XV, 14th Judicial District,
and JOSE L. ESPELETA, Assistant
Provincial Fiscal, Province of Cebu,
representing the Solicitor General's Office
and the Bureau of Lands, respondents.
Jose Antonio R Conde for petitioner.
Office of the Acting Solicitor General Hugo E.
Gutierrez, Jr., Assistant Solicitor General
Octavio R. Ramirez and Trial Attorney David
R. Hilario for respondents. .
CONCEPCION, Jr., J.:
This is a petition for the review of the order of
the Court of First Instance of Cebu dismissing
petitioner's application for registration of title
over a parcel of land situated in the City of
Cebu.
The parcel of land sought to be registered was
only a portion of M. Borces Street, Mabolo,
Cebu City. On September 23, 1968, the City
Council of Cebu, through Resolution No.
2193, approved on October 3, 1968, declared
the terminal portion of M. Borces Street,
Mabolo, Cebu City, as an abandoned road, the
same not being included in the City
Development Plan.1 Subsequently, on
December 19, 1968, the City Council of Cebu
passed Resolution No. 2755, authorizing the
Acting City Mayor to sell the land through a
public bidding.2 Pursuant thereto, the lot was
awarded to the herein petitioner being the
highest bidder and on March 3, 1969, the City
of Cebu, through the Acting City Mayor,
executed a deed of absolute sale to the herein
petitioner for a total consideration of
P10,800.00.3 By virtue of the aforesaid deed of
absolute sale, the petitioner filed an
application with the Court of First instance of
Cebu to have its title to the land registered.4
On June 26, 1974, the Assistant Provincial
Fiscal of Cebu filed a motion to dismiss the
application on the ground that the property
sought to be registered being a public road
P a g e | 43
intended for public use is considered part of
the public domain and therefore outside the
commerce of man. Consequently, it cannot be
subject to registration by any private
individual.5
After hearing the parties, on October 11, 1974
the trial court issued an order dismissing the
petitioner's application for registration of
title.6 Hence, the instant petition for review.
For the resolution of this case, the petitioner
poses the following questions:
(1) Does the City Charter of Cebu
City (Republic Act No. 3857)
under Section 31, paragraph 34,
give the City of Cebu the valid
right to declare a road as
abandoned? and
(2) Does the declaration of the
road, as abandoned, make it the
patrimonial property of the City
of Cebu which may be the object
of a common contract?
(1) The pertinent portions of the Revised
Charter of Cebu City provides:
Section 31. Legislative Powers.
Any provision of law and
executive order to the contrary
notwithstanding, the City
Council shall have the following
legislative powers:
xxx xxx xxx
(34) ...; to close any city road,
street or alley, boulevard,
avenue, park or square. Property
thus withdrawn from public
servitude may be used or
conveyed for any purpose for
which other real property
belonging to the City may be
lawfully used or conveyed.
From the foregoing, it is undoubtedly clear
that the City of Cebu is empowered to close a
city road or street. In the case of Favis vs. City
of Baguio,7 where the power of the city Council
of Baguio City to close city streets and to
vacate or withdraw the same from public use
was similarly assailed, this court said:
5. So it is, that appellant may
not challenge the city council's
act of withdrawing a strip of
Lapu-Lapu Street at its dead end
from public use and converting

PROPERTY CASES: CLASSIFICATION OF PROPERTY
the remainder thereof into an
alley. These are acts well within
the ambit of the power to close a
city street. The city council, it
would seem to us, is the
authority competent to
determine whether or not a
certain property is still necessary
for public use.
Such power to vacate a street or
alley is discretionary. And the
discretion will not ordinarily be
controlled or interfered with by
the courts, absent a plain case of
abuse or fraud or collusion.
Faithfulness to the public trust
will be presumed. So the fact
that some private interests may
be served incidentally will not
invalidate the vacation
ordinance.
(2) Since that portion of the city street subject
of petitioner's application for registration of
title was withdrawn from public use, it follows
that such withdrawn portion becomes
patrimonial property which can be the object
of an ordinary contract.
Article 422 of the Civil Code expressly
provides that "Property of public dominion,
when no longer intended for public use or for
public service, shall form part of the
patrimonial property of the State."
Besides, the Revised Charter of the City of
Cebu heretofore quoted, in very clear and
unequivocal terms, states that: "Property thus
withdrawn from public servitude may be used
or conveyed for any purpose for which other
real property belonging to the City may be
lawfully used or conveyed."
Accordingly, the withdrawal of the property in
question from public use and its subsequent
sale to the petitioner is valid. Hence, the
petitioner has a registerable title over the lot
in question.
WHEREFORE, the order dated October 11,
1974, rendered by the respondent court in
Land Reg. Case No. N-948, LRC Rec. No. N-
44531 is hereby set aside, and the respondent
court is hereby ordered to proceed with the
hearing of the petitioner's application for
registration of title.
SO ORDERED. FIRST DIVISION
21
P a g e | 44
G.R. No. L-61744 June 25, 1984
MUNICIPALITY OF SAN MIGUEL,
BULACAN, petitioner,
vs.
HONORABLE OSCAR C. FERNANDEZ, in his
capacity as the Presiding Judge, Branch IV,
Baliuag, Bulacan, The PROVINCIAL
SHERIFF of Bulacan, MARGARITA D. VDA.
DE IMPERIO, ADORACION IMPERIO,
RODOLFO IMPERIO, CONRADO IMPERIO,
ERNESTO IMPERIO, ALFREDO IMPERIO,
CARLOS IMPERIO, JR., JUAN IMPERIO and
SPOUSES MARCELO PINEDA and LUCILA
PONGCO, respondents.
Pascual C. Liatchko for petitioner.
The Solicitor General and Marcelo Pineda for
respondents.
RELOVA, J.:
In Civil Case No. 604-B, entitled "Margarita D.
Vda. de Imperio, et al. vs. Municipal
Government of San Miguel, Bulacan, et al.",
the then Court of First Instance of Bulacan,
on April 28, 1978, rendered judgment holding
herein petitioner municipality liable to private
respondents, as follows:
WHEREFORE, premises
considered, judgment is hereby
rendered in favor of the plaintiffs
and against the defendant
Municipal Government of San
Miguel Bulacan, represented by
Mayor Mar Marcelo G. Aure and
its Municipal Treasurer:
1. ordering the partial revocation
of the Deed of Donation signed
by the deceased Carlos Imperio
in favor of the Municipality of
San Miguel Bulacan, dated
October 27, 1947 insofar as Lots
Nos. 1, 2, 3, 4 and 5, Block 11 of
Subdivision Plan Psd-20831 are
concerned, with an aggregate
total area of 4,646 square
meters, which lots are among
those covered and described
under TCT No. T-1831 of the
Register of Deeds of Bulacan in
the name of the Municipal
Government of San Miguel
Bulacan,
2. ordering the defendant to
execute the corresponding Deed

PROPERTY CASES: CLASSIFICATION OF PROPERTY
of Reconveyance over the
aforementioned five lots in favor
of the plaintiffs in the proportion
of the undivided one-half (½)
share in the name of plaintiffs
Margarita D. Vda. de Imperio,
Adoracion, Rodolfo, Conrado,
Ernesto, Alfredo, Carlos, Jr. and
Juan, all surnamed Imperio, and
the remaining undivided one-half
(½) share in favor of plaintiffs
uses Marcelo E. Pineda and
Lucila Pongco;
3. ordering the defendant
municipality to pay to the
plaintiffs in the proportion
mentioned in the immediately
preceding paragraph the sum of
P64,440.00 corresponding to the
rentals it has collected from the
occupants for their use and
occupation of the premises from
1970 up to and including 1975,
plus interest thereon at the legal
rate from January 1970 until
fully paid;
4. ordering the restoration of
ownership and possession over
the five lots in question in favor
of the plaintiffs in the same
proportion aforementioned;
5. ordering the defendant to pay
the plaintiffs the sum of
P3,000.00 for attomey's fees; and
to pay the cost of suit.
The counterclaim of the
defendant is hereby ordered
dismissed for lack of evidence
presented to substantiate the
same.
SO ORDERED. (pp. 11-12, Rollo)
The foregoing judgment became final when
herein petitioner's appeal was dismissed due
to its failure to file the record on appeal on
time. The dismissal was affirmed by the then
Court of Appeals in CA-G.R. No. SP-12118
and by this Court in G.R. No. 59938.
Thereafter, herein private respondents moved
for issuance of a writ of execution for the
satisfaction of the judgment. Respondent
judge, on July 27, 1982, issued an order, to
wit:
Considering that an entry of
judgment had already been made
P a g e | 45
on June 14, 1982 in G. R. No. L-
59938 and;
Considering further that there is
no opposition to plaintiffs'
motion for execution dated July
23, 1983;
Let a writ of execution be so
issued, as prayed for in the
aforestated motion. (p. 10, Rollo)
Petitioner, on July 30, 1982, filed a Motion to
Quash the writ of execution on the ground
that the municipality's property or funds are
all public funds exempt from execution. The
said motion to quash was, however, denied by
the respondent judge in an order dated
August 23, 1982 and the alias writ of
execution stands in full force and effect.
On September 13, 1982, respondent judge
issued an order which in part, states:
It is clear and evident from the
foregoing that defendant has
more than enough funds to meet
its judgment obligation.
Municipal Treasurer Miguel C,
Roura of San Miguel, Bulacan
and Provincial Treasurer of
Bulacan Agustin O. Talavera are
therefor hereby ordered to
comply with the money judgment
rendered by Judge Agustin C.
Bagasao against said
municipality. In like manner, the
municipal authorities of San
Miguel, Bulacan are likewise
ordered to desist from plaintiffs'
legal possession of the property
already returned to plaintiffs by
virtue of the alias writ of
execution.
Finally, defendants are hereby
given an inextendible period of
ten (10) days from receipt of a
copy of this order by the Office of
the Provincial Fiscal of Bulacan
within which to submit their
written compliance, (p. 24, Rollo)
When the treasurers (provincial and
municipal) failed to comply with the order of
September 13, 1982, respondent judge issued
an order for their arrest and that they will be
release only upon compliance thereof.
Hence, the present petition on the issue
whether the funds of the Municipality of San
Miguel, Bulacan, in the hands of the

PROPERTY CASES: CLASSIFICATION OF PROPERTY
provincial and municipal treasurers of
Bulacan and San Miguel, respectively, are
public funds which are exempt from execution
for the satisfaction of the money judgment in
Civil Case No. 604-B.
Well settled is the rule that public funds are
not subject to levy and execution. The reason
for this was explained in the case of
Municipality of Paoay vs. Manaois, 86 Phil.
629 "that they are held in trust for the people,
intended and used for the accomplishment of
the purposes for which municipal
corporations are created, and that to subject
said properties and public funds to execution
would materially impede, even defeat and in
some instances destroy said purpose." And,
in Tantoco vs. Municipal Council of Iloilo, 49
Phil. 52, it was held that "it is the settled
doctrine of the law that not only the public
property but also the taxes and public
revenues of such corporations Cannot be
seized under execution against them, either in
the treasury or when in transit to it.
Judgments rendered for taxes, and the
proceeds of such judgments in the hands of
officers of the law, are not subject to execution
unless so declared by statute." Thus, it is
clear that all the funds of petitioner
municipality in the possession of the
Municipal Treasurer of San Miguel, as well as
those in the possession of the Provincial
Treasurer of Bulacan, are also public funds
and as such they are exempt from execution.
Besides, Presidential Decree No. 477, known
as "The Decree on Local Fiscal
Administration", Section 2 (a), provides:
SEC. 2. Fundamental Principles.
— Local government financial
affairs, transactions, and
operations shall be governed by
the fundamental principles set
forth hereunder:
(a) No money shall be paid out of
the treasury except in pursuance
of a lawful appropriation or other
specific statutory authority.
xxx xxx xxx
Otherwise stated, there must be a
corresponding appropriation in the form of an
ordinance duly passed by the Sangguniang
Bayan before any money of the municipality
may be paid out. In the case at bar, it has not
been shown that the Sangguniang Bayan has
passed an ordinance to this effect.
P a g e | 46
Furthermore, Section 15, Rule 39 of the New
Rules of Court, outlines the procedure for the
enforcement of money judgment:
(a) By levying on all the property
of the debtor, whether real or
personal, not otherwise exempt
from execution, or only on such
part of the property as is
sufficient to satisfy the judgment
and accruing cost, if he has more
than sufficient property for the
purpose;
(b) By selling the property levied
upon;
(c) By paying the judgment-
creditor so much of the proceeds
as will satisfy the judgment and
accruing costs; and
(d) By delivering to the judgment-
debtor the excess, if any, unless
otherwise, directed by judgment
or order of the court.
The foregoing has not been followed in the
case at bar.
ACCORDINGLY, the petition is granted and
the order of respondent judge, dated July 27,
1982, granting issuance of a writ of execution;
the alias writ of execution, dated July 27,
1982; and the order of respondent judge,
dated September 13, 1982, directing the
Provincial Treasurer of Bulacan and the
Municipal Treasurer of San Miguel, Bulacan
to comply with the money judgments, are SET
ASIDE; and respondents are hereby enjoined
from implementing the writ of execution.
SO ORDERED.
Makalintal, C.J, Fernando, Barredo and
Aquino, JJ., concur.
EN BANC
22
G.R. No. L-28379 March 27, 1929
THE GOVERNMENT OF THE PHILIPPINE
ISLANDS, applicant-appellant,
vs.
CONSORCIA CABANGIS, ET AL., claimants-
appellees.
Attorney-General Jaranilla for appellant.
Abad Santos, Camus & Delgado for appellees.

PROPERTY CASES: CLASSIFICATION OF PROPERTY
VILLA-REAL, J.:
The Government of the Philippine Islands
appeals to this court from the judgment of the
Court of First Instance of Manila in cadastral
proceeding No. 373 of the Court of First
Instance of Manila, G. L. R. O. Cadastral
Record No. 373, adjudicating the title and
decreeing the registration of lots Nos. 36, 39
and 40, block 3055 of the cadastral survey of
the City of Manila in favor of Consuelo,
Consorcia, Elvira and Tomas, surnamed
Cabangis, in equal parts, and dismissing the
claims presented by the Government of the
Philippine Islands and the City of Manila.
In support of its appeal, the appellant assigns
the following alleged errors as committed by
the trial court in its judgment, to wit:
1. The lower court erred in not holding
that the lots in question are of the
public domain, the same having been
gained from the sea (Manila Bay) by
accession, by fillings made by the
Bureau of Public Works and by the
construction of the break-water (built
by the Bureau of Navigation) near the
mouth of Vitas Estero.
2. The lower court erred in holding that
the lots in question formed part of the
big parcel of land belonging to the
spouses Maximo Cabangis and Tita
Andres, and in holding that these
spouses and their successors in
interest have been in continuous,
public, peaceful and uninterrupted
possession of said lots up to the time
this case came up.
3. The lower court erred in holding that
said lots existed before, but that due to
the current of the Pasig River and to the
action of the big waves in Manila Bay
during the south-west monsoons, the
same disappeared.
4. The lower court erred in adjudicating
the registration of the lands in question
in the name of the appellees, and in
denying the appellant's motion for a
new trial.
A preponderance of the evidence in the record
which may properly be taken into
consideration in deciding the case, proves the
following facts:
Lots 36, 39 and 40, block 3035 of cadastral
proceeding No. 71 of the City of Manila, G. L.
R. O. Record No. 373, were formerly a part of
P a g e | 47
a large parcel of land belonging to the
predecessor of the herein claimants and
appellees. From the year 1896 said land began
to wear away, due to the action of the waves of
Manila Bay, until the year 1901 when the said
lots became completely submerged in water in
ordinary tides, and remained in such a state
until 1912 when the Government undertook
the dredging of Vitas Estuary in order to
facilitate navigation, depositing all the sand
and silt taken from the bed of the estuary on
the low lands which were completely covered
with water, surrounding that belonging to the
Philippine Manufacturing Company, thereby
slowly and gradually forming the lots, the
subject matter of this proceeding.
Up to the month of February, 1927 nobody
had declared lot 39 for the purposes of
taxation, and it was only in the year 1926 that
Dr. Pedro Gil, in behalf of the claimants and
appellees, declared lot No. 40 for such
purpose.
In view of the facts just stated, as proved by a
preponderance of the evidence, the question
arises: Who owns lots 36, 39 and 40 in
question?
The claimants-appellees contend that
inasmuch as the said lots once formed a part
of a large parcel of land belonging to their
predecessors, whom they succeeded, and their
immediate predecessor in interest, Tomas
Cabangis, having taken possession thereof as
soon as they were reclaimed, giving his
permission to some fishermen to dry their
fishing nets and deposit their bancas thereon,
said lots belong to them.
Article 339, subsection 1, of the Civil Code,
reads:
Article 339. Property of public
ownership is —
1. That devoted to public use, such as
roads, canals, rivers, torrents, ports
and bridges constructed by the State,
riverbanks, shorts, roadsteads, and
that of a similar character.
xxx xxx xxx
Article 1, case 3, of the Law of Waters of
August 3, 1866, provides as follows:
ARTICLE 1. The following are part of
the national domain open to public use:
xxx xxx xxx

PROPERTY CASES: CLASSIFICATION OF PROPERTY
3. The Shores. By the shore is
understood that space covered and
uncovered by the movement of the tide.
Its interior or terrestrial limit is the line
reached by the highest equinoctial
tides. Where the tides are not
appreciable, the shore begins on the
land side at the line reached by the sea
during ordinary storms or tempests.
In the case of Aragon vs. Insular Government
(19 Phil., 223), with reference to article 339 of
the Civil Code just quoted, this court said:
We should not be understood, by this
decision, to hold that in a case of gradual
encroachment or erosion by the ebb and flow
of the tide, private property may not become
'property of public ownership,' as defined in
article 339 of the code, where it appears that
the owner has to all intents and purposes
abandoned it and permitted it to be totally
destroyed, so as to become a part of the 'playa'
(shore of the seas), 'rada' (roadstead), or the
like. . . .
In the Enciclopedia Juridica Espanola, volume
XII, page 558, we read the following:
With relative frequency the opposite
phenomenon occurs; that is, the sea
advances and private properties are
permanently invaded by the waves, and
in this case they become part of the
shore or beach. They then pass to the
public domain, but the owner thus
dispossessed does not retain any right
to the natural products resulting from
their new nature; it is a de facto case of
eminent domain, and not subject to
indemnity.
Now then , when said land was reclaimed, did
the claimants-appellees or their predecessors
recover it as their original property?
As we have seen, the land belonging to the
predecessors of the herein claimants-appellees
began to wear way in 1896, owing to the
gradual erosion caused by the ebb and flow of
the tide, until the year 1901, when the waters
of Manila Bay completely submerged a portion
of it, included within lots 36, 39 and 40 here
in question, remaining thus under water until
reclaimed as a result of certain work done by
the Government in 1912. According to the
above-cited authorities said portion of land,
that is, lots 36, 39 and 40, which was private
property, became a part of the public domain.
The predecessors of the herein claimants-
appellees could have protected their land by
building a retaining wall, with the consent of
P a g e | 48
competent authority, in 1896 when the waters
of the sea began to wear it away, in
accordance with the provisions of Article 29 of
the aforecited Law of Waters of August 3,
1866, and their failure to do so until 1901,
when a portion of the same became completely
covered by said waters, remaining thus
submerged until 1912, constitutes
abandonment.
Now then: The lots under discussion having
been reclaimed from the seas as a result of
certain work done by the Government, to
whom do they belong?
The answer to this question is found in article
5 of the aforementioned Law of Waters, which
is as follows:
ART. 5. Lands reclaimed from the sea
in consequence of works constructed by
the State, or by the provinces, pueblos
or private persons, with proper
permission, shall become the property
of the party constructing such works,
unless otherwise provided by the terms
of the grant of authority.
The fact that from 1912 some fishermen had
been drying their fishing nets and depositing
their bancas on lots 36, 39 and 40, by
permission of Tomas Cabangis, does not
confer on the latter or his successors the
ownership of said lots, because, as they were
converted into public land, no private person
could acquire title thereto except in the form
and manner established by the law.
In the case of Buzon vs. Insular Government
and City of Manila (13 Phil., 324), cited by the
claimants-appellees, this court, admitting the
findings and holdings of the lower court, said
the following:
If we heed the parol evidence, we find
that the seashore was formerly about
one hundred brazas distant from the
land in question; that, in the course of
time, and by the removal of a
considerable quantity of sand from the
shore at the back of the land for the
use of the street car company in filling
in Calle Cervantes, the sea water in
ordinary tides now covers part of the
land described in the petition.
The fact that certain land, not the bed
of a river or of the sea, is covered by sea
water during the period of ordinary

PROPERTY CASES: CLASSIFICATION OF PROPERTY
high tide, is not a reason established by
any law to cause the loss thereof,
especially when, as in the present case,
it becomes covered by water owing to
circumstances entirely independent of
the will of the owner.
In the case of Director of Lands vs. Aguilar
(G.R. No. 22034),1 also cited by the claimants-
appellees, wherein the Government adduced
no evidence in support of its contention, the
lower court said in part:
The contention of the claimants
Cabangis is to the effect that said lots
are a part of the adjoining land
adjudicated to their deceased father,
Don Tomas Cabangis, which, for over
fifty years had belonged to their
deceased grandmother, Tita Andres,
and that, due to certain improvements
made in Manila Bay, the waters of the
sea covered a large part of the lots
herein claimed.
The Government of the Philippine
Islands also claims the ownership of
said lots, because, at ordinary high
tide, they are covered by the sea.
Upon petition of the parties, the lower
court made an ocular inspection of said
lots on September 12, 1923, and on
said inspection found some light
material houses built thereon, and that
on that occasion the waters of the sea
did not reach the aforesaid lots.
From the evidence adduced at the trial
of this cause, it may be inferred that
Tita Andres, during her lifetime was the
owner of a rather large parcel of land
which was adjudicated by a decree to
her son Tomas Cabangis; the lots now
in question are contiguous to that land
and are covered by the waters of the
sea at extraordinary high tide; some 50
years before the sea did not reach said
strip of land, and on it were
constructed, for the most part, light
material houses, occupied by the
tenants of Tita Andres, to whom they
paid rent. Upon her death, her son
Tomas Cabangis succeeded to the
possession, and his children succeeded
him, they being the present claimants,
Consuelo, Jesus, Tomas, and Consorcia
Cabangis.
The Government of the Philippine
Islands did not adduce any evidence in
support of its contention, with the
P a g e | 49
exception of registry record No. 8147, to
show that the lots here in question
were not excluded from the application
presented in said proceeding.
It will be seen that in the case of Buzon vs.
Insular Government and City of Manila, cited
above, the rise of the waters of the sea that
covered the lands there in dispute, was due
not to the action of the tide but to the fact that
a large quantity of sand was taken from the
sea at the side of said land in order to fill in
Cervantes Street, and this court properly held
that because of this act, entirely independent
of the will of the owner of said land, the latter
could not lose the ownership thereof, and the
mere fact that the waters of the sea covered it
as a result of said act, is not sufficient to
convert it into public land, especially, as the
land was high and appropriate for building
purposes.
In the case of the Director of Lands vs. Aguilar
also cited by the claimants-appellees, the
Insular Government did not present any
evidence in support of its contention, thus
leaving uncontradicted the evidence adduced
by the claimants Aguilar et al., as to the
ownership, possession and occupation of said
lots.
In the instant case the evidence shows that
from 1896, the waves of Manila Bay had been
gradually and constantly washing away the
sand that formed the lots here in question,
until 1901, when the sea water completely
covered them, and thus they remained until
the year 1912. In the latter year they were
reclaimed from the sea by filling in with sand
and silt extracted from the bed of Vitas
Estuary when the Government dredged said
estuary in order to facilitate navigation.
Neither the herein claimants-appellees nor
their predecessors did anything to prevent
their destruction.
In conclusion, then, we hold that the lots in
question having disappeared on account of the
gradual erosion due to the ebb and flow of the
tide, and having remained in such a state
until they were reclaimed from the sea by the
filling in done by the Government, they are
public land. (Aragon vs. Insular Government,
19 Phil., 223; Francisco vs. Government of the
Philippine Islands, 28 Phil., 505).
By virtue whereof, the judgment appealed
from is reversed and lots Nos. 36, 39 and 40
of cadastral proceeding No. 373 of the City of
Manila are held to be public land belonging to
the Government of the United States under
the administration and control of the

PROPERTY CASES: CLASSIFICATION OF PROPERTY
Government of the Philippine Islands. So
ordered.
FIRST DIVISION
24
G.R. No. 151440 June 17, 2003
HEIRS OF SIMPLICIO SANTIAGO,
represented by ANGELITA S.
CASTRO, petitioners,
vs.
HEIRS OF MARIANO E.
SANTIAGO, respondents.
YNARES-SANTIAGO, J.:
A free patent issued over a private land is null
and void and produces no legal effects
whatsoever. Quod nullum est, nullum producit
effectum.1 Free patent applications under the
Public Land Act2 apply only to disposable
lands of the public domain, and not to private
lands which became such by virtue of a duly
registered possessory information or by open,
continuous, exclusive, and notorious
possession, of the present or previous
occupants.3
This petition seeks to reverse and set aside the
December 3, 1999 decision4 of the Court of
Appeals in CA-G.R. CV No. 42761, which
reversed and set aside the December 3, 1999
decision5 of the Regional Trial Court of
Malolos, Bulacan, Branch 27 in Civil Case No.
7401-M.
The instant controversy involves a 574 square
meter parcel of land known as Lot No. 2344,
Cad-349,6 located in Poblacion, Angat,
Bulacan, which was formerly owned by the
spouses Vicente Santiago and Magdalena
Sanchez. The spouses had five children,
among whom were Pablo and Marta. Pablo is
the father of Simplicio Santiago and Guillermo
Santiago; while Marta is the mother of Jose
Santiago.7
On April 3, 1984, petitioners, the heirs of
Simplicio Santiago, initiated a
complaint8 for accion publiciana with damages
against Mariano Santiago, son of Jose
Santiago.9 They alleged that Lot 2344 was
acquired by Simplicio by purchase from his
father, Pablo, and brother, Guillermo.10 When
Simplicio retired from government service in
1968, he constructed a house on the said
lot.11 Before his demise on May 6, 1983, he
applied for a free patent,12which was granted.
Thus, on September 26, 1980, Original
Certificate of Title No. P-10878 covering Lot
2344 was issued in his name.13 Sometime in
1983, Mariano Santiago, through stealth and
P a g e | 50
evident bad faith, constructed a house on a
portion of Lot 2344 and refused to vacate the
premises despite written and oral demands.14
At the trial, twenty-three-year old Nestor
Santiago, one of the children of Simplicio
Santiago, admitted that since he attained the
age of reason, the house of Mariano Santiago
was already existing in Lot No. 2344-C. His
father allegedly advised Mariano to remove the
house but the latter refused to do so.15
In his answer,16 Mariano Santiago contended
that Lot 2344 was subdivided into three
portions, i.e., Lot 2344-A, with an area of 168
square meters; Lot 2344-B, with an area of
349 square meters; and Lot 2344-C, with an
area of 57 square meters.17 Petitioners owned
only Lot 2344-B, and Lots 2344-A and 2344-
C, containing an area of 225 square meters,
was fraudulently included in the free patent
and certificate of title issued to Simplicio
Santiago. Mariano testified that he and his
sister, Belen S. Marcelo, purchased Lot 2344-
A from Simplicio Santiago for the price of
P5,000.00, as evidenced by a deed of sale
dated September 15, 1972.18 Immediately after
the sale, they constructed a house on the
lot.19 Without their knowledge, however,
Simplicio secured a free patent and an original
certificate of title over the entire Lot 2344. On
the other hand, he and his sister inherited Lot
2344-C from their grandmother, Marta
Santiago, who in turn inherited the lot from
her parents, Vicente and Magdalena. During
her lifetime, Marta had been living in the
house built on the said lot.20 When Mariano
was born in 1926, the house was still made
of nipa, but it was subsequently improved in
1931 and 1952 into a house of strong
materials.21
Mariano’s testimony was corroborated by
seventy-year old Socorro Ocampo,22 first
cousin of Simplicio and Mariano’s father,
Jose, and by fifty-two-year old Flordeliza
Austria,23 a long-time neighbor of the parties.
Both witnesses testified that since they were
still children, the house of Marta where she
and Mariano’s family resided was already
existing on Lot 2344-C.
On August 6, 1991, the trial court rendered a
decision in favor of petitioners. It found that
Mariano’s claim over the controverted lot lacks
basis and held that his defense constitutes a
collateral attack on the validity of a Torrens
title which was barred by prescription for
having been raised more than one year after
the entry of the decree of registration. The
dispositive portion of the decision reads:

PROPERTY CASES: CLASSIFICATION OF PROPERTY
WHEREFORE, judgment is hereby
rendered in favor of the plaintiffs and
against the defendant:
1. Declaring the plaintiffs, children and
heirs of the late Simplicio Santiago, the
owners of the property covered by
Original Certificate of Title No. P-10878
of the Registry of Deeds of Bulacan,
which is registered in the name of
Simplicio Santiago;
2. Ordering the defendant Mariano
Santiago to remove and vacate the 57
square meter portion of the property
covered by said title (O.C.T. No. P-
10878) on which his house is
established and surrender the
possession thereof to the plaintiffs;
3. Dismissing/denying all claims and
counterclaims for damages by the
parties.
No pronouncement as to costs.
SO ORDERED.24
Meanwhile, Mariano died on July 5, 1993 and
was substituted by his heirs.25
Respondents appealed to the Court of Appeals
which reversed the decision of the trial court
on December 3, 1999. It sustained
respondents’ claim over Lots 2344-A and
2344-C and ruled that the Free Patent and the
Original Certificate of Title issued in favor of
Simplicio Santiago are void, because Lot 2344
is a private land which cannot be the subject
of a Free Patent. The decretal portion thereof
states:
WHEREFORE, premises considered, the
decision dated August 6, 1991 is
hereby REVERSED and SET ASIDE and
in its stead another judgment is
rendered in favor of the appellant and
against the appellees as follows:
a. declaring the Free Patent Title under
O.C.T. No. P-10878 (Exh. "A") null and
void;
b. declaring the appellants the absolute
owner of the 225 square meters of Lot
2344, designated as Lot 2344-A and
2344-C (Exhs. "2-A" & "2-B",
respectively;
c. declaring the appellees the absolute
owners of 349 square meters of Lot
P a g e | 51
2344, designated as Lot No. 2344-B
(Exh. "2-C");
d. ordering the appellees to pay the
costs.
SO ORDERED.26
Hence, the instant petition.
The main issues are: (1) whether or not the
free patent and the certificate of title issued to
Simplicio Santiago are valid; and (2) whether
or not respondents’ claim over Lots 2344-C
and 2344-A is supported by the evidence.
The settled rule is that a free patent issued
over a private land is null and void, and
produces no legal effects whatsoever. Private
ownership of land – as when there is a prima
facie proof of ownership like a duly registered
possessory information or a clear showing of
open, continuous, exclusive, and notorious
possession, by present or previous occupants
– is not affected by the issuance of a free
patent over the same land, because the Public
Land law applies only to lands of the public
domain. The Director of Lands has no
authority to grant free patent to lands that
have ceased to be public in character and
have passed to private ownership.
Consequently, a certificate of title issued
pursuant to a homestead patent partakes of
the nature of a certificate issued in a judicial
proceeding only if the land covered by it is
really a part of the disposable land of the
public domain.27
In the instant case, it was established that Lot
2344 is a private property of the Santiago clan
since time immemorial, and that they have
declared the same for taxation.28 Although tax
declarations or realty tax payment of property
are not conclusive evidence of ownership,
nevertheless, they are good indicia of
possession in the concept of owner, for no one
in his right mind would be paying taxes for a
property that is not in his actual or
constructive possession. They constitute at
least proof that the holder has a claim of title
over the property. The voluntary declaration of
a piece of property for taxation purposes
manifests not only one’s sincere and honest
desire to obtain title to the property and
announces his adverse claim against the State
and all other interested parties, but also the
intention to contribute needed revenues to the
Government. Such an act strengthens
one’s bona fide claim of acquisition of
ownership.29

PROPERTY CASES: CLASSIFICATION OF PROPERTY
Considering the open, continuous, exclusive
and notorious possession and occupation of
the land by respondents and their
predecessors in interests, they are deemed to
have acquired, by operation of law, a right to a
government grant without the necessity of a
certificate of title being issued. The land was
thus segregated from the public domain and
the director of lands had no authority to issue
a patent. Hence, the free patent covering Lot
2344, a private land, and the certificate of title
issued pursuant thereto, are void.30
Similarly in Magistrado v. Esplana,31 the
applicant for a free patent declared that the
lots subject of the application formed part of
the public domain for the sole purpose of
obtaining title thereto as cheaply as possible.
We annulled the titles granted to the applicant
after finding that the lots were privately owned
and continuously possessed by the applicant
and his predecessors-in-interest since time
immemorial. Likewise, in Robles v. Court of
Appeals,32 the free patent issued to the
applicant was declared void because the lot
involved was shown to be private land which
petitioner inherited from his grandparents.
Respondents’ claim of ownership over Lot
2344-C and Lot 2344-A is fully substantiated.
Their open, continuous, exclusive, and
notorious possession of Lot 2344-C in the
concept of owners for more than seventy years
supports their contention that the lot was
inherited by Mariano from her grandmother
Marta, who in turn inherited the lot from her
parents. This fact was also corroborated by
respondents’ witnesses who declared that the
house where Marta and Mariano’s family
resided was already existing in the disputed
portion of Lot 2344 even when they were still
children. It is worthy to note that although Lot
2344-C was within the property declared for
taxation by the late Simplicio Santiago, he did
not disturb the possession of Marta and
Mariano. Moreover, while the heirs of
Simplicio tried to make it appear that Mariano
built his house only in 1983, Nestor Santiago
admitted on cross-examination that Mariano
Santiago’s house was already existing in the
disputed lot since he attained the age of
reason. The fact that Mariano did not declare
Lot 2344-C for taxation does not militate
against his title. As he explained, he was
advised by the Municipal Assessor that his 57
square meter lot was tax exempt and that it
was too small to be declared for taxation,
hence, he just gave his share in the taxes to
his uncle, Simplicio, in whose name the entire
Lot 2344 was declared for taxation.33
P a g e | 52
The Court of Appeals correctly ruled that Lot
2344-C was sold by Simplicio Santiago to
Mariano Santiago and Belen Sanchez. The
document of sale evidencing the transaction is
duly notarized and, as such, is considered a
public document and enjoys the presumption
of validity as to its authenticity and due
execution. This legal presumption was not
overcome by petitioners.34 Other than their
allegation that the deed of sale was a
forgery,35 no other evidence was presented to
substantiate their claim. Hence, the
presumption of validity of the deed of sale,
ceding Lot 2344-C to Mariano Santiago and
Belen Marcelo, prevails.
Furthermore, respondents’ assertion of
ownership is buttressed by their possession of
Lot 2344-C. Immediately after the sale in
1972, Mariano Santiago and Belen Sanchez
built a house on the said lot. The lack of
opposition on the part of petitioners, indicates
that they recognized the validity of the sale
and it was only later that they thought of
repudiating the authenticity thereof.
Clearly, therefore, respondents are the lawful
owners of Lot 2344-C and Lot 2344-A, which
they co-own with Belen Marcelo. Free Patent
No. 0130448 and OCT No. P-10878 are void
not only because of the fraudulent inclusion
therein of respondents’ lots, but also because
Lot 2344 is a private lot, over which the
Bureau of Lands had no jurisdiction.
Petitioners contend that respondents’ action to
annul OCT No. P-10878 is barred by
prescription and that, even assuming that it
was filed within one year from the entry of the
decree of registration, it constitutes a
collateral attack on a Torrens title. Further,
they averred that respondents have no
personality to sue for the annulment of OCT
No. P-10878.
The contentions are without merit.
A certificate of title issued under an
administrative proceeding pursuant to a
homestead patent covering a disposable public
land within the contemplation of the Public
Land Law or Commonwealth Act No. 141 is as
indefeasible as a certificate of title issued
under a judicial registration proceeding.
Under the Land Registration Act, title to the
property covered by a Torrens certificate
becomes indefeasible after the expiration of
one year from the entry of the decree of
registration. Such decree of registration is
incontrovertible and becomes binding on all
persons whether or not they were notified of,
or participated in, the in rem registration

PROPERTY CASES: CLASSIFICATION OF PROPERTY
process. There is no specific provision in the
Public Land Law or the Land Registration Act
(Act 496), now Presidential Decree 1529, fixing
a similar one-year period within which a
public land patent can be considered open to
review on the ground of actual fraud (such as
that provided for in Section 38 of the Land
Registration Act, and now Section 32 of
Presidential Decree 1529), and clothing a
public land patent certificate of title with
indefeasibility. Nevertheless, this Court has
repeatedly applied Section 32 of Presidential
Decree 1529 to a patent issued by the Director
of Lands, approved by the Secretary of Natural
Resources, under the signature of the
President of the Philippines. The date of the
issuance of the patent corresponds to the date
of the issuance of the decree in ordinary
cases. Just as the decree finally awards the
land applied for registration to the party
entitled to it, the patent issued by the Director
of Lands equally and finally grants and
conveys the land applied for to the
applicant. 36
The one-year prescriptive period, however,
does not apply when the person seeking
annulment of title or reconveyance is in
possession of the lot. This is because the
action partakes of a suit to quiet title which is
imprescriptible.37 In David v. Malay,38 we held
that a person in actual possession of a piece of
land under claim of ownership may wait until
his possession is disturbed or his title is
attacked before taking steps to vindicate his
right, and his undisturbed possession gives
him the continuing right to seek the aid of a
court of equity to ascertain and determine the
nature of the adverse claim of a third party
and its effect on his title.
In the case at bar, inasmuch as respondents
are in possession of the disputed portions of
Lot 2344, their action to annul Original
Certificate of Title No. P-10878, being in the
nature of an action to quiet title, is therefore
not barred by prescription.
Section 48 of P.D. 1529, the Property
Registration Decree, provides that a certificate
of title shall not be subject to collateral attack
and can not be altered, modified, or canceled
except in a direct proceeding. An action is an
attack on a title when the object of the action
is to nullify the title, and thus challenge the
judgment or proceeding pursuant to which the
title was decreed. The attack is direct when
the object of an action is to annul or set aside
such judgment, or enjoin its enforcement. On
the other hand, the attack is indirect or
collateral when, in an action to obtain a
different relief, an attack on the judgment or
P a g e | 53
proceeding is nevertheless made as an
incident thereof.39
In this case, while the original complaint filed
by the petitioners was for recovery of
possession, or accion publiciana,and the
nullity of the title was raised merely as
respondents’ defense, we can rule on the
validity of the free patent and OCT No. P-
10878 because of the counterclaim filed by
respondents. A counterclaim can be
considered a direct attack on the title.
In Development Bank of the Philippines v.
Court Appeals,40 we ruled on the validity of a
certificate of title despite the fact that the
nullity thereof was raised only as a
counterclaim. It was held that a counterclaim
is considered a complaint, only this time, it is
the original defendant who becomes the
plaintiff. It stands on the same footing and is
to be tested by the same rules as if it were an
independent action. Moreover, since all the
facts necessary in the determination of the
title’s validity are now before the Court, it
would be in the best interest of justice to settle
this issue which has already dragged on for 19
years.41
There is no merit in petitioners’ contention
that only the State may bring an action for
reconveyance of the lots in dispute. To
reiterate, Lot 2344 is a private property in
open, continuous, exclusive and notorious
possession of the Santiago family. The
nullification of its free patent and title would
not therefore result in its reversion to the
public domain. Hence, the State, represented
by the Solicitor General, is not the real party
in interest. Parenthetically, in Robles v. Court
of Appeals,42 a case involving the personality
to sue for the reconveyance of a private land,
we ruled that inasmuch as there was no
reversion of the disputed property to the
public domain, the State is not the proper
party to bring a suit for reconveyance.
It should be clarified, however, that
notwithstanding the Court’s declaration that
Lot No. 2344 is a private property and not a
part of the public domain, the parties’ title to
the said lot is imperfect and is still subject to
the rules on confirmation of title under
Section 48 (b) of the Public Land Act.
Nevertheless, this imperfect title is enough to
defeat the free patent and certificate of title
issued over the said lot. Hence, the ruling of
the Court of Appeals declaring the
respondents as the absolute owners of Lot
Nos. 2344-A and C; and declaring petitioners
as absolute owners of Lot No. 2344-B, should
be modified.
 P a g e | 54
PROPERTY CASES: CLASSIFICATION OF PROPERTY

WHEREFORE, in view of the foregoing, the

Decision of the Court of Appeals in CA-G.R.
CV No. 42761
is AFFIRMED with MODIFICATION. Patent
No. 0130448 and Original Certificate of Title
No. P-10878, both in the name of Simplicio
Santiago are declared null and void.
Respondent Heirs of Mariano Santiago are
declared owners and holders of imperfect title
over Lot No. 2344-A and Lot No. 2344-C; while
petitioner Heirs of Simplicio Santiago are
declared owners and holders of imperfect title
over Lot No. 2344-B. Costs against petitioners.

SO ORDERED.

Davide, Jr., C.J., Vitug, Carpio, and Azcuna,

JJ., concur.