G.R. No.

103882 November 25, 1998

REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
THE HONORABLE COURT OF APPEALS AND REPUBLIC REAL ESTATE CORPORATION,
respondents, CULTURAL CENTER OF THE PHILIPPINES, intervenor.
G.R. No. 105276 November 25, 1998
PASAY CITY AND REPUBLIC REAL ESTATE CORPORATION, petitioners,
vs.
COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES, respondents.

PURISIMA, J .:
At bar are two consolidated petitions for review on certiorari under Rule 45 of the Revised Rules of
Court. Here, the Court is confronted with a case commenced before the then Court of First Instance
(now Regional Trial Court) of Rizal in Pasay City, in 1961, more than 3 decades back, that has
spanned six administrations of the Republic and outlasted the tenure of ten (10) Chief Justices of the
Supreme Court.
In G.R. No. 103882, the Republic of the Philippines, as petitioner, assails the Decision, dated
January 29, 1992 and Amended Decision, dated April 28, 1992, of the Court of Appeals
1
which
affirmed with modification the Decision of the former Court of First Instance of Rizal (Branch 7, Pasay
City) in Civil Case No. 2229-P, entitled "Republic of the Philippines vs. Pasay City and Republic Real
Estate Corporation".
The facts that matter are, as follows:
Republic Act No. 1899 ("RA 1899"), which was approved on June 22, 1957, authorized the
reclamation of foreshore lands by chartered cities and municipalities. Section I of said law, reads:
Sec. 1. Authority is hereby granted to all municipalities and chartered cities to
undertake and carry out at their own expense the reclamation by dredging, filling, or
other means, of any foreshore lands bordering them, and to establish, provide,
construct, maintain and repair proper and adequate docking and harbor facilities as
such municipalities and chartered cities may determine in consultation with the
Secretary of Finance and the Secretary of Public Works and Communications.
On May 6, 1958, invoking the a forecited provision of RA 1899, the Pasay City Council passed
Ordinance No. 121, for the reclamation of Three Hundred (300) hectares of foreshore lands in Pasay
City, empowering the City Mayor to award and enter into reclamation contracts, and prescribing
terms and conditions therefor. The said Ordinance was amended on April 21, 1959 by Ordinance
No. 158, which authorized the Republic Real Estate Corporation ("RREC") to reclaim foreshore
lands of Pasay City under certain terms and conditions.
On April 24, 1959, Pasay City and RREC entered into an Agreement
2
for the reclamation of the
foreshore lands in Pasay City.
On December 19, 1961, the Republic of the Philippines ("Republic") filed a Complaint
3
for Recovery
of Possession and Damages with Writ of Preliminary Preventive injunction and Mandatory Injunction,
docketed as Civil Case No. 2229-P before the former Court of First Instance of Rizal, (Branch 7, Pasay
City).
On March 5, 1962, the Republic of the Philippines filed an Amended Complaint
4
questioning subject
Agreement between Pasay City and RREC (Exhibit "P") on the grounds that the subject-matter of such
Agreement is outside the commerce of man, that its terms and conditions are violative of RA 1899, and
that the said Agreement was executed without any public bidding.
The Answers
5
of RREC and Pasay City, dated March 10 and March 14, 1962, respectively, averred that
the subject-matter of said Agreement is within the commerce of man, that the phrase "foreshore lands"
within the contemplation of RA 1899 has a broader meaning than the cited definition of the term in the
Words and Phrases and in the Webster's Third New International Dictionary and the plans and
specifications of the reclamation involved were approved by the authorities concerned.
On April 26,1962, Judge Angel H. Mojica, (now deceased) of the former Court of First Instance of
Rizal (Branch 7, Pasay City) issued an Order
6
the dispositive portion of which was to the following
effect:
WHEREFORE, the court hereby orders the defendants, their agents, and all persons
claiming under them, to refrain from "further reclaiming or committing acts of
dispossession or dispoilation over any area within the Manila Bay or the Manila Bay
Beach Resort", until further orders of the court.
On the following day, the same trial court issued a writ of preliminary injunction
7
which enjoined the
defendants, RREC and Pasay City, their agents, and all persons claiming under them "from further
reclaiming or committing acts of dispossession."
Thereafter, a Motion to Intervene
8
, dated June 27, 1962, was filed by Jose L. Bautista, Emiliano
Custodio, Renato Custodio, Roger de la Rosa, Belen Gonzales, Norma Martiner, Emilia E. Paez,
Ambrosio R. Parreno, Antolin M. Oreta, Sixto L. Orosa, Pablo S. Sarmiento, Jesus Yujuico, Zamora
Enterprises, Inc., Industrial and Commercial Factors, Inc., Metropolitan Distributors of the Philippines, and
Bayview Hotel, Inc. stating inter alia that they were buyers of lots in the Manila Bay area being reclaimed
by RREC, whose rights would be affected by whatever decision to be rendered in the case. The Motion
was granted by the trial court and the Answer attached thereto admitted.
9

The defendants and the intervenors then moved to dismiss
10
the Complaint of the Republic, placing
reliance on Section 3 of Republic Act No. 5187, which reads:
Sec. 3. Miscellaneous Projects
xxx xxx xxx
m. For the construction of seawall and limited access highway from the south
boundary of the City of Manila to Cavite City, to the south, and from the north
boundary of the City of Manila to the municipality of Mariveles, province of Bataan, to
the north, including the reclamation of the foreshore and submerged areas: Provided,
That priority in the construction of such seawalls, highway and attendant reclamation
works shall be given to any corporation and/or corporations that may offer to
undertake at its own expense such projects, in which case the President of the
Philippines may, after competitive didding, award contracts for the construction of
such project, with the winning bidder shouldering all costs thereof, the same to be
paid in terms of percentage fee of the contractor which shall not exceed fifty percent
of the area reclaimed by the contractor and shall represent full compensation for the
purpose, the provisions of the Public Land Law concerning disposition of reclaimed
and foreshore lands to the contrary notwithstanding: Provided, finally, that the
foregoing provisions and those of other laws, executive orders, rules and regulations
to the contrary notwithstanding, existing rights, projects and/or contracts of city or
municipal governments for the reclamation of foreshore and submerged lands shall
be respected. . . . . (emphasis ours).
Since the aforecited law provides that existing contracts shall be respected, movants
contended that the issues raised by the pleadings have become "moot, academic and of no
further validity or effect."
Meanwhile, the Pasay Law and Conscience Union, Inc. ("PLCU") moved to intervene
11
, alleging as
legal interest in the matter in litigation the avowed purpose of the organization for the promotion of good
government in Pasay City. In its Order of June 10, 1969, the lower court of origin allowed the said
intervention
12
.
On March 24, 1972, the trial court of origin came out with a Decision, disposing, thus:
WHEREFORE, after carefully considering (1) the original complaint, (2) the first
Amended Complaint, (3) the Answer of Defendant Republic Real Estate Corporation
to the first Amended Complaint, (4) the Answer of Defendant Pasay City to the first
Amended Complaint, (5) the Second Amended Complaint, (6) the Answer of
Defendant Republic Real Estate Corporation to the Second Amended Complaint, (7)
the Answer of Defendant Pasay City to the Second Amended Complaint, (8) the
Memorandum in Support of Preliminary Injunction of Plaintiff, (9) the Memorandum In
Support of the Opposition to the Issuance of Preliminary Injunction of Defendant
Pasay City and Defendant Republic Real Estate Corporation, (10) the Answer in
Intervention of Intervenors Bautista, et. al., (11) Plaintiff's Opposition to Motion to
Intervene, (12) the Reply to Opposition to Motion to Intervene of Intervenors
Bautista, et. al., (13) the Stipulation of Facts by all the parties, (14) the Motion for
Leave to Intervene of Intervenor Pasay Law and Conscience Union, Inc., (15) the
Opposition to Motion For Leave to Intervene of Intervenors Bautista, et. al., (16) the
Reply of Intervenor Pasay Law and Conscience Union, Inc., (17) the Supplement to
Opposition to Motion to Intervene of Defendant Pasay City and Republic Real Estate
Corporation (18) the Complain in Intervention of Intervenor Pasay Law and
Conscience Union, Inc., (19) the Answer of Defendant Republic Real Estate
Corporation, (20) the Answer of Intervenor Jose L. Bautista, et. al., to Complaint in
Intervention, (21) the Motion to Dismiss of Defendant Republic Real Estate
Corporation, and Intervenors Bautista, et. al., (22) the Opposition of Plaintiff to said
Motion to Dismiss, (23) the Opposition of Intervenor Pasay Law and Conscience
Union, Inc., (24) the Memorandum of the Defendant Republic Real Estate
Corporation, (25) the Memorandum for the Intervenor Pasay Law and Conscience
Union, Inc., (26) the Manifestation of Plaintiff filed by the Office of the Solicitor
General, and all the documentary evidence by the parties to wit: (a) Plaintiff's
Exhibits "A" to "YYY- 4", (b) Defendant Republic Real Estate Corporation's Exhibits
"1-RREC" to "40-a" and (c) Intervenor Pasay Law and Conscience Union, Inc's.,
Exhibits "A-PLACU" to "C-PLACU", the Court hereby:
(1) Denies the "Motion to Dismiss" filed on January 10, 1968, by Defendant Republic
Real Estate Corporation and Intervenors Bautista, et. al., as it is the finding of this
Court that Republic Act No. 5187 was not passed by Congress to cure any defect in
the ordinance and agreement in question and that the passage of said Republic Act
No. 5187 did not make the legal issues raised in the pleadings "moot, academic and
of no further validity or effect;" and
(2) Renders judgment:
(a) dismissing the Plaintiff's Complaint;
(b) Dismissing the Complaint in Intervention of Intervenor Pasay Law and
Conscience Union, Inc.,
(c) Enjoining Defendant Republic Real Estate Corporation and Defendant Pasay City
to have all the plans and specifications in the reclamation approved by the Director of
Public Works and to have all the contracts and sub-contracts for said reclamation
awarded by means of, and only after, public bidding; and
(d) Lifting the preliminary Injunction issued by the Court on April 26, 1962, as soon as
Defendant Republic Real Estate Corporation and Defendant Pasay City shall have
submitted the corresponding plans and specifications to the Director of Public Works,
and shall have obtained approval thereof, and as soon as the corresponding public
bidding for the award to the contractor and sub-contractor that will undertake the
reclamation project shall have been effected.
No pronouncement as to costs.
SO ORDERED. (See Court of Appeals' Decision dated January 28, 1992; pp. 6-8)
Dissatisfied with the said judgment, the Republic appealed therefrom to the Court of Appeals.
However, on January 11, 1973, before the appeal could be resolved, Presidential Decree No. 3-A
issued, amending Presidential Decree No. 3, thus:
Sec. 1. Section 7 of Presidential Decree No. 3, dated September 26, 1972, is hereby
amended by the addition of the following paragraphs:
The provisions of any law to the contrary notwithstanding, the reclamation of areas
under water, whether foreshore or inland, shall be limited to the National Government
or any person authorized by it under a proper contract.
All reclamations made in violation of this provision shall be forfeited to the State
without need of judicial action.
Contracts for reclamation still legally existing or whose validity has been accepted by
the National Government shall be taken over by the National Government on the
basis of quantum meruit, for proper prosecution of the project involved by
administration.
On November 20, 1973, the Republic and the Construction Development Corporation of the
Philippines ("CDCP") signed a Contract
13
for the Manila-Cavite Coastal Road Project (Phases I and II)
which contract included the reclamation and development of areas covered by the Agreement between
Pasay City and RREC. Then, there was issued Presidential Decree No. 1085 which transferred to the
Public Estate Authority ("PEA") the rights and obligations of the Republic of the Philippines under the
contract between the Republic and CDCP.
Attempts to settle amicably the dispute between representatives of the Republic, on the one hand,
and those of Pasay City and RREC, on the other, did not work out. The parties involved failed to
hammer out a compromise.
On January 28, 1992, the Court of Appeals came out with a Decision
14
dismissing the appeal of the
Republic and holding, thus:
WHEREFORE, the decision appealed from is hereby AFFIRMED with the following
modifications:
1. The requirement by the trial court on public bidding and submission of RREC's
plans specification to the Department Public Works and Highways in order that
RREC may continue the implementation of the reclamation work is deleted for being
moot and academic;
2. Ordering the plaintiff-appellant to turn over to Pasay City the ownership and
possession over all vacant spaces in the twenty-one hectare area already reclaimed
by Pasay City and RREC at the time it took over the same. Areas thereat over which
permanent structures has (sic) been introduced shall, including the structures,
remain in the possession of the present possessor, subject to any negotiation
between Pasay City and the said present possessor, as regards the continued
possession and ownership of the latter area.
3. Sustaining RREC's irrevocable option to purchase sixty (60%) percent of the
Twenty-One (21) hectares of land already reclaimed by it, to be exercised within one
(1) year from the finality of this decision, at the same terms and condition embodied
in the Pasay City-RREC reclamation contract, and enjoining appellee Pasay City to
respect RREC's option.
SO ORDERED.
On February 14, 1992, Pasay City and RREC presented a Motion for Reconsideration of such
Decision of the Court of Appeals, contending, among others, that RREC had actually reclaimed Fifty-
Five (55) hectares, and not only Twenty-one (21) hectares, and the respondent Court of Appeals
erred in not awarding damages to them, movants.
On April 28, 1992, the Court of Appeals acted favorably on the said Motion for Reconsideration, by
amending the dispositive portion of its judgment of January 28, 1992, to read as follows:
WHEREFORE, the dispositive portion of our Decision dated January 28, 1992 is
hereby AMENDED to read as follows:
1. The requirement by the trial court on public bidding and the submission of the
RREC's plans and specification to the Department of Public Works and Highways in
order that RREC may continue the implementation of the reclamation work is deleted
for being moot and academic.
2. Ordering plaintiff-appellant to turn over to Pasay City the ownership and
possession of the above enumerated lots (1 to 9).
3. Sustaining RREC's irrevocable option to purchase sixty (60%) percent of the land
referred to in No. 2 of this dispositive portion, to be exercised within one (1) year from
the finality of this Decision, at the same terms and condition embodied in the Pasay
City-RREC reclamation contract, and enjoining Pasay City to respect RREC's
irrevocable option.
SO ORDERED.
From the Decision and Amended Decision of the Court of Appeals aforementioned, the Republic of
the Philippines, as well as Pasay City and RREC, have come to this Court to seek relief, albeit with
different prayers.
On September 10, 1997, the Court commissioned the former thirteenth Division of Court of Appeals
to hear and receive evidence on the controversy. The corresponding Commissioner's Report, dated
November 25, 1997, was submitted and now forms part of the records.
On October 11, 1997, the Cultural Center of the Philippines ("CCP") filed a Petition in Intervention,
theorizing that it has a direct interest in the case being the owner of subject nine (9) lots titled in its
(CCP) name, which the respondent Court of Appeals ordered to be turned over to Pasay City. The
CCP, as such intervenor, was allowed to present its evidence, as it did, before the Court of Appeals,
which evidence has been considered in the formulation of this disposition.
In G.R. No. 103882, the Republic of the Philippines theorizes, by way of assignment of errors, that:
I
THE COURT OF APPEALS ERRED IN UPHOLDING THE VALIDITY
OF PASAY CITY ORDINANCE NO. 158 DATED APRIL 21, 1959
AND THE RECLAMATION CONTRACT ENTERED INTO BETWEEN
PASAY CITY AND RREC;
II
THE COURT OF APPEALS ERRED IN FINDING THAT RREC HAD
RECLAIMED 55 HECTARES AND IN ORDERING THE TURN-OVER
TO PASAY CITY OF THE OWNERSHIP AND POSSESSION OF
NINE (9) LOTS TITLED IN THE NAME OF CCP.
In G.R. No. 105276, the petitioners, Pasay City and RREC, contend, that:
I
THE COURT OF APPEALS ERRED IN NOT DECLARING
PRESIDENTIAL DECREE NO. 3-A UNCONSTITUTIONAL;
II
THE COURT OF APPEALS ERRED IN NOT AWARDING DAMAGES
IN FAVOR OF PASAY CITY AND RREC.
Let us first tackle the issues posed in G.R. No. 103882.
On the first question regarding the validity of Pasay City Ordinance No. 158 dated April 21, 1959 and
the Agreement dated April 24, 1959 between Pasay City and RREC, we rule in the negative.
Sec. 1 of RA 1899, reads:
Sec. 1. Authority is hereby granted to all municipalities and chartered
cities to undertake and carry out at their own expense the reclamation
by dredging, filling, or other means, of any foreshore lands bordering
them, and to establish, provide, construct, maintain and repair proper
and adequate docking and harbor facilities as such municipalities and
chartered cities may determine in consultation with the Secretary of
Finance and the Secretary of Public Works and Communications.
It is the submission of the petitioner, Republic of the Philippines, that there are no foreshore
lands along the seaside of Pasay City
15
; that what Pasay City has are submerged or offshore
areas outside the commerce of man which could not be a proper subject matter of the Agreement
between Pasay City and RREC in question as the area affected is within the National Park, known
as Manila Bay Beach
Resort
, established under Proclamation No. 41, dated July 5, 1954, pursuant to Act No. 3915, of which area it
(Republic) has been in open, continuous and peaceful possession since time immemorial.
Petitioner faults the respondent court for unduly expanding what may be considered "foreshore land"
through the following disquisition:
The former Secretary of Justice Alejo Mabanag, in response to a
request for an opinion from the then Secretary of Public Works and
Communications as to whether the term, "foreshore areas" as used in
Section I of the immediately aforequoted law is that defined in
Webster's Dictionary and the Law of Waters so as to make any
dredging or filling beyond its prescribed limit illegal, opined:
According to the basic letter of the Director of Public
Works, the law of Waters speaks of "shore" and
defines it thus: "that space movement of the tide. Its
interior or terrestrial limit in the line reached by
highest equinoctial tides."
Webster's definition of foreshore reads as follows:
That part of the shore between high water and low-
water marks usually fixed at the line to which the
ordinary means tide flows: also, by extension, the
beach, the shore near the water's edge.
If we were to be strictly literal the term foreshore or
foreshore lands should be confined to but a portion of
the shore, in itself a very limited area. (p. 6,
Intervenors-appellees' brief).
Bearing in mind the (Webster's and Law of Waters)
definitions of "shore" and of foreshore lands, one is
struck with the apparent inconsistency between the
areas thus described and the purpose to which that
area, when reclaimed under the provision of Republic
Act No. 1899, shall be devoted. Section I (of said
Law) authorizes the construction thereat of "adequate
docking and harbor facilities". This purpose is
repeated in Sections 3 and 4 of the Act.
And yet, it is well known fact that foreshore lands
normally extend only from 10 to 20 meters along the
coast. Not very much more if at all. In fact certain
parts in Manila bordering on Manila Bay, has no
foreshore to speak of since the sea washes the sea
wall.
It does not seem logical, then, that Congress had in
mind. Webster's limited concept of foreshore when it
enacted Republic Act No. 1899, unless it intends that
the wharves, piers, docks, etc. should be constructed
parallel to the shore, which is impractical.
Since it is to be presumed that Congress could not
have intended to enact an ineffectual measure not
one that would lead to absurd consequences, it would
seem that it used "foreshore" in a sense wider in
scope that defined by Webster. . . .
To said opinion on the interpretation of the R.A. 1899, plaintiff-
appellant could not offer any refutation or contrary opinion. Neither
can we. In fact, the above construction is consistent with the "rule on
context" in statutory construction which provides that in construing a
statute, the same must be construed as a whole. The particular
words, clauses and phrases should not be studied as detached and
isolated expressions, but the whole and every part of the statute must
be considered in fixing the meaning of any of its parts in order to
produce a harmonious whole (see Araneta vs. Concepcion, 99 Phil.
709). There are two reasons for this. Firstly, the force and
significance of particular expressions will largely depend upon the
connection in which they are found and their relation to the general
subject-matter of the law. The legislature must be understood to have
expressed its whole mind on the special object to which the
legislative act is directed but the vehicle for the expressions of that
meaning is the statute, considered as one entire and continuous act,
and not as an agglomeration of unrelated clauses. Each clause or
provision will be illuminated by those which are cognate to it and by
the general tenor of the whole statute and thus obscurities end
ambiguities may often be cleared up by the most direct and natural
means. Secondly effect must be given, if it is possible, to every word
and clause of the statute, so that nothing shall be left devoid of
meaning or destitute of force. To this end, each provision of the
statute should be read in the light of the whole. For the general
meaning of the legislature, as gathered from the entire act, may often
prevail over the construction which would appear to be the most
natural and obvious on the face of a particular clause. If is by this
means that contradiction and repugnance between the different parts
of the statute may be avoided. (See Black, Interpretation of Laws,
2nd Ed., pp. 317-319).
Resorting to extrinsic aids, the "Explanatory Note" to House Bill No.
3830, which was subsequently enacted as Republic Act No. 1899,
reads:
In order to develop and expand the Maritime
Commerce of the Philippines, it is necessary that
harbor facilities be correspondingly improved and,
where necessary, expanded and developed. The
national government is not in a financial position to
handle all this work. On the other hand, with a greater
autonomy many chartered cities and provinces are
financially able to have credit position which will allow
them to undertake these projects. Some cities, such
as the City of Bacolod under R.A. 161, has been
authorized to reclaim foreshore lands bordering it.
Other cities end provinces have continuously been
requesting for authority to reclaim foreshore lands on
the basis of the Bacolod City pattern, and to
undertake work to establish, construct on the
reclaimed area and maintain such port facilities as
may be necessary. In order not to unduly delay the
undertaking of these projects, and inorder to obviate
the passage of individual pieces of legislation for
every chartered city and province, it is hereby
recommended that the accompanying bill be
approved. It covers Authority for All chartered cities
and provinces to undertake this work. . . . (emphasis
supplied)
Utilizing the above explanatory note in interpreting and construing the
provisions of R.A. 1899, then Secretary of Justice Mabanag opined:
It is clear that the "Bacolod City pattern" was the basis
of the enactment of the aforementioned bill of general
application. This so-called "Bacolod City pattern"
appears to be composed of 3 parts, namely: Republic
Ad No. 161, which grants authority to Bacolod City to
undertake or carry out . . . the reclamation . . . of any
[sic] carry out the reclamation project conformably
with Republic Act No. 161; and Republic Act No. 1132
authorizing Bacolod City to contract indebtedness or
to issue bonds in the amount not exceeding six million
pesos to finance the reclamation of land in said city.
Republic Act No. 161 did not in itself specify the
precise space therein referred to as "foreshore" lands,
but it provided that docking and harbor facilities
should be erected on the reclaimed portions thereof,
while not conclusive would indicate that Congress
used the word "foreshore" in its broadest sense.
Significantly, the plan of reclamation of foreshore
drawn up by the Bureau of Public Works maps out an
area of approximately 1,600,000 square meters, the
boundaries of which clearly extend way beyond
Webster's limited concept of the term "foreshore". As
a contemporaneous construction by that branch of the
Government empowered to oversee at least, the
conduct of the work, such an interpretation deserves
great weight. Finally, Congress in enacting Republic
Act No. 1132 (supplement to RA 161), tacitly
confirmed and approved the Bureau's interpretation of
the term 'foreshore' when instead of taking the
occasion to correct the Bureau of over extending its
plan, it authorized the city of Bacolod to raise the full
estimated cost of reclaiming the total area covered by
the plan. The explanatory note to House Bill No. 1249
which became Republic Act No. 1132 states among
the things:
The Bureau of Public Works already prepared a plan
for the reclamation of about 1,600,000 square meters
of land at an estimated costs of about P6,000,000.00.
The project is self-supporting because the proceeds
from the sales or leases of lands so reclaimed will be
more than sufficient to cover the cost of the project.
Consequently, when Congress passed Republic Act
No. 1899 in order to facilitate the reclamation by local
governments of foreshore lands on the basis of the
Bacolod City pattern and in order to obviate the
passage of individual pieces of legislation for every
chartered city and provinces requesting authority to
undertake such projects, the lawmaking body could
not have had in mind the limited area described by
Webster as "foreshore" lands. . . . .
If it was really the intention of Congress to limit the area to the strict
literal meaning of "foreshore" lands which may be reclaimed by
chartered cities and municipalities, Congress would have excluded
the cities of Manila, Iloilo, Cebu, Zamboanga and Davao from the
operation of RA 1899 as suggested by Senator Cuenco during the
deliberation of the bill considering that these cities do not have
'foreshore' lands in the strict meaning of the term. Yet, Congress did
not approve the proposed amendment of Senator Cuenco, implying
therefore, that Congress intended not to limit the area that may be
reclaimed to the strict definition of "foreshore" lands.
The opinion of the then Secretary of Justice Mabanag, who was at
that time the chief law officer and legal adviser of the government and
whose office is required by law to issue opinions for the guidance of
the various departments of the government, there being then no
judicial interpretation to the contrary, is entitled to respect
(see Bengzon vs. Secretary of Justice and Insular Auditor, 68 Phil.
912).
We are not unmindful of the Supreme Court Resolution dated
February 3, 1965 in Ponce vs. Gomez (L-21870) and Ponce vs. City
of Cebu (L-2266), by a unanimous vote of six (6) justices (the other
five (5) members deemed it unnecessary to express their view
because in their opinion the questions raised were not properly
brought before the court), which in essence applied the strict
dictionary meaning of "foreshore lands" as used in RA 1899 in the
case of the city of Cebu. But this was promulgated long after the then
Secretary of Justice Mabanag rendered the above opinion on
November 16, 1959 and long after RREC has started the subject
reclamation project.
Furthermore, as held by the lower court, Congress, after the Supreme
Court issued the aforementioned Resolution, enacted RA 5187. In
Sec. 3 (m) of said law, Congress appropriated money "for the
construction of the seawall and limited access highway from the
South boundary of the city of Manila to Cavite City, to the South, and
from the North boundary of the city of Manila to the municipality of
Mariveles, province of Bataan, to the North (including the reclamation
of foreshore and submerged areas . . . provided . . . that . . . existing
projects and/or contracts of city or municipal governments for the
reclamation of foreshore and submerged lands shall be respected . .
." This is a clear manifestation that Congress in enacting RA 1899,
did not intend to limit the interpretation of the term "foreshore land" to
its dictionary meaning.
It is presumed that the legislature was acquainted with and had in
mind the judicial construction given to a former statute on the subject,
and that the statute on the subject, and that the statute was enacted
having in mind the judicial construction that the prior enactment had
received, or in the light of such existing judicial decisions as have
direct bearing upon it (see 50 Am. Jur., Sec. 321, pp. 312-313). But
notwithstanding said interpretation by the Supreme Court of RA 1899
in the Ponce cases, Congress enacted a law covering the same
areas previously embraced in a RA 1899 (as mentioned earlier, cities
without foreshore lands which were sought to be excluded from the
operation of RA 1899 were not excluded), providing that respect be
given the reclamation of not only foreshore lands but also of
submerged lands signifying its non-conformity to the judicial
construction given to RA 1899. If Congress was in accord with the
interpretation and construction made by the Supreme Court on RA
1899, it would have mentioned reclamation of "foreshore lands" only
in RA 5187, but Congress included "submerged lands" in order to
clarify the intention on the grant of authority to cities and
municipalities in the reclamation of lands bordering them as provided
in RA 1899. It is, therefore, our opinion that it is actually the intention
of Congress in RA 1899 not to limit the authority granted to cities and
municipalities to reclaim foreshore lands in its strict dictionary
meaning but rather in its wider scope as to include submerged lands.
The Petition is impressed with merit.
To begin with, erroneous and unsustainable is the opinion of respondent court that under RA 1899,
the term "foreshore lands" includes submerged areas. As can be gleaned from its disquisition and
rationalization aforequoted, the respondent court unduly stretched and broadened the meaning of
"foreshore lands", beyond the intentment of the law, and against the recognized legal connotation of
"foreshore lands". Well entrenched, to the point of being elementary, is the rule that when the law
speaks in clear and categorical language, there is no reason for interpretation or construction, but
only for application.
16
So also, resort to extrinsic aids, like the records of the constitutional convention, is
unwarranted, the language of the law being plain and unambiguous.
17
Then, too, opinions of the
Secretary of Justice are unavailing to supplant or rectify any mistake or omission in the law.
18
To repeat,
the term "foreshore lands" refers to:
The strip of land that lies between the high and low water marks and
that is alternately wet and dry according to the flow of the tide.
(Words and Phrases, "Foreshore")
A strip of land margining a body of water (as a lake or stream); the
part of a seashore between the low-water line usually at the seaward
margin of a low-tide terrace and the upper limit of wave wash at high
tide usually marked by a beach scarp or berm. (Webster's Third New
International Dictionary)
The duty of the court is to interpret the enabling Act, RA 1899. In so doing, we cannot broaden its
meaning, much less widen the coverage thereof. If the intention of Congress were to include
submerged areas, it should haveprovided expressly. That Congress did not so provide could only
signify the exclusion of submerged areas from the term "foreshore lands".
Neither is there any valid ground to disregard the Resolution of this Court dated February 3, 1965
in Ponce v. Gomez (L-21870) and Ponce v. City of Cebu (L-22669) despite the enactment of
Republic Act No. 5187 ("RA 5187"), the relevant portion of which, reads:
Sec. 3. Miscellaneous Projects
xxx xxx xxx
m. For the construction of seawall and limited access highway from
the south boundary of the City of Manila to Cavite City, to the south,
and from the north boundary of the City of Manila to the municipality
of Mariveles, province of Bataan, to the north, including the
reclamation of the foreshore and submerged areas: Provided, That
priority in the construction of such seawalls, highway and attendant
reclamation works shell be given to any corporation and/or
corporations that may offer to undertake at its own expense such
projects, in which case the President of the Philippines may, after
competitive bidding, award contracts for the construction of such
projects, with the winning bidder shouldering all costs thereof, the
same to be paid in terms of percentage fee of the contractor which
shall not exceed fifty percent of the area reclaimed by the contractor
and shall represent full compensation for the purpose, the provisions
of the Public Land Law concerning disposition of reclaimed and
foreshore lands to the contrary notwithstanding: Provided, finally, that
the foregoing provisions and those of other laws, executive orders,
rules and regulations to the contrary notwithstanding, existing rights,
projects and/or contracts of city or municipal governments for the
reclamation of foreshore and submerged lands shall be respected. . .
. .
There is nothing in the foregoing provision of RA 5187 which can be interpreted to broaden the
scope of "foreshore lands." The said law is not amendatory to RA 1899. It is an Appropriations Act,
entitled "AN ACT APPROPRIATING FUNDS FOR PUBLIC WORKS, SYNCHRONIZING THE
SAME WITH PREVIOUS PUBLIC WORKS APPROPRIATIONS."
All things viewed in proper perspective, we reiterate what was said in Ponce v. Gomez (L-21870)
and Ponce v. City of Cebu (L-22669) that the term "foreshore" refers to "that part of the land
adjacent to the sea which is alternately covered and left dry by the ordinary flow of the tides." As
opined by this Court in said cases:
WHEREAS, six (6) members of the Court (Justices Bautista Angelo,
Concepcion, Reyes, Barrera, Dizon and Jose P. Bengzon) opine that
said city ordinance and contracts areultra vires and hence, null and
void, insofar as the remaining 60% of the area aforementioned,
because the term "foreshore lands" as used in Republic Act No. 1899
should be understood in the sense attached thereto by common
parlance; (emphasis ours)
The aforesaid ruling was applied by then Secretary of Justice Claudio Teehankee, in his opinion
dated December 22, 1966, in a case with analogous facts as the present one, to wit:
Decem
ber 22,
1966
The Secretary of Agriculture
and Natural Resources
Diliman, Quezon City
Sir:
xxx xxx xxx
I. Facts
1. On January 19, 1961, pursuant to the provisions of Republic Act
No. 1899, the Municipality of Navotas enacted Ordinance No. 1
authorizing the Municipal Mayor to enter into a reclamation contract
with Mr. Chuanico.
2. On March 15, 1961, a reclamation contract was concluded
between the Municipality of Navotas, represented by the Municipal
Mayor, and Mr. Chuanico in accordance with the above ordinance.
Thereunder, Mr. Chuanico shall be the attorney-in-fact of the
Municipality in prosecuting the reclamation project and shall advance
the money needed therefor; that the actual expenses incurred shall
be deemed a loan to the Municipality; that Mr. Chuanico shall have
the irrevocable option to buy 70% of the reclaimed area at P7.00 per
square meter; that he shall have the full and irrevocable powers to do
any and all things necessary and proper in and about the premises,"
including the power to hire necessary personnel for the prosecution of
the work, purchase materials and supplies, and purchase or lease
construction machineries and equipment, but any and all contracts to
be concluded by him in behalf of the Municipality shall be submitted
to public bidding.
xxx xxx xxx
3. On March 16, 1961, the Municipal Council of Navotas passed
Resolution No. 22 approving and ratifying the contract.
xxx xxx xxx
III. Comments
1. The above reclamation contract was concluded on the basis of
Navotas Ordinance No. 1 which, in turn, had been enacted avowedly
pursuant to Republic Act No. 1899. This being so, the contract, in
order to be valid, must conform to the provisions of the said law.
By authorizing local governments "to execute by administration any
reclamation work," (Republic Act No. 1899 impliedly forbids the
execution of said project by contract. Thus, in the case or Ponce et
al. vs. Gomez (February 3, 1966), five justices of the Supreme Court
voted to annul the contract between Cebu Development Corporation
and Cebu City for the reclamation of foreshore lands because "the
provisions of said . . . contract are not . . . in accordance with the
provisions of Republic Act No. 1899," as against one Justice who
opined that the contract substantially complied with the provisions of
the said law. (Five Justices expressed no opinion on this point.)
Inasmuch as the Navotas reclamation contract is substantially similar
to the Cebu reclamation contract, it is believed that the former is
likewise fatally defective.
2. The Navotas reclamation project envisages the construction of a
channel along the Manila Bay periphery of that town and the
reclamation of approximately 650 hectares of land from said channel
to a seaward distance of one kilometer. In the basic letter it is stated
that "practically, all the 650 hectares of lands proposed to be
reclaimed under the agreement" do not constitute foreshore lands
and that "the greater portion of the area . . . is in fact navigable and
presently being used as a fishing harbor by deep-sea fishing
operators as well as a fishing ground of sustenance fisherman.
Assuming the correctness of these averments, the Navotas
reclamation contract evidently transcends the authority granted under
Republic Act No. 1899, which empowers the local governments to
reclaim nothing more than "foreshore lands, i.e., "that part of the land
adjacent to the see which is alternately covered and left dry by the
ordinary flow of the tides." (26 C.J. 890.) It was for this reason that in
the cited case Ponce case, the Supreme Court, by a vote of 6-0 with
five Justices abstaining, declared ultra vires and void the contractual
stipulation for the reclamation of submerged lands off Cebu City, and
permanently enjoined its execution under Republic Act No. 1899.
xxx xxx xxx
In accordance with the foregoing, I have the honor to submit the view
that the Navotas reclamation contract is not binding and should be
disregarded for non-compliance with law.
Very
truly
yours,
(SGD)
CLAUD
IO
TEEHA
NKEE
Secret
ary of
Justice
The said opinion of Justice Secretary Teehankee who became Associate Justice, and later Chief
Justice, of this Court, did, in our considered view, supersede the earlier opinion of former justice
Secretary Alejo Mabanag, aforestated, as the cases, in connection with which subject opinions were
sought, were with similar facts. The said Teehankee opinion accords with RA 1899.
It bears stressing that the subject matter of Pasay City Ordinance No. 121, as amended by
Ordinance No. 158, and the Agreement under attack, have been found to be outside the intendment
and scope of RA 1899, and therefore ultra vires and null and void.
What is worse, the same Agreement was vitiated by the glaring absence of a public bidding.
Obviously, there is a complete dearth of evidence to prove that RREC had really reclaimed 55
hectares. The letter of Minister Baltazar Aquino relied upon by RREC is no proof at all that RREC
had reclaimed 55 hectares. Said letter was just referring to a tentative schedule of work to be done
by RREC, even as it required RREC to submit the pertinent papers to show its supposed
accomplishment, to secure approval by the Ministry of Public Works and Highways to the
reclamation plan, and to submit to a public bidding all contracts and sub-contracts for subject
reclamation project but RREC never complied with such requirements and conditions sine qua non.
No contracts or sub-contracts or agreements, plans, designs, and/or specifications of the
reclamation project were presented to reflect any accomplishment. Not even any statement or
itemization of works accomplished by contractors or subcontractors or vouchers and other relevant
papers were introduced to describe the extent of RREC's accomplishment. Neither was the requisite
certification from the City Engineer concerned that "portions of the reclamation project not less than
50 hectares in area shall have been accomplished or completed" obtained and presented by RREC.
As a matter of fact, no witness ever testified on any reclamation work done by RREC, and extent
thereof, as of April 26, 1962. Not a single contractor, sub-contractor, engineer, surveyor, or any other
witness involved in the alleged reclamation work of RREC testified on the 55 hectares supposedly
reclaimed by RREC. What work was done, who did the work, where was it commenced, and when
was it completed, was never brought to light by any witness before the court. Certainly, onus
probandi was on RREC and Pasay City to show and point out the as yet unidentified 55 hectares
they allegedly reclaimed. But this burden of proof RREC and Pasay City miserably failed to
discharge.
So also, in the decision of the Pasay Court of First Instance dismissing the complaint of plaintiff-
appellant, now petitioner Republic of the Philippines, the lifting of the writ of Preliminary Injunction
issued on April 26, 1962 would become effective only "as soon as Defendant Republic Real Estate
Corporation and Defendant Pasay City shall have submitted the corresponding plans and
specifications to the Director of Public Work, and shall have obtained approval thereof, and as soon
as corresponding public bidding for the award to the contractor and sub-contractor that will
undertake the reclamation project shall have been effected." (Rollo, pp. 127-129, G.R. No. 103882)
From the records on hand, it is abundantly clear that RREC and Pasay City never complied with
such prerequisites for the lifting of the writ of Preliminary Injunction. Consequently, RREC had no
authority to resume its reclamation work which was stopped by said writ of preliminary injunction
issued on April 26, 1962.
From the Contract for Dredging Work, dated November 26, 1960, marked Exhibit "21-A" for RREC
before the lower court, and Exhibit "EE" for CCP before the Court of Appeals, it can be deduced that
only on November 26, 1960 did RREC contract out the dredging work to C and A Construction
Company, Inc., for the reclamation of the 55 hectares initially programmed to be reclaimed by it. But,
as stated by RREC itself in the position paper filed with this Court on July 15, 1997, with reference to
CDCP's reclamation work, mobilization of the reclamation team would take one year before a
reclamation work could actually begin. Therefore, the reclamation work undertaker by RREC could
not have started before November 26, 1961.
Considering that on April 26, 1962 RREC was enjoined from proceeding any further with its
reclamation work, it had barely five (5) months, from November, 1961 to April, 1962, to work on
subject reclamation project. It was thus physically impossible for RREC to reclaim 55 hectares, with
the stipulated specifications and elevation, in such a brief span of time. In the report of RREC
(Exhibit "DD" for CCP), it was conceded that due to the writ of preliminary injunction issued on April
26, 1962, C and A Construction Co., Inc. had suspended its dredging operation since May, 1962.
The "graphical report" on the Pasay Reclamation project, as of April 30, 1962, attached to the
Progress Report marked Exhibit "DD", is a schematic representation of the work accomplishment
referred to in such Progress Report, indicating the various elevations of the land surface it
embraced, ranging from 0.00 meters to the highest elevation of 2.5 meters above MLLW. Such
portrayal of work accomplished is crucial in our determination of whether or not RREC had actually
"reclaimed" any land as under its Contract for Dredging Work with C and A Construction Company
(Exhibit "EE", the required final elevation for a completely reclaimed land was 3.5 meters above
MLLW, as explicitly provided in said Contract for Dredging Work. So, the irresistible conclusion is
when the work on subject RREC-Pasay City reclamation project stopped in April, 1962 in
compliance with the writ of preliminary injunction issued by the trial court of origin, no portion of the
reclamation project worked on by RREC had reached the stipulated elevation of 3.5 meters above
MLLW. The entire area it worked on was only at sea level or 0.00 meter above MLLW. In short,
RREC had not yet reclaimed any area when the writ of preliminary injunction issued in April 1962.
On this point, the testimonies of Architect Ruben M. Protacio, Architect and Managing partner of
Leandro V. Locsin and partners, Architect and City Planner Manuel T. Maoza, Jr. of Planning
Resources and Operation System, Inc., Rose D. Cruz, Executive Assistant, Office of the President,
from 1966 to 1970, and Dr. Lucrecia Kasilag, National Artist and member of CCP Advisory
Committee, come to the fore. These credible, impartial and knowledgeable witnesses recounted on
the witness stand that when the construction of the Main Building of the Cultural Center of the
Philippines (CCP) began in 1966, the only surface land available was the site for the said building
(TSN, Sept. 29, 1997, pages 8, 14 and 50), what could be seen in front of and behind it was all water
(TSN, Sept. 29, 1997 pages 127-128). When the CCP Main Building was being constructed, from
1968 to 1969, the land above sea level thereat was only where the CCP Main Building was erected
and the rest of the surroundings were all under water, particularly the back portion fronting the bay.
(TSN, Sept. 13, 1997, pp. 181, 182, 185, 186, 188). Dr. Lucrecia R. Kasilag stressed that on April
16, 1966, during the ground breaking for the CCP Main Building, it was water all around (TSN, Sept.
30, 1997, pp. 320, 324, 325).
There was indeed no legal and factual basis for the Court of Appeals to order and declare that "the
requirement by the trial court on public bidding and the submission of RREC's plans and
specification to the Department of Public Works and Highways in order that RREC may continue the
implementation of the reclamation work is deleted for being moot and academic." Said requirement
has never become moot and academic. It has remained indispensable, as ever, and non-compliance
therewith restrained RREC from lawfully resuming the reclamation work under controversy,
notwithstanding the rendition below of the decision in its favor.
Verily, contrary to what the Court of Appeals found, RREC had not reclaimed any area with the
prescribed elevation of 3.5 meters above MLLW, so much so that in 1978, it (RREC) opted to file
with the former Ministry of Public Highways, a claim for compensation of P30,396,878.20, for
reclamation work allegedly done before the CDCP started working on the reclamation of the CCP
grounds. On September 7, 1979, RREC asked the Solicitor General to settle its subject claim for
compensation at the same amount of P30,396,878.20. But on June 10, 1981, guided by the cost
data, work volume accomplished and other relevant information gathered by the former Ministry of
Public Highways, the Solicitor General informed RREC that the value of what it had accomplished,
based on 1962 price levels, was only P8,344,741.29, and the expenses for mobilization of
equipment amounted to P2,581,330.00. The aforesaid evaluation made by the government, through
the then Minister of Public Highways, is factual and realistic, so much so that on June 25, 1981,
RREC, in its reply letter to the Solicitor General, stated:
We regret that we are not agreeable to the amount of
P10,926,071.29, based on 1962 cost data, etc., as compensation
based on quantum meruit. The least we would consider is the amount
of P10,926,071.29 plus interest at the rate of 6% per annum from
1962 to the time of payment. We feel that 6% is very much less than
the accepted rate of inflation that has supervened since 1962 to the
present, and even less than the present legal rate of 12% per
annum.
19

Undoubtedly, what RREC claimed for was compensation for what it had done, and for the dredge fill
of 1,558,395 cubic meters it used, on subject reclamation project.
Respondent Court likewise erred in ordering the turn-over to Pasay City of the following titled lots, to
wit:
LOT NO. BUILDING AREA OCT/TCT
42 Gloria Maris 9,516 sq.m. OCT 159 in the
Restaurant name of GSIS
3 Asean Garden 76,299 sq.m. OCT 10251 in the
name of CCP
12 Folk Arts Theater 1.7503 hec. TCT 18627 in the
and PICC parking name of CCP
space
22 landscaped with 132,924 sq.m. TCT 75676 in the
sculpture of Asean name of CCP
Artists-site of
Boom na Boom
23 open space, back 34,346 sq.m. TCT 75677 in the
of Philcite name of CCP
24 Parking space for 10,352 sq.m. TCT 75678 in the
Star City, CCP, name of CCP
Philcite
25 open space 11,323 sq.m. TCT 75679 in the
occupied by Star name of CCP
City
28 open space, 27,689 sq.m. TCT 75684 in the
beside PICC name of CCP
29 open space, 106,067 sq.m. TCT 75681 in the
leased by El name of CCP
Shaddai
We discern no factual basis nor any legal justification therefor. In the first place, in their
answer to the Complaint and Amended Complaint below, RREC and Pasay City never
prayed for the transfer to Pasay City of subject lots, title to which had long become
indefeasible in favor of the rightful title holders, CCP and GSIS, respectively.
The annotation of a notice of lis pendens on the certificates of title covering the said lots is of no
moment. It did not vest in Pasay City and RREC any real right superior to the absolute ownership
thereover of CCP and GSIS. Besides, the nature of the action did not really warrant the issuance of
a notice of lis pendens.
Sec. 14 of Rule 13, Revised Rules of Civil Procedure, reads:
Sec. 14. Notice of lis pendens. In an action affecting the title or the
right of possession of real properly, the plaintiff and the defendant,
when affirmative relief is claimed in his answer, may record in the
office of the registry of deeds of the province in which the property is
situated a notice of the pendency of the action. Said notice shall
contain the names of the parties and the object of the action or
defense, and a description of the property in that province affected
thereby. Only from the time of filing such notice for record shall a
purchaser, or encumbrancer of the property affected thereby, be
deemed to have constructive notice of the pendency of the action,
and only of its pendency against the parties designated by their real
names.
The notice of lis pendens herein above mentioned may be cancelled
only upon order of the court, after proper showing that the notice is
for the purpose of molesting the adverse party, or that it is not
necessary to protect the rights of the party who caused it to be
recorded.
Under the aforecited provision of law in point, a notice of lis pendens is necessary when the action is
for recovery of possession or ownership of a parcel of land. In the present litigation, RREC and
Pasay City, as defendants in the main case, did not counterclaim for the turnover to Pasay City of
the titled lots aforementioned.
What is more, a torrens title cannot be collaterally attacked. The issue of validity of a torrens title,
whether fraudulently issued or not, may be posed only in an action brought to impugn or annul it.
(Halili vs. National Labor Relations Commission, 257 SCRA 174, Cimafranca vs. Intermediate
Appellate Court, 147 SCRA 611.) Unmistakable, and cannot be ignored, is the germane provision of
Section 48 of P.D. 1529, that a certificate of title can never be the subject of a collateral attack. It
cannot be altered, modified, or cancelled except in a direct proceeding instituted in accordance with
law.
Although Pasay City and RREC did not succeed in their undertaking to reclaim any area within
subject reclamation project, it appearing that something compensable was accomplished by them,
following the applicable provision of law and hearkening to the dictates of equity, that no one, not
even the government, shall unjustly enrich oneself/itself at the expense of another
20
, we believe; and
so hold, that Pasay City and RREC should be paid for the said actual work done and dredge-fill poured in,
worth P10,926,071.29, as verified by the former Ministry of Public Highways, and as claimed by RREC
itself in its aforequoted letter dated June 25, 1981.
It is fervently hoped that long after the end of our sojourn in this valley of tears, the court, for its
herein historic disposition, will be exalted by the future generations of Filipinos, for the preservation
of the national patrimony and promotion of our cultural heritage. As writer Channing rightly puts it:
"Whatever expands the affections, or enlarges the sphere of our sympathies Whatever makes us
feel our relation to the universe and all that it inherits in time and in eternity, and to the great and
beneficent cause of all, must unquestionably refine our nature, and elevate us in the scale of being."
WHEREFORE:
In G.R. No. 103882, the Petition is GRANTED; the Decision, dated January 28, 1992, and Amended
Decision, dated April 28, 1992, of the Court of Appeals, are both SET ASIDE; and Pasay City
Ordinance No. 121, dated May 6, 1958, and Ordinance No. 158, dated April 21, 1959, as well as the
Reclamation Agreements entered into by Pasay City and Republic Real Estate Corporation (RREC)
as authorized by said city ordinances, are declared NULL and VOID for being ultra vires, and
contrary to Rep. Act 1899.
The writ of preliminary injunction issued on April 26, 1962 by the trial court a quo in Civil Case No.
2229-P is made permanent and the notice of lis pendens issued by the Court of Appeals in CA G.R.
CV No. 51349 ordered CANCELLED. The Register of Deeds of Pasay City is directed to take note of
and annotate on the certificates of title involved, the cancellation of subject notice of lis pendens.
The petitioner, Republic of the Philippines, is hereby ordered to pay Pasay City and Republic Real
Estate Corporation the sum of TEN MILLION NINE HUNDRED TWENTY-SIX THOUSAND
SEVENTY-ONE AND TWENTY-NINE CENTAVOS (P10,926,071.29) PESOS, plus interest thereon
of six (6%) percent per annum from May 1, 1962 until full payment, which amount shall be divided by
Pasay City and RREC, share and share alike.
In G.R. No. 105276, the Petition is hereby DENIED for lack of merit.
No pronouncement as to costs.
SO ORDERED



G.R. No. L40474 August 29, 1975
CEBU OXYGEN & ACETYLENE CO., INC., petitioner,
vs.
HON. PASCUAL A. BERCILLES Presiding Judge, Branch XV, 14th Judicial District, and JOSE
L. ESPELETA, Assistant Provincial Fiscal, Province of Cebu, representing the Solicitor
General's Office and the Bureau of Lands, respondents.
Jose Antonio R Conde for petitioner.
Office of the Acting Solicitor General Hugo E. Gutierrez, Jr., Assistant Solicitor General Octavio R.
Ramirez and Trial Attorney David R. Hilario for respondents. .

CONCEPCION, Jr., J .:
This is a petition for the review of the order of the Court of First Instance of Cebu dismissing
petitioner's application for registration of title over a parcel of land situated in the City of Cebu.
The parcel of land sought to be registered was only a portion of M. Borces Street, Mabolo, Cebu
City. On September 23, 1968, the City Council of Cebu, through Resolution No. 2193, approved on
October 3, 1968, declared the terminal portion of M. Borces Street, Mabolo, Cebu City, as an
abandoned road, the same not being included in the City Development Plan.
1
Subsequently, on
December 19, 1968, the City Council of Cebu passed Resolution No. 2755, authorizing the Acting City
Mayor to sell the land through a public bidding.
2
Pursuant thereto, the lot was awarded to the herein
petitioner being the highest bidder and on March 3, 1969, the City of Cebu, through the Acting City
Mayor, executed a deed of absolute sale to the herein petitioner for a total consideration of
P10,800.00.
3
By virtue of the aforesaid deed of absolute sale, the petitioner filed an application with the
Court of First instance of Cebu to have its title to the land registered.
4

On June 26, 1974, the Assistant Provincial Fiscal of Cebu filed a motion to dismiss the application
on the ground that the property sought to be registered being a public road intended for public use is
considered part of the public domain and therefore outside the commerce of man. Consequently, it
cannot be subject to registration by any private individual.
5

After hearing the parties, on October 11, 1974 the trial court issued an order dismissing the
petitioner's application for registration of title.
6
Hence, the instant petition for review.
For the resolution of this case, the petitioner poses the following questions:
(1) Does the City Charter of Cebu City (Republic Act No. 3857) under Section 31,
paragraph 34, give the City of Cebu the valid right to declare a road as abandoned?
and
(2) Does the declaration of the road, as abandoned, make it the patrimonial property
of the City of Cebu which may be the object of a common contract?
(1) The pertinent portions of the Revised Charter of Cebu City provides:
Section 31. Legislative Powers. Any provision of law and executive order to the
contrary notwithstanding, the City Council shall have the following legislative powers:
xxx xxx xxx
(34) ...; to close any city road, street or alley, boulevard, avenue, park or square.
Property thus withdrawn from public servitude may be used or conveyed for any
purpose for which other real property belonging to the City may be lawfully used or
conveyed.
From the foregoing, it is undoubtedly clear that the City of Cebu is empowered to close a city road or
street. In the case of Favis vs. City of Baguio,
7
where the power of the city Council of Baguio City to
close city streets and to vacate or withdraw the same from public use was similarly assailed, this court
said:
5. So it is, that appellant may not challenge the city council's act of withdrawing a
strip of Lapu-Lapu Street at its dead end from public use and converting the
remainder thereof into an alley. These are acts well within the ambit of the power to
close a city street. The city council, it would seem to us, is the authority competent to
determine whether or not a certain property is still necessary for public use.
Such power to vacate a street or alley is discretionary. And the discretion will not
ordinarily be controlled or interfered with by the courts, absent a plain case of abuse
or fraud or collusion. Faithfulness to the public trust will be presumed. So the fact that
some private interests may be served incidentally will not invalidate the
vacation
ordinance.
(2) Since that portion of the city street subject of petitioner's application for registration of
title was withdrawn from public use, it follows that such withdrawn portion becomes
patrimonial property which can be the object of an ordinary contract.
Article 422 of the Civil Code expressly provides that "Property of public dominion, when no longer
intended for public use or for public service, shall form part of the patrimonial property of the State."
Besides, the Revised Charter of the City of Cebu heretofore quoted, in very clear and unequivocal
terms, states that: "Property thus withdrawn from public servitude may be used or conveyed for any
purpose for which other real property belonging to the City may be lawfully used or conveyed."
Accordingly, the withdrawal of the property in question from public use and its subsequent sale to
the petitioner is valid. Hence, the petitioner has a registerable title over the lot in question.
WHEREFORE, the order dated October 11, 1974, rendered by the respondent court in Land Reg.
Case No. N-948, LRC Rec. No. N-44531 is hereby set aside, and the respondent court is hereby
ordered to proceed with the hearing of the petitioner's application for registration of title.
SO ORDERED.
Makalintal, C.J, Fernando, Barredo and Aquino, JJ., concur.
G.R. No. 92013 July 25, 1990
SALVADOR H. LAUREL, petitioner,
vs.
RAMON GARCIA, as head of the Asset Privatization Trust, RAUL MANGLAPUS, as Secretary
of Foreign Affairs, and CATALINO MACARAIG, as Executive Secretary, respondents.
G.R. No. 92047 July 25, 1990
DIONISIO S. OJEDA, petitioner,
vs.
EXECUTIVE SECRETARY MACARAIG, JR., ASSETS PRIVATIZATION TRUST CHAIRMAN
RAMON T. GARCIA, AMBASSADOR RAMON DEL ROSARIO, et al., as members of the
PRINCIPAL AND BIDDING COMMITTEES ON THE UTILIZATION/DISPOSITION PETITION OF
PHILIPPINE GOVERNMENT PROPERTIES IN JAPAN,respondents.
Arturo M. Tolentino for petitioner in 92013.

GUTIERREZ, JR., J .:
These are two petitions for prohibition seeking to enjoin respondents, their representatives
and agents from proceeding with the bidding for the sale of the 3,179 square meters of land
at 306 Roppongi, 5-Chome Minato-ku Tokyo, Japan scheduled on February 21, 1990. We
granted the prayer for a temporary restraining order effective February 20, 1990. One of the
petitioners (in G.R. No. 92047) likewise prayes for a writ of mandamus to compel the
respondents to fully disclose to the public the basis of their decision to push through with
the sale of the Roppongi property inspire of strong public opposition and to explain the
proceedings which effectively prevent the participation of Filipino citizens and entities in the
bidding process.
The oral arguments in G.R. No. 92013, Laurel v. Garcia, et al. were heard by the Court on
March 13, 1990. After G.R. No. 92047, Ojeda v. Secretary Macaraig, et al. was filed, the
respondents were required to file a comment by the Court's resolution dated February 22,
1990. The two petitions were consolidated on March 27, 1990 when the memoranda of the
parties in the Laurel case were deliberated upon.
The Court could not act on these cases immediately because the respondents filed a motion
for an extension of thirty (30) days to file comment in G.R. No. 92047, followed by a second
motion for an extension of another thirty (30) days which we granted on May 8, 1990, a third
motion for extension of time granted on May 24, 1990 and a fourth motion for extension of
time which we granted on June 5, 1990 but calling the attention of the respondents to the
length of time the petitions have been pending. After the comment was filed, the petitioner in
G.R. No. 92047 asked for thirty (30) days to file a reply. We noted his motion and resolved to
decide the two (2) cases.
I
The subject property in this case is one of the four (4) properties in Japan acquired by the
Philippine government under the Reparations Agreement entered into with Japan on May 9,
1956, the other lots being:
(1) The Nampeidai Property at 11-24 Nampeidai-machi, Shibuya-ku, Tokyo which has an area
of approximately 2,489.96 square meters, and is at present the site of the Philippine Embassy
Chancery;
(2) The Kobe Commercial Property at 63 Naniwa-cho, Kobe, with an area of around 764.72
square meters and categorized as a commercial lot now being used as a warehouse and
parking lot for the consulate staff; and
(3) The Kobe Residential Property at 1-980-2 Obanoyama-cho, Shinohara, Nada-ku, Kobe, a
residential lot which is now vacant.
The properties and the capital goods and services procured from the Japanese government
for national development projects are part of the indemnification to the Filipino people for
their losses in life and property and their suffering during World War II.
The Reparations Agreement provides that reparations valued at $550 million would be
payable in twenty (20) years in accordance with annual schedules of procurements to be
fixed by the Philippine and Japanese governments (Article 2, Reparations Agreement). Rep.
Act No. 1789, the Reparations Law, prescribes the national policy on procurement and
utilization of reparations and development loans. The procurements are divided into those for
use by the government sector and those for private parties in projects as the then National
Economic Council shall determine. Those intended for the private sector shall be made
available by sale to Filipino citizens or to one hundred (100%) percent Filipino-owned entities
in national development projects.
The Roppongi property was acquired from the Japanese government under the Second Year
Schedule and listed under the heading "Government Sector", through Reparations Contract
No. 300 dated June 27, 1958. The Roppongi property consists of the land and building "for
the Chancery of the Philippine Embassy" (Annex M-D to Memorandum for Petitioner, p. 503).
As intended, it became the site of the Philippine Embassy until the latter was transferred to
Nampeidai on July 22, 1976 when the Roppongi building needed major repairs. Due to the
failure of our government to provide necessary funds, the Roppongi property has remained
undeveloped since that time.
A proposal was presented to President Corazon C. Aquino by former Philippine Ambassador
to Japan, Carlos J. Valdez, to make the property the subject of a lease agreement with a
Japanese firm - Kajima Corporation which shall construct two (2) buildings in Roppongi
and one (1) building in Nampeidai and renovate the present Philippine Chancery in
Nampeidai. The consideration of the construction would be the lease to the foreign
corporation of one (1) of the buildings to be constructed in Roppongi and the two (2)
buildings in Nampeidai. The other building in Roppongi shall then be used as the Philippine
Embassy Chancery. At the end of the lease period, all the three leased buildings shall be
occupied and used by the Philippine government. No change of ownership or title shall
occur. (See Annex "B" to Reply to Comment) The Philippine government retains the title all
throughout the lease period and thereafter. However, the government has not acted favorably
on this proposal which is pending approval and ratification between the parties. Instead, on
August 11, 1986, President Aquino created a committee to study the disposition/utilization of
Philippine government properties in Tokyo and Kobe, Japan through Administrative Order
No. 3, followed by Administrative Orders Numbered 3-A, B, C and D.
On July 25, 1987, the President issued Executive Order No. 296 entitling non-Filipino citizens
or entities to avail of separations' capital goods and services in the event of sale, lease or
disposition. The four properties in Japan including the Roppongi were specifically mentioned
in the first "Whereas" clause.
Amidst opposition by various sectors, the Executive branch of the government has been
pushing, with great vigor, its decision to sell the reparations properties starting with the
Roppongi lot. The property has twice been set for bidding at a minimum floor price of $225
million. The first bidding was a failure since only one bidder qualified. The second one, after
postponements, has not yet materialized. The last scheduled bidding on February 21, 1990
was restrained by his Court. Later, the rules on bidding were changed such that the $225
million floor price became merely a suggested floor price.
The Court finds that each of the herein petitions raises distinct issues. The petitioner in G.R.
No. 92013 objects to the alienation of the Roppongi property to anyone while the petitioner in
G.R. No. 92047 adds as a principal objection the alleged unjustified bias of the Philippine
government in favor of selling the property to non-Filipino citizens and entities. These
petitions have been consolidated and are resolved at the same time for the objective is the
same - to stop the sale of the Roppongi property.
The petitioner in G.R. No. 92013 raises the following issues:
(1) Can the Roppongi property and others of its kind be alienated by the Philippine
Government?; and
(2) Does the Chief Executive, her officers and agents, have the authority and jurisdiction, to
sell the Roppongi property?
Petitioner Dionisio Ojeda in G.R. No. 92047, apart from questioning the authority of the
government to alienate the Roppongi property assails the constitutionality of Executive Order
No. 296 in making the property available for sale to non-Filipino citizens and entities. He also
questions the bidding procedures of the Committee on the Utilization or Disposition of
Philippine Government Properties in Japan for being discriminatory against Filipino citizens
and Filipino-owned entities by denying them the right to be informed about the bidding
requirements.
II
In G.R. No. 92013, petitioner Laurel asserts that the Roppongi property and the related lots
were acquired as part of the reparations from the Japanese government for diplomatic and
consular use by the Philippine government. Vice-President Laurel states that the Roppongi
property is classified as one of public dominion, and not of private ownership under Article
420 of the Civil Code (See infra).
The petitioner submits that the Roppongi property comes under "property intended for public
service" in paragraph 2 of the above provision. He states that being one of public dominion,
no ownership by any one can attach to it, not even by the State. The Roppongi and related
properties were acquired for "sites for chancery, diplomatic, and consular quarters, buildings
and other improvements" (Second Year Reparations Schedule). The petitioner states that
they continue to be intended for a necessary service. They are held by the State in
anticipation of an opportune use. (Citing 3 Manresa 65-66). Hence, it cannot be appropriated,
is outside the commerce of man, or to put it in more simple terms, it cannot be alienated nor
be the subject matter of contracts (Citing Municipality of Cavite v. Rojas, 30 Phil. 20 [1915]).
Noting the non-use of the Roppongi property at the moment, the petitioner avers that the
same remains property of public dominion so long as the government has not used it for
other purposes nor adopted any measure constituting a removal of its original purpose or
use.
The respondents, for their part, refute the petitioner's contention by saying that the subject
property is not governed by our Civil Code but by the laws of Japan where the property is
located. They rely upon the rule of lex situs which is used in determining the applicable law
regarding the acquisition, transfer and devolution of the title to a property. They also invoke
Opinion No. 21, Series of 1988, dated January 27, 1988 of the Secretary of Justice which used
the lex situs in explaining the inapplicability of Philippine law regarding a property situated in
Japan.
The respondents add that even assuming for the sake of argument that the Civil Code is
applicable, the Roppongi property has ceased to become property of public dominion. It has
become patrimonial property because it has not been used for public service or for
diplomatic purposes for over thirteen (13) years now (Citing Article 422, Civil Code) and
because the intention by the Executive Department and the Congress to convert it to private
use has been manifested by overt acts, such as, among others: (1) the transfer of the
Philippine Embassy to Nampeidai (2) the issuance of administrative orders for the possibility
of alienating the four government properties in Japan; (3) the issuance of Executive Order
No. 296; (4) the enactment by the Congress of Rep. Act No. 6657 [the Comprehensive
Agrarian Reform Law] on June 10, 1988 which contains a provision stating that funds may be
taken from the sale of Philippine properties in foreign countries; (5) the holding of the public
bidding of the Roppongi property but which failed; (6) the deferment by the Senate in
Resolution No. 55 of the bidding to a future date; thus an acknowledgment by the Senate of
the government's intention to remove the Roppongi property from the public service
purpose; and (7) the resolution of this Court dismissing the petition in Ojeda v. Bidding
Committee, et al., G.R. No. 87478 which sought to enjoin the second bidding of the Roppongi
property scheduled on March 30, 1989.
III
In G.R. No. 94047, petitioner Ojeda once more asks this Court to rule on the constitutionality
of Executive Order No. 296. He had earlier filed a petition in G.R. No. 87478 which the Court
dismissed on August 1, 1989. He now avers that the executive order contravenes the
constitutional mandate to conserve and develop the national patrimony stated in the
Preamble of the 1987 Constitution. It also allegedly violates:
(1) The reservation of the ownership and acquisition of alienable lands of the public domain
to Filipino citizens. (Sections 2 and 3, Article XII, Constitution; Sections 22 and 23 of
Commonwealth Act 141).itc-asl
(2) The preference for Filipino citizens in the grant of rights, privileges and concessions
covering the national economy and patrimony (Section 10, Article VI, Constitution);
(3) The protection given to Filipino enterprises against unfair competition and trade
practices;
(4) The guarantee of the right of the people to information on all matters of public concern
(Section 7, Article III, Constitution);
(5) The prohibition against the sale to non-Filipino citizens or entities not wholly owned by
Filipino citizens of capital goods received by the Philippines under the Reparations Act
(Sections 2 and 12 of Rep. Act No. 1789); and
(6) The declaration of the state policy of full public disclosure of all transactions involving
public interest (Section 28, Article III, Constitution).
Petitioner Ojeda warns that the use of public funds in the execution of an unconstitutional
executive order is a misapplication of public funds He states that since the details of the
bidding for the Roppongi property were never publicly disclosed until February 15, 1990 (or a
few days before the scheduled bidding), the bidding guidelines are available only in Tokyo,
and the accomplishment of requirements and the selection of qualified bidders should be
done in Tokyo, interested Filipino citizens or entities owned by them did not have the chance
to comply with Purchase Offer Requirements on the Roppongi. Worse, the Roppongi shall be
sold for a minimum price of $225 million from which price capital gains tax under Japanese
law of about 50 to 70% of the floor price would still be deducted.
IV
The petitioners and respondents in both cases do not dispute the fact that the Roppongi site
and the three related properties were through reparations agreements, that these were
assigned to the government sector and that the Roppongi property itself was specifically
designated under the Reparations Agreement to house the Philippine Embassy.
The nature of the Roppongi lot as property for public service is expressly spelled out. It is
dictated by the terms of the Reparations Agreement and the corresponding contract of
procurement which bind both the Philippine government and the Japanese government.
There can be no doubt that it is of public dominion unless it is convincingly shown that the
property has become patrimonial. This, the respondents have failed to do.
As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot
be alienated. Its ownership is a special collective ownership for general use and enjoyment,
an application to the satisfaction of collective needs, and resides in the social group. The
purpose is not to serve the State as a juridical person, but the citizens; it is intended for the
common and public welfare and cannot be the object of appropration. (Taken from 3
Manresa, 66-69; cited in Tolentino, Commentaries on the Civil Code of the Philippines, 1963
Edition, Vol. II, p. 26).
The applicable provisions of the Civil Code are:
ART. 419. Property is either of public dominion or of private ownership.
ART. 420. The following things are property of public dominion
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports
and bridges constructed by the State, banks shores roadsteads, and others of
similar character;
(2) Those which belong to the State, without being for public use, and are
intended for some public service or for the development of the national wealth.
ART. 421. All other property of the State, which is not of the character stated in
the preceding article, is patrimonial property.
The Roppongi property is correctly classified under paragraph 2 of Article 420 of the Civil
Code as property belonging to the State and intended for some public service.
Has the intention of the government regarding the use of the property been changed because
the lot has been Idle for some years? Has it become patrimonial?
The fact that the Roppongi site has not been used for a long time for actual Embassy service
does not automatically convert it to patrimonial property. Any such conversion happens only
if the property is withdrawn from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66
SCRA 481 [1975]). A property continues to be part of the public domain, not available for
private appropriation or ownership until there is a formal declaration on the part of the
government to withdraw it from being such (Ignacio v. Director of Lands, 108 Phil. 335
[1960]).
The respondents enumerate various pronouncements by concerned public officials
insinuating a change of intention. We emphasize, however, that an abandonment of the
intention to use the Roppongi property for public service and to make it patrimonial property
under Article 422 of the Civil Code must be definite Abandonment cannot be inferred from the
non-use alone specially if the non-use was attributable not to the government's own
deliberate and indubitable will but to a lack of financial support to repair and improve the
property (See Heirs of Felino Santiago v. Lazaro, 166 SCRA 368 [1988]). Abandonment must
be a certain and positive act based on correct legal premises.
A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not relinquishment of the
Roppongi property's original purpose. Even the failure by the government to repair the
building in Roppongi is not abandonment since as earlier stated, there simply was a shortage
of government funds. The recent Administrative Orders authorizing a study of the status and
conditions of government properties in Japan were merely directives for investigation but did
not in any way signify a clear intention to dispose of the properties.
Executive Order No. 296, though its title declares an "authority to sell", does not have a
provision in its text expressly authorizing the sale of the four properties procured from Japan
for the government sector. The executive order does not declare that the properties lost their
public character. It merely intends to make the properties available to foreigners and not to
Filipinos alone in case of a sale, lease or other disposition. It merely eliminates the restriction
under Rep. Act No. 1789 that reparations goods may be sold only to Filipino citizens and one
hundred (100%) percent Filipino-owned entities. The text of Executive Order No. 296
provides:
Section 1. The provisions of Republic Act No. 1789, as amended, and of other
laws to the contrary notwithstanding, the above-mentioned properties can be
made available for sale, lease or any other manner of disposition to 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 the disposition of the properties of the
Government in foreign countries, did not withdraw the Roppongi property from being
classified as one of public dominion when it mentions Philippine properties abroad. Section
63 (c) refers to properties which are alienable and not to those reserved for public use or
service. Rep Act No. 6657, therefore, does not authorize the Executive Department to sell the
Roppongi property. It merely enumerates possible sources of future funding to augment (as
and when needed) the Agrarian Reform Fund created under Executive Order No. 299.
Obviously any property outside of the commerce of man cannot be tapped as a source of
funds.
The respondents try to get around the public dominion character of the Roppongi property by
insisting that Japanese law and not our Civil Code should apply.
It is exceedingly strange why our top government officials, of all people, should be the ones
to insist that in the sale of extremely valuable government property, Japanese law and not
Philippine law should prevail. The Japanese law - its coverage and effects, when enacted, and
exceptions to its provision is not presented to the Court It is simply asserted that the lex
loci rei sitae or Japanese law should apply without stating what that law provides. It is a ed
on faith that Japanese law would allow the sale.
We see no reason why a conflict of law rule should apply when no conflict of law situation
exists. A conflict of law situation arises only when: (1) There is a dispute over the title or
ownership of an immovable, such that the capacity to take and transfer immovables, the
formalities of conveyance, the essential validity and effect of the transfer, or the
interpretation and effect of a conveyance, are to be determined (See Salonga, Private
International Law, 1981 ed., pp. 377-383); and (2) A foreign law on land ownership and its
conveyance is asserted to conflict with a domestic law on the same matters. Hence, the need
to determine which law should apply.
In the instant case, none of the above elements exists.
The issues are not concerned with validity of ownership or title. There is no question that the
property belongs to the Philippines. The issue is the authority of the respondent officials to
validly dispose of property belonging to the State. And the validity of the procedures adopted
to effect its sale. This is governed by Philippine Law. The rule of lex situs does not apply.
The assertion that the opinion of the Secretary of Justice sheds light on the relevance of
the lex situsrule is misplaced. The opinion does not tackle the alienability of the real
properties procured through reparations nor the existence in what body of the authority to
sell them. In discussing who are capableof acquiring the lots, the Secretary merely explains
that it is the foreign law which should determinewho can acquire the properties so that the
constitutional limitation on acquisition of lands of the public domain to Filipino citizens and
entities wholly owned by Filipinos is inapplicable. We see no point in belaboring whether or
not this opinion is correct. Why should we discuss who can acquire the Roppongi lot when
there is no showing that it can be sold?
The subsequent approval on October 4, 1988 by President Aquino of the recommendation by
the investigating committee to sell the Roppongi property was premature or, at the very least,
conditioned on a valid change in the public character of the Roppongi property. Moreover,
the approval does not have the force and effect of law since the President already lost her
legislative powers. The Congress had already convened for more than a year.
Assuming for the sake of argument, however, that the Roppongi property is no longer of
public dominion, there is another obstacle to its sale by the respondents.
There is no law authorizing its conveyance.
Section 79 (f) of the Revised Administrative Code of 1917 provides
Section 79 (f ) Conveyances and contracts to which the Government is a party.
In cases in which the Government of the Republic of the Philippines is a
party to any deed or other instrument conveying the title to real estate or to
any other property the value of which is in excess of one hundred thousand
pesos, the respective Department Secretary shall prepare the necessary
papers which, together with the proper recommendations, shall be submitted
to the Congress of the Philippines for approval by the same. Such deed,
instrument, or contract shall be executed and signed by the President of the
Philippines on behalf of the Government of the Philippines unless the
Government of the Philippines unless the authority therefor be expressly
vested by law in another officer. (Emphasis supplied)
The requirement has been retained in Section 48, Book I of the Administrative Code of 1987
(Executive Order No. 292).
SEC. 48. Official Authorized to Convey Real Property. Whenever real
property of the Government is authorized by law to be conveyed, the deed of
conveyance shall be executed in behalf of the government by the following:
(1) For property belonging to and titled in the name of the Republic of the
Philippines, by the President, unless the authority therefor is expressly vested
by law in another officer.
(2) For property belonging to the Republic of the Philippines but titled in the
name of any political subdivision or of any corporate agency or
instrumentality, by the executive head of the agency or instrumentality.
(Emphasis supplied)
It is not for the President to convey valuable real property of the government on his or her
own sole will. Any such conveyance must be authorized and approved by a law enacted by
the Congress. It requires executive and legislative concurrence.
Resolution No. 55 of the Senate dated June 8, 1989, asking for the deferment of the sale of
the Roppongi property does not withdraw the property from public domain much less
authorize its sale. It is a mere resolution; it is not a formal declaration abandoning the public
character of the Roppongi property. In fact, the Senate Committee on Foreign Relations is
conducting hearings on Senate Resolution No. 734 which raises serious policy
considerations and calls for a fact-finding investigation of the circumstances behind the
decision to sell the Philippine government properties in Japan.
The resolution of this Court in Ojeda v. Bidding Committee, et al., supra, did not pass upon
the constitutionality of Executive Order No. 296. Contrary to respondents' assertion, we did
not uphold the authority of the President to sell the Roppongi property. The Court stated that
the constitutionality of the executive order was not the real issue and that resolving the
constitutional question was "neither necessary nor finally determinative of the case." The
Court noted that "[W]hat petitioner ultimately questions is the use of the proceeds of the
disposition of the Roppongi property." In emphasizing that "the decision of the Executive to
dispose of the Roppongi property to finance the CARP ... cannot be questioned" in view of
Section 63 (c) of Rep. Act No. 6657, the Court did not acknowledge the fact that the property
became alienable nor did it indicate that the President was authorized to dispose of the
Roppongi property. The resolution should be read to mean that in case the Roppongi
property is re-classified to be patrimonial and alienable by authority of law, the proceeds of a
sale may be used for national economic development projects including the CARP.
Moreover, the sale in 1989 did not materialize. The petitions before us question the proposed
1990 sale of the Roppongi property. We are resolving the issues raised in these petitions, not
the issues raised in 1989.
Having declared a need for a law or formal declaration to withdraw the Roppongi property
from public domain to make it alienable and a need for legislative authority to allow the sale
of the property, we see no compelling reason to tackle the constitutional issues raised by
petitioner Ojeda.
The Court does not ordinarily pass upon constitutional questions unless these questions are
properly raised in appropriate cases and their resolution is necessary for the determination
of the case (People v. Vera, 65 Phil. 56 [1937]). The Court will not pass upon a constitutional
question although properly presented by the record if the case can be disposed of on some
other ground such as the application of a statute or general law (Siler v. Louisville and
Nashville R. Co., 213 U.S. 175, [1909], Railroad Commission v. Pullman Co., 312 U.S. 496
[1941]).
The petitioner in G.R. No. 92013 states why the Roppongi property should not be sold:
The Roppongi property is not just like any piece of property. It was given to the
Filipino people in reparation for the lives and blood of Filipinos who died and
suffered during the Japanese military occupation, for the suffering of widows
and orphans who lost their loved ones and kindred, for the homes and other
properties lost by countless Filipinos during the war. The Tokyo properties are
a monument to the bravery and sacrifice of the Filipino people in the face of an
invader; like the monuments of Rizal, Quezon, and other Filipino heroes, we do
not expect economic or financial benefits from them. But who would think of
selling these monuments? Filipino honor and national dignity dictate that we
keep our properties in Japan as memorials to the countless Filipinos who died
and suffered. Even if we should become paupers we should not think of selling
them. For it would be as if we sold the lives and blood and tears of our
countrymen. (Rollo- G.R. No. 92013, p.147)
The petitioner in G.R. No. 92047 also states:
Roppongi is no ordinary property. It is one ceded by the Japanese government
in atonement for its past belligerence for the valiant sacrifice of life and limb
and for deaths, physical dislocation and economic devastation the whole
Filipino people endured in World War II.
It is for what it stands for, and for what it could never bring back to life, that its
significance today remains undimmed, inspire of the lapse of 45 years since
the war ended, inspire of the passage of 32 years since the property passed on
to the Philippine government.
Roppongi is a reminder that cannot should not be dissipated ... (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 determination where both the President and Congress must
concur. Considering the properties' importance and value, the laws on conversion and
disposition of property of public dominion must be faithfully followed.
WHEREFORE, IN VIEW OF THE FOREGOING, the petitions are GRANTED. A writ of
prohibition is issued enjoining the respondents from proceeding with the sale of the
Roppongi property in Tokyo, Japan. The February 20, 1990 Temporary Restraining Order is
made PERMANENT.
SO ORDERED.
Melencio-Herrera, Paras, Bidin, Grio-Aquino and Regalado, J J ., concur












G.R. No. L-66807 January 26, 1989
REPUBLIC OF THE PHILIPPINES, represented by the DIRECTOR OF LANDS, petitioner,
vs.
MELITONA ALAGAD, SPOUSES CARMEN ALAGAD AND ESPIRIDION KOLIMLIM, JUSTO
ALAGAD, CARLOS ALAGAD, SPOUSES LIBRADA ALAGAD AND EMERSON ABANO,
DEMETRIO ALAGAD, ANTONIO ALAGAD, REGISTER OF DEEDS OF LAGUNA, and the
INTERMEDIATE APPELLATE COURT (Fourth Civil Cases Division), respondents.
The Solicitor General for petitioner.
Alberto, Salazar & Associates for private respondents.

SARMIENTO, J .:
The Republic appeals from the decision of the Court of Appeals
1
affirming two orders of the defunct
Court of First Instance of Laguna
2
dismissing its petition for "annulment of title and reversion.
3
The facts
appear in the decision appealed from:
On or about October 11, 1951, defendants filed an application for registration of their
title over a parcel of land situated at Linga, Pila, Laguna, with an area of 8.1263
hectares, reflected in survey plan Psu-116971, which was amended after the land
was divided into two parcels, namely, Lot 1 with an area of 5.2476 hectares and Lot
2 with an area of 2.8421 hectares, reflected in survey plan Psu-226971, amd. 2.
The Republic opposed the application on the stereo-typed ground that applicants and
their predecessors have not been in possession of the land openly, continuously,
publicly and adversely under a bona fide claim of ownership since July 26, 1894 and
the land has not ceased to be a part of the public domain. It appears that barrio folk
also opposed the application. (LRC Case No. 189. G.L.R.O. Rec. No. 4922 of the
Court of First Instance of Laguna).
By virtue of a final judgment in said case, promulgated January 16, 1956,
supplemented by orders issued on March 21, 1956 and August 13, 1956, defendants
were declared owners of Lot 1 and the remaining portion, or Lot 2, was declared
public land. Decree No. N-51479 was entered and Original Certificate of Title No. 0-
40 1, dated October 18, 1956, was issued in the names of defendants.
In August, 1966, Civil Case No. 52 of the Municipal Court of Pila, Laguna, was filed
by defendants to evict the barrio folk occupying portions of Lot 1. On August 8, 1968,
judgment was rendered in the eviction case ordering the defendants therein to return
possession of the premises to herein defendants, as plaintiffs therein. The
defendants therein did not appeal.
The foregoing anterior proceedings triggered the filing of the instant case. On
October 6, 1970, as prayed for in the complaint, a writ of preliminary injunction was
issued enjoining the Provincial Sheriff of Laguna or his deputies from enforcing the
writ of execution issued in Civil Case No. 52, and the defendants from selling,
mortgaging, disposing or otherwise entering into any transaction affecting the area.
This case was set for pre-trial on July 6, 1971. Despite notice of the pre-trial, Atty. Alejandro A.
Ponferada, Special Attorney, Bureau of Lands, representing plaintiff Republic, did not appear. On
July 16, 1971, the court a quodismissed the complaint. The Republic filed a motion for
reconsideration, was set for hearing, and finally denied by the court a quo, hence, this appeal.
Plaintiff filed its record on appeal on March 13, 1972. It appears that the appeal was dismissed by
this Court for failure to show in the record on appeal that the appeal was perfected on time. Plaintiff
went to the Supreme Court on a petition for review on the action of this Court. On November 19,
1982, the Supreme Court set aside the dismissal resolution of this Court and ordered Us to reinstate
and give due course to plaintiffs appeal.
4

In commencing proceedings below, the Republic claims that the decree and title [rendered and
issued in LRC Case No. 189, G.L.R.O. Rec. No. L-4922] insofar as the 1.42 hectare northwestern
portion on end of Lot 1, Psu-116971, Amd. 2, is concerned, are void ab initio,
5
for the following
reasons:
(a) That said l.42 hectare northwestern portion or end of Lot l, Psu-116971, Amd. 2,
like the adjoining Lot 2 of the same survey plan containing 2.8421 hectares, had
since time immemorial, been foreshore land reached and covered by the waters
of the Laguna de Bay (Republic vs. Ayala y Cia, L-20950, May 31, 1965; Antonio
Dizon, et al., vs. Juan de G. Rodriguez, et al., L-20355- 56, April 30, 1965);
(b) That moreover said 1.42 hectare portion is actually now the site of Barrio Aplaya,
formerly a sitio of Linga, Pila, Laguna, having been occupied by the barrio people
since the American occupation of the country in the early 1900's where they
established their houses;
(c) That the barrio people of Aplaya thru the years since the early 1900's have filled
up and elevated the land to its present condition of being some feet above the level
of the adjoining Lot 2 of plan Psu-116971 and the rest of Lot 1 of the same survey
plan so much so that this barrio site of Aplaya where there are now sixty-eight (68)
houses occupied by more than one hundred (100) families is no longer reached and
covered by the waters of the Laguna de Bay; and
(d) That were it not for the fillings made by the barrio people, the land in question
would not have been fit for human habitation, so much so that defendants and their
predecessors-in-interest could not have acquired an imperfect title to the property
which could be judicially confirmed in a registration case, as in fact said defendants
and their predecessors-in-interest have never been in actual possession of the land
in question, the actual occupants thereof being the barrio people of Aplaya;
6

In sustaining the trial court, the Court of Appeals held that under Section 20, of Rule 20, of the Rules
of Court, dismissal was proper upon failure of the Republic to appear for pre-trial. It likewise ruled
that the judgment, dated January 16, 1956, in the said LRC No. 189 has long become final, titles to
the properties had been issued (in favor of the private respondents), and that res
judicata, consequently, was a bar.
In its petition, the Republic assails the decision insofar as it sustained the lower court: (1) in
dismissing the petition for failure of the Republic to appear for pre-trial; and (2) in holding that res
judicata is an obstacle to the suit.
I.
With respect to the first question, we hold that the Court of Appeals has been guilty of grave abuse
of discretion. It is well-established that the State cannot be bound by, or estopped from, the mistakes
or negligent acts of its official or agents,
7
much more, non-suited as a result thereof.
This is so because:
... [T]he state as a persona in law is the judicial entity, which is the source of any
asserted right to ownership in land under the basic doctrine embodied in the 1935
Constitution as well as the present charter. It is charged moreover with the
conservation of such patrimony. There is need therefore of the most rigorous scrutiny
before private claims to portions thereof are judicially accorded recognition,
especially so where the matter is sought to be raked up anew after almost fifty years.
Such primordial consideration, not the apparent carelessness, much less the
acquiescense of public officials, is the controlling norm . . .
8

The cases of Ramos v. Centra l Bank of the Philippines
9
and Nilo v. Romero,
10
cited by the Court of
Appeals in support of its decision, are not applicable. In Ramos, we applied estoppel upon finding of bad
faith on the part of the State (the Central Bank) in deliberately reneging on its promises. In Nilo, we
denied efforts to impugn the jurisdiction of the court on the ground that the defendant had been
"erroneously' represented in the complaint by the City Attorney when it should have been the City Mayor,
on a holding that the City Attorney, in any event, could have ably defended the City (Davao City). In both
cases, it is seen that the acts that gave rise to estoppel were voluntary and intentional in character, in
which cases, it could not be said that the Government had been prejudiced by some negligent act or
omission.
There is no merit either, in claims that res judicata is an impediment to reversion of property.
In Republic v. Court of Appeals,
11
this Court stated:
... [a] certificate of title may be ordered cancelled (Republic v Animas, et al., . supra),
and the cancellation may be pursued through an ordinary action therefor. This action
cannot be barred by the prior judgment of the land registration court, since the said
court had no jurisdiction over the subject matter. And if there was no such
jurisdiction, then the principle of res judicata does not apply. For it is a well-settled
rule that for a prior judgment to constitute a bar to a subsequent case, the following
requisites must concur; (1) it must be a final judgment; (2) it must have been
rendered by a court having jurisdiction over the subject matter and over the parties;
(3) it must be a judgment on the merits; and (4) there must be, between the first and
second actions, identity of parties, identity of subject matter and identity of cause of
action (Municipality of Daet vs. CA, 93 SCRA 503; Mendoza vs. Arrieta, et al., 91
SCRA 113)...
12

In the case at bar, if the parcel registered in the names of the private respondents were foreshore
land, the land registration court could not have validly awarded title thereto. It would have been
without the authority to do so. The fact that the Bureau of Lands had failed to appeal from the decree
of registration could not have validated the court's decision, rendered without jurisdiction.
II.
"Property, according to the Civil Code, is either of public dominion or of private ownership
."
13
Property is of public dominion if it is:
(1) ... 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;
14
or if it:
(2) . . . belong[s] to the State, without being for public use, and are intended for some
public service or for the development of the national wealth.
15

All other property of the State, it is provided further, which is not of the character
mentioned in ... article [4201, is patrimonial property,
16
meaning to say, property 'open to
disposition
17
by the Government, or otherwise, property pertaining to the national
domain, or public lands.
18
Property of the public dominion, on the other hand, refers to
things held by the State by regalian right. They are things res publicae in nature and
hence, incapable of private appropriation. Thus, under the present Constitution, [w]ith the
exception of agricultural lands, all other natural resources shall not be alienated.'
19

Specifically:
ART. 502. The following are of public dominion:
(1) Rivers and their natural beds;
(2) Continuous or intermittent waters of springs and brooks running in
their natural beds and the beds themselves;
(3) Waters rising continuously or intermittently on lands of public
dominion;
(4) Lakes and lagoons formed by Nature on public lands, and their
beds;
(5) Rain waters running through ravines or sand beds, which are also
of public dominion;
(6) Subterranean waters on public lands;
(7) Waters found within the zone of operation of public works, even if
constructed by a contractor;
(8) Waters rising continuously or intermittently on lands belonging to
private persons, to the State, to a province, or to a city or municipality
from the moment they leave such lands;
(9) The waste waters of fountains, sewers and public
establishments.
20

So also is it ordained by the Spanish Law of Waters of August 3, 1866:
Art. 44. Natural ponds and lakes existing upon public lands and fed by public waters,
belong to the public domain.
Lakes, ponds, and pools existing upon the lands of private individuals, or the State or provinces,
belong to the respective owners of such lands, and those situated upon lands of communal use
belong to their respective pueblos.21
Assuming, therefore, for purposes of this petition, that the lands subject of the Republic's reversion
efforts are foreshore in nature, the Republic has legitimate reason to demand reconveyance. In that
case, res judicata or estoppel is no defense.
22

Of course, whether or not the properties in question are, indeed, foreshore lands is the core of
controversy. According to the trial court, the aforementioned parcel of land is a portion of the
public domain belonging to the Republic of the Philippines,
23
and hence, available disposition and
registration. As we have pointed out, the Government holds otherwise, and that as foreshore laud, it is not
registerable.
The question, so it follows, is one of fact: Is the parcel foreshore or is it part and parcel of the public
domain?
Laguna de Bay has long been recognized as a lake .
24
Thus:
Laguna de Bay is a body of water formed in depressions of the earth; it contains fresh water coming
from rivers and brooks or springs, and is connected with Manila Bay by the Pasig River. According to
the definition just quoted, Laguna de Bay is a lake.
25

And, "[i]nasmuch as Laguna de Bay is a lake, so Colegio de San Jose further tells us, "we must
resort
to the legal provisions governing the ownership and use of lakes and their beds and shores, in order to
determine the character and ownership of the parcels of land in question.
26
The recourse to legal
provisions is necessary, for under Article 74 of the Law of Waters, [T]he natural bed or basin of lakes ...
is the ground covered by their waters when at their highest ordinary depth.
27
and in which case, it
forms part of the national dominion. When Laguna de Bay's waters are at their highest ordinary
depth has been defined as:
... the highest depth of the waters of Laguna de Bay during the dry season,
such depth being the regular, common, natural, which occurs always or most
of the time during the year . . .
28

Otherwise, where the rise in water level is due to the extraordinary action of nature, rainfall
for instance, the portions inundated thereby are not considered part of the bed or basin of the
body of water in question. It cannot therefore be said to be foreshore land but land outside of
the public dominion, and land capable of registration as private property.
A foreshore land, on the other hand, has been defined as follows:
. . . that part of (the land) which is between high and low water and left dry by the flux
and reflux of the tides...
29

The strip of land that lies between the high and low water marks and that is alternatively
wet and dry according to the flow of the tide.
30

If the submergence, however, of the land is due to precipitation, it does not become foreshore,
despite its proximity to the waters.
The case, then, has to be decided alongside these principles and regretfully, the Court cannot make
a ruling, in the first place, because it is not a trier of facts, and in the second, it is in possession of no
evidence to assist it in arriving at a conclusive disposition
31
We therefore remand the case to the court
a quo to determine whether or not the property subject of controversy is foreshore. We, consequently,
reverse both the Court of Appeals and the trial court and reinstate the Republic's complaint.
WHEREFORE, this case is hereby REMANDED to the trial court for further proceedings.
Melencio-Herrera (Chairperson), Paras, Padilla and Regalado, JJ., concur.





















G.R. No. 136438 November 11, 2004
TEOFILO C. VILLARICO, petitioner,
vs.
VIVENCIO SARMIENTO, SPOUSES BESSIE SARMIENTO-DEL MUNDO & BETH DEL MUNDO,
ANDOKS LITSON CORPORATION and MARITES CARINDERIA, respondents.


D E C I S I O N


SANDOVAL-GUTIERREZ, J .:
Before us is a petition for review on certiorari of the Decision
1
of the Court of Appeals dated
December 7, 1998 in CA-G.R. CV No. 54883, affirming in toto the Decision
2
of the Regional Trial
Court (RTC) of Paraaque City, Branch 259, dated November 14, 1996, in Civil Case No. 95-044.
The facts of this case, as gleaned from the findings of the Court of Appeals, are:
Teofilo C. Villarico, petitioner, is the owner of a lot in La Huerta, Paraaque City, Metro Manila with
an area of sixty-six (66) square meters and covered by Transfer Certificate of Title (T.C.T.) No.
95453 issued by the Registry of Deeds, same city.
Petitioners lot is separated from the Ninoy Aquino Avenue (highway) by a strip of land belonging to
the government. As this highway was elevated by four (4) meters and therefore higher than the
adjoining areas, the Department of Public Works and Highways (DPWH) constructed stairways at
several portions of this strip of public land to enable the people to have access to the highway.
Sometime in 1991, Vivencio Sarmiento, his daughter Bessie Sarmiento and her husband Beth Del
Mundo, respondents herein, had a building constructed on a portion of said government land. In
November that same year, a part thereof was occupied by Andoks Litson Corporation and Marites
Carinderia, also impleaded as respondents.
In 1993, by means of a Deed of Exchange of Real Property, petitioner acquired a 74.30 square
meter portion of the same area owned by the government. The property was registered in his name
as T.C.T. No. 74430 in the Registry of Deeds of Paraaque City.
In 1995, petitioner filed with the RTC, Branch 259, Paraaque City, a complaint for accion publiciana
against respondents, docketed as Civil Case No. 95-044. He alleged inter alia that respondents
structures on the government land closed his "right of way" to the Ninoy Aquino Avenue; and
encroached on a portion of his lot covered by T.C.T. No. 74430.
Respondents, in their answer, specifically denied petitioners allegations, claiming that they have
been issued licenses and permits by Paraaque City to construct their buildings on the area; and
that petitioner has no right over the subject property as it belongs to the government.
After trial, the RTC rendered its Decision, the dispositive portion of which reads:
"WHEREFORE, premises considered, judgment is hereby rendered:
1. Declaring the defendants to have a better right of possession over the subject land
except the portion thereof covered by Transfer Certificate of Title No. 74430 of the
Register of Deeds of Paraaque;
2. Ordering the defendants to vacate the portion of the subject premises described in
Transfer Certificate of Title No. 74430 and gives its possession to plaintiff; and
3. Dismissing the claim for damages of the plaintiff against the defendants, and
likewise dismissing the claim for attorneys fees of the latter against the former.
Without pronouncement as to costs.
SO ORDERED."
3

The trial court found that petitioner has never been in possession of any portion of the public land in
question. On the contrary, the defendants are the ones who have been in actual possession of the
area. According to the trial court, petitioner was not deprived of his "right of way" as he could use the
Kapitan Tinoy Street as passageway to the highway.
On appeal by petitioner, the Court of Appeals issued its Decision affirming the trial courts Decision
in toto, thus:
"WHEREFORE, the judgment hereby appealed from is hereby AFFIRMED in toto, with costs
against the plaintiff-appellant.
SO ORDERED."
4

In this petition, petitioner ascribes to the Court of Appeals the following assignments of error:
"I
THE FINDINGS OF FACT OF THE HON. COURT OF APPEALS CONTAINED A
CONCLUSION WITHOUT CITATION OF SPECIFIC EVIDENCE ON WHICH THE SAME
WAS BASED.
II
THE HON. COURT OF APPEALS ERRED IN CONSIDERING THAT THE ONLY ISSUE IN
THIS CASE IS WHETHER OR NOT THE PLAINTIFF-APPELLANT HAS ACQUIRED A
RIGHT OF WAY OVER THE LAND OF THE GOVERNMENT WHICH IS BETWEEN HIS
PROPERTY AND THE NINOY AQUINO AVENUE.
III
THE HON. COURT OF APPEALS ERRED IN CONCLUDING THAT ACCION PUBLICIANA
IS NOT THE PROPER REMEDY IN THE CASE AT BAR.
IV
THE HON. COURT OF APPEALS ERRED IN CONCLUDING THAT THE EXISTENCE OF
THE PLAINTIFF-APPELLANTS RIGHT OF WAY DOES NOT CARRY POSSESSION OVER
THE SAME.
V
THE HON. COURT OF APPEALS ERRED IN NOT RESOLVING THE ISSUE OF WHO HAS
THE BETTER RIGHT OF POSSESSION OVER THE SUBJECT LAND BETWEEN THE
PLAINTIFF-APPELLANT AND THE DEFENDANT-APPELLEES."
5

In their comment, respondents maintain that the Court of Appeals did not err in ruling that petitioners
action for accion publiciana is not the proper remedy in asserting his "right of way" on a lot owned by
the government.
Here, petitioner claims that respondents, by constructing their buildings on the lot in question, have
deprived him of his "right of way" and his right of possession over a considerable portion of the same
lot, which portion is covered by his T.C.T. No. 74430 he acquired by means of exchange of real
property.
It is not disputed that the lot on which petitioners alleged "right of way" exists belongs to the state or
property of public dominion. Property of public dominion is defined by Article 420 of the Civil Code as
follows:
"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 other 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."
Public use is "use that is not confined to privileged individuals, but is open to the indefinite
public."
6
Records show that the lot on which the stairways were built is for the use of the
people as passageway to the highway. Consequently, it is a property of public dominion.
Property of public dominion is outside the commerce of man and hence it: (1) cannot be
alienated or leased or otherwise be the subject matter of contracts; (2) cannot be acquired by
prescription against the State; (3) is not subject to attachment and execution; and (4) cannot
be burdened by any voluntary easement.
7

Considering that the lot on which the stairways were constructed is a property of public
dominion, it can not be burdened by a voluntary easement of right of way in favor of herein
petitioner. In fact, its use by the public is by mere tolerance of the government through the
DPWH. Petitioner cannot appropriate it for himself. Verily, he can not claim any right of
possession over it. This is clear from Article 530 of the Civil Code which provides:
"ART. 530. Only things and rights which are susceptible of being appropriated may be the
object of possession."
Accordingly, both the trial court and the Court of Appeals erred in ruling that respondents have better
right of possession over the subject lot.
However, the trial court and the Court of Appeals found that defendants buildings were constructed
on the portion of the same lot now covered by T.C.T. No. 74430 in petitioners name. Being its
owner, he is entitled to its possession.
WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals dated
December 7, 1998 in CA-G.R. CV No. 54883 is AFFIRMED with MODIFICATION in the sense that
neither petitioner nor respondents have a right of possession over the disputed lot where the
stairways were built as it is a property of public dominion. Costs against petitioner.
SO ORDERED.
Panganiban, (Chairman), Carpio Morales and Garcia, JJ., concur.
Corona, J., on leave.


















G.R. No. L-65334 December 26, 1984
MUNICIPALITY OF ANTIPOLO, petitioner,
vs.
AQUILINA ZAPANTA, ISIDRO DELA CRUZ, ELIAS DELA CRUZ, MARIA DELA CRUZ,
MODESTA LEYVA, FERMIN LEYVA, SUSANA LEYVA, MARCIAL LEYVA, FELISA LEYVA,
ISIDORA LEYVA, HONORIO LEYVA, CONCORDIA GALICIA, APOLONIA AVENDANO,
AMPARO AVENDANO, FIDELA SARTE, BEATRIZ SARTE, VICTORIO SARTE, VIRGINIA
SARTE, JULIANA SARTE, RODOLFO SARTE, BENITA SARTE, ANTONINA SUAREZ, DANIEL
SUAREZ, BEATA SUAREZ, ENRIQUE AVENDANO, PAULINO AVENDANO, SAMSON LAVILLA,
SR., AURELIA LAPAR, VIRGILIO HILARIO, NATIVIDAD MARQUEZ, LUISITO LOPEZ,
REMEDIOS LOPEZ, ROMEO LOPEZ, NATIVIDAD LOPEZ and the HONORABLE
INTERMEDIATE APPELLATE COURT, respondents.
Mariano A.G. Cervo for petitioner.
Leonardo C. Rodriguez for respondents.

MELENCIO-HERRERA, J .:
In this appeal by Certiorari, we called upon to review the Resolution of respondent Intermediate
Appellate Court, dated August 23, 1983. Dismissing petitioner's appeal for failure to file its brief
within the reglementary period, and the subsequent Resolution of the same Court, dated September
27, 1983, denying petitioner's Motion for Reconsideration for being without any legal and factual
basis.
The facts may be briefly stated as follows: On August 8, 1977, a single application for the
registration of two distinct parcels of land was filed by two distinct applicants before the then Court of
First Instance of Rizal, Branch XV, Makati (the Registration Court, for short). One of the two
applicants was Conrado Eniceo. He had applied for registration under the Torrens system of a
parcel of land containing 258 square meters. The other applicant was "Heirs of Joaquin Avendao",
and the land they were applying for registration was a parcel (hereinafter called the DISPUTED
PROPERTY) containing 9,826 square meters surveyed in the name of the Municipality of Antipolo
(ANTIPOLO, for short). Both parcels were situated in the Municipality of Antipolo. The applications
were approved by the Registration Court on February 26, 1980. ANTIPOLO took steps to interpose
an appeal but because it failed to amend the Record on Appeal, its appeal was disallowed.
On May 22, 1981, ANTIPOLO filed a complaint in Civil Case No. 41353, also of the Court of First
Instance of Rizal, Branch XIII, Pasig (the CASE BELOW, for short) against named "Heirs of Joaquin
Avendao", and their assignees (hereinafter called the AVENDAO HEIRS) praying for nullification
of the judgment rendered by the Registration Court. The defendants, in their Answer, pleaded a
special defense of res judicata, After a preliminary hearing on the mentioned special defense, the
CASE BELOW was dismissed. ANTIPOLO perfected an appeal to the then Court of Appeals.
A notice to file Brief was issued by the Appellate Court, which ANTIPOLO claimed it had not
received. Upon motion of the defendants-appellees to dismiss on the ground that ANTIPOLO had
not filed its Brief within the reglementary period, the appeal was dismissed despite the fact that
before the dismissal, ANTIPOLO had submitted its Appellant's Brief.
We gave due course to the Petition for Review on certiorari filed with this Court by ANTIPOLO, and
the latter had restated the issues as follow:
I
The Intermediate Appellate Court erred in dismissing petitioner's appeal on the
alleged ground of failure to file appellant's brief within the reglementary period the
fact being that counsel had not been duly served with the notice to file brief.
II
At any rate, the Appellate Court should have given due course to the appeal since
the appellant's brief was filed within the 90-day period which is uniformly granted as a
matter of course to all litigants before the Appellate Court, instead of dismissing the
appeal on a technicality.
III
With more reason should petitioner's appeal have been given due course on the
important and substantial allegation that the registration court did not have
jurisdiction over the land subject of registration, it being property of the Municipality of
Antipolo, used long before the war as a public market and other public purposes, and
hence actually devoted to public use and service.
Only a short resolution need be made to sustain the first and second issues of error. Although failure
to file Brief within the time provided by the Rules is, indeed, a ground for dismissal of an appeal, this
Court had held that rules of technicality must yield to the broader interests of substantial
justice 1 specially where, as in this case, the important issue of lack of jurisdiction over the subject matter of the Land Registration Court
has been raised.
With the foregoing conclusion, a remand to respondent Court, for the entertainment of the appeal on
the merits, would ordinarily be the appropriate relief. However, considering the three Motions for
Early Decision filed by private respondents, we shall resolve the substantive merits of the appeal to
the appellate tribunal from the judgment rendered in the CASE BELOW.
From the record, we have gathered that ANTIPOLO, for more than 50 years now, has considered
the DISPUTED PROPERTY to be public land subject to ANTI POLO's use and permission to use
within the prerogatives and purposes of a municipal corporation. There is indication to the effect that
it had been the site of the public market as far back as 1908,
2
or at the latest, since 1920 "up to
today."
3
Gradually, additional public structures were built thereon, like the Puericulture and Family
Planning Center, the Integrated National Police Building, the Office of the Municipal Treasurer, and the
public abattoir. Those public structures occupy almost the entire area of the land. At the time the
application for registration was filed on August 8, 1977, the DISPUTED PROPERTY was already devoted
to public use and public service. Therefore, it was outside the commerce of man and could no longer be
subject to private registration.
The claim of the AVENDAO HEIRS that they merely tolerated occupancy by ANTIPOLO which had
borrowed the DISPUTED PROPERTY from them, since they had been in possession, since as far
back as 1916, erroneously presupposes ownership thereof since that time. They forget that all
lands are presumed to be public lands until the contrary is established.
4
The fact
that the DISPUTED PROPERTY may have been declared for taxation purposes in
their names or of their predecessors-in-interest as early as 1918
5
does not
necessarily prove ownership. They are merely indicia of a claim of
ownership.
6
ANTIPOLO had also declared the DISPUTED PROPERTY as its own
in Tax Declarations Nos. 909, 993 and 454.
Since the Land Registration Court had no jurisdiction to entertain the application for registration of
public property of ANTIPOLO, its Decision adjudicating the DISPUTED PROPERTY as of private
ownership is null and void. It never attained finality, and can be attacked at any time. It was not a bar
to the action brought by ANTIPOLO for its annulment by reason of res judicata.
* * * the want of jurisdiction by a court over the subject-matter renders the judgment
void and a mere nullity, and considering that a void judgment is in legal effect no
judgment, by which no rights are divested, from which no rights can be obtained,
which neither binds nor bars any one, and under which all acts performed and all
claims flowing out of are void, and considering, further, that the decision, for want of
jurisdiction of the court, is not a decision in contemplation of law, and hence, can
never become executory, it follows that such a void judgment cannot constitute a bar
to another case by reason of res judicata.
7

It follows that the titles issued in favor of the AVENDAO HEIRS must also be held to be null and void.
They were issued by a Court with no jurisdiction over the subject matter. Perforce, they must be ordered
cancelled.
...It follows that "if a person obtains a title under the Public Land Act which includes,
by oversight, lands which cannot be registered under the Torrens System, or when
the Director of Lands did not have jurisdiction over the same because it is a public
forest, the grantee does not, by virtue of the said certificate of title alone, become the
owner of the land illegally included" (Republic vs. Animas, 56 SCRA 499,
503; Ledesma vs. Municipality of Iloilo, 49 Phil. 769).
xxx xxx xxx
Under these circumstances, the certificate of title may be ordered cancelled
(Republic vs. Animas, et al., supra), and the cancellation may be pursued through an
ordinary action therefor. This action cannot be barred by the prior judgment of the
land registration court, since the said court had no jurisdiction over the subject
matter. And if there was no such jurisdiction, then the principle of res judicata does
not apply. * * *. Certainly, one of the essential requisites, i.e., jurisdiction over the
subject matter is absent in this case.
8
(Emphasis supplied).
WHEREFORE, judgment is hereby rendered as follows:
(1) The Resolutions of respondent Court, now the Intermediate Appellate Court, dated August 23,
1983 and September 27, 1983, are hereby set aside, with this Court acting directly on the appeal of
the Municipality of Antipolo from the judgment rendered by the then Court of First Instance of Rizal,
Branch XIII, in its Civil Case No. 41353;
(2) The aforesaid judgment of the then Court of First Instance of Rizal, Branch XIII, in Civil Case No.
41353 is set aside; and, instead, the judgment and decree rendered by the then Court of First
Instance of Rizal, Branch XV, in Land Registration Case No. N-9995, LRC Rec. No. N-52176, is
hereby declared null and void in respect of the "Heirs of Joaquin Avendao";
(3) The Register of Deeds of Rizal is hereby ordered to cancel all certificates of title
issued/transferred by virtue of the said judgment and decree issued in the mentioned Land
Registration Case No. N-9995; LRC Rec. No. N-52176 in respect of the "Heirs of Isabela Avendao";
(4) The certificate of title issued in the name of Conrado Eniceo and transfers therefrom, by virtue of
the judgment and decree in the mentioned Land Registration Case No. N-9995; LRC Rec. No. N-
52176, for practical purposes, shall continue to be valid.
Without pronouncement as to costs.
SO ORDERED.
Teehankee (Chairman), Plana, Gutierrez, Jr. and De la Fuente, JJ., concur.
Relova. J., took no part

















G.R. No. 92161 March 18, 1991
SIMPLICIO BINALAY, PONCIANO GANNABAN, NICANOR MACUTAY, DOMINGO ROSALES,
GREGORIO ARGONZA, EUSTAQUIO BAUA, FLORENTINO ROSALES, TEODORO
MABBORANG, PATRICIO MABBORANG and FULGENCIO MORA, petitioners
vs.
GUILLERMO MANALO and COURT OF APPEALS, respondents.
Josefin De Alban Law Office for Petitioners.

FELICIANO, J .:p
The late Judge Taccad originally owned a parcel of land situated in Tumauini, Isabela having an
estimated area of twenty (20) hectares. The western portion of this land bordering on the Cagayan
River has an elevation lower than that of the eastern portion which borders on the national road.
Through the years, the western portion would periodically go under the waters of the Cagayan River
as those waters swelled with the coming of the rains. The submerged portion, however, would re-
appear during the dry season from January to August. It would remain under water for the rest of the
year, that is, from September to December during the rainy season.
The ownership of the landholding eventually moved from one person to another. On 9 May 1959,
respondent Guillermo Manalo acquired 8.65 hectares thereof from Faustina Taccad, daughter of
Judge Juan Taccad. The land sold was described in the Deed of Absolute Sale
1
as follows:
. . . a parcel of agricultural land in Balug, Tumauini, Isabela, containing an area of
8.6500 hectares, more or less; bounded on the North by Francisco Forto on the East
by National Road; on South by Julian Tumolva and on the West by Cagayan River;
declared for taxation under Tax Declaration No. 12681 in the name of Faustina
Taccad, and assessed at P 750.00. . . .
Later in 1964, respondent Manalo purchased another 1.80 hectares from Gregorio Taguba who had
earlier acquired the same from Judge Juan Taccad. The second purchase brought the total
acquisition of respondent Manalo to 10.45 hectares. The second piece of property was more
particularly described as follows:
. . . a piece of agricultural land consisting of tobacco land, and containing an area of
18,000 square meters, more or less, bounded on the North by Balug Creek; on the
South, by Faustina Taccad (now Guillermo R. Manalo); on the East, by a Provincial
Road; and on the West, by Cagayan River assessed at P 440.00, as tax Declaration
No. 3152. . . .
2

During the cadastral survey conducted at Balug, Tumauini, Isabela on 21 October 1969, the two (2)
parcels of land belonging to respondent Manalo were surveyed and consolidated into one lot,
designated as Lot No. 307, Pls-964. Lot 307 which contains 4.6489 hectares includes: (a) the whole
of the 1.80 hectares acquired from Gregorio Taguba; and (b) 2.8489 hectares out of the 8.65
hectares purchased from Faustina Taccad. As the survey was conducted on a rainy month, a portion
of the land bought from Faustina Taccad then under water was left unsurveyed and was not included
in Lot 307.
The Sketch Plan
3
submitted during the trial of this case and which was identified by respondent Manalo
shows that the Cagayan River running from south to north, forks at a certain point to form two (2)
branchesthe western and the eastern branchesand then unites at the other end, further north, to form
a narrow strip of land. The eastern branch of the river cuts through the land of respondent Manalo and is
inundated with water only during the rainy season. The bed of the eastern branch is the submerged or the
unsurveyed portion of the land belonging to respondent Manalo. For about eight (8) months of the year
when the level of water at the point where the Cagayan River forks is at its ordinary depth, river water
does not flow into the eastern branch. While this condition persists, the eastern bed is dry and is
susceptible to cultivation.
Considering that water flowed through the eastern branch of the Cagayan River when the cadastral
survey was conducted, the elongated strip of land formed by the western and the eastern branches
of the Cagayan River looked very much like an island. This strip of land was surveyed on 12
December 1969.
4
It was found to have a total area of 22.7209 hectares and was designated as Lot 821
and Lot 822. The area of Lot 822 is 10.8122 hectares while Lot 821 has an area of 11.9087 hectares. Lot
821 is located directly opposite Lot 307 and is separated from the latter only by the eastern branch of the
Cagayan River during the rainy season and, during the dry season, by the exposed, dry river bed, being a
portion of the land bought from Faustina Taccad. Respondent Manalo claims that Lot 821 also belongs to
him by way of accretion to the submerged portion of the property to which it is adjacent.
Petitioners who are in possession of Lot 821, upon the other hand, insist that they own Lot 821.
They occupy the outer edges of Lot 821 along the river banks, i.e., the fertile portions on which they
plant tobacco and other agricultural products. They also cultivate the western strip of the unsurveyed
portion during summer.
5
This situation compelled respondent Manalo to file a case for forcible entry
against petitioners on 20 May 1969. The case was dismissed by the Municipal Court of Tumauini, Isabela
for failure of both parties to appear. On 15 December 1972, respondent Manalo again filed a case for
forcible entry against petitioners. The latter case was similarly dismissed for lack of jurisdiction by the
Municipal Court of Tumauini, Isabela.
On 24 July 1974, respondent Manalo filed a complaints
6
before the then Court of First Instance of
Isabela, Branch 3 for quieting of title, possession and damages against petitioners. He alleged ownership
of the two (2) parcels of land he bought separately from Faustina Taccad and Gregorio Taguba for which
reason he prayed that judgment be entered ordering petitioners to vacate the western strip of the
unsurveyed portion. Respondent Manalo likewise prayed that judgment be entered declaring him as
owner of Lot 821 on which he had laid his claim during the survey.
Petitioners filed their answer denying the material allegations of the complaint. The case was then
set for trial for failure of the parties to reach an amicable agreement or to enter into a stipulation of
facts.
7
On 10 November 1982, the trial court rendered a decision with the following dispositive portion:
WHEREFORE, in the light of the foregoing premises, the Court renders judgment
against the defendants and in favor of the plaintiff and orders:
1. That plaintiff, Guillermo Manalo, is declared the lawful owner of the land in
question, Lot No. 821, Pls-964 of Tumauini Cadastre, and which is more particularly
described in paragraph 2-b of the Complaint;
2. That the defendants are hereby ordered to vacate the premises of the land in
question, Lot No. 821, Pls-964 of Tumauini Cadastre, and which is more particularly
described in paragraph 2-b of the Complaint;
3. That the defendants are being restrained from entering the premises of the land in
question, Lot No. 821, Pls-964 of Tumauini Cadastre, and which is more particularly
described in paragraph 2-b of the Complaint; and
4. That there is no pronouncement as to attorney's fees and costs.
SO ORDERED.
8

Petitioners appealed to the Court of Appeals which, however, affirmed the decision of the trial court.
They filed a motion for reconsideration, without success.
While petitioners insist that Lot 821 is part of an island surrounded by the two (2) branches of the
Cagayan River, the Court of Appeals found otherwise. The Court of Appeals concurred with the
finding of the trial court that Lot 821 cannot be considered separate and distinct from Lot 307 since
the eastern branch of the Cagayan River substantially dries up for the most part of the year such that
when this happens, Lot 821 becomes physically (i.e., by land) connected with the dried up bed
owned by respondent Manalo. Both courts below in effect rejected the assertion of petitioners that
the depression on the earth's surface which separates Lot 307 and Lot 821 is, during part of the
year, the bed of the eastern branch of the Cagayan River.
It is a familiar rule that the findings of facts of the trial court are entitled to great respect, and that
they carry even more weight when affirmed by the Court of Appeals.
9
This is in recognition of the
peculiar advantage on the part of the trial court of being able to observe first-hand the deportment of the
witnesses while testifying. Jurisprudence is likewise settled that the Court of Appeals is the final arbiter of
questions of fact.
10
But whether a conclusion drawn from such findings of facts is correct, is a question of
law cognizable by this Court.
11

In the instant case, the conclusion reached by both courts below apparently collides with their
findings that periodically at the onset of and during the rainy season, river water flows through the
eastern bed of the Cagayan River. The trial court held:
The Court believes that the land in controversy is of the nature and character of
alluvion (Accretion), for it appears that during the dry season, the body of water
separating the same land in controversy (Lot No. 821, Pls-964) and the two (2)
parcels of land which the plaintiff purchased from Gregorio Taguba and Justina
Taccad Cayaba becomes a marshy land and is only six (6) inches deep and twelve
(12) meters in width at its widest in the northern tip (Exhs. "W", "W-l", "W-2", "W-3"
and "W-4"), It has been held by our Supreme Court that "the owner of the riparian
land which receives the gradual deposits of alluvion, does not have to make an
express act of possession. The law does not require it, and the deposit created by
the current of the water becomes manifest" (Roxas vs. Tuazon, 6 Phil. 408).
12

The Court of Appeals adhered substantially to the conclusion reached by the trial court, thus:
As found by the trial court, the disputed property is not an island in the strict sense of
the word since the eastern portion of the said property claimed by appellants to be
part of the Cagayan River dries up during summer. Admittedly, it is the action of the
heavy rains which comes during rainy season especially from September to
November which increases the water level of the Cagayan river. As the river
becomes swollen due to heavy rains, the lower portion of the said strip of land
located at its southernmost point would be inundated with water. This is where the
water of the Cagayan river gains its entry. Consequently, if the water level is high the
whole strip of land would be under water.
In Government of the Philippine Islands vs. Colegio de San Jose, it was held that
According to the foregoing definition of the words "ordinary" and
"extra-ordinary," the highest depth of the waters of Laguna de Bay
during the dry season is the ordinary one, and the highest depth they
attain during the extra-ordinary one (sic); inasmuch as the former is
the one which is regular, common, natural, which occurs always or
most of the time during the year, while the latter is uncommon,
transcends the general rule, order and measure, and goes beyond
that which is the ordinary depth. If according to the definition given by
Article 74 of the Law of Waters quoted above, the natural bed or
basin of the lakes is the ground covered by their waters when at their
highest ordinary depth, the natural bed or basin of Laguna de Bay is
the ground covered by its waters when at their highest depth during
the dry season, that is up to the northeastern boundary of the two
parcels of land in question.
We find the foregoing ruling to be analogous to the case at bar. The highest ordinary
level of the waters of the Cagayan River is that attained during the dry season which
is confined only on the west side of Lot [821] and Lot [822]. This is the natural
Cagayan river itself. The small residual of water between Lot [821] and 307 is part of
the small stream already in existence when the whole of the late Judge Juan
Taccad's property was still susceptible to cultivation and uneroded.
13

The Court is unable to agree with the Court of Appeals that Government of the Philippine Islands
vs. Colegio de San Jose
14
is applicable to the present case. That case involved Laguna de Bay; since
Laguna de Bay is a lake, the Court applied the legal provisions governing the ownership and use of lakes
and their beds and shores, in order to determine the character and ownership of the disputed property.
Specifically, the Court applied the definition of the natural bed or basin of lakes found in Article 74 of the
Law of Waters of 3 August 1866. Upon the other hand, what is involved in the instant case is the eastern
bed of the Cagayan River.
We believe and so hold that Article 70 of the Law of Waters of 3 August 1866 is the law
applicable to the case at bar:
Art. 70. The natural bed or channel of a creek or river is the ground covered by
its waters during the highest floods. (Emphasis supplied)
We note that Article 70 defines the natural bed or channel of a creek or river as the ground
covered by its waters during the highest floods. The highest floods in the eastern branch of
the Cagayan River occur with the annual coming of the rains as the river waters in their
onward course cover the entire depressed portion. Though the eastern bed substantially
dries up for the most part of the year (i.e., from January to August), we cannot ignore the
periodical swelling of the waters ( i.e., from September to December) causing the eastern
bed to be covered with flowing river waters.
The conclusion of this Court that the depressed portion is a river bed rests upon evidence of record.
Firstly, respondent Manalo admitted in open court that the entire area he bought from Gregorio
Taguba was included in Lot 307.
15
If the 1.80 hectares purchased from Gregorio Taguba was included
in Lot 307, then the Cagayan River referred to as the western boundary in the Deed of Sale transferring
the land from Gregorio Taguba to respondent Manalo as well as the Deed of Sale signed by Faustina
Taccad, must refer to the dried up bed (during the dry months) or the eastern branch of the river (during
the rainy months). In the Sketch Plan attached to the records of the case, Lot 307 is separated from the
western branch of the Cagayan River by a large tract of land which includes not only Lot 821 but also
what this Court characterizes as the eastern branch of the Cagayan River.
Secondly, the pictures identified by respondent Manalo during his direct examination depict the
depressed portion as a river bed. The pictures, marked as Exhibits "W" to "W-4", were taken in July
1973 or at a time when the eastern bed becomes visible.
16
Thus, Exhibit "W-2" which according to
respondent Manalo was taken facing the east and Exhibit "W-3" which was taken facing the west both
show that the visible, dried up portion has a markedly lower elevation than Lot 307 and Lot 821. It has
dike-like slopes on both sides connecting it to Lot 307 and Lot 821 that are vertical upward and very
prominent. This topographic feature is compatible with the fact that a huge volume of water passes
through the eastern bed regularly during the rainy season. In addition, petitioner Ponciano Gannaban
testified that one had to go down what he called a "cliff" from the surveyed portion of the land of
respondent Manalo to the depressed portion. The cliff, as related by petitioner Gannaban, has a height of
eight (8) meters.
17

The records do not show when the Cagayan River began to carve its eastern channel on the surface
of the earth. However, Exhibit "E"
18
for the prosecution which was the Declaration of Real Property
standing in the name of Faustina Taccad indicates that the eastern bed already existed even before the
sale to respondent Manalo. The words "old bed" enclosed in parenthesesperhaps written to make
legitimate the claim of private ownership over the submerged portionis an implied admission of the
existence of the river bed. In the Declaration of Real Property made by respondent Manalo, the
depressed portion assumed the name Rio Muerte de Cagayan. Indeed, the steep dike-like slopes on
either side of the eastern bed could have been formed only after a prolonged period of time.
Now, then, pursuant to Article 420 of the Civil Code, respondent Manalo did not acquire
private ownership of the bed of the eastern branch of the river even if it was included in the
deeds of absolute sale executed by Gregorio Taguba and Faustina Taccad in his favor. These
vendors could not have validly sold land that constituted property of public dominion. Article
420 of the Civil Code states:
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. (Emphasis
supplied)
Although Article 420 speaks only of rivers and banks, "rivers" is a composite term which includes: (1)
the running waters, (2) the bed, and (3) the banks.
19
Manresa, in commenting upon Article 339 of the
Spanish Civil Code of 1889 from which Article 420 of the Philippine Civil Code was taken, stressed the
public ownership of river beds:
La naturaleza especial de los rios, en punto a su disfrute general, hace que sea
necesario considerar en su relacion de dominio algo mas que sus aguas corrientes.
En efecto en todo rio es preciso distinguir 1. esta agua corriente; 2. el alveo o cauce,
y 3. las riberas. Ahora bien: son estas dos ultimas cosas siempre de dominio publico,
como las aguas?
Realmente no puede imaginarse un rio sin alveo y sin ribera; de suerte que al decir
el Codigo civil que los rios son de dominio publico, parece que debe ir implicito el
dominio publico de aquellos tres elementos que integran el rio. Por otra parte, en
cuanto a los alveos o cauces tenemos la declaracion del art. 407, num 1, donde
dice: son de dominion publico . . . los rios y sus cauces naturales; declaracion que
concuerda con lo que dispone el art. 34 de la ley de [Aguas], segun el cual, son de
dominion publico: 1. los alveos o cauces de los arroyos que no se hallen
comprendidos en el art. 33, y 2. los alveos o cauces naturales de los rios en la
extension que cubran sus aguas en las mayores crecidas ordinarias.
20
(Emphasis
supplied)
The claim of ownership of respondent Manalo over the submerged portion is bereft of basis even if it
were alleged and proved that the Cagayan River first began to encroach on his property after the
purchase from Gregorio Taguba and Faustina Taccad. Article 462 of the Civil Code would then apply
divesting, by operation of law, respondent Manalo of private ownership over the new river bed. The
intrusion of the eastern branch of the Cagayan River into his landholding obviously prejudiced
respondent Manalo but this is a common occurrence since estates bordering on rivers are exposed
to floods and other evils produced by the destructive force of the waters. That loss is compensated
by, inter alia, the right of accretion acknowledged by Article 457 of the Civil Code.
21
It so happened
that instead of increasing the size of Lot 307, the eastern branch of the Cagayan River had carved a
channel on it.
We turn next to the issue of accretion. After examining the records of the case, the Court considers
that there was no evidence to prove that Lot 821 is an increment to Lot 307 and the bed of the
eastern branch of the river. Accretion as a mode of acquiring property under Article 457 of the Civil
Code requires the concurrence of three (3) requisites: (a) that the deposition of soil or sediment be
gradual and imperceptible; (b) that it be the result of the action of the waters of the river (or sea); and
(c) that the land where accretion takes place is adjacent to the banks of rivers (or the sea
coast).
22
The Court notes that the parcels of land bought by respondent Manalo border on the eastern
branch of the Cagayan River. Any accretion formed by this eastern branch which respondent Manalo may
claim must be deposited on or attached to Lot 307. As it is, the claimed accretion (Lot 821) lies on the
bank of the river not adjacent to Lot 307 but directly opposite Lot 307 across the river.
Assuming (arguendo only) that the Cagayan River referred to in the Deeds of Sale transferring
ownership of the land to respondent Manalo is the western branch, the decision of the Court of
Appeals and of the trial court are bare of factual findings to the effect that the land purchased by
respondent Manalo received alluvium from the action of the aver in a slow and gradual manner. On
the contrary, the decision of the lower court made mention of several floods that caused the land to
reappear making it susceptible to cultivation. A sudden and forceful action like that of flooding is
hardly the alluvial process contemplated under Article 457 of the Civil Code. It is the slow and hardly
perceptible accumulation of soil deposits that the law grants to the riparian owner.
Besides, it is important to note that Lot 821 has an area of 11.91 hectares. Lot 821 is the northern
portion of the strip of land having a total area of 22.72 hectares. We find it difficult to suppose that
such a sizable area as Lot 821 resulted from slow accretion to another lot of almost equal size. The
total landholding purchased by respondent Manalo is 10.45 hectares (8.65 hectares from Faustina
Taccad and 1.80 hectares from Gregorio Taguba in 1959 and 1964, respectively), in fact even
smaller than Lot 821 which he claims by way of accretion. The cadastral survey showing that Lot
821 has an area of 11.91 hectares was conducted in 1969. If respondent Manalo's contention were
accepted, it would mean that in a span of only ten (10) years, he had more than doubled his
landholding by what the Court of Appeals and the trial court considered as accretion. As already
noted, there are steep vertical dike-like slopes separating the depressed portion or river bed and Lot
821 and Lot 307. This topography of the land, among other things, precludes a reasonable
conclusion that Lot 821 is an increment to the depressed portion by reason of the slow and constant
action of the waters of either the western or the eastern branches of the Cagayan River.
We turn finally to the issue of ownership of Lot 821. Respondent Manalo's claim over Lot 821 rests
on accretion coupled with alleged prior possession. He alleged that the parcels of land he bought
separately from Gregorio Taguba and Faustina Taccad were formerly owned by Judge Juan Taccad
who was in possession thereof through his (Judge Taccad's) tenants. When ownership was
transferred to him, respondent Manalo took over the cultivation of the property and had it declared
for taxation purposes in his name. When petitioners forcibly entered into his property, he twice
instituted the appropriate action before the Municipal Trial Court of Tumauini, Isabela. Against
respondent Manalo's allegation of prior possession, petitioners presented tax declarations standing
in their respective names. They claimed lawful, peaceful and adverse possession of Lot 821 since
1955.
If respondent Manalo had proved prior possession, it was limited physically to Lot 307 and the
depressed portion or the eastern river bed. The testimony of Dominga Malana who was a tenant for
Justina Taccad did not indicate that she was also cultivating Lot 821. In fact, the complaints for
forcible entry lodged before the Municipal Trial Court of Tumauini, Isabela pertained only to Lot 307
and the depressed portion or river bed and not to Lot 821. In the same manner, the tax declarations
presented by petitioners conflict with those of respondent Manalo. Under Article 477 of the Civil
Code, the plaintiff in an action for quieting of title must at least have equitable title to or interest in the
real property which is the subject matter of the action. The evidence of record on this point is less
than satisfactory and the Court feels compelled to refrain from determining the ownership and
possession of Lot 821, adjudging neither petitioners nor respondent Manalo as owner(s) thereof.
WHEREFORE, the Decision and Resolution of the Court of Appeals in CA-GR CV No. 04892 are
hereby SET ASIDE. Respondent Manalo is hereby declared the owner of Lot 307. The regularly
submerged portion or the eastern bed of the Cagayan River is hereby DECLARED to be property of
public dominion. The ownership of Lot 821 shall be determined in an appropriate action that may be
instituted by the interested parties inter se. No pronouncement as to costs.
SO ORDERED.








G.R. No. L-19570 April 27, 1967
JOSE V. HILARIO, JR., plaintiff-appellant,
vs.
THE CITY OF MANILA, defendant-appellee,
DIRECTOR OF PUBLIC WORKS, CITY ENGINEER OF MANILA, FERNANDO BUSUEGO and
EUGENIO SESE,defendants-appellants,
MAXIMO CALALANG, intervenor;
DIRECTOR OF MINES, intervenor.
Maximo Calalang for plaintiff and appellant.
Gregorio Ejercito and Leandro L. Arguelles for defendant-appellee City of Manila.
Office of the Solicitor General for other defendants and appellants.
BENGZON, J.P., J .:
Dr. Jose Hilario was the registered owner of a large tract of land around 49 hectares in area
located at Barrio Guinayang, in San Mateo, Rizal.
1
Upon his death, this property was inherited by his
son, herein plaintiff-appellant Jose Hilario, Jr., to whom a new certificate of title
2
was issued.
During the lifetime of plaintiff's father, the Hilario estate was bounded on the western side by the San
Mateo River.
3
To prevent its entry into the land, a bamboo and lumber post dike or ditch was
constructed on the northwestern side. This was further fortified by a stonewall built on the northern
side. For years, these safeguards served their purpose. However, in 1937, a great and
extraordinary flood occurred which inundated the entire place including the neighboring
barrios and municipalities. The river destroyed the dike on the northwest, left its original bed
and meandered into the Hilario estate, segregating from the rest thereof a lenticular place of
land. The disputed area is on the eastern side of this lenticular strip which now stands
between the old riverbed site and the new course.
4

In 1945 the U.S. Army opened a sand and gravel plant within the premises
5
and started scraping,
excavating and extracting soil, gravel and sand from the nearby areas the River. The operations
eventually extended northward into this strip of land. Consequently, a claim for damages was filed
with the U.S. War Department by Luis Hilario, the then administrator of Dr. Hilario's estate. The U.S.
Army paid.
6
In 1947, the plant was turned over to herein defendants-appellants and appellee who
took over its operations and continued the extractions and excavations of gravel and sand from the
strip of land along an area near the River.
On October 22, 1949, plaintiff filed his complaint
7
for injunction and damages against the defendants
City Engineer of Manila, District Engineer of Rizal, the Director of Public Works, and Engr. Busuego,
the Engineer-in-charge of the plant. It was prayed that the latter be restrained from excavating,
bulldozing and extracting gravel, sand and soil from his property and that they solidarily pay to him
P5,000.00 as damages. Defendants' answer alleged, in affirmative defense, that the extractions
were made from the riverbed while counterclaiming with a prayer for injunction against plaintiff
who, it was claimed, was preventing them from their operations.
Subsequently, the Bureau of Mines and Atty. Maximo Calalang were respectively allowed to join the
litigation as intervenors. The former complained that the disputed area was within the bed of the river
so that plaintiff should not only be enjoined from making extractions therefrom but should also be
ordered to pay the fees and penalties for the materials taken by him. On the other hand, the latter
claimed that he was authorized by plaintiff to extract materials from the disputed area but this
notwithstanding, the Provincial Treasurer of Rizal collected from him a sand and gravel fee which
would be an illegal exaction if the disputed area turns out to be of private ownership. Answers to the
two complaints in intervention were duly filed by the affected parties.
On March 14, 1954, defendants filed a petition for injunction against plaintiff and intervenor Calalang
in the same case, alleging that the latter have fenced off the disputed area in contravention of an
agreement
8
had between the latter and the Director of Public Works wherein he defendants were
allowed to continue their operations but subject to the final outcome of the pending suit. It was
prayed that plaintiff and intervenor Calalang be ordered to remove the fence and allow defendants'
men to continue their operations unhampered. Opposition to this petition was filed by the other side,
with a prayer for counter injunction. On March 23, 1954, the lower court issued an order maintaining
the status quo and allowing the defendants to continue their extractions from the disputed area
provided a receipt
9
in plaintiff's favor be issued for all the materials taken.
On May 13, 1954, plaintiff amended his complaint. Impleaded as additional defendants were the City
of Manila,
10
the Provincial Treasurer of Rizal,
11
and Engr. Eugenio Sese, the new Engineer-in-charge
of the plant. Plaintiff also converted his claim to one purely for damages directed against the City of
Manila and the Director of Public Works, solidarily, in the amount of P1,000,000.00, as the cost of
materials taken since 1949, as well as those to be extracted therefrom until defendants stop their
operations.
Came the separate amended answers of the several defendants. Manila City denied ownership of
the plant and claimed that the City Engineer, acted merely as a deputy of the Public Works Director.
The other defendants
12
put up, as special defense, the agreement between plaintiff and the Public
Works Director, and asserted a P1.2 million counterclaim for damages against plaintiff. The
rest
13
renewed the same defense; that the disputed area was part of the public domain, since it was
situated on the riverbanks.
On November 3, 1954, the defendant City Engineer of Manila filed a petition to delimit the area of
excavation and asked the lower court to authorize his men to extend their operations west of the
camachile tree in the disputed area. This met vigorous opposition from plaintiff and intervenor
Calalang. On May 27, 1955, the petition was denied.
Finally, on December 21, 1956, the lower court rendered its decision on the merits. The dispositive
portion provided:
14

WHEREFORE, judgment is hereby rendered against the defendants City of Manila and the
Director of Public Works, to pay solidarily the herein plaintiff the sum of P376,989.60, as the
cost of gravel and sand extracted from plaintiff's land, plus costs. Judgment is likewise
hereby rendered against the defendant Provincial Treasurer of Rizal, ordering him to
reimburse to intervenor Maximo Calalang the amount of P236.80 representing gravel fees
illegally collected. Finally, defendants herein are perpetually enjoined from extracting any
sand or gravel from plaintiff's property which is two-fifths northern portion of the disputed
area.
It is so ordered.
None of the parties litigants seemed satisfied with this decision and they all sought a reconsideration
of the same. On August 30, 1957, the lower court resolved the motions to reconsider with an order,
the dispositive portion of which provided:
15

WHEREFORE, the court hereby denies the motion for reconsideration filed by plaintiff and
intervenor Calalang; dismisses the complaint with respect to defendant City of Manila; holds
that the northern two-fifths portion of the area in controversy belongs to the plaintiff with right
to the immediate possession thereof and hereby enjoins the defendants and intervenor
Bureau of Mines to vacate the same and to stop from extracting gravel thereon. The Court
however hereby dismisses the case against the defendant Bureau of Public Works and its
agents and employees insofar as the claim for money is concerned without prejudice to
plaintiffs taking such action as he may deem proper to enforce said claim against the proper
party in accordance with law.
It is so ordered.
Still unsatisfied, plaintiff and intervenor Calalang filed a second motion for reconsideration. The lower
court stood firm on its ruling of August 30, 1957.
16

Hence, this appeal.
17
The defendants Director of Public Works, City Engineer of Manila, and Engrs.
Busuego and Sese have also appealed from the declaration made by the lower court that the
northern two-fifths of the disputed area belongs to plaintiff Hilario.
The parties herein have presented before this Court mixed questions of law and fact for resolution
and adjudication. Foremost among them is this legal query; when a river, leaving its old bed,
changes its original course and opens a new one through private property, would the new riverbanks
lining said course be of public ownership also?
18

The defendants answer in the affirmative. They claim that under the Law of Waters of August 3,
1866, the riverbanks are, by definition, considered part of the riverbed which is always of public
ownership. On the other hand, plaintiff would have the question resolved in the negative. He
maintains that not all riverbanks are of public ownership because: (1) Art. 372 of the old Civil Code,
which governs this particular case, speaks only of the new bed; nothing is said about the new banks;
(2) Art. 73 of the Law of Waters which defines the phrase "banks of a river" cannot be applied in the
case at bar in conjunction with the other articles cited by defendants since that article applies only to
banks of natural riverbeds and the present, River is not in its natural bed; and (3) if all banks were of
public ownership, then Art. 553 of the old Civil Code and the second sentence, first paragraph of Art.
73 of the Law of Waters can never have any application.
Since the change in the course of the River took place in 1937, long before the present Civil Code
took effect,
19
the question before Us should be determined in accordance with the provisions of the
old Civil Code and those of the Law of Waters of August 3, 1866.
We agree with defendants that under the cited laws, all riverbanks are of public ownership
including those formed when a river leaves its old bed and opens a new course through a private
estate. Art. 339 of the old Civil Code is very clear. Without any qualifications, it provides:
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, shores, roadsteads, and that of a similar character;
(Emphasis supplied)
Moreover, as correctly contended by defendants, the riverbank is part of the riverbed. Art. 73 of the
Law of Waters which defines the phrase "banks of a river" provides:
By the phrase "banks of a river" is understood those lateral strips or zones of its bed which
are washed by the stream only during such high floods as do not cause inundations. ...
(Emphasis supplied)
The use the of words "of its bed [de sus alveos]" clearly indicates the intent of the law to
consider the banks for all legal purposes as part of the riverbed. The lower court also
ruled correctly that the banks of the River are paint of its bed.
20
Since undeniably all
beds of rivers are of public ownership,
21
it follows that the banks, which form part of them,
are also of public ownership.
Plaintiff's contention that Arts. 70 and 73 of the Law of Waters cannot apply because Art. 312 of the
old Civil Code mentions only the new bed but omits the banks, and that said articles only apply
to natural meaning original bed and banks is untenable. Art. 70, which defines beds of rivers
and creeks, provides:
The natural bed or channel of a creek or river is the ground covered by its waters during the
highest [ordinary] floods.
22
(Emphasis supplied)
Art. 372 of the old Civil Code which provides that
Whenever a navigable or floatable river changes its course from natural causes and opens
a new bedthrough a private estate, the new bed shall be of public ownership, but the owner
of the estate shall recover it in the event that the waters leave it dry again either naturally or
as the result of any work legally authorized for this purpose. (Emphasis supplied)
did not have to mention the banks because it was unnecessary. The nature of the banks
always follows that of the bed and the running waters of the river. A river is a compound
concept consisting of three elements: (1) the running waters, (2) the bed and (3) the banks.
23 All these constitute the river. American authorities are in accord with this view:
'River' consists of water, a bed and banks.
24

A "river" consists of water, a bed and banks, these several parts constituting the river, the
whole river. It is a compound idea; it cannot exist without all its paints. Evaporate the water,
and you have a dry hollow. If you could sink the bed, instead of a river, you would have a
fathomless gulf. Remove the banks, and you have a boundless flood.
25

Since a river is but one compound concept, it should have only one nature, i.e., it should either be
totally public or completely private. And since rivers are of public ownership,
26
it is implicit that all the
three component elements be of the same nature also. As Manresa commented:
Realmente no puede imaginarse un rio sin alveo y sin ribera; de suerte que al decir el
Codigo Civil que los rios son de dominio publico, parece que debe ir implicito el dominio
publico de anquellos tres elementos que integran el rio.
27

However, to dispel all possible doubts, the law expressly makes all three elements public. Thus,
riverbanks and beds are public under Arts. 339 and 407, respectively, of the Code, while the flowing
waters are declared so under Art. 33, par. 2 of the Law of Waters of 1866.
Articles 70, 72 and 73 of the Law of Waters speak of natural beds and their banks. Plaintiff now
equates the term "natural" with the word "original" so that a change in the course of a river would
render those articles inapplicable. However, the premise is incorrect. Diccionario De La Real
Academia Espaola defines the word "natural" as follows:
NATURAL perteneciente a la naturaleza o conforme a la calidad o propriedad de las
cosas; nativo, originario de un pueblo o nacion; hecho con verdad, ni artificio, mezcla ni
composicion alguna; ingenuo y sin doblez en su modo de proceder; diceze tambien de las
cosas que imitar a la naturaleza con propiedad; regular y que comunmente sucede, y por
eso, facilmente creible; que se produce por solas las fuerzas de la naturaleza, como
contrapuesto a sobre natural y milagroso, (Emphasis supplied)
"Natural" is not made synonymous to "original" or "prior condition". On the contrary, even if
a river should leave its original bed so long as it is due to the force of nature, the new course
would still fall within the scope of the definition provided above. Hence, the law must have
used the word "natural" only because it is in keeping with the ordinary nature and concept of
a river always to have a bed and banks.
Plaintiff's third point is not lightly to be taken. Indeed, it would seem possible to acquire private
ownership of banks under Art. 553 of the old Civil Code which provides:
Las riberas de los rios, aun cuando sean de dominio privado, estan sujetas en toda su
extension y en sus margenes, en una zona de tres metros, a la servidumbre de uso publico
en interes general de la navegacion, la flotacion, la pesca y el salvamento. (Emphasis
supplied) .
And plaintiff is not without jurisprudential backing for in Commonwealth vs. Gungun,
28
it was
said that the private ownership of the banks was not prohibited. His point is then neatly
brought home with the proposition that it is precisely when a river changes its course and
opens a new bed through a private estate that there can be private ownership of the banks.
A study of the history of Art. 553 will however reveal that it was never intended to authorize the
private acquisition of riverbanks. That could not have been legally possible in view of the legislative
policy clearly enunciated in Art. 339 of the Code that all riverbanks were of public ownership. The
article merely recognized and preserved the vested rights of riparian owners who, because of prior
law or custom, were able to acquire ownership over the banks. This was possible under the Siete
Partidas which was promulgated in 1834 yet.
29
Under Law 6, Title 28, Partidas 3, the banks of rivers
belonged to the riparian owners, following the Roman Law rule.
30
In other words, they were privately
owned then. But subsequent legislation radically changed this rule. By the Law of Waters of August
3, 1866, riverbanks became of public ownership, albeit impliedly only because considered part of the
bed which was public by statutory definition.
31
But this law, while expressly repealing all prior
inconsistent laws, left undisturbed all vested rights then existing.
32
So privately owned banks then
continued to be so under the new law, but they were subjected by the latter to an easement for
public use. As Art. 73 provides:
Se entienden por riberas de un rio las fajas o zonis laterales de sus alveos que solamente
sor baadas por las aguas en las crecidas que no causan inundacion. El dominio privado de
las riberas esta suieto a la survidumbre de tres metros de zona para uso publico, en el
interest general de la navegacion, la flotacion, la pesca y el salvamento. ... (Emphasis
supplied).1wph 1. t
This was perhaps the reconciliation effected between the private ownership of the banks, on the one
hand, and the policy of the law on the other hand, to devote all banks to public use.
33
The easement
would preserve the private ownership of the banks and still effectuate the policy of the law. So, the
easement in Art. 73 only recognized and preserved existing privately owned banks; it did not
authorize future private appropriation of riverbanks.
The foregoing observation is confirmed by the still subsequent Law of Waters of June 13, 1879,
which was principally based on the Law of August 3, 1865.
34
Art. 36 of the new law, which was a
substantial reenactment of Art. 73 of the Law of Waters of August 3, 1866, reads:
Las riberas, aun cuando sean de dominio privado en virtud de antigue ley o de costumbre,
estan sujetas en toda su extension las margenes en una zona de tres metros, a la
servidumbre de uso publico en interes general de la navegacion, la flotacion la pesca y el
salvamento. ... (Emphasis supplied)
The new law also affirmed the public ownership of rivers and their beds, and the treatment of the
banks as part of the bed.
35
But nowhere in the law was there any provision authorizing the private
appropriation of the banks. What it merely did was to recognize the fact that at that time there were
privately owned banks pursuant to the SietePartidas, and to encumber these with an easement for
public use.
However, the public nature of riverbanks still obtained only by implication. But with the promulgation
of the Civil Code of 1889, this fact was finally made explicit in Art. 339 thereof. Riverbanks were
declared as public property since they were destined for public use. And the first paragraph of Art.
36 of the Law of Waters of 1879 was substantially reenacted in Art. 553 of the Code.
36
Hence, this
article must also be understood not as authorizing the private acquisition of riverbanks but only as
recognizing the vested titles of riparian owners who already owned the banks.
The authority, then, for the private ownership of the banks is neither the old Civil Code nor the Law
of Waters of 1866 but the Siete Partidas. Unfortunately, plaintiff cannot invoke it. Law 6, Title 28,
Partida 3, which provides for private ownership of banks, ceased to be of force in this jurisdiction as
of 1871 yet when the Law of Waters of August 3, 1866, took effect.
37
Since the change in the course
of the River took place in 1937, the new banks which were formed could not have been subjected to
the provisions of the Siete Partidas which had already been superseded by then.
Coming to the factual issues: both parties assail the conclusion made by the lower court that only the
northern two-fifths of the disputed area remained as plaintiff's private property. This conclusion was
apparently based on the findings that the portion where rice and corn were found
38
in the ocular
inspection of June 15, 1951, was on the northern two-fifths of the disputed area; that this cannot be
a part of the bed because of the existence of vegetation which could not have grown underwater,
and that this portion is man-made. However, there is no evidentiary basis for these findings. The
area indicated by Nos. 1 and 2 in Exh. D-1 where no excavations had been made, appears to be
more on the south-western one-fourth of the disputed area. The American cases
39
cited by the lower
court cannot apply here. Our Law of Waters, in defining "beds" and considers the latter is part of the
former. Those cited cases did not involve a similar statutory provision. That plants can and do grow
on the banks which otherwise could not have grown in the bed which is constantly subjected to the
flow of the waters proves the distinction between "beds" and "banks" in the physical order. However,
We are dealing with the legal order where legal definitions prevail. And apart from these
considerations, We also note the considerable difficulty which would attend the execution of the
ruling of the lower court. The latter failed to indicate fixed markers from which an exact delimitation
of the boundaries of the portion could be made. This flaw is conducive to future litigations.
Plaintiff's theory is that the disputed area, although covered at times by flood waters, cannot be
considered as within the banks of the River because: (1) such floods are only accidental, and (2)
even if they are regular, the flooding of the area is due to the excavations and extractions made by
defendants which have caused the widening of the channel.
40
Defendants claim, however, that the
area is always covered by the normal yearly floods and that the widening of the channel is due to
natural causes.
There is a gravel pit
41
located along the west side of the River. This is about 500 meters long.
42
A
greater part of this pit occupies a portion of the strip of land that was sliced by the River from the rest
of the Hilario estate. As shown in Exhs. D and D-1, this strip of land is that western segment of the
Hilario estate bounded on the west by the same lines connecting stakes 23 through 27, which form
part of the western boundary of the estate, and on the east, bounded by the western waterline of the
River.
Now, the disputed area, generally speaking,
43
is only that part of the gravel pit which is within the
strip of land. Its northern tip is that point where the so-called "secondary bank" line intersects the
west River waterline up north; its southern boundary is along the line connecting stakes 23 and 24.
From these two ends, the disputed area measures approximately 250 meters long. The eastern
boundary is the western River waterline at low tide and the western boundary is the "secondary
bank" line, a line passing near stake 24 and running almost parallel to the line connecting stakes 25
and 26. Around the later part of 1949, the disputed area was about 150 to 160 meters wide.
44
This
increased to about 175 to 180 meters by the later part of 1950. And by January, 1953, the distance
from the "secondary bank" line to the west waterline was about 230 meters.
45

This increasing width of the disputed area could be attributed to the gradual movement of the River
to the east. Since it entered into the Hilario estate, the River has not stayed put.
46
Vicente Vicente,
plaintiff's witness declared
47
that after the River changed its course in 1937, the distance between
the old and the new river sites was about 100 meters. Exh. D-2 shows that in 1943, the south end of
the River was about 5 meters southeast of stake 24.
48
Honorato Sta. Maria, another witness for
plaintiff, indicated the flow of this course with a blue line in Exh. D-1.
49
This blue line is about 100
meters from the line connecting stakes 25 and 26, which was also the east boundary of the old
River.
50
Around 1945 to 1949, the River was about 193 meters
51
east of this line. This measurement
is based on the testimonies of two defense witnesses
52
and stated that during that period, the River
passed along the Excavated Area and the New Accretion Area
53
sites, as shown in Exh. 54. By the
later part of 1949 up to November 1950, the west waterline was from 248 to 270 meters
54
east of the
aforesaid boundary line. And finally in January, 1953, based on the scale in Exh. 3-Calalang, the
west waterline was from 300 to 305 meters away already. Hence, from 100 meters in 1937, the
River had moved to 305 meters eastward in 1953.
There are two questions to be resolved here. First, where on the strip of land are the lateral borders
of the western riverbank? And second, where have defendants made their extractions?
Anent the first question, the key is supplied by Art. 73 of the Law of Waters which defines the limits
of banks of rivers
By the phrase "banks of a river" is understood those lateral strips or zones of its bed which
are washed by the stream only during such high floods as do not cause in inundations. ...
(Emphasis supplied)
The farthest extremity of the bank on the west side would, therefore, be that lateral line or
strip which is reached by the waters during those high floods that do not cause inundations.
In other words, the extent reached by the waters when the River is at high tide.
However, there is a difference between the topography of the two sides immediately adjoining the
River. The line indicated as "primary bank"
55
in Exh. 3-Calalang, which is on the east, is about 3
meters high and has a steep grade right at the edge where it drops almost vertically to the
watercourse level. The precipice here, which is near the east waterline, is very easily detectible. But
the opposite side has no such steep activity. In fact, it is almost flat with the bed of the River,
especially near the water edge, where it is about 30 to 50 cms. high only. But it gradually slopes up
to a height of about 2 to 2- meters along the line indicated as "secondary bank", which is quite far
from the waterline. This "bank" line is about 1- meters higher than the level of the gravel pit and
there are erosions here. This is about 175 meters west from the November 1950 waterline, and
about 100 meters west from the camachile tree.
56

During the dry season, the waterlevel of the River is quite low about knee-deep only. However,
during the rainy season, the River generally becomes swollen, and the waterlevel rises, reaching up
to the neck.
57
However, considering the peculiar characteristics of the two sides banking the river,
the rise in the waterlevel would not have the same effect on the two sides. Thus, on the east, the
water would rise vertically, until the top of the "primary bank" is reached, but on the west, there
would be a low-angled inclined rise, the water covering more ground until the "secondary bank" line
is reached. In other words, while the water expansion on the east is vertical, that on the west is more
or less lateral, or horizontal.
The evidence also shows that there are two types of floods in the area during the rainy
season.
58
One is the so-called "ordinary" flood, when the river is swollen but the flowing water is kept
within the confines, of the "primary" and "secondary" banks. This occurs annually, about three to four
times during the period. Then there is the "extraordinary" flood, when the waters overflow beyond the
said banks, and even inundate the surrounding areas. However, this flood does not happen
regularly. From 1947 to 1955, there were only three such floods.
59
Now, considering that the
"ordinary" flood easily cover the west side since any vertical rise of the waterlevel on the east
would necessarily be accompanied by a lateral water expansion on the west the "inundations"
which the law mentions must be those caused by the "extraordinary" floods which reach and
overflow beyond both "primary" and "secondary" banks. And since the "primary" bank is higher than
the "secondary" bank, it is only when the former is reached and overflowed that there can be an
inundation of the banks the two banks. The question therefore, may be stated thus: up to what
extent on the west side do the highest flood waters reach when the "primary" bank is not
overflowed?
Defendants have presented several witnesses who testified on the extent reached by the ordinary
flood waters. David Ross, a bulldozer operator at the plant since 1945, testified
60
that from 1945 to
1949, when the River was still passing along the site where the camachile tree is located, the annual
flood waters reached up to the "secondary bank" line. These floods usually took from 3 to 5 days to
recede, during which time their work was suspended. Corroboration is supplied by Macario Suiza, a
crane operator in the plant since 1945, and by Fidel Villafuerte, a plant employee since 1946. Suiza
stated
61
that from 1947 to 1949, the area enclosed within the blue lines and marked as Exh. 54-B
which includes the New Accretion Area was always covered by water when it rained hard and they
had to stop work temporarily. The western extremity of this area reaches up to the "secondary bank"
line. Villafuerte stated
62
that in the ordinary floods when the water was just 50 cm. below the top of
the "primary bank", the waters would go beyond the camachile tree by as much as 100 meters
westward and just about reach the "secondary bank" line. Further corroboration is supplied by
plaintiff's own evidence. Exh. 1-Calalang states that from 1947 to 1949, based on the casual
observations made by geologist David Cruz, the area between the "primary" and "secondary" banks
were always covered by the non-inundating ordinary floods.
From 1950 to 1952, We have the testimony of Ross who stated
63
that there were still floods but they
were not as big anymore, except one flood in 1952, since the River had already moved to the east.
Engr. Ricardo Pacheco, who made a survey of the disputed area in November 1952, and who
conducted actual observations of the extent of the water reach when the river was swollen,
testified
64
that the non-inundating flood regularly reached up to the blue zigzag line along the
disputed area, as shown in Exh. I-City Engineer Manila. This blue line, at the point where it
intersects line BB,
65
is about 140 meters west of the waterline and about 20 meters west of the
camachile tree. His testimony was based on three floods
66
which he and his men actually recorded.
Corroboration is again supplied by Exh. 1-Calalang. According to Cruz' report, the floods in 1950 and
1951 barely covered the disputed area. During the normal days of the rainy season, the waters of
the swollen river did not reach the higher portions of the gravel pit which used to be submerged. One
cause for this was the lesser amount of rainfall from 1949 to 1951. But two floods occurred from
October 16 to 28, 1952, which overflowed the whole area and inundated the banks. From 1953 to
1955, when the River was farther away to the east, the flood waters still covered the west
side.
67
Testifying on the extent reached by the water during the rainy season in 1954, Ross
stated
68
that it reached up to the camachile tree only. The last and latest data comes from Engr.
Magbayani Leao, the Engineer-in-charge of the plant from August 1954. He testified
69
that as of
December 1955, when the disputed area was underwater, the water reach was about 20 meters or
less to the east from the camachile tree.
From all the foregoing, it can be safely concluded: (1) that from 1945 to 1949, the west bank of the
River extended westward up to the "secondary bank" line; (2) that from 1950 to 1952, this bank had
moved, with the River, to the east its lateral borders running along a line just 20 meters west of the
camachile tree; and (3) that from 1953 to 1955, the extremities of the west bank further receded
eastward beyond the camachile tree, until they lay just about 20 meters east of said tree.
To counteract the testimonies of the defense witnesses, plaintiff presented two rebuttal
witnesses
70
who told a somewhat different story. However, their testimonies are not convincing
enough to offset the dovetailing testimonies of the defense witnesses who were much better
qualified and acquainted with the actual situs of the floods. And said defense witnesses were
corroborated by plaintiffs' own evidence which contradicts the aforesaid rebuttal witnesses.
However, plaintiff maintains that the floods which cover the area in question are merely accidental
and hence, under Art. 77 of the Law of Waters,
71
and following the ruling in Government vs. Colegio
de San Jose,
72
he is deemed not to have lost the inundated area. This is untenable. Plaintiff's own
evidence
73
shows that the river floods with annual regularity during the rainy season. These floods
can hardly be called "accidental." The Colegio de San Jose case is not exactly in point. What was
mainly considered there was Art. 74 of the Law of Waters relating to lakes, ponds and pools. In the
case at bar, none of these is involved.
Also untenable is plaintiff's contention that the regular flooding of the disputed area was due to the
continuous extraction of materials by defendants which had lowered the level of said area and
caused the consequent widening of the channel and the river itself. The excavations and
extractions of materials, even from the American period, have been made only on the strip of
land west of the River.
74
Under the "following-the-nature-of-things" argument advanced by
plaintiff, the River should have moved westward, where the level of the ground had been
lowered. But the movement has been in the opposite direction instead. Therefore, it cannot
be attributed to defendants' operation. Moreover, plaintiff's own evidence indicates that the
movement eastward was all due to natural causes. Thus, Exh. 1-Calalang shows that the movement
eastward of the channel by as much as 31 meters, from 1950 to 1953, was due to two typhoons
which caused the erosion of the east bank and the depositing of materials on the west side which
increased its level from as much as .93 to 2 meters.
Plaintiff's assertion that the defendants also caused the unnatural widening of the River is
unfounded. Reliance is made on the finding by the lower court that in 1943, the River was only 60
meters wide as shown in Exh. D-2, whereas in 1950, it was already 140 meters wide as shown in
Exh. D. However, Exh. D-2 only shows the width of the River near the southwestern boundary of the
Hilario estate. It does not indicate how wide it was in the other parts, especially up north. And Eligio
Lorenzo, plaintiff's own witness, admitted
75
on cross-examination that the width of the new river was
not uniform. This is confirmed by Exhs. D and D-1 which show that the new river was wider by as
much as 50% up north than it was down south. The 140-meter distance in Exh. D was at the widest
part up north whereas down south, near the mouth of the Bulobok River, it was only 70 meters wide.
Lastly, the scale in Exh. 3-Calalang will show that in January 1953, the River, near the same point
also, was less than 50 meters wide.
The only remaining question now is to determine if the defendants have really confined their
operations within the banks of the River as alleged by them. To resolve this, We have to find out
from what precise portion in the disputed area the defendants have extracted gravel and sand since
they did not extract indiscriminately from within the entire area. None of the parties' briefs were very
helpful but the evidence on record discloses that defendants made their extractions only within
specified areas during definite periods.
From 1947 to the early part of 1949, the defendants conducted their operations only in the New
Accretion Area along a narrow longitudinal zone contiguous to the watercourse then. This zone,
marked as Exh. 2-City Engineer Manila, is about one (1) km. long and extends northward up to pt.
50.35 in Exh. 54. However, no extractions nor excavations were undertaken west of this zone, i.e.,
above the "temporary bank" line.
76
These facts are corroborated by plaintiff's witnesses. That the
extractions were near the river then finds support in Vicente's testimony
77
while Leon Angeles and
Mrs. Salud Hilario confirm the fact that defendants have not gone westward beyond the "temporary
bank" line.
78
This line is located east of the "secondary bank" line, the lateral extremity of the west
bank then.
In the later part of 1949, plaintiff prohibited the defendants from extracting along the New Accretion
Area and constructed a fence across the same. This forced the defendants to go below southeast of
the "Excavated Area" and the New Accretion Area sites in Exh. 54.
79
Engr. Busuego, testifying
80
in
1952, indicated their are of extraction as that enclosed within the red dotted line in Exh. D-1 which
lies on the south end of the strip of land. Only a small portion of the southeastern boundary of the
disputed area is included. The ocular inspection conducted on June 15, 1951, confirms this.
81
Exh. 4-
Calalang shows the total amount of materials taken from within the area from 1949 to 1951.
82
Thus,
from 1950 up to 1953, although the defendants were able to continue their operations because of
the agreement between the plaintiff and the Director of Public Works,
83
they were confined only to
the southeastern portion of the disputed area. On the other hand, the lateral extremities of the west
bank then ran along a line about 20 meters west of the camachile tree in the New Accretion Area.
From 1954 to 1955, defendants' area of operation was still farther near of the New Accretion Area.
They were working within a confined area along the west waterline, the northern and western
boundaries of which were 20 meters away east from the camachile tree.
84
Ross indicated
85
this zone
in Exh. 54 as that portion on the southern end of the disputed area between the blue lines going
through the words "Marikina River Bed" and the red zigzag line indicating the watercourse then.
Engr. Leao even stated, 86 that they got about 80% of the materials from the river itself and only
20% from the dry bed. The sand and gravel covered by Exhs. LL to LL-55 were all taken from here.
The foregoing facts are not only corroborated by Mrs. Hilario
87
but even admitted by the plaintiff in
his opposition
88
to defendants' petition to extend their area of operation west of the camachile tree.
And because their petition was denied, defendants could not, and have not,
89
gone beyond the
lateral line about 20 meters east from said tree, which has already been established as the lateral
extremity of the west bank during the period.
It appears sufficiently established, therefore, that defendants have not gone beyond the
receding western extremities of the west riverbank. They have confined their extraction of
gravel and sand only from within the banks of the river which constitute part of the public
domain wherein they had the right to operate. Plaintiff has not presented sufficient
evidence that defendants have gone beyond the limits of the west bank, as previously
established, and have invaded his private estate. He cannot, therefore, recover from them.
As a parting argument, plaintiff contends that to declare the entire disputed area as part of the
riverbanks would be tantamount to converting about half of his estate to public ownership without
just compensation. He even adds that defendants have already exhausted the supply in that area
and have unjustly profited at his expense. These arguments, however, do not detract from the above
conclusions.
First of all, We are not declaring that the entire channel, i.e., all that space between the "secondary
bank" line and the "primary bank" line, has permanently become part of the riverbed. What We are
only holding is that at the time the defendants made their extractions, the excavations were within
the confines of the riverbanks then. The "secondary bank" line was the western limit of the west bank
around 1945 to 1949 only. By 1955, this had greatly receded to the line just 20 meters east of the
camachile tree in the New Accretion Area. All that space to the west of said receding line
90
would still
be part of plaintiff's property and also whatever portion adjoining the river is, at present, no longer
reached by the non-inundating ordinary floods.
Secondly, it is not correct to say that plaintiff would be deprived of his property without any
compensation at all. Under Art. 370 of the old Civil Code, the abandoned bed of the old river belongs
to the riparian owners either fully or in part with the other riparian owners. And had the change
occurred under the Civil Code of the Philippines, plaintiff would even be entitled to all of the old bed
in proportion to the area he has lost.
91

And, lastly, defendants cannot be accused of unjustly profiting at plaintiff's expense. They were not
responsible for the shifting of the River. It was due to natural causes for which no one can be
blamed. And defendants were extracting from public property then, under proper authorization. The
government, through the defendants, may have been enriched by chance, but not unjustly.
Considering the conclusions We have thus reached, the other questions involved in the remaining
assignments of errors particularly those apropos the doctrine of state immunity from suit and the
liability of defendant City of Manila are rendered moot.
Wherefore, the decision and orders appealed from are hereby set aside and another judgment is
hereby entered as follows:
(1) Defendants City of Manila and the Director of Public Works and his agents and
employees are hereby absolved from liability to plaintiff since they did not extract materials
from plaintiff's property but from the public domain.
(2) All that portion within the strip of land in question, starting from the line running parallel to
the western waterline of the river and twenty meters east from the camachile tree in the New
Accretion Area measured along line AA in Exhs. 3-Calalang, 13 and 54, and going to the
west up to the western boundaries of the Hilario estate, is hereby declared as not part of the
public domain and confirmed as part of plaintiff's private property. No costs. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar, Sanchez and Castro, JJ.,
concur
G.R. No. L-24440 March 28, 1968
THE PROVINCE OF ZAMBOANGA DEL NORTE, plaintiff-appellee,
vs.
CITY OF ZAMBOANGA, SECRETARY OF FINANCE and COMMISSIONER OF INTERNAL
REVENUE,defendants-appellants.
Fortugaleza, Lood, Sarmiento, M. T. Yap & Associates for plaintiff-appellee.
Office of the Solicitor General for defendants-appellants.
BENGZON, J.P., J .:
Prior to its incorporation as a chartered city, the Municipality of Zamboanga used to be the
provincial capital of the then Zamboanga Province. On October 12, 1936, Commonwealth Act 39
was approved converting the Municipality of Zamboanga into Zamboanga City. Sec. 50 of the Act
also provided that
Buildings and properties which the province shall abandon upon the transfer of the
capital to another place will be acquired and paid for by the City of Zamboanga at a price to
be fixed by the Auditor General.
The properties and buildings referred to consisted of 50 lots and some buildings constructed
thereon, located in the City of Zamboanga and covered individually by Torrens certificates of title in
the name of Zamboanga Province. As far as can be gleaned from the records,
1
said properties were
being utilized as follows
No. of Lots Use
1 ................................................ Capitol Site
3 ................................................ School Site
3 ................................................ Hospital Site
3 ................................................ Leprosarium
1 ................................................ Curuan School
1 ................................................ Trade School
2 ................................................ Burleigh School
2 ................................................ High School Playground
9 ................................................ Burleighs
1 ................................................ Hydro-Electric Site (Magay)
1 ................................................ San Roque
23 ................................................ vacant
It appears that in 1945, the capital of Zamboanga Province was transferred to
Dipolog.
2
Subsequently, or on June 16, 1948, Republic Act 286 was approved creating the
municipality of Molave and making it the capital of Zamboanga Province.
On May 26, 1949, the Appraisal Committee formed by the Auditor General, pursuant to
Commonwealth Act 39, fixed the value of the properties and buildings in question left by Zamboanga
Province in Zamboanga City at P1,294,244.00.
3

On June 6, 1952, Republic Act 711 was approved dividing the province of Zamboanga into
two (2): Zamboanga del Norte and Zamboanga del Sur. As to how the assets and obligations of the
old province were to be divided between the two new ones, Sec. 6 of that law provided:
Upon the approval of this Act, the funds, assets and other properties and the
obligations of the province of Zamboanga shall be divided equitably between the Province of
Zamboanga del Norte and the Province of Zamboanga del Sur by the President of the
Philippines, upon the recommendation of the Auditor General.
Pursuant thereto, the Auditor General, on January 11, 1955, apportioned the assets and
obligations of the defunct Province of Zamboanga as follows: 54.39% for Zamboanga del Norte and
45.61% for Zamboanga del Sur. Zamboanga del Norte therefore became entitled to 54.39% of
P1,294,244.00, the total value of the lots and buildings in question, or P704,220.05 payable by
Zamboanga City.
On March 17, 1959, the Executive Secretary, by order of the President, issued a
ruling
4
holding that Zamboanga del Norte had a vested right as owner (should be co-owner pro-
indiviso) of the properties mentioned in Sec. 50 of Commonwealth Act 39, and is entitled to the price
thereof, payable by Zamboanga City. This ruling revoked the previous Cabinet Resolution of July 13,
1951 conveying all the said 50 lots and buildings thereon to Zamboanga City for P1.00, effective as
of 1945, when the provincial capital of the then Zamboanga Province was transferred to Dipolog.
The Secretary of Finance then authorized the Commissioner of Internal Revenue to deduct an
amount equal to 25% of the regular internal revenue allotment for the City of Zamboanga for the
quarter ending March 31, 1960, then for the quarter ending June 30, 1960, and again for the first
quarter of the fiscal year 1960-1961. The deductions, all aggregating P57,373.46, was credited to
the province of Zamboanga del Norte, in partial payment of the P764,220.05 due it.
However, on June 17, 1961, Republic Act 3039 was approved amending Sec. 50 of
Commonwealth Act 39 by providing that
All buildings, properties and assets belonging to the former province of
Zamboanga and located within the City of Zamboanga are hereby transferred, free of
charge, in favor of the said City of Zamboanga. (Stressed for emphasis).
Consequently, the Secretary of Finance, on July 12, 1961, ordered the Commissioner of
Internal Revenue to stop from effecting further payments to Zamboanga del Norte and to return to
Zamboanga City the sum of P57,373.46 taken from it out of the internal revenue allotment of
Zamboanga del Norte. Zamboanga City admits that since the enactment of Republic Act 3039,
P43,030.11 of the P57,373.46 has already been returned to it.
This constrained plaintiff-appellee Zamboanga del Norte to file on March 5, 1962, a complaint
entitled "Declaratory Relief with Preliminary Mandatory Injunction" in the Court of First Instance of
Zamboanga del Norte against defendants-appellants Zamboanga City, the Secretary of Finance and
the Commissioner of Internal Revenue. It was prayed that: (a) Republic Act 3039 be declared
unconstitutional for depriving plaintiff province of property without due process and just
compensation; (b) Plaintiff's rights and obligations under said law be declared; (c) The Secretary of
Finance and the Internal Revenue Commissioner be enjoined from reimbursing the sum of
P57,373.46 to defendant City; and (d) The latter be ordered to continue paying the balance of
P704,220.05 in quarterly installments of 25% of its internal revenue allotments.
On June 4, 1962, the lower court ordered the issuance of preliminary injunction as prayed for.
After defendants filed their respective answers, trial was held. On August 12, 1963, judgment was
rendered, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered declaring Republic Act No. 3039
unconstitutional insofar as it deprives plaintiff Zamboanga del Norte of its private properties,
consisting of 50 parcels of land and the improvements thereon under certificates of title
(Exhibits "A" to "A-49") in the name of the defunct province of Zamboanga; ordering
defendant City of Zamboanga to pay to the plaintiff the sum of P704,220.05 payment thereof
to be deducted from its regular quarterly internal revenue allotment equivalent to 25% thereof
every quarter until said amount shall have been fully paid; ordering defendant Secretary of
Finance to direct defendant Commissioner of Internal Revenue to deduct 25% from the
regular quarterly internal revenue allotment for defendant City of Zamboanga and to remit
the same to plaintiff Zamboanga del Norte until said sum of P704,220.05 shall have been
fully paid; ordering plaintiff Zamboanga del Norte to execute through its proper officials the
corresponding public instrument deeding to defendant City of Zamboanga the 50 parcels of
land and the improvements thereon under the certificates of title (Exhibits "A" to "A-49") upon
payment by the latter of the aforesaid sum of P704,220.05 in full; dismissing the
counterclaim of defendant City of Zamboanga; and declaring permanent the preliminary
mandatory injunction issued on June 8, 1962, pursuant to the order of the Court dated June
4, 1962. No costs are assessed against the defendants.
It is SO ORDERED.
Subsequently, but prior to the perfection of defendants' appeal, plaintiff province filed a motion
to reconsider praying that Zamboanga City be ordered instead to pay the P704,220.05 in lump
sum with 6% interest per annum. Over defendants' opposition, the lower court granted plaintiff
province's motion.
The defendants then brought the case before Us on appeal.
Brushing aside the procedural point concerning the property of declaratory relief filed in the
lower court on the assertion that the law had already been violated and that plaintiff sought to give it
coercive effect, since assuming the same to be true, the Rules anyway authorize the conversion of
the proceedings to an ordinary action,
5
We proceed to the more important and principal question of
the validity of Republic Act 3039.
The validity of the law ultimately depends on the nature of the 50 lots and buildings thereon in
question. For, the matter involved here is the extent of legislative control over the properties of a
municipal corporation, of which a province is one. The principle itself is simple: If the property is
owned by the municipality (meaning municipal corporation) in its public and governmental
capacity, the property is public and Congress has absolute control over it. But if the property
is owned in its private or proprietary capacity, then it is patrimonial and Congress has no
absolute control. The municipality cannot be deprived of it without due process and payment
of just compensation.
6

The capacity in which the property is held is, however, dependent on the use to which it is
intended and devoted. Now, which of two norms, i.e., that of the Civil Code or that obtaining under
the law of Municipal Corporations, must be used in classifying the properties in question?
The Civil Code classification is embodied in its Arts. 423 and 424 which provide:1wph1. t
ART. 423. The property of provinces, cities, and municipalities is divided into property
for public use and patrimonial property.
ART. 424. Property for public use, in the provinces, cities, and municipalities, consists
of the provincial roads, city streets, municipal streets, the squares, fountains, public waters,
promenades, and public works for public service paid for by said provinces, cities, or
municipalities.
All other property possessed by any of them is patrimonial and shall be governed by this
Code, without prejudice to the provisions of special laws. (Stressed for emphasis).
Applying the above cited norm, all the properties in question, except the two (2) lots used as
High School playgrounds, could be considered as patrimonial properties of the former Zamboanga
province. Even the capital site, the hospital and leprosarium sites, and the school sites will be
considered patrimonial for they are not for public use. They would fall under the phrase "public works
for public service" for it has been held that under theejusdem generis rule, such public works must
be for free and indiscriminate use by anyone, just like the preceding enumerated properties in the
first paragraph of Art 424.
7
The playgrounds, however, would fit into this category.
This was the norm applied by the lower court. And it cannot be said that its actuation was
without jurisprudential precedent for in Municipality of Catbalogan v. Director of Lands,
8
and
in Municipality of Tacloban v. Director of Lands,
9
it was held that the capitol site and the school sites
in municipalities constitute their patrimonial properties. This result is understandable because, unlike
in the classification regarding State properties, properties for public service in the municipalities are
not classified as public. Assuming then the Civil Code classification to be the chosen norm, the lower
court must be affirmed except with regard to the two (2) lots used as playgrounds.
On the other hand, applying the norm obtaining under the principles constituting the law of
Municipal Corporations, all those of the 50 properties in question which are devoted to public
service are deemed public; the rest remain patrimonial. Under this norm, to be considered
public, it is enough that the property be held and, devoted for governmental purposes like
local administration, public education, public health, etc.
10

Supporting jurisprudence are found in the following cases: (1) HINUNANGAN V. DIRECTOR
OF LANDS,
11
where it was stated that "... where the municipality has occupied lands distinctly for
public purposes, such as for the municipal court house, the public school, the public market, or other
necessary municipal building, we will, in the absence of proof to the contrary, presume a grant from
the States in favor of the municipality; but, as indicated by the wording, that rule may be invoked only
as to property which is used distinctly for public purposes...." (2) VIUDA DE TANTOCO V.
MUNICIPAL COUNCIL OF ILOILO
12
held that municipal properties necessary for governmental
purposes are public in nature. Thus, the auto trucks used by the municipality for street sprinkling, the
police patrol automobile, police stations and concrete structures with the corresponding lots used as
markets were declared exempt from execution and attachment since they were not patrimonial
properties. (3) MUNICIPALITY OF BATANGAS VS. CANTOS
13
held squarely that a municipal lot
which had always been devoted to school purposes is one dedicated to public use and is not
patrimonial property of a municipality.
Following this classification, Republic Act 3039 is valid insofar as it affects the lots used as
capitol site, school sites and its grounds, hospital and leprosarium sites and the high school
playground sites a total of 24 lots since these were held by the former Zamboanga province in
its governmental capacity and therefore are subject to the absolute control of Congress. Said lots
considered as public property are the following:
TCT
Number
Lot Number U s e
2200 ...................................... 4-B ...................................... Capitol Site
2816 ...................................... 149 ...................................... School Site
3281 ...................................... 1224 ...................................... Hospital Site
3282 ...................................... 1226 ...................................... Hospital Site
3283 ...................................... 1225 ...................................... Hospital Site
3748 ...................................... 434-A-1 ...................................... School Site
5406 ...................................... 171 ...................................... School Site
5564 ...................................... 168 ......................................
High School Play-
ground
5567 ......................................
157 &
158
...................................... Trade School
5583 ...................................... 167 ......................................
High School Play-
ground
6181 ...................................... (O.C.T.) ...................................... Curuan School
11942 ...................................... 926 ...................................... Leprosarium
11943 ...................................... 927 ...................................... Leprosarium
11944 ...................................... 925 ...................................... Leprosarium
5557 ...................................... 170 ...................................... Burleigh School
5562 ...................................... 180 ...................................... Burleigh School
5565 ...................................... 172-B ...................................... Burleigh
5570 ...................................... 171-A ...................................... Burleigh
5571 ...................................... 172-C ...................................... Burleigh
5572 ...................................... 174 ...................................... Burleigh
5573 ...................................... 178 ...................................... Burleigh
5585 ...................................... 171-B ...................................... Burleigh
5586 ...................................... 173 ...................................... Burleigh
5587 ...................................... 172-A ...................................... Burleigh
We noticed that the eight Burleigh lots above described are adjoining each other and in turn
are between the two lots wherein the Burleigh schools are built, as per records appearing herein and
in the Bureau of Lands. Hence, there is sufficient basis for holding that said eight lots constitute the
appurtenant grounds of the Burleigh schools, and partake of the nature of the same.
Regarding the several buildings existing on the lots above-mentioned, the records do not
disclose whether they were constructed at the expense of the former Province of Zamboanga.
Considering however the fact that said buildings must have been erected even before 1936 when
Commonwealth Act 39 was enacted and the further fact that provinces then had no power to
authorize construction of buildings such as those in the case at bar at their own expense,
14
it can be
assumed that said buildings were erected by the National Government, using national funds. Hence,
Congress could very well dispose of said buildings in the same manner that it did with the lots in
question.
But even assuming that provincial funds were used, still the buildings constitute mere
accessories to the lands, which are public in nature, and so, they follow the nature of said lands,
i.e., public. Moreover, said buildings, though located in the city, will not be for the exclusive use and
benefit of city residents for they could be availed of also by the provincial residents. The province
then and its successors-in-interest are not really deprived of the benefits thereof.
But Republic Act 3039 cannot be applied to deprive Zamboanga del Norte of its share in
the value of the rest of the 26 remaining lots which are patrimonial properties since they are
not being utilized for distinctly, governmental purposes. Said lots are:
TCT Number Lot Number U s e
5577 ...................................... 177 ...................................... Mydro, Magay

13198 ...................................... 127-0 ...................................... San Roque

5569 ...................................... 169 ...................................... Burleigh
15


5558 ...................................... 175 ...................................... Vacant

5559 ...................................... 188 ...................................... "

5560 ...................................... 183 ...................................... "

5561 ...................................... 186 ...................................... "

5563 ...................................... 191 ...................................... "

5566 ...................................... 176 ...................................... "

5568 ...................................... 179 ...................................... "

5574 ...................................... 196 ...................................... "

5575 ...................................... 181-A ...................................... "

5576 ...................................... 181-B ...................................... "

5578 ...................................... 182 ...................................... "

5579 ...................................... 197 ...................................... "

5580 ...................................... 195 ...................................... "

5581 ...................................... 159-B ...................................... "

5582 ...................................... 194 ...................................... "

5584 ...................................... 190 ...................................... "

5588 ...................................... 184 ...................................... "

5589 ...................................... 187 ...................................... "

5590 ...................................... 189 ...................................... "

5591 ...................................... 192 ...................................... "

5592 ...................................... 193 ...................................... "

5593 ...................................... 185 ...................................... "

7379 ...................................... 4147 ...................................... "

Moreover, the fact that these 26 lots are registered strengthens the proposition that they are
truly private in nature. On the other hand, that the 24 lots used for governmental purposes are also
registered is of no significance since registration cannot convert public property to private.
16

We are more inclined to uphold this latter view. The controversy here is more along the
domains of the Law of Municipal Corporations State vs. Province than along that of Civil Law.
Moreover, this Court is not inclined to hold that municipal property held and devoted to public service
is in the same category as ordinary private property. The consequences are dire. As ordinary private
properties, they can be levied upon and attached. They can even be acquired thru adverse
possession all these to the detriment of the local community. Lastly, the classification of
properties other than those for public use in the municipalities as patrimonial under Art. 424 of the
Civil Code is "... without prejudice to the provisions of special laws." For purpose of this article, the
principles, obtaining under the Law of Municipal Corporations can be considered as "special laws".
Hence, the classification of municipal property devoted for distinctly governmental purposes as
public should prevail over the Civil Code classification in this particular case.
Defendants' claim that plaintiff and its predecessor-in-interest are "guilty of laches is without
merit. Under Commonwealth Act 39, Sec. 50, the cause of action in favor of the defunct Zamboanga
Province arose only in 1949 after the Auditor General fixed the value of the properties in question.
While in 1951, the Cabinet resolved transfer said properties practically for free to Zamboanga City, a
reconsideration thereof was seasonably sought. In 1952, the old province was dissolved. As
successor-in-interest to more than half of the properties involved, Zamboanga del Norte was able to
get a reconsideration of the Cabinet Resolution in 1959. In fact, partial payments were effected
subsequently and it was only after the passage of Republic Act 3039 in 1961 that the present
controversy arose. Plaintiff brought suit in 1962. All the foregoing, negative laches.
It results then that Zamboanga del Norte is still entitled to collect from the City of
Zamboanga the former's 54.39% share in the 26 properties which are patrimonial in nature,
said share to computed on the basis of the valuation of said 26 properties as contained in Resolution
No. 7, dated March 26, 1949, of the Appraisal Committee formed by the Auditor General.
Plaintiff's share, however, cannot be paid in lump sum, except as to the P43,030.11 already
returned to defendant City. The return of said amount to defendant was without legal basis. Republic
Act 3039 took effect only on June 17, 1961 after a partial payment of P57,373.46 had already been
made. Since the law did not provide for retroactivity, it could not have validly affected a completed
act. Hence, the amount of P43,030.11 should be immediately returned by defendant City to plaintiff
province. The remaining balance, if any, in the amount of plaintiff's 54.39% share in the 26 lots
should then be paid by defendant City in the same manner originally adopted by the Secretary of
Finance and the Commissioner of Internal Revenue, and not in lump sum. Plaintiff's prayer,
particularly pars. 5 and 6, read together with pars. 10 and 11 of the first cause of action recited in the
complaint
17
clearly shows that the relief sought was merely the continuance of the quarterly
payments from the internal revenue allotments of defendant City. Art. 1169 of the Civil Code on
reciprocal obligations invoked by plaintiff to justify lump sum payment is inapplicable since there has
been so far in legal contemplation no complete delivery of the lots in question. The titles to the
registered lots are not yet in the name of defendant Zamboanga City.
WHEREFORE, the decision appealed from is hereby set aside and another judgment is
hereby entered as follows:.
(1) Defendant Zamboanga City is hereby ordered to return to plaintiff Zamboanga del Norte in
lump sum the amount of P43,030.11 which the former took back from the latter out of the sum of
P57,373.46 previously paid to the latter; and
(2) Defendants are hereby ordered to effect payments in favor of plaintiff of whatever balance
remains of plaintiff's 54.39% share in the 26 patrimonial properties, after deducting therefrom the
sum of P57,373.46, on the basis of Resolution No. 7 dated March 26, 1949 of the Appraisal
Committee formed by the Auditor General, by way of quarterly payments from the allotments of
defendant City, in the manner originally adopted by the Secretary of Finance and the Commissioner
of Internal Revenue. No costs. So ordered.
Reyes, J.B.L., Actg. C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles and Fernando, .
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 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

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 Yiguez 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 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 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 further, That in the event of lease the rentals which may be
charged shall not exceed eight per cent per annum of the assessed value of the
property leased: And provided, finally, That in fixing the price of each lot, which shall
not exceed twenty pesos per square meter, the cost of subdivision and survey shall
not be included.
Sec. 2. Upon approval of this Act no ejectment proceedings against any tenant or
bona fide occupant of the above lots shall be instituted and any ejectment
proceedings pending in court against any such tenant or bona fide occupant shall be
dismissed upon motion of the defendant: Provided, That any demolition order
directed against any tenant or bona fide occupant shall be lifted.
Sec. 3. Upon approval of this Act, if the tenant or bona fide occupant is in arrears in
the payment of any rentals, the amount legally due shall be liquidated and shall be
payable in twenty-four equal monthly installments from the date of liquidation.
Sec. 4. No property acquired by virtue of this Act shall be transferred, sold,
mortgaged, or otherwise disposed of within a period of five years from the date full
ownership thereof has been vested in the purchaser without the consent of the Land
Tenure Administration.
Sec. 5. In the event of the death of the purchaser prior to the complete payment of
the price of the lot purchased by him, his widow and children shall succeed in all his
rights and obligations with respect to his lot.
Sec. 6. The Chairman of the Land Tenure Administration shall implement and issue
such rules and regulations as may be necessary to carry out the provisions of this
Act.
Sec. 7. The sum of one hundred fifty thousand pesos is appropriated out of any
funds in the National Treasury not otherwise appropriated, to carry out the purposes
of this Act.
Sec. 8. All laws or parts of laws inconsistent with this Act are repealed or modified
accordingly.
Sec. 9. This Act shall take effect upon its approval.
Approved, June 20, 1964.
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

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 these lots (for public purposes) immediately passed to the new municipality; that in the
case of common lands or "legua comunal", there was no such immediate acquisition of ownership by
the pueblo, and the land though administered thereby, did not automatically become its property in
the absence of an express grant from the Central Government, and that the reason for this
arrangement is that this class of land was not absolutely needed for the discharge of the
municipality's governmental functions.
It is argued that the parcel of land involved herein has not been used by the City of Manila for any
public purpose and had not been officially earmarked as a site for the erection of some public
buildings; that this circumstance confirms the fact that it was originally "communal" land alloted to the
City of Manila by the Central Government not because it was needed in connection with its
organization as a municipality but simply for the common use of its inhabitants; that the present City
of Manila as successor of the Ayuntamiento de Manila under the former Spanish sovereign merely
enjoys the usufruct over said land, and its exercise of acts of ownership by selling parts thereof did
not necessarily convert the land into a patrimonial property of the City of Manila nor divest the State
of its paramount title.
Appellants further argue that a municipal corporation, like a city is a governmental agent of the State
with authority to govern a limited portion of its territory or to administer purely local affairs in a given
political subdivision, and the extent of its authority is strictly delimited by the grant of power conferred
by the State; that Congress has the exclusive power to create, change or destroy municipal
corporations; that even if We admit that legislative control over municipal corporations is not
absolute and even if it is true that the City of Manila has a registered title over the property in
question, the mere transfer of such land by an act of the legislature from one class of public land to
another, without compensation, does not invade the vested rights of the City.
Appellants finally argue that Republic Act No. 4118 has treated the land involved as one reserved for
communal use, and this classification is conclusive upon the courts; that if the City of Manila feels
that this is wrong and its interests have been thereby prejudiced, the matter should be brought to the
attention of Congress for correction; and that since Congress, in the exercise of its wide
discretionary powers has seen fit to classify the land in question as communal, the Courts certainly
owe it to 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 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 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.
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 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
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:
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.
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 resulting subdivision lots to the occupants by
Congressional authorization does not operate as an exercise of the power of eminent domain
without just compensation in violation of Section 1, subsection (2), Article III of the Constitution, but
simply as a manifestation of its right and power to deal with state property.
It should be emphasized that the law assailed was enacted upon formal written petition of the
Municipal Board of Manila in the form of a legally approved resolution. The certificate of title over the
property in the name of the City of Manila was accordingly cancelled and another issued to the Land
Tenure Administration after the voluntary surrender of the City's duplicate certificate of title by the
City Treasurer with the knowledge and consent of the City Mayor. To implement the provisions of
Republic Act No. 4118, the then Deputy Governor of the Land Authority sent a letter, dated February
18, 1965, to the City Mayor furnishing him with a copy of the "proposed subdivision plan of the said
lot as prepared for the Republic of the Philippines for subdivision and resale by the Land Authority to
bona fide applicants." On March 2, 1965, the Mayor of Manila, through his Executive and Technical
Adviser, acknowledged receipt of the subdivision plan and informed the Land Authority that his
Office "will interpose no objection to the implementation of said law provided that its provisions are
strictly complied with." The foregoing sequence of events, clearly indicate a pattern of regularity and
observance of due process in the reversion of the property to the National Government. All such acts
were done in recognition by the City of Manila of the right and power of the Congress to dispose of
the land involved.
Consequently, the City of Manila was not deprived of anything it owns, either under the due process
clause or under the eminent domain provisions of the Constitution. If it failed to get from the
Congress the concession it sought of having the land involved given to it as its patrimonial property,
the Courts possess no power to grant that relief. Republic Act No. 4118 does not, therefore, suffer
from any constitutional infirmity.
WHEREFORE, the appealed decision is hereby reversed, and petitioners shall proceed with the free
and untrammeled implementation of Republic Act No. 4118 without any obstacle from the
respondents. Without costs.
Concepcion, C.J., Makalintal, Zaldivar, Castro, Fernando, Teehankee and Antonio, JJ., concur.
Barredo and Makasiar, JJ., took no part.


















G. R. No. L-41001 September 30, 1976
MANILA LODGE NO. 761, BENEVOLENT AND PROTECTIVE ORDER OF THE ELKS,
INC., petitioner,
vs.
THE HONORABLE COURT OF APPEALS, CITY OF MANILA, and TARLAC DEVELOPMENT
CORPORATION,respondents.
No. L-41012 September 30, 1976
TARLAC DEVELOPMENT CORPORATION, petitioner,
vs.
HONORABLE COURT OF APPEALS, CITY OF MANILA, LODGE NO. 761, BENEVOLENT AND
PROTECTIVE ORDER OF ELKS, INC., respondents.

CASTRO, C.J .:t. hqw
STATEMENT OF THE CASE AND STATEMENTOF THE FACTS
These two cases are petitions on certiorari to review the decision dated June 30, 1975 of the Court
of Appeals in CA-G.R. No. 51590-R entitled "Tarlac Development Corporation vs. City of Manila, and
Manila Lodge No. 761, Benevolent and Protective Order of Elks, Inc.," affirming the trial court's
finding in Civil Case No. 83009 that the property subject of the decision a quo is a "public park or
plaza."
On June 26, 1905 the Philippine Commission enacted Act No. l360 which authorized the City of
Manila to reclaim a portion of Manila Bay. The reclaimed area was to form part of the Luneta
extension. The Act provided that the reclaimed area "Shall be the property of the City of Manila" and
that "the City of Manila is hereby authorized to set aside a tract of the reclaimed land formed by the
Luneta extension x x x at the north end not to exceed five hundred feet by six hundred feet in size,
for a
hotel
site, and to lease the same, with the approval of the Governor General, to a responsible person or
corporation for a term not exceed ninety-nine years."
Subsequently, the Philippine Commission passed on May 18, 1907 Act No. 1657, amending Act No.
1360, so as to authorize the City of' Manila either to lease or to sell the portion set aside as a hotel
site.
The total area reclaimed was a little over 25 hectares. The City of Manila applied for the registration
of the reclaimed area, and on January 20, 1911, O.C.T. No. 1909 was issued in the name of the City
of Manila. The title described the registered land as "un terreno conocido con el nombre de Luneta
Extension, situato en el distrito de la Ermita x x x." The registration was "subject, however to such of
the incumbrances mentioned in Article 39 of said law (Land Registration Act) as may be subsisting"
and "sujeto a las disposiciones y condiciones impuestas en la Ley No. 1360; y sujeto tambein a los
contratos de venta, celebrados y otorgados por la Ciudad de Manila a favor del Army and Navy Club
y la Manila Lodge No. 761, Benevolent and Protective Order of Elks, fechados respectivamente, en
29 de Diciembre de 1908 y 16 de Enero de 1909."
1

On July 13, 1911 the City of Manila, affirming a prior sale dated January 16, 1909 cancelled
5,543.07 square meters of the reclaimed area to the Manila Lodge No. 761, Benevolent and
Protective Order of Elks of the U.S.A. (BPOE, for short) on the basis of which TCT No. 2195
2
was
issued to the latter over the Marcela de terreno que es parte de la Luneta Extension, Situada en el
Distrito le la Ermita ... ." At the back of this title vas annotated document 4608/T-1635, which in part reads
as follows: "que la citada Ciusdad de Manila tendra derecho a su opcion, de recomparar la expresada
propiedad para fines publicos solamete in cualquier tiempo despues de cincuenta anos desde el 13 le
Julio le 1911, precio de la misma propiedad, mas el valor que entonces tengan las mejoras."
For the remainder of the Luneta Extension, that is, after segregating therefrom the portion sold to the
Manila Lodge No. 761, PBOE, a new Certificate of Title No. 2196
3
was issued on July 17, 1911 to the
City of Manila.
Manila Lodge No. 761, BPOE, subsequently sold the said 5,543.07 square meters to the Elks Club,
Inc., to which was issued TCT No. 67488. 4 The registered owner, "The Elks Club, Inc.," was later
changed by court oder to "Manila Lodge No. 761, Benevolent and Protective Order of Elks, Inc."
In January 1963 the BPOE. petitioned the Court of First Instance of Manila, Branch IV, for the
cancellation of the right of the City of Manila to repurchase the property This petition was granted on
February 15, 1963.
On November 19, 1963 the BPOE sold for the sum of P4,700,000 the land together with all the
improvements thereon to the Tarlac Development Corporation (TDC, for short) which paid
P1,700.000 as down payment and mortgaged to the vendor the same realty to secure the payment
of the balance to be paid in quarterly installments.5 At the time of the sale,, there was no annotation of any subsisting lien
on the title to the property. On December 12, 1963 TCT No. 73444 was issued to TDC over the subject land still described as "UNA
PARCELA DE TERRENO, que es parte de la Luneta Extension, situada en el Distrito de Ermita ... ."
In June 1964 the City of Manila filed with the Court of First Instance of Manila a petition for the
reannotation of its right to repurchase; the court, after haering, issued an order, dated November 19,
1964, directing the Register of Deeds of the City of Manila to reannotate in toto the entry regarind
the right of the City of Manila to repurchase the property after fifty years. From this order TDC and
BPOE appealed to this Court which on July 31, 1968 affirmed in G.R. Nos. L-24557 and L-24469 the
trial court's order of reannotation, but reserved to TDC the right to bring another action for the
clarification of its rights.
As a consequence of such reservation, TDC filed on April 28, 1971 against the City of Manila and
the Manila Lodge No. 761, BPOE, a complaint, docketed as Civil Case No. 83009 of the Court of
First Instance of Manila, containing three causes of action and praying -
a) On the first cause of action, that the plaintiff TDC be declared to have purchased the parcel of
land now in question with the buildings and improvements thereon from the defendant BPOE for
value and in good faith, and accordingly ordering the cancellation of Entry No. 4608/T-1635 on
Transfer Certificate of Title No. 73444 in the name of the Plaintiff;
b) On the second cause of action, ordering the defendant City of Manila to pay the plaintiff TDC
damages in the sum of note less than one hundred thousand pesos (P100,000.00);
c) On the third cause of action, reserving to the plaintiff TDC the right to recover from the defendant
BPOE the amounts mentioned in par. XVI of the complaint in accordance with Art. 1555 of the Civil
Code, in the remote event that the final judgment in this case should be that the parcel of land now
in question is a public park; and
d) For costs, and for such other and further relief as the Court may deem just and equitable.
6

Therein defendant City of Manila, in its answer dated May 19, 1971, admitted all the facts alleged in
the first cause of action except the allegation that TDC purchased said property "for value and in
good faith," but denied for lack of knowledge or information the allegations in the second and third
causes of action. As, special and affirmative defense, the City of Manila claimed that TDC was not a
purchaser in good faith for it had actual notice of the City's right to repurchase which was annotated
at the back of the title prior to its cancellation, and that, assumingarguendo that TDC had no notice
of the right to repurchase, it was, nevertheless, under obligation to investigate inasmuch as its title
recites that the property is a part of the Luneta extension.
7

The Manila Lodge No. 761, BPOE, in its answer dated June 7, 1971, admitted having sold the land
together with the improvements thereon for value to therein plaintiff which was in good faith, but
denied for lack of knowledge as to their veracity the allegations under the second cause of action. It
furthermore admitted that TDC had paid the quarterly installments until October l5, 1964 but claimed
that the latter failed without justifiable cause to pay the subsequent installments. It also asserted that
it was a seller for value in good faith without having misrepresented or concealed tacts relative to the
title on the property. As counterclaim, Manila Lodge No. 761 (BPOE) sought to recover the balance
of the purchase price plus interest and costs.
8

On June 15, 1971 TDC answered the aforesaid counterclaim, alleging that its refusal to make further
payments was fully justified.
9

After due trial the court a quo rendered on July 14, 1972 its decision finding the subject land to be
part of the "public park or plaza" and, therefore, part of the public domain. The court consequently
declared that the sale of the subject land by the City of Manila to Manila Lodge No. 761, BPOE, was
null and void; that plaintiff TDC was a purchaser thereof in g faith and for value from BPOE and can
enforce its rights against the latter; and that BPOE is entitled to recover from the City of Manila
whatever consideration it had 'paid the latter. 'The dispositive part of the decision reads: +. wph! 1
WHEREFORE, the Court hereby declares that the parcel of land formerly covered by
Transfer Certificate of Title Nos 2195 and 67488 in the name of BPOE and now by
Transfer Certificate of Title No. 73444 in the name of Tarlac Development
Corporation is a public' park or plaza, and, consequently, instant complaint is
dimissed, without pronouncement as to costs.
In view of the reservation made by plaintiff Tarlac Development Corporation to
recover from defendant BPOE the amounts mentioned in paragraph XVI of the
complaint in accordance with Article 1555 of the Civil Code, the Court makes no
pronouncement on this point.
10

From said decision the therein plaintiff TDC as well as the defendant Manila Lodge No. 761, BPOE,
appealed to the Court of Appeals.
In its appeal docketed as CA-G.R. No. 51590-R, the Manila Lodge No. 761, BPOE, avers that the
trial court committed the following errors, namely:
1. In holding that the property subject of the action is not patrimonial property of the City of Manila;
and
2. In holding that the Tarlac Development Corporation may recover and enforce its right against the
defendant BPOE.
11

The Tarlac Development Corporation, on the other hand, asserts that the trial court erred:
(1) In finding that the property in question is or was a public park and in consequently nullifying the
sale thereof by the City of Manila to BPOE;
(2) In applying the cases of Municipality of Cavite vs. Rojas, 30 Phil. 602, and Government vs.
Cabangis, 53 Phil. 112, to the case at bar; and
(3) In not holding that the plaintiff-appellant is entitled to ,recover damages from the defendant City
of Manila.
12

Furthermore, TDC as appellee regarding the second assignment of error raised by BPOE,
maintained that it can recover and enforce its rigth against BPOE in the event that the land in
question is declared a public park or part thereof.
13

In its decision promulgated on June 30, 1975, the Court of Appeals concur ed in the findings and
conclusions of the lower court upon the ground that they are supported by he evidence and are in
accordance with law, and accordingly affirmed the lower court's judgment.
Hence, the present petitions for review on certiorari.
G.R. No. L-41001
The Manila Lodge No. 761, BPOE, contends, in its petition for review on certiorari docketed as G.R.
No. L-41001, that the Court of Appeals erred in (1) disregarding the very enabling acts and/or
statutes according to which the subject property was, and still is, patrimonial property of the City of
Manila and could therefore be sold and/or disposed of like any other private property; and (2) in
departing from the accepted and usual course of judicial proceedings when it simply made a general
affirmance of the court a quo's findings and conclusions without bothering to discuss or resolve
several vital points stressed by the BPOE in its assigned errrors.
14

G.R. No. L-41012
The Tarlac Development Corporation, in its petition for review on certiorari docketed as G.R. No. L-
41012, relies on the following grounds for the allowance of its petition:
1. that the Court of Appeals did not correctly interpret Act No. 1360, as amended by Act No. 1657, of
the Philippine Commission; and
2. that the Court of Appeals has departed from the accepted and usual course of judicial
proceedings in that it did not make its own findings but simply recited those of the lower court.
15

ISSUES AND ARGUMENTS
FIRST ISSUE
Upon the first issue, both petitioners claim that the property subject of the action, pursuant to the
provisions of Act No. 1360, as amended by Act No. 1657, was patrimonial property of the City of
Manila and not a park or plaza.
Arguments of Petitioners
In G.R. No. L-41001, the Manila Lodge No. 761, BPOE, admits that "there appears to be some logic
in the conclusion" of the Court of Appeals that "neither Act No. 1360 nor Act No. 1657 could have
meant to supply the City of Manila the authority to sell the subject property which is located at the
south end not the north of the reclaimed area."
16
It argues, however, that when Act No. 1360, as
amended, authorized the City of Manila to undertake the construction of the Luneta extension by
reclaimed land from the Manila Bay, and declared that the reclaimed land shall be the "property of the
City of Manila," the State expressly granted the ownership thereof to the City of Manila which.
consequently. could enter into transactions involving it; that upon the issuance of O.C.T. No. 1909, there
could he no doubt that the reclaimed area owned by the City was its patrimonial property;" that the south
end of the reclaimed area could not be for public use for. as argued by TDC a street, park or promenade
can be property for public use pursuant to Article 344 of the Spanish Civil Code only when it has already
been so constructed or laid out, and the subject land, at the time it was sold to the Elk's Club, was neither
actually constructed as a street, park or promenade nor laid out as a street, park or promenade;" that
even assuming that the subject property was at the beginning property of public dominion, it was
subsequently converted into patrimonial property pursuant to Art. 422 of the Civil Code, inasmuch as it
had never been used, red or utilized since it was reclaimed in 1905 for purpose other than this of an
ordinary real estate for sale or lease; that the subject property had never been intended for public use, is
further shown by the fact that it was neither included as a part of the Luneta Park under Plan No. 30 of
the National Planning Commission nor considered a part of the Luneta National Park (now Rizal Park) by
Proclamation No. 234 dated December 19, 1955 of President Ramon Magsaysay or by Proclamation
Order No. 274 dated October 4, 1967 of President Ferdinand E. Marcos;"
19
that, such being the case,
there is no reason why the subject property should -not be considered as having been converted into
patrimonial property, pursuant to the ruling in Municipality vs. Roa 7 Phil. 20, inasmuch as the City of
Manila has considered it as its patrimonial property not only bringing it under the operation of the Land
Registration Act but also by disposing of it;
20
and that to consider now the subject property as a public
plaza or park would not only impair the obligations of the parties to the contract of sale (rated July 13,
1911, but also authorize deprivation of property without due process of law.
21

G.R. No. L-410112
In L-41012, the petitioner TDC stresses that the principal issue is the interpretation of Act No. 1360,
as amended by. Act No. 1657 of the Philippine Commission,
22
and avers that inasmuch as Section 6
of Act No. 1360, as amended by Act 1657, provided that the reclamation of the Luneta extension was to
be paid for out of the funds of the City of Manila which was authorized to borrow P350,000 "to be
expended in the construction of Luneta Extension," the reclaimed area became "public land" belonging to
the City of Manila that spent for the reclamation, conformably to the holding in Cabangis,
23
and
consequently, said land was subject to sale and other disposition; that the Insular Government itself
considered the reclaimed Luneta extension as patrimonial property subject to disposition as evidenced by
the fact that See. 3 of Act 1360 declared that "the land hereby reclaimed shall be the property of the City
of Manila;" that this property cannot be property for public use for according to Article 344 of the Civil
Code, the character of property for public use can only attach to roads and squares that have already
been constructed or at least laid out as such, which conditions did not obtain regarding the subject land,
that Sec. 5 of Act 1360 authorized the City of Manila to lease the northern part of the reclaimed area for
hotel purposes; that Act No. 1657 furthermore authorized the City of Manila to sell the same;
24
that the
express statutory authority to lease or sell the northern part of the reclaimed area cannot be interpreted to
mean that the remaining area could not be sold inasmuch as the purpose of the statute was not merely to
confer authority to sell the northern portion but rather to limit the city's power of disposition thereof, to wit:
to prevent disposition of the northern portion for any purpose other than for a hotel site that the northern
and southern ends of the reclaimed area cannot be considered as extension of the Luneta for they lie
beyond the sides of the original Luneta when extended in the direction of the sea, and that is the reason
why the law authorized the sale of the northern portion for hotel purposes, and, for the same reason, it is
implied that the southern portion could likewise be disposed of.
26

TDC argues likewise that there are several items of uncontradicted circumstantial evidence which
may serve as aids in construing the legislative intent and which demonstrate that the subject
property is patrimonial in nature, to wit: (1) Exhibits "J" and "J-1", or Plan No. 30 of the National
Planning Commission showing the Luneta and its vicinity, do not include the subject property as part
of the Luneta Park; (2) Exhibit "K", which is the plan of the subject property covered by TCT No.
67488 of BPOE, prepared on November 11, 1963, indicates that said property is not a public park;
(3) Exhibit "T", which is a certified copy of Proclamation No. 234 issued on December 15, 1955 is
President Magsaysay, and Exhibit "U" which is Proclamation Order No. 273 issued on October 4,
1967 by President Marcos, do not include the subject property in the Luneta Park-, (4) Exhibit "W",
which is the location plan of the Luneta National Park under Proclamations Nos. 234 and 273,
further confirms that the subject property is not a public park; and (5) Exhibit "Y", which is a copy of
O.C.T. No. 7333 in the name of the United States of America covering the land now occupied by the
America covering the land now occupied by the American Embassy, the boundaries of which were
delineated by the Philippine Legislature, states that the said land is bounded on the northwest by
properties of the Army and Navy Club (Block No. 321) and the Elks Club (Block No. 321), and this
circumstance shows that even the Philippine Legislature recognized the subject property as private
property of the Elks Club.
27

TDC furthermore contends that the City of Manila is estopped from questioning the validity of the
sale of the subject property that it executed on July 13, 1911 to the Manila Lodge No. 761, BPOE,
for several reasons, namely: (1) the City's petition for the reannotation of Entry No. 4608/T-1635 was
predicated on the validity of said sale; (2) when the property was bought by the petitioner TDC it was
not a public plaza or park as testified to by both Pedro Cojuanco, treasurer of TDC, and the
surveyor, Manuel Aoneuvo, according to whom the subject property was from all appearances
private property as it was enclosed by fences; (3) the property in question was cadastrally surveyed
and registered as property of the Elks Club, according to Manuel Anonuevo; (4) the property was
never used as a public park, for, since the issuance of T.C.T. No. 2165 on July 17, 1911 in the name
of the Manila Lodge NO. 761, the latter used it as private property, and as early as January 16, 1909
the City of Manila had already executed a deed of sale over the property in favor of the Manila
Lodge No. 761; and (5) the City of Manila has not presented any evidence to show that the subject
property has ever been proclaimed or used as a public park.
28

TDC, moreover, contends that Sec. 60 of Com. Act No. 141 cannot apply to the subject land, for
Com. Act No. 141 took effect on December 1, 1936 and at that time the subject land was no longer
part of the part of the public domain.
29

TDC also stresses that its rights as a purchaser in good faith cannot be disregarded, for the mere
mention in the certificate of title that the lot it purchased was "part of the Luneta extension" was not a
sufficient warning that tile title to the City of Manila was invalid; and that although the trial court, in its
decision affirmed by the Court of Appeals, found the TDC -to has been an innocent purchaser for
value, the court disregarded the petitioner's rights as such purchaser that relied on Torrens
certificate of title.
30

The Court, continues the petitioner TDC erred in not holding that the latter is entitled to recover from
the City of Manila damages in the amount of P100,000 caused by the City's petition for- reannotation
of its right to repurchase.
DISCUSSION AND RESOLUTION OF FIRST ISSUE
It is a cardinal rule of statutory construction that courts must give effect to the general legislative
intent that can be discovered from or is unraveled by the four corners of the statute,
31
and in order to
discover said intent, the whole statute, and not only a particular provision thereof, should be
considered.
32
It is, therefore, necessary to analyze all the provisions of Act No. 1360, as amended, in
order to unravel the legislative intent.
Act No. 1360 which was enacted by the Philippine Commission on June 26, 1905, as amended by
Act No. 1657 enacted on May 18, 1907, authorized the "construction of such rock and timber
bulkheads or sea walls as may be necessary for the making of an extension to the Luneta" (Sec. 1
[a]), and the placing of the material dredged from the harbor of Manila "inside the bulkheads
constructed to inclose the Luneta extension above referred to" (Sec. 1 [a]). It likewise provided that
the plan of Architect D. H. Burnham as "a general outline for the extension and improvement of the
Luneta in the City of Manila" be adopted; that "the reclamation from the Bay of Manila of the land
included in said projected Luneta extension... is hereby authorized and the land thereby reclaimed
shall be the property of the City of Manila" (Sec. 3); that "the City of Manila is hereby authorized to
set aside a tract of the reclaimed land formed by the Luneta extension authorized by this Act at the
worth end of said tract, not to exceed five hundred feet by six hundred feet in size, for a hotel site,
and to lease the same with the approval of the Governor General, ... for a term not exceeding ninety-
nine years; that "should the Municipal Board ... deem it advisable it is hereby authorized to advertise
for sale to sell said tract of land ... ;" "that said tract shall be used for hotel purposes as herein
prescribed, and shall not be devoted to any other purpose or object whatever;" "that should the
grantee x x x fail to maintain on said tract a first-class hotel x x x then the title to said tract of land
sold, conveyed, and transferred, and shall not be devoted to any other purpose or object whatever;"
"that should the grantee x x x fail to maintain on said tract a first-class hotel x x x then the title to said
tract of land sold, conveyed, and transferred to the grantee shall revert to the City of Manila, and
said City of Manila shall thereupon become entitled to immediate possession of said tract of land"
(Sec. 5); that the construction of the rock and timber bulkheads or sea wall "shall be paid for out of
the funds of the City of Manila, but the area to be reclaimed by said proposed Luneta extension shall
be filled, without cost to the City of Manila, with material dredged from Manila Bay at the expense of
the Insular Government" (Sec. 6); and that "the City of Manila is hereby authorized to borrow from
the Insular Government ... the sum of three hundred thousand pesos, to be expended in the
construction of Luneta extension provided for by paragraph (a) of section one hereof" (Sec.7).
The grant made by Act No. 1360 of the reclaimed land to the City of Manila is a grant of "public"
nature, the same having been made to a local political subdivision. Such grants have always
been strictly construed against the grantee.
33
One compelling reason given for the strict interpretation
of a public grant is that there is in such grant a gratuitous donation of, public money or resources which
results in an unfair advantage to the grantee and for that reason, the grant should be narrowly restricted
in favor of the public.
34
This reason for strict interpretation obtains relative to the aforesaid grant, for,
although the City of Manila was to pay for the construction of such work and timber bulkheads or sea
walls as may be necessary for the making of the Luneta extension, the area to be reclaimed would be
filled at the expense of the Insular Government and without cost to the City of Manila, with material
dredged from Manila Bay. Hence, the letter of the statute should be narrowed to exclude maters which if
included would defeat the policy of the legislation.
The reclaimed area, an extension to the Luneta, is declared to be property of the City of Manila.
Property, however, is either of public ownership or of private ownership. 35 What kind of property of
the City is the reclaimed land? Is it of public ownership (dominion) or of private ownership?
We hold that it is of public dominion, intended for public use.
Firstly, if the reclaimed area was granted to the City of Manila as its patrimonial property, the City
could, by virtue of its ownership, dispose of the whole reclaimed area without need
of authorization to do so from the lawmaking body. Thus Article 348 of the Civil Code of Spain
provides that "ownership is the right to enjoy and dispose of a thing without further limitations than
those established by law."
36
The right to dispose (jus disponendi) of one's property is an attribute of
ownership. Act No. 1360, as amended, however, provides by necessary implication, that the City of
Manila could not dispose of the reclaimed area without being authorized by the lawmaking body. Thus the
statute provides that "the City of Manila is hereby authorized to set aside a tract ... at the north end, for a
hotel site, and to lease the same ... should the municipal board ... deem it advisable, it is hereby
authorized ...to sell said tract of land ... " (Sec. 5). If the reclaimed area were patrimonial property of the
City, the latter could dispose of it without need of the authorization provided by the statute, and the
authorization to set aside ... lease ... or sell ... given by the statute would indeed be superfluous. To so
construe the statute s to render the term "authorize," which is repeatedly used by the statute, superfluous
would violate the elementary rule of legal hermeneutics that effect must be given to every word, clause,
and sentence of the statute and that a statute should be so interpreted that no part thereof becomes
inoperative or superfluous.
37
To authorize means to empower, to give a right to act.
38
Act No. 1360
furthermore qualifies the verb it authorize" with the adverb "hereby," which means "by means of this
statue or section," Hence without the authorization expressly given by Act No. 1360, the City of Manila
could not lease or sell even the northern portion; much less could it dispose of the whole reclaimed area.
Consequently, the reclaimed area was granted to the City of Manila, not as its patrimonial property. At
most, only the northern portion reserved as a hotel site could be said to be patrimonial property for, by
express statutory provision it could be disposed of, and the title thereto would revert to the City should the
grantee fail to comply with the terms provided by the statute.
TDC however, contends that the purpose of the authorization provided in Act No. 1360 to lease or
sell was really to limit the City's power of disposition. To sustain such contention is to beg the
question. If the purpose of the law was to limit the City's power of disposition then it is necessarily
assumed that the City had already the power to dispose, for if such power did not exist, how could it
be limited? It was precisely Act 1360 that gave the City the power to dispose for it was hereby
authorized by lease of sale. Hence, the City of Manila had no power to dispose of the reclaimed land
had such power not been granted by Act No. 1360, and the purpose of the authorization was to
empower the city to sell or lease the northern part and not, as TDC claims, to limit only the power to
dispose. Moreover, it is presumed that when the lawmaking body enacted the statute, it had full
knowledge of prior and existing laws and legislation on the subject of the statute and acted in
accordance or with respect thereto.
39
If by another previous law, the City of Manila could already
dispose of the reclaimed area, which it could do if such area were given to it as its patrimonial property,
would it then not be a superfluity for Act No. 1360 to authorize the City to dispose of the reclaimed land?
Neither has petitioner TDC pointed to any other law that authorized the City to do so, nor have we come
across any. What we do know is that if the reclaimed land were patrimonial property, there would be no
need of giving special authorization to the City to dispose of it. Said authorization was given because the
reclaimed land was not intended to be patrimonial property of the City of Manila, and without the express
authorization to dispose of the northern portion, the City could not dispose of even that part.
Secondly, the reclaimed area is an "extension to the Luneta in the City of Manila."
40
If the reclaimed
area is an extension of the Luneta, then it is of the same nature or character as the old Luneta. Anent this
matter, it has been said that a power to extend (or continue an act or business) cannot authorize a
transaction that is totally distinct.
41
It is not disputed that the old Luneta is a public park or plaza and it is
so considered by Section 859 of the Revised Ordinances of the City of Manila.
42
Hence the "extension
to the Luneta" must be also a public park or plaza and for public use.
TDC, however, contends that the subject property cannot be considered an extension of the old
Luneta because it is outside of the limits of the old Luneta when extended to the sea. This is a
strained interpretation of the term "extension," for an "extension," it has been held, "signifies
enlargement in any direction in length, breadth, or circumstance."
43

Thirdly, the reclaimed area was formerly a part of the manila Bay. A bay is nothing more than
an inlet of the sea. Pursuant to Article 1 of the Law of Waters of 1866, bays, roadsteads, coast
sea, inlets and shores are parts of the national domain open to public use. These are also
property of public ownership devoted to public use, according to Article 339 of the Civil Code
of Spain.
When the shore or part of the bay is reclaimed, it does not lose its character of being
property for public use, according to Government of the Philippine Islands vs. Cabangis.
44
The
predecessor of the claimants in this case was the owner of a big tract of land including the lots in
question. From 1896 said land began to wear away due to the action of the waters of Manila Bay. In 1901
the lots in question became completely submerged in water in ordinary tides. It remained in such a state
until 1912 when the Government undertook the dredging of the Vitas estuary and dumped the Sand and -
silt from estuary on the low lands completely Submerged in water thereby gradually forming the lots in
question. Tomas Cabangis took possession thereof as soon as they were reclaimed hence, the
claimants, his successors in interest, claimed that the lots belonged to them. The trial court found for the
claimants and the Government appealed. This Court held that when the lots became a part of the shore.
As they remained in that condition until reclaimed by the filling done by the Government, they belonged to
the public domain. for public use .4' Hence, a part of the shore, and for that purpose a part of the bay, did
not lose its character of being for public use after it was reclaimed.
Fourthly, Act 1360, as amended, authorized the lease or sale of the northern portion of the reclaimed
area as a hotel sites. The subject property is not that northern portion authorized to be leased or
sold; the subject property is the southern portion. Hence, applying the rule of expresio unius est
exlusio alterius, the City of Manila was not authorized to sell the subject property. The application of
this principle of statutory construction becomes the more imperative in the case at bar inasmuch as
not only must the public grant of the reclaimed area to the City of Manila be, as above stated, strictly
construed against the City of Manila, but also because a grant of power to a municipal corporation,
as happens in this case where the city is author ized to lease or sell the northern portion of the
Luneta extension, is strictly limited to such as are expressly or impliedly authorized or necessarily
incidental to the objectives of the corporation.
Fifthly, Article 344 of the Civil Code of Spain provides that to property of public use, in provinces and
in towns, comprises the provincial and town roads, the squares streets fountains, and public waters
the promenades, and public works of general service paid for by such towns or provinces." A park or
plaza, such as the extension to the Luneta, is undoubtedly comprised in said article.
The petitioners, however, argue that, according to said Article 344, in order that the character of
property for public use may be so attached to a plaza, the latter must be actually constructed or at
least laid out as such, and since the subject property was not yet constructed as a plaza or at least
laid out as a plaza when it was sold by the City, it could not be property for public use. It should be
noted, however, that properties of provinces and towns for public use are governed by the same
principles as properties of the same character belonging to the public domain.
46
In order to be
property of public domain an intention to devote it to public use is sufficient.
47
The, petitioners' contention
is refuted by Manresa himself who said, in his comments", on Article 344, that: +.wph! 1
Las plazas, calles y paseos publicos correspondent sin duda aiguna aldominio
publico municipal ), porque se hallan establecidos sobre suelo municipal y estan
destinadas al uso de todos Laurent presenta tratando de las plazas, una question
relativa a si deben conceptuarse como de dominio publico los lugares vacios libres,
que se encuenttan en los Municipios rurales ... Laurent opina contra Pioudhon que
toda vez que estan al servicio de todos pesos lugares, deben considerable publicos
y de dominion publico. Realmente, pala decidir el punto, bastara siempre fijarse en el
destino real y efectivo de los citados lugares, y si este destino entraa un uso comun
de todos, no hay duda que son de dominio publico municipal si no patrimoniales.
It is not necessary, therefore, that a plaza be already constructed of- laid out as a plaza in
order that it be considered property for public use. It is sufficient that it be intended to be
such In the case at bar, it has been shown that the intention of the lawmaking body in giving
to the City of Manila the extension to the Luneta was not a grant to it of patrimonial property
but a grant for public use as a plaza.
We have demonstrated ad satietatem that the Luneta extension as intended to be property of the
City of Manila for public use. But, could not said property-later on be converted, as the petitioners
contend, to patrimonial property? It could be. But this Court has already said, in Ignacio vs. The
Director of Lands,
49
the executive and possibly the legislation department that has the authority and the
power to make the declaration that said property, is no longer required for public use, and until such
declaration i made the property must continue to form paint of the public domain. In the case at bar, there
has been no such explicit or unequivocal declaration It should be noted, furthermore, anent this matter,
that courts are undoubted v not. primarily called upon, and are not in a position, to determine whether any
public land is still needed for the purposes specified in Article 4 of the Law of Waters .
50

Having disposed of the petitioners' principal arguments relative to the main issue, we now pass to
the items of circumstantial evidence which TDC claims may serve as aids in construing the
legislative intent in the enactment of Act No. 1360, as amended. It is noteworthy that all these items
of alleged circumstantial evidence are acts far removed in time from the date of the enactment of Act
No.1360 such that they cannot be considered contemporaneous with its enactment. Moreover, it is
not farfetched that this mass of circumstantial evidence might have been influenced by the
antecedent series of invalid acts, to wit: the City's having obtained over the reclaimed area OCT No.
1909 on January 20,1911; the sale made by the City of the subject property to Manila Lodge No.
761; and the issuance to the latter of T.C.T. No. 2195. It cannot gainsaid that if the subsequent acts
constituting the circumstantial evidence have been base on, or at least influenced, by those
antecedent invalid acts and Torrens titles S they can hardly be indicative of the intent of the
lawmaking body in enacting Act No. 1360 and its amendatory act.
TDC claims that Exhs. "J," "J-l" "K," "T," "U," "W" and "Y" show that the subject property is not a
park.
Exhibits "J" and "J-1," the "Luneta and vicinity showing proposed development" dated May 14, 1949,
were prepared by the National Urban Planning Commission of the Office of the President. It cannot
be reasonably expected that this plan for development of the Luneta should show that the subject
property occupied by the ElksClub is a public park, for it was made 38 years after the sale to the
Elks, and after T.C.T. No. 2195 had been issued to Elks. It is to be assumed that the Office of the
President was cognizant of the Torrens title of BPOE. That the subject property was not included as
a part of the Luneta only indicated that the National Urban Planning Commission that made the plan
knew that the subject property was occupied by Elks and that Elks had a Torrens title thereto. But
this in no way proves that the subject property was originally intended to be patrimonial property of
the City of Manila or that the sale to Elks or that the Torrens-title of the latter is valid.
Exhibit "K" is the "Plan of land covered by T.C.T . No ----, as prepared for Tarlac Development
Company." It was made on November 11, 1963 by Felipe F. Cruz, private land surveyor. This
surveyor is admittedly a surveyor for TDC.
51
This plan cannot be expected to show that the subject
property is a part of the Luneta Park, for he plan was made to show the lot that "was to be sold to
petitioner." This plan must have also assumed the existence of a valid title to the land in favor of Elks.
Exhibits "T" and "U" are copies of Presidential Proclamations No. 234 issued on November 15, 1955
and No. 273 issued on October 4, 1967, respectively. The purpose of the said Proclamations was to
reserve certain parcels of land situated in the District of Ermita, City of Manila, for park site
purposes. Assuming that the subject property is not within the boundaries of the reservation, this
cannot be interpreted to mean that the subject property was not originally intended to be for public
use or that it has ceased to be such. Conversely, had the subject property been included in the
reservation, it would mean, if it really were private property, that the rights of the owners thereof
would be extinguished, for the reservations was "subject to private rights, if any there be." That the
subject property was not included in the reservation only indicates that the President knew of the
existence of the Torrens titles mentioned above. The failure of the Proclamations to include the
subject property in the reservation for park site could not change the character of the subject
property as originally for public use and to form part of the Luneta Park. What has been said here
applies to Exhibits "V", "V-1" to "V-3," and "W" which also refer to the area and location of the
reservation for the Luneta Park.
Exhibit "Y" is a copy of O.C.T. No. 7333 dated November 13, 1935, covering the lot where now
stands the American Embassy [Chancery]. It states that the property is "bounded ... on the
Northwest by properties of Army and Navy Club (Block No.321) and Elks Club (Block No. 321)."
Inasmuch as the said bounderies delineated by the Philippine Legislature in Act No. 4269, the
petitioners contend that the Legislature recognized and conceded the existence of the Elks Club
property as a primate property (the property in question) and not as a public park or plaza. This
argument is non sequitur plain and simple Said Original Certificate of Title cannot be considered as
an incontrovertible declaration that the Elks Club was in truth and in fact the owner of such boundary
lot. Such mention as boundary owner is not a means of acquiring title nor can it validate a title that is
null and void.
TDC finally claims that the City of Manila is estopped from questioning the validity of the sale it
executed on July 13,'1911 conconveying the subject property to the Manila Lodge No. 761, BPOE.
This contention cannot be seriously defended in the light of the doctrine repeatedly enunciated by
this Court that the Government is never estopped by mistakes or errors on the pan of its agents, and
estoppel does not apply to a municipal corporation to validate a contract that is prohibited by law or
its against Republic policy, and the sale of July 13, 1911 executed by the City of Manila to Manila
Lodge was certainly a contract prohibited by law. Moreover, estoppel cannot be urged even if the
City of Manila accepted the benefits of such contract of sale and the Manila Lodge No. 761 had
performed its part of the agreement, for to apply the doctrine of estoppel against the City of Manila in
this case would be tantamount to enabling it to do indirectly what it could not do directly.
52

The sale of the subject property executed by the City of Manila to the Manila Lodge No. 761, BPOE,
was void and inexistent for lack of subject matter.
53
It suffered from an incurable defect that could not
be ratified either by lapse of time or by express ratification. The Manila Lodge No. 761 therefore acquired
no right by virtue of the said sale. Hence to consider now the contract inexistent as it always has seen,
cannot be, as claimed by the Manila Lodge No. 761, an impairment of the obligations of contracts, for
there was it, contemplation of law, no contract at all.
The inexistence of said sale can be set up against anyone who asserts a right arising from it, not
only against the first vendee, the Manila Lodge No. 761, BPOE, but also against all its suceessors,
including the TDC which are not protected the doctrine of bona fide ii purchaser without notice, being
claimed by the TDC does not apply where there is a total absence of title in the vendor, and the
good faith of the purchaser TDC cannot create title where none exists.
55

The so-called sale of the subject property having been executed, the restoration or restitution of
what has been given is order
56

SECOND ISSUE
The second ground alleged in support of the instant petitions for review on certiorari is that the Court
of Appeals has departed from the accepted and usual course of judicial proceedings as to call for an
exercise of the power of supervision. TDC in L-41012, argues that the respondent Court did not
make its own findings but simply recited those of the lower court and made a general affirmance,
contrary to the requirements of the Constitution; that the respondent Court made glaring and patent
mistakes in recounting even the copied findings, palpably showing lack of deliberate consideration of
the matters involved, as, for example, when said court said that Act No. 1657 authorized the City of
Manila to set aside a portion of the reclaimed land "formed by the Luneta Extension of- to lease or
sell the same for park purposes;" and that respondent Court. further more, did not resolve or dispose
of any of the assigned errors contrary to the mandate of the Judiciary Act..
57

The Manila Lodge No. 761, in L-41001, likewise alleges, as one of the reasons warranting review,
that the Court of Appeals departed from the accepted and usual course of Judicial proceedings by
simply making a general affirmance of the court a quo findings without bothering to resolve several
vital points mentioned by the BPOE in its assigned errors.
58

COMMENTS ON SECOND ISSUE
We have shown in our discussion of the first issue that the decision of the trial court is fully in
accordance with law. To follows that when such decision was affirmed by the Court of Appeals, the
affirmance was likewise in accordance with law. Hence, no useful purpose will be served in further
discussing the second issue.
CONCLUSION
ACCORDINGLY, the petitions in both G.R. Nos. L-41001 and L-41012 are denied for lack of merit,
and the decision of the Court of Appeals of June 30, 1975, is hereby affirmed, at petitioner's cost.
Makasiar, Munoz Palma and Martin, JJ., concur.1wph1.t
Teehankee, concurs in the r












G.R. No. L-24661 February 28, 1974
BENJAMIN RABUCO, VENANCIO G. GUIRNALDA, LEODEGARIO ALOBA, ELEUTERIO
IBAES, ROGELIO ARAGONES, ASENCIO ABANCO, BENEDICTO BAUTISTA, MAXIMO
AQUINO, PAULINA DALUMIAS, NENITA RAMOS, GUILLERMO VARIAS, EMELDA ARELLANO,
PEDRO BILBAO, ERNESTO BONBALES, ROSITA OCA BAUTISTA, TERESITA ESTEBAN,
JOSE BENJAMIN, LORENZO BELDEVER, LEODEGARIO TUMLOS, PATRICIO MALATE,
ANSELMO CORTEJOS, ANACLETA ADUCA, SALOME BARCELONA, ENRICO CELSO, IRENE
CAMBA, MARIA COLLADO, RUFINO CANTIL, ANANIAS CANILLO, MAXIMO DE CASTRO,
CEFERINO SALAZAR, PATRIA ANAYA, FELISA VELASCO, IGNACIO SARASPI, FLAVIO
DINAGUIT, REMEDIOS BAROMETRO, PEDRO GEBANIA, RUBEN GEGABALEN, EMETRIO
EDAO, LUCIANO ARAGONES, ADRIANO ESTRELLADO, BONIFACIO EVARISTO, ISIDORO
EDORIA, TIMOTEA ECARUAN, BIENVENIDO COLLADO, CENON DAJUYA, RAFAELA
FERNANDEZ, ALFONSO FAUSTINO, AVELINO GARCIA, RICARDO GUIRNALDA, FRANCISCO
HENERAL, CARMEN KIONESALA, FELICIANO LUMACTOD, DOLORES VILLACAMPA,
NARCISO LIM, EUFEMIO LEGASPI, MATILDE MABAQUIAO, EULOGIO VIA, MACARIO
ANTONIO, JEREMIAS DE LA CRUZ, MARTIN MANGABAN, SIMEON MANGABA T., CARIDAD
MER MILLA, FELIX MAHINAY, NAPOLEON MARZAN, ISAIAS MANALASTAS, JOSEFA
CORVERA, JOSE APRUEDO, ARSENIO REYES, EUGENIA A. ONO, CORNELIO OPOLENCIA,
SEDECIAS PASCUA, ABUNDIO PAGUNTALAN, ESPERANZA DE QUIROS, CRESENCIO
SALEM, MOISES FERNANDEZ, FORTUNATO GONZALES, SOCORRO R. VALEN, RODOLFO
COLLADO, VENERIO CELSO, GREGORIO DE LA CRUZ, CELSO ALCERA, NICOLAS
ARAGONES, JOSEFINA MANANSALA, ADELAIDA CALASIN , JOSE AGUSTIN, TOMAS
JOSEPH, MANUEL DADOR, SERGIO LIPATON, ERNESTO SUMAYDING, MARCELINO DIOSO,
MIGUEL ALCERA, CRISANTA ENAMER, JUAN VIADO HILARION CHIOCO, EUROPIA
CABAHUG, VICTORIA DUERO, CONSORCIO ENOC, MAMERTO GAMONIDO, BONIFACIO
SABADO, MARIA INTROLIZO, HENRY ENOLBA, REYNALDO LIM, FORTUNATO LIPON,
ERNESTO MALLOS, FLORENTINA PATRICIO, MAMERTO PALAPALA, RAMON DE PERALTA,
JOSE PARRAS, APOLINARIO YAP, JUAN ROQUE, FELIX ROQUE, GLICERIA SALAZAR,
MIGUELA SABIO, AGAPITO SAYAS, PAULINO SARROZA, PACIFICO JUANICO, LIBERADO
TULAWAN, LIGAYA LAUS, ERNESTO VERZOSA, LEOPOLDO BERNALES, JAIME VISTA,
ISAIAS AMURAO, BENITA M. BARENG, and BRIGIDA SANCHEZ,petitioners,
vs.
HON. ANTONIO J. VILLEGAS substituted by HON. RAMON BAGATSING as CITY MAYOR OF
MANILA, HON. LADISLAO J. TOLENTINO, City Engineer of Manila, their agents, employees,
assistants and all persons acting under them; HON. BENJAMIN GOZON, Administrator, Land
Reform Authority substituted by HON CONRADO ESTRELLA as Secretary of the Department
of Agrarian Reforms and his agents, employees, assistants and all persons acting under his
orders, respondent.
1

G.R. No. L-24915 February 28, 1974
BENJAMIN RABUCO, et al., (the same co-petitioners in L-24661), petitioners,
vs.
HON. ANTONIO J. VILLEGAS substituted by HON. RAMON BAGATSING as CITY MAYOR OF
MANILA, et al., (the same co-respondents in L-24661), respondents.
G.R. No. L-24916 February 28, 1974
BENJAMIN RABUCO, et al. (the same co-petitioners in L-24661), petitioners-appellants,
vs.
HON. ANTONIO J. VILLEGAS substituted by HON. RAMON BAGATSING as CITY MAYOR OF
MANILA, et al., (the same co-respondents in L-24661), respondents-appellees.
Manuel D. Melotindos and Ricardo M. Guirnalda for petitioners.
Second Assistant City Fiscal Manuel T. Reyes for respondents.

TEEHANKEE, J .:p
The Court herein upholds the constitutionality of Republic Act 3120 on the strength of the
established doctrine that the subdivision of communal land of the State (although titled in the name
of the municipal corporation) and conveyance of the resulting subdivision lots by sale on installment
basis to bona fide occupants by Congressional authorization and disposition does not constitute
infringements of the due process clause or the eminent domain provisions of the Constitution but
operates simply as a manifestation of the legislature's right of control and power to deal with State
property.
The origin and background of the cases at bar which deal with the decisive issue of constitutionality
of Republic Act 3120 enacted on June 17, 1961, as raised by respondent mayor of Manila in
resisting petitioners' pleas that respondent mayor not only lacks the authority to demolish their
houses or eject them as tenants and bona fide occupants of a parcel of land in San Andres,
Malate
2
but is also expressly prohibited from doing so by section 2 of the Act, may be summarized from
the Court of Appeals'
3
certification of resolution of May 31, 1965 as follows:
Case L-24916 involves petitioners' appeal to the Court of Appeals
4
from the decision of the Manila
court of first instance dismissing their petition for injunction and mandamus to enjoin the demolition of
their houses and the ejectment from the public lots in question and to direct respondent administrator of
the Land Authority (now Secretary of Agrarian Reform) to implement the provisions of Republic Act 3120
for the subdivision and sale on installment basis of the subdivided lots to them as the tenants and bona
fide occupants thereof, and instead ordering their ejectment.
Case L-24915 involves petitioners' independent petition for injunction filed directly with the Court of
Appeals January 29, 1965
5
to forestall the demolition overnight of their houses pursuant to the order of
demolition set for January 30, 1965 at 8 a.m. issued by respondents city officials pending the elevation of
their appeal. The appellate court gave due course thereto and issued the writ of preliminary injunction as
prayed for.
The two cases were ordered "consolidated into one" since they were "unavoidably interlaced." The
appellate court, finding that the constitutionality of Republic Act 3120 was "the dominant and
inextricable issue in the appeal" over which it had no jurisdiction and that the trial court incorrectly
"sidetracked" the issue, thereafter certified the said cases to this Court, as follows:
The validity of Republic Act 3120 which was seasonably posed in issue in the court
below was sidetracked by the trial court, thus:
The constitutionality of Republic Act No. 3120 need not be passed
upon as the principal question in issue is whether the houses of the
petitioners are public nuisances, which the court resolved in the
affirmative. As a matter of fact even if the petitioners were already the
owners of the land on which their respected houses are erected, the
respondent city officials could cause the removal thereof as they were
constructed in violation of city ordinances and constitute public
nuisance.
It is significant to note, however, that what is sought by the respondent City Mayor
and City Engineer of Manila is not only the demolition of the petitioners' houses in the
premises in controversy, but their ejectment as well. Moreover, Republic Act 3120
does intend not only the dismissal of the ejectment proceedings against the
petitioners from the land in controversy upon their motion, but as well that any
demolition order issued against them shall also have to be dismissed. The law says:
Upon approval of this Act no ejectment proceedings against any
tenants or bona fide occupant shall be instituted and any
proceedings against any such tenant or bona fideoccupant shall
be dismissed upon motion of the defendant. Provided, That any
demolition order directed against any tenant or bona
fide occupant thereof, shall be dismissed. (Sec. 2, R. A. 3120).
Indeed, the petitioners-appellants, who contended in the court below that it was not
necessary to decide on the validity or constitutionality of the law, now asseverate that
'Republic Act No. 3120 expressly prohibits ejectment and demolition of petitioners'
home.' The petitioners' argument in their appeal to this Court runs as follows:
1. Petitioners-appellants are entitled to the remedies of injunction
and mandamus, being vested with lawful possession over Lot 21-B,
Block 610, granted by law, Republic Act No. 3120.
2. Civil Case No. 56092 has not been barred by any prior judgment,
as wrongly claimed by respondents-appellees.
3. Ejectment and demolition against petitioners-appellants are
unlawful and clearly prohibited by Republic Act No. 3120.
The defense of the respondents Mayor and City Engineer of Manila to arguments 2
and 3 is the invalidity of the said Republic Act 3120 for being in violation of the
Constitutional prohibition against the deprivation of property without due process of
law and without just compensation. So that even if argument 2 interposed by the
petitioners-appellants should be rejected, still they may claim a right, by virtue of the
aforesaid provisions of Republic Act 3120, to continue possession and occupation of
the premises and the lifting of the order of demolition issued against them. The
constitutionality of the said Republic Act 3120, therefore, becomes the dominant and
inextricable issue of the appeal.
Case L-24661 for the continuation and maintenance of the writ of preliminary injunction previously
issued by the Court of Appeals for preservation of the status quo was filed by petitioners directly with
this Court on June 21, 1965, pending transmittal of the records of Cases L-24915 and L-24916 to
this Court as certified by the Court of Appeals which declared itself without jurisdiction over the
principal and decisive issue of constitutionality of Republic Act 3120.
The Court gave due course thereto and on August 17, 1965 issued upon a P1,000 bond the writ
of preliminary injunction as prayed for enjoining respondents "from demolishing and/or continuing to
demolish the houses of herein petitioners situated in Lot No. 21-B, Block No. 610 of the Cadastral
Survey of the City of Manila, or from performing any act constituting an interference in or disturbance
of their present possession."
The records of two cases certified by the appellate court, L-24915 and L-24916, were eventually
forwarded to this Court which per its resolution of August 24, 1965 ordered that they be docketed
and be considered together with case L-24661.
In the early morning of April 19, 1970, a large fire of undetermined origin gutted the Malate area
including the lot on which petitioners had built their homes and dwellings. Respondents city officials
then took over the lot and kept petitioners from reconstructing or repairing their burned dwellings. At
petitioners' instance, the Court issued on June 17, 1970 a temporary restraining order enjoining
respondents city officials "from performing any act constituting an interference in or disturbance of
herein petitioners' possession of Lot No. 21-B, Block No. 610, of the Cadastral Survey of the City of
Manila" as safeguarded them under the Court's subsisting preliminary injunction of August 17, 1965.
The "dominant and inextricable issue" at bar, as correctly perceived by the appellate court is the
constitutionality of Republic Act 3120 whereby Congress converted the lot in question together with
another lot in San Andres, Malate "which are reserved as communal property" into "disposable or
alienable lands of the State to be placed under the administration and disposal of the Land Tenure
Administration" for subdivision into small lots not exceeding 120 square meters per lot for sale on
installment basis to the tenants or bona fide occupants thereof
6
and expressly prohibited ejectment and
demolition of petitioners' homes under section 2 of the Act as quoted in the appellate court's certification
resolution, supra.
The incidental issue seized upon by the trial court as a main issue for "sidetracking" the decisive
issue of constitutionality, to wit, that petitioners' houses as they stood at the time of its judgment in
1965 "were constructed in violation of city ordinances and constituted public nuisances" whose
removal could be ordered "even if petitioners were already the owners of the land on which their
respective houses are erected" has become moot with the burning down of the petitioners' houses in
the fire of April 19, 1970.
If the Act is invalid and unconstitutional for constituting deprivation of property without due process of
law and without just compensation as contended by respondents city officials, then the trial court's
refusal to enjoin ejectment and demolition of petitioners' houses may be upheld. Otherwise,
petitioners' right under the Act to continue possession and occupation of the premises and to the
lifting and dismissal of the order of demolition issued against them must be enforced and the trial
court's judgment must be set aside.
Respondents city officials' contention that the Act must be stricken down as unconstitutional for
depriving the city of Manila of the lots in question and providing for their sale in subdivided small lots
to bona fide occupants or tenants without payment of just compensation is untenable and without
basis, since the lots in question are manifestly owned by the city in
its public and governmental capacity and are therefore public property over which Congress had
absolute control as distinguished from patrimonial property owned by it in
its private or proprietarycapacity of which it could not be deprived without due process and without
just compensation.
7

Here, Republic Act 3120 expressly declared that the properties were "reserved as communal
property" and ordered their conversion into "disposable and alienable lands of the State" for sale in
small lots to the bona fide occupants thereof. It is established doctrine that the act of classifying
State property calls for the exercise of wide discretionary legislative power which will not be
interfered with by the courts.
The case of Salas vs. Jarencio
8
wherein the Court upheld the constitutionality of Republic Act 4118
whereby Congress in identical terms as in Republic Act 3120 likewise converted another city lot (Lot 1-B-
2-B of Block 557 of the cadastral survey of Manila also in Malate) which was reserved as communal
property into disposable land of the State for resale in small lots by the Land Tenure, Administration to the
bona fide occupants is controlling in the case at bar.
The Court therein reaffirmed the established 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"
9
and stressed that "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."
10

There as here, the Court holds that the Acts in question (Republic Acts 4118 in Salas and Republic
Act 3120 in the case at bar) were intended to implement the social justice policy of the Constitution
and the government program of land for the landless and that they were not "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: ... The subdivision of the land and
conveyane of the resulting subdivision lots to the occupants by Congressional authorization
does not operate as an exercise of the power of eminent domain without just compensation
in violation of Section 1, subsection (2), Article III of the Constitution,
11
but simply as
a manifestationof its right and power to deal with state property."
12

Since the challenge of respondents city officials against the constitutionality of Republic Act 3120
must fail as the City was not deprived thereby of anything it owns by acquisition with its private or
corporate funds either under the due process clause or under the eminent domain provisions of the
Constitution, the provisions of said Act must be enforced and petitioners are entitled to the injunction
as prayed for implementing the Act's prohibition against their ejectment and demolition of their
houses.
WHEREFORE, the appealed decision of the lower court (in Case No. L-24916) is hereby set aside,
and the preliminary injunction heretofore issued on August 17, 1965 is hereby made permanent. The
respondent Secretary of Agrarian Reform as successor agency of the Land Tenure Administration
may now proceed with the due implementation of Republic Act 3120 in accordance with its terms
and provisions. No costs.
Makalintal, C.J., Zaldivar, Castro, Barredo, Makasiar, Antonio, Esguerra, Muoz Palma and Aquino,
JJ., concur.
Fernandez, J., took no part.


G.R. No. 97764 August 10, 1992
LEVY D. MACASIANO, Brigadier General/PNP Superintendent, Metropolitan Traffic
Command, petitioner,
vs.
HONORABLE ROBERTO C. DIOKNO, Presiding Judge, Branch 62, Regional Trial Court of
Makati, Metro Manila, MUNICIPALITY OF PARAAQUE, METRO MANILA, PALANYAG
KILUSANG BAYAN FOR SERVICE,respondents.
Ceferino, Padua Law Office for Palanyag Kilusang Bayan for service.
Manuel de Guia for Municipality of Paraaque.

MEDIALDEA, J .:
This is a petition for certiorari under Rule 65 of the Rules of Court seeking the annulment of the
decision of the Regional Trial Court of Makati, Branch 62, which granted the writ of preliminary
injunction applied for by respondents Municipality of Paraaque and Palanyag Kilusang Bayan for
Service (Palanyag for brevity) against petitioner herein.
The antecedent facts are as follows:
On June 13, 1990, the respondent municipality passed Ordinance No. 86, Series of 1990 which
authorized the closure of J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena Streets
located at Baclaran, Paraaque, Metro Manila and the establishment of a flea market thereon. The
said ordinance was approved by the municipal council pursuant to MMC Ordinance No. 2, Series of
1979, authorizing and regulating the use of certain city and/or municipal streets, roads and open
spaces within Metropolitan Manila as sites for flea market and/or vending areas, under certain terms
and conditions.
On July 20, 1990, the Metropolitan Manila Authority approved Ordinance No. 86, s. 1990 of the
municipal council of respondent municipality subject to the following conditions:
1. That the aforenamed streets are not used for vehicular traffic, and that the majority
of the residents do not oppose the establishment of the flea market/vending areas
thereon;
2. That the 2-meter middle road to be used as flea market/vending area shall be
marked distinctly, and that the 2 meters on both sides of the road shall be used by
pedestrians;
3. That the time during which the vending area is to be used shall be clearly
designated;
4. That the use of the vending areas shall be temporary and shall be closed once the
reclaimed areas are developed and donated by the Public Estate Authority.
On June 20, 1990, the municipal council of Paraaque issued a resolution authorizing
Paraaque Mayor Walfrido N. Ferrer to enter into contract with any service cooperative for
the establishment, operation, maintenance and management of flea markets and/or vending
areas.
On August 8, 1990, respondent municipality and respondent Palanyag, a service cooperative,
entered into an agreement whereby the latter shall operate, maintain and manage the flea market in
the aforementioned streets with the obligation to remit dues to the treasury of the municipal
government of Paraaque. Consequently, market stalls were put up by respondent Palanyag on the
said streets.
On September 13, 1990, petitioner Brig. Gen. Macasiano, PNP Superintendent of the Metropolitan
Traffic Command, ordered the destruction and confiscation of stalls along G.G. Cruz and J. Gabriel
St. in Baclaran. These stalls were later returned to respondent Palanyag.
On October 16, 1990, petitioner Brig. General Macasiano wrote a letter to respondent Palanyag
giving the latter ten (10) days to discontinue the flea market; otherwise, the market stalls shall be
dismantled.
Hence, on October 23, 1990, respondents municipality and Palanyag filed with the trial court a joint
petition for prohibition and mandamus with damages and prayer for preliminary injunction, to which
the petitioner filed his memorandum/opposition to the issuance of the writ of preliminary injunction.
On October 24, 1990, the trial court issued a temporary restraining order to enjoin petitioner from
enforcing his letter-order of October 16, 1990 pending the hearing on the motion for writ of
preliminary injunction.
On December 17, 1990, the trial court issued an order upholding the validity of Ordinance No. 86 s.
1990 of the Municipality' of Paraaque and enjoining petitioner Brig. Gen. Macasiano from enforcing
his letter-order against respondent Palanyag.
Hence, this petition was filed by the petitioner thru the Office of the Solicitor General alleging grave
abuse of discretion tantamount to lack or excess of jurisdiction on the part of the trial judge in issuing
the assailed order.
The sole issue to be resolved in this case is whether or not an ordinance or resolution issued
by the municipal council of Paraaque authorizing the lease and use of public streets or
thoroughfares as sites for flea markets is valid.
The Solicitor General, in behalf of petitioner, contends that municipal roads are used for public
service and are therefore public properties; that as such, they cannot be subject to private
appropriation or private contract by any person, even by the respondent Municipality of Paraaque.
Petitioner submits that a property already dedicated to public use cannot be used for another public
purpose and that absent a clear showing that the Municipality of Paraaque has been granted by the
legislature specific authority to convert a property already in public use to another public use,
respondent municipality is, therefore, bereft of any authority to close municipal roads for the
establishment of a flea market. Petitioner also submits that assuming that the respondent
municipality is authorized to close streets, it failed to comply with the conditions set forth by the
Metropolitan Manila Authority for the approval of the ordinance providing for the establishment of flea
markets on public streets. Lastly, petitioner contends that by allowing the municipal streets to be
used by market vendors the municipal council of respondent municipality violated its duty under the
Local Government Code to promote the general welfare of the residents of the municipality.
In upholding the legality of the disputed ordinance, the trial court ruled:
. . . that Chanter II Section 10 of the Local Government Code is a statutory grant of
power given to local government units, the Municipality of Paraaque as such, is
empowered under that law to close its roads, streets or alley subject to limitations
stated therein (i.e., that it is in accordance with existing laws and the provisions of
this code).
xxx xxx xxx
The actuation of the respondent Brig. Gen. Levi Macasiano, though apparently within
its power is in fact an encroachment of power legally vested to the municipality,
precisely because when the municipality enacted the ordinance in question the
authority of the respondent as Police Superintendent ceases to be operative on the
ground that the streets covered by the ordinance ceases to be a public thoroughfare.
(pp. 33-34, Rollo)
We find the petition meritorious. In resolving the question of whether the disputed municipal
ordinance authorizing the flea market on the public streets is valid, it is necessary to examine the
laws in force during the time the said ordinance was enacted, namely, Batas Pambansa Blg. 337,
otherwise known as Local Government Code, in connection with established principles embodied in
the Civil Code an property and settled jurisprudence on the matter.
The property of provinces, cities and municipalities is divided into property for public use and
patrimonial property (Art. 423, Civil Code). As to what consists of property for public use, Article 424
of Civil Code states:
Art. 424. Property for public use, in the provinces, cities and municipalities, consists
of the provincial roads, city 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.
Based on the foregoing, J. Gabriel G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena
streets are local roads used for public service and are therefore considered public properties
of respondent municipality. Properties of the local government which are devoted to public
service are deemed public and are under the absolute control of Congress (Province of
Zamboanga del Norte v. City of Zamboanga, L-24440, March 28, 1968, 22 SCRA 1334). Hence,
local governments have no authority whatsoever to control or regulate the use of public
properties unless specific authority is vested upon them by Congress. One such example of
this authority given by Congress to the local governments is the power to close roads as provided in
Section 10, Chapter II of the Local Government Code, which states:
Sec. 10. Closure of roads. A local government unit may likewise, through its head
acting pursuant to a resolution of its sangguniang and in accordance with existing
law and the provisions of this Code, close any barangay, municipal, city or provincial
road, street, alley, park or square. No such way or place or any part of thereof shall
be close without indemnifying any person prejudiced thereby. A property thus
withdrawn from public use may be used or conveyed for any purpose for which other
real property belonging to the local unit concerned might be lawfully used or
conveyed. (Emphasis ours).
However, the aforestated legal provision which gives authority to local government units to close
roads and other similar public places should be read and interpreted in accordance with basic
principles already established by law. These basic principles have the effect of limiting such authority
of the province, city or municipality to close a public street or thoroughfare. Article 424 of the Civil
Code lays down the basic principle that properties of public dominion devoted to public use
and made available to the public in general are outside the commerce of man and cannot be
disposed of or leased by the local government unit to private persons. Aside from the
requirement of due process which should be complied with before closing a road, street or
park, the closure should be for the sole purpose of withdrawing the road or other public
property from public use when circumstances show that such property is no longer intended
or necessary for public use or public service. When it is already withdrawn from public use,
the property then becomes patrimonial property of the local government unit concerned
(Article 422, Civil Code; Cebu Oxygen, etc. et al. v. Bercilles, et al., G.R. No. L-40474, August 29,
1975, 66 SCRA 481). It is only then that the respondent municipality can "use or convey them for
any purpose for which other real property belonging to the local unit concerned might be lawfully
used or conveyed" in accordance with the last sentence of Section 10, Chapter II of Blg. 337, known
as Local Government Code. In one case, the City Council of Cebu, through a resolution, declared
the terminal road of M. Borces Street, Mabolo, Cebu City as an abandoned road, the same not being
included in the City Development Plan. Thereafter, the City Council passes another resolution
authorizing the sale of the said abandoned road through public bidding. We held therein that the City
of Cebu is empowered to close a city street and to vacate or withdraw the same from public use.
Such withdrawn portion becomes patrimonial property which can be the object of an ordinary
contract (Cebu Oxygen and Acetylene Co., Inc. v. Bercilles, et al., G.R. No.
L-40474, August 29, 1975, 66 SCRA 481). However, those roads and streets which are available
to the public in general and ordinarily used for vehicular traffic are still considered public
property devoted to public use. In such case, the local government has no power to use it for
another purpose or to dispose of or lease it to private persons. This limitation on the authority of
the local government over public properties has been discussed and settled by this Court en banc in
"Francisco V. Dacanay, petitioner v. Mayor Macaria Asistio, Jr., et al., respondents, G.R. No. 93654,
May 6, 1992." This Court ruled:
There is no doubt that the disputed areas from which the private respondents' market
stalls are sought to be evicted are public streets, as found by the trial court in Civil
Case No. C-12921. A public street is property for public use hence outside the
commerce of man (Arts. 420, 424, Civil Code). Being outside the commerce of man,
it may not be the subject of lease or others contract (Villanueva, et al. v. Castaeda
and Macalino, 15 SCRA 142 citing the Municipality of Cavite v. Rojas, 30 SCRA 602;
Espiritu v. Municipal Council of Pozorrubio, 102 Phil. 869; And Muyot v. De la
Fuente, 48 O.G. 4860).
As the stallholders pay fees to the City Government for the right to occupy portions of
the public street, the City Government, contrary to law, has been leasing portions of
the streets to them. Such leases or licenses are null and void for being contrary to
law. The right of the public to use the city streets may not be bargained away through
contract. The interests of a few should not prevail over the good of the greater
number in the community whose health, peace, safety, good order and general
welfare, the respondent city officials are under legal obligation to protect.
The Executive Order issued by acting Mayor Robles authorizing the use of Heroes
del '96 Street as a vending area for stallholders who were granted licenses by the
city government contravenes the general law that reserves city streets and roads for
public use. Mayor Robles' Executive Order may not infringe upon the vested right of
the public to use city streets for the purpose they were intended to serve: i.e., as
arteries of travel for vehicles and pedestrians.
Even assuming, in gratia argumenti, that respondent municipality has the authority to pass the
disputed ordinance, the same cannot be validly implemented because it cannot be considered
approved by the Metropolitan Manila Authority due to non-compliance by respondent municipality of
the conditions imposed by the former for the approval of the ordinance, to wit:
1. That the aforenamed streets are not used for vehicular traffic, and that the majority
of the residents do(es) not oppose the establishment of the flea market/vending
areas thereon;
2. That the 2-meter middle road to be used as flea market/vending area shall be
marked distinctly, and that the 2 meters on both sides of the road shall be used by
pedestrians;
3. That the time during which the vending area is to be used shall be clearly
designated;
4. That the use of the vending areas shall be temporary and shall be closed once the
reclaimed areas are developed and donated by the Public Estate Authority. (p.
38, Rollo)
Respondent municipality has not shown any iota of proof that it has complied with the foregoing
conditions precedent to the approval of the ordinance. The allegations of respondent municipality
that the closed streets were not used for vehicular traffic and that the majority of the residents do not
oppose the establishment of a flea market on said streets are unsupported by any evidence that will
show that this first condition has been met. Likewise, the designation by respondents of a time
schedule during which the flea market shall operate is absent.
Further, it is of public notice that the streets along Baclaran area are congested with people, houses
and traffic brought about by the proliferation of vendors occupying the streets. To license and allow
the establishment of a flea market along J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and
Opena streets in Baclaran would not help in solving the problem of congestion. We take note of the
other observations of the Solicitor General when he said:
. . . There have been many instances of emergencies and fires where ambulances
and fire engines, instead of using the roads for a more direct access to the fire area,
have to maneuver and look for other streets which are not occupied by stalls and
vendors thereby losing valuable time which could, otherwise, have been spent in
saving properties and lives.
Along G.G. Cruz Street is a hospital, the St. Rita Hospital. However, its ambulances
and the people rushing their patients to the hospital cannot pass through G.G. Cruz
because of the stalls and the vendors. One can only imagine the tragedy of losing a
life just because of a few seconds delay brought about by the inaccessibility of the
streets leading to the hospital.
The children, too, suffer. In view of the occupancy of the roads by stalls and vendors,
normal transportation flow is disrupted and school children have to get off at a
distance still far from their schools and walk, rain or shine.
Indeed one can only imagine the garbage and litter left by vendors on the streets at
the end of the day. Needless to say, these cause further pollution, sickness and
deterioration of health of the residents therein. (pp. 21-22, Rollo)
Respondents do not refute the truth of the foregoing findings and observations of petitioners.
Instead, respondents want this Court to focus its attention solely on the argument that the use of
public spaces for the establishment of a flea market is well within the powers granted by law to a
local government which should not be interfered with by the courts.
Verily, the powers of a local government unit are not absolute. They are subject to limitations laid
down by toe Constitution and the laws such as our Civil Code. Moreover, the exercise of such
powers should be subservient to paramount considerations of health and well-being of the members
of the community. Every local government unit has the sworn obligation to enact measures that will
enhance the public health, safety and convenience, maintain peace and order, and promote the
general prosperity of the inhabitants of the local units. Based on this objective, the local government
should refrain from acting towards that which might prejudice or adversely affect the general welfare.
As what we have said in the Dacanay case, the general public have a legal right to demand the
demolition of the illegally constructed stalls in public roads and streets and the officials of respondent
municipality have the corresponding duty arising from public office to clear the city streets and
restore them to their specific public purpose.
The instant case as well as the Dacanay case, involves an ordinance which is void and illegal for
lack of basis and authority in laws applicable during its time. However, at this point, We find it worthy
to note that Batas Pambansa Blg. 337, known as Local Government Lode, has already been
repealed by Republic Act No. 7160 known as Local Government Code of 1991 which took effect on
January 1, 1992. Section 5(d) of the new Code provides that rights and obligations existing on the
date of effectivity of the new Code and arising out of contracts or any other source of prestation
involving a local government unit shall be governed by the original terms and conditions of the said
contracts or the law in force at the time such rights were vested.
ACCORDINGLY, the petition is GRANTED and the decision of the respondent Regional Trial Court
dated December 17, 1990 which granted the writ of preliminary injunction enjoining petitioner as
PNP Superintendent, Metropolitan Traffic Command from enforcing the demolition of market stalls
along J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena streets is hereby
RESERVED and SET ASIDE.
SO ORDERED.
Narvasa, C.J., Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Regalado, Davide, Jr.,
Romero, Nocon and Bellosillo, JJ., concur.





G.R. No. 133250 July 9, 2002
FRANCISCO I. CHAVEZ, petitioner,
vs.
PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY DEVELOPMENT
CORPORATION, respondents.
CARPIO, J .:
This is an original Petition for Mandamus with prayer for a writ of preliminary injunction and a
temporary restraining order. The petition seeks to compel the Public Estates Authority ("PEA" for
brevity) to disclose all facts on PEA's then on-going renegotiations with Amari Coastal Bay and
Development Corporation ("AMARI" for brevity) to reclaim portions of Manila Bay. The petition
further seeks to enjoin PEA from signing a new agreement with AMARI involving such reclamation.
The Facts
On November 20, 1973, the government, through the Commissioner of Public Highways,
signed a contract with the Construction and Development Corporation of the Philippines
("CDCP" for brevity) to reclaim certain foreshore and offshore areas of Manila Bay. The
contract also included the construction of Phases I and II of the Manila-Cavite Coastal Road.
CDCP obligated itself to carry out all the works in consideration of fifty percent of the total
reclaimed land.
On February 4, 1977, then President Ferdinand E. Marcos issued Presidential Decree No. 1084
creating PEA. PD No. 1084 tasked PEA "to reclaim land, including foreshore and submerged areas,"
and "to develop, improve, acquire, x x x lease and sell any and all kinds of lands."
1
On the same
date, then President Marcos issued Presidential Decree No. 1085 transferring to PEA the "lands
reclaimed in the foreshore and offshore of the Manila Bay"
2
under the Manila-Cavite Coastal Road
and Reclamation Project (MCCRRP).
On December 29, 1981, then President Marcos issued a memorandum directing PEA to amend its
contract with CDCP, so that "[A]ll future works in MCCRRP x x x shall be funded and owned by
PEA." Accordingly, PEA and CDCP executed a Memorandum of Agreement dated December 29,
1981, which stated:
"(i) CDCP shall undertake all reclamation, construction, and such other works in the
MCCRRP as may be agreed upon by the parties, to be paid according to progress of works
on a unit price/lump sum basis for items of work to be agreed upon, subject to price
escalation, retention and other terms and conditions provided for in Presidential Decree No.
1594. All the financing required for such works shall be provided by PEA.
x x x
(iii) x x x CDCP shall give up all its development rights and hereby agrees to cede and
transfer in favor of PEA, all of the rights, title, interest and participation of CDCP in and to all
the areas of land reclaimed by CDCP in the MCCRRP as of December 30, 1981 which have
not yet been sold, transferred or otherwise disposed of by CDCP as of said date, which
areas consist of approximately Ninety-Nine Thousand Four Hundred Seventy Three (99,473)
square meters in the Financial Center Area covered by land pledge No. 5 and approximately
Three Million Three Hundred Eighty Two Thousand Eight Hundred Eighty Eight (3,382,888)
square meters of reclaimed areas at varying elevations above Mean Low Water Level
located outside the Financial Center Area and the First Neighborhood Unit."
3

On January 19, 1988, then President Corazon C. Aquino issued Special Patent No. 3517, granting
and transferring to PEA "the parcels of land so reclaimed under the Manila-Cavite Coastal Road and
Reclamation Project (MCCRRP) containing a total area of one million nine hundred fifteen thousand
eight hundred ninety four (1,915,894) square meters." Subsequently, on April 9, 1988, the Register
of Deeds of the Municipality of Paraaque issued Transfer Certificates of Title Nos. 7309, 7311, and
7312, in the name of PEA, covering the three reclaimed islands known as the "Freedom Islands"
located at the southern portion of the Manila-Cavite Coastal Road, Paraaque City. The Freedom
Islands have a total land area of One Million Five Hundred Seventy Eight Thousand Four Hundred
and Forty One (1,578,441) square meters or 157.841 hectares.
On April 25, 1995, PEA entered into a Joint Venture Agreement ("JVA" for brevity) with AMARI, a
private corporation, to develop the Freedom Islands. The JVA also required the reclamation of an
additional 250 hectares of submerged areas surrounding these islands to complete the configuration
in the Master Development Plan of the Southern Reclamation Project-MCCRRP. PEA and AMARI
entered into the JVA through negotiation without public bidding.
4
On April 28, 1995, the Board of
Directors of PEA, in its Resolution No. 1245, confirmed the JVA.
5
On June 8, 1995, then President
Fidel V. Ramos, through then Executive Secretary Ruben Torres, approved the JVA.
6

On November 29, 1996, then Senate President Ernesto Maceda delivered a privilege speech in the
Senate and denounced the JVA as the "grandmother of all scams." As a result, the Senate
Committee on Government Corporations and Public Enterprises, and the Committee on
Accountability of Public Officers and Investigations, conducted a joint investigation. The Senate
Committees reported the results of their investigation in Senate Committee Report No. 560 dated
September 16, 1997.
7
Among the conclusions of their report are: (1) the reclaimed lands PEA seeks
to transfer to AMARI under the JVA are lands of the public domain which the government has not
classified as alienable lands and therefore PEA cannot alienate these lands; (2) the certificates of
title covering the Freedom Islands are thus void, and (3) the JVA itself is illegal.
On December 5, 1997, then President Fidel V. Ramos issued Presidential Administrative Order No.
365 creating a Legal Task Force to conduct a study on the legality of the JVA in view of Senate
Committee Report No. 560. The members of the Legal Task Force were the Secretary of
Justice,
8
the Chief Presidential Legal Counsel,
9
and the Government Corporate Counsel.
10
The Legal
Task Force upheld the legality of the JVA, contrary to the conclusions reached by the Senate
Committees.
11

On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published reports that there were on-
going renegotiations between PEA and AMARI under an order issued by then President Fidel V.
Ramos. According to these reports, PEA Director Nestor Kalaw, PEA Chairman Arsenio Yulo and
retired Navy Officer Sergio Cruz composed the negotiating panel of PEA.
On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for Prohibition with Application
for the Issuance of a Temporary Restraining Order and Preliminary Injunction docketed as G.R. No.
132994 seeking to nullify the JVA. The Court dismissed the petition "for unwarranted disregard of
judicial hierarchy, without prejudice to the refiling of the case before the proper court."
12

On April 27, 1998, petitioner Frank I. Chavez ("Petitioner" for brevity) as a taxpayer, filed the
instant Petition for Mandamus with Prayer for the Issuance of a Writ of Preliminary Injunction and
Temporary Restraining Order. Petitioner contends the government stands to lose billions of pesos in
the sale by PEA of the reclaimed lands to AMARI. Petitioner prays that PEA publicly disclose the
terms of any renegotiation of the JVA, invoking Section 28, Article II, and Section 7, Article III, of the
1987 Constitution on the right of the people to information on matters of public concern. Petitioner
assails the sale to AMARI of lands of the public domain as a blatant violation of Section 3, Article XII
of the 1987 Constitution prohibiting the sale of alienable lands of the public domain to private
corporations. Finally, petitioner asserts that he seeks to enjoin the loss of billions of pesos in
properties of the State that are of public dominion.
After several motions for extension of time,
13
PEA and AMARI filed their Comments on October 19,
1998 and June 25, 1998, respectively. Meanwhile, on December 28, 1998, petitioner filed an
Omnibus Motion: (a) to require PEA to submit the terms of the renegotiated PEA-AMARI contract;
(b) for issuance of a temporary restraining order; and (c) to set the case for hearing on oral
argument. Petitioner filed a Reiterative Motion for Issuance of a TRO dated May 26, 1999, which the
Court denied in a Resolution dated June 22, 1999.
In a Resolution dated March 23, 1999, the Court gave due course to the petition and required the
parties to file their respective memoranda.
On March 30, 1999, PEA and AMARI signed the Amended Joint Venture Agreement ("Amended
JVA," for brevity). On May 28, 1999, the Office of the President under the administration of then
President Joseph E. Estrada approved the Amended JVA.
Due to the approval of the Amended JVA by the Office of the President, petitioner now prays that on
"constitutional and statutory grounds the renegotiated contract be declared null and void."
14

The Issues
The issues raised by petitioner, PEA
15
and AMARI
16
are as follows:
I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE MOOT
AND ACADEMIC BECAUSE OF SUBSEQUENT EVENTS;
II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE THE
PRINCIPLE GOVERNING THE HIERARCHY OF COURTS;
III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF
ADMINISTRATIVE REMEDIES;
IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT;
V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES OFFICIAL
INFORMATION ON ON-GOING NEGOTIATIONS BEFORE A FINAL AGREEMENT;
VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE AGREEMENT
FOR THE TRANSFER TO AMARI OF CERTAIN LANDS, RECLAIMED AND STILL TO BE
RECLAIMED, VIOLATE THE 1987 CONSTITUTION; AND
VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE OF
WHETHER THE AMENDED JOINT VENTURE AGREEMENT IS GROSSLY
DISADVANTAGEOUS TO THE GOVERNMENT.
The Court's Ruling
First issue: whether the principal reliefs prayed for in the petition are moot and academic
because of subsequent events.
The petition prays that PEA publicly disclose the "terms and conditions of the on-going negotiations
for a new agreement." The petition also prays that the Court enjoin PEA from "privately entering into,
perfecting and/or executing any new agreement with AMARI."
PEA and AMARI claim the petition is now moot and academic because AMARI furnished petitioner
on June 21, 1999 a copy of the signed Amended JVA containing the terms and conditions agreed
upon in the renegotiations. Thus, PEA has satisfied petitioner's prayer for a public disclosure of the
renegotiations. Likewise, petitioner's prayer to enjoin the signing of the Amended JVA is now moot
because PEA and AMARI have already signed the Amended JVA on March 30, 1999. Moreover, the
Office of the President has approved the Amended JVA on May 28, 1999.
Petitioner counters that PEA and AMARI cannot avoid the constitutional issue by simply fast-tracking
the signing and approval of the Amended JVA before the Court could act on the issue. Presidential
approval does not resolve the constitutional issue or remove it from the ambit of judicial review.
We rule that the signing of the Amended JVA by PEA and AMARI and its approval by the President
cannot operate to moot the petition and divest the Court of its jurisdiction. PEA and AMARI have still
to implement the Amended JVA. The prayer to enjoin the signing of the Amended JVA on
constitutional grounds necessarily includes preventing its implementation if in the meantime PEA
and AMARI have signed one in violation of the Constitution. Petitioner's principal basis in assailing
the renegotiation of the JVA is its violation of Section 3, Article XII of the Constitution, which prohibits
the government from alienating lands of the public domain to private corporations. If the Amended
JVA indeed violates the Constitution, it is the duty of the Court to enjoin its implementation, and if
already implemented, to annul the effects of such unconstitutional contract.
The Amended JVA is not an ordinary commercial contract but one which seeks to transfer title and
ownership to 367.5 hectares of reclaimed lands and submerged areas of Manila Bay to a
single private corporation. It now becomes more compelling for the Court to resolve the issue to
insure the government itself does not violate a provision of the Constitution intended to safeguard
the national patrimony. Supervening events, whether intended or accidental, cannot prevent the
Court from rendering a decision if there is a grave violation of the Constitution. In the instant case, if
the Amended JVA runs counter to the Constitution, the Court can still prevent the transfer of title and
ownership of alienable lands of the public domain in the name of AMARI. Even in cases where
supervening events had made the cases moot, the Court did not hesitate to resolve the legal or
constitutional issues raised to formulate controlling principles to guide the bench, bar, and the
public.
17

Also, the instant petition is a case of first impression. All previous decisions of the Court involving
Section 3, Article XII of the 1987 Constitution, or its counterpart provision in the 1973
Constitution,
18
covered agricultural landssold to private corporations which acquired the lands from
private parties. The transferors of the private corporations claimed or could claim the right to judicial
confirmation of their imperfect titles
19
under Title II of Commonwealth Act. 141 ("CA No. 141" for
brevity). In the instant case, AMARI seeks to acquire from PEA, a public corporation, reclaimed
lands and submerged areas for non-agricultural purposes by purchase under PD No. 1084
(charter of PEA) and Title III of CA No. 141. Certain undertakings by AMARI under the Amended
JVA constitute the consideration for the purchase. Neither AMARI nor PEA can claim judicial
confirmation of their titles because the lands covered by the Amended JVA are newly reclaimed or
still to be reclaimed. Judicial confirmation of imperfect title requires open, continuous, exclusive and
notorious occupation of agricultural lands of the public domain for at least thirty years since June 12,
1945 or earlier. Besides, the deadline for filing applications for judicial confirmation of imperfect title
expired on December 31, 1987.
20

Lastly, there is a need to resolve immediately the constitutional issue raised in this petition because
of the possible transfer at any time by PEA to AMARI of title and ownership to portions of the
reclaimed lands. Under the Amended JVA, PEA is obligated to transfer to AMARI the latter's seventy
percent proportionate share in the reclaimed areas as the reclamation progresses. The Amended
JVA even allows AMARI to mortgage at any time the entirereclaimed area to raise financing for the
reclamation project.
21

Second issue: whether the petition merits dismissal for failing to observe the principle
governing the hierarchy of courts.
PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief directly from the
Court. The principle of hierarchy of courts applies generally to cases involving factual questions. As
it is not a trier of facts, the Court cannot entertain cases involving factual issues. The instant case,
however, raises constitutional issues of transcendental importance to the public.
22
The Court can
resolve this case without determining any factual issue related to the case. Also, the instant case is a
petition for mandamus which falls under the original jurisdiction of the Court under Section 5, Article
VIII of the Constitution. We resolve to exercise primary jurisdiction over the instant case.
Third issue: whether the petition merits dismissal for non-exhaustion of administrative
remedies.
PEA faults petitioner for seeking judicial intervention in compelling PEA to disclose publicly certain
information without first asking PEA the needed information. PEA claims petitioner's direct
resort
to the Court violates the principle of exhaustion of administrative remedies. It also violates the
rule that mandamus may issue only if there is no other plain, speedy and adequate remedy in the
ordinary course of law.
PEA distinguishes the instant case from Taada v. Tuvera
23
where the Court granted the petition for
mandamus even if the petitioners there did not initially demand from the Office of the President the
publication of the presidential decrees. PEA points out that in Taada, the Executive Department
had an affirmative statutory duty under Article 2 of the Civil Code
24
and Section 1 of
Commonwealth Act No. 638
25
to publish the presidential decrees. There was, therefore, no need for
the petitioners in Taada to make an initial demand from the Office of the President. In the instant
case, PEA claims it has no affirmative statutory duty to disclose publicly information about its
renegotiation of the JVA. Thus, PEA asserts that the Court must apply the principle of exhaustion of
administrative remedies to the instant case in view of the failure of petitioner here to demand initially
from PEA the needed information.
The original JVA sought to dispose to AMARI public lands held by PEA, a government corporation.
Under Section 79 of the Government Auditing Code,
26
the disposition of government lands to private
parties requires public bidding. PEA was under a positive legal duty to disclose to the public the
terms and conditions for the sale of its lands. The law obligated PEA to make this public
disclosure even without demand from petitioner or from anyone. PEA failed to make this public
disclosure because the original JVA, like the Amended JVA, was the result of a negotiated
contract, not of a public bidding. Considering that PEA had an affirmative statutory duty to make the
public disclosure, and was even in breach of this legal duty, petitioner had the right to seek direct
judicial intervention.
Moreover, and this alone is determinative of this issue, the principle of exhaustion of administrative
remedies does not apply when the issue involved is a purely legal or constitutional question.
27
The
principal issue in the instant case is the capacity of AMARI to acquire lands held by PEA in view of
the constitutional ban prohibiting the alienation of lands of the public domain to private corporations.
We rule that the principle of exhaustion of administrative remedies does not apply in the instant
case.
Fourth issue: whether petitioner has locus standi to bring this suit
PEA argues that petitioner has no standing to institute mandamus proceedings to enforce his
constitutional right to information without a showing that PEA refused to perform an affirmative duty
imposed on PEA by the Constitution. PEA also claims that petitioner has not shown that he will
suffer any concrete injury because of the signing or implementation of the Amended JVA. Thus,
there is no actual controversy requiring the exercise of the power of judicial review.
The petitioner has standing to bring this taxpayer's suit because the petition seeks to compel PEA to
comply with its constitutional duties. There are two constitutional issues involved here. First is the
right of citizens to information on matters of public concern. Second is the application of a
constitutional provision intended to insure the equitable distribution of alienable lands of the public
domain among Filipino citizens. The thrust of the first issue is to compel PEA to disclose publicly
information on the sale of government lands worth billions of pesos, information which the
Constitution and statutory law mandate PEA to disclose. The thrust of the second issue is to prevent
PEA from alienating hundreds of hectares of alienable lands of the public domain in violation of the
Constitution, compelling PEA to comply with a constitutional duty to the nation.
Moreover, the petition raises matters of transcendental importance to the public. In Chavez v.
PCGG,
28
the Court upheld the right of a citizen to bring a taxpayer's suit on matters of transcendental
importance to the public, thus -
"Besides, petitioner emphasizes, the matter of recovering the ill-gotten wealth of the
Marcoses is an issue of 'transcendental importance to the public.' He asserts that ordinary
taxpayers have a right to initiate and prosecute actions questioning the validity of acts or
orders of government agencies or instrumentalities, if the issues raised are of 'paramount
public interest,' and if they 'immediately affect the social, economic and moral well being of
the people.'
Moreover, the mere fact that he is a citizen satisfies the requirement of personal interest,
when the proceeding involves the assertion of a public right, such as in this case. He invokes
several decisions of this Court which have set aside the procedural matter of locus standi,
when the subject of the case involved public interest.
x x x
In Taada v. Tuvera, the Court asserted that when the issue concerns a public right and the
object of mandamus is to obtain the enforcement of a public duty, the people are regarded
as the real parties in interest; and because it is sufficient that petitioner is a citizen and as
such is interested in the execution of the laws, he need not show that he has any legal or
special interest in the result of the action. In the aforesaid case, the petitioners sought to
enforce their right to be informed on matters of public concern, a right then recognized in
Section 6, Article IV of the 1973 Constitution, in connection with the rule that laws in order to
be valid and enforceable must be published in the Official Gazette or otherwise effectively
promulgated. In ruling for the petitioners' legal standing, the Court declared that the right they
sought to be enforced 'is a public right recognized by no less than the fundamental law of the
land.'
Legaspi v. Civil Service Commission, while reiterating Taada, further declared that 'when a
mandamus proceeding involves the assertion of a public right, the requirement of personal
interest is satisfied by the mere fact that petitioner is a citizen and, therefore, part of the
general 'public' which possesses the right.'
Further, in Albano v. Reyes, we said that while expenditure of public funds may not have
been involved under the questioned contract for the development, management and
operation of the Manila International Container Terminal, 'public interest [was] definitely
involved considering the important role [of the subject contract] . . . in the economic
development of the country and the magnitude of the financial consideration involved.' We
concluded that, as a consequence, the disclosure provision in the Constitution would
constitute sufficient authority for upholding the petitioner's standing.
Similarly, the instant petition is anchored on the right of the people to information and access
to official records, documents and papers a right guaranteed under Section 7, Article III of
the 1987 Constitution. Petitioner, a former solicitor general, is a Filipino citizen. Because of
the satisfaction of the two basic requisites laid down by decisional law to sustain petitioner's
legal standing, i.e. (1) the enforcement of a public right (2) espoused by a Filipino citizen, we
rule that the petition at bar should be allowed."
We rule that since the instant petition, brought by a citizen, involves the enforcement of constitutional
rights - to information and to the equitable diffusion of natural resources - matters of transcendental
public importance, the petitioner has the requisite locus standi.
Fifth issue: whether the constitutional right to information includes official information on on-
going negotiations before a final agreement.
Section 7, Article III of the Constitution explains the people's right to information on matters of public
concern in this manner:
"Sec. 7. The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents, and papers pertaining to
official acts, transactions, or decisions, as well as to government research data used as
basis for policy development, shall be afforded the citizen, subject to such limitations as may
be provided by law." (Emphasis supplied)
The State policy of full transparency in all transactions involving public interest reinforces the
people's right to information on matters of public concern. This State policy is expressed in Section
28, Article II of the Constitution, thus:
"Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and
implements a policy of full public disclosure of all its transactions involving public
interest." (Emphasis supplied)
These twin provisions of the Constitution seek to promote transparency in policy-making and in the
operations of the government, as well as provide the people sufficient information to exercise
effectively other constitutional rights. These twin provisions are essential to the exercise of freedom
of expression. If the government does not disclose its official acts, transactions and decisions to
citizens, whatever citizens say, even if expressed without any restraint, will be speculative and
amount to nothing. These twin provisions are also essential to hold public officials "at all times x x x
accountable to the people,"
29
for unless citizens have the proper information, they cannot hold public
officials accountable for anything. Armed with the right information, citizens can participate in public
discussions leading to the formulation of government policies and their effective implementation. An
informed citizenry is essential to the existence and proper functioning of any democracy. As
explained by the Court inValmonte v. Belmonte, J r.
30

"An essential element of these freedoms is to keep open a continuing dialogue or process of
communication between the government and the people. It is in the interest of the State that
the channels for free political discussion be maintained to the end that the government may
perceive and be responsive to the people's will. Yet, this open dialogue can be effective only
to the extent that the citizenry is informed and thus able to formulate its will intelligently. Only
when the participants in the discussion are aware of the issues and have access to
information relating thereto can such bear fruit."
PEA asserts, citing Chavez v. PCGG,
31
that in cases of on-going negotiations the right to information
is limited to "definite propositions of the government." PEA maintains the right does not include
access to "intra-agency or inter-agency recommendations or communications during the stage when
common assertions are still in the process of being formulated or are in the 'exploratory stage'."
Also, AMARI contends that petitioner cannot invoke the right at the pre-decisional stage or before
the closing of the transaction. To support its contention, AMARI cites the following discussion in the
1986 Constitutional Commission:
"Mr. Suarez. And when we say 'transactions' which should be distinguished from contracts,
agreements, or treaties or whatever, does the Gentleman refer to the steps leading to the
consummation of the contract, or does he refer to the contract itself?
Mr. Ople: The 'transactions' used here, I suppose is generic and therefore, it can cover
both steps leading to a contract and already a consummated contract, Mr. Presiding
Officer.
Mr. Suarez: This contemplates inclusion of negotiations leading to the consummation
of the transaction.
Mr. Ople: Yes, subject only to reasonable safeguards on the national interest.
Mr. Suarez: Thank you."
32
(Emphasis supplied)
AMARI argues there must first be a consummated contract before petitioner can invoke the right.
Requiring government officials to reveal their deliberations at the pre-decisional stage will degrade
the quality of decision-making in government agencies. Government officials will hesitate to express
their real sentiments during deliberations if there is immediate public dissemination of their
discussions, putting them under all kinds of pressure before they decide.
We must first distinguish between information the law on public bidding requires PEA to disclose
publicly, and information the constitutional right to information requires PEA to release to the public.
Before the consummation of the contract, PEA must, on its own and without demand from anyone,
disclose to the public matters relating to the disposition of its property. These include the size,
location, technical description and nature of the property being disposed of, the terms and conditions
of the disposition, the parties qualified to bid, the minimum price and similar information. PEA must
prepare all these data and disclose them to the public at the start of the disposition process, long
before the consummation of the contract, because the Government Auditing Code requires public
bidding. If PEA fails to make this disclosure, any citizen can demand from PEA this information at
any time during the bidding process.
Information, however, on on-going evaluation or review of bids or proposals being undertaken by
the bidding or review committee is not immediately accessible under the right to information. While
the evaluation or review is still on-going, there are no "official acts, transactions, or decisions" on the
bids or proposals. However, once the committee makes its official recommendation, there arises
a "definite proposition" on the part of the government. From this moment, the public's right to
information attaches, and any citizen can access all the non-proprietary information leading to such
definite proposition. In Chavez v. PCGG,
33
the Court ruled as follows:
"Considering the intent of the framers of the Constitution, we believe that it is incumbent
upon the PCGG and its officers, as well as other government representatives, to disclose
sufficient public information on any proposed settlement they have decided to take up with
the ostensible owners and holders of ill-gotten wealth. Such information, though, must
pertain to definite propositions of the government, not necessarily to intra-agency or
inter-agency recommendations or communications during the stage when common
assertions are still in the process of being formulated or are in the "exploratory" stage. There
is need, of course, to observe the same restrictions on disclosure of information in general,
as discussed earlier such as on matters involving national security, diplomatic or foreign
relations, intelligence and other classified information." (Emphasis supplied)
Contrary to AMARI's contention, the commissioners of the 1986 Constitutional Commission
understood that the right to information "contemplates inclusion of negotiations leading to the
consummation of the transaction." Certainly, a consummated contract is not a requirement for the
exercise of the right to information. Otherwise, the people can never exercise the right if no contract
is consummated, and if one is consummated, it may be too late for the public to expose its defects.1wphi 1. nt
Requiring a consummated contract will keep the public in the dark until the contract, which may be
grossly disadvantageous to the government or even illegal, becomes a fait accompli. This negates
the State policy of full transparency on matters of public concern, a situation which the framers of the
Constitution could not have intended. Such a requirement will prevent the citizenry from participating
in the public discussion of any proposedcontract, effectively truncating a basic right enshrined in the
Bill of Rights. We can allow neither an emasculation of a constitutional right, nor a retreat by the
State of its avowed "policy of full disclosure of all its transactions involving public interest."
The right covers three categories of information which are "matters of public concern," namely: (1)
official records; (2) documents and papers pertaining to official acts, transactions and decisions; and
(3) government research data used in formulating policies. The first category refers to any document
that is part of the public records in the custody of government agencies or officials. The second
category refers to documents and papers recording, evidencing, establishing, confirming, supporting,
justifying or explaining official acts, transactions or decisions of government agencies or officials.
The third category refers to research data, whether raw, collated or processed, owned by the
government and used in formulating government policies.
The information that petitioner may access on the renegotiation of the JVA includes evaluation
reports, recommendations, legal and expert opinions, minutes of meetings, terms of reference and
other documents attached to such reports or minutes, all relating to the JVA. However, the right to
information does not compel PEA to prepare lists, abstracts, summaries and the like relating to the
renegotiation of the JVA.
34
The right only affords access to records, documents and papers, which
means the opportunity to inspect and copy them. One who exercises the right must copy the
records, documents and papers at his expense. The exercise of the right is also subject to
reasonable regulations to protect the integrity of the public records and to minimize disruption to
government operations, like rules specifying when and how to conduct the inspection and copying.
35

The right to information, however, does not extend to matters recognized as privileged information
under the separation of powers.
36
The right does not also apply to information on military and
diplomatic secrets, information affecting national security, and information on investigations of
crimes by law enforcement agencies before the prosecution of the accused, which courts have long
recognized as confidential.
37
The right may also be subject to other limitations that Congress may
impose by law.
There is no claim by PEA that the information demanded by petitioner is privileged information
rooted in the separation of powers. The information does not cover Presidential conversations,
correspondences, or discussions during closed-door Cabinet meetings which, like internal
deliberations of the Supreme Court and other collegiate courts, or executive sessions of either house
of Congress,
38
are recognized as confidential. This kind of information cannot be pried open by a co-
equal branch of government. A frank exchange of exploratory ideas and assessments, free from the
glare of publicity and pressure by interested parties, is essential to protect the independence of
decision-making of those tasked to exercise Presidential, Legislative and Judicial power.
39
This is not
the situation in the instant case.
We rule, therefore, that the constitutional right to information includes official information on on-
going negotiations before a final contract. The information, however, must constitute definite
propositions by the government and should not cover recognized exceptions like privileged
information, military and diplomatic secrets and similar matters affecting national security and public
order.
40
Congress has also prescribed other limitations on the right to information in several
legislations.
41

Sixth issue: whether stipulations in the Amended J VA for the transfer to AMARI of lands,
reclaimed or to be reclaimed, violate the Constitution.
The Regalian Doctrine
The ownership of lands reclaimed from foreshore and submerged areas is rooted in the
Regalian doctrine which holds that the State owns all lands and waters of the public domain.
Upon the Spanish conquest of the Philippines, ownership of all "lands, territories and possessions" in
the Philippines passed to the Spanish Crown.
42
The King, as the sovereign ruler and representative
of the people, acquired and owned all lands and territories in the Philippines except those he
disposed of by grant or sale to private individuals.
The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting, however, the
State, in lieu of the King, as the owner of all lands and waters of the public domain. The Regalian
doctrine is the foundation of the time-honored principle of land ownership that "all lands that were not
acquired from the Government, either by purchase or by grant, belong to the public domain."
43
Article
339 of the Civil Code of 1889, which is now Article 420 of the Civil Code of 1950, incorporated the
Regalian doctrine.
Ownership and Disposition of Reclaimed Lands
The Spanish Law of Waters of 1866 was the first statutory law governing the ownership and
disposition of reclaimed lands in the Philippines. On May 18, 1907, the Philippine Commission
enacted Act No. 1654 which provided for the lease, but not the sale, of reclaimed lands of the
government to corporations and individuals. Later, on November 29, 1919, the Philippine
Legislature approved Act No. 2874, the Public Land Act, which authorized the lease, but not the
sale, of reclaimed lands of the government to corporations and individuals. On November 7,
1936, the National Assembly passed Commonwealth Act No. 141, also known as the Public Land
Act, which authorized the lease, but not the sale, of reclaimed lands of the government to
corporations and individuals. CA No. 141 continues to this day as the general law governing the
classification and disposition of lands of the public domain.
The Spanish Law of Waters of 1866 and the Civil Code of 1889
Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all waters within the
maritime zone of the Spanish territory belonged to the public domain for public use.
44
The Spanish
Law of Waters of 1866 allowed the reclamation of the sea under Article 5, which provided as follows:
"Article 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."
Under the Spanish Law of Waters, land reclaimed from the sea belonged to the party undertaking
the reclamation, provided the government issued the necessary permit and did not reserve
ownership of the reclaimed land to the State.
Article 339 of the Civil Code of 1889 defined property of public dominion as follows:
"Art. 339. Property of public dominion is
1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, riverbanks, shores, roadsteads, and that of a similar character;
2. That belonging exclusively to the State which, without being of general public use, is
employed in some public service, or in the development of the national wealth, such as walls,
fortresses, and other works for the defense of the territory, and mines, until granted to private
individuals."
Property devoted to public use referred to property open for use by the public. In contrast, property
devoted to public service referred to property used for some specific public service and open only to
those authorized to use the property.
Property of public dominion referred not only to property devoted to public use, but also to property
not so used but employed to develop the national wealth. This class of property constituted
property of public dominion although employed for some economic or commercial activity to increase
the national wealth.
Article 341 of the Civil Code of 1889 governed the re-classification of property of public dominion into
private property, to wit:
"Art. 341. Property of public dominion, when no longer devoted to public use or to the
defense of the territory, shall become a part of the private property of the State."
This provision, however, was not self-executing. The legislature, or the executive department
pursuant to law, must declare the property no longer needed for public use or territorial defense
before the government could lease or alienate the property to private parties.
45

Act No. 1654 of the Philippine Commission
On May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated the lease of
reclaimed and foreshore lands. The salient provisions of this law were as follows:
"Section 1. The control and disposition of the foreshore as defined in existing law, and
the title to all Government or public lands made or reclaimed by the Government by
dredging or filling or otherwise throughout the Philippine Islands, shall be retained by the
Government without prejudice to vested rights and without prejudice to rights conceded to
the City of Manila in the Luneta Extension.
Section 2. (a) The Secretary of the Interior shall cause all Government or public lands made
or reclaimed by the Government by dredging or filling or otherwise to be divided into lots or
blocks, with the necessary streets and alleyways located thereon, and shall cause plats and
plans of such surveys to be prepared and filed with the Bureau of Lands.
(b) Upon completion of such plats and plans the Governor-General shall give notice to the
public that such parts of the lands so made or reclaimed as are not needed for public
purposes will be leased for commercial and business purposes, x x x.
x x x
(e) The leases above provided for shall be disposed of to the highest and best
bidder therefore, subject to such regulations and safeguards as the Governor-General may
by executive order prescribe." (Emphasis supplied)
Act No. 1654 mandated that the government should retain title to all lands reclaimed by the
government. The Act also vested in the government control and disposition of foreshore lands.
Private parties could lease lands reclaimed by the government only if these lands were no longer
needed for public purpose. Act No. 1654 mandated public bidding in the lease of government
reclaimed lands. Act No. 1654 made government reclaimed lands sui generis in that unlike other
public lands which the government could sell to private parties, these reclaimed lands were available
only for lease to private parties.
Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of 1866. Act No. 1654
did not prohibit private parties from reclaiming parts of the sea under Section 5 of the Spanish Law
of Waters. Lands reclaimed from the sea by private parties with government permission remained
private lands.
Act No. 2874 of the Philippine Legislature
On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public Land Act.
46
The
salient provisions of Act No. 2874, on reclaimed lands, were as follows:
"Sec. 6. The Governor-General, upon the recommendation of the Secretary of
Agriculture and Natural Resources, shall from time to time classify the lands of the
public domain into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands, x x x.
Sec. 7. For the purposes of the government and disposition of alienable or disposable public
lands, the Governor-General, upon recommendation by the Secretary of Agriculture
and Natural Resources, shall from time to time declare what lands are open to
disposition or concession under this Act."
Sec. 8. Only those lands shall be declared open to disposition or concession which
have been officially delimited or classified x x x.
x x x
Sec. 55. Any tract of land of the public domain which, being neither timber nor mineral land,
shall be classified as suitable for residential purposes or for commercial, industrial, or
other productive purposes other than agricultural purposes, and shall be open to
disposition or concession, shall be disposed of under the provisions of this chapter, and not
otherwise.
Sec. 56. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the Government by dredging, filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores or banks of
navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
x x x.
Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six shall be
disposed of to private parties by lease only and not otherwise, as soon as the
Governor-General, upon recommendation by the Secretary of Agriculture and Natural
Resources, shall declare that the same are not necessary for the public service and
are open to disposition under this chapter. The lands included in class (d) may be
disposed of by sale or lease under the provisions of this Act." (Emphasis supplied)
Section 6 of Act No. 2874 authorized the Governor-General to "classify lands of the public domain
into x x x alienable or disposable"
47
lands. Section 7 of the Act empowered the Governor-General to
"declare what lands are open to disposition or concession." Section 8 of the Act limited alienable or
disposable lands only to those lands which have been "officially delimited and classified."
Section 56 of Act No. 2874 stated that lands "disposable under this title
48
shall be classified" as
government reclaimed, foreshore and marshy lands, as well as other lands. All these lands,
however, must be suitable for residential, commercial, industrial or other productive non-
agricultural purposes. These provisions vested upon the Governor-General the power to classify
inalienable lands of the public domain into disposable lands of the public domain. These provisions
also empowered the Governor-General to classify further such disposable lands of the public domain
into government reclaimed, foreshore or marshy lands of the public domain, as well as other non-
agricultural lands.
Section 58 of Act No. 2874 categorically mandated that disposable lands of the public domain
classified as government reclaimed, foreshore and marshy lands "shall be disposed of to private
parties by lease only and not otherwise." The Governor-General, before allowing the lease of
these lands to private parties, must formally declare that the lands were "not necessary for the public
service." Act No. 2874 reiterated the State policy to lease and not to sell government reclaimed,
foreshore and marshy lands of the public domain, a policy first enunciated in 1907 in Act No. 1654.
Government reclaimed, foreshore and marshy lands remained sui generis, as the only alienable or
disposable lands of the public domain that the government could not sell to private parties.
The rationale behind this State policy is obvious. Government reclaimed, foreshore and marshy
public lands for non-agricultural purposes retain their inherent potential as areas for public service.
This is the reason the government prohibited the sale, and only allowed the lease, of these lands to
private parties. The State always reserved these lands for some future public service.
Act No. 2874 did not authorize the reclassification of government reclaimed, foreshore and marshy
lands into other non-agricultural lands under Section 56 (d). Lands falling under Section 56 (d) were
the only lands for non-agricultural purposes the government could sell to private parties. Thus, under
Act No. 2874, the government could not sell government reclaimed, foreshore and marshy lands to
private parties, unless the legislature passed a law allowing their sale.
49

Act No. 2874 did not prohibit private parties from reclaiming parts of the sea pursuant to Section 5 of
the Spanish Law of Waters of 1866. Lands reclaimed from the sea by private parties with
government permission remained private lands.
Dispositions under the 1935 Constitution
On May 14, 1935, the 1935 Constitution took effect upon its ratification by the Filipino people. The
1935 Constitution, in adopting the Regalian doctrine, declared in Section 1, Article XIII, that
"Section 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals,
coal, petroleum, and other mineral oils, all forces of potential energy and other natural
resources of the Philippines belong to the State, and their disposition, exploitation,
development, or utilization shall be limited to citizens of the Philippines or to corporations or
associations at least sixty per centum of the capital of which is owned by such citizens,
subject to any existing right, grant, lease, or concession at the time of the inauguration of the
Government established under this Constitution. Natural resources, with the exception of
public agricultural land, shall not be alienated, and no license, concession, or lease for
the exploitation, development, or utilization of any of the natural resources shall be granted
for a period exceeding twenty-five years, renewable for another twenty-five years, except as
to water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases beneficial use may be the measure and limit of
the grant." (Emphasis supplied)
The 1935 Constitution barred the alienation of all natural resources except public agricultural lands,
which were the only natural resources the State could alienate. Thus, foreshore lands, considered
part of the State's natural resources, became inalienable by constitutional fiat, available only for
lease for 25 years, renewable for another 25 years. The government could alienate foreshore lands
only after these lands were reclaimed and classified as alienable agricultural lands of the public
domain. Government reclaimed and marshy lands of the public domain, being neither timber nor
mineral lands, fell under the classification of public agricultural lands.
50
However, government
reclaimed and marshy lands, although subject to classification as disposable public agricultural
lands, could only be leased and not sold to private parties because of Act No. 2874.
The prohibition on private parties from acquiring ownership of government reclaimed and marshy
lands of the public domain was only a statutory prohibition and the legislature could therefore
remove such prohibition. The 1935 Constitution did not prohibit individuals and corporations from
acquiring government reclaimed and marshy lands of the public domain that were classified as
agricultural lands under existing public land laws. Section 2, Article XIII of the 1935 Constitution
provided as follows:
"Section 2. No private corporation or association may acquire, lease, or hold public
agricultural lands in excess of one thousand and twenty four hectares, nor may any
individual acquire such lands by purchase in excess of one hundred and forty
hectares, or by lease in excess of one thousand and twenty-four hectares, or by
homestead in excess of twenty-four hectares. Lands adapted to grazing, not exceeding two
thousand hectares, may be leased to an individual, private corporation, or association."
(Emphasis supplied)
Still, after the effectivity of the 1935 Constitution, the legislature did not repeal Section 58 of Act No.
2874 to open for sale to private parties government reclaimed and marshy lands of the public
domain. On the contrary, the legislature continued the long established State policy of retaining for
the government title and ownership of government reclaimed and marshy lands of the public domain.
Commonwealth Act No. 141 of the Philippine National Assembly
On November 7, 1936, the National Assembly approved Commonwealth Act No. 141, also known as
the Public Land Act, which compiled the then existing laws on lands of the public domain. CA No.
141, as amended, remains to this day the existing general law governing the classification and
disposition of lands of the public domain other than timber and mineral lands.
51

Section 6 of CA No. 141 empowers the President to classify lands of the public domain into
"alienable or disposable"
52
lands of the public domain, which prior to such classification are
inalienable and outside the commerce of man. Section 7 of CA No. 141 authorizes the President to
"declare what lands are open to disposition or concession." Section 8 of CA No. 141 states that the
government can declare open for disposition or concession only lands that are "officially delimited
and classified." Sections 6, 7 and 8 of CA No. 141 read as follows:
"Sec. 6. The President, upon the recommendation of the Secretary of Agriculture and
Commerce, shall from time to time classify the lands of the public domain into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands,
and may at any time and in like manner transfer such lands from one class to another,
53
for
the purpose of their administration and disposition.
Sec. 7. For the purposes of the administration and disposition of alienable or disposable
public lands, the President, upon recommendation by the Secretary of Agriculture and
Commerce, shall from time to time declare what lands are open to disposition or
concession under this Act.
Sec. 8. Only those lands shall be declared open to disposition or concession which
have been officially delimited and classified and, when practicable, surveyed, and which
have not been reserved for public or quasi-public uses, nor appropriated by the
Government, nor in any manner become private property, nor those on which a private right
authorized and recognized by this Act or any other valid law may be claimed, or which,
having been reserved or appropriated, have ceased to be so. x x x."
Thus, before the government could alienate or dispose of lands of the public domain, the President
must first officially classify these lands as alienable or disposable, and then declare them open to
disposition or concession. There must be no law reserving these lands for public or quasi-public
uses.
The salient provisions of CA No. 141, on government reclaimed, foreshore and marshy lands of the
public domain, are as follows:
"Sec. 58. 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,
industrial, or other productive purposes other than agricultural, and is open to
disposition or concession, shall be disposed of under the provisions of this chapter
and not otherwise.
Sec. 59. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the Government by dredging, filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores or banks of
navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
Sec. 60. Any tract of land comprised under this title may be leased or sold, as the case may
be, to any person, corporation, or association authorized to purchase or lease public lands
for agricultural purposes. x x x.
Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine shall be
disposed of to private parties by lease only and not otherwise, as soon as the
President, upon recommendation by the Secretary of Agriculture, shall declare that the
same are not necessary for the public service and are open to disposition under this
chapter. The lands included in class (d) may be disposed of by sale or lease under the
provisions of this Act." (Emphasis supplied)
Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution, Section 58 of Act
No. 2874 prohibiting the sale of government reclaimed, foreshore and marshy disposable lands of
the public domain. All these lands are intended for residential, commercial, industrial or other non-
agricultural purposes. As before, Section 61 allowed only the lease of such lands to private parties.
The government could sell to private parties only lands falling under Section 59 (d) of CA No. 141, or
those lands for non-agricultural purposes not classified as government reclaimed, foreshore and
marshy disposable lands of the public domain. Foreshore lands, however, became inalienable under
the 1935 Constitution which only allowed the lease of these lands to qualified private parties.
Section 58 of CA No. 141 expressly states that disposable lands of the public domain intended for
residential, commercial, industrial or other productive purposes other than agricultural "shall be
disposed of under the provisions of this chapter and not otherwise." Under Section 10 of CA
No. 141, the term "disposition" includes lease of the land. Any disposition of government reclaimed,
foreshore and marshy disposable lands for non-agricultural purposes must comply with Chapter IX,
Title III of CA No. 141,
54
unless a subsequent law amended or repealed these provisions.
In his concurring opinion in the landmark case of Republic Real Estate Corporation v. Court of
Appeals,
55
Justice Reynato S. Puno summarized succinctly the law on this matter, as follows:
"Foreshore lands are lands of public dominion intended for public use. So too are lands
reclaimed by the government by dredging, filling, or other means. Act 1654 mandated that
the control and disposition of the foreshore and lands under water remained in the national
government. Said law allowed only the 'leasing' of reclaimed land. The Public Land Acts of
1919 and 1936 also declared that the foreshore and lands reclaimed by the government
were to be "disposed of to private parties by lease only and not otherwise." Before leasing,
however, the Governor-General, upon recommendation of the Secretary of Agriculture and
Natural Resources, had first to determine that the land reclaimed was not necessary for the
public service. This requisite must have been met before the land could be disposed of. But
even then, the foreshore and lands under water were not to be alienated and sold to
private parties. The disposition of the reclaimed land was only by lease. The land
remained property of the State." (Emphasis supplied)
As observed by Justice Puno in his concurring opinion, "Commonwealth Act No. 141 has remained
in effect at present."
The State policy prohibiting the sale to private parties of government reclaimed, foreshore and
marshy alienable lands of the public domain, first implemented in 1907 was thus reaffirmed in CA
No. 141 after the 1935 Constitution took effect. The prohibition on the sale of foreshore lands,
however, became a constitutional edict under the 1935 Constitution. Foreshore lands became
inalienable as natural resources of the State, unless reclaimed by the government and classified as
agricultural lands of the public domain, in which case they would fall under the classification of
government reclaimed lands.
After the effectivity of the 1935 Constitution, government reclaimed and marshy disposable lands of
the public domain continued to be only leased and not sold to private parties.
56
These lands
remained sui generis, as the only alienable or disposable lands of the public domain the
government could not sell to private parties.
Since then and until now, the only way the government can sell to private parties government
reclaimed and marshy disposable lands of the public domain is for the legislature to pass a law
authorizing such sale. CA No. 141 does not authorize the President to reclassify government
reclaimed and marshy lands into other non-agricultural lands under Section 59 (d). Lands classified
under Section 59 (d) are the only alienable or disposable lands for non-agricultural purposes that the
government could sell to private parties.
Moreover, Section 60 of CA No. 141 expressly requires congressional authority before lands under
Section 59 that the government previously transferred to government units or entities could be sold
to private parties. Section 60 of CA No. 141 declares that
"Sec. 60. x x x The area so leased or sold shall be such as shall, in the judgment of the
Secretary of Agriculture and Natural Resources, be reasonably necessary for the purposes
for which such sale or lease is requested, and shall not exceed one hundred and forty-four
hectares: Provided, however, That this limitation shall not apply to grants, donations, or
transfers made to a province, municipality or branch or subdivision of the Government for the
purposes deemed by said entities conducive to the public interest;but the land so granted,
donated, or transferred to a province, municipality or branch or subdivision of the
Government shall not be alienated, encumbered, or otherwise disposed of in a manner
affecting its title, except when authorized by Congress: x x x." (Emphasis supplied)
The congressional authority required in Section 60 of CA No. 141 mirrors the legislative authority
required in Section 56 of Act No. 2874.
One reason for the congressional authority is that Section 60 of CA No. 141 exempted government
units and entities from the maximum area of public lands that could be acquired from the State.
These government units and entities should not just turn around and sell these lands to private
parties in violation of constitutional or statutory limitations. Otherwise, the transfer of lands for non-
agricultural purposes to government units and entities could be used to circumvent constitutional
limitations on ownership of alienable or disposable lands of the public domain. In the same manner,
such transfers could also be used to evade the statutory prohibition in CA No. 141 on the sale of
government reclaimed and marshy lands of the public domain to private parties. Section 60 of CA
No. 141 constitutes by operation of law a lien on these lands.
57

In case of sale or lease of disposable lands of the public domain falling under Section 59 of CA No.
141, Sections 63 and 67 require a public bidding. Sections 63 and 67 of CA No. 141 provide as
follows:
"Sec. 63. Whenever it is decided that lands covered by this chapter are not needed for public
purposes, the Director of Lands shall ask the Secretary of Agriculture and Commerce (now
the Secretary of Natural Resources) for authority to dispose of the same. Upon receipt of
such authority, the Director of Lands shall give notice by public advertisement in the same
manner as in the case of leases or sales of agricultural public land, x x x.
Sec. 67. The lease or sale shall be made by oral bidding; and adjudication shall be
made to the highest bidder. x x x." (Emphasis supplied)
Thus, CA No. 141 mandates the Government to put to public auction all leases or sales of alienable
or disposable lands of the public domain.
58

Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal Section 5 of the Spanish
Law of Waters of 1866. Private parties could still reclaim portions of the sea with government
permission. However, the reclaimed land could become private land only if classified as
alienable agricultural land of the public domain open to disposition under CA No. 141. The 1935
Constitution prohibited the alienation of all natural resources except public agricultural lands.
The Civil Code of 1950
The Civil Code of 1950 readopted substantially the definition of property of public dominion found in
the Civil Code of 1889. Articles 420 and 422 of the Civil Code of 1950 state that
"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.
x x x.
Art. 422. 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."
Again, the government must formally declare that the property of public dominion is no longer
needed for public use or public service, before the same could be classified as patrimonial property
of the State.
59
In the case of government reclaimed and marshy lands of the public domain, the
declaration of their being disposable, as well as the manner of their disposition, is governed by the
applicable provisions of CA No. 141.
Like the Civil Code of 1889, the Civil Code of 1950 included as property of public dominion those
properties of the State which, without being for public use, are intended for public service or the
"development of the national wealth." Thus, government reclaimed and marshy lands of the State,
even if not employed for public use or public service, if developed to enhance the national wealth,
are classified as property of public dominion.
Dispositions under the 1973 Constitution
The 1973 Constitution, which took effect on January 17, 1973, likewise adopted the Regalian
doctrine. Section 8, Article XIV of the 1973 Constitution stated that
"Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral
oils, all forces of potential energy, fisheries, wildlife, and other natural resources of the
Philippines belong to the State. With the exception of agricultural, industrial or
commercial, residential, and resettlement lands of the public domain, natural
resources shall not be alienated, and no license, concession, or lease for the exploration,
development, exploitation, or utilization of any of the natural resources shall be granted for a
period exceeding twenty-five years, renewable for not more than twenty-five years, except as
to water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases, beneficial use may be the measure and the
limit of the grant." (Emphasis supplied)
The 1973 Constitution prohibited the alienation of all natural resources with the exception of
"agricultural, industrial or commercial, residential, and resettlement lands of the public domain." In
contrast, the 1935 Constitution barred the alienation of all natural resources except "public
agricultural lands." However, the term "public agricultural lands" in the 1935 Constitution
encompassed industrial, commercial, residential and resettlement lands of the public domain.
60
If the
land of public domain were neither timber nor mineral land, it would fall under the classification of
agricultural land of the public domain. Both the 1935 and 1973 Constitutions, therefore,
prohibited the alienation of all natural resources except agricultural lands of the public
domain.
The 1973 Constitution, however, limited the alienation of lands of the public domain to individuals
who were citizens of the Philippines. Private corporations, even if wholly owned by Philippine
citizens, were no longer allowed to acquire alienable lands of the public domain unlike in the 1935
Constitution. Section 11, Article XIV of the 1973 Constitution declared that
"Sec. 11. The Batasang Pambansa, taking into account conservation, ecological, and
development requirements of the natural resources, shall determine by law the size of land
of the public domain which may be developed, held or acquired by, or leased to, any
qualified individual, corporation, or association, and the conditions therefor. No private
corporation or association may hold alienable lands of the public domain except by
lease not to exceed one thousand hectares in area nor may any citizen hold such lands by
lease in excess of five hundred hectares or acquire by purchase, homestead or grant, in
excess of twenty-four hectares. No private corporation or association may hold by lease,
concession, license or permit, timber or forest lands and other timber or forest resources in
excess of one hundred thousand hectares. However, such area may be increased by the
Batasang Pambansa upon recommendation of the National Economic and Development
Authority." (Emphasis supplied)
Thus, under the 1973 Constitution, private corporations could hold alienable lands of the public
domain only through lease. Only individuals could now acquire alienable lands of the public domain,
and private corporations became absolutely barred from acquiring any kind of alienable land
of the public domain. The constitutional ban extended to all kinds of alienable lands of the public
domain, while the statutory ban under CA No. 141 applied only to government reclaimed, foreshore
and marshy alienable lands of the public domain.
PD No. 1084 Creating the Public Estates Authority
On February 4, 1977, then President Ferdinand Marcos issued Presidential Decree No. 1084
creating PEA, a wholly government owned and controlled corporation with a special charter.
Sections 4 and 8 of PD No. 1084, vests PEA with the following purposes and powers:
"Sec. 4. Purpose. The Authority is hereby created for the following purposes:
(a) To reclaim land, including foreshore and submerged areas, by dredging, filling or
other means, or to acquire reclaimed land;
(b) To develop, improve, acquire, administer, deal in, subdivide, dispose, lease and sell any
and all kinds of lands, buildings, estates and other forms of real property, owned,
managed, controlled and/or operated by the government;
(c) To provide for, operate or administer such service as may be necessary for the efficient,
economical and beneficial utilization of the above properties.
Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying out the
purposes for which it is created, have the following powers and functions:
(a)To prescribe its by-laws.
x x x
(i) To hold lands of the public domain in excess of the area permitted to private
corporations by statute.
(j) To reclaim lands and to construct work across, or otherwise, any stream, watercourse,
canal, ditch, flume x x x.
x x x
(o) To perform such acts and exercise such functions as may be necessary for the
attainment of the purposes and objectives herein specified." (Emphasis supplied)
PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public domain.
Foreshore areas are those covered and uncovered by the ebb and flow of the tide.
61
Submerged
areas are those permanently under water regardless of the ebb and flow of the tide.
62
Foreshore and
submerged areas indisputably belong to the public domain
63
and are inalienable unless reclaimed,
classified as alienable lands open to disposition, and further declared no longer needed for public
service.
The ban in the 1973 Constitution on private corporations from acquiring alienable lands of the public
domain did not apply to PEA since it was then, and until today, a fully owned government
corporation. The constitutional ban applied then, as it still applies now, only to "private corporations
and associations." PD No. 1084 expressly empowers PEA "to hold lands of the public domain"
even "in excess of the area permitted to private corporations by statute." Thus, PEA can hold title
to private lands, as well as title to lands of the public domain.
In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the public domain,
there must be legislative authority empowering PEA to sell these lands. This legislative authority is
necessary in view of Section 60 of CA No.141, which states
"Sec. 60. x x x; but the land so granted, donated or transferred to a province, municipality, or
branch or subdivision of the Government shall not be alienated, encumbered or otherwise
disposed of in a manner affecting its title, except when authorized by Congress; x x x."
(Emphasis supplied)
Without such legislative authority, PEA could not sell but only lease its reclaimed foreshore and
submerged alienable lands of the public domain. Nevertheless, any legislative authority granted to
PEA to sell its reclaimed alienable lands of the public domain would be subject to the constitutional
ban on private corporations from acquiring alienable lands of the public domain. Hence, such
legislative authority could only benefit private individuals.
Dispositions under the 1987 Constitution
The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted the
Regalian doctrine. The 1987 Constitution declares that all natural resources are "owned by
the State," and except for alienable agricultural lands of the public domain, natural resources
cannot be alienated. Sections 2 and 3, Article XII of the 1987 Constitution state that
"Section 2. All lands of the public domain, waters, minerals, coal, petroleum and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and
fauna, and other natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated. The exploration,
development, and utilization of natural resources shall be under the full control and
supervision of the State. x x x.
Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral
lands, and national parks. Agricultural lands of the public domain may be further classified by
law according to the uses which they may be devoted. Alienable lands of the public
domain shall be limited to agricultural lands. Private corporations or associations may
not hold such alienable lands of the public domain except by lease, for a period not
exceeding twenty-five years, renewable for not more than twenty-five years, and not to
exceed one thousand hectares in area. Citizens of the Philippines may lease not more
than five hundred hectares, or acquire not more than twelve hectares thereof by purchase,
homestead, or grant.
Taking into account the requirements of conservation, ecology, and development, and
subject to the requirements of agrarian reform, the Congress shall determine, by law, the
size of lands of the public domain which may be acquired, developed, held, or leased and
the conditions therefor." (Emphasis supplied)
The 1987 Constitution continues the State policy in the 1973 Constitution banning private
corporations fromacquiring any kind of alienable land of the public domain. Like the 1973
Constitution, the 1987 Constitution allows private corporations to hold alienable lands of the
public domain only through lease. As in the 1935 and 1973 Constitutions, the general law
governing the lease to private corporations of reclaimed, foreshore and marshy alienable lands of
the public domain is still CA No. 141.
The Rationale behind the Constitutional Ban
The rationale behind the constitutional ban on corporations from acquiring, except through lease,
alienable lands of the public domain is not well understood. During the deliberations of the 1986
Constitutional Commission, the commissioners probed the rationale behind this ban, thus:
"FR. BERNAS: Mr. Vice-President, my questions have reference to page 3, line 5 which
says:
`No private corporation or association may hold alienable lands of the public domain except
by lease, not to exceed one thousand hectares in area.'
If we recall, this provision did not exist under the 1935 Constitution, but this was introduced
in the 1973 Constitution. In effect, it prohibits private corporations from acquiring alienable
public lands. But it has not been very clear in jurisprudence what the reason for this is.
In some of the cases decided in 1982 and 1983, it was indicated that the purpose of this
is to prevent large landholdings. Is that the intent of this provision?
MR. VILLEGAS: I think that is the spirit of the provision.
FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were instances
where the Iglesia ni Cristo was not allowed to acquire a mere 313-square meter land where a
chapel stood because the Supreme Court said it would be in violation of this." (Emphasis
supplied)
In Ayog v. Cusi,
64
the Court explained the rationale behind this constitutional ban in this way:
"Indeed, one purpose of the constitutional prohibition against purchases of public agricultural
lands by private corporations is to equitably diffuse land ownership or to encourage 'owner-
cultivatorship and the economic family-size farm' and to prevent a recurrence of cases like
the instant case. Huge landholdings by corporations or private persons had spawned social
unrest."
However, if the constitutional intent is to prevent huge landholdings, the Constitution could have
simply limited the size of alienable lands of the public domain that corporations could acquire. The
Constitution could have followed the limitations on individuals, who could acquire not more than 24
hectares of alienable lands of the public domain under the 1973 Constitution, and not more than 12
hectares under the 1987 Constitution.
If the constitutional intent is to encourage economic family-size farms, placing the land in the name
of a corporation would be more effective in preventing the break-up of farmlands. If the farmland is
registered in the name of a corporation, upon the death of the owner, his heirs would inherit shares
in the corporation instead of subdivided parcels of the farmland. This would prevent the continuing
break-up of farmlands into smaller and smaller plots from one generation to the next.
In actual practice, the constitutional ban strengthens the constitutional limitation on individuals from
acquiring more than the allowed area of alienable lands of the public domain. Without the
constitutional ban, individuals who already acquired the maximum area of alienable lands of the
public domain could easily set up corporations to acquire more alienable public lands. An individual
could own as many corporations as his means would allow him. An individual could even hide his
ownership of a corporation by putting his nominees as stockholders of the corporation. The
corporation is a convenient vehicle to circumvent the constitutional limitation on acquisition by
individuals of alienable lands of the public domain.
The constitutional intent, under the 1973 and 1987 Constitutions, is to transfer ownership of
only a limited area of alienable land of the public domain to a qualified individual. This
constitutional intent is safeguarded by the provision prohibiting corporations from acquiring
alienable lands of the public domain, since the vehicle to circumvent the constitutional intent
is removed. The available alienable public lands are gradually decreasing in the face of an ever-
growing population. The most effective way to insure faithful adherence to this constitutional intent is
to grant or sell alienable lands of the public domain only to individuals. This, it would seem, is the
practical benefit arising from the constitutional ban.
The Amended J oint Venture Agreement
The subject matter of the Amended JVA, as stated in its second Whereas clause, consists of three
properties, namely:
1. "[T]hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo
Boulevard in Paranaque and Las Pinas, Metro Manila, with a combined titled area of
1,578,441 square meters;"
2. "[A]nother area of 2,421,559 square meters contiguous to the three islands;" and
3. "[A]t AMARI's option as approved by PEA, an additional 350 hectares more or less to
regularize the configuration of the reclaimed area."
65

PEA confirms that the Amended JVA involves "the development of the Freedom Islands and further
reclamation of about 250 hectares x x x," plus an option "granted to AMARI to subsequently reclaim
another 350 hectares x x x."
66

In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of the
750-hectare reclamation project have been reclaimed, and the rest of the 592.15 hectares are
still submerged areas forming part of Manila Bay.
Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00 for PEA's
"actual cost" in partially reclaiming the Freedom Islands. AMARI will also complete, at its own
expense, the reclamation of the Freedom Islands. AMARI will further shoulder all the reclamation
costs of all the other areas, totaling 592.15 hectares, still to be reclaimed. AMARI and PEA will
share, in the proportion of 70 percent and 30 percent, respectively, the total net usable area which is
defined in the Amended JVA as the total reclaimed area less 30 percent earmarked for common
areas. Title to AMARI's share in the net usable area, totaling 367.5 hectares, will be issued in the
name of AMARI. Section 5.2 (c) of the Amended JVA provides that
"x x x, PEA shall have the duty to execute without delay the necessary deed of transfer or
conveyance of the title pertaining to AMARI's Land share based on the Land Allocation
Plan. PEA, when requested in writing by AMARI, shall then cause the issuance and
delivery of the proper certificates of title covering AMARI's Land Share in the name of
AMARI, x x x; provided, that if more than seventy percent (70%) of the titled area at any
given time pertains to AMARI, PEA shall deliver to AMARI only seventy percent (70%) of the
titles pertaining to AMARI, until such time when a corresponding proportionate area of
additional land pertaining to PEA has been titled." (Emphasis supplied)
Indisputably, under the Amended J VA AMARI will acquire and own a maximum of 367.5
hectares of reclaimed land which will be titled in its name.
To implement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI joint venture
PEA's statutory authority, rights and privileges to reclaim foreshore and submerged areas in Manila
Bay. Section 3.2.a of the Amended JVA states that
"PEA hereby contributes to the joint venture its rights and privileges to perform Rawland
Reclamation and Horizontal Development as well as own the Reclamation Area, thereby
granting the Joint Venture the full and exclusive right, authority and privilege to undertake the
Project in accordance with the Master Development Plan."
The Amended JVA is the product of a renegotiation of the original JVA dated April 25, 1995 and its
supplemental agreement dated August 9, 1995.
The Threshold Issue
The threshold issue is whether AMARI, a private corporation, can acquire and own under the
Amended JVA 367.5 hectares of reclaimed foreshore and submerged areas in Manila Bay in view of
Sections 2 and 3, Article XII of the 1987 Constitution which state that:
"Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and
fauna, and other natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated. x x x.
x x x
Section 3. x x x Alienable lands of the public domain shall be limited to agricultural
lands. Private corporations or associations may not hold such alienable lands of the
public domain except by lease, x x x."(Emphasis supplied)
Classification of Reclaimed Foreshore and Submerged Areas
PEA readily concedes that lands reclaimed from foreshore or submerged areas of Manila Bay are
alienable or disposable lands of the public domain. In its Memorandum,
67
PEA admits that
"Under the Public Land Act (CA 141, as amended), reclaimed lands are classified as
alienable and disposable lands of the public domain:
'Sec. 59. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the government by dredging, filling, or other means;
x x x.'" (Emphasis supplied)
Likewise, the Legal Task Force
68
constituted under Presidential Administrative Order No. 365
admitted in its Report and Recommendation to then President Fidel V. Ramos, "[R]eclaimed lands
are classified as alienable and disposable lands of the public domain."
69
The Legal Task Force
concluded that
"D. Conclusion
Reclaimed lands are lands of the public domain. However, by statutory authority, the rights of
ownership and disposition over reclaimed lands have been transferred to PEA, by virtue of
which PEA, as owner, may validly convey the same to any qualified person without violating
the Constitution or any statute.
The constitutional provision prohibiting private corporations from holding public land, except
by lease (Sec. 3, Art. XVII,
70
1987 Constitution), does not apply to reclaimed lands whose
ownership has passed on to PEA by statutory grant."
Under Section 2, Article XII of the 1987 Constitution, the foreshore and submerged areas of Manila
Bay are part of the "lands of the public domain, waters x x x and other natural resources" and
consequently "owned by the State." As such, foreshore and submerged areas "shall not be
alienated," unless they are classified as "agricultural lands" of the public domain. The mere
reclamation of these areas by PEA does not convert these inalienable natural resources of
the State into alienable or disposable lands of the public domain. There must be a law or
presidential proclamation officially classifying these reclaimed lands as alienable or
disposable and open to disposition or concession. Moreover, these reclaimed lands cannot
be classified as alienable or disposable if the law has reserved them for some public or
quasi-public use.
71

Section 8 of CA No. 141 provides that "only those lands shall be declared open to disposition or
concession which have been officially delimited and classified."
72
The President has the authority
to classify inalienable lands of the public domain into alienable or disposable lands of the public
domain, pursuant to Section 6 of CA No. 141. In Laurel vs. Garcia,
73
the Executive Department
attempted to sell the Roppongi property in Tokyo, Japan, which was acquired by the Philippine
Government for use as the Chancery of the Philippine Embassy. Although the Chancery had
transferred to another location thirteen years earlier, the Court still ruled that, under Article 422
74
of
the Civil Code, a property of public dominion retains such character until formally declared
otherwise. The Court ruled that
"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]." (Emphasis supplied)
PD No. 1085, issued on February 4, 1977, authorized the issuance of special land patents for lands
reclaimed by PEA from the foreshore or submerged areas of Manila Bay. On January 19, 1988 then
President Corazon C. Aquino issued Special Patent No. 3517 in the name of PEA for the 157.84
hectares comprising the partially reclaimed Freedom Islands. Subsequently, on April 9, 1999 the
Register of Deeds of the Municipality of Paranaque issued TCT Nos. 7309, 7311 and 7312 in the
name of PEA pursuant to Section 103 of PD No. 1529 authorizing the issuance of certificates of title
corresponding to land patents. To this day, these certificates of title are still in the name of PEA.
PD No. 1085, coupled with President Aquino's actual issuance of a special patent covering the
Freedom Islands, is equivalent to an official proclamation classifying the Freedom Islands as
alienable or disposable lands of the public domain. PD No. 1085 and President Aquino's issuance of
a land patent also constitute a declaration that the Freedom Islands are no longer needed for public
service. The Freedom Islands are thus alienable or disposable lands of the public domain,
open to disposition or concession to qualified parties.
At the time then President Aquino issued Special Patent No. 3517, PEA had already reclaimed the
Freedom Islands although subsequently there were partial erosions on some areas. The government
had also completed the necessary surveys on these islands. Thus, the Freedom Islands were no
longer part of Manila Bay but part of the land mass. Section 3, Article XII of the 1987 Constitution
classifies lands of the public domain into "agricultural, forest or timber, mineral lands, and national
parks." Being neither timber, mineral, nor national park lands, the reclaimed Freedom Islands
necessarily fall under the classification of agricultural lands of the public domain. Under the 1987
Constitution, agricultural lands of the public domain are the only natural resources that the State may
alienate to qualified private parties. All other natural resources, such as the seas or bays, are
"waters x x x owned by the State" forming part of the public domain, and are inalienable pursuant to
Section 2, Article XII of the 1987 Constitution.
AMARI claims that the Freedom Islands are private lands because CDCP, then a private
corporation, reclaimed the islands under a contract dated November 20, 1973 with the
Commissioner of Public Highways. AMARI, citing Article 5 of the Spanish Law of Waters of 1866,
argues that "if the ownership of reclaimed lands may be given to the party constructing the works,
then it cannot be said that reclaimed lands are lands of the public domain which the State may not
alienate."
75
Article 5 of the Spanish Law of Waters reads as follows:
"Article 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." (Emphasis supplied)
Under Article 5 of the Spanish Law of Waters of 1866, private parties could reclaim from the sea only
with "proper permission" from the State. Private parties could own the reclaimed land only if not
"otherwise provided by the terms of the grant of authority." This clearly meant that no one could
reclaim from the sea without permission from the State because the sea is property of public
dominion. It also meant that the State could grant or withhold ownership of the reclaimed
land because any reclaimed land, like the sea from which it emerged, belonged to the State.
Thus, a private person reclaiming from the sea without permission from the State could not
acquire ownership of the reclaimed land which would remain property of public dominion like
the sea it replaced.
76
Article 5 of the Spanish Law of Waters of 1866 adopted the time-honored
principle of land ownership that "all lands that were not acquired from the government, either by
purchase or by grant, belong to the public domain."
77

Article 5 of the Spanish Law of Waters must be read together with laws subsequently enacted on the
disposition of public lands. In particular, CA No. 141 requires that lands of the public domain must
first be classified as alienable or disposable before the government can alienate them. These lands
must not be reserved for public or quasi-public purposes.
78
Moreover, the contract between CDCP
and the government was executed after the effectivity of the 1973 Constitution which barred private
corporations from acquiring any kind of alienable land of the public domain. This contract could not
have converted the Freedom Islands into private lands of a private corporation.
Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws authorizing the
reclamation of areas under water and revested solely in the National Government the power to
reclaim lands. Section 1 of PD No. 3-A declared that
"The provisions of any law to the contrary notwithstanding, the reclamation of areas
under water, whether foreshore or inland, shall be limited to the National Government or
any person authorized by it under a proper contract. (Emphasis supplied)
x x x."
PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because reclamation of areas
under water could now be undertaken only by the National Government or by a person contracted by
the National Government. Private parties may reclaim from the sea only under a contract with the
National Government, and no longer by grant or permission as provided in Section 5 of the Spanish
Law of Waters of 1866.
Executive Order No. 525, issued on February 14, 1979, designated PEA as the National
Government's implementing arm to undertake "all reclamation projects of the government," which
"shall be undertaken by the PEA or through a proper contract executed by it with any person
or entity." Under such contract, a private party receives compensation for reclamation services
rendered to PEA. Payment to the contractor may be in cash, or in kind consisting of portions of the
reclaimed land, subject to the constitutional ban on private corporations from acquiring alienable
lands of the public domain. The reclaimed land can be used as payment in kind only if the reclaimed
land is first classified as alienable or disposable land open to disposition, and then declared no
longer needed for public service.
The Amended JVA covers not only the Freedom Islands, but also an additional 592.15
hectares which are still submerged and forming part of Manila Bay. There is no legislative or
Presidential act classifying these submerged areas as alienable or disposable lands of the
public domain open to disposition. These submerged areas are not covered by any patent or
certificate of title. There can be no dispute that these submerged areas form part of the public
domain, and in their present state are inalienable and outside the commerce of man. Until
reclaimed from the sea, these submerged areas are, under the Constitution, "waters x x x
owned by the State," forming part of the public domain and consequently inalienable. Only
when actually reclaimed from the sea can these submerged areas be classified as public
agricultural lands, which under the Constitution are the only natural resources that the State
may alienate. Once reclaimed and transformed into public agricultural lands, the government
may then officially classify these lands as alienable or disposable lands open to disposition.
Thereafter, the government may declare these lands no longer needed for public service.
Only then can these reclaimed lands be considered alienable or disposable lands of the
public domain and within the commerce of man.
The classification of PEA's reclaimed foreshore and submerged lands into alienable or disposable
lands open to disposition is necessary because PEA is tasked under its charter to undertake public
services that require the use of lands of the public domain. Under Section 5 of PD No. 1084, the
functions of PEA include the following: "[T]o own or operate railroads, tramways and other kinds of
land transportation, x x x; [T]o construct, maintain and operate such systems of sanitary sewers as
may be necessary; [T]o construct, maintain and operate such storm drains as may be necessary."
PEA is empowered to issue "rules and regulations as may be necessary for the proper use by
private parties of any or all of the highways, roads, utilities, buildings and/or any of its
properties and to impose or collect fees or tolls for their use." Thus, part of the reclaimed foreshore
and submerged lands held by the PEA would actually be needed for public use or service since
many of the functions imposed on PEA by its charter constitute essential public services.
Moreover, Section 1 of Executive Order No. 525 provides that PEA "shall be primarily responsible for
integrating, directing, and coordinating all reclamation projects for and on behalf of the National
Government." The same section also states that "[A]ll reclamation projects shall be approved by the
President upon recommendation of the PEA, and shall be undertaken by the PEA or through a
proper contract executed by it with any person or entity; x x x." Thus, under EO No. 525, in relation
to PD No. 3-A and PD No.1084, PEA became the primary implementing agency of the National
Government to reclaim foreshore and submerged lands of the public domain. EO No. 525
recognized PEA as the government entity "to undertake the reclamation of lands and ensure their
maximum utilization in promoting public welfare and interests."
79
Since large portions of these
reclaimed lands would obviously be needed for public service, there must be a formal declaration
segregating reclaimed lands no longer needed for public service from those still needed for public
service.1wphi 1.nt
Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA "shall belong to or be owned
by the PEA," could not automatically operate to classify inalienable lands into alienable or disposable
lands of the public domain. Otherwise, reclaimed foreshore and submerged lands of the public
domain would automatically become alienable once reclaimed by PEA, whether or not classified as
alienable or disposable.
The Revised Administrative Code of 1987, a later law than either PD No. 1084 or EO No. 525, vests
in the Department of Environment and Natural Resources ("DENR" for brevity) the following powers
and functions:
"Sec. 4. Powers and Functions. The Department shall:
(1) x x x
x x x
(4) Exercise supervision and control over forest lands, alienable and disposable public
lands, mineral resources and, in the process of exercising such control, impose appropriate
taxes, fees, charges, rentals and any such form of levy and collect such revenues for the
exploration, development, utilization or gathering of such resources;
x x x
(14) Promulgate rules, regulations and guidelines on the issuance of licenses,
permits, concessions, lease agreements and such other privileges concerning the
development, exploration and utilization of the country's marine, freshwater, and
brackish water and over all aquatic resources of the country and shall continue to
oversee, supervise and police our natural resources; cancel or cause to cancel such
privileges upon failure, non-compliance or violations of any regulation, order, and for all other
causes which are in furtherance of the conservation of natural resources and supportive of
the national interest;
(15) Exercise exclusive jurisdiction on the management and disposition of all lands of
the public domain and serve as the sole agency responsible for classification, sub-
classification, surveying and titling of lands in consultation with appropriate
agencies."
80
(Emphasis supplied)
As manager, conservator and overseer of the natural resources of the State, DENR exercises
"supervision and control over alienable and disposable public lands." DENR also exercises
"exclusive jurisdiction on the management and disposition of all lands of the public domain." Thus,
DENR decides whether areas under water, like foreshore or submerged areas of Manila Bay, should
be reclaimed or not. This means that PEA needs authorization from DENR before PEA can
undertake reclamation projects in Manila Bay, or in any part of the country.
DENR also exercises exclusive jurisdiction over the disposition of all lands of the public domain.
Hence, DENR decides whether reclaimed lands of PEA should be classified as alienable under
Sections 6
81
and 7
82
of CA No. 141. Once DENR decides that the reclaimed lands should be so
classified, it then recommends to the President the issuance of a proclamation classifying the lands
as alienable or disposable lands of the public domain open to disposition. We note that then DENR
Secretary Fulgencio S. Factoran, Jr. countersigned Special Patent No. 3517 in compliance with the
Revised Administrative Code and Sections 6 and 7 of CA No. 141.
In short, DENR is vested with the power to authorize the reclamation of areas under water, while
PEA is vested with the power to undertake the physical reclamation of areas under water, whether
directly or through private contractors. DENR is also empowered to classify lands of the public
domain into alienable or disposable lands subject to the approval of the President. On the other
hand, PEA is tasked to develop, sell or lease the reclaimed alienable lands of the public domain.
Clearly, the mere physical act of reclamation by PEA of foreshore or submerged areas does not
make the reclaimed lands alienable or disposable lands of the public domain, much less patrimonial
lands of PEA. Likewise, the mere transfer by the National Government of lands of the public domain
to PEA does not make the lands alienable or disposable lands of the public domain, much less
patrimonial lands of PEA.
Absent two official acts a classification that these lands are alienable or disposable and open to
disposition and a declaration that these lands are not needed for public service, lands reclaimed by
PEA remain inalienable lands of the public domain. Only such an official classification and formal
declaration can convert reclaimed lands into alienable or disposable lands of the public domain,
open to disposition under the Constitution, Title I and Title III
83
of CA No. 141 and other applicable
laws.
84

PEA's Authority to Sell Reclaimed Lands
PEA, like the Legal Task Force, argues that as alienable or disposable lands of the public domain,
the reclaimed lands shall be disposed of in accordance with CA No. 141, the Public Land Act. PEA,
citing Section 60 of CA No. 141, admits that reclaimed lands transferred to a branch or subdivision of
the government "shall not be alienated, encumbered, or otherwise disposed of in a manner affecting
its title, except when authorized by Congress: x x x."
85
(Emphasis by PEA)
In Laurel vs. Garcia,
86
the Court cited Section 48 of the Revised Administrative Code of 1987, which
states that
"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: x x x."
Thus, the Court concluded that a law is needed to convey any real property belonging to the
Government. The Court declared that -
"It is not for the President to convey 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." (Emphasis supplied)
PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority allowing PEA to
sell its reclaimed lands. PD No. 1085, issued on February 4, 1977, provides that
"The land reclaimed in the foreshore and offshore area of Manila Bay pursuant to the
contract for the reclamation and construction of the Manila-Cavite Coastal Road Project
between the Republic of the Philippines and the Construction and Development Corporation
of the Philippines dated November 20, 1973 and/or any other contract or reclamation
covering the same area is hereby transferred, conveyed and assigned to the ownership
and administration of the Public Estates Authority established pursuant to PD No. 1084;
Provided, however, That the rights and interests of the Construction and Development
Corporation of the Philippines pursuant to the aforesaid contract shall be recognized and
respected.
Henceforth, the Public Estates Authority shall exercise the rights and assume the obligations
of the Republic of the Philippines (Department of Public Highways) arising from, or incident
to, the aforesaid contract between the Republic of the Philippines and the Construction and
Development Corporation of the Philippines.
In consideration of the foregoing transfer and assignment, the Public Estates Authority shall
issue in favor of the Republic of the Philippines the corresponding shares of stock in said
entity with an issued value of said shares of stock (which) shall be deemed fully paid and
non-assessable.
The Secretary of Public Highways and the General Manager of the Public Estates Authority
shall execute such contracts or agreements, including appropriate agreements with the
Construction and Development Corporation of the Philippines, as may be necessary to
implement the above.
Special land patent/patents shall be issued by the Secretary of Natural Resources in
favor of the Public Estates Authority without prejudice to the subsequent transfer to
the contractor or his assignees of such portion or portions of the land reclaimed or to
be reclaimed as provided for in the above-mentioned contract. On the basis of such
patents, the Land Registration Commission shall issue the corresponding certificate
of title." (Emphasis supplied)
On the other hand, Section 3 of EO No. 525, issued on February 14, 1979, provides that -
"Sec. 3. All lands reclaimed by PEA shall belong to or be owned by the PEA which shall
be responsible for its administration, development, utilization or disposition in accordance
with the provisions of Presidential Decree No. 1084. Any and all income that the PEA may
derive from the sale, lease or use of reclaimed lands shall be used in accordance with the
provisions of Presidential Decree No. 1084."
There is no express authority under either PD No. 1085 or EO No. 525 for PEA to sell its reclaimed
lands. PD No. 1085 merely transferred "ownership and administration" of lands reclaimed from
Manila Bay to PEA, while EO No. 525 declared that lands reclaimed by PEA "shall belong to or be
owned by PEA." EO No. 525 expressly states that PEA should dispose of its reclaimed lands "in
accordance with the provisions of Presidential Decree No. 1084," the charter of PEA.
PEA's charter, however, expressly tasks PEA "to develop, improve, acquire, administer, deal in,
subdivide, dispose, lease and sell any and all kinds of lands x x x owned, managed, controlled
and/or operated by the government."
87
(Emphasis supplied) There is, therefore, legislative
authority granted to PEA to sell its lands, whether patrimonial or alienable lands of the public
domain. PEA may sell to private parties its patrimonial properties in accordance with the PEA
charter free from constitutional limitations. The constitutional ban on private corporations from
acquiring alienable lands of the public domain does not apply to the sale of PEA's patrimonial lands.
PEA may also sell its alienable or disposable lands of the public domain to private individuals
since, with the legislative authority, there is no longer any statutory prohibition against such sales
and the constitutional ban does not apply to individuals. PEA, however, cannot sell any of its
alienable or disposable lands of the public domain to private corporations since Section 3, Article XII
of the 1987 Constitution expressly prohibits such sales. The legislative authority benefits only
individuals. Private corporations remain barred from acquiring any kind of alienable land of the public
domain, including government reclaimed lands.
The provision in PD No. 1085 stating that portions of the reclaimed lands could be transferred by
PEA to the "contractor or his assignees" (Emphasis supplied) would not apply to private corporations
but only to individuals because of the constitutional ban. Otherwise, the provisions of PD No. 1085
would violate both the 1973 and 1987 Constitutions.
The requirement of public auction in the sale of reclaimed lands
Assuming the reclaimed lands of PEA are classified as alienable or disposable lands open to
disposition, and further declared no longer needed for public service, PEA would have to conduct a
public bidding in selling or leasing these lands. PEA must observe the provisions of Sections 63 and
67 of CA No. 141 requiring public auction, in the absence of a law exempting PEA from holding a
public auction.
88
Special Patent No. 3517 expressly states that the patent is issued by authority of
the Constitution and PD No. 1084, "supplemented by Commonwealth Act No. 141, as amended."
This is an acknowledgment that the provisions of CA No. 141 apply to the disposition of reclaimed
alienable lands of the public domain unless otherwise provided by law. Executive Order No.
654,
89
which authorizes PEA "to determine the kind and manner of payment for the transfer" of its
assets and properties, does not exempt PEA from the requirement of public auction. EO No. 654
merely authorizes PEA to decide the mode of payment, whether in kind and in installment, but does
not authorize PEA to dispense with public auction.
Moreover, under Section 79 of PD No. 1445, otherwise known as the Government Auditing Code,
the government is required to sell valuable government property through public bidding. Section 79
of PD No. 1445 mandates that
"Section 79. When government property has become unserviceable for any cause, or is no
longer needed, it shall, upon application of the officer accountable therefor, be inspected by
the head of the agency or his duly authorized representative in the presence of the auditor
concerned and, if found to be valueless or unsaleable, it may be destroyed in their
presence. If found to be valuable, it may be sold at public auction to the highest
bidder under the supervision of the proper committee on award or similar body in the
presence of the auditor concerned or other authorized representative of the
Commission, after advertising by printed notice in the Official Gazette, or for not less
than three consecutive days in any newspaper of general circulation, or where the
value of the property does not warrant the expense of publication, by notices posted for a like
period in at least three public places in the locality where the property is to be sold. In the
event that the public auction fails, the property may be sold at a private sale at such
price as may be fixed by the same committee or body concerned and approved by the
Commission."
It is only when the public auction fails that a negotiated sale is allowed, in which case the
Commission on Audit must approve the selling price.
90
The Commission on Audit implements
Section 79 of the Government Auditing Code through Circular No. 89-296
91
dated January 27, 1989.
This circular emphasizes that government assets must be disposed of only through public auction,
and a negotiated sale can be resorted to only in case of "failure of public auction."
At the public auction sale, only Philippine citizens are qualified to bid for PEA's reclaimed foreshore
and submerged alienable lands of the public domain. Private corporations are barred from bidding at
the auction sale of any kind of alienable land of the public domain.
PEA originally scheduled a public bidding for the Freedom Islands on December 10, 1991. PEA
imposed a condition that the winning bidder should reclaim another 250 hectares of submerged
areas to regularize the shape of the Freedom Islands, under a 60-40 sharing of the additional
reclaimed areas in favor of the winning bidder.
92
No one, however, submitted a bid. On December 23,
1994, the Government Corporate Counsel advised PEA it could sell the Freedom Islands through
negotiation, without need of another public bidding, because of the failure of the public bidding on
December 10, 1991.
93

However, the original JVA dated April 25, 1995 covered not only the Freedom Islands and the
additional 250 hectares still to be reclaimed, it also granted an option to AMARI to reclaim another
350 hectares. The original JVA, a negotiated contract, enlarged the reclamation area to 750
hectares.
94
The failure of public bidding on December 10, 1991, involving only 407.84 hectares,
95
is
not a valid justification for a negotiated sale of 750 hectares, almost double the area publicly
auctioned. Besides, the failure of public bidding happened on December 10, 1991, more than three
years before the signing of the original JVA on April 25, 1995. The economic situation in the country
had greatly improved during the intervening period.
Reclamation under the BOT Law and the Local Government Code
The constitutional prohibition in Section 3, Article XII of the 1987 Constitution is absolute and clear:
"Private corporations or associations may not hold such alienable lands of the public domain except
by lease, x x x." Even Republic Act No. 6957 ("BOT Law," for brevity), cited by PEA and AMARI as
legislative authority to sell reclaimed lands to private parties, recognizes the constitutional ban.
Section 6 of RA No. 6957 states
"Sec. 6. Repayment Scheme. - For the financing, construction, operation and maintenance
of any infrastructure projects undertaken through the build-operate-and-transfer arrangement
or any of its variations pursuant to the provisions of this Act, the project proponent x x x may
likewise be repaid in the form of a share in the revenue of the project or other non-monetary
payments, such as, but not limited to, the grant of a portion or percentage of the reclaimed
land, subject to the constitutional requirements with respect to the ownership of the
land: x x x." (Emphasis supplied)
A private corporation, even one that undertakes the physical reclamation of a government BOT
project, cannot acquire reclaimed alienable lands of the public domain in view of the constitutional
ban.
Section 302 of the Local Government Code, also mentioned by PEA and AMARI, authorizes local
governments in land reclamation projects to pay the contractor or developer in kind consisting of a
percentage of the reclaimed land, to wit:
"Section 302. Financing, Construction, Maintenance, Operation, and Management of
Infrastructure Projects by the Private Sector. x x x
x x x
In case of land reclamation or construction of industrial estates, the repayment plan may
consist of the grant of a portion or percentage of the reclaimed land or the industrial estate
constructed."
Although Section 302 of the Local Government Code does not contain a proviso similar to that of the
BOT Law, the constitutional restrictions on land ownership automatically apply even though not
expressly mentioned in the Local Government Code.
Thus, under either the BOT Law or the Local Government Code, the contractor or developer, if a
corporate entity, can only be paid with leaseholds on portions of the reclaimed land. If the contractor
or developer is an individual, portions of the reclaimed land, not exceeding 12 hectares
96
of non-
agricultural lands, may be conveyed to him in ownership in view of the legislative authority allowing
such conveyance. This is the only way these provisions of the BOT Law and the Local Government
Code can avoid a direct collision with Section 3, Article XII of the 1987 Constitution.
Registration of lands of the public domain
Finally, PEA theorizes that the "act of conveying the ownership of the reclaimed lands to public
respondent PEA transformed such lands of the public domain to private lands." This theory is
echoed by AMARI which maintains that the "issuance of the special patent leading to the eventual
issuance of title takes the subject land away from the land of public domain and converts the
property into patrimonial or private property." In short, PEA and AMARI contend that with the
issuance of Special Patent No. 3517 and the corresponding certificates of titles, the 157.84 hectares
comprising the Freedom Islands have become private lands of PEA. In support of their theory, PEA
and AMARI cite the following rulings of the Court:
1. Sumail v. Judge of CFI of Cotabato,
97
where the Court held
"Once the patent was granted and the corresponding certificate of title was issued, the land
ceased to be part of the public domain and became private property over which the Director
of Lands has neither control nor jurisdiction."
2. Lee Hong Hok v. David,
98
where the Court declared -
"After the registration and issuance of the certificate and duplicate certificate of title based on
a public land patent, the land covered thereby automatically comes under the operation of
Republic Act 496 subject to all the safeguards provided therein."3. Heirs of Gregorio Tengco
v. Heirs of Jose Aliwalas,
99
where the Court ruled -
"While the Director of Lands has the power to review homestead patents, he may do so only
so long as the land remains part of the public domain and continues to be under his
exclusive control; but once the patent is registered and a certificate of title is issued, the land
ceases to be part of the public domain and becomes private property over which the Director
of Lands has neither control nor jurisdiction."
4. Manalo v. Intermediate Appellate Court,
100
where the Court held
"When the lots in dispute were certified as disposable on May 19, 1971, and free patents
were issued covering the same in favor of the private respondents, the said lots ceased to be
part of the public domain and, therefore, the Director of Lands lost jurisdiction over the
same."
5.Republic v. Court of Appeals,
101
where the Court stated
"Proclamation No. 350, dated October 9, 1956, of President Magsaysay legally effected a
land grant to the Mindanao Medical Center, Bureau of Medical Services, Department of
Health, of the whole lot, validly sufficient for initial registration under the Land Registration
Act. Such land grant is constitutive of a 'fee simple' title or absolute title in favor of petitioner
Mindanao Medical Center. Thus, Section 122 of the Act, which governs the registration of
grants or patents involving public lands, provides that 'Whenever public lands in the
Philippine Islands belonging to the Government of the United States or to the Government of
the Philippines are alienated, granted or conveyed to persons or to public or private
corporations, the same shall be brought forthwith under the operation of this Act (Land
Registration Act, Act 496) and shall become registered lands.'"
The first four cases cited involve petitions to cancel the land patents and the corresponding
certificates of titlesissued to private parties. These four cases uniformly hold that the Director of
Lands has no jurisdiction over private lands or that upon issuance of the certificate of title the land
automatically comes under the Torrens System. The fifth case cited involves the registration under
the Torrens System of a 12.8-hectare public land granted by the National Government to Mindanao
Medical Center, a government unit under the Department of Health. The National Government
transferred the 12.8-hectare public land to serve as the site for the hospital buildings and other
facilities of Mindanao Medical Center, which performed a public service. The Court affirmed the
registration of the 12.8-hectare public land in the name of Mindanao Medical Center under Section
122 of Act No. 496. This fifth case is an example of a public land being registered under Act No. 496
without the land losing its character as a property of public dominion.
In the instant case, the only patent and certificates of title issued are those in the name of PEA, a
wholly government owned corporation performing public as well as proprietary functions. No patent
or certificate of title has been issued to any private party. No one is asking the Director of Lands to
cancel PEA's patent or certificates of title. In fact, the thrust of the instant petition is that PEA's
certificates of title should remain with PEA, and the land covered by these certificates, being
alienable lands of the public domain, should not be sold to a private corporation.
Registration of land under Act No. 496 or PD No. 1529 does not vest in the registrant private or
public ownership of the land. Registration is not a mode of acquiring ownership but is merely
evidence of ownership previously conferred by any of the recognized modes of acquiring ownership.
Registration does not give the registrant a better right than what the registrant had prior to the
registration.
102
The registration of lands of the public domain under the Torrens system, by itself,
cannot convert public lands into private lands.
103

Jurisprudence holding that upon the grant of the patent or issuance of the certificate of title the
alienable land of the public domain automatically becomes private land cannot apply to government
units and entities like PEA. The transfer of the Freedom Islands to PEA was made subject to the
provisions of CA No. 141 as expressly stated in Special Patent No. 3517 issued by then President
Aquino, to wit:
"NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the Philippines and
in conformity with the provisions of Presidential Decree No. 1084, supplemented by
Commonwealth Act No. 141, as amended, there are hereby granted and conveyed unto
the Public Estates Authority the aforesaid tracts of land containing a total area of one million
nine hundred fifteen thousand eight hundred ninety four (1,915,894) square meters; the
technical description of which are hereto attached and made an integral part hereof."
(Emphasis supplied)
Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters not covered by PD No.
1084. Section 60 of CA No. 141 prohibits, "except when authorized by Congress," the sale of
alienable lands of the public domain that are transferred to government units or entities. Section 60
of CA No. 141 constitutes, under Section 44 of PD No. 1529, a "statutory lien affecting title" of the
registered land even if not annotated on the certificate of title.
104
Alienable lands of the public domain
held by government entities under Section 60 of CA No. 141 remain public lands because they
cannot be alienated or encumbered unless Congress passes a law authorizing their disposition.
Congress, however, cannot authorize the sale to private corporations of reclaimed alienable lands of
the public domain because of the constitutional ban. Only individuals can benefit from such law.
The grant of legislative authority to sell public lands in accordance with Section 60 of CA No. 141
does not automatically convert alienable lands of the public domain into private or patrimonial lands.
The alienable lands of the public domain must be transferred to qualified private parties, or to
government entities not tasked to dispose of public lands, before these lands can become private or
patrimonial lands. Otherwise, the constitutional ban will become illusory if Congress can declare
lands of the public domain as private or patrimonial lands in the hands of a government agency
tasked to dispose of public lands. This will allow private corporations to acquire directly from
government agencies limitless areas of lands which, prior to such law, are concededly public lands.
Under EO No. 525, PEA became the central implementing agency of the National Government to
reclaim foreshore and submerged areas of the public domain. Thus, EO No. 525 declares that
"EXECUTIVE ORDER NO. 525
Designating the Public Estates Authority as the Agency Primarily Responsible for all
Reclamation Projects
Whereas, there are several reclamation projects which are ongoing or being proposed to be
undertaken in various parts of the country which need to be evaluated for consistency with
national programs;
Whereas, there is a need to give further institutional support to the Government's declared
policy to provide for a coordinated, economical and efficient reclamation of lands;
Whereas, Presidential Decree No. 3-A requires that all reclamation of areas shall be limited
to the National Government or any person authorized by it under proper contract;
Whereas, a central authority is needed to act on behalf of the National Government
which shall ensure a coordinated and integrated approach in the reclamation of lands;
Whereas, Presidential Decree No. 1084 creates the Public Estates Authority as a
government corporation to undertake reclamation of lands and ensure their maximum
utilization in promoting public welfare and interests; and
Whereas, Presidential Decree No. 1416 provides the President with continuing authority to
reorganize the national government including the transfer, abolition, or merger of functions
and offices.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of
the powers vested in me by the Constitution and pursuant to Presidential Decree No. 1416,
do hereby order and direct the following:
Section 1. The Public Estates Authority (PEA) shall be primarily responsible for
integrating, directing, and coordinating all reclamation projects for and on behalf of
the National Government. All reclamation projects shall be approved by the President upon
recommendation of the PEA, and shall be undertaken by the PEA or through a proper
contract executed by it with any person or entity; Provided, that, reclamation projects of any
national government agency or entity authorized under its charter shall be undertaken in
consultation with the PEA upon approval of the President.
x x x ."
As the central implementing agency tasked to undertake reclamation projects nationwide, with
authority to sell reclaimed lands, PEA took the place of DENR as the government agency charged
with leasing or selling reclaimed lands of the public domain. The reclaimed lands being leased or
sold by PEA are not private lands, in the same manner that DENR, when it disposes of other
alienable lands, does not dispose of private lands but alienable lands of the public domain. Only
when qualified private parties acquire these lands will the lands become private lands. In the hands
of the government agency tasked and authorized to dispose of alienable of disposable lands
of the public domain, these lands are still public, not private lands.
Furthermore, PEA's charter expressly states that PEA "shall hold lands of the public domain" as
well as "any and all kinds of lands." PEA can hold both lands of the public domain and private lands.
Thus, the mere fact that alienable lands of the public domain like the Freedom Islands are
transferred to PEA and issued land patents or certificates of title in PEA's name does not
automatically make such lands private.
To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands
will sanction a gross violation of the constitutional ban on private corporations from acquiring any
kind of alienable land of the public domain. PEA will simply turn around, as PEA has now done
under the Amended J VA, and transfer several hundreds of hectares of these reclaimed and still to
be reclaimed lands to a single private corporation in only one transaction. This scheme will
effectively nullify the constitutional ban in Section 3, Article XII of the 1987 Constitution which was
intended to diffuse equitably the ownership of alienable lands of the public domain among Filipinos,
now numbering over 80 million strong.
This scheme, if allowed, can even be applied to alienable agricultural lands of the public domain
since PEA can "acquire x x x any and all kinds of lands." This will open the floodgates to
corporations and even individuals acquiring hundreds of hectares of alienable lands of the public
domain under the guise that in the hands of PEA these lands are private lands. This will result in
corporations amassing huge landholdings never before seen in this country - creating the very evil
that the constitutional ban was designed to prevent. This will completely reverse the clear direction
of constitutional development in this country. The 1935 Constitution allowed private corporations to
acquire not more than 1,024 hectares of public lands.
105
The 1973 Constitution prohibited private
corporations from acquiring any kind of public land, and the 1987 Constitution has unequivocally
reiterated this prohibition.
The contention of PEA and AMARI that public lands, once registered under Act No. 496 or PD No.
1529, automatically become private lands is contrary to existing laws. Several laws authorize lands
of the public domain to be registered under the Torrens System or Act No. 496, now PD No. 1529,
without losing their character as public lands. Section 122 of Act No. 496, and Section 103 of PD No.
1529, respectively, provide as follows:
Act No. 496
"Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x x
Government of the Philippine Islands are alienated, granted, or conveyed to persons or
the public or private corporations, the same shall be brought forthwith under the operation
of this Act and shall become registered lands."
PD No. 1529
"Sec. 103. Certificate of Title to Patents. Whenever public land is by the Government
alienated, granted or conveyed to any person, the same shall be brought forthwith under the
operation of this Decree." (Emphasis supplied)
Based on its legislative history, the phrase "conveyed to any person" in Section 103 of PD No. 1529
includes conveyances of public lands to public corporations.
Alienable lands of the public domain "granted, donated, or transferred to a province, municipality, or
branch or subdivision of the Government," as provided in Section 60 of CA No. 141, may be
registered under the Torrens System pursuant to Section 103 of PD No. 1529. Such registration,
however, is expressly subject to the condition in Section 60 of CA No. 141 that the land "shall not be
alienated, encumbered or otherwise disposed of in a manner affecting its title, except when
authorized by Congress." This provision refers to government reclaimed, foreshore and marshy
lands of the public domain that have been titled but still cannot be alienated or encumbered unless
expressly authorized by Congress. The need for legislative authority prevents the registered land of
the public domain from becoming private land that can be disposed of to qualified private parties.
The Revised Administrative Code of 1987 also recognizes that lands of the public domain may be
registered under the Torrens System. Section 48, Chapter 12, Book I of the Code states
"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) x x x
(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)
Thus, private property purchased by the National Government for expansion of a public wharf may
be titled in the name of a government corporation regulating port operations in the country. Private
property purchased by the National Government for expansion of an airport may also be titled in the
name of the government agency tasked to administer the airport. Private property donated to a
municipality for use as a town plaza or public school site may likewise be titled in the name of the
municipality.
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All these properties become properties of the public domain, and if already registered
under Act No. 496 or PD No. 1529, remain registered land. There is no requirement or provision in
any existing law for the de-registration of land from the Torrens System.
Private lands taken by the Government for public use under its power of eminent domain become
unquestionably part of the public domain. Nevertheless, Section 85 of PD No. 1529 authorizes the
Register of Deeds to issue in the name of the National Government new certificates of title covering
such expropriated lands. Section 85 of PD No. 1529 states
"Sec. 85. Land taken by eminent domain. Whenever any registered land, or interest therein,
is expropriated or taken by eminent domain, the National Government, province, city or
municipality, or any other agency or instrumentality exercising such right shall file for
registration in the proper Registry a certified copy of the judgment which shall state definitely
by an adequate description, the particular property or interest expropriated, the number of
the certificate of title, and the nature of the public use. A memorandum of the right or interest
taken shall be made on each certificate of title by the Register of Deeds, and where the fee
simple is taken, a new certificate shall be issued in favor of the National Government,
province, city, municipality, or any other agency or instrumentality exercising such right for
the land so taken. The legal expenses incident to the memorandum of registration or
issuance of a new certificate of title shall be for the account of the authority taking the land or
interest therein." (Emphasis supplied)
Consequently, lands registered under Act No. 496 or PD No. 1529 are not exclusively private or
patrimonial lands. Lands of the public domain may also be registered pursuant to existing laws.
AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the Freedom Islands
or of the lands to be reclaimed from submerged areas of Manila Bay. In the words of AMARI, the
Amended JVA "is not a sale but a joint venture with a stipulation for reimbursement of the original
cost incurred by PEA for the earlier reclamation and construction works performed by the CDCP
under its 1973 contract with the Republic." Whether the Amended JVA is a sale or a joint venture,
the fact remains that the Amended JVA requires PEA to "cause the issuance and delivery of the
certificates of title conveying AMARI's Land Share in the name of AMARI."
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This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which provides that
private corporations "shall not hold such alienable lands of the public domain except by lease." The
transfer of title and ownership to AMARI clearly means that AMARI will "hold" the reclaimed lands
other than by lease. The transfer of title and ownership is a "disposition" of the reclaimed lands, a
transaction considered a sale or alienation under CA No. 141,
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the Government Auditing
Code,
109
and Section 3, Article XII of the 1987 Constitution.
The Regalian doctrine is deeply implanted in our legal system. Foreshore and submerged areas
form part of the public domain and are inalienable. Lands reclaimed from foreshore and submerged
areas also form part of the public domain and are also inalienable, unless converted pursuant to law
into alienable or disposable lands of the public domain. Historically, lands reclaimed by the
government are sui generis, not available for sale to private parties unlike other alienable public
lands. Reclaimed lands retain their inherent potential as areas for public use or public service.
Alienable lands of the public domain, increasingly becoming scarce natural resources, are to be
distributed equitably among our ever-growing population. To insure such equitable distribution, the
1973 and 1987 Constitutions have barred private corporations from acquiring any kind of alienable
land of the public domain. Those who attempt to dispose of inalienable natural resources of the
State, or seek to circumvent the constitutional ban on alienation of lands of the public domain to
private corporations, do so at their own risk.
We can now summarize our conclusions as follows:
1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by
certificates of title in the name of PEA, are alienable lands of the public domain. PEA may
lease these lands to private corporations but may not sell or transfer ownership of these
lands to private corporations. PEA may only sell these lands to Philippine citizens, subject to
the ownership limitations in the 1987 Constitution and existing laws.
2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural
resources of the public domain until classified as alienable or disposable lands open
to disposition and declared no longer needed for public service. The government can
make such classification and declaration only after PEA has reclaimed these
submerged areas. Only then can these lands qualify as agricultural lands of the public
domain, which are the only natural resources the government can alienate. In their
present state, the 592.15 hectares of submerged areas are inalienable and outside the
commerce of man.
3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of
77.34 hectares
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of the Freedom Islands, such transfer is void for being contrary to Section
3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any
kind of alienable land of the public domain.
4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156
hectares
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of still submerged areas of Manila Bay, such transfer is void for being contrary to
Section 2, Article XII of the 1987 Constitution which prohibits the alienation of natural
resources other than agricultural lands of the public domain. PEA may reclaim these
submerged areas. Thereafter, the government can classify the reclaimed lands as alienable
or disposable, and further declare them no longer needed for public service. Still, the transfer
of such reclaimed alienable lands of the public domain to AMARI will be void in view of
Section 3, Article XII of the 1987 Constitution which prohibits private corporations from
acquiring any kind of alienable land of the public domain.
Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution.
Under Article 1409
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of the Civil Code, contracts whose "object or purpose is contrary to law," or
whose "object is outside the commerce of men," are "inexistent and void from the beginning." The
Court must perform its duty to defend and uphold the Constitution, and therefore declares the
Amended J VA null and void ab initio.
Seventh issue: whether the Court is the proper forum to raise the issue of whether the
Amended J VA is grossly disadvantageous to the government.
Considering that the Amended JVA is null and void ab initio, there is no necessity to rule on this last
issue. Besides, the Court is not a trier of facts, and this last issue involves a determination of factual
matters.
WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari Coastal Bay
Development Corporation are PERMANENTLY ENJOINED from implementing the Amended Joint
Venture Agreement which is hereby declared NULL and VOID ab initio.