P R O P E R T Y No.
3 | 1
[No. 28379. March 27, 1929]
THE GOVERNMENT OF THE PHILIPPINE ISLANDS, applicant and
appellant, vs. CONSORCIA CABAÑGIS ET AL., claimants and appellees.
LAND REGISTRATION ; LAND DISAPPEARING INTO SEA; PUBLIC DOMAIN.—
As the lots in question disappeared by natural erosion due to the ebb and flow
of the tide, and as they remained in that condition until reclaimed from the
sea by the filling in done by the Government, they belong to the public domain
for public use. (Aragon vs. Insular Government, 19 Phil., 223; Francisco vs.
Government of the Philippine Islands, 28 Phil., 505.)
APPEAL from a judgment of the Court of First Instance of Manila. Imperial, J.
The facts are stated in the opinion of the court.
Attorney-General Jaranilla, for appellant.
Abad Santos, Camus & Delgado for appellees.
VILLA-REAL, J.:
The Government of the Philippine Islands appeals to this court from the
judgment of the Court of First Instance of Manila in cadastral proceeding No.
373 of the Court of First Instance of Manila, G. L. R. O. Cadastral Record No.
373, adjudicating the title and decreeing the registration of lots Nos. 36, 39
and 40, block 3055 of the cadastral survey of the City of Manila in favor of
Consuelo, Consorcia, Elvira and Tomas, surnamed Cabangis, in equal parts,
and dismissing the claims presented by the Government of the Philippine
Islands and the City of Manila.
In support of its appeal, the appellant assigns the following alleged errors as
committed by the trial court in its judgment, to wit:
“1. The lower court erred in not holding that the lots in question are of
the public domain, the same having been gained from the sea (Manila
Bay) by accession, by fillings made by the Bureau of Public Works and
by the construction of the break-water (built by the Bureau of
Navigation) near the mouth of Vitas Estero.
“2. The lower court erred in holding that the lots in question formed part
of the big parcel of land belonging to the spouses Maximo Cabangis and
Tita Andres, and in holding that these spouses and their successors in
interest have been in continuous, public, peaceful, and uninterrupted
possession of said lots up to the time this case came up.
“3. The lower court erred in holding that said lots existed before, but
that due to the current of the Pasig River and to the action of the big
waves in Manila Bay during south-west monsoons, the same
disappeared.
“4. The lower court erred in adjudicating the registration of the lands in
question in the name of the appellees, and in denying the appellant's
motion for a new trial.”
A preponderance of the evidence in the record which may properly be taken
into consideration in deciding the case, proves the following facts:
Lots 36, 39 and 40, block 3035 of cadastral proceeding No. 71 of the City of
Manila, G. L. R. O. Record No. 373, were formerly a part of a large parcel of
land belonging to the predecessor of the herein claimants and appellees. From
the year 1896 said land began to wear away, due to the action of the waves
of Manila Bay, until the year 1901 when the said lots became completely
submerged in water in ordinary tides, and remained in such a state until 1912
when the Government undertook the dredging of Vitas Estuary in order to
facilitate navigation, depositing all the sand and silt taken from the bed of the
estuary on the low lands which were completely covered with water,
surrounding that belonging to the Philippine Manufacturing Company, thereby
slowly and gradually forming the lots, the subject matter of this proceeding.
Up to the month of February, 1927 nobody had declared lot 39 for the
purposes of taxation, and it was only in the year 1926 that Dr. Pedro Gil, in
behalf of the claimants and appellees, declared lot No. 40 for such purpose.
In view of the facts just stated, as proved by a preponderance of the evidence,
the question arises: Who owns lots 86, 39 and 40 in question?
The claimants-appellees contend that inasmuch as the said lots once formed
a part of a large parcel of land belonging to their predecessors, whom they
succeeded, and their immediate predecessor in interest, Tomas Cabangis,
having taken possession thereof as soon as they were reclaimed, giving his
permission to some fishermen to dry their fishing nets and deposit their bancas
thereon, said lots belong to them.
Article 339, subsection 1, of the Civil Code, reads:
"Art. 339. Property of public ownership is—
"1. That devoted to public use, such as roads, canals, rivers, torrents, ports
and bridges constructed by the State, riverbanks, shores, roadsteads, and that
of a similar character."

* * * * * was private property, became a part of the public domain. The predecessors
* *
Article 1, case 3, of the Law of Waters of August 3, 1866, provides as follows:
"ARTICLE 1. The following are part of the national domain open to public use:
* * * * * article 29 of the aforecited Law of Waters of August 3, 1866, and their failure
* *
"3. The Shores. By the shore is understood that space covered and uncovered
by the movement of the tide. Its interior or terrestrial limit is the line reached
by the highest equinoctial tides. Where the tides are not appreciable, the shore
begins on the land side at the line reached by the sea during ordinary storms
or tempests."
In the case of Aragon vs. Insular Government (19 Phil., 223), with reference
to article 339 of the Civil Code just quoted, this court said:
"We should not be understood, by this decision, to hold that in a case of
gradual encroachment or erosion by the ebb and flow of the tide, private
property may not become 'property of public ownership/ as defined in article
339 of the code, where it appears that the owner has to all intents and
purposes abandoned it and permitted it to be totally destroyed, so as to
become a part of the 'playa' (shore of the sea), 'rada' (roadstead), or the like.
* * *"
In the Enciclopedia Jurídica Española, volume XII, page 558, we read the
following:
"With relative frequency the opposite phenomenon occurs; that is, the sea
advances and private properties are permanently invaded by the waves, and
in this case they become part of the shore or beach. They then pass to the
public domain, but the owner thus dispossessed does not retain any right to
the natural products resulting from their new nature; it is a de facto case of
eminent domain, and not subject to indemnity."
Now then, when said land was reclaimed, did the claimants-appellees. or their
predecessors recover it as their original property?
As we have seen, the land belonging to the predecessors of the herein
claimants-appellees began to wear away in 1896, owing to the gradual erosion
caused by the ebb and flow of the tide, until the year 1901, when the waters
of Manila Bay completely submerged a portion of it, included within lots 36,
39 and 40 here in question, remaining thus under water until reclaimed as a
result of certain work done by the Government in 1912. According to the
above-cited authorities said portion of land, that is, lots 36, 39 and 40, which
P R O P E R T Y No. 3 | 2
of the herein claimants-appellees could have protected their land by building
a retaining wall, with the consent of competent authority, in 1896 when the
waters of the sea began to wear it away, in accordance with the provisions of
to do so until 1901, when a portion of the same became completely covered
by said waters, remaining thus submerged until 1912, constitutes
abandonment.
Now then: The lots under discussion having been reclaimed from the sea as a
result of certain work done by the Government, to whom do they belong?
The answer to this question is found in article 5 of the aforementioned Law of
Waters, which is as follows:
"ART. 5. Lands reclaimed from the sea in consequence of works constructed
by the State, or by the provinces, pueblos, or private persons, with proper
permission, shall become the property of the party constructing such works,
unless otherwise provided by the terms of the grant of authority.”
The fact that from 1912 some fishermen had been drying their fishing nets
and depositing their bancas on lots 36, 39 and 40, by permission of Tomas
Cabangis, does not confer on the latter or his successors the ownership of said
lots, because, as they were converted into public land, no private person could
acquire title thereto except in the form and manner established by the law.
In the case of Buzon vs. Insular Government and City of Manila (13 Phil., 324),
cited by the claimants-appellees, this court, admitting the findings and
holdings of the lower court, said the following:
"If we heed the parol evidence, we find that the seashore was formerly about
one hundred brazas distant from the land in question; that, in the course of
time, and by the removal of a considerable quantity of sand from the shore at
the back of the land for the use of the street car company in filling in Calle
Cervantes, the sea water in ordinary tides now covers part of the land
described in the petition.
"The fact that certain land, not the bed of a river or of the sea, is covered by
sea water during the period of ordinary high tide, is not a reason established
by any law to cause the loss thereof, especially when, as in the present case,
it becomes covered by water owing to circumstances entirely independent of
the will of the owner."

In the case of Director of Lands vs. Aguilar (G. R. No. 22034) , also cited by
1
the claimants-appellees, wherein the Government adduced no evidence in
support of its contention, the lower court said in part:
"The contention of the claimants Cabangis is to the effect that said lots are a
part of the adjoining land adjudicated to their deceased father, Don Tomas
Cabangis, which, for over fifty years had belonged to their deceased
grandmother, Tita Andres, and that, due to certain improvements made in
Manila Bay, the waters of the sea covered a large part of the lots herein
claimed.
"The Government of the Philippine Islands also claims the ownership of said
lots, because, at ordinary high tide, they are covered by the sea.
"Upon petition of the parties, the lower court made an ocular inspection of
said lots on September 12, 1923, and on said inspection found some light
material houses built thereon, and that on that occasion the waters of the sea
did not reach the aforesaid lots.
"From the evidence adduced at the trial of this cause, it may be inferred that
Tita Andres, during her lifetime, was the owner of a rather large parcel of land
which was adjudicated by a decree to her son Tomas Cabangis; the lots now
in question are contiguous to that land and are covered by the waters of the
sea at extraordinary high tide; some 50 years before the sea did not reach
said strip of land, and on it were constructed, for the most part, light material
houses, occupied by the tenants of Tita Andres, to whom they paid rent. Upon
her death, her son Tomas Cabangis succeeded to the possession, and his
children succeeded him, they being the present claimants, Consuelo, Jesus,
Tomas, and Consorcia Cabangis.
"The Government of the Philippine Islands did not adduce any evidence in
support of its contention, with the exception of registry record No. 8147, to
show that the lots here in question were not excluded f rom the application
presented in said proceeding.”
It will be seen that in the case of Buzon vs. Insular Government and City of
Manila, cited above, the rise of the waters of the sea that covered the lands
there in dispute, was due not to the action of the tide but to the fact that a
large quantity of sand was taken from the sea at the side of said land in order
to fill in Cervantes Street, and this court properly held that because of this act,
entirely independent of the will of the owner of said land, the latter could not
lose the ownership thereof, and the mere fact that the waters of the sea
P R O P E R T Y No. 3 | 3
covered it as a result of said act, is not sufficient to convert it into public land,
especially, as the land was high and appropriate for building purposes.
In the case of the Director of Lands vs. Aguilar also cited by the claimants-
appellees, the Insular Government did not present any evidence in support of
its contention,. thus leaving uncontradicted the evidence adduced by the
claimants Aguilar et al., as to the ownership, possession and occupation of
said lots.
In the instant case the evidence shows that from 1896, the waves of Manila
Bay had been gradually and constantly washing away the sand that formed
the lots here in question, until 1901, when the sea water completely covered
them, and thus they remained until the year 1912. In the latter year they were
reclaimed from the sea by filling in with sand and silt extracted from the bed
of Vitas Estuary when the Government dredged said estuary in order to
facilitate navigation. Neither the herein claimants-appellees nor their
predecessors did anything to prevent their destruction.
In conclusion, then, we hold that the lots in question having disappeared on
account of the gradual erosion due to the ebb and flow of the tide, and having
remained in such a state until they were reclaimed from. the sea by the filling
in done by the Government, they are public land. (Aragon vs. Insular
Government, 19 Phil., 223; Francisco vs. Government of the Philippine Islands,
28 Phil., 505.)
By virtue whereof, the judgment appealed from is reversed and lots Nos.
36, 39 and 40 of cadastral proceeding No. 373 of the City of Manila are held
to be public land belonging to the Government of the United States under the
administration and control of the Government of the Philippine Islands. So
ordered.
Johnson, Street, Malcolm, Ostrand, Johns, and Romual-dez, JJ., concur.
Judgment reversed.

No. L-40474. 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.
Municipal corporations; Authority of city council to close city streets and to
vacate or withdraw the same from public use discretionary.—The city council
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.
Property; Property of public dominion withdrawn from public use becomes
patrimonial property.—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.”
Same; Same; Patrimonial property can be the object of an ordinary contract.—
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.
PETITION for review of an order of the Court of First Instance of Cebu.
Bercilles, J.
The facts are stated in the opinion of the Court.
Jose Antonio B. Conde for petitioner.
Acting Solicitor General Hugo E. Gutierrez, Jr., Assistant Solicitor General
Octavio R. Ramirez and Trial Attorney David R. Hilario for respondents.
CONCEPCION, Jr., J.:
P R O P E R T Y No. 3 | 4
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 originally 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 xxx

(34) x x x; 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
P R O P E R T Y No. 3 | 5
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.
Order set aside.
Notes.—a) Extent of legislative control over properties of municipal
corporations.—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 municipal cannot be
deprived of it without due process and payment of just compensation.
(Province of Zamboanga del Norte vs. City of Zamboanga, L-24440, March 28,
1968).
b) Material factors to consider in vacating a street.—Deemed as material
factors which a municipality must consider in deliberating upon the advisability
of closing a street are: “the topography of the property surrounding the street
in the light of ingress and egress to other streets; the relationship of the street
in the road system throughout the subdivision; the problem posed by the ‘dead
end’ of the street; the width of the street; the cost of rebuilding and
maintaining the street as contrasted to its ultimate value to all of the property
in the vicinity; the inconvenience of those visiting the subdivision; and whether
the closing of the street would cut off any property owners from access to a
street.” (Favis vs. City of Baguio, L-29910, April 25, 1969).

[No. 24950. March 25, 1926]
VIUDA DE TAN Toco, plaintiff and appellant, vs. THE MUNICIPAL
COUNCIL OF ILOILO, defendant and appellee.
1. MUNICIPAL CORPORATIONS; EXEMPTION FROM EXECUTION.—The
property of a municipality, whether real or personal, necessary for
governmental purposes cannot be attached and sold at public auction to
satisfy a judgment against the municipality.
2. ID. ; ID. ; PROPERTY EXEMPT.—Auto trucks used by a municipality in
sprinkling its streets, its police patrol automobile, police stations, and
public markets, together with the land on which they stand, are exempt
from execution.
3. ID. ; ID. ; MANDAMUS.—Where after judgment is entered against a
municipality, the latter has no property subject to execution, the
creditor's remedy-for collecting his judgment is mandamus.
APPEAL from a judgment of the Court of First Instance of Iloilo. Salas, J.
The facts are stated in the opinion of the court.
Arroyo & Evangelista, for appellant.
Provincial Fiscal Borromeo Veloso for appellee.
VlLLAMOR, J.:
It appears from the record that the widow of Tan Toco had sued the municipal
council of Iloilo for the amount of P42,966.40, being the purchase price of two
strips of land, one on Calle J. M. Basa consisting of 592 square meters, and
the other on Calle Aldiguer consisting of 59 square meters, which the
municipality of Iloilo had appropriated for widening said street. The Court of
First Instance of Iloilo sentenced the said municipality to pay the plaintiff the
amount so claimed, plus the interest, and the said judgment was on appeal
affirmed by this court.1
On account of lack of funds the municipality of Iloilo was unable to pay the
said judgment, wherefore plaintiff had a writ of execution issue against the
property of the said municipality, by virtue of which the sheriff attached two
auto trucks used for street sprinkling, one police patrol automobile, the police
stations on Mabini street, and in Molo and Mandurriao and the concrete
structures, with the corresponding lots, used as markets by Iloilo, Molo, and
Mandurriao.
P R O P E R T Y No. 3 | 6
After notice of the sale of said property had been made, and a few days bef
ore the sale, the provincial fiscal of Iloilo filed a motion with the Court of First
Instance praying that the attachment on the said property be dissolved, that
the said attachment be declared null and void as being illegal and violative of
the rights of the defendant municipality.
Plaintiff's counsel objected to the fiscal's motion but the court, by order of
August 12, 1925, declared the attachment levied upon the aforementioned
property of the defendant municipality null and void, thereby dissolving the
said attachment.
From this order the plaintiff has appealed by bill of exceptions. The
fundamental question raised by appellant in her four assignments of error is
whether or not the property levied upon is exempt from execution.
The municipal law, section 2165 of the Administrative Code, provides that:
"Municipalities are political bodies corporate, and as such are endowed with
the faculties of municipal corporations, to be exercised by and through their
respective municipal government in conformity with law.
"It shall be competent f or them, in their proper corporate name, to sue and
be sued, to contract and be contracted with, to acquire and hold real and
personal property for municipal purposes, and generally to exercise the powers
hereinafter specified or otherwise conferred upon them by law.”
For the purposes of the matter here in question, the Administrative Code does
not specify the kind of property that a municipality may acquire. However,
article 343 of the Civil Code divides the property of provinces and towns
(municipalities) into property for public use and patrimonial property.
According to article 344 of the same Code, provincial roads and foot-path,
squares, streets, fountains, and public waters, drives and public improvements
of general benefit built at the expense of the said towns or provinces, are
property for public use.
All other property possessed by the said towns and provinces is patrimonial
and shall be subject to the provisions of the Civil Code except as provided by
special laws.
Commenting upon article 344, Mr. Manresa says that "In accordance with
administrative legislation" (Spanish) we must distinguish, as to the patrimonial
property of the towns, "between that of common benefit and that which is
private property of the town. The first differs from property for public use in

that generally its enjoyment is less, as it is limited to neighbors or to a group
or class thereof; and, furthermore, such use, more or less general, is not
intrinsic with this kind of property, for by its very nature it may be enjoyed as
though it were private property. The third group, that is, private property, is
used in the name of the town or province by the entities representing it and,
like any private property, giving a source of revenue.”
Such distinction, however, is of little practical importance in this jurisdiction in
view of the different principles underlying the functions of a municipality under
the American rule. Notwithstanding this, we believe that the principle
governing property of the public domain of the State is applicable to property
for public use of the municipalities as said municipal property is similar in
character. The principle is that the property for public use of the State is not
within the commerce of man and, consequently, is inalienable and not subject
to prescription. Likewise, property for public use of the municipality is not
within the commerce of man so long as it is used by the public and,
consequently, said property is also inalienable.
The American Law is more explicit about this matter as expounded by McQuillin
in Municipal Corporations, volume 3, paragraph 1160, where he says that:
"State statutes often provide that court houses, jails and other buildings owned
by municipalities and the lots on which they stand shall be exempt from
attachment and execution. But independent of express statutory exemption,
as a general proposition, property, real and personal, held by municipal
corporations, in trust for the benefit of their inhabitants, and used for public
purposes, is exempt.
"For example, public buildings, school houses, streets, squares, parks,
wharves, engines and engine houses, and the like, are not subject to
execution. So city waterworks, and a stock of liquors carried in a town
dispensary, are exempt. The reason for the exemption is obvious. Municipal
cor-porations are created for public purposes and for the good of the citizens
in their aggregate or public capacity. That they may properly discharge such
public functions corporate property and revenues are essential, and to deny
them these means the very purpose of their creation would be materially
impeded, and in some instances practically destroy it. Respecting this subject
the Supreme Court of Louisiana remarked: 'On the first view of this question
there is something very repugnant to the moral sense in the idea that a
municipal corporation should contract debts, and that, having no resources
but the taxes which are due to it, these should not be subjected by legal
process to the satisfaction of its creditors. This consideration, deduced from
the principles of moral equity has only given way to the more enlarged
P R O P E R T Y No. 3 | 7
contemplation of the great and paramount interests of public order and the
principles of government.’
"It is generally held that property owned by a municipality, where not used for
a public purpose but for quasi private purposes, is subject to execution on a
judgment against the municipality, and may be sold. This rule applies to shares
of stock owned by a municipal corporation, and the like. But the mere fact that
corporate property held for public uses is being temporarily used for private
purposes does not make it subject to execution.
"If municipal property exempt from execution is destroyed, the insurance
money stands in lieu thereof and is also exempt.
"The members or inhabitants of a municipal corporation proper are not
personally liable for the debts of the municipality, except that in the New
England States the individual liability of the inhabitant is generally maintained.”
In Corpus Juris, vol 23, page 355, the following is found:
"Where property of a municipal or other public corporation is sought to be
subjected to execution to satisfy judgments recovered against such
corporation, the question as to whether such property is leviable or not is to
be determined by the usage and purposes for which it is held. The rule is that
property held for public uses, such as public buildings, streets, squares, parks,
promenades, wharves, landing places, fire engines, hose and hose carriages,
engine houses, public markets, hospitals, cemeteries, and generally everything
held for governmental purposes, is not subject to levy and sale under
execution against such corporation. The rule also applies to funds in the hands
of a public officer. Likewise it has been held that taxes due to a municipal
corporation or county cannot be seized under execution by a creditor of such
corporation. But where a municipal corporation or county owns in its
proprietary, as distinguished from its public or governmental capacity, property
not useful or used for a public purpose but for quasi private purposes, the
general rule is that such property may be seized and sold under execution
against the corporation, precisely as similar property of individuals is seized
and sold. But property held for public purposes is not subject to execution
merely because it is temporarily used for private purposes, although if the
public use is wholly abandoned it becomes subject to execution. Whether or
not property held as public property is necessary for the public use is a political,
rather than a judicial question.”
In the case of City of New Orleans vs. Louisiana Construction Co., Ltd. (140 U.
S., 654; 35 Law. ed., 556), it was held that a wharf for unloading sugar and

molasses, open to the public, was property for the public use of the City of
New Orleans and was not subject to attachment for the payment of the debts
of the said city.
In that case it was proven that the said wharf was a parcel of land adjacent to
the Mississippi River where all shipments of sugar and molasses taken to New
Orleans were unloaded.
That city leased the said wharf to the Louisiana Construction Company, Ltd.,
in order that it might erect warehouses so that the merchandise upon
discharge might not be spoiled by the elements. The said company was given
the privilege of charging certain fees for storing merchandise in the said
warehouses and the public in general had the right to unload sugar and
molasses there by paying the required fees, 10 per cent of which was turned
over to the city treasury.
The United States Supreme Court on an appeal held that the wharf was public
property, that it never ceased to be such in order, to become private property
of the city; wherefore the company could not levy execution upon the wharf
in order to collect the amount of the judgment rendered in favor thereof.
In the case of Klein vs. City of New Orleans (98 U. S., 149; 25 Law. ed., 430),
the Supreme Court of the United States held that a public wharf on the banks
of the Mississippi River was public property and not subject to execution for
the payment of a debt of the City of New Orleans where said wharf was
located.
In this case a parcel of land adjacent to the Mississippi River, which formerly
was the shore of the river and which later enlarged itself by accession, was
converted into a wharf by the city for public use, who charged a certain fee
for its use.
It was held that that land was public property as necessary as a public street
and was not subject to execution on account of the debts of the city. It was
further held that the fees collected were also exempt from execution because
they were a part of the income of the city.
In the case of Tufexis vs. Olaguera and Municipal Council of Guinobatan (32
Phil., 654), the question raised was whether for the payment of a debt to a
third person by the concessionaire of a public market, the said public market
could be attached and sold at public auction. The Supreme Court held that:
"Even though a creditor is unquestionably entitled to recover out of his debtor's
property, yet when among such property there is included the special right
P R O P E R T Y No. 3 | 8
granted by the Government of usufruct in a building intended for a public
service, and when this privilege is closely related to a service of a public
character, such right of the creditor to the collection of a debt owed him by
the debtor who enjoys the said special privilege of usufruct in a public market
is not absolute and may be exercised only through the action of a court of
justice with respect to the profits or revenue obtained under the special right
of usufruct enjoyed by debtor.
"The special concession of the right of usufruct in a public market cannot be
attached like any ordinary right, because that would be to permit a person
who has contracted with the state or with the administrative officials thereof
to conduct and manage a service of a public character, to be substituted,
without the knowledge and consent of the administrative authorities, by one
who took no part in the contract, thus giving rise to the possibility of' the
regular course of a public service being disturbed by the more or less legal
action of a grantee, to the prejudice of the state and the public interests.
"The privilege or franchise granted to a private person to enjoy the usufruct
of a public market cannot lawfully be attached and sold, and a creditor of such
person can recover his debt only out of the income or revenue obtained by the
debtor from the enjoyment or usufruct of the said privilege, in the same
manner that the rights of the creditors of a railroad company can be exercised
and their credit collected only out of the gross receipts remaining after
deduction has been made therefrom 'of the operating expenses of the road.
(Law of November 12, 1869, extended to the overseas provinces by the royal
order of August 3, 1886.)”
For the reasons contained in the authorities above quoted we believe that this
court would have reached the same conclusion if the debtor had been the
municipality of Guinobatan and the public market had been levied upon by
virtue of the execution.
It is evident that the movable and immovable property of a municipality,
necessary for governmental purposes, may not be attached and sold for the
payment of a judgment against the municipality. The supreme reason f or this
rule is the character of the public use to which such kind of property is devoted.
The necessity for government service justifies that the property of public use
of the municipality be exempt from execution just as it is necessary to exempt
certain property of private individuals in accordance with section 452 of the
Code of Civil Procedure.
Even the municipal income, according to the above quoted authorities, is
exempt from levy and execution. In volume 1, page 467, Municipal
Corporations by Dillon we find that:
 P R O P E R T Y No. 3 | 9

"Municipal corporations are instituted by the supreme authority of a state for

the public good. They exercise, by delegation from the legislature, a portion
of the sovereign power. The main object of their creation is to act as
administrative agencies for the state, and to provide for the police and local
government of certain designated civil divisions of its territory. To this end
they are invested with certain governmental powers and charged with civil,
political, and municipal duties. To enable them beneficially to exercise these
powers and discharge these duties, they are clothed with the authority to raise
revenues, chiefly by taxation, and subordinately by other modes, as by
licenses, fines, and penalties. The revenue of the public corporation is the
essential means by which it is enabled to perform its appointed work. Deprived
of its regular and adequate supply of revenue, such a corporation is practically
destroyed, and the ends of its erection thwarted. Based upon considerations
of this character, it is the settled doctrine of the law that not only the public-
property but also the taxes and public revenues of such corporations cannot
be seized under execution against them, either in the treasury or when in
transit to it. Judgments rendered for taxes, and the proceeds of such
judgments in the hands of officers of the law, are not subject to execution
unless so declared by statute. The doctrine of the inviolability of the public
revenues by the creditor is maintained, although the corporation is in debt,
and has no means of payment but the taxes which it is authorized to collect.”

Another error assigned by counsel for appellant is the holding of the court a
quo that the proper remedy for collecting the judgment in favor of the plaintiff
was by way of mandamus.

While this question is not necessarily included in the one which is the subject
of this appeal, yet we believe that the holding of the trial court, assigned as
error by appellant's counsel, is true when, after a judgment is rendered against
a municipality, it has no property subject to execution. This doctrine is
maintained by Dillon (Municipal Corporations, vol. 4, par. 1507, 5th ed.) based
upon the decisions of several States ,of the Union upholding the same principle
and which are cited on page 2679 of the aforesaid work. In this sense this
assignment of error, we believe, is groundless.

By virtue of all the foregoing, the judgment appealed from should be and
is hereby affirmed with costs against the appellant. So ordered.
Avanceña, C. J., Street, Malcolm, Ostrand, Johns, Romualdez, and Villa-Real,
JJ., concur.

Judgment affirmed.

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.
Civil law; Property; Municipal corporations; Presumption where manner
of acquisition of land by municipality not shown. —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. In the absence of 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).
Same; Same; Same; Ownership of communal lands belongs to the
State.—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).
Same; Same; Same; Rule as to ownership of land in possession of
municipality.—It may 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 iv trust for the State for the benefit of its inhabitants, whether
it be for governmental or proprietary purposes. It holds such lands Rubiect 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
P R O P E R T Y No. 3 | 10
work, the municipality being but a subdivision or instrumentality thereof for
purposes of local administration.
Constitutional Law; Separation of powers; Legislative classification of
land not subject to judicial review.—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.
Constitutional law; Statutes; Presumption of constitutionality of
statutes.—It is now well established that the presumption is always in favor of
the constitutionality of a law. 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.
Municipal corporations; City of Manila; No presumption of State grant of
ownership to municipality where land remained idle.—Since the City of Manila
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 may
be acquiesced in to justify the claim that it is its own private or patrimonial
property.
Constitutional law; Eminent domain; City of Manila; Republic Act 4118
merely confirmed character of property in possession of the City of Manila. —
Republic Act 4118 was never intended to expropriate the properly 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 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 but simply as a manifestation of
its right and power to deal with state property.
PETITION FOR REVIEW by certiorari of a decision of the Court of First
Instance of Manila.
The facts are stated in the opinion of the Court.
Solicitor General Felix V. Makasiar, Assistant Solicitor General Antonio A.
Torres, Solicitor Raul L Gocoand 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.:
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
Manila, containing an area of 9,680.8 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 kind. 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 (T.C.T,) 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, 1980, the Municipal Board of Manila, presided by then Vice-
Mayor Antonio 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
P R O P E R T Y No. 3 | 11
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 Municipal 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
Yñiguez as House Bill No. 1453, with the following explanatory note:
“The accompanying bill seeks to convert one (1) parcel of land in the district
of Malate, which is reserved as communal property into a disposable or
alienable property of the State and to provide its subdivision and sale to bona
fide occupants or tenants.
“This parcel of land in question was originally an aggregate part of a piece of
land with an area of 9,689.8 square meters, more or less, x x x 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 recalled 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 bill is approved on second reading after
several Senators said aye and nobody said nay.”
P R O P E R T Y No. 3 | 12
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 1-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 mto disposal or alienable land of the State, to
be placed under ihe 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 fideoccupants. 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, wMch 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 in 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 attd 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 m 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
P R O P E R T Y No. 3 | 13
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 al-loted 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:
P R O P E R T Y No. 3 | 14
“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 praperty 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:
‘x x x 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 Ley es 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
P R O P E R T Y No. 3 | 15
ultimate title remained in the sovereign (City of Manila vs. Insular
Government, 10 Phil 827).
“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 which 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, x x x.” (Municipality of Catbalo-gan vs. Director of Lands, 17
Phil. 216, 220) (Italics 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:
“x x x 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 xxx. 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, 25 111. 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
P R O P E R T Y No. 3 | 16
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) [Italics 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 V3.
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.
P R O P E R T Y No. 3 | 17
It should be emphasized that the law assailed was enacted upon formal written
petition of the Municipal Board o£ 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
‘Viii 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, J., did not take part.
Makasiar, J., took no part.
Decision reversed.
Notes.—Test as to the extent of legislative control aver properties of the
municipalities. If the property is owned by the municipality in its public and
governmental capacity, the property is public and Congress has absolute
 P R O P E R T Y No. 3 | 18
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. Province of Zamboanga del Norte vs. City of Zamboanga, L-
24440, March 28, 1968, 22 SCRA 1334.

Classification of properties of public corporations.—Articles 423 and 424 of the

Civil Code classify property of provinces, cities, and municipalities into property
for public use and patrimonial property. Property for public U3e consists of
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 the Code, without prejudice to the
provisions of special laws.

No. L-61744. June 25, 1984. *
MUNICIPALITY OF SAN MIGUEL, BULACAN,
petitioner, vs. HONORABLE OSCAR C. FERNANDEZ, in his capacity as
the Presiding Judge, Branch IV, Baliuag, Bulacan, The PROVINCIAL
SHERIFF of Bulacan, MARGARITA D. VDA. DE IMPERIO, ADORACION
IMPERIO, RODOLFO IMPERIO, CONRADO IMPERIO, ERNESTO
IMPERIO, ALFREDO IMPERIO, CARLOS IMPERIO, JR., JUAN
IMPERIO and SPOUSES MARCELO PINEDA and LUCILA PONGCO,
respondents.
Political Law; Municipal Corporations; Execution; Rule that public funds not
subject to levy and execution; Municipal funds in possession of provincial and
municipal treasurers are public funds exempt from execution; Reason.—Well
settled is the rule that public funds are not subject to levy and execution. The
reason for this was explained in the case of Municipality of Paoay vs. Manaois,
86 Phil. 629 “that they are held in trust for the people, intended and used for
the accomplishment of the purposes for which municipal corporations are
created, and that to subject said properties and public funds to execution
would materially impede, even defeat and in some instances destroy said
purpose.” And, in Tantoco vs. Municipal Council of Iloilo, 49 Phil. 52, it was
held that “it is the settled doctrine of the law that not only the public property
but also the taxes and public revenues of such corporations cannot be seized
under execution against them, either in the treasury or when in transit to it.
Judgments rendered for taxes, and the proceeds of such judgments in the
hands of officers of the law, are not subject to execution unless so declared
by statute.” Thus, it is clear that all the funds of petitioner municipality in the
possession of the Municipal Treasurer of San Miguel, as well as those in the
possession of the Provincial Treasurer of Bulacan, are also public funds and as
such they are exempt from execution.
Same; Same; Same; Same; Appropriation in the form of an ordinance passed
by the Sangguniang Bayan, necessary before any money of a municipality may
be paid out.—Otherwise stated, there must be a corresponding appropriation
in the form of an ordinance duly passed by the Sangguniang Bayan before any
money of the municipality may be paid out. In the case at bar, it has not been
shown that the Sangguniang Bayan has passed an ordinance to this effect.
Same; Same; Procedure for enforcement of money judgment under Sec. 15,
Rule 39, Rules of Court, to be followed before public funds may be paid out.—
Furthermore, Section 15, Rule 39 of the New Rules of Court, outlines the
procedure for the enforcement of money judgment: “(a) By levying on all the
property of the debtor, whether real or personal, not otherwise exempt from
execution, or only on such part of the property as is sufficient to satisfy the
P R O P E R T Y No. 3 | 19
judgment and accruing cost, if he has more than sufficient property for the
purpose; (b) By selling the property levied upon; (c) By paying the judgment-
creditor so much of the proceeds as will satisfy the judgment and accruing
costs; and (d) By delivering to the judgment-debtor the excess, if any, unless
otherwise directed by judgment or order of the court.”
PETITION to review the order of the Court of First Instance of Baliuag,
Bulacan. Fernandez, J.
The facts are stated in the opinion of the Court.
Pascual C. Liatchko for petitioner.
The Solicitor General and Marcelo Pineda for respondents.
RELOVA, J.:
In Civil Case No. 604-B, entitled “Margarita D. Vda. de Imperio, et al. vs.
Municipal Government of San Miguel, Bulacan, et al.”, the then Court of First
Instance of Bulacan, on April 28, 1978, rendered judgment holding herein
petitioner municipality liable to private respondents, as follows:
“WHEREFORE, premises considered, judgment is hereby rendered in favor of
the plaintiffs and against the defendant Municipal Government of San Miguel,
Bulacan, represented by Mayor Mar Marcelo G. Aure and its Municipal
Treasurer:
“1.ordering the partial revocation of the Deed of Donation signed by
the deceased Carlos Imperio in favor of the Municipality of San Miguel,
Bulacan, dated October 27, 1947 insofar as Lots Nos. 1, 2, 3, 4 and 5,
Block 11 of Subdivision Plan Psd-20831 are concerned, with an
aggregate total area of 4,646 square meters, which lots are among
those covered and described under TCT No. T-1831 of the Register of
Deeds of Bulacan in the name of the Municipal Government of San
Miguel, Bulacan,
“2.ordering the defendant to execute the corresponding Deed of
Reconveyance over the aforementioned five lots in favor of the
plaintiffs in the proportion of the undivided one-half (½) share in the
name of plaintiffs Margarita D. Vda. de Imperio, Adoracion, Rodolfo,
Conrado, Ernesto, Alfredo, Carlos, Jr. and Juan, all surnamed Imperio,
and the remaining undivided one-half (½) share in favor of plaintiff-
spouses Marcelo E. Pineda and Lucila Pongco;

“3.ordering the defendant municipality to pay to the plaintiffs in the
proportion mentioned in the immediately preceding paragraph the
sum of P64,440.00 corresponding to the rentals it has collected from
the occupants for their use and occupation of the premises from 1970
up to and including 1975, plus interest thereon at the legal rate from
January 1970 until fully paid;
“4.ordering the restoration of ownership and possession over the five
lots in question in favor of the plaintiffs in the same proportion
aforementioned;
“5.ordering the defendant to pay the plaintiffs the sum of P3,000.00
for attorney’s fees; and to pay the cost of suit.
“The counterclaim of the defendant is hereby ordered dismissed for
lack of evidence presented to substantiate the same.
“SO ORDERED.” (pp. 11-12, Rollo)
The foregoing judgment became final when herein petitioner’s appeal was
dismissed due to its failure to file the record on appeal on time. The dismissal
was affirmed by the then Court of Appeals in CA-G.R. No. SP-12118 and by
this Court in G.R. No. 59938. Thereafter, herein private respondents moved
for issuance of a writ of execution for the satisfaction of the judgment.
Respondent judge, on July 27, 1982, issued an order, to wit:
“Considering that an entry of judgment had already been made on June 14,
1982 in G.R. No. L-59938 and;
“Considering further that there is no opposition to plaintiffs’ motion for
execution dated July 23, 1983;
“Let a writ of execution be so issued, as prayed for in the aforestated motion.”
(p. 10, Rollo)
Petitioner, on July 30, 1982, filed a Motion to Quash the writ of execution on
the ground that the municipality’s property or funds are all public funds exempt
from execution. The said motion to quash was, however, denied by the
respondent judge in an order dated August 23, 1982 and the alias writ of
execution stands in full force and effect.
On September 13, 1982, respondent judge issued an order which in part,
states:
“It is clear and evident from the foregoing that defendant has more than
enough funds to meet its judgment obligation. Municipal Treasurer Miguel C.
P R O P E R T Y No. 3 | 20
Roura of San Miguel, Bulacan and Provincial Treasurer of Bulacan Agustin O.
Talavera are therefor hereby ordered to comply with the money judgment
rendered by Judge Agustin C. Bagasao against said municipality. In like
manner, the municipal authorities of San Miguel, Bulacan are likewise ordered
to desist from plaintiffs’ legal possession of the property already returned to
plaintiffs by virtue of the alias writ of execution.
“Finally, defendants are hereby given an inextendible period of ten (10) days
from receipt of a copy of this order by the Office of the Provincial Fiscal of
Bulacan within which to submit their written compliance.” (p. 24, Rollo)
When the treasurers (provincial and municipal) failed to comply with the order
of September 13, 1982, respondent judge issued an order for their arrest and
that they will be released only upon compliance thereof.
Hence, the present petition on the issue whether the funds of the Municipality
of San Miguel, Bulacan, in the hands of the provincial and municipal treasurers
of Bulacan and San Miguel, respectively, are public funds which are exempt
from execution for the satisfaction of the money judgment in Civil Case No.
604-B.
Well settled is the rule that public funds are not subject to levy and execution.
The reason for this was explained in the case of Municipality of Paoay vs.
Manaois, 86 Phil. 629“that they are held in trust for the people, intended and
used for the accomplishment of the purposes for which municipal corporations
are created, and that to subject said properties and public funds to execution
would materially impede, even defeat and in some instances destroy said
purpose.” And, in Tantoco vs. Municipal Council of Iloilo, 49 Phil. 52, it was
held that “it is the settled doctrine of the law that not only the public property
but also the taxes and public revenues of such corporations cannot be seized
under execution against them, either in the treasury or when in transit to it.
Judgments rendered for taxes, and the proceeds of such judgments in the
hands of officers of the law, are not subject to execution unless so declared
by statute.” Thus, it is clear that all the funds of petitioner municipality in the
possession of the Municipal Treasurer of San Miguel, as well as those in the
possession of the Provincial Treasurer of Bulacan, are also public funds and as
such they are exempt from execution.
Besides, Presidential Decree No. 477, known as “The Decree on Local Fiscal
Administration”, Section 2 (a), provides:
“SEC. 2. Fundamental Principles.—Local government financial affairs,
transactions, and operations shall be governed by the fundamental principles
set forth hereunder:
 P R O P E R T Y No. 3 | 21

“(a) No money shall be paid out of the treasury except in pursuance of a
lawful appropriation or other specific statutory authority.
xxx xxx xxx
Otherwise stated, there must be a corresponding appropriation in the form of
an ordinance duly passed by the Sangguniang Bayan before any money of the
municipality may be paid out. In the case at bar, it has not been shown that
the Sangguniang Bayan has passed an ordinance to this effect.
Furthermore, Section 15, Rule 39 of the New Rules of Court, outlines the
procedure for the enforcement of money judgment:
Notes.—Possession of public lands, however long never confers upon the
possession, unless the occupant can prove occupation of the same under claim
of ownership for the required period to constitute a grant from the State.
(Republic vs. Vera, 120 SCRA 210.)
Exception to rule that public lands may be acquired by prescription is not
applicable in the absence of conclusive showing of continuous possession and
occupancy of public land under claim of ownership. Presumptive grant from
the State is not applicable as possession is not exclusive and notorious.
(Municipality of Santiago, Isabela vs. Court of Appeals, 120 SCRA 734.)

“(a)By levying on all the property of the debtor, whether real or

personal, not otherwise exempt from execution, or only on such part
of the property as is sufficient to satisfy the judgment and accruing
cost, if he has more than sufficient property for the purpose;

“(b)By selling the property levied upon;

“(c)By paying the judgment-creditor so much of the proceeds as will

satisfy the judgment and accruing costs; and

“(d) By delivering to the judgment-debtor the excess, if any, unless

otherwise directed by judgment or order of the court.”

The foregoing has not been followed in the case at bar.

ACCORDINGLY, the petition is granted and the order of respondent judge,

dated July 27, 1982, granting issuance of a writ of execution; the alias writ of
execution, dated July 27, 1982; and the order of respondent judge, dated
September 13, 1982, directing the Provincial Treasurer of Bulacan and the
Municipal Treasurer of San Miguel, Bulacan to comply with the money
judgments, are SET ASIDE; and respondents are hereby enjoined from
implementing the writ of execution.
SO ORDERED.

Teehankee,(Chairman), Melencio-Herrera, Plana, Gutierrez, Jr., and De la

Fuente, JJ., concur.

Petition granted and order set aside.


No. L-24440. March 28, 1968.
THE PROVINCE OF ZAMBOANGA DEL NORTE, plaintiff-
appellee, vs. CITY OF ZAMBOANGA, SECRETARY OF FI-NANCE and
COMMISSIONER OF INTERNAL REVENUE, defendants-appellants.
Municipal corporations; Test as to the extent of legislative control over
properties of the municipalities.—If the property is owned by the municipality
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.
Same; Properties; Classification under the Civil Code. —Articles 423 and
424 of the Civil Code classify property of provinces, cities, and municipalities
into property for public use and patrimonial property. Property for public use
consists of 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.
Municipal corporations; Properties; Law on municipal corporation.—
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 . Und er t his n or m, to be consi
dered p it is enough that the property be held and devoted for governmental
purposes like local administration, public education, public health, etc.
Same; Same; Rep. Act 3039, validity of.—Republic Act 3039 which
provides that all buildings, properties and assets belonging to the former
province of Zamboanga, and located within the City of Zamboanga, are
transferred to Zamboanga City free of charge, is valid insofar as it affects 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
they are, therefore, subject to the absolute control of Congress.
Same; Same; Lots adjoining public schools partake of the nature of the
same.—The eight lots which are adjoining each other, and in turn are between
two lots wherein the Burleigh Schools, are built, constitute the appurtenant
grounds of the said Burleigh Schools, and partake of the nature of the same.
P R O P E R T Y No. 3 | 22
Same; Same; Buildings which were erected by the national government,
using national fund, can very well be disposed of by Congress in the same
manner that it did with the lots in question. —Buildings built on lots which are
public in nature follow the classification of the lots on which they are built.
Moreover, said buildings, then 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.
Same; Same; Same; Republic Act 3039; Effect on patrimonial project.—
Republic Act 3039 cannot be applied to deprive Zamboanga del Norte of its
share in the value of the rest of the 26 lots which are patrimonial properties
since they are not being utilized for distinctly governmenta l purposes.
Moreover, the fact that they are registered strengthens the proposition that
they are truly private in nature.
Municipal Corporations; Properties; Principles under Law of Municipal
Corporations considered "special laws"—Under the provisions of Art. 424 of
the Civil Code, 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.
Same; Action; Laches.—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 f ixed the
value of the properties in question. While in 1951, the Cabinet resolved to
transfer said properties practically for free to Zamboanga City, a
reconsideration thereof was reasonably 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.
Same; Claim cannot be paid in lump sum.—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 clearly shows that the relief sought was merely the
continuance of the quarterly payment 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.
APPEAL from a decision of the Court of First Instance Zamboanga del Norte.
The facts are stated in the opinion of the Court.
Fortugaleza, Lood, Sarmiento, M. T. Yap & Associatefor plaintiff-
appellee.
Solicitor General for def endants-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, said properties were being utilized
as follows —
No. of Lots Use
1 ................................................ Capitol Site
3 ................................................ School Site
3 ................................................ Hospital Site
P R O P E R T Y No. 3 | 23
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. 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.
P R O P E R T Y No. 3 | 24
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:
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 the ejusdem
generis rule, such public works must be for free and indiscriminate use by
anyone, just like the preceding enumerated properties in the first paragraph
of Art 424. 7 The playgrounds, however, would fit into this category.
This was the norm applied by the lower court. And it cannot be said that its
actuation was without jurisprudential precedent for in Municipality of
Catbalogan v. Director of Lands, 8 and in Municipality of Tacloban v. Director
P R O P E R T Y No. 3 | 25
of Lands, it was held that the capitol site and the school sites in municipalities
9
constitute their patrimonial properties. This result is understandable because,
unlike in the classification regarding State properties, properties for public
service in the municipalities are not classified as public. Assuming then the
Civil Code classification to be the chosen norm, the lower court must be
affirmed except with regard to the two (2) lots used as playgrounds.
On the other hand, applying the norm obtaining under the principles
constituting the law of Municipal Corporations, all those of the 50 properties
in question which are devoted to public service are deemed public; the rest
remain patrimonial. Under this norm, to be considered public, it is enough that
the property be held and, devoted for governmental purposes like local
administration, public education, public health, etc. 10
Supporting jurisprudence are found in the following cases: (1) HINUNANGAN
V. DIRECTOR OF LANDS, 11where it was stated that "... where the municipality
has occupied 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
Numbe Lot Number Use
r
 P R O P E R T Y No. 3 | 26
................................... ................................... ................................... ...................................
2200 4-B Capitol Site 5570 171-A Burleigh
... ... ... ...
................................... ................................... ................................... ...................................
2816 149 School Site 5571 172-C Burleigh
... ... ... ...
................................... ................................... Hospital ................................... ...................................
3281 1224 5572 174 Burleigh
... ... Site ... ...
................................... ................................... Hospital ................................... ...................................
3282 1226 5573 178 Burleigh
... ... Site ... ...
................................... ................................... Hospital ................................... ...................................
3283 1225 5585 171-B Burleigh
... ... Site ... ...
................................... 434-A- ................................... ................................... ...................................
3748 School Site 5586 173 Burleigh
... 1 ... ... ...
................................... ................................... ................................... ...................................
5406 171 School Site 5587 172-A Burleigh
... ... ... ...
High
................................... ................................... School
5564 168
... ... Play- We noticed that the eight Burleigh lots above described are adjoining each
ground other and in turn are between the two lots wherein the Burleigh schools are
................................... 157 & ................................... Trade built, as per records appearing herein and in the Bureau of Lands. Hence, there
5567 is sufficient basis for holding that said eight lots constitute the appurtenant
... 158 ... School
High grounds of the Burleigh schools, and partake of the nature of the same.
................................... ................................... School
5583 167 Regarding the several buildings existing on the lots above-mentioned, the
... ... Play-
ground records do not disclose whether they were constructed at the expense of the
former Province of Zamboanga. Considering however the fact that said
................................... (O.C.T. ................................... Curuan
6181 buildings must have been erected even before 1936 when Commonwealth Act
... ) ... School
39 was enacted and the further fact that provinces then had no power to
................................... ................................... Leprosariu authorize construction of buildings such as those in the case at bar at their
11942 926
... ... m own expense, 14 it can be assumed that said buildings were erected by the
................................... ................................... Leprosariu National Government, using national funds. Hence, Congress could very well
11943 927
... ... m dispose of said buildings in the same manner that it did with the lots in
................................... ................................... Leprosariu question.
11944 925
... ... m
................................... ................................... Burleigh But even assuming that provincial funds were used, still the buildings
5557 170 constitute mere accessories to the lands, which are public in nature , and so,
... ... School
they follow the nature of said lands, i.e., public. Moreover, said buildings,
................................... ................................... Burleigh
5562 180 though located in the city, will not be for the exclusive use and benefit of city
... ... School
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
5565 172-B Burleigh
... ... 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 NumberLot NumberU s Civil Code classification in this particular case.
e5577 ......................................177 ......................................Mydro,
Magay13198 ......................................127-0 ......................................San
Roque5569 ......................................169 ......................................Burleigh
15
5558 ......................................175 ......................................Vacant5559 .
.....................................188 ......................................"5560 ......................
................183 ......................................"5561 ......................................18
6 ......................................"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
P R O P E R T Y No. 3 | 27
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
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
 P R O P E R T Y No. 3 | 28
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, JJ., concur.
Concepcion, C.J., is on leave.

No. L-61311. September 21,1987. *
FELICIDAD VILLANUEVA, FERNANDO CAISIP, ANTONIO LIANG,
FELINA MIRANDA, RICARDO PUNO, FLORENCIO LAXA, and RENE
OCAMPO, petitioners, vs. HON. MARIANO CASTAÑEDA, JR.,
Presiding Judge of the Court of First Instance of Pampanga, Branch
III, VICENTE A. MACALINO, Officer-in-Charge, Office of the Mayor,
San Fernando, Pampanga, respondents.
Property; Place occupied by petitioner found to be a public plaza.—There is no
question that the place occupied by the peti tioners and from which they are
sought to be evicted is a public plaza, as found by the trial court in Civil Case
No. 2040. This finding was made after consideration of the antecedent facts
as especially established by the testimony of former San Fernando Mayor
Rodolfo Hizon, who later became governor of Pampanga, that the National
Planning Commission had reserved the area for a public plaza as early as 1951.
This intention was reiterated in 1964 through the adoption of Resolution No.
29.
Same; Same; Lease; It is elementary that a public plaza is beyond the
commerce of man, lease thereon is null and void—A public plaza is beyond the
commerce of man and so cannot be the subject of lease or any other
contractual undertaking. This is elementary. Indeed, this point was settled as
early as in Municipality of Cavite v. Rojas, decided in 1915, where the Court
declared as null and void the lease of a public plaza of the said municipality in
favor of a private person.
Same; Same; Same; Same; Petitioners had no right to occupy the disputed
premises by invoking lease contracts.—Applying this wellsettled doctrine, we
rule that the petitioners had no right in the first place to occupy the disputed
premises and cannot insist in remaining there now on the strength of their
alleged lease contracts. They should have realized and accepted this earlier,
considering that even before Civil Case No. 2040 was decided, the municipal
council of San Fernando had already adopted Resolution No. 29, series of
1964, declaring the area as the parking place and public plaza of the
municipality.
Same; Same; Same; Same; Same; Mayor has duty to clear the area and
restore it as a parking place and public plaza; No whimsical action was taken
in the demolition of the stalls.—It is the decision in Civil Case No. 2040 and
the said resolution of the municipal council of San Fernando that respondent
Macalino was seeking to enforce when he ordered the demolition of the stalls
constructed in the disputed area. As officer-in-charge of the office of the
mayor, he had the duty to clear the area and restore it to its intended use as
a parking place and public plaza of the municipality of San Fernando,
conformably to the aforementioned orders from the court and the council. It
is, therefore, not correct to say that he had acted without authority or taken
the law into his hands in issuing his order. Neither can it be said that he acted
P R O P E R T Y No. 3 | 29
whimsically in exercising his authority for it has been established that he
directed the demolition of the stalls only after, upon his instructions, the
municipal attorney had conducted an investigation, to look into the complaint
filed by the Association of Concerned Citizens and Consumers of San Fernando.
There is evidence that the petitioners were notified of this hearing, which they
chose to disregard. Photographs of the disputed area, which does look
congested and ugly, show that the complaint was valid and that the area really
needed to be cleared, as recommended by the municipal attorney. The Court
observes that even without such investigation and recommendation, the
respondent mayor was justified in ordering the area cleared on the strength
alone of its status as a public plaza as declared by the judicial and legislative
authorities. In calling first for the investigation (which the petitioner saw fit to
boycott), he was just scrupulously paying deference to the requirements of
due process, to remove all taint of arbitrariness in the action he was called
upon to take.
Constitutional Law; Police Power was validly exercised in this case. —The
problems caused by the usurpation of the place by the petitioners are covered
by the police power as delegated to the municipality under the general welfare
clause. This authorizes the municipal council "to enact such ordinances and
make such regulations, not repugnant to law, as may be necessary to carry
into effect and discharge the powers and duties conferred upon it by law and
such as shall seem necessary and proper to provide for the health and safety,
promote the prosperity, improve the morals, peace, good order, comfort, and
convenience of the municipality and the inhabitants thereof, and for the
protection of property therein." This authority was validly exercised in this case
through the adoption of Resolution No. 29, series of 1964, by the municipal
council of San Fernando.
Same; Same; Rule that police power cannot be surrendered or bargained away
through the medium of a contract is settled—Even assuming a valid lease of
the property in dispute, the resolution could have effectively terminated the
agreement for it is settled that the police power cannot be surrendered or
bargained away through the medium of a contract. In fact, every contract
affecting the public interest suffers a congenital infirmity in that it contains an
implied reservation of the police power as a postulate of the existing legal
order. This power can be activated at any time to change the provisions of the
contract, or even abrogate it entirely, for the promotion or protection of the
general welfare. Such an act will not militate against the impairment clause,
which is subject to and limited by the paramount police power.
PETITION for certiorari to review the decision of the Court of First Instance
of Pampanga, Br. III. Castañeda, Jr., J.
The facts are stated in the opinion of the Court.

CRUZ, J.:
There is in the vicinity of the public market of San Fernando, Pampanga,
along Mercado Street, a strip of land measuring 12 by 77 meters on which
stands a conglomeration of vendors stalls together forming what is
commonly known as a talipapa. This is the subject of the herein petition. The
petitioners claim they have a right to remain in and conduct business in this
area by virtue of a previous authorization granted to them by the municipal
government. The respondents deny this and justify the demolition of their
stalls as illegal constructions on public property. At the petitioners' behest,
we have issued a temporary restraining order to preserve the status quo
between the parties pending our decision.1 Now we shall rule on the merits.
This dispute goes back to November 7, 1961, when the municipal council of
San Fernando adopted Resolution No, 218 authorizing some 24 members of
the Fernandino United Merchants and Traders Association to construct
permanent stalls and sell in the above-mentioned place.2 The action was pro
tested on November 10,1961, in Civil Case No. 2040, where the Court of First
Instance of Pampanga, Branch 2, issued a writ of preliminary injunction that
prevented the defendants from constracting the said stalls until final resolution
of the controversy.3 On January 18, 1964, while this case was pending, the
municipal council of San Fernando adopted Resolution No. 29, which declared
the subject area as "the parking place and as the public plaza of the
municipality,"4 thereby impliedly revoking Resolution No, 218- series of 1961,
Four years later, on November 2, 1968, Judge Andres C. Aguilar decided the
aforesaid case and held that the land occupied by the petitioners, being public
in nature, was beyond the commerce of man and therefore could not be the
subject of private occupancy.5 The writ of preliminary injunction was made
permanent.6
The decision was apparently not enforced, for the petitioners were not evicted
from the place; in fact, according to them, they and the 128 other persons
were in 1971 assigned specific areas or space allotments therein for which
they paid daily fees to the municipal government. 7 The problem appears to
have festered for some more years under a presumably uneasy truce among
the protagonists, none of whom made any move, for some reason that does
not appear in the record Then, on January 12, 1982. the Association of
Concerned Citizens and Consumers of San Fernando filed a petition for the
immediate implementation of Resolution No. 29, to restore the subject
property "to its original and customary use as a public plaza."8
Acting thereon after an investigation conducted by the municipal attorney, 9
respondent Vicente A. Macalino, as officer-in-charge of the office of the mayor
of San Fernando, issued on June 14, 1982, a resolution requiring the municipal
treasurer and the municipal engineer to demolish the stalls in the subject place
P R O P E R T Y No. 3 | 30
10
beginning July 1,1982. The reaction of the petitioners was to file a petition
for prohibition with the Court of First Instance of Pampanga, docketed as Civil
Case No. 6470, on June 26,1982. The respondent judge denied the petition
on July 19,1982," and the motion for reconsideration on August 5, 1982, 12
prompting the petitioners to come to this Court on certiorari to challenge his
decision.13
As required, respondent Macalino filed his comment 14 on the petition, and the
petitioners countered with their reply.15 In compliance with our resolution of
February 2, 1983, the petitioners submitted their memorandum 16 and
respondent Macalino, for his part, asked that his comment be considered his
memorandum.17 On July 28,1986, the new officer-in-charge of the office of
the mayor of San Fernando, Paterno S. Guevarra, was impleaded in lieu of
Virgilio Sanchez, who had himself earlier replaced the original respondent
Macalino.18
After considering the issues and the arguments raised by the parties in their
respective pleadings, we rule for the respondents. The petition must be
dismissed.
There is no question that the place occupied by the petitioners and from which
they are sought to be evicted is a public plaza, as found by the trial court in
Civil Case No. 2040. This f inding was made after consideration of the
antecedent facts as especially established by the testimony of former San
Fernando Mayor Rodolfo Hizon, who later became governor of Pampanga, that
the National Planning Commission had reserved the area for a public plaza as
early as 1951. This intention was reiterated in 1964 through the adoption of
Resolution No. 29.19
It does not appear that the decision in this case was appealed or has been
reversed. In Civil Case No. 6740, which is the subject of this petition, the
respondent judge saw no reason to disturb the finding in Civil Case No. 2040
and indeed used it as a basis for his own decision sustaining the questioned
order.20
The basic contention of the petitioners is that the disputed area is under lease
to them by virtue of contracts they had entered into with the municipal
government, first in 1961 insofar as the original occupants were concerned,
and later with them and the other petitioners by virtue of the space allocations
made in their favor in 1971 for which they saw they are paying daily fees. 21
The municipal government has denied making such agreements. In any case,
they argue, since the fees were collected daily, the leases, assuming their
validity, could be terminated at will, or any day, as the claimed rentals
indicated that the period of the leases was from day to day.22
The parties belabor this argument needlessly.
A public plaza is beyond the commerce of man and so cannot be the subject
of lease or any other contractual undertaking. This is elementary. Indeed, this
point was settled as early as in Municipality of Cavite v. Rojas, 23 decided in

1915, where the Court declared as null and void the lease of a public plaza of
the said municipality in favor of a private person.
Justice Torres said in that case:
"According to article 344 of the Civil Code: 'Property for 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 supported by said towns or provinces.
"The said Plaza Soledad being a promenade for public use, the municipal
council of Cavite could not in 1907 withdraw or exclude from public use a
portion thereof in order to lease it for the sole benefit of the defendant Hilaria
Rojas. In leasing a portion of said plaza OF public place to the defendant for
private use the plaintiff municipality exceeded its authority in the exercise of
its powers by executing a contract over a thing of which it could not dispose,
nor is it empowered so to do.
"The Civil Code, article 1271, prescribes that everything which is not outside
the commerce of man may be the object of a contract, and plazas and streets
are outside of this commerce, as was decided by the supreme court of Spain
in its decision of February 12, 1895, which says: 'Communal things that cannot
be sold because they are by their very nature outside of commerce are those
for public use, such as the plazas, streets, common lands, rivers, fountains,
etc.'
"Therefore, it must be concluded that the contract, Exhibit C, whereby the
municipality of Cavite leased to Hilaria Rojas a portion of the Plaza Soledad is
null and void and of no force or effect, because it is contrary to the law and
the thing leased cannot be the object of a contract."
In Muyot v. de la Fuente,24 it was held that the City of Manila could not lease
a portion of a public sidewalk on Plaza Sta. Cruz, being likewise beyond the
commerce of man. Echoing Rojas, the decision said;
"Appelants claim that they had obtained permit from the government of the
City of Manila, to construct booths Nos. 1 and 2, along the premises in
question, and for the use of spaces where the booths were constructed, they
had paid and continued paying the corresponding rentals. Granting this claim
to be true, one should not entertain any doubt that such permit was not legal,
because the City of Manila does not have any power or authority at all to lease
a portion of a public sidewalk. The sidewalk in question, forming part of the
public plaza of Sta. Cruz, could not be a proper subject matter of the contract,
as it was not within the commerce of man (Article 1347, new Civil Code, and
article 1271, old Civil Code). Any contract entered into by the City of Manila in
connection with the sidewalk, is ipso facto null and ultra vires. (Municipality of
Cavite vs. Roxas, et al., 30 Phil. 603.) The sidewalk in question was intended
for and was used by the public in going from one place to another. The streets
and public places of the city shall be kept free and dear for the use of the
public, and the sidewalks and crossings for the pedestrians, and the same shall
P R O P E R T Y No. 3 | 31
only be used or occupied for other purposes as provided by ordinance or
regulation; x x x.' (Sec. 1119, Revised Ordinances of the City of Manila.) The
booths in question served as fruit stands for their owners and often, if not
always, blocked the free passage of pedestrians who had to take the plaza
itself which used to be clogged with vehicular traffic.''
Exactly in point is Espiritu v. Municipal Council of Pozorrubio,25 where the
Supreme Court declared:
"There is absolutely no question that the town plaza cannot be used for the
construction of market stalls, specially of residences, and that such structures
constitute a nuisance subject to abatement according to law. Town plazas are
properties of public dominion, to be devoted to public use and to be made
available to the public in general. They are outside the commerce of man and
cannot be disposed of or even leased by the municipality to private parties"
Applying this well-settled doctrine, we rule that the petitioners had no right in
the first place to occupy the disputed premises and cannot insist in remaining
there now on the strength of their alleged lease contracts. They should have
realized and accepted this earlier, considering that even before Civil Case No.
2040 was decided, the municipal council of San Fernando had already adopted
Resolution No. 29, series of 1964, declaring the area as the parking place and
public plaza of the municipality.
It is the decision in Civil Case No. 2040 and the said resolution of the municipal
council of San Fernando that respondent Macalino was seeking to enforce
when he ordered the demolition of the stalls constructed in the disputed area.
As officer-incharge of the office of the mayor, he had the duty to clear the
area and restore it to its intended use as a parking place and public plaza of
the municipality of San Fernando, conformably to the aforementioned orders
from the court and the council. It is, therefore, not correct to say that he had
acted without authority or taken the law into his hands in issuing his order.
Neither can it be said that he acted whimsically in exercising his authority for
it has been established that he directed the demolition of the stalls only after,
upon his instructions, the municipal attorney had conducted an investigation,
to look into the complaint filed by the Association of Concerned Citizens and
Consumers of San Fernando.26 There is evidence that the petitioners were
notified of this hearing,27 which they chose to disregard. Photographs of the
disputed area,28 which does look congested and ugly, show that the complaint
was valid and that the area really needed to be cleared, as recommended by
the municipal attorney.
The Court observes that even without such investigation and recommendation,
the respondent mayor was justified in ordering the area cleared on the
strength alone of its status as a public plaza as declared by the judicial and
legislative authorities. In calling first for the investigation (which the petitioner
saw fit to boycott), he was just scrupulously paying deference to the

requirements of due process, to remove all taint of arbitrariness in the action
he was called upon to take.
Since the occupation of the place in question in 1961 by the original 24
stallholders (whose number later ballooned to almost 200), it has deteriorated
increasingly to the great prejudice of the community in general. The
proliferation of stalls therein, most of them makeshift and of flammable
materials, has converted it into a veritable fire trap, which, added to the fact
that it obstructs access to and from the public market itself, has seriously
endangered public safety. The filthy condition of the talipapa, where fish and
other wet items are sold, has aggravated health and sanitation problems,
besides pervading the place with a foul odor that has spread into the
surrounding areas. The entire place is unsightly, to the dismay and
embarrassment of the inhabitants, who want it converted into a showcase of
the town of which they can all be proud. The vendors in the talipapa have also
spilled into the street and obstruct the flow of traffic, thereby impairing the
convenience of motorists and pedestrians alike. The regular stallholders in the
public market, who pay substantial rentals to the municipality, are deprived of
a sizable volume of business from prospective customers who are intercepted
by the talipapa vendors before they can reach the market proper. On top of
all these, the people are denied the proper use of the place as a public plaza,
where they may spend their leisure in a relaxed and even beautiful
environment and civic and' other communal activities of the town can be held.
The problems caused by the usurpation of the place by the petitioners are
covered by the police power as delegated to the municipality under the general
welfare clause.29 This authorizes the municipal council "to enact such
ordinances and make such regulations, not repugnant to law, as may be
necessary to carry into effect and discharge the powers and duties conferred
upon it by law and such as shall seem necessary and proper to provide for the
health and safety, promote the prosperity, improve the morals, peace, good
order, comfort, and convenience of the municipality and the inhabitants
thereof, and for the protection of property therein." This authority was validly
exercised in this case through the adoption of Resolution No. 29, series of
1964, by the municipal council of San Fernando.
Even assuming a valid lease of the property in dispute, the resolution could
have effectively terminated the agreement for it is settled that the police power
cannot be surrendered or bargained away through the medium of a contract.30
In fact, every contract affecting the public interest suf fers a congenital
infirmity in that it contains an implied reservation of the police power as a
postulate of the existing legal order.31 This power can be activated at any time
to change the provisions of the contract, or even abrogate it entirely, for the
promotion or protection of the general welfare. Such an act will not militate
against the impairment clause, which is subject to and limited by the
paramount police power.32
P R O P E R T Y No. 3 | 32
We hold that the respondent judge did not commit grave abuse of discretion
in denying the petition for prohibition. On the contrary, he acted correctly in
sustaining the right and responsibility of the mayor to evict the petitioners
from the disputed area and clear it of all the structures illegally constructed
therein.
The Court feels that it would have been far more amiable if the petitioners
themselves, recognizing their own civic duty, had at the outset desisted from
their original stance and withdrawn in good grace from the disputed area to
permit its peaceful restoration as a public plaza and parking place for the
benefit of the whole municipality. They owned this little sacrifice to the
community in general, which has suffered all these many years because of
their intransigence. Regrettably, they have refused to recognize that in the
truly democratic society, the interests of the few should yield to those of the
greater number in def erence to the principles that the welfare of the people
is the supreme law and overriding purpose. We do not see any altruism here.
The traditional ties of sharing are absent here. What we find, sad to say, is a
cynical disdaining of the spirit of "bayanihan," a selfish rejection of the cordial
virtues of "pakikisama" and "pagbibigayan" which are the hallmarks of our
people.
WHEREFORE, the petition is DISMISSED. The decision dated July 19,
1982, and the order dated August 5, 1982, are AFFIRMED. The temporary
restraining order dated August 9, 1982, is LIFTED. This decision is immediately
executory. Costs against the petitioners.
SO ORDERED.
Teehankee (C.J.), Narvasa and Paras, JJ., concur.
Gancayco, J., on leave.
Petition dismissed. Decision and order affirmed.
Notes.—Property already devoted to public use and public service, is
outside the commerce of man and could no longer be subject to private
registration. (Municipality of Antipolo vs. Zapanta, 133 SCRA 820.)
A conveyance of public land in excess of the Constitutional limitation is
malum prohibitum only. (Guiang vs. Kintanar, 106 SCRA 49.)

No. L-66575. September 30, 1986. *
ADRIANO MANECLANG, JULIETA, RAMONA, VICTOR, ANTONINA,
LOURDES, TEODORO and MYRNA, all surnamed MANECLANG,
petitioners, vs. THE INTERMEDIATE APPELLATE COURT and ALFREDO
MAZA, CORLETO CASTRO, SALOME RODRIGUEZ, EDUCARDO
CUISON, FERNANDO ZARCILLA, MARIANO GABRIEL, NICOMEDES
CORDERO, CLETO PEDROZO, FELIX SALARY and JOSE PANLILIO,
respondents.
Civil Law; Contracts; Compromise Agreement; Stipulations in agreement which
partake of the nature of an adjudication of ownership of the fishpond which
was originally a creek, null and void, as said creek is a property of the public
domain not susceptible to private appropriation; Creek, concept of.—The
stipulations contained in the Compromise Agreement partake of the nature of
an adjudication of ownership in favor of herein petitioners of the fishpond in
dispute, which, as clearly found by the lower and appellate courts, was
originally a creek forming a tributary of the Agno River. Considering that as
held in the case of Mercado vs. Municipal President of Macabebe, 59 Phil. 592
[1934], a creek, defined as a recess or arm extending from a river and
participating in the ebb and flow of the sea, is a property belonging to the
public domain which is not susceptible to private appropriation and acquisitive
prescription, and as a public water, it cannot be registered under the Torrens
System in the name of any individual [Diego v. Court of Appeals, 102 Phil. 494;
Mangaldan v. Manaoag, 38 Phil. 455]; and considering further that neither the
mere construction of irrigation dikes by the National Irrigation Administration
which prevented the water from flowing in and out of the subject fishpond,
nor its conversion into a fishpond, alter or change the nature of the creek as
a property of the public domain, the Court finds the Compromise Agreement
null and void and of no legal effect, the same being contrary to law and public
policy.
Same; Same; Same; Finding that subject body of water is a creek belonging
to the public domain, a factual determination binding on the Supreme Court;
Denial of due process, not a case of; Publication of notice of public bidding
suffices as a constructive notice to the whole world .—The finding that the
subject body of water is a creek belonging to the public domain is a factual
determination binding upon this Court. The Municipality of Bugallon, acting
thru its dulyconstituted municipal council is clothed with authority to pass, as
it did the two resolutions dealing with its municipal waters, and it cannot be
said that petitioners were deprived of their right to due process as mere
publication of the notice of the public bidding suffices as a constructive notice
to the whole world.
P R O P E R T Y No. 3 | 33
PETITION to review the decision of the Intermediate Appellate Court.
The facts are stated in the resolution of the Court.
Loreto Novisteros for petitioners.
Corleto R. Castro for respondents.
FERNAN, J.:
Petitioners Adriano Maneclang, et. al. filed before the then Court of First
Instance of Pangasinan, Branch XI a complaint for quieting of title over a
certain fishpond located within the four [4] parcels of land belonging to them
situated in Barrio Salomague, Bugallon, Pangasinan, and the annulment of
Resolutions Nos. 38 and 95 of the Municipal Council of Bugallon, Pangasinan.
The trial court dismissed the complaint in a decision dated August 15, 1975
upon a finding that the body of water traversing the titled properties of
petitioners is a creek constituting a tributary of the Agno River; therefore public
in nature and not subject to private appropriation. The lower court likewise
held that Resolution No. 38, ordering an ocular inspection of the Cayangan
Creek situated between Barrios Salomague Sur and Salomague Norte, and
Resolution No. 95 authorizing public bidding for the lease of all municipal
ferries and fisheries, including the fishpond under consideration, were passed
by respondents herein as members of the Municipal Council of Bugallon,
Pangasinan in the exercise of their legislative powers.
Petitioners appealed said decision to the Intermediate Appellate Court, which
affirmed the same on April 29, 1983. Hence, this petition for review on
certiorari.
Acting on the petition, the Court required the respondents to comment
thereon. However, before respondents could do so, petitioners manifested that
for lack of interest on the part of respondent Alfredo Maza, the awardee in the
public bidding of the fishpond, the parties desire to amicably settle the case
by submitting to the Court a Compromise Agreement praying that judgment
be rendered recognizing the ownership of petitioners over the land the body
of water found within their titled properties, stating therein, among other
things, that “to pursue the case, the same will not amount to any benefit of
the parties, on the other hand it is to the advantage and benefit of the
municipality if the ownership of the land and the water found therein belonging
to petitioners be recognized in their favor as it is now clear that after the
National Irrigation Administration [NIA] had built the dike around the land, no
water gets in or out of the land.1
The stipulations contained in the Compromise Agreement partake of the
nature of an adjudication of ownership in favor of herein petitioners of the
fishpond in dispute, which, as clearly found by the lower and appellate courts,
was originally a creek forming a tributary of the Agno River. Considering that
 P R O P E R T Y No. 3 | 34
as held in the case of Mercado vs. Municipal President of Macabebe, 59 Phil.
592 [1934], a creek, defined as a recess or arm extending from a river and
participating in the ebb and flow of the sea, is a property belonging to the
public domain which is not susceptible to private appropriation and acquisitive
prescription, and as a public water, it cannot be registered under the Torrens
System in the name of any individual [Diego v. Court of Appeals, 102 Phil. 494;
Mangaldan v. Manaoag, 38 Phil. 455]; and considering further that neither the
mere construction of irrigation dikes by the National Irrigation Administration
which prevented the water from flow-ing in and out of the subject fishpond,
nor its conversion into a fishpond, alter or change the nature of the creek as
a property of the public domain, the Court finds the Compromise Agreement
null and void and of no legal effect, the same being contrary to law and public
policy.

The finding that the subject body of water is a creek belonging to the public
domain is a factual determination binding upon this Court. The Municipality of
Bugallon, acting thru its duly-constituted municipal council is clothed with
authority to pass, as it did the two resolutions dealing with its municipal
waters, and it cannot be said that petitioners were deprived of their right to
due process as mere publication of the notice of the public bidding suffices as
a constructive notice to the whole world.

IN VIEW OF THE FOREGOING, the Court Resolved to set aside the

Compromise Agreement and declare the same null and void for being contrary
to law and public policy. The Court further resolved to DISMISS the instant
petition for lack of merit.
SO ORDERED.
Feria (Chairman), Alampay, Gutierrez, Jr. and Paras, JJ., concur.
Petition dismissed.

Notes.—The law applicable to the lease of municipal fisheries is the

provisions of Sections 67 and 69 of Act No. 4003. (San Buenaventura vs.
Municipality of San Jose, Camarines Sur, 13 SCRA 90.)

The Fisheries Act (Act No. 4003) authorizes the municipality to grant, for
purposes of profit, the exclusive privileges of erecting fish corrals or operating
fishponds within any definite portion or areas of the municipal waters for a
period not exceeding five years to the highest bidder in a pubic bidding held,
where the call for bid has specified the period of the lease. ( San Buenaventura
vs. Municipality of San Jose, Camarines Sur, 13 SCRA 90.)

No. L-57461. September 11, 1987. *
THE DIRECTOR OF LANDS, petitioner, vs. MANILA ELECTRIC COMPANY
and HON. RIZALINA BONIFACIO VERA, as Presiding Judge, Court of
First Instance of Rizal, Pasig, Branch XXIII, respondents.
Civil Law; Land Registration; Public Lands; A corporation may apply for
registration of titles to public land. —The Director of Lands interposed this
petition raising the issue of whether or not a corporation may apply for
registration of title to land. After comments were filed by the respondents, the
Court gave the petition due course. The legal issue raised by the petitioner
Director of Lands has been squarely dealt with in two recent cases [The
Director of Lands v. Intermediate Appellate Court and Acme Plywood & Veneer
Co., Inc., etc., No. L-73002 (December 29, 1986), 146 SCRA 509. The Director
of Lands v. Hon. Bengzon and Dynamarine Corporation, etc., No. 54045 (July
28, 1987)], and resolved in the affirmative. There can be no different answer
in the case at bar.
Same; Same; Same; Doctrine that open, exclusive and undisputed possession
of alienable public land for the period prescribed by law creates the legal fiction
whereby the land ceases to be public land and becomes private property. —In
the Acme decision, this Court upheld the doctrine that "open, exclusive and
undisputed possession of alienable public land for the period prescribed by law
creates the legal fiction whereby the land, upon completion of the requisite
period ipso jure and without the need of judicial or other sanction, ceases to
be public land and becomes private property."
Same; Same; Same; Constitutional Law; If the land was already private at the
time Meralco bought it from the seller, then the prohibition in the 1973
Constitution against corporations holding alienable lands of the public domain
except by lease does not apply.—Coming to the case at bar, if the land was
already private at the time Meralco bought it from Natividad, then the
prohibition in the 1973 Constitution against corporations holding alienable
lands of the public domain except by lease (1973 Const., Art. XIV, Sec. 11)
does not apply.
Same; Same; Same; Same; Fact that the confirmation proceedings were
instituted by a corporation is accidental and does not affect the substance and
merits of the right of ownership sought to be confirmed; Where the sellers
could have had their title confirmed, only a rigid subservience to the letter of
the law would deny the private corporation the right to register its property
which was validly acquired.—As ruled in the Acme case, the fact that the
confirmation proceedings were instituted by a corporation is simply another
accidental circumstance, "productive of a defect hardly more than procedural
P R O P E R T Y No. 3 | 35
and in nowise affecting the substance and merits of the right of ownership
sought to be confirmed in said proceedings." Considering that it is not disputed
that the Natividads could have had their title confirmed, only a rigid
subservience to the letter of the law would deny private respondent the right
to register its property which was validly acquired.
GUTIERREZ, JR., J., dissenting:
Civil Law; Land Registration; Public Lands; Sec. 3, Art. XII of the 1973
Constitution which prohibits private corporations or associations from holding
alienable lands of the public domain except by lease is circumvented when
corporations are allowed to apply for judicial confirmation of imperfect titles
to public lands.—lt is my view that Article XII, Section 3 of the Constitution
which prohibits private corporations or associations from holding alienable
lands of the public domain except by lease is circumvented when we allow
corporations to apply for judicial confirmation of imperfect titles to public land.
APPEAL by certiorari from the decision of the Court of First Instance of Rizal,
Br. XXIII. Vera, J.
The facts are stated in the opinion of the Court.
CORTES, J.:
This is an appeal by certiorari of a decision of the respondent Judge in Land
Registration Case No. N-10317, LRC Record No. N-54803 entitled "In Re:
Application for Registration of Title, Manila Electric Company, applicant," dated
May 29, 1981.
The facts are not disputed. Manila Electric Company filed an amended
application for registration of a parcel of land located in Taguig, Metro Manila
on December 4, 1979. On August 17, 1976, applicant acquired the land applied
for registration by purchase from Ricardo Natividad (Exhibit E) who in turn
acquired the same from his father Gregorio Natividad as evidenced by a Deed
of Original Absolute Sale executed on December 28, 1970 (Exhibit E).
Applicant's predecessors-in-interest have possessed the property under the
concept of an owner for more than 30 years. The property was declared for
taxation purposes under the name of the applicant (Exhibit I) and the taxes
due thereon have been paid (Exhibits J and J-1).
On May 29, 1981 respondent Judge rendered a decision ordering the
registration of the property in the name of the private respondent. The Director
of Lands interposed this petition raising the issue of whether or not a
corporation may apply for registration of title to land. After comments were

filed by the respondents, the Court gave the petition due course. The legal
issue raised by the petitioner Director of Lands has been squarely dealt with
in two recent cases [The Director of Lands v. Intermediate Appellate Court and
Acme Plywood & Veneer Co., Inc., etc., No. L-73002 (December 29, 1986),
146 SCRA 509. The Director of Lands v. Hon. Bengzon and Dynamarine
Corporation, etc., No. 54045 (July 28, 1987)], and resolved in the affirmative.
There can be no different answer in the case at bar.
In the Acme decision, this Court upheld the doctrine that "open, exclusive and
undisputed possession of alienable public land for the period prescribed by law
creates the legal fiction whereby the land, upon completion of the requisite
period ipso jure and without the need of judicial or other sanction, ceases to
be public land and becomes private property."
As the Court said in that case:
Nothing can more clearly demonstrate the logical inevitability of
considering possession of public land which is of the character and
duration prescribed by statute as the equivalent of an express grant
from the State than the dictum of the statute itself that the
possessor(s) "x x x shall be conclusively presumed to have performed
all the conditions essential to a Government grant and shall be entitled
to a certificate of title x x x." No proof being admissible to overcome
a conclusive presumption, confirmation proceedings would in truth be
little more than a formality, at the most limited to ascertaining whether
the possession claimed is of the required character and length of time;
and registration thereunder would not confer title, but simply
recognize a title already vested. The proceedings would not originally
convert the land from public to private land, but only confirm such a
conversion already affected (sic) from the moment the required period
of possession became complete.
Coming to the case at bar, if the land was already private at the time Meralco
bought it from Natividad, then the prohibition in the 1973 Constitution against
corporations holding alienable lands of the public domain except by lease
(1973 Const., Art. XIV, Sec. 11) does not apply.
Petitioner, however, contends that a corporation is not among those that may
apply for confirmation of title under Section 48 of Commonwealth Act No. 141,
the Public Land Act.
P R O P E R T Y No. 3 | 36
As ruled in the Acme case, the fact that the confirmation proceedings were
instituted by a corporation is simply another accidental circumstance,
"productive of a defect hardly more than procedural and in nowise affecting
the substance and merits of the right of ownership sought to be conf irmed in
said proceedings." Considering that it is not disputed that the Natividads could
have had their title confirmed, only a rigid subservience to the letter of the law
would deny private respondent the right to register its property which was
validly acquired.
WHEREFORE, the petition is DENIED. The questioned decision of the
respondent Judge is AFFIRMED.
SO ORDERED.
Fernan (Chairman), Feliciano and Bidin, JJ., concur.
Gutierrez, Jr., J., please see dissent.
GUTIERREZ, JR., J.: DISSENTING OPINION
It is my view that Article XII, Section 3 of the Constitution which prohibits
private corporations or associations from holding alienable lands of the public
domain except by lease is circumvented when we allow corporations to apply
for judicial confirmation of imperfect titles to public land. I, therefore, reiterate
my vote in Meralco v. Castro Bartolome, (114 SCRA 799), Republic v.
Villanueva and Iglesia ni Cristo (114 SCRA 875) and Director of Lands v.
Intermediate Appellate Court (146 SCRA 509), and accordingly, dissent from
the majority opinion in this case.
Petition denied. Decision affirmed.
Notes.—Exclusive supervision and control of disposition of public lands
vested with a Bureau of Lands. ( De Guzman vs. Director of Lands, 121 SCRA
13).

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 OF
PHILIPPINE GOVERNMENT PROPERTIES IN JAPAN, respondents.
Civil Law; Property; Roppongi property is of public dominion.—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.
Same; Same; Same; As property of public dominion, the Roppongi lot is
outside the commerce of man and can not be alienated.—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 appropriation.
Same; Same; Same; Roppongi property correctly classified under paragraph 2
of Article 420 of the Civil Code as property belonging to the State and intended
for some public service.—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.
Same; Same; Same; 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. —
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.
P R O P E R T Y No. 3 | 37
Same; Same; Same; Same; 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. —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.
Same; Same; Same; Same; A mere transfer of the Philippine Embassy to
Nampeidai in 1976 is not relinquishment of the Roppongi property’s original
purpose.—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.
Same; Same; Same; Same; Republic Act No. 6657 (the CARP Law) does not
authorize the Executive Department to sell the Roppongi property. —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.
Administrative Law; Political Law; President can not convey valuable real
property of the government on his or her own sole will; Conveyance must be
authorized and approved by a law enacted by Congress.—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.
Same; Same; Same; 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. —
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.
CRUZ, J., Concurring
Property.—The sale of the property may be authorized only by Congress
through a duly enacted statute and there is no such law.
PADILLA, J., Concurring Statement
Property.—It is Congress which can decide and declare the conversion of
Roppongi from a public dominion property to a state patrimonial property.
Congress has made no such decision or declaration. It is clear that the
President cannot sell or order the sale of Roppongi thru public bidding or
otherwise without a prior congressional approval, first, converting Roppongi
from a public dominion property to a State patrimonial property and second,
authorizing the President to sell the same.
FELICIANO, J., Dissenting
Property.—The only requirement which is legitimately imposable is that the
intent to convert must be reasonably clear from a consideration of the act or
acts of the Executive Department or of the Legislative Department which are
said to have effected such conversion.
Same.—Assuming that the majority opinion is right in saying that
Executive Order No. 296 is insufficient to authorize the sale of the Roppongi
property; it is here submitted with respect that Executive Order No. 296 is
more than sufficient to indicate an intention to convert the property previously
devoted to public service into patrimonial property that is capable of being sold
or otherwise dispose of.
SARMIENTO, J., Concurring:
Property; To turn public property to patrimonial, a legislative or executive
declaration is necessary, not were non-use thereof.—In holding that there is
P R O P E R T Y No. 3 | 38
“a need for a law or formal declaration to withdraw the Roppongi property
from public domain to make it alienable and a land for legislative authority to
allow the sale of the property,” the majority lays stress to the fact that: (1) An
affirmative act—executive or legislative—is necessary to reclassify property of
the public dominion, and (2) a legislative decree is required to make it
alienable. It also clears the uncertainties brought about by earlier
interpretations that the nature of property—whether public or patrimonial—is
predicated on the manner it is actually used, or not used, and in the same
breath, repudiates the Government’s position that the continuous non-use of
“Roppongi”, among other arguments, for “diplomatic purposes”, has turned it
into State patrimonial property.
PETITIONS for prohibition and mandamus to review the decision of the
Executive Secretary.
The facts are stated in the opinion of the Court.
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 inspite 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 construct two (2) buildings in Roppongi and one (1) building in Nampeidai and
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 Obanoyamacho, 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.
P R O P E R T Y No. 3 | 39
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
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 Executie Order No. 296 entitling non-
Filipino citizens or entities to avail of reparations’ 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 nonFilipino 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,
P R O P E R T Y No. 3 | 40
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).
(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 II, 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 acquired 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 appropriation. (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:
P R O P E R T Y No. 3 | 41
“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
abovementioned 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.
P R O P E R T Y No. 3 | 42
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
provisions—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 assumed 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 situs rule is misplaced. The opinion does not tackle the
alienability of the real properties procured through reparations nor the
existence in what body of the authority to sell them. In discussing who are
capable of acquiring the lots, the Secretary merely explains that it is the foreign
law which should determine who can acquire the properties so that the
constitutional limitation on acquisition of lands of the public domain to Filipino
citizens and entities wholly owned by Filipinos is inapplicable. We see no point
in belaboring whether or not this opinion is correct. Why should we discuss
who can acquire the Roppongi lot when there is no showing that it can be
sold?

The subsequent approval on October 4, 1988 by President Aquino of the
recommendation by the investigating committee to sell the Roppongi property
was premature or, at the very least, conditioned on a valid change in the public
character of the Roppongi property. Moreover, the approval does not have the
force and effect of law since the President already lost her legislative powers.
The Congress had already convened for more than a year.
Assuming for the sake of argument, however, that the Roppongi property is
no longer of public dominion, there is another obstacle to its sale by the
respondents.
There is no law authorizing its conveyance.
Section 79 (f) of the Revised Administrative Code of 1917 provides:
“Section 79 (f). Conveyances and contracts to which the Government
is a party.—In cases in which the Government of the Republic of the
Philippines is a party to any deed or other instrument conveying the
title to real estate or to any other property the value of which is in
excess of one hundred thousand pesos, the respective Department
Secretary shall prepare the necessary papers which, together with the
proper recommendations, shall be submitted to the Congress of the
Philippines for approval by the same. Such deed, instrument, or
contract shall be executed and 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.” (Italics 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.” (Italics supplied)
P R O P E R T Y No. 3 | 43
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 x x x 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:
P R O P E R T Y No. 3 | 44
Considering the properties’ importance and value, the laws on conversion and
disposition of property of public dominion must be faithfully followed.
WHEREFORE, IN VIEW OF THE FOREGOING, the petitions are GRANTED. A
writ of prohibition is issued enjoining the respondents from proceeding with
the sale of the Roppongi property in Tokyo, Japan. The February 20, 1990
Temporary Restraining Order is made PERMANENT.
SO ORDERED.
Melencio-Herrera, Paras, Bidin, Griño-Aquino and Regalado, JJ., concur.
Fernan (C.J.), Narvasa, Gancayco, Cortés and Medialdea, JJ., join Justice
Feliciano’s dissent.
Cruz, J., See concurrence.
Feliciano, J., See separate dissent.
Padilla, J., See concurring statement.
Sarmiento, J., See Concurring Opinion.

“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, inspite of the lapse
of 45 years since the war ended, inspite 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. x x

x.” (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.

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 PARAÑAQUE, METRO
MANILA, PALANYAG KILUSANG BAYAN FOR SERVICE, respondents.
Civil Law; Property; Properties of the local government which are devoted to
public service are deemed public and are under the absolute control of
Congress.—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.
Same; Same; Properties of public dominion devoted to public use and made
available to the public in general are outside the commerce of men and cannot
be disposed of or leased by the local government unit to private persons. —
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.
P R O P E R T Y No. 3 | 45
Same; Same; 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.—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.
Constitutional Law; Local Government Code; Batas Pambansa Blg. 337 known
as Local Government Code already repealed by Republic Act No. 7160 known
as Local Government Code of 1991.—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
Code, 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.
PETITION for certiorari to review the decision of the Regional Trial Court of
Makati, Br. 62. Diokno, J.
The facts are stated in the opinion of the Court.
Ceferino, Padua Law Office for Palanyag Kilusang Bayan for service.
Manuel de Guia for Municipality of Parañaque.
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 Parañaque 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,
Parañaque, 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 Parañaque issued a resolution
authorizing Parañaque 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 Parañaque. 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.
P R O P E R T Y No. 3 | 46
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 Parañaque 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 Parañaque 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 Parañaque. 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
Parañaque has been granted by the legislature a 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:
“x x x that Chapter II Section 10 of the Local Government Code is a
statutory grant of power given to local government units, the

Municipality of Parañaque 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).
“x x x
“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 on 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
P R O P E R T Y No. 3 | 47
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 thereof shall be
closed 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 passed 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 Macario 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 other contract (Villanueva, et al. v.
Castañeda 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:
P R O P E R T Y No. 3 | 48
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:
“x x x. 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.
P R O P E R T Y No. 3 | 49
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 REVERSED and SET ASIDE.
SO ORDERED.
Narvasa (C.J.), Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Griño-
Aquino, Regalado, Davide, Jr., Romero, Nocon and Bellosillo, JJ., concur.
Petition granted; decision reversed and set aside.
Note.—_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 (Laurel vs. Garcia,
187 SCRA 797).

Verily, the powers of a local government unit are not absolute. They are
subject to limitations laid down by the 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 Code, 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.

G.R. No. 133250. July 9, 2002. *
FRANCISCO I. CHAVEZ, petitioner, vs. PUBLIC ESTATES AUTHORITY
and AMARI COASTAL BAY DEVELOPMENT CORPORATION,
respondents.
Actions: Moot and Academic Issues: The signing of the Amended Joint Venture
Agreement (JVA) by the Public Estates Authority (PEA) and Amari Coastal Bay
and Development Corporation (AMARI) cannot operate to moot the petition
and divest the Court of its jurisdiction, as 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. 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.—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.
Same: Same; The instant petition is a case of first impression since all previous
decisions of the Court involving Section 3, Article XII of the 1987 Constitution,
or its counterpart provision in the 1973 Constitution, covered agricultural lands
P R O P E R T Y No. 3 | 50
sold to private corporations which acquired the lands from private parties,
while in the instant case, a private corporation seeks to acquire from a public
corporation, reclaimed lands and submerged areas for non-agricultural
purposes by purchase under PD No. 1084 (charter of PEA) and Title II of CA
No. 141.—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, covered agricultural lands
sold 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 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
nonagricultural purposes by purchase under PD No. 1084 (charter of PEA) and
Title II 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.
Same: Hierarchy of Courts; The principle of hierarchy of courts applies
generally to cases involving factual questions, not to those raising
constitutional issues of transcendental importance to the public .—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. 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.
Same; Same; Administrative Law; Exhaustion of Administrative Remedies;
Right to Information; Considering that PEA had an affirmative statutory duty
to disclose to the public the terms and conditions of the sale of its lands, and
was even in breach of this legal duty, petitioner had the right to seek direct
judicial intervention.—The original JVA sought to dispose to AMARI public
lands held by PEA, a government corporation. Under Section 79 of the
Government Auditing Code, 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.
Same; Same; Same; Same; Same; The principle of exhaustion of
administrative remedies does not apply when the issue involved is a purely
legal or constitutional question.—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. 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.
Same; Parties; Taxpayer’s Suits: A citizen has standing to bring this taxpayer’s
suit because the petition seeks to compel PEA to comply with its constitutional
duties; Where a petition for mandamus involves the enforcement of
constitutional rights—to information and to the equitable diffusion of natural
resources—matters of transcendental public importance, a citizen has the
requisite locus standi.—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, the Court upheld
the right of a citizen to bring a taxpayer’s suit on matters of transcendental
importance to the public, thus—* * * 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.
P R O P E R T Y No. 3 | 51
Right to Information; The twin provisions of the Constitution—right to
information on matters of public concern and policy of full transparency—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; An informed citizenry is essential to the
existence and proper functioning of any democracy.—These twin provisions of
the Constitution seek to promote transparency in policymaking 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,” 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.
Same; Bids and Bidding; While information on, on-going evaluation or review
of bids or proposal being undertaken by the bidding or review committee is
not immediately accessible under the right to information, once the committee
makes its official recommendation, there arises a “definite proposition” on the
part of the government, and 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.—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
ongoing, 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.
Same; The commissioners of the 1986 Constitutional Commission understood
that the right to information contemplates inclusion of negotiations leading to
the consummation of the transaction—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 .—
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. 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
proposed contract, 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.”
Same; The right to information 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 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.
P R O P E R T Y No. 3 | 52
Same; The information that a citizen 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 .—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. 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.
Same; The right to information, however, does not extend to matters
recognized as privileged information under the separation of powers .—The
right to information, however, does not extend to matters recognized as
privileged information under the separation of powers. 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. The right may also be subject to other
limitations that Congress may impose by law.
Same; The constitutional right to information includes official information on
on-going negotiations before a final contract, which 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 .—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. Congress has also prescribed other limitations on the right to
information in several legislations.
National Economy and Patrimony; Regalian Doctrine; Foreshore and
Submerged Areas; Reclamation Projects; Words and Phrases; The ownership
of lands reclaimed from foreshore and submerged areas is rooted in the
Regalian doctrine which holds that the State owns all lands and waters of the

public domain.—The 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. 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.
Same; Same; Same; Same; 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. These lands
remained sui generis, as the only alienable or disposable lands of the public
domain the government could not sell to private parties.—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. These lands remained sui generis, as the only alienable or disposable
lands of the public domain the government could not sell to private parties.
Same; Same; Same; Same; 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 .—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.
Same; Same; Same; Same; One reason for the congressional authority before
lands under Section 59 of CA No. 141 previously transferred to government
units or entities could be sold to private parties 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.—One reason for the congressional
P R O P E R T Y No. 3 | 53
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.
Same; Same; Same; Same; 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, though 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, such legislative authority could only
benefit private individuals.—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.
Same; Same; Same; Same; The rationale behind the constitutional ban on
corporations from acquiring, except through lease, alienable lands of the public
domain is not well understood; 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; 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.—The rationale behind the constitutional ban on
corporations from acquiring, except through lease, alienable lands of the public
domain is not well understood. * * * 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.
Same; Same; Same; Same; The mere reclamation of certain 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.—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.
Same; Same; Same; Same; 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, open to disposition or concession to
qualified parties.—PD No. 1085, issued on February 4, 1977, authorized the
issuance of special land patents for lands reclaimed by PEA from the foreshore
P R O P E R T Y No. 3 | 54
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.
Same; Same; Same; Same; Spanish Law of Waters of 1866; Under the Spanish
Law of Waters, 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 .—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 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. 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.”
Same; Same; Same; Same; Same; Article 5 of the Spanish Law of Waters must
be read together with laws subsequently enacted on the disposition of public
lands.—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. 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.
Same; Same; Same; Same; There is no legislative or Presidential act classifying
the additional 592.15 hectares submerged areas under the Amended JVA as
alienable or disposable lands of the public domain open to disposition—these
areas form part of the public domain, and in their present state are inalienable
and outside the commerce of man.—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.
Same: Same; Same; Same; Public Estates Authority; 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.—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.” Since large portions of these reclaimed lands
would obviously be needed for public service, there must be a formal
P R O P E R T Y No. 3 | 55
declaration segregating reclaimed lands no longer needed for public service
from those still needed for public service.
Same; Same; Same; Same; Same; Section 3 of EO No. 525, by declaring that
all lands reclaimed by PEA “shall belong to or be owned by PEA could not
automatically operate to classify inalienable lands into alienable or disposable
lands of the public domain.—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.
Same; Same; Same; Same; Same; Department of Environment and Natural
Resources; As manager, conservator and overseer of the natural resources of
the State, DENR exercises “supervision and control over alienable and
disposable public lands.” PEA needs authorization from DENR before PEA can
undertake reclamation in Manila Bay, or in any part of the country; 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 .—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 and 7 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.

Same; Same; Same; Same; Same; Same; 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.—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 of CA No. 141 and other applicable laws.
Same; Same; Same; Same; Same; 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; While PEA may sell its alienable
or disposable lands of the public domain to private individuals, it cannot sell
any of its alienable or disposable lands of the public domain to private
corporations.—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.” (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.
Same; Same; Same; Same; Same; The provision in PD No. 1085 stating that
portions of the reclaimed lands could be transferred by PEA to the “contractor
P R O P E R T Y No. 3 | 56
or his assignees” would not apply to private corporations but only to individuals
because of the constitutional ban.—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.
Same; Same; Same; Same; Same; Bids and Bidding; EO No. 654, which
authorized 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, but merely authorizes PEA to decide the mode
of payment, whether in kind or in installment, but does not authorize PEA to
dispense with public auction.—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. 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, 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.
Same; Same; Same; Same; Same; Same; 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.—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.
Same; Same; Same; Same; Same; Same; The failure of an earlier public
bidding involving only 407.84 hectares, is not a valid justification for a
subsequent negotiated sale of 750 hectares, almost double the area publicly
auctioned.—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. The
failure of public bidding on December 10, 1991, involving only 407.84
hectares, 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.
Same; Same; Same; Same; BOT Law (RA No. 6957); Local Government Code;
Under either the BOT Law or the Local Government Code, the contractor or
developer, if a corporate entity, can only be paid with lease-holds on portions
of the reclaimed land, and if the contractor or developer is an individual,
portions of the reclaimed land, not exceeding 12 hectares of non-agricultural
lands, may be conveyed to him in ownership.—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 of nonagricultural 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.
Same; Same; Same; Same; Land Registration; 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 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.
The registration of lands of the public domain under the Torrens system, by
itself, cannot convert public lands into private lands.
Same; Same; Same; Same; Same; 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.—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
P R O P E R T Y No. 3 | 57
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)
Same; Same; Same; Same; 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.—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.
Same; Same; Same; Same; Public Estates Authority; 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.—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.
Same; Same; Same; Same; Same; The mere fact that alienable lands of the
public domain 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’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 JVA, 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.
Same; Same; Same; Same; Same; Whether the Amended JVA is a sale or a
joint venture, the fact remains that the Amended JVA required PEA to “cause
the issuance and delivery of the certificates of title conveying AMARI’s Land
Share in the name of AMARI,” a stipulation contravening Section 3, Article XII
of the 1987 Constitution—the transfer of title and ownership to AMARI clearly
means that AMARI will “hold” the reclaimed lands other than by lease, and the
transfer of title and ownership is a “disposition” of the reclaimed lands, a
transaction considered a sale or alienation under CA No. 141, the Government
Auditing Code, and Section 3, Article XII of the 1987 Constitution .—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
P R O P E R T Y No. 3 | 58
to “cause the issuance and delivery of the certificates of title conveying
AMARI’s Land Share in the name of AMARI.” 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, the Government Auditing
Code, and Section 3, Article XII of the 1987 Constitution.
Same; Same; Same; Same; 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.—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.
SPECIAL CIVIL ACTION in the Supreme Court. Mandamus.
The facts are stated in the opinion of the Court.
Francisco I. Chavez for and in his own behalf.
Azcuna, Yorac, Arroyo, & Chua Law Offices for Amari Coastal Bay, etc.
Romulo, Mabanta, Buenaventura, Sayoc & De Los Angeles Collaborating
Counsel for Amari Coastal Bay, etc.
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.
xxx
(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, 1984 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
P R O P E R T Y No. 3 | 59
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 Parañaque 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, Parañaque 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.
P R O P E R T Y No. 3 | 60
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, PEA15 and AMARI16 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
P R O P E R T Y No. 3 | 61
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 lands
sold 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 titles19 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 II 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 entire reclaimed
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 Tañada v. Tuvera23 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 Tañada, the Executive Department had an
affirmative statutory duty under Article 2 of the Civil Code24 and Section 1 of
Commonwealth Act No. 63825 to publish the presidential decrees. There was,
therefore, no need for the petitioners in Tañada 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.
P R O P E R T Y No. 3 | 62
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 tends 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 illgotten
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.
xxx

In Tañada 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 Tañada, 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
P R O P E R T Y No. 3 | 63
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 in Valmonte v. Belmonte, Jr.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
P R O P E R T Y No. 3 | 64
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 intraagency 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.

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 proposed contract,
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.
P R O P E R T Y No. 3 | 65
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 JVA 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
P R O P E R T Y No. 3 | 66
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 reclassification 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.

xxx
(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.
xxx
P R O P E R T Y No. 3 | 67
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 nonagricultural 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
P R O P E R T Y No. 3 | 68
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
P R O P E R T Y No. 3 | 69
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 nonagricultural

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 tended 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
P R O P E R T Y No. 3 | 70
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
nonagricultural 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:
P R O P E R T Y No. 3 | 71
(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 Constitution, 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
P R O P E R T Y No. 3 | 72
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.
(b) x x x
(c) (i)
 To hold lands of the public domain in excess of the area
permitted to private corporations by statute.
(d) (j)
 To reclaim lands and to construct work across, or
otherwise, any stream, watercourse, canal, ditch, flume x x x.
(e) x x x
(f) (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 domain63 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.
P R O P E R T Y No. 3 | 73
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 from acquiring 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
P R O P E R T Y No. 3 | 74
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 Joint 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 JVA 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.
xxx
Section 3. x x x Alienable lands of the public domain shall be limited
to agricultural lands. Private corporations or associations may not hold
P R O P E R T Y No. 3 | 75
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 Force68 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 do-main.”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
P R O P E R T Y No. 3 | 76
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.
P R O P E R T Y No. 3 | 77
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.
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
xxx
(4)
 Exercise supervision and control over forest lands,
alienable and disposable public lands, mineral resources and,
in the process of exercising such control, impels 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, noncompliance 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)
P R O P E R T Y No. 3 | 78
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 681 and 782 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
P R O P E R T Y No. 3 | 79
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, to be reclaimed as provided
for in the abovementioned 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
P R O P E R T Y No. 3 | 80
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. 89-29691 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
xxx
P R O P E R T Y No. 3 | 81
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 hectares96 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 titles issued 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.
P R O P E R T Y No. 3 | 82
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 convent 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
P R O P E R T Y No. 3 | 83
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
JVA, 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 pplied)
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
P R O P E R T Y No. 3 | 84
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. 106 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 deregistration 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.”107
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, 108 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
P R O P E R T Y No. 3 | 85
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 evergrowing 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 hectares110 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 hectares111 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.
P R O P E R T Y No. 3 | 86
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.” ( Republic
vs. Court of Appeals, 299 SCRA 199 [1998])

Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the
1987 Constitution. Under Article 1409112 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 JVA null and void ab initio.

Seventh issue: whether the Court is the proper forum to raise the
issue of whether the Amended JVA 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.
SO ORDERED.
Davide, Jr. (C.J.), Bellosillo, Puno, Vitug, Kapunan, Mendoza, Panganiban,
Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Austria-Martinez and
Corona, JJ., concur.
Petition granted. Amended Joint Venture Agreement declared null and void.
Respondents enjoined permanently from implementing the same.

Notes.—Before the Treaty of Paris on April 11, 1899, our lands, whether
agricultural, mineral or forest were under the exclusive patrimony and
dominion of the Spanish Crown, hence, private ownership of land could only
be acquired through royal concessions. (Palomo vs. Court of Appeals, 266
SCRA 392 [1997]).

Only judicial review of decisions of administrative agencies made in the

exercise of their quasi-judicial function is subject to the exhaustion doctrine.
(Association of Philippine Coconut Desiccators vs. Philippine Coconut Authority ,
286 SCRA 109 [1998]).

G.R. No. 179987. September 3, 2013. *
HEIRS OF MARIO MALABANAN, (Represented by Sally A.
Malabanan), petitioners, vs. REPUBLIC OF THE PHILIPPINES,
respondent.
Civil Law; Property; Public Dominion; Private Ownership; Land, which is
an immovable property, may be classified as either of public dominion or of
private ownership.—Land, which is an immovable property, may be classified
as either of public dominion or of private ownership. Land is considered of
public dominion if it either: (a) is intended for public use; or (b) belongs to the
State, without being for public use, and is intended for some public service or
for the development of the national wealth. Land belonging to the State that
is not of such character, or although of such character but no longer intended
for public use or for public service forms part of the patrimonial property of
the State. Land that is other than part of the patrimonial property of the State,
provinces, cities and municipalities is of private ownership if it belongs to a
private individual.
Same; Same; Same; Regalian Doctrine; Pursuant to the Regalian
Doctrine (Jura Regalia), a legal concept first introduced into the country from
the West by Spain through the Laws of the Indies and the Royal Cedulas, all
lands of the public domain belong to the State.—Pursuant to the Regalian
Doctrine (Jura Regalia), a legal concept first introduced into the country from
the West by Spain through the Laws of the Indies and the Royal Cedulas, all
lands of the public domain belong to the State. This means that the State is
the source of any asserted right to ownership of land, and is charged with the
conservation of such patrimony. All lands not appearing to be clearly under
private ownership are presumed to belong to the State. Also, public lands
remain part of the inalienable land of the public domain unless the State is
shown to have reclassified or alienated them to private persons.
Same; Same; Same; Agricultural Lands; The 1987 Constitution adopted the
classification under the 1935 Constitution into agricultural, forest or timber,
and mineral, but added national parks; Under Section 2, Article XII of the 1987
Constitution, only agricultural lands of the public domain may be alienated; all
other natural resources may not be.—Whether or not land of the public domain
is alienable and disposable primarily rests on the classification of public lands
made under the Constitution. Under the 1935 Constitution, lands of the public
domain were classified into three, namely, agricultural, timber and mineral.
Section 10, Article XIV of the 1973 Constitution classified lands of the public
domain into seven, specifically, agricultural, industrial or commercial,
residential, resettlement, mineral, timber or forest, and grazing land, with the
reservation that the law might provide other classifications. The 1987
P R O P E R T Y No. 3 | 87
Constitution adopted the classification under the 1935 Constitution into
agricultural, forest or timber, and mineral, but added national parks.
Agricultural lands may be further classified by law according to the uses to
which they may be devoted. The identification of lands according to their legal
classification is done exclusively by and through a positive act of the Executive
Department. Based on the foregoing, the Constitution places a limit on the
type of public land that may be alienated. Under Section 2, Article XII of the
1987 Constitution, only agricultural lands of the public domain may be
alienated; all other natural resources may not be.
Same; Same; Alienable and Disposable Lands; Agricultural Lands; Alienable
and disposable lands of the State fall into two categories, to wit: (a)
patrimonial lands of the State, or those classified as lands of private ownership
under Article 425 of the Civil Code, without limitation; and (b) lands of the
public domain, or the public lands as provided by the Constitution, but with
the limitation that the lands must only be agricultural. —Alienable and
disposable lands of the State fall into two categories, to wit: ( a) patrimonial
lands of the State, or those classified as lands of private ownership under
Article 425 of the Civil Code, without limitation; and (b) lands of the public
domain, or the public lands as provided by the Constitution, but with the
limitation that the lands must only be agricultural. Consequently, lands
classified as forest or timber, mineral, or national parks are not susceptible of
alienation or disposition unless they are reclassified as agricultural. A positive
act of the Government is necessary to enable such reclassification, and the
exclusive prerogative to classify public lands under existing laws is vested in
the Executive Department, not in the courts. If, however, public land will be
classified as neither agricultural, forest or timber, mineral or national park, or
when public land is no longer intended for public service or for the
development of the national wealth, thereby effectively removing the land
from the ambit of public dominion, a declaration of such conversion must be
made in the form of a law duly enacted by Congress or by a Presidential
proclamation in cases where the President is duly authorized by law to that
effect. Thus, until the Executive Department exercises its prerogative to
classify or reclassify lands, or until Congress or the President declares that the
State no longer intends the land to be used for public service or for the
development of national wealth, the Regalian Doctrine is applicable.
Same; Same; Same; Same; Section 11 of the Public Land Act (CA No.
141) provides the manner by which alienable and disposable lands of the
public domain, i.e., agricultural lands, can be disposed of.—Section 11 of the
Public Land Act (CA No. 141) provides the manner by which alienable and
disposable lands of the public domain, i.e., agricultural lands, can be disposed
of, to wit: Section 11. Public lands suitable for agricultural purposes can be
disposed of only as follows, and not otherwise: (1) For homestead settlement;

(2) By sale; (3) By lease; and (4) By confirmation of imperfect or incomplete
titles; (a) By judicial legalization; or (b) By administrative legalization (free
patent).
Same; Same; Same; Same; Absent proof that the land is already classified as
agricultural land of the public domain, the Regalian Doctrine applies, and
overcomes the presumption that the land is alienable and disposable as laid
down in Section 48(b) of the Public Land Act. —Taking into consideration that
the Executive Department is vested with the authority to classify lands of the
public domain, Section 48(b) of the Public Land Act, in relation to Section 14(1)
of the Property Registration Decree, presupposes that the land subject of the
application for registration must have been already classified as agricultural
land of the public domain in order for the provision to apply. Thus, absent
proof that the land is already classified as agricultural land of the public
domain, the Regalian Doctrine applies, and overcomes the presumption that
the land is alienable and disposable as laid down in Section 48(b) of the Public
Land Act. However, emphasis is placed on the requirement that the
classification required by Section 48(b) of the Public Land Act is classification
or reclassification of a public land as agricultural.
Same; Same; Same; Same; Alienable public land held by a possessor,
either personally or through his predecessors-in-interest, openly, continuously
and exclusively during the prescribed statutory period is converted to private
property by the mere lapse or completion of the period. —An examination of
Section 48(b) of the Public Land Act indicates that Congress prescribed no
requirement that the land subject of the registration should have been
classified as agricultural since June 12, 1945, or earlier. As such, the applicant’s
imperfect or incomplete title is derived only from possession and occupation
since June 12, 1945, or earlier. This means that the character of the property
subject of the application as alienable and disposable agricultural land of the
public domain determines its eligibility for land registration, not the ownership
or title over it. Alienable public land held by a possessor, either personally or
through his predecessors-in-interest, openly, continuously and exclusively
during the prescribed statutory period is converted to private property by the
mere lapse or completion of the period. In fact, by virtue of this doctrine,
corporations may now acquire lands of the public domain for as long as the
lands were already converted to private ownership, by operation of law, as a
result of satisfying the requisite period of possession prescribed by the Public
Land Act. It is for this reason that the property subject of the application of
Malabanan need not be classified as alienable and disposable agricultural land
of the public domain for the entire duration of the requisite period of
possession.
P R O P E R T Y No. 3 | 88
Same; Same; Same; Same; Rules Relative to the Disposition of Public Land or
Lands of the Public Domain.—We now observe the following rules relative to
the disposition of public land or lands of the public domain, namely: (1) As a
general rule and pursuant to the Regalian Doctrine, all lands of the public
domain belong to the State and are inalienable. Lands that are not clearly
under private ownership are also presumed to belong to the State and,
therefore, may not be alienated or disposed; (2) The following are excepted
from the general rule, to wit: (a) Agricultural lands of the public domain are
rendered alienable and disposable through any of the exclusive modes
enumerated under Section 11 of the Public Land Act. If the mode is judicial
confirmation of imperfect title under Section 48(b) of the Public Land Act, the
agricultural land subject of the application needs only to be classified as
alienable and disposable as of the time of the application, provided the
applicant’s possession and occupation of the land dated back to June 12, 1945,
or earlier. Thereby, a conclusive presumption that the applicant has performed
all the conditions essential to a government grant arises, and the applicant
becomes the owner of the land by virtue of an imperfect or incomplete title.
By legal fiction, the land has already ceased to be part of the public domain
and has become private property. (b) Lands of the public domain subsequently
classified or declared as no longer intended for public use or for the
development of national wealth are removed from the sphere of public
dominion and are considered converted into patrimonial lands or lands of
private ownership that may be alienated or disposed through any of the modes
of acquiring ownership under the Civil Code. If the mode of acquisition is
prescription, whether ordinary or extraordinary, proof that the land has been
already converted to private ownership prior to the requisite acquisitive
prescriptive period is a condition sine qua non in observance of the law (Article
1113, Civil Code) that property of the State not patrimonial in character shall
not be the object of prescription.
Brion, J., Separate Opinion:
Civil Law; Property; Public Land Act; View that Section 7 of the Public
Land Act delegates to the President the authority to administer and dispose of
alienable public lands.—Section 7 of the PLA delegates to the President the
authority to administer and dispose of alienable public lands. Section 8 sets
out the public lands open to disposition or concession, and the requirement
that they should be officially delimited and classified and, when practicable,
surveyed. Section 11, a very significant provision, states that — Section 11.
Public lands suitable for agricultural purposes can be disposed of only as
follows, and not otherwise: (1) For homestead settlement (2) By sale (3) By
lease (4) By confirmation of imperfect or incomplete title: (a) By judicial
legalization (b) By administrative legalization (free patent).

Same; Same; Public Lands; View that the Constitution classifies public lands
into agricultural, mineral, timber lands and national parks. Of these, only
agricultural lands can be alienated.—The Constitution classifies public lands
into agricultural, mineral, timber lands and national parks. Of these, only
agricultural lands can be alienated. Without the requisite classification, there
can be no basis to determine which lands of the public domain are alienable
and which are not. Hence, classification is a constitutionally-required step
whose importance should be given full legal recognition and effect. Otherwise
stated, without classification into disposable agricultural land, the land
continues to form part of the mass of the public domain that, not being
agricultural, must be mineral, timber land or national parks that are completely
inalienable and, as such, cannot be possessed with legal effects. To recognize
possession prior to any classification is to do violence to the Regalian Doctrine;
the ownership and control that the Regalian Doctrine embodies will be less
than full if the possession — that should be with the State as owner, but is
also elsewhere without any solid legal basis — can anyway be recognized.
Same; Same; Alienable and Disposable Lands; View that no imperfect
title can be confirmed over lands not yet classified as disposable or alienable
because, in the absence of such classification, the land remains unclassified
public land that fully belongs to the State.—No imperfect title can be confirmed
over lands not yet classified as disposable or alienable because, in the absence
of such classification, the land remains unclassified public land that fully
belongs to the State. This is fully supported by Sections 6, 7, 8, 9, and 10 of
the PLA. If the land is either mineral, timber or national parks that cannot be
alienated, it defies legal logic to recognize that possession of these unclassified
lands can produce legal effects.
Same; Same; Forest Lands; Revised Forestry Code (P.D. No. 705); View that
P.D. No. 705 confirms that all lands of the public domain that remain
unclassified are considered as forest land. As forest land, these lands of the
public domain cannot be alienated until they have been reclassified as
agricultural lands.—Parenthetically, PD No. 705 or the Revised Forestry Code
states that “Those [lands of public domain] still to be classified under the
present system shall continue to remain as part of the public forest.” It further
declares that public forest covers “the mass of lands of the public domain
which has not been the subject of the present system of classification for the
determination of which lands are needed for forest purposes and which are
not.” Thus, PD No. 705 confirms that all lands of the public domain that remain
unclassified are considered as forest land. As forest land, these lands of the
public domain cannot be alienated until they have been reclassified as
agricultural lands. For purposes of the present case, these terms confirm the
P R O P E R T Y No. 3 | 89
position that re/classification is essential at the time possession is acquired
under Section 48(b) of the PLA.
Same; Same; Regalian Doctrine; View that the Regalian Doctrine was
incorporated in all the Constitutions of the Philippines (1935, 1973 and 1987)
and the statutes governing private individuals’ land acquisition and
registration.—The Regalian Doctrine was incorporated in all the Constitutions
of the Philippines (1935, 1973 and 1987) and the statutes governing private
individuals’ land acquisition and registration. In his Separate Opinion in Cruz
v. Sec. of Environment and Natural Resources, 347 SCRA 128 (2000), former
Chief Justice Reynato S. Puno made a brief yet informative historical discussion
on how the Regalian Doctrine was incorporated in our legal system, especially
in all our past and present organic laws. His historical disquisition was quoted
in La Bugal-B’laan Tribal Association, Inc. v. Sec. Ramos, 421 SCRA 148
(2004), and the consolidated cases of The Secretary of the DENR et al. v. Yap
and Sacay et al. v. The Secretary of the DENR , 568 SCRA 164 (2008), which
were also quoted in Justice Lucas P. Bersamin’s Separate Opinion in his very
brief discussion on how the doctrine was carried over from our Spanish and
American colonization up until our present legal system.
Same; Same; Alienable and Disposable Lands; Possession; View that
prior to the declaration of alienability, a land of the public domain cannot be
appropriated; hence, any claimed possession cannot have legal effects. —
Possession is essentially a civil law term that can best be understood in terms
of the Civil Code in the absence of any specific definition in the PLA, other than
in terms of time of possession. Article 530 of the Civil Code provides that
“[o]nly things and rights which are susceptible of being appropriated may be
the object of possession.” Prior to the declaration of alienability, a land of the
public domain cannot be appropriated; hence, any claimed possession cannot
have legal effects. In fact, whether an application for registration is filed before
or after the declaration of alienability becomes immaterial if, in one as in the
other, no effective possession can be recognized prior to and within the proper
period for the declaration of alienability.
Separation of Powers; Statutes; View that if the Supreme Court believes
that a law already has absurd effects because of the passage of time, its role
under the principle of separation of powers is not to give the law an
interpretation that is not there in order to avoid the perceived absurdity. —If
the Court believes that a law already has absurd effects because of the
passage of time, its role under the principle of separation of powers is not to
give the law an interpretation that is not there in order to avoid the perceived
absurdity. If the Court does, it thereby intrudes into the realm of policy — a
role delegated by the Constitution to the Legislature. If only for this reason,

the Court should avoid expanding — through the present ponencia and its
cited cases — the plain meaning of Section 48(b) of the PLA, as amended by
PD No. 1073.
Same; Supreme Court; View that the Supreme Court should be very
careful in delineating the line between the constitutionally-allowed
interpretation and the prohibited judicial legislation, given the powers that the
1987 Constitution has entrusted to this Court.—In the Philippines, a civil law
country where the Constitution is very clear on the separation of powers and
the assignment of constitutional duties, I believe that this Court should be very
careful in delineating the line between the constitutionally-allowed
interpretation and the prohibited judicial legislation, given the powers that the
1987 Constitution has entrusted to this Court. As a Court, we are given more
powers than the U.S. Supreme Court; under Section 1, Article VIII of the 1987
Constitution, we are supposed to act, as a matter of duty, on any grave abuse
of discretion that occurs anywhere in government. While broad, this power
should nevertheless be exercised with due respect for the separation of powers
doctrine that underlies our Constitution.
Civil Law; Land Registration; View that the act of registration merely confirms
that title already exists in favor of the applicant.—The act of registration merely
confirms that title already exists in favor of the applicant. To require
classification of the property only on application for registration point would
imply that during the process of acquisition of title (specifically, during the
period of possession prior to the application for registration), the property
might not have been alienable for being unclassified land (or a forest land
under PD No. 705) of the public domain. This claim totally contravenes the
constitutional rule that only agricultural lands of the public domain may be
alienated.
Leonen, J., Concurring and Dissenting Opinion:
Civil Law; Property; Regalian Doctrine; View that our present
Constitution does not contain the term, “regalian doctrine.” —I do not agree
that all lands not appearing to be clearly within private ownership are
presumed to belong to the State or that lands remain part of the public domain
if the State does not reclassify or alienate it to a private person. These
presumptions are expressions of the Regalian Doctrine. Our present
Constitution does not contain the term, “regalian doctrine.” What we have is
Article XII, Section 2, which provides: 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.
P R O P E R T Y No. 3 | 90
Same; Same; View that there could be land, considered as property,
where ownership has vested as a result of either possession or prescription,
but still, as yet, undocumented.—Article III, Section 1 of the Constitution
provides: Section 1. No person shall be deprived of life, liberty or property
without due process of law, nor shall any person be denied equal protection
of the laws. This section protects all types of property. It does not limit its
provisions to property that is already covered by a form of paper title. Verily,
there could be land, considered as property, where ownership has vested as
a result of either possession or prescription, but still, as yet, undocumented.
The original majority’s opinion in this case presents some examples.
MOTIONS FOR RECONSIDERATION of a decision of the Court of Appeals.
The facts are stated in the resolution of the Court.
Fortun, Narvasa & Salazar for petitioners.
The Solicitor General for respondent.
RESOLUTION
BERSAMIN, J.:
For our consideration and resolution are the motions for reconsideration of the
parties who both assail the decision promulgated on April 29, 2009, whereby
we upheld the ruling of the Court of Appeals (CA) denying the application of
the petitioners for the registration of a parcel of land situated in Barangay
Tibig, Silang, Cavite on the ground that they had not established by sufficient
evidence their right to the registration in accordance with either Section 14(1)
or Section 14(2) of Presidential Decree No. 1529 (Property Registration
Decree).
Antecedents
The property subject of the application for registration is a parcel of land
situated in Barangay Tibig, Silang Cavite, more particularly identified as Lot
9864-A, Cad-452-D, with an area of 71,324-square meters. On February 20,
1998, applicant Mario Malabanan, who had purchased the property from
Eduardo Velazco, filed an application for land registration covering the
property in the Regional Trial Court (RTC) in Tagaytay City, Cavite, claiming
that the property formed part of the alienable and disposable land of the public
domain, and that he and his predecessors-in-interest had been in open,
continuous, uninterrupted, public and adverse possession and occupation of
the land for more than 30 years, thereby entitling him to the judicial
confirmation of his title.1
To prove that the property was an alienable and disposable land of the public
domain, Malabanan presented during trial a certification dated June 11, 2001
issued by the Community Environment and Natural Resources Office (CENRO)

of the Department of Environment and Natural Resources (DENR), which
reads:
This is to certify that the parcel of land designated as Lot No. 9864 Cad 452-
D, Silang Cadastre as surveyed for Mr. Virgilio Velasco located at Barangay
Tibig, Silang, Cavite containing an area of 249,734 sq. meters as shown and
described on the Plan Ap-04-00952 is verified to be within the Alienable or
Disposable land per Land Classification Map No. 3013 established under
Project No. 20-A and approved as such under FAO 4-1656 on March 15, 1982.2
After trial, on December 3, 2002, the RTC rendered judgment granting
Malabanan’s application for land registration, disposing thusly:
WHEREFORE, this Court hereby approves this application for
registration and thus places under the operation of Act 141, Act 496
and/or P.D. 1529, otherwise known as Property Registration Law, the
lands described in Plan Csd-04-0173123-D, Lot 9864-A and containing
an area of Seventy One Thousand Three Hundred Twenty Four
(71,324) Square Meters, as supported by its technical description now
forming part of the record of this case, in addition to other proofs
adduced in the name of MARIO MALABANAN, who is of legal age,
Filipino, widower, and with residence at Munting Ilog, Silang, Cavite.
Once this Decision becomes final and executory, the corresponding
decree of registration shall forthwith issue.
SO ORDERED.3
The Office of the Solicitor General (OSG) appealed the judgment to the CA,
arguing that Malabanan had failed to prove that the property belonged to the
alienable and disposable land of the public domain, and that the RTC erred in
finding that he had been in possession of the property in the manner and for
the length of time required by law for confirmation of imperfect title.
On February 23, 2007, the CA promulgated its decision reversing the RTC and
dismissing the application for registration of Malabanan. Citing the ruling in
Republic v. Herbieto (Herbieto),4 the CA declared that under Section 14(1) of
the Property Registration Decree, any period of possession prior to the
classification of the land as alienable and disposable was inconsequential and
should be excluded from the computation of the period of possession. Noting
that the CENRO-DENR certification stated that the property had been declared
alienable and disposable only on March 15, 1982, Velazco’s possession prior
to March 15, 1982 could not be tacked for purposes of computing Malabanan’s
period of possession.
P R O P E R T Y No. 3 | 91
Due to Malabanan’s intervening demise during the appeal in the CA, his heirs
elevated the CA’s decision of February 23, 2007 to this Court through a petition
for review on certiorari.
The petitioners assert that the ruling in Republic v. Court of Appeals and
Corazon Naguit5 (Naguit) remains the controlling doctrine especially if the
property involved is agricultural land. In this regard, Naguit ruled that any
possession of agricultural land prior to its declaration as alienable and
disposable could be counted in the reckoning of the period of possession to
perfect title under the Public Land Act (Commonwealth Act No. 141) and the
Property Registration Decree. They point out that the ruling in Herbieto, to the
effect that the declaration of the land subject of the application for registration
as alienable and disposable should also date back to June 12, 1945 or earlier,
was a mere obiter dictum considering that the land registration proceedings
therein were in fact found and declared void ab initio for lack of publication of
the notice of initial hearing.
The petitioners also rely on the ruling in Republic v. T.A.N. Properties, Inc.6 to
support their argument that the property had been ipso jure converted into
private property by reason of the open, continuous, exclusive and notorious
possession by their predecessors-in-interest of an alienable land of the public
domain for more than 30 years. According to them, what was essential was
that the property had been “converted” into private property through
prescription at the time of the application without regard to whether the
property sought to be registered was previously classified as agricultural land
of the public domain.
As earlier stated, we denied the petition for review on certiorari because
Malabanan failed to establish by sufficient evidence possession and occupation
of the property on his part and on the part of his predecessors-in interest since
June 12, 1945, or earlier.
Petitioners’ Motion for Reconsideration
In their motion for reconsideration, the petitioners submit that the mere
classification of the land as alienable or disposable should be deemed sufficient
to convert it into patrimonial property of the State. Relying on the rulings in
Spouses De Ocampo v. Arlos,7 Menguito v. Republic8 and Republic v. T.A.N.
Properties, Inc.,9 they argue that the reclassification of the land as alienable
or disposable opened it to acquisitive prescription under the Civil Code; that
Malabanan had purchased the property from Eduardo Velazco believing in
good faith that Velazco and his predecessors-in-interest had been the real
owners of the land with the right to validly transmit title and ownership
thereof; that consequently, the ten-year period prescribed by Article 1134 of

the Civil Code, in relation to Section 14(2) of the Property Registration Decree,
applied in their favor; and that when Malabanan filed the application for
registration on February 20, 1998, he had already been in possession of the
land for almost 16 years reckoned from 1982, the time when the land was
declared alienable and disposable by the State.
The Republic’s Motion for Partial Reconsideration
The Republic seeks the partial reconsideration in order to obtain a clarification
with reference to the application of the rulings in Naguit and Herbieto.
Chiefly citing the dissents, the Republic contends that the decision has
enlarged, by implication, the interpretation of Section 14(1) of the Property
Registration Decree through judicial legislation. It reiterates its view that an
applicant is entitled to registration only when the land subject of the
application had been declared alienable and disposable since June 12, 1945 or
earlier.
Ruling
We deny the motions for reconsideration.
In reviewing the assailed decision, we consider to be imperative to discuss the
different classifications of land in relation to the existing applicable land
registration laws of the Philippines.
Classifications of land according
to ownership
Land, which is an immovable property,10 may be classified as either of public
dominion or of private ownership.11 Land is considered of public dominion if it
either: (a) is intended for public use; or (b) belongs to the State, without being
for public use, and is intended for some public service or for the development
of the national wealth.12 Land belonging to the State that is not of such
character, or although of such character but no longer intended for public use
or for public service forms part of the patrimonial property of the State. 13 Land
that is other than part of the patrimonial property of the State, provinces, cities
and municipalities is of private ownership if it belongs to a private individual.
Pursuant to the Regalian Doctrine (Jura Regalia), a legal concept first
introduced into the country from the West by Spain through the Laws of the
Indies and the Royal Cedulas,14 all lands of the public domain belong to the
State.15 This means that the State is the source of any asserted right to
ownership of land, and is charged with the conservation of such patrimony. 16
All lands not appearing to be clearly under private ownership are presumed to
belong to the State. Also, public lands remain part of the inalienable land of
P R O P E R T Y No. 3 | 92
the public domain unless the State is shown to have reclassified or alienated
them to private persons.17
Classifications of public lands
according to alienability
Whether or not land of the public domain is alienable and disposable primarily
rests on the classification of public lands made under the Constitution. Under
the 1935 Constitution,18 lands of the public domain were classified into three,
namely, agricultural, timber and mineral.19 Section 10, Article XIV of the 1973
Constitution classified lands of the public domain into seven, specifically,
agricultural, industrial or commercial, residential, resettlement, mineral, timber
or forest, and grazing land, with the reservation that the law might provide
other classifications. The 1987 Constitution adopted the classification under
the 1935 Constitution into agricultural, forest or timber, and mineral, but
added national parks.20 Agricultural lands may be further classified by law
according to the uses to which they may be devoted. 21 The identification of
lands according to their legal classification is done exclusively by and through
a positive act of the Executive Department. 22
Based on the foregoing, the Constitution places a limit on the type of public
land that may be alienated. Under Section 2, Article XII of the 1987
Constitution, only agricultural lands of the public domain may be alienated; all
other natural resources may not be.
Alienable and disposable lands of the State fall into two categories, to wit: ( a)
patrimonial lands of the State, or those classified as lands of private ownership
under Article 425 of the Civil Code,23 without limitation; and (b) lands of the
public domain, or the public lands as provided by the Constitution, but with
the limitation that the lands must only be agricultural. Consequently, lands
classified as forest or timber, mineral, or national parks are not susceptible of
alienation or disposition unless they are reclassified as agricultural. 24 A positive
act of the Government is necessary to enable such reclassification, 25 and the
exclusive prerogative to classify public lands under existing laws is vested in
the Executive Department, not in the courts. 26 If, however, public land will be
classified as neither agricultural, forest or timber, mineral or national park, or
when public land is no longer intended for public service or for the
development of the national wealth, thereby effectively removing the land
from the ambit of public dominion, a declaration of such conversion must be
made in the form of a law duly enacted by Congress or by a Presidential
proclamation in cases where the President is duly authorized by law to that
effect.27 Thus, until the Executive Department exercises its prerogative to
classify or reclassify lands, or until Congress or the President declares that the

State no longer intends the land to be used for public service or for the
development of national wealth, the Regalian Doctrine is applicable.
Disposition of alienable public lands
Section 11 of the Public Land Act (CA No. 141) provides the manner by which
alienable and disposable lands of the public domain, i.e., agricultural lands,
can be disposed of, to wit:
Section 11. Public lands suitable for agricultural purposes can be
disposed of only as follows, and not otherwise:
(1) For homestead settlement;
(2) By sale;
(3) By lease; and
(4) By confirmation of imperfect or incomplete titles;
(a) By judicial legalization; or
(b) By administrative legalization (free patent).
The core of the controversy herein lies in the proper interpretation of Section
11(4), in relation to Section 48(b) of the Public
Land Act, which expressly requires possession by a
Filipino citizen of the land since June 12, 1945, or
earlier, viz.:
Section 48. The following-described citizens of the Philippines, occupying
lands of the public domain or claiming to own any such lands or an interest
therein, but whose titles have not been perfected or completed, may apply to
the Court of First Instance of the province where the land is located for
confirmation of their claims and the issuance of a certificate of title thereafter,
under the Land Registration Act, to wit:
xxxx
(b) Those who by themselves or through their predecessors-
ininterest have been in open, continuous, exclusive, and notorious
possession and occupation of alienable and disposable lands of the
public domain, under a bona fide claim of acquisition of ownership,
since June 12, 1945, or earlier, immediately preceding the filing of the
applications for confirmation of title, except when prevented by war
or force majeure. These shall be conclusively presumed to have
performed all the conditions essential to a Government grant and shall
be entitled to a certificate of title under the provisions of this chapter.
(Bold emphasis supplied)
P R O P E R T Y No. 3 | 93
Note that Section 48(b) of the Public Land Act used the words “ lands of the
public domain” or “alienable and disposable lands of the public domain” to
clearly signify that lands otherwise classified, i.e., mineral, forest or timber, or
national parks, and lands of patrimonial or private ownership, are outside the
coverage of the Public Land Act. What the law does not include, it excludes.
The use of the descriptive phrase “alienable and disposable” further limits the
coverage of Section 48(b) to only the agricultural lands of the public domain
as set forth in Article XII, Section 2 of the 1987 Constitution. Bearing in mind
such limitations under the Public Land Act, the applicant must satisfy the
following requirements in order for his application to come under Section 14(1)
of the Property Registration Decree,28 to wit:
1. The applicant, by himself or through his predecessor-in-interest,
has been in possession and occupation of the property subject of the
application;
2. The possession and occupation must be open, continuous,
exclusive, and notorious;
3. The possession and occupation must be under a bona fide claim
of acquisition of ownership;
4. The possession and occupation must have taken place since June
12, 1945, or earlier; and
5. The property subject of the application must be an agricultural
land of the public domain.
Taking into consideration that the Executive Department is vested with the
authority to classify lands of the public domain, Section 48(b) of the Public
Land Act, in relation to Section 14(1) of the Property Registration Decree,
presupposes that the land subject of the application for registration must have
been already classified as agricultural land of the public domain in order for
the provision to apply. Thus, absent proof that the land is already classified as
agricultural land of the public domain, the Regalian Doctrine applies, and
overcomes the presumption that the land is alienable and disposable as laid
down in Section 48(b) of the Public Land Act. However, emphasis is placed on
the requirement that the classification required by Section 48(b) of the Public
Land Act is classification or reclassification of a public land as agricultural.
The dissent stresses that the classification or reclassification of the land as
alienable and disposable agricultural land should likewise have been made on
June 12, 1945 or earlier, because any possession of the land prior to such
classification or reclassification produced no legal effects. It observes that the
fixed date of June 12, 1945 could not be minimized or glossed over by mere
judicial interpretation or by judicial social policy concerns, and insisted that the
full legislative intent be respected.

We find, however, that the choice of June 12, 1945 as the reckoning point of
the requisite possession and occupation was the sole prerogative of Congress,
the determination of which should best be left to the wisdom of the lawmakers.
Except that said date qualified the period of possession and occupation, no
other legislative intent appears to be associated with the fixing of the date of
June 12, 1945. Accordingly, the Court should interpret only the plain and literal
meaning of the law as written by the legislators.
Moreover, an examination of Section 48(b) of the Public Land Act indicates
that Congress prescribed no requirement that the land subject of the
registration should have been classified as agricultural since June 12, 1945, or
earlier. As such, the applicant’s imperfect or incomplete title is derived only
from possession and occupation since June 12, 1945, or earlier. This means
that the character of the property subject of the application as alienable and
disposable agricultural land of the public domain determines its eligibility for
land registration, not the ownership or title over it. Alienable public land held
by a possessor, either personally or through his predecessors-in-interest,
openly, continuously and exclusively during the prescribed statutory period is
converted to private property by the mere lapse or completion of the period. 29
In fact, by virtue of this doctrine, corporations may now acquire lands of the
public domain for as long as the lands were already converted to private
ownership, by operation of law, as a result of satisfying the requisite period of
possession prescribed by the Public Land Act.30 It is for this reason that the
property subject of the application of Malabanan need not be classified as
alienable and disposable agricultural land of the public domain for the entire
duration of the requisite period of possession.
To be clear, then, the requirement that the land should have been classified
as alienable and disposable agricultural land at the time of the application for
registration is necessary only to dispute the presumption that the land is
inalienable.
The declaration that land is alienable and disposable also serves to determine
the point at which prescription may run against the State. The imperfect or
incomplete title being confirmed under Section 48(b) of the Public Land Act is
title that is acquired by reason of the applicant’s possession and occupation of
the alienable and disposable agricultural land of the public domain. Where all
the necessary requirements for a grant by the Government are complied with
through actual physical, open, continuous, exclusive and public possession of
an alienable and disposable land of the public domain, the possessor is
deemed to have acquired by operation of law not only a right to a grant, but
P R O P E R T Y No. 3 | 94
a grant by the Government, because it is not necessary that a certificate of
title be issued in order that such a grant be sanctioned by the courts. 31
If one follows the dissent, the clear objective of the Public Land Act to
adjudicate and quiet titles to unregistered lands in favor of qualified Filipino
citizens by reason of their occupation and cultivation thereof for the number
of years prescribed by law32 will be defeated. Indeed, we should always bear
in mind that such objective still prevails, as a fairly recent legislative
development bears out, when Congress enacted legislation (Republic Act No.
10023)33 in order to liberalize stringent requirements and procedures in the
adjudication of alienable public land to qualified applicants, particularly
residential lands, subject to area limitations.34
On the other hand, if a public land is classified as no longer intended for
public use or for the development of national wealth by declaration of Congress
or the President, thereby converting such land into patrimonial or private land
of the State, the applicable provision concerning disposition and registration is
no longer Section 48(b) of the Public Land Act but the Civil Code, in conjunction
with Section 14(2) of the Property Registration Decree.35 As such, prescription
can now run against the State.
To sum up, we now observe the following rules relative to the disposition
of public land or lands of the public domain, namely:
(1) As a general rule and pursuant to the Regalian Doctrine, all lands of
the public domain belong to the State and are inalienable. Lands that are not
clearly under private ownership are also presumed to belong to the State and,
therefore, may not be alienated or disposed;
(2) The following are excepted from the general rule, to wit:
(a) Agricultural lands of the public domain are rendered alienable and
disposable through any of the exclusive modes enumerated under Section 11
of the Public Land Act. If the mode is judicial confirmation of imperfect title
under Section 48(b) of the Public Land Act, the agricultural land subject of the
application needs only to be classified as alienable and disposable as of the
time of the application, provided the applicant’s possession and occupation of
the land dated back to June 12, 1945, or earlier. Thereby, a conclusive
presumption that the applicant has performed all the conditions essential to a
government grant arises,36 and the applicant becomes the owner of the land
by virtue of an imperfect or incomplete title. By legal fiction, the land has
already ceased to be part of the public domain and has become private
property.37
 P R O P E R T Y No. 3 | 95
(b) Lands of the public domain subsequently classified or declared as no longer
intended for public use or for the development of national wealth are removed
from the sphere of public dominion and are considered converted into
patrimonial lands or lands of private ownership that may be alienated or
disposed through any of the modes of acquiring ownership under the Civil
Code. If the mode of acquisition is prescription, whether ordinary or
extraordinary, proof that the land has been already converted to private
ownership prior to the requisite acquisitive prescriptive period is a condition
sine qua non in observance of the law (Article 1113, Civil Code) that property
of the State not patrimonial in character shall not be the object of prescription.

To reiterate, then, the petitioners failed to present sufficient evidence to

establish that they and their predecessors-in-interest had been in possession
of the land since June 12, 1945. Without satisfying the requisite character and
period of possession — possession and occupation that is open, continuous,
exclusive, and notorious since June 12, 1945, or earlier — the land cannot be
considered ipso jure converted to private property even upon the subsequent
declaration of it as alienable and disposable. Prescription never began to run
against the State, such that the land has remained ineligible for registration
under Section 14(1) of the Property Registration Decree. Likewise, the land
continues to be ineligible for land registration under Section 14(2) of the
Property Registration Decree unless Congress enacts a law or the President
issues a proclamation declaring the land as no longer intended for public
service or for the development of the national wealth.
WHEREFORE, the Court DENIES the petitioners’ Motion for
Reconsideration and the respondent’s Partial Motion for Reconsideration for
their lack of merit.
SO ORDERED.
Sereno (CJ.), Carpio, Peralta, Del Castillo, Abad, Villarama, Jr., Perez,
Mendoza, Reyes and Perlas-Bernabe, JJ., concur.
Velasco, Jr., J., No part due to relationship to a party.
Leonardo-De Castro, J., I submitted my vote joining the Separate
Opinion of Justice Brion.
Brion, J., In the result: See Separate Opinion.
Leonen, J., See separate concurring and dissenting opinion.