CASE #13

SALVADOR LAUREL vs RAMON GARCIA (head of the Asset Privatization Trust), RAUL
MANGLAPUS (Secretary of Foreign Affairs), and CATALINO MACARAIG (Executive Secretary)

DIONISIO OJEDA JR. vs MACARAIG (Executive Secretary), GARCIA (head of the Asset
Privatization Trust), AMBASSADOR RAMON DEL ROSARIO ET AL. (members of the Principal and
Bidding Committees on the Utilization/Disposition Petition of Philippine Government Properties
in Japan)

PROMULGATED: JULY 25, 1990

PONENTE: J. GUTIERREZ, JR.

These are two consolidated petitions for prohibition seeking to enjoin respondents, their
representatives and agents from proceeding with the bidding for the sale of the Roppongi Property
in Japan on February 20, 1990.

BACKGROUND: The Roppongi Property is one of the four properties in Japan acquired by the
Philippine Government under the Reparations Agreement which was entered into with Japan on
May 9, 1956. Other properties are: the (1) Nampeidai Property, which is the present site of the
Philippine Embassy Chancery; the (2) Kobe Commercial Property, which is now being used as a
warehouse and parking lot for the consulate staff; and the (3) Kobe Residential Property, which
is now vacant. The Reparation Agreement was entered into to indemnify the Filipino People for
their losses in life and property and their suffering during WWII.

The Roppongi Property was intended to be the site of the Philippine Embassy until it was
later transferred to Nampeidai when the Roppongi Building needed major repairs. The Philippine
government failed to provide the necessary funds thereby making the Roppongi Property
undeveloped. A proposal was presented to then President Cory by the Ambassador to Japan,
Carlos Valdez. The proposal is to make the property the subject of lease agreement with a
Japanese firm Kajima Corporation, which shall construct buildings in Roppongi and
Nampeidai. The consideration of the construction would be the lease to the foreign corporation
of one of the buildings to be constructed in Roppongi and two in Nampeidai. The government did
not act favorably on this proposal. Instead, then President Cory created a committee to study the
disposition/utilization of Philippine Government Properties in Tokyo and Kobe, Japan. On July
25, 1987, the President issued E.O. 296 entitling non-filipino citizens or entities to avail of
separations capital goods and services in the event of sale, lease or disposition. The four
reparation properties, starting with the Roppongi Property, were to be sold.

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. He further states that it is classified as one of public dominion, and not
of private ownership under Article 420 of the Civil Code. He submits that it come under property
intended for public service. He states that being one of public dominion, no ownership by anyone
can attach to it, not even by the State. On the other hand, respondents argued that the properties
are governed not by the Civil Code but by the laws of Japan, relying 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. And if the Civil Code is indeed applicable, the Roppongi
Property has ceased to become property of public dominion for it has become patrimonial
property because it has not been used for public service or for diplomatic purposes for over
thirteen years.

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WHETHER THE ROPPONGI LOT IN JAPAN IS OF PUBLIC DOMINION AND CANNOT BE
THEREFORE ALIENATED?

Yes. There can be no doubt that the property is of public dominion. The respondents
failed to show that the property has become patrimonial. 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. Articles 419, 420 and 421 of the Civil Code are applicable. The Roppongi Property
is classified under paragraph 2 of Art. 420. 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. A property
continues to be part of the public domain, not available for private appropriation or ownership
until there is formal declaration on the part of the government to withdraw it from being such.
Abandonment of the intention to use the Roppongi property for public service and to make it
patrimonial property under Art 422 of the Code must be definite. Abandonment cannot be
inferred from the non-use alone specially if the non-use was attributable not to the governments
deliberate and indubitable will but to lack of financial support to repair and improve the property.
Abandonment must be a certain and positive act based on correct legal premises.

The contention that Japanese Law, instead of the Civil Code, should apply is untenable.
There is no reason why a conflict of law rule should apply when no conflict of law situation exists,

In the petition of Ojeda, the constitutionality of E.O. 296 was not ruled upon for it is not
the real issue in the case.

PETITIONS ARE GRANTED.