MIAA v.

Court of Appeals
G.R. No. 155650, July 20, 2006
Carpio, J.

Facts:
The Manila International Airport Authority (MIAA) operates the Ninoy Aquino
International Airport (NAIA) Complex in Paraaque City under Executive Order No. 903 (MIAA
Charter), as amended. As such operator, it administers the land, improvements and equipment
within the NAIA Complex. In March 1997, the Office of the Government Corporate Counsel
(OGCC) issued Opinion No. 061 to the effect that the Local Government Code of 1991 (LGC)
withdrew the exemption from real estate tax granted to MIAA under Section 21 of its Charter.

Thus, MIAA paid some of the real estate tax already due. In June 2001, it received Final
Notices of Real Estate Tax Delinquency from the City of Paraaque for the taxable years 1992 to
2001. The City Treasurer subsequently issued notices of levy and warrants of levy on the airport
lands and buildings.

At the instance of MIAA, the OGCC issued Opinion No. 147 clarifying Opinion No. 061,
pointing out that Sec. 206 of the LGC requires persons exempt from real estate tax to show
proof of exemption. According to the OGCC, Sec. 21 of the MIAA Charter is the proof that MIAA
is exempt from real estate tax. MIAA, thus, filed a petition with the Court of Appeals seeking to
restrain the City of Paraaque from imposing real estate tax on, levying against, and auctioning
for public sale the airport lands and buildings, but this was dismissed for having been filed out
of time.

Hence, MIAA filed this petition for review, pointing out that it is exempt from real estate
tax under Sec. 21 of its charter and Sec. 234 of the LGC. It invokes the principle that the
government cannot tax itself as a justification for exemption, since the airport lands and
buildings, being devoted to public use and public service, are owned by the Republic of the
Philippines. On the other hand, the City of Paraaque invokes Sec. 193 of the LGC, which
expressly withdrew the tax exemption privileges of government-owned and controlled
corporations (GOCC) upon the effectivity of the LGC.

It asserts that an international airport is not among the exceptions mentioned in the said
law. Meanwhile, the City of Paraaque posted and published notices announcing the public
auction sale of the airport lands and buildings. In the afternoon before the scheduled public
auction, MIAA applied with the Court for the issuance of a TRO to restrain the auction sale. The
Court issued a TRO on the day of the auction sale, however, the same was received only by the
City of Paraaque three hours after the sale.

Issue:
Whether or not the airport lands and buildings of MIAA are exempt from real estate tax?
Held:
The airport lands and buildings of MIAA are exempt from real estate tax imposed by
local governments. Sec. 243(a) of the LGC exempts from real estate tax any real property owned
by the Republic of the Philippines. This exemption should be read in relation with Sec. 133(o) of
the LGC, which provides that the exercise of the taxing powers of local governments shall not
extend to the levy of taxes, fees or charges of any kind on the National Government, its agencies
and instrumentalities.

These provisions recognize the basic principle that local governments cannot tax the
national government, which historically merely delegated to local governments the power to
tax.

The rule is that a tax is never presumed and there must be clear language in the law
imposing the tax. This rule applies with greater force when local governments seek to tax
national government instrumentalities. Moreover, a tax exemption is construed liberally in favor
of national government instrumentalities.

MIAA is not a GOCC, but an instrumentality of the government.

The Republic remains the beneficial owner of the properties. MIAA itself is owned solely
by the Republic. At any time, the President can transfer back to the Republic title to the airport
lands and buildings without the Republic paying MIAA any consideration. As long as the airport
lands and buildings are reserved for public use, their ownership remains with the State. Unless
the President issues a proclamation withdrawing these properties from public use, they remain
properties of public dominion. As such, they are inalienable, hence, they are not subject to levy
on execution or foreclosure sale, and they are exempt from real estate tax.

However, portions of the airport lands and buildings that MIAA leases to private entities
are not exempt from real estate tax. In such a case, MIAA has granted the beneficial use of such
portions for a consideration to a taxable person.

Francisco Chavez vs Public Estates Authority

 G.R. No. 133250, July 10, 2002
Carpio, J.

Facts:
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, lease and sell any and all kinds of lands."
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" under the Manila-
Cavite Coastal Road and Reclamation Project (MCCRRP).

On January 19, 1988, then President Corazon C. Aquino issued Special Patent No. 3517,
granting and transferring to PEA "the parcels of land so reclaimed under the Manila-Cavite
Coastal Road and Reclamation Project (MCCRRP) containing a total area of one million nine
hundred fifteen thousand eight hundred ninety four (1,915,894) square meters." Subsequently,
on April 9, 1988, the Register of Deeds of the Municipality of Paraaque issued Transfer
Certificates of Title Nos. 7309, 7311, and 7312, in the name of PEA, covering the three
reclaimed islands known as the "Freedom Islands" located at the southern portion of the
Manila-Cavite Coastal Road, Paraaque City.

PEA and AMARI entered into the JVA through negotiation without public bidding. On April 28,
1995, the Board of Directors of PEA, in its Resolution No. 1245, confirmed the JVA. On June 8,
1995, then President Fidel V. Ramos, through then Executive Secretary Ruben Torres, approved
the JVA.

The Senate Committees reported the results of their investigation in Senate Committee
Report No. 560 dated September 16, 1997. 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, the Chief Presidential Legal Counsel, and the Government Corporate Counsel. The Legal
Task Force upheld the legality of the JVA, contrary to the conclusions reached by the Senate
Committees.

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.

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."

Issue: The issues raised by petitioner, PEA and AMARI are as follows:
1. Whether the reliefs prayed for are moot and academic because of subsequent events;
2. Whether the petition should be dismissed for failing to observe the principle of governing
the heirarchy of courts;
3. Whether the petition should be dismissed for non-exhaustion of administrative remedies;
4. Whether petitioner has locus standi;
5. Whether the constitutional right to information includes information on on-going
neogtiations BEFORE a final agreement;
6. 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
7. Whether the Court has jurisdiction over the issue whether the amended JVA is grossly
disadvantageous to the government

Held: 1. We rule that the signing and 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 the Section 3, Article XII
of the Constitution, which prohibits the government from alienating lands of the public domain
to private corporations. 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.

Also, the instant petition is a case of first impression being a wholly government owned
corporation performing public as well as proprietary functions. 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.

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.

2. 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.

3. 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 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.

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.

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 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.

4. 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.'

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.

5. 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: 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."

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.

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.

6. Article 339 of the Civil Code of 1889 defined property of public dominion as follows:
"Art. 339. Property of public dominion is
1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, riverbanks, shores, roadsteads, and that of a similar character;
2. That belonging exclusively to the State which, without being of general public use, is
employed in some public service, or in the development of the national wealth, such as walls,
fortresses, and other works for the defense of the territory, and mines, until granted to private
individuals.

Property devoted to public use referred to property open for use by the public. In contrast,
property devoted to public service referred to property used for some specific public service
and open only to those authorized to use the property.Property of public dominion referred not
only to property devoted to public use, but also to property not so used but employed to
develop the national wealth. This class of property constituted property of public dominion
although employed for some economic or commercial activity to increase the national wealth.

"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.

Act No. 2874 of the Philippine Legislature

 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.

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.

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 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.

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.

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. 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 . . . owned by the State" forming part of
the public domain, and are inalienable pursuant to Section 2, Article XII of the 1987
Constitution.

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.

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." 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
. . . 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.

Moreover, under Section 79 of PD No. 1445, otherwise known as the Government Auditing
Code, the government is required to sell valuable government property through public bidding.
Section 79 of PD No. 1445 mandates that:... "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."

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. 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.

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 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.

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. This scheme can even be applied
to alienable agricultural lands of the public domain since PEA can "acquire . . . any and all kinds
of lands."

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.

7. 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 the 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.
 Philippine fisheries and Development Authority vs Central Board of Assessment Appeals
G.R. No. 178030, December 10, 2010
Carpio, J.

The Case

This petition for review1 assails the 9 May 2007 Decision2 of the Court of Tax Appeals in C.T.A. EB
No. 193, affirming the 5 October 2005 Decision of the Central Board of Assessment Appeals
(CBAA) in CBAA Case No. L-33. The CBAA dismissed the appeal of petitioner Philippine Fisheries
Development Authority (PFDA) from the Decision of the Local Board of Assessment Appeals
(LBAA) of Lucena City, ordering PFDA to pay the real property taxes imposed by the City
Government of Lucena on the Lucena Fishing Port Complex.

The Facts

The facts as found by the CBAA are as follows:

The records show that the Lucena Fishing Port Complex (LFPC) is one of the fishery
infrastructure projects undertaken by the National Government under the Nationwide
Fish Port-Package. Located at Barangay Dalahican, Lucena City, the fish port was
constructed on a reclaimed land with an area of 8.7 hectares more or less, at a total cost
of PHP 296,764,618.77 financed through a loan (L/A PH-25 and 51) from the Overseas
Economic Cooperation Fund (OECF) of Japan, dated November 9, 1978 and May 31,
1978, respectively.

The Philippine Fisheries Development Authority (PFDA) was created by virtue of P.D. 977
as amended by E.O. 772, with functions and powers to (m)anage, operate, and develop
the Navotas Fishing Port Complex and such other fishing port complexes that may be
established by the Authority. Pursuant thereto, Petitioner-Appellant PFDA took over the
management and operation of LFPC in February 1992.

On October 26, 1999, in a letter addressed to PFDA, the City Government

of Lucena demanded payment of realty taxes on the LFPC property for the period from
1993 to 1999 in the total amount of P39,397,880.00. This was received by PFDA on
November 24, 1999.

On October 17, 2000 another demand letter was sent by the Government of Lucena City
on the same LFPC property, this time in the amount of P45,660,080.00 covering the
period from 1993 to 2000.

On December 18, 2000 Petitioner-Appellant filed its Appeal before the Local Board of
Assessment Appeals of Lucena City, which was dismissed for lack of merit. On November
 6, 2001 Petitioner-Appellant filed its motion for reconsideration; this was denied by
the Appellee Local Board on December 10, 2001.

PFDA appealed to the CBAA. In its Decision dated 5 October 2005, the CBAA dismissed the
appeal for lack of merit. The CBAA ruled:

Ownership of LFPC however has, before hand, been handed over to the PFDA, as
provided for under Sec. 11 of P.D. No. 977, as amended, and declared under the MCIAA
case [Mactan Cebu International Airport Authority v. Marcos, G.R. No. 120082, 11
September 1996, 261 SCRA 667]. The allegations therefore that PFDA is not the
beneficial user of LFPC and not a taxable person are rendered moot and academic by
such ownership of PFDA over LFPC.

xxx

PFDAs Charter, P.D. 977, provided for exemption from income tax under Par. 2, Sec. 10
thereof: (t)he Authority shall be exempted from the payment of income tax. Nothing
was said however about PFDAs exemption from payment of real property tax: PFDA
therefore was not to lay claim for realty tax exemption on its Fishing Port Complexes.
Reading Sec. 40 of P.D. 464 and Sec. 234 of R.A. 7160 however, provided such ground:
LFPC is owned by the Republic of the Philippines, PFDA is only tasked to manage,
operate, and develop the same. Hence, LFPC is exempted from payment of realty tax.

xxx

The ownership of LFPC as passed on by the Republic of the Philippines to PFDA

is bourne by Direct evidence: P.D. 977, as amended (supra). Therefore, Petitioner-
Appellants claim for realty tax exemption on LFPC is untenable.

WHEREFORE, for all of the foregoing, the herein Appeal is hereby dismissed for lack of
merit

SO ORDERED.

PFDA moved for reconsideration, which the CBAA denied in its Resolution dated 7 June
2006.5 On appeal, the Court of Tax Appeals denied PFDAs petition for review and affirmed the 5
October 2005 Decision of the CBAA

Hence, this petition for review.

 The Ruling of the Court of Tax Appeals

The Court of Tax Appeals held that PFDA is a government-owned or controlled corporation, and
is therefore subject to the real property tax imposed by local government units pursuant to
Section 232 in relation to Sections 193 and 234 of the Local Government Code. Furthermore,
the Court of Tax Appeals ruled that PFDA failed to prove that it is exempt from real property tax
pursuant to Section 234 of the Local Government Code or any of its provisions.

The Issue

The sole issue raised in this petition is whether PFDA is liable for the real property tax assessed
on the Lucena Fishing Port Complex.

The Ruling of the Court

The petition is meritorious.

In ruling that PFDA is not exempt from paying real property tax, the Court of Tax Appeals cited
Sections 193, 232, and 234 of the Local Government Code which read:

Section 193. Withdrawal of Tax Exemption Privileges. Unless otherwise provided in this
Code, tax exemptions or incentives granted to, or presently enjoyed by all persons,
whether natural or juridical, including government-owned or -controlled corporations,
except local water districts, cooperatives duly registered under R.A. No. 6938, non-stock
and non-profit hospitals and educational institutions, are hereby withdrawn upon
the effectivity of this Code.

Section 232. Power to Levy Real Property Tax. A province or city or a municipality
within the Metropolitan Manila Area may levy an annual ad valorem tax on real property
such as land, building, machinery, and other improvement not hereinafter specifically
exempted.

Section 234. Exemptions from Real Property Tax. The following are exempted from
payment of the real property tax:

(a) Real property owned by the Republic of the Philippines or any of its political
subdivision except when the beneficial use thereof has been granted, for consideration
or otherwise, to a taxable person;

(b) Charitable institutions, churches, parsonages or convents appurtenant thereto,

mosques, nonprofit or religious cemeteries and all lands, buildings and improvements
actually, directly, and exclusively used for religious, charitable or educational purposes;
 (c) All machineries and equipment that are actually, directly and exclusively used by local
water districts and government-owned or -controlled corporations engaged in the supply
and distribution of water and/or generation and transmission of electric power;

(d) All real property owned by duly registered cooperatives as provided for under R.A.
No. 6938; and

(e) Machinery and equipment used for pollution control and environmental protection.

Except as provided herein, any exemption from payment of real property tax previously
granted to, or presently enjoyed by, all persons, whether natural or juridical, including all
government-owned or -controlled corporations are hereby withdrawn upon
the effectivity of this Code.

The Court of Tax Appeals held that as a government-owned or controlled corporation, PFDA is
subject to real property tax imposed by local government units having jurisdiction over its real
properties pursuant to Section 232 of the Local Government Code. According to the Court of Tax
Appeals, Section 193 of the Local Government Code withdrew all tax exemptions granted to
government-owned or controlled corporations. Furthermore, Section 234 of the Local
Government Code explicitly provides that any exemption from payment of real property tax
granted to government-owned or controlled corporations have already been withdrawn upon
the effectivity of the Local Government Code.

The ruling of the Court of Tax Appeals is anchored on the wrong premise that the PFDA is a
government-owned or controlled corporation. On the contrary, this Court has already ruled that
the PFDA is a government instrumentality and not a government-owned or controlled
corporation.

In the 2007 case of Philippine Fisheries Development Authority v. Court of Appeals,6 the Court
resolved the issue of whether the PFDA is a government-owned or controlled corporation or an
instrumentality of the national government. In that case, the City of Iloilo assessed real property
taxes on the Iloilo Fishing Port Complex (IFPC), which was managed and operated by PFDA. The
Court held that PFDA is an instrumentality of the government and is thus exempt from the
payment of real property tax, thus:

The Court rules that the Authority [PFDA] is not a GOCC but an instrumentality of the
national government which is generally exempt from payment of real property tax.
However, said exemption does not apply to the portions of the IFPC which the
Authority leased to private entities. With respect to these properties, the Authority is
liable to pay property tax. Nonetheless, the IFPC, being a property of public dominion
cannot be sold at public auction to satisfy the tax delinquency.
 xxx

Indeed, the Authority is not a GOCC but an instrumentality of the government. The
Authority has a capital stock but it is not divided into shares of stocks. Also, it has no
stockholders or voting shares. Hence it is not a stock corporation. Neither is it a non-
stock corporation because it has no members.

The Authority is actually a national government instrumentality which is defined as an

agency of the national government, not integrated within the department framework,
vested with special functions or jurisdiction by law, endowed with some if not all
corporate powers, administering special funds, and enjoying operational autonomy,
usually through a charter. When the law vests in a government instrumentality corporate
powers, the instrumentality does not become a corporation. Unless the government
instrumentality is organized as a stock or non-stock corporation, it remains a
government instrumentality exercising not only governmental but also corporate
powers.7 (Emphasis supplied)

This ruling was affirmed by the Court in a subsequent PFDA case involving the Navotas Fishing
Port Complex, which is also managed and operated by the PFDA. In consonance with the
previous ruling, the Court held in the subsequent PFDA case that the PFDA is a government
instrumentality not subject to real property tax except those portions of the Navotas Fishing
Port Complex that were leased to taxable or private persons and entities for their beneficial
use.8

Similarly, we hold that as a government instrumentality, the PFDA is exempt from real property
tax imposed on the Lucena Fishing Port Complex, except those portions which are leased to
private persons or entities.

The exercise of the taxing power of local government units is subject to the limitations
enumerated in Section 133 of the Local Government Code.9 Under Section 133(o)10 of the Local
Government Code, local government units have no power to tax instrumentalities of the
national government like the PFDA. Thus, PFDA is not liable to pay real property tax assessed by
the Office of the City Treasurer of Lucena City on the Lucena Fishing Port Complex, except those
portions which are leased to private persons or entities.

Besides, the Lucena Fishing Port Complex is a property of public dominion intended for public
use, and is therefore exempt from real property tax under Section 234(a)11 of the Local
Government Code. Properties of public dominion are owned by the State or the Republic of the
Philippines.12 Thus, Article 420 of the Civil Code provides:

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. (Emphasis
supplied).

The Lucena Fishing Port Complex, which is one of the major infrastructure projects undertaken
by the National Government under the Nationwide Fishing Ports Package, is devoted for public
use and falls within the term ports. The Lucena Fishing Port Complex serves as PFDAs
commitment to continuously provide post-harvest infrastructure support to the fishing industry,
especially in areas where productivity among the various players in the fishing industry need to
be enhanced.13 As property of public dominion, the Lucena Fishing Port Complex is owned by
the Republic of the Philippines and thus exempt from real estate tax.

WHEREFORE, we GRANT the petition. We SET ASIDE the Decision dated 9 May 2007 of the
Court of Tax Appeals in C.T.A. EB No. 193. We DECLARE the Lucena Fishing Port
Complex EXEMPT from real property tax imposed by the City of Lucena. We declare VOID all the
real property tax assessments issued by the City of Lucena on the Lucena Fishing Port Complex
managed by Philippine Fisheries Development Authority, EXCEPT for the portions that the
Philippine Fisheries Development Authority has leased to private parties.

SO ORDERED.
 Teofilo C. Villarico vs Vivencio Sarmiento, Spouses Del Mundo Andoks Litson and Marites
Carinderia
G.R. No. 13649, November 4, 2004
Sandoval-Guttierez, J.

Facts:

Villarico here is an owner of a lot that is separated from the Ninoy Aquino Avenue highway by a
strip of land belonging to the government. Vivencio Sarmiento had a building constructed on a
portion of the said government land and a part thereof was occupied by Andoks Litson Corp.

In 1993, by means of a Deed of Exchange of Real Property, Villarico acquired a portion of the
same area owned by the government.

He then filed an accion publiciana alleging that respondents(Vivencio) on the government land
closed his right of way to the Ninoy Aquino Avenue and encroached on a portion of his lot.

Issue:
Whether or not VIllarico has a right of way to the NAA.

Ratio:
No. It is not disputed in this case that the alleged right of way to the lot belongs to the
state or property of public dominion.

It is intended for public use meaning that it is not confined toprivileged individuals but is
open to the indefinite public.Records show that the lot on which the stairways were built
isfor the use of the people as passageway hence, it is a property for public dominion.

Public dominion property is outside the commerce of man and hence, it cannot be:

Alienated or leased or otherwise be the subject matterof contracts

Acquired by prescription against the state

Cannot be the subject of attachment and execution

Be burdened by any voluntary easement

It cannot be burdened by a voluntary easement of right of way in favorof the petitioner

and petitioner cannot appropriate it for himself andhe cannot claim any right of
possession over it.
Republic vs Andrea Tan
G.R. No. 199537, February 10 2016
 Brion, J.

Antecedents

On October 2, 2002, Tan applied for the original registration of title of Lot No. 4080, Cad. 545-D
(new) situated in Casili, Consolacion, Cebu (the subject lot). She alleged that she is the absolute
owner in fee simple of the said 7,807 square-meter parcel of residential land she purchased
from a certain Julian Gonzaga on September 17, 1992. Her application was docketed as LRC
Case No. N-144.

After complying with the jurisdictional requirements, the land registration court issued an order
of general default, excepting the State which was duly represented by the Solicitor General.

During the trial, Tan proved the following facts:

The subject lot is within Block 1, Project No. 28, per LC Map No. 2545 of Consolacion, Cebu;

The subject lot was declared alienable and disposable on September 1, 1965, pursuant to
Forestry Administrative Order No. 4-1063;

Luciano Gonzaga who was issued Tax Declaration Nos. 01465 in 1965 and 02983 in 1972 initially
possessed the subject lot.

After Luciano's death, Julian Gonzaga inherited the subject lot;

Andrea Tan purchased the subject lot from Julian Gonzaga on September 17, 1992;

She, through her predecessors, had been in peaceful, open, continuous, exclusive, and
notorious possession of the subject lot in the concept of an owner for over thirty (30) years.

On 28 April 2004, the land registration court granted Tan's application. The court confirmed her
title over the subject lot and ordered its registration.

The Republic appealed the case to the CA, arguing that Tan failed to prove that she is a Filipino
citizen who has been in open, continuous, exclusive, and notorious possession and occupation
of the subject lot, in the concept of an owner, since June 12, 1945, or earlier, immediately
preceding the filing of her application. The appeal was docketed as CA-G.R. CEB-CV No. 00702.

On May 29, 2009, the CA denied the appeal. The CA observed that under the Public Land Act,
there are two kinds of applicants for original registration: (1) those who had possessed the land
since June 12, 1945; and (2) those who already acquired the property through prescription. The
respondent's application fell under the second category.
The CA noted that before land of the public domain can be acquired by prescription, it must
have been declared alienable and disposable agricultural land. The CA pointed to the
certification issued by the Community Environment and Natural Resources Office (CENRO) as
evidence that the subject was classified as alienable and disposable on September 1, 1965,
pursuant to Land Classification Project No. 28. The CA concluded that Tan had already acquired
the subject lot by prescription.

On July 2, 2009, the Republic moved for reconsideration. Citing Republic v. Herbieto,4 it argued
that an applicant for judicial confirmation of title must have been in possession and occupation
of the subject land since June 12, 1945, or earlier, and that the subject land has been likewise
already declared alienable and disposable since June 12, 1945, or earlier.5

On October 18, 2011, the CA denied the motion for reconsideration citing the then recent case
of Heirs of Mario Malabanan v. Rep. of the Philippines6 which abandoned the ruling in Herbieto.
Malabanan declared that our law does not require that the property should have been declared
alienable and disposable since June 12, 1945, as long as the declaration was made before the
application for registration is filed.7

On January 5, 2012, the Republic filed the present petition for review on certiorari.

The Petition

The Republic argues: (1) that the CA misapplied the doctrine in Malabanan; and (2) that the
CENRO certification and tax declarations presented were insufficient to prove that the subject
lot was no longer intended for public use.

Meanwhile, the respondent insists that she has already proven her title over the subject lot. She
maintains that the classification of the subject lot as alienable and disposable public land by the
DENR on September 1, 1965, per Land Classification Project No. 28, converted it into
patrimonial property of the State.

From the submissions, the lone issue is whether a declaration that Government-owned land has
become alienable and disposable sufficiently converts it into patrimonial property of the State,
making it susceptible to acquisitive prescription.

Our Ruling

We find the petition meritorious.

All lands of the public domain belong to the State. It is the fountain from which springs any
asserted right of ownership over land. Accordingly, the State owns all lands that are not clearly
within private ownership. This is the Regalian Doctrine which has been incorporated in all of our
Constitutions and repeatedly embraced in jurisprudence.8 Under the present Constitution,
lands of the public domain are not alienable except for agricultural lands.9
The Public Land Act10 (PLA) governs the classification, grant, and disposition of alienable and
disposable lands of the public domain. It is the primary substantive law on this matter. Section
11 thereof recognizes judicial confirmation of imperfect titles as a mode of disposition of
alienable public lands.11 Relative thereto, Section 48(b) of the PLA identifies who are entitled to
judicial confirmation of their title:

(b) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive, and notorious possession and occupation of agricultural lands of the
public domain, under a bona fide claim of acquisition or ownership, since June 12, 1945,
immediately preceding the filing of the application for confirmation of title, except when
prevented by war or force majeure. Those 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. (As amended by PD 1073.)

The Property Registration Decree12 (PRD) complements the PLA by prescribing how registrable
lands, including alienable public lands, are brought within the coverage of the Torrens system.
Section 14 of the PRD enumerates the qualified applicants for original registration of title:

Section 14. Who may apply. The following persons may file in the proper Court of First Instance
an application for registration of title to land, whether personally or through their duly
authorized representatives:

(1) Those who by themselves or through their predecessors-in-interest 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 ownership since June 12,1945, or earlier;

(2) Those who have acquired ownership of private lands by prescription under the provision of
existing laws;

(3) Those who have acquired ownership of private lands or abandoned river beds by right of
accession or accretion under the existing laws;

(4) Those who have acquired ownership of land in any other manner provided for by
law.13ChanRoblesVirtualawlibrary

The PRD also recognizes prescription as a mode of acquiring ownership under the Civil Code.14
Nevertheless, prescription under Section 14(2) must not be confused with judicial confirmation
of title under Section 14(1). Judicial confirmation of title requires:

That the applicant is a Filipino citizen;15

That the applicant, by himself or through his predecessors-in- interest, has been in open,
continuous, exclusive and notorious possession and occupation of the property since June 12,
1945;16

That the property had been declared alienable and disposable as of the filing of the
application.17

Only private property can be acquired by prescription. Property of public dominion is outside
the commerce of man.18 It cannot be the object of prescription19 because prescription does
not run against the State in its sovereign capacity.20 However, when property of public
dominion is no longer intended for public use or for public service, it becomes part of the
patrimonial property of the State.21 When this happens, the property is withdrawn from public
dominion and becomes property of private ownership, albeit still owned by the State.22 The
property is now brought within the commerce of man and becomes susceptible to the concepts
of legal possession and prescription.

In the present case, respondent Tan's application is not anchored on judicial confirmation of an
imperfect title because she does not claim to have possessed the subject lot since June 12,
1945. Her application is based on acquisitive prescription on the claim that: (1) the property was
declared alienable and disposable on September 1, 1965; and (2) she had been in open
continuous, public, and notorious possession of the subject lot in the concept of an owner for
over thirty (30) years.

In our 2009 decision and 2013 resolution23 in Malabanan, we already held en banc that a
declaration that property of the public dominion is alienable and disposable does not ipso facto
convert it into patrimonial property. We said:

Accordingly, there must be an express declaration by the State that the public dominion
property is no longer intended for public service or the development of the national wealth or
that the property has been converted into patrimonial. Without such express declaration, the
property, even if classified as alienable or disposable, remains property of the public dominion,
pursuant to Article 420(2), and thus incapable of acquisition by prescription. It is only when
such alienable and disposable lands are expressly declared by the State to be no longer
intended for public service or for the development of the national wealth that the period of
acquisitive prescription can begin to run. Such declaration shall be in the form of a law duly
enacted by Congress or a Presidential Proclamation in cases where the President is duly
authorized by law.24ChanRoblesVirtualawlibrary

While a prior declaration that the property has become alienable and disposable is sufficient in
an application for judicial confirmation of title under Section 14(1) of the PRD, it does not suffice
for the purpose of prescription under the Civil Code.25 Before prescription can even begin to
run against the State, the following conditions must concur to convert the subject into
patrimonial property:
The subject lot must have been classified as agricultural land in compliance with Sections 2 and
3 of Article XII of the Constitution;

The land must have been classified as alienable and disposable;26

There must be a declaration from a competent authority that the subject lot is no longer
intended for public use, thereby converting it to patrimonial property.

Only when these conditions are met can applicants begin their public and peaceful possession
of the subject lot in the concept of an owner.

In the present case, the third condition is absent. Even though it has been declared alienable
and disposable, the property has not been withdrawn from public use or public service.
Without this, prescription cannot begin to run because the property has not yet been converted
into patrimonial property of the State. It remains outside the commerce of man and the
respondent's physical possession and occupation thereof do not produce any legal effect. In the
eyes of the law, the respondent has never acquired legal possession of the property and her
physical possession thereof, no matter how long, can never ripen into ownership.chanrobleslaw

WHEREFORE, we hereby GRANT the petition. The May 29, 2009 decision and October 18, 2011
resolution of the Court of Appeals in CA-G.R. CEB-CV No. 00702 are REVERSED and SET ASIDE.
The respondent's application for Land Registration is DENIED for lack of merit. No
pronouncement as to costs.

SO ORDERED.

DENR et al VS. YAP et al

 G.R. No. 167707
October 8, 2008

FACTS: On November 10, 1978, then President Marcos issued Proc. No. 1801 declaring Boracay
Island, among other islands, caves and peninsulas in the Philippines, as tourist zones and
marine reserves under the administration of the Philippine Tourism Authority (PTA). President
Marcos later approved the issuance of PTA Circular 3-82 dated September 3, 1982, to
implement Proclamation No. 1801.

Claiming that Proclamation No. 1801 and PTA Circular No 3-82 precluded them from filing an
application for judicial confirmation of imperfect title or survey of land for titling purposes,
respondents-claimants Mayor . Yap, Jr., and others filed a petition for declaratory relief with
the RTC in Kalibo, Aklan

In their petition, respondents-claimants alleged that Proc. No. 1801 and PTA Circular No. 3-82
raised doubts on their right to secure titles over their occupied lands. They declared that they
themselves, or through their predecessors-in-interest, had been in open, continuous, exclusive,
and notorious possession and occupation in Boracay since June 12, 1945, or earlier since time
immemorial. They declared their lands for tax purposes and paid realty taxes on them.
Respondents-claimants posited that Proclamation No. 1801 and its implementing Circular did
not place Boracay beyond the commerce of man. Since the Island was classified as a tourist
zone, it was susceptible of private ownership. Under Section 48(b) of the Public Land Act, they
had the right to have the lots registered in their names through judicial confirmation of
imperfect titles.

The Republic, through the OSG, opposed the petition for declaratory relief. The OSG countered
that Boracay Island was an unclassified land of the public domain. It formed part of the mass of
lands classified as public forest, which was not available for disposition pursuant to Section
3(a) of the Revised Forestry Code, as amended. The OSG maintained that respondents-
claimants reliance on PD No. 1801 and PTA Circular No. 3-82 was misplaced. Their right to
judicial confirmation of title was governed by Public Land Act and Revised Forestry Code, as
amended. Since Boracay Island had not been classified as alienable and disposable, whatever
possession they had cannot ripen into ownership.

On July 14, 1999, the RTC rendered a decision in favor of respondents-claimants, declaring that,
PD 1810 and PTA Circular No. 3-82 Revised Forestry Code, as amended.

The OSG moved for reconsideration but its motion was denied. The Republic then appealed to
the CA. On In 2004, the appellate court affirmed in toto the RTC decision. Again, the OSG sought
reconsideration but it was similarly denied. Hence, the present petition under Rule 45.
On May 22, 2006, during the pendency the petition in the trial court, President Gloria
Macapagal-Arroyo issued Proclamation No. 1064 classifying Boracay Island partly reserved
forest land (protection purposes) and partly agricultural land (alienable and disposable).

On August 10, 2006, petitioners-claimants Sacay,and other landowners in Boracay filed with this
Court an original petition for prohibition, mandamus, and nullification of Proclamation No.
1064. They allege that the Proclamation infringed on their prior vested rights over portions of
Boracay. They have been in continued possession of their respective lots in Boracay since time
immemorial.

On November 21, 2006, this Court ordered the consolidation of the two petitions

ISSUE: the main issue is whether private claimants have a right to secure titles over their
occupied portions in Boracay.

HELD: petitions DENIED. The CA decision is reversed.

Except for lands already covered by existing titles, Boracay was an unclassified land of the
public domain prior to Proclamation No. 1064. Such unclassified lands are considered public
forest under PD No. 705.

PD No. 705 issued by President Marcos categorized all unclassified lands of the public domain as
public forest. Section 3(a) of PD No. 705 defines a public forest as a 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 purpose and which are not. Applying PD
No. 705, all unclassified lands, including those in Boracay Island, are ipso facto considered public
forests. PD No. 705, however, respects titles already existing prior to its effectivity.

The 1935 Constitution classified lands of the public domain into agricultural, forest or timber,
such classification modified by the 1973 Constitution. The 1987 Constitution reverted to the
1935 Constitution classification with one addition: national parks. Of these, only agricultural
lands may be alienated. Prior to Proclamation No. 1064 of May 22, 2006, Boracay Island had
never been expressly and administratively classified under any of these grand divisions. Boracay
was an unclassified land of the public domain.

A positive act declaring land as alienable and disposable is required. In keeping with the
presumption of State ownership, the Court has time and again emphasized that there must be a
positive act of the government, such as a presidential proclamation or an executive order; an
administrative action; investigation reports of Bureau of Lands investigators; and a legislative act
or a statute. The applicant may also secure a certification from the government that the land
claimed to have been possessed for the required number of years is alienable and disposable.
The burden of proof in overcoming such presumption is on the person applying for registration
(or claiming ownership), who must prove that the land subject of the application is alienable or
disposable.
In the case at bar, no such proclamation, executive order, administrative action, report, statute,
or certification was presented to the Court. The records are bereft of evidence showing that,
prior to 2006, the portions of Boracay occupied by private claimants were subject of a
government proclamation that the land is alienable and disposable. Matters of land
classification or reclassification cannot be assumed. They call for proof.

Proc. No. 1801 cannot be deemed the positive act needed to classify Boracay Island as alienable
and disposable land. If President Marcos intended to classify the island as alienable and
disposable or forest, or both, he would have identified the specific limits of each, as President
Arroyo did in Proclamation No. 1064. This was not done in Proclamation No. 1801.

NOTES:

1. Private claimants reliance on Ankron and De Aldecoa is misplaced. Ankron and De Aldecoa
were decided at a time when the President of the Philippines had no power to classify lands of
the public domain into mineral, timber, and agricultural. At that time, the courts were free to
make corresponding classifications in justiciable cases, or were vested with implicit power to do
so, depending upon the preponderance of the evidence. Act No. 2874, promulgated in 1919
and reproduced in Section 6 of Public Land Act, gave the Executive Department, through the
President, the exclusive prerogative to classify or reclassify public lands into alienable or
disposable, mineral or forest. Since then, courts no longer had the authority, whether express or
implied, to determine the classification of lands of the public domain.

2. Each case must be decided upon the proof in that particular case, having regard for its
present or future value for one or the other purposes. We believe, however, considering the
fact that it is a matter of public knowledge that a majority of the lands in the Philippine Islands
are agricultural lands that the courts have a right to presume, in the absence of evidence to the
contrary, that in each case the lands are agricultural lands until the contrary is shown.
Whatever the land involved in a particular land registration case is forestry or mineral land
must, therefore, be a matter of proof. Its superior value for one purpose or the other is a
question of fact to be settled by the proof in each particular case

Forests, in the context of both the Public Land Act and the Constitution classifying lands of the
public domain into agricultural, forest or timber, mineral lands, and national parks, do not
necessarily refer to large tracts of wooded land or expanses covered by dense growths of trees
and underbrushes. The discussion in Heirs of Amunategui v. Director of Forestry is particularly
instructive:

A forested area classified as forest land of the public domain does not lose such classification
simply because loggers or settlers may have stripped it of its forest cover. Parcels of land
classified as forest land may actually be covered with grass or planted to crops by kaingin
cultivators or other farmers. Forest lands do not have to be on mountains or in out of the way
places. Swampy areas covered by mangrove trees, nipa palms, and other trees growing in
brackish or sea water may also be classified as forest land. The classification is descriptive of its
legal nature or status and does not have to be descriptive of what the land actually looks like.
Unless and until the land classified as forest is released in an official proclamation to that
effect so that it may form part of the disposable agricultural lands of the public domain, the
rules on confirmation of imperfect title do not apply.

There is a big difference between forest as defined in a dictionary and forest or timber land
as a classification of lands of the public domain as appearing in our statutes. One is descriptive
of what appears on the land while the other is a legal status, a classification for legal purposes.
At any rate, the Court is tasked to determine the legal status of Boracay Island, and not look into
its physical layout. Hence, even if its forest cover has been replaced by beach resorts,
restaurants and other commercial establishments, it has not been automatically converted from
public forest to alienable agricultural land.

3. All is not lost, however, for private claimants. While they may not be eligible to apply for
judicial confirmation of imperfect title under Section 48(b) of CA No. 141, as amended, this does
not denote their automatic ouster from the residential, commercial, and other areas they
possess now classified as agricultural. Neither will this mean the loss of their substantial
investments on their occupied alienable lands. Lack of title does not necessarily mean lack of
right to possess.

For one thing, those with lawful possession may claim good faith as builders of improvements.
They can take steps to preserve or protect their possession. For another, they may look into
other modes of applying for original registration of title, such as by homestead or sales patent,
subject to the conditions imposed by law.

More realistically, Congress may enact a law to entitle private claimants to acquire title to their
occupied lots or to exempt them from certain requirements under the present land laws. There
is one such bill now pending in the House of Representatives.
Pagkatipunan v. CA (379 SCRA 621, G.R. No. 129682, March 21, 2002)

FACTS:Petitioners (Nestor Pagkatipunan and Rosalina Maagas-Pagkatipunan) were able to

register a parcel of land. 18 years later, the Republic of the Philippines filed with the CA an
action to cancel the registration for the certificates of title therein are null and void alleging that
at the tile of the filing of the land registration, the subject land was still classified as timberland,
hence inalienable and not subject to registration. Petitioner on the other hand raised the
defenses of indefeasibility of title for it took the government 18 years to assail the validity of the
certificate of title issued to them.

ISSUE: WON the republic is barred by prescription? NO.

HELD: Unless public land is shown to have been reclassified or alienated to a private person by
the State, it remains part of the inalienable public domain. Occupation thereof in the concept of
owner, no matter how long, cannot ripen into ownership and be registered as a title.
Furthermore, evidence extant on record showed that at the time of filing of the application for
land registration and issuance of the certificate of title over the disputed land in the name of
petitioners, the same was timberland and formed part of the public domain.

Under the Regalian doctrine, all lands of the public domain belong to the State, and the
State is the source of any asserted right to ownership in land and charged with the conservation
of such patrimony. This same doctrine also states that all lands not otherwise appearing to be
clearly within private ownership are presumed to belong to the State. To overcome such
presumption, incontrovertible evidence must be shown by the applicant that the land subject of
the application is alienable or disposable.

In the case at bar, there was no evidence showing that the land has been reclassified as
disposable or alienable. Before any land may be declassified from the forest group and
converted into alienable or disposable land for agricultural or other purposes, there must be a
positive act from the government. Even rules on the confirmation of imperfect titles do not
apply unless and until the land classified as forest land is released in an official proclamation to
that effect so that it may form part of the disposable agricultural lands of the public domain.
Declassification of forest land is an express and positive act of Government. It cannot be
presumed. Neither should it be ignored nor deemed waived. It calls for proof.

The classification of forest land, or any land for that matter, is descriptive of its legal
nature or status, and does not have to be descriptive of what the land actually looks like. A
person cannot enter into forest land and by the simple act of cultivating a portion of that land,
earn credits towards an eventual confirmation of imperfect
EVY D. MACASIANO VS. HONORABLE ROBERTO C. DIOKNO,MUNICIPALITY OF
PARANAQUE,METRO MANILA, PALANYAG KILUSANG BAYAN FOR SERVICE GR No.
97764 August 10, 1992

Facts: On June 13, 1990, the municipality of Paranaque passed an ordinance

authorizing the closure of some streets located at Baclaran, Paranaque, Metro
Manila and the establishment of a flea market thereon. By virtue of this Paranaque
Mayor Ferrer was authorized to enter into a contract to any service cooperative for
the establishment, operation, maintenance and management of flea market and/or
vending areas. Because of this purpose, respondent Palanyag entered into an
agreement with the municipality of Paranaque with the obligation to remit dues to
the treasury. Consequently, market stalls were put up by respondent Palanyag on
the said streets.

On September 30, 1990, Brig. Gen Macasiano, PNP Superintendent of

Metropolitan Traffic Command ordered the destruction and confiscation of the
stalls. These stalls were later returned to Palanyag. Petitioner then sent a letter to
Palanyag giving the latter 10 days to discontinue the flea market otherwise the
market stalls shall be dismantled. Hence, respondents filed with the 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. The court issued a temporary restraining order
to enjoin petitioner from enforcing his letter pending the hearing on the motion for
writ of preliminary injunction.

Issue: Whether an ordinance issued by the municipality of Paranaque authorizing

the lease and use of public streets or thoroughfares as sites for flea market is valid?

Held: Article 424 lays down the basic principle that properties of public domain
devoted to public use and made available to the public in general are outside the
commerce of man and cannot be disposed or leased by the local government unit to
private persons. Aside from the requirement of due process, the closure of the road
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 becomes patrimonial property of the local government unit
concerned. It is only then that respondent municipality can use or convey them for
any purpose for which other real property belonging to the local unit concerned
might lawfully used or conveyed.

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. Hence the ordinance is null
and void.
 G.R. No. L-24440 March 28, 1968
THE PROVINCE OF ZAMBOANGA DEL NORTE, plaintiff-appellee,
vs.
CITY OF ZAMBOANGA, SECRETARY OF FINANCE and
COMMISSIONER OF INTERNAL REVENUE,defendants-appellants.
Facts:
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.

Such properties include lots of capitol site, schools, hospitals,

leprosarium, high school playgrounds, burleighs, and hydro-electric
sites.
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.

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.

This constrained Zamboanga del Norte to file on March 5, 1962, a complaint

against defendants-appellants Zamboanga City; that, among others, Republic
Act 3039 be declared unconstitutional for depriving Zamboanga del Norte of
property without due process and just compensation.

Lower court declared RA 3039 unconstitutional as it deprives Zamboanga del

Norte of its private properties.

Hence the appeal.

Issue:
Whether RA 3039 is unconstitutional on the grounds that it deprives
Zamboanga del Norte of its private properties.

Held:
No. RA 3039 is valid. The properties petitioned by Zamboanga del Norte is a
public property.

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.

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?

Civil Code
The Civil 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.

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. The playgrounds, however, would fit into this category.

Law of Municipal Corporations

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.

Final Ruling
The controversy here is more along the domains of the Law of Municipal
Corporations State vs. Province than along that of Civil Law. If municipal
property held and devoted to public service is in the same category as
ordinary private property, then that would mean they can be levied upon and
attached; they can even be acquired thru adverse possession all these to
the detriment of the local community. It is wrong to consider those properties
as ordinary private property.

Lastly, the classification of properties other than those for public use in the
municipalities as patrimonial under Art. 424 of the Civil Code is without
prejudice to the provisions of special laws. For purpose of this article, the
principles, obtaining under the Law of Municipal Corporations can be
considered as special laws. Hence, the classification of municipal property
devoted for distinctly governmental purposes as public should prevail over the
Civil Code classification in this particular case.

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 plaintiffs 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.