FELS appealed the LBAA’s ruling to the Central Board of Assessment
FELS ENERGY, INC. V THE PROVINCE OF BATANGAS and
THE OFFICE OF THE PROVINCIAL ASSESSOR OF
BATANGAS
G.R. No. 168557 February 16, 2007
FACTS
Two consolidated cases were filed by FELS Energy, Inc. (FELS) and
National Power Corporation (NPC), respectively.
NPC entered into a lease contract with Polar Energy, Inc. over diesel
engine power barges moored at Batangas. The contract, denominated
as an Energy Conversion Agreement, was for a period of five years
wherein, NPC shall be responsible for the payment of:
(a) all taxes, import duties, fees, charges and other levies imposed by
the National Government
(b) all real estate taxes and assessments, rates and other charges in
respect of the Power Barges
Subsequently, Polar Energy, Inc. assigned its rights under the
Agreement to FELS. Thereafter, FELS received an assessment of real
property taxes on the power barges. The assessed tax, which likewise
covered those due for 1994, amounted to P56,184,088.40 per annum.
FELS referred the matter to NPC, reminding it of its obligation under
the Agreement to pay all real estate taxes. It then gave NPC the full
power and authority to represent it in any conference regarding the real
property assessment of the Provincial Assessor.
NPC sought reconsideration of the Provincial Assessor’s decision to
assess real property taxes on the power barges. However, the motion
was denied. The Local Board of Assessment Appeals
(LBAA) ruled that the power plant facilities, while they may be
classified as movable or personal property, are nevertheless
considered real property for taxation purposes because they are
installed at a specific location with a character of permanency.
Appeals (CBAA). The CBAA rendered a Decision finding the power
barges exempt from real property tax.
It was later reversed by the cbaa upon reconsideration and affirmed by
the CA
ISSUE
Whether power barges, which are floating and movable, are personal
properties and therefore, not subject to real property tax.
RULING
No. Article 415 (9) of the New Civil Code provides that "[d]ocks and
structures which, though floating, are intended by their nature and
object to remain at a fixed place on a river, lake, or coast" are
considered immovable property. Thus, power barges are categorized
as immovable property by destination, being in the nature of
machinery and other implements intended by the owner for an industry
or work which may be carried on in a building or on a piece of land
and which tend directly to meet the needs of said industry or work.
The findings of the LBAA and CBAA that the owner of the taxable
properties is petitioner FELS is the entity being taxed by the local
government. As stipulated under the Agreement:
OWNERSHIP OF POWER BARGES. POLAR shall own the Power
Barges and all the fixtures, fittings, machinery and equipment on the
Site used in connection with the Power Barges which have been
supplied by it at its own cost. POLAR shall operate, manage and
maintain the Power Barges for the purpose of converting Fuel of
NAPOCOR into electricity.
It follows then that FELS cannot escape liability from the payment of
realty taxes by invoking its exemption in Section 234 (c) of R.A. No.
7160,
…the law states that the machinery must be actually, directly
and exclusively used by the government owned or controlled
corporation;

The agreement POLAR undertakes that until the end of the Lease
Period, it will operate the Power Barges to convert such Fuel into
electricity. Therefore, FELS shall be liable for the realty taxes and not
the NPC who is not actually, directly and exclusively using the same.
It is a basic rule that obligations arising from a contract have the force
of law between the parties. Petitioners are denied.
416 Movable properties
U.S vs Carlos
Carlos stole about 2273 kilowatts of electricity worth 909 pesos from
Meralco. The court issued warrant for arrest. Mr. Carlos demurred
and refused to enter a plea. He claimed that what he did failed to
constitute an offense. His counsel further asserted that the crime of
larceny applied only to tangibles, chattels and objects that can be
taken into possession and spirited away.
Deliberation quickly followed at the court which subsequently
sentenced him to over a year in jail. Mr. Carlos contested saying that
electrical energy can’t be stolen (how can one steal an incorporeal
thing?). He filed an appeal on such grounds and the court of first
instance affirmed the decision. The case reached the Supreme Court.
Whether or not larceny can be committed against an intangible such
as electricity.
Yes, larceny of incorporeal objects is possible. The right of
ownership of electrical current was secured by
Art 517 and 518 of the Penal Code which applies to gas.
Analogically, electricity can be considered as ‘gas’ which can be
stolen. However, the true test of what constitutes the proper subject
of larceny is not whether the subject is corporeal or incorporeal, but
whether is is capable of appropriation by another other than the
owner. It is a valuable article of merchandise, a force of nature
brought under the control of science. Mr. Carlos secretly and with
intent to deprive the company of its rightful property, used jumper
cables to appropriate the same for his own use. This constitutes
larceny.
LUIS MARCOS P. LAUREL, G.R. No. 155076
HON. ZEUS C. ABROGAR,
Presiding Judge of the Regional
Trial Court, Makati City, Branch 150,
PEOPLE OF THE PHILIPPINES Promulgated:
& PHILIPPINE LONG DISTANCE
TELEPHONE COMPANY,
Respondents. January 13, 2009
On February 27, 2006, this Courts First Division rendered judgment
in this case as follows:
IN LIGHT OF ALL THE FOREGOING, the petition
is GRANTED. The assailed Orders of the Regional Trial Court and
the Decision of the Court of Appeals are REVERSED and SET
ASIDE. The Regional Trial Court is directed to issue an order
granting the motion of the petitioner to quash the Amended
Information.
SO ORDERED.[1]
By way of brief background, petitioner is one of the accused in
Criminal Case No. 99-2425, filed with
the Regional Trial Court of Makati City, Branch 150. The Amended
Information charged the accused with theft under Article 308 of the
Revised Penal Code, committed as follows:
On or about September 10-19, 1999, or prior thereto in Makati City,
and within the jurisdiction of this Honorable Court, the accused,
conspiring and confederating together and all of them mutually
helping and aiding one another, with intent to gain and without the
knowledge and consent of the Philippine Long Distance Telephone
(PLDT), did then and there willfully, unlawfully and feloniously
take, steal and use the international long distance calls belonging to
PLDT by conducting International Simple Resale (ISR), which is a
method of routing and completing international long distance calls
using lines, cables, antenae, and/or air wave frequency which
connect directly to the local or domestic exchange facilities of the
country where the call is destined, effectively stealing this business
from PLDT while using its facilities in the estimated amount of
P20,370,651.92 to the damage and prejudice of PLDT, in the said
amount.
CONTRARY TO LAW.[2]
Petitioner filed a Motion to Quash (with Motion to Defer
Arraignment), on the ground that the factual allegations in the
Amended Information do not constitute the felony of theft. The trial
court denied the Motion to Quash the Amended Information, as well
petitioners subsequent Motion for Reconsideration.
Petitioners special civil action for certiorari was dismissed by the
Court of Appeals. Thus, petitioner filed the instant petition for
review with this Court.
In the above-quoted Decision, this Court held that the Amended
Information does not contain material allegations charging petitioner
with theft of personal property since international long distance calls
and the business of providing telecommunication or telephone
services are not personal properties under Article 308 of the Revised
Penal Code.
Respondent Philippine Long Distance Telephone Company (PLDT)
filed a Motion for Reconsideration with Motion to Refer the Case to
the Supreme Court En Banc. It maintains that the Amended
Information charging petitioner with theft is valid and sufficient; that
it states the names of all the accused who were specifically charged
with the crime of theft of PLDTs international calls and business of
providing telecommunication or telephone service on or about
September 10 to 19, 1999 in Makati City by conducting ISR or
International Simple Resale; that it identifies the international calls
and business of providing telecommunication or telephone service of
PLDT as the personal properties which were unlawfully taken by the
accused; and that it satisfies the test of sufficiency as it enabled a
person of common understanding to know the charge against him
and the court to render judgment properly.
PLDT further insists that the Revised Penal Code should be
interpreted in the context of the Civil Codes definition of real and
personal property. The enumeration of real properties in Article 415
of the Civil Code is exclusive such that all those not included therein
are personal properties. Since Article 308 of the Revised Penal Code
used the words personal property without qualification, it follows
that all personal properties as understood in the context of the Civil
Code, may be the subject of theft under Article 308 of the Revised
Penal Code. PLDT alleges that the international calls and business of
providing telecommunication or telephone service are personal
properties capable of appropriation and can be objects of theft.
PLDT also argues that taking in relation to theft under the Revised
Penal Code does not require asportation, the sole requisite being that
the object should be capable of appropriation. The element of taking
referred to in Article 308 of the Revised Penal Code means the act of
depriving another of the possession and dominion of a movable
coupled with the intention, at the time of the taking, of withholding it
with the character of permanency. There must be intent to
appropriate, which means to deprive the lawful owner of the
thing. Thus, the term personal properties under Article 308 of the
Revised Penal Code is not limited to only personal properties which
are susceptible of being severed from a mass or larger quantity and
of being transported from place to place.
PLDT likewise alleges that as early as the 1930s, international
telephone calls were in existence; hence, there is no basis for this
Courts finding that the Legislature could not have contemplated the
theft of international telephone calls and the unlawful transmission
and routing of electronic voice signals or impulses emanating from
such calls by unlawfully tampering with the telephone device as
within the coverage of the Revised Penal Code.
According to respondent, the international phone calls which are
electric currents or sets of electric impulses transmitted through a
medium, and carry a pattern representing the human voice to a
receiver, are personal properties which may be subject of
theft. Article 416(3) of the Civil Code deems forces of nature (which
includes electricity) which are brought under the control by science,
are personal property.
In his Comment to PLDTs motion for reconsideration, petitioner
Laurel claims that a telephone call is a conversation on the phone or
a communication carried out using the telephone. It is not
synonymous to electric current or impulses. Hence, it may not be
considered as personal property susceptible of
appropriation. Petitioner claims that the analogy between generated
electricity and telephone calls is misplaced. PLDT does not produce
or generate telephone calls. It only provides the facilities or services
for the transmission and switching of the calls. He also insists that
business is not personal property. It is not the business that is
protected but the right to carry on a business. This right is what is
considered as property. Since the services of PLDT cannot be
considered as property, the same may not be subject of theft.
The Office of the Solicitor General (OSG) agrees with respondent
PLDT that international phone calls and the business or service of
providing international phone calls are subsumed in the enumeration
and definition of personal property under the Civil Code hence, may
be proper subjects of theft. It noted that the cases of United States v.
Genato,[3]United States v. Carlos[4] and United States v.
Tambunting,[5] which recognized intangible properties like gas and
electricity as personal properties, are deemed incorporated in our
penal laws. Moreover, the theft provision in the Revised Penal Code
was deliberately couched in broad terms precisely to be all-
encompassing and embracing even such scenario that could not have
been easily anticipated.
According to the OSG, prosecution under Republic Act (RA) No.
8484 or the Access Device Regulations Act of 1998 and RA 8792 or
the Electronic Commerce Act of 2000does not preclude prosecution
under the Revised Penal Code for the crime of theft. The latter
embraces unauthorized appropriation or use of PLDTs international
calls, service and business, for personal profit or gain, to the
prejudice of PLDT as owner thereof. On the other hand, the special
laws punish the surreptitious and advanced technical means
employed to illegally obtain the subject service and business. Even
assuming that the correct indictment should have been under RA
8484, the quashal of the information would still not be proper. The
charge of theft as alleged in the Information should be taken in
relation to RA 8484 because it is the elements, and not the
designation of the crime, that control.
Considering the gravity and complexity of the novel questions of law
involved in this case, the Special First Division resolved to refer the
same to the Banc.
We resolve to grant the Motion for Reconsideration but remand the
case to the trial court for proper clarification of the Amended
Information.
Article 308 of the Revised Penal Code provides:
Art. 308. Who are liable for theft. Theft is committed by any person
who, with intent to gain but without violence against, or intimidation
of persons nor force upon things, shall take personal property of
another without the latters consent.
The elements of theft under Article 308 of the Revised Penal Code
are as follows: (1) that there be taking of personal property; (2) that
said property belongs to another; (3) that the taking be done with
intent to gain; (4) that the taking be done without the consent of the
owner; and (5) that the taking be accomplished without the use of
violence against or intimidation of persons or force upon things.
Prior to the passage of the Revised Penal Code on December 8, 1930,
the definition of the term personal property in the penal code
provision on theft had been established in Philippine
jurisprudence. This Court, in United States v. Genato, United States
v. Carlos, and United States v. Tambunting, consistently ruled that
any personal property, tangible or intangible, corporeal or
incorporeal, capable of appropriation can be the object of theft.
Moreover, since the passage of the Revised Penal Code on December
8, 1930, the term personal property has had a generally accepted
definition in civil law. In Article 335 of the Civil Code of Spain,
personal property is defined as anything susceptible of appropriation
and not included in the foregoing chapter (not real property). Thus,
the term personal property in the Revised Penal Code should be
interpreted in the context of the Civil Code provisions in accordance
with the rule on statutory construction that where words have been
long used in a technical sense and have been judicially construed to
have a certain meaning, and have been adopted by the legislature as
having a certain meaning prior to a particular statute, in which they
are used, the words used in such statute should be construed
according to the sense in which they have been previously used.[6] In
fact, this Court used the Civil Code definition of personal property in
interpreting the theft provision of the penal code in United States v.
Carlos.
Cognizant of the definition given by jurisprudence and the Civil
Code of Spain to the term personal property at the time the old Penal
Code was being revised, still the legislature did not limit or qualify
the definition of personal property in the Revised Penal
Code. Neither did it provide a restrictive definition or an exclusive
enumeration of personal property in the Revised Penal Code, thereby
showing its intent to retain for the term an extensive and unqualified
interpretation. Consequently, any property which is not included in
the enumeration of real properties under the Civil Code and capable
of appropriation can be the subject of theft under the Revised Penal
Code.
The only requirement for a personal property to be the object of theft
under the penal code is that it be capable of appropriation. It need not
be capable of asportation, which is defined as carrying
away.[7] Jurisprudence is settled that to take under the theft provision
of the penal code does not require asportation or carrying away.[8]
To appropriate means to deprive the lawful owner of the thing.[9] The
word take in the Revised Penal Code includes any act intended to
transfer possession which, as held in the assailed Decision, may be
committed through the use of the offenders own hands, as well as
any mechanical device, such as an access device or card as in the
instant case. This includes controlling the destination of the property
stolen to deprive the owner of the property, such as the use of a
meter tampering, as held in Natividad v. Court of Appeals,[10]use of a
device to fraudulently obtain gas, as held in United States v.
Tambunting, and the use of a jumper to divert electricity, as held in
the cases of United States v. Genato, United States v. Carlos,
and United States v. Menagas.[11]
As illustrated in the above cases, appropriation of forces of nature
which are brought under control by science such as electrical energy
can be achieved by tampering with any apparatus used for generating
or measuring such forces of nature, wrongfully redirecting such
forces of nature from such apparatus, or using any device to
fraudulently obtain such forces of nature. In the instant case,
petitioner was charged with engaging in International Simple Resale
(ISR) or the unauthorized routing and completing of international
long distance calls using lines, cables, antennae, and/or air wave
frequency and connecting these calls directly to the local or domestic
exchange facilities of the country where destined.
As early as 1910, the Court declared in Genato that ownership over
electricity (which an international long distance call consists of), as
well as telephone service, is protected by the provisions on theft of
the Penal Code. The pertinent provision of the Revised Ordinance of
the City of Manila, which was involved in the said case, reads as
follows:
Injury to electric apparatus; Tapping current; Evidence. No person
shall destroy, mutilate, deface, or otherwise injure or tamper with
any wire, meter, or other apparatus installed or used for generating,
containing, conducting, or measuring electricity, telegraph or
telephone service, nor tap or otherwise wrongfully deflect or take
any electric current from such wire, meter, or other apparatus.
No person shall, for any purpose whatsoever, use or enjoy the
benefits of any device by means of which he may fraudulently obtain
any current of electricity or any telegraph or telephone service; and
the existence in any building premises of any such device shall, in
the absence of satisfactory explanation, be deemed sufficient
evidence of such use by the persons benefiting thereby.
It was further ruled that even without the above ordinance the acts of
subtraction punished therein are covered by the provisions on theft of
the Penal Code then in force, thus:
Even without them (ordinance), the right of the ownership of electric
current is secured by articles 517 and 518 of the Penal Code; the
application of these articles in cases of subtraction of gas, a fluid
used for lighting, and in some respects resembling electricity, is
confirmed by the rule laid down in the decisions of the supreme court
of Spain of January 20, 1887, and April 1, 1897, construing and
enforcing the provisions of articles 530 and 531 of the Penal Code of
that country, articles 517 and 518 of the code in force in these
islands.
The acts of subtraction include: (a) tampering with any wire, meter,
or other apparatus installed or used for generating, containing,
conducting, or measuring electricity, telegraph or telephone service;
(b) tapping or otherwise wrongfully deflecting or taking any electric
current from such wire, meter, or other apparatus; and (c) using or
enjoying the benefits of any device by means of which one may
fraudulently obtain any current of electricity or any telegraph or
telephone service.
In the instant case, the act of conducting ISR operations by illegally
connecting various equipment or apparatus to private respondent
PLDTs telephone system, through which petitioner is able to resell or
re-route international long distance calls using respondent PLDTs
facilities constitutes all three acts of subtraction mentioned above.
The business of providing telecommunication or telephone service is
likewise personal property which can be the object of theft under
Article 308 of the Revised Penal Code.Business may be appropriated
under Section 2 of Act No. 3952 (Bulk Sales Law), hence, could be
object of theft:
Section 2. Any sale, transfer, mortgage, or assignment of a stock of
goods, wares, merchandise, provisions, or materials otherwise than in
the ordinary course of trade and the regular prosecution of the
business of the vendor, mortgagor, transferor, or assignor, or any
sale, transfer, mortgage, or assignment of all, or substantially all, of
the business or trade theretofore conducted by the vendor,
mortgagor, transferor or assignor, or all, or substantially all, of the
fixtures and equipment used in and about the business of the vendor,
mortgagor, transferor, or assignor, shall be deemed to be a sale and
transfer in bulk, in contemplation of the Act. x x x.
In Strochecker v. Ramirez,[12] this Court stated:
With regard to the nature of the property thus mortgaged which is
one-half interest in the business above described, such interest is a
personal property capable of appropriation and not included in the
enumeration of real properties in article 335 of the Civil Code, and international long distance telephone calls, rather than respondent
may be the subject of mortgage. PLDTs business.

A perusal of the records of this case readily reveals that petitioner

and respondent PLDT extensively discussed the issue of ownership
Interest in business was not specifically enumerated as personal
of telephone calls. The prosecution has taken the position that said
property in the Civil Code in force at the time the above decision was
telephone calls belong to respondent PLDT. This is evident from its
rendered. Yet, interest in business was declared to be personal
Comment where it defined the issue of this case as whether or not the
property since it is capable of appropriation and not included in the
unauthorized use or appropriation of PLDT international telephone
enumeration of real properties. Article 414 of the Civil Code
calls, service and facilities, for the purpose of generating personal
provides that all things which are or may be the object of
profit or gain that should have otherwise belonged to PLDT,
appropriation are considered either real property or personal
constitutes theft.[14]
property. Business is likewise not enumerated as personal property
under the Civil Code. Just like interest in business, however, it may
be appropriated. Following the ruling in Strochecker v. Ramirez,
In discussing the issue of ownership, petitioner and respondent
business should also be classified as personal property. Since it is not
PLDT gave their respective explanations on how a telephone call is
included in the exclusive enumeration of real properties under
generated.[15] For its part, respondent PLDT explains the process of
Article 415, it is therefore personal property.[13]
generating a telephone call as follows:

As can be clearly gleaned from the above disquisitions, petitioners

38. The role of telecommunication companies is not limited to
acts constitute theft of respondent PLDTs business and service,
merely providing the medium (i.e. the electric current) through
committed by means of the unlawful use of the latters facilities. In
which the human voice/voice signal of the caller is
this regard, the Amended Information inaccurately describes the
transmitted. Before the human voice/voice signal can be so
offense by making it appear that what petitioner took were the
transmitted, a telecommunication company, using its facilities, must
first break down or decode the human voice/voice signal into
electronic impulses and subject the same to further augmentation and
enhancements. Only after such process of conversion will the
resulting electronic impulses be transmitted by a telecommunication
company, again, through the use of its facilities. Upon reaching the
destination of the call, the telecommunication company will again
break down or decode the electronic impulses back to human
voice/voice signal before the called party receives the same. In other
words, a telecommunication company both converts/reconverts the
human voice/voice signal and provides the medium for transmitting
the same.
39. Moreover, in the case of an international telephone call, once the
electronic impulses originating from a foreign telecommunication
company country (i.e. Japan) reaches the Philippines through a local
telecommunication company (i.e. private respondent PLDT), it is the
latter which decodes, augments and enhances the electronic impulses
back to the human voice/voice signal and provides the medium (i.e.
electric current) to enable the called party to receive the call. Thus, it
is not true that the foreign telecommunication company provides (1)
the electric current which transmits the human voice/voice signal of
the caller and (2) the electric current for the called party to receive
said human voice/voice signal.
40. Thus, contrary to petitioner Laurels assertion, once the electronic
impulses or electric current originating from a foreign
telecommunication company (i.e. Japan) reaches private respondent
PLDTs network, it is private respondent PLDT which decodes,
augments and enhances the electronic impulses back to the human
voice/voice signal and provides the medium (i.e. electric current) to
enable the called party to receive the call. Without private respondent
PLDTs network, the human voice/voice signal of the calling party
will never reach the called party.[16]
In the assailed Decision, it was conceded that in making the
international phone calls, the human voice is converted into electrical
impulses or electric current which are transmitted to the party
called. A telephone call, therefore, is electrical energy. It was also
held in the assailed Decision that intangible property such as
electrical energy is capable of appropriation because it may be taken
and carried away. Electricity is personal property under Article 416
(3) of the Civil Code, which enumerates forces of nature which are
brought under control by science.[17]
Indeed, while it may be conceded that international long distance
calls, the matter alleged to be stolen in the instant case, take the form
of electrical energy, it cannot be said that such international long
distance calls were personal properties belonging to PLDT since the
latter could not have acquired ownership over such calls. PLDT
merely encodes, augments, enhances, decodes and transmits said
calls using its complex communications infrastructure and
facilities. PLDT not being the owner of said telephone calls, then it
could not validly claim that such telephone calls were taken without
its consent. It is the use of these communications facilities without
the consent of PLDT that constitutes the crime of theft, which is the
unlawful taking of the telephone services and business.
Therefore, the business of providing telecommunication and the
telephone service are personal property under Article 308 of the
Revised Penal Code, and the act of engaging in ISR is an act of
subtraction penalized under said article. However, the Amended
Information describes the thing taken as, international long distance
calls, and only later mentions stealing the business from PLDT as the
manner by which the gain was derived by the accused. In order to
correct this inaccuracy of description, this case must be remanded to
the trial court and the prosecution directed to amend the Amended
Information, to clearly state that the property subject of the theft are
the services and business of respondent PLDT. Parenthetically, this
amendment is not necessitated by a mistake in charging the proper
offense, which would have called for the dismissal of the information
under Rule 110, Section 14 and Rule 119, Section 19 of the Revised
Rules on Criminal Procedure. To be sure, the crime is properly
designated as one of theft. The purpose of the amendment is simply
to ensure that the accused is fully and sufficiently apprised of the
nature and cause of the charge against him, and thus guaranteed of
his rights under the Constitution.
ACCORDINGLY, the motion for reconsideration
is GRANTED. The assailed Decision dated February 27, 2006
is RECONSIDERED and SET ASIDE. The Decision of the Court
of Appeals in CA-G.R. SP No. 68841 affirming the Order issued by
Judge Zeus C. Abrogar of the Regional Trial Court of Makati City,
Branch 150, which denied the Motion to Quash (With Motion to
Defer Arraignment) in Criminal Case No. 99-2425 for theft,
is AFFIRMED. The case is remanded to the trial court and the
Public Prosecutor of Makati City is hereby DIRECTED to amend
the Amended Information to show that the property subject of the
theft were services and business of the private offended party.
Republic of the Philippines
SUPREME COURT
Manila
 EN BANC
G.R. No. 18520 September 26, 1922
INVOLUNTARY INSOLVENCY OF PAUL
STROCHECKER, appellee,
vs.
ILDEFONSO RAMIREZ, creditor and appellant.
WILLIAM EDMONDS, assignee.
Lim & Lim for appellant.
Ross & Lawrence and Antonio T. Carrascoso, jr., for the Fidelity &
Surety Co.
ROMUALDEZ, J.:
The question at issue in this appeal is, which of the two mortgages
here in question must be given preference? Is it the one in favor of
the Fidelity & Surety Co., or that in favor of Ildefonso Ramirez. The
first was declared by the trial court to be entitled to preference.
In the lower court there were three mortgagees each of whom
claimed preference. They were the two above mentioned and
Concepcion Ayala. The latter's claim was rejected by the trial court,
and from that ruling she did not appeal.
There is no question as to the priority in time of the mortgage in
favor of the Fidelity & Surety Co. which was executed on March 10,
1919, and registered in due time in the registry of property, that in
favor of the appellant being dated September 22, 1919, and
registered also in the registry.
The appellant claims preference on these grounds: (a) That the first
mortgage above-mentioned is not valid because the property which is
the subject-matter thereof is not capable of being mortgaged, and the
description of said property is not sufficient; and (b) that the amount
due the appellant is a purchase price, citing article 1922 of the Civil
Code in support thereof, and that his mortgage is but a modification
of the security given by the debtor on February 15, 1919, that is,
prior to the mortgage executed in favor of the Fidelity & Surety Co.
As to the first ground, the thing that was mortgaged to this
corporation is described in the document as follows:
. . . his half interest in the drug business known as Antigua
Botica Ramirez (owned by Srta. Dolores del Rosario and the
mortgagor herein referred to as the partnership), located at
Calle Real Nos. 123 and 125, District of Intramuros, Manila,
Philippine Islands.
With regard to the nature of the property thus mortgaged, which is
one-half interest in the business above described, such interest is a
personal property capable of appropriation and not included in the
enumeration of real properties in article 335 of the Civil Code, and
may be the subject of mortgage. All personal property may be
mortgaged. (Sec. 2, Act No. 1508.)
The description contained in the document is sufficient. The law
(sec. 7, Act No. 1508) requires only a description of the following
nature:
The description of the mortgaged property shall be such as to
enable the parties to the mortgage, or any other person, after
reasonable inquiry and investigation, to identify the same.
Turning to the second error assigned, numbers 1, 2, and 3 of article
1922 of the Civil Code invoked by the appellant are not applicable.
Neither he, as debtor, nor the debtor himself, is in possession of the
property mortgaged, which is, and since the registration of the
mortgage has been, legally in possession of the Fidelity & Surety Co.
(Sec. 4, Act No. 1508; Meyers vs. Thein, 15 Phil., 303.)
In no way can the mortgage executed in favor of the appellant on
September 22, 1919, be given effect as of February 15, 1919, the
date of the sale of the drug store in question. On the 15th of February DECISION
of that year, there was a stipulation about a persons security, but not
a mortgage upon any property, and much less upon the property in
question. CARPIO, J.:

Moreover, the appellant cannot deny the preferential character of the

mortgage in favor of the Fidelity & Surety Co. because in the very The Case
document executed in his favor it was stated that his mortgage was
a second mortgage, subordinate to the one made in favor of the
Fidelity & Surety Co. Before the Court is a petition for review[1] of the 27 November 2002

The judgment appealed from is affirmed with costs against the Decision[2] and the 19 August 2003 Resolution[3] of the Court of
appellant. So ordered. Appeals in CA-G.R. SP No. 53911. The Court of Appeals dismissed
the petition of Philippine Long Distance Telephone Company (PLDT)
and affirmed the 26 March 1999 Decision of the National Labor
SECOND DIVISION Relations Commission (NLRC)

PHILIPPINE LONG DISTANCE G.R. No. 159701 finding the dismissal of Romeo F. Bolso (Bolso) illegal.[4]
TELEPHONE COMPANY,
Petitioner, Present:

QUISUMBING, J., The Facts

Chairperson,
CARPIO,
- versus - CARPIO MORALES, Bolso was an Installer/Repairman II of PLDT since February 1982
TINGA, and
VELASCO, JR., JJ. until PLDT dismissed him on 20 July 1997.

THE LATE ROMEO F. BOLSO, Promulgated: On 5 February 1996, Samuel Mabunga (Mabunga), a PLDT
represented by his heirs,
Respondent. August 17, 2007 subscriber, sold the rights to his telephone line to Ismael Salazar
(Salazar) for P20,000. Mabunga received P15,000 for the transfer.
Then, for the installation of this telephone line, Salazar paid P2,500 to
a PLDT installer who introduced himself as Boy Negro and the
remaining P2,500 to Boy Negros two companions.
On 20 May 1996, Salazar wrote PLDT complaining about Mabungas
continued usage of the telephone line through an extension, despite the
transfer. Salazar requested PLDT tocheck out the problem and
[5]
immediately cut-off the extension line.
On 28 June 1996, Salazar went to PLDTs Quality Control and
Inspection Division (QCID) office where he affirmed having
paid P2,500 to Boy Negro and another P2,500 to Boy Negros two
companions for installing the telephone line at his residence. During
the investigation, Salazar positively identified a photograph of Bolso
as that of Boy Negro.Salazar voluntarily executed a Sinumpaang
[6]
Salaysay narrating the circumstances surrounding the installation of
the illegal extension line and a Certification[7] that the man he had
identified in the photograph was the one who actually went to his
residence and installed the telephone line.
On 29 June 1996, the QCID personnel inspected the telephone
installation at Salazars residence and confirmed that Mabunga was
using the telephone line through an outside extension installed at
Salazars house. PLDT informed Salazar and Mabunga that it was an
unofficial installation, and invited them to its QCID office to enlighten
it on the matter.
On 23 July 1996, PLDT issued an Inter-Office Memo requesting the
appearance of Bolso, together with his immediate supervisor or union
council representative, at PLDTs Sampaloc Office for the
investigation of his alleged participation in the illegal installation.
On 26 July 1996, both Salazar and Bolso appeared at the QCID
investigation. Salazar reaffirmed his earlier Sinumpaang Salaysay and
Certification, and at the same time, positively picked out and identified
Bolso from among those present as the installer of the unofficial
telephone line. Bolso denied the allegations against him.
Subsequently, Bolso submitted to PLDT what appears to be a
recantation of Salazars previous statements, alleging that he did not
personally know Bolso and that Bolso was not Boy Negro. The letter
dated 5 August 1996 reads:
QUALITY CONTROL
INSPECTION DIVISION PLDT
SA KINAUUKULAN,
SA NAGANAP PONG IMBISTIGASYON NI G.
FERNANDO R. ARAMBULO, IMBISTIGADOR
NG (Q.C.I.D.) QUALITY CONTROL AND
INSPECTION DIVISION PLDT NOONG IKA-26
NG HULYO, 1996 GANAP NA ALA UNA Y
MEDYA NG HAPON, ARAW NG BIYERNES.
NA ANG BUONG KATOTOHANAN AY HINDI
KO KILALA SI ROMEO BOLSO AT SIYA AY
 NAITURO KO LAMANG NOONG MAGHARAP- Inter-Office Memo, terminated Bolso effective 20 June 1997 for
HARAP KAMI NOONG IKA-26 NG HULYO, 1996
DAHIL NGA SA KABIGLAAN KO AT INIT NG serious misconduct.
ULO AT SA TOTOO IYON BOY NEGRO NA
SINASABI AY HINDI SIYA.
On 15 August 1997, Bolso filed with the Labor Arbiter a complaint
AKO PO AY BINABAGABAG NG AKING against PLDT for illegal dismissal, backwages, and damages,
KONSENSIYA AT DAMDAMIN SA docketed as NLRC NCR Case No. 00-08-05842-97.
PAGTUTURO NG ISANG TAONG WALA NA
MANG KINALAMAN AY MALAKI PO ANG
NAGAWANG KASALANAN. On 6 August 1998, the Labor Arbiter[11] issued his decision dismissing
ANG SA INYO AY LUBOS NA GUMAGALANG the case for lack of merit.[12] The Labor Arbiter found Bolsos evidence
NA SANA AKO AY INYONG MAUNAWAAN.
too speculative and conjectural.Bolsos denial of the charges of serious
Sgd. misconduct, fraud, and breach of trust was not supported by
ISMAEL G. SALAZAR[8]
convincing evidence except the retraction made by Salazar of his
previous statement pointing to Bolso as the one who installed the
On 20 January 1997, the Manggagawang Komunikasyon ng Pilipinas,
illegal extension line. The Labor Arbiter further held that while there
Bolsos union, requested the withdrawal of the complaint against Bolso
is no direct evidence that Bolso exacted money from Salazar in
since the complainant [sic] failed to satisfy the standard basis for it to
consideration of the installation of the unofficial extension line, there
merit further investigation x x x.[9]
is substantial evidence against him for serious misconduct.

On 10 July 1997, Bolsos counsel demanded the immediate dismissal

On 28 September 1998, Bolso appealed to the NLRC.
of the administrative case against Bolso based on Salazars retraction
and the release of Bolsos benefits under PLDTs early
Ruling in favor of Bolso, the NLRC held that PLDT failed to prove
retirement/redundancy program.[10]
that Bolso committed the infraction imputed against him. The
recantation of Salazar of his previous statement regarding Bolsos
Giving no credence to the recantation letter and finding that Salazars
installation of the illegal extension line totally established Bolsos
previous statements established Bolsos culpability, PLDT, through an
innocence. The NLRC also stated that this was the first time PLDT
charged Bolso with an offense and that it would have been foolhardy
on the part of Bolso to risk and lose his only source of livelihood at
the cost of a measly amount of P2,500. The NLRC further noted that
Salazar voluntarily gave his recantation letter, and he did it in his own
handwriting and in a language very well known to him. The NLRC
also found that Bolso was denied of his right to due process.
The NLRC disposed of the case as follows:
WHEREFORE, in the light of the foregoing,
the appeal is hereby GRANTED. The assailed
Decision dated August 6, 1998 is hereby VACATED
and SET ASIDE and a new one is hereby entered
ordering respondent Philippine Long Distance
Telephone Co. to reinstate complainant Romeo F.
Bolso to his former position as Installer/Repairman II
without loss of seniority rights and other employee
benefits with full backwages counted from the time
of his dismissal on June 20, 1997 up to the time of
actual reinstatement.
All other reliefs herein sought and prayed for
are hereby DENIED for lack of merit.
SO ORDERED.[13]
On 26 April 1999, PLDT filed a motion for reconsideration,
which the NLRC denied in its 30 April 1999 Resolution.
On 23 July 1999, PLDT filed with the Court of Appeals a
petition for certiorari to nullify the NLRC decision and resolution.
On 27 November 2002, the Court of Appeals issued a
Decision dismissing the petition for certiorari.
PLDT filed a motion for reconsideration on 22 January 2003,
which the Court of Appeals denied in its Resolution of 19 August
2003.
Hence, this petition.
The Ruling of the Court of Appeals
Sustaining the NLRC, the Court of Appeals ruled that special
circumstances exist which raise serious doubt as to the accountability
of Bolso. Salazars recantation letter rendered some truth to Bolsos
innocence. Salazar reasoned out that confusion coupled with
indignation drove him to implicate an innocent person, which bothered
his conscience. The Court of Appeals held that Salazars retraction was
a declaration against his own interest under Section 38, Rule 130 of
the Rules of Court.[14] The Court of Appeals also found no evidence
that Bolso committed the breach attributed to him. Other than Salazars
inadvertence, the alleged incident involving Bolso was unsupported
by relevant and convincing evidence.[15]
 On the issue of just cause

The Court of Appeals went on to say that assuming the recantation

was invalid and that Bolso did commit serious misconduct, dismissal The Labor Code provides that an employer may terminate the services

is too harsh a penalty considering the length of his service in PLDT of an employee for a just cause.[16] Among the just causes in the Labor

and the infraction was his first offense. Code is serious misconduct. Misconduct is improper or wrong
conduct. It is the transgression of some established and definite rule of

The Court of Appeals likewise ruled that there was no hearing where action, a forbidden act, a dereliction of duty, willful in character, and

Bolso had a reasonable opportunity to air his side and confront his implies wrongful intent and not mere error in judgment. The

accuser. If there was any, it was surely not the kind of investigation misconduct to be serious within the meaning of the Labor Code must

that would suffice to comply with the procedural requirement. Hence, be of such a grave and aggravated character and not merely trivial or

Bolso was denied of his right to due process, rendering his dismissal unimportant. Such misconduct, however serious, must nevertheless be

illegal. in connection with the employees work to constitute just cause for his
separation.[17]

An employees dismissal due to serious misconduct must be supported

by substantial evidence.[18] Substantial evidence is that amount of
relevant evidence as a reasonable mind might accept as adequate to
The Issue
support a conclusion, even if other minds, equally reasonable, might

The issue in this case boils down to whether Bolsos dismissal for conceivably opine otherwise.[19]

serious misconduct was lawful. In this case, there is no question that PLDT installers, such as Bolso,
repairmen, and linemen provide services but cannot collect or receive
any personal fees for such services.Violating this company rule
The Ruling of this Court constitutes serious misconduct.[20] Did Bolso accept payment for the
installation of an unauthorized PLDT telephone line, which would
The petition is meritorious. constitute serious misconduct warranting his dismissal?
Based on the records, Salazars initial statements given to PLDT QCID
narrated how he gave Bolso P2,500 for the installation of the
telephone line which he purchased from Mabunga. The telephone line
turned out to be an illegal extension line. Salazar gave separate but
similar statements in the course of the investigation, the first was on
28 June 1996 and another was on 26 July 1996. During the first
instance he went to PLDT QCIDs office, Salazar easily, immediately,
and unhesitatingly identified Bolsos photograph as the man who went
to his house to install the extension line. During the 26 July 1996
investigation, while Salazar was facing Bolso, Salazar pointed to him
as the installer of the illegal extension line.
There was also evidence that Bolso received money in exchange for
the installation of the extension line. Salazar added during the 26 July
1996 investigation the following statements:
T25 : Ano ang gusto ninyong idagdag, ibawas o
baguhin?
S : Hindi ko talaga siya kilala dahil iyong dalawang
taong nauna sa kanya ang talagang may kilala sa
kanya. Kilala ko lang siya sa alyas niyang BOY
NEGRO. At nung nagbayad ako ng pera, ay siya
talaga ang pinagbigyan ko, doon sa loob ng bahay
ko, kasama iyong dalawa.[21] (Emphasis supplied)
The standard of substantial evidence is met where the employer, as in
this case, has reasonable ground to believe that the employee is
responsible for the misconduct and his participation in such
misconduct makes him unworthy of the trust and confidence
demanded by his position.[22]
However, Salazar retracted his statement pointing to Bolso as Boy
Negro who installed the illegal extension line. Salazars recantation,
Bolso now claims, clearly established his innocence of the offense
charged. Hence, Bolsos fate as a PLDT employee lies solely on
Salazars statements. Does Salazars subsequent retraction of his
previous statement convincingly prove Bolsos non-participation in the
offense charged?
We rule in the negative.
In a similar case involving PLDT and one of its installers,[23] the Court
held that it was more reasonable to believe that the affidavits of
retraction were, as claimed by petitioner, a mere afterthought,
executed out of compassion to enable private respondent to extricate
himself from the consequence of his malfeasance. As such, the
affidavits had no probative value.
Moreover, a retraction does not necessarily negate an earlier
declaration. For this reason, courts look with disfavor upon
retractions. Hence, when confronted with a recanting witness, in this
case the complainant, courts must not automatically exclude the
original statement based solely on the recantation. Courts should
determine which statement should be given credence through a
comparison of the original and the new statements, applying the
general rules of evidence.[24]
In this case, Salazar did not expressly repudiate his earlier statement
that he paid Bolso P2,500 for the installation of the illegal telephone
line. What Salazar stated in his recantation letter was that Bolso was
not Boy Negro. Therefore, only Bolsos identity as Boy Negro was
retracted. Salazars original statement that Bolso received P2,500 for
the installation of the outside extension line remains undisputed.
Even assuming that Salazar retracted fully his original statements
given during the PLDT investigation, Salazar did not swear or
subscribe to his recantation letter. Salazar never identified it himself
or affirmed its veracity. Bolso also submitted the letter to PLDT.
Further, Bolso did not offer any reason for Salazars initial imputation
against him. In fact, Bolso stated during the 26 July 1996 investigation
that he did not know of any motive on the part of Salazar for accusing
and pointing him as the installer of the illegal extension line.
T22 : Sa iyong pagkakaalam, ano ang maaaring
motibo ni G. Salazar para paratangan ka niya ng
ganito?
S : Wala akong alam na dahilan dahil, unang-una
hindi ko siya kilala at nakikita. Pangalawa, ay hindi
ko area iyong lugar na iyan, at hindi ako nagagawi
roon.
T23 : Kung gayon, ano sa palagay mo ang malaking
dahilan kung bakit sa dinami-dami ng empleyado sa
PLDT Sampaloc ay ikaw pa ang naituro ni G. Salazar
na isa sa mga nagkabit sa kanyang tirahan ng telepono
bilang 742-5015?
S : Hindi ko alam talaga.[25]
The Court is mindful that Bolsos employment with PLDT was his
main source of income and that the infraction imputed on him was his
first offense in his 15 years of service to PLDT. However, the Court
cannot close its eyes to the fact that Salazar positively identified Bolso
as the installer of the illegal extension line for which he was
paid P2,500. The Court has held that the longer an employee stays in
the service of the company, the greater is his responsibility for
knowledge and compliance with the norms of conduct and the code of
discipline in the company.[26] An employees length of service with the
company even aggravates his offense.[27] Bolso should have been more
loyal to PLDT from which he had derived his income for 15 years.
Upholding the employees interest in disregard of the employers right
to dismiss and discipline does not serve the cause of social justice.
Social justice ceases to be an effective instrument for the equalization
of the social and economic forces by the State when it is used to shield
wrongdoing.[28]
Moreover, it is worthy to note that Bolso applied for benefits under
PLDTs early retirement/redundancy program. Bolsos counsel even
wrote PLDT for the withdrawal of the administrative complaint
against Bolso and for the release of the benefits under this
program. Therefore, Bolsos plea for reinstatement in this case
conflicts with his application for early retirement, which PLDT denied
due to the then pending complaint against him. Reinstatement is
plainly irreconcilable with retirement.
At any rate, since Bolso was dismissed for a just cause, neither he nor
his heirs can avail of the retirement benefits.
On the issue of due process
Bolsos claim that he was denied of his right to due process when PLDT
dismissed him is untenable.
The essence of due process is simply an opportunity to be heard, or as
applied to administrative proceedings, an opportunity to explain ones
side or an opportunity to seek a reconsideration of the action or ruling
complained of.[29] A formal or trial-type hearing is not at all times and
in all circumstances essential.[30]
In the present case, Bolso was notified by way of an Inter-Office
Memo[31] dated 23 July 1996 of an investigation, specifically, on his
alleged participation in the installation of an illegal outside extension
found on telephone number 742-5015. He was advised to appear at the
investigation to be conducted on 26 July 1996 with his immediate
supervisor or union council representative.
At the investigation conducted on 26 July 1996, Bolso did
appear during which he was apprised of the charges against him, as
well as his rights:
Tanong 16: Ginoong Bolso, narinig mo ba ang mga
sinabi ni G. Salazar laban sa iyo. Ngunit bago ka
sumagot, nais ko munang ipaalam sa iyo ang mga
karapatan mo sa ilalim ng Bagong Saligang
Batas. Una, ikaw ay may karapatan hindi sumagot o
magsawalang kibo sa mga katanungan ko. May
karapatan ka ring sumangguni muna sa isang abogado
o Union Council rep na siyang pili mo upang
makatulong sa pagsisiyasat na ito. Dahil lahat ng
sasabihin mo ay maaari naming gamitin ebidensya
laban o pabor sa iyo sa lahat ng hukuman dito sa
Philipinas.Naiintindihan mo ba ang iyong mga
nabanggit na karapatan?
S: Oo.[32]
During this investigation, Bolso was allowed to confront his accuser
Salazar face-to-face, and was given adequate opportunity to
immediately respond to the charges against him. Thereafter, Bolsos
union, Manggagawang Komunikasyon ng Pilipinas, interceded on his
behalf. Bolsos counsel also moved for the immediate dismissal of the
pending administrative case against Bolso. Clearly, Bolso was
afforded ample opportunity to air his side and defend himself. Hence,
there was no denial of his right to due process.
WHEREFORE, we GRANT the petition. We REINSTATE the
Decision of the Labor Arbiter dated 6 August 1998.
G.R. No. 184079
VILLARAMA, JR., J.:
Before the Court are twin petitions for review on certiorari under
Rule 45 of the 1997 Rules of Civil Procedure, as amended.
[1]
The petition in G.R. No. 184079 was filed by petitioners spouses
Armando Silverio, Sr. and Remedios Silverio to assail the
Decision[2]dated March 18, 2008 and Resolution[3] dated August 12,
2008 of the Court of Appeals (CA) in CA-G.R. SP No. 98105. The
CA had affirmed the Decision[4] dated November 7, 2006 of the
Regional Trial Court (RTC) of Parañaque City, Branch 258, in Civil
Case No. 06-0099, which in turn, affirmed the Decision[5] dated
September 6, 2005 of the Metropolitan Trial Court (MeTC), Branch
78 in Civil Case No. 2004-271. The Parañaque MeTC, Branch 78,
had ordered petitioners to demolish the improvements they have
introduced in Lot No. 3976, Parañaque Cad. 299 (Lot 3976), to
peacefully surrender possession of the same to respondents spouses
Ricardo and Evelyn Marcelo and to pay P1,000 per month from May
20, 2004 until they have done so. The court a quo likewise directed
petitioners to pay respondents P20,000 as attorney's fees plus P3,000
per appearance of the latter's counsel and costs.
[6]
Meanwhile, the petition in G.R. No. 184490 was filed by
petitioners spouses Evelyn and Ricardo Marcelo to contest the
Decision[7]dated March 27, 2008 and Resolution[8] dated September
1, 2008 of the CA in CA-G.R. SP No. 98713. The CA had reversed
and set aside the Decision[9] dated December 29, 2006 of the RTC of
Parañaque City, Branch 257, in Civil Case No. 06-0237, which in
turn, affirmed in toto the Decision[10] dated April 25, 2006 of the
MeTC of Parañaque City, Branch 77, in Civil Case No. 2004-269.
The Parañaque MeTC, Branch 77, had ordered respondents Armando
Silverio, Sr. and Remedios Silverio to vacate the Marcelo Compound
in Lot 3976 and to surrender possession thereof to petitioners. The
court a quo likewise directed respondents to pay petitioners P1,000
per month from May 20, 2004 until they have completely moved out
of said property, P10,000 as attorney's fees and costs.
The factual antecedents of these consolidated petitions are culled
from the records.
G.R. No. 184079
On July 12, 2004, respondents spouses Ricardo and Evelyn Marcelo
filed a Complaint[11] for unlawful detainer against petitioners spouses
Armando Silverio, Sr., and his mother, Remedios Silverio. The case
was docketed as Civil Case No. 2004-271 before the MeTC of
Parañaque City, Branch 78.
Respondents represented themselves as the lawful owners and
possessors of Lot 3976, a residential land with an area of 5,004
square meters located in Marcelo Compound, Philip St. Ext.,
Multinational Village, Parañaque City. They claimed ownership over
said lot by virtue of a Decision[12] dated December 12, 1996 of the
Department of Environment and Natural Resources (DENR) in
DENR-NCR Case No. 95-253 and Tax Declaration No. E-008-
19942.[13]
Respondents alleged that sometime in May 1987, petitioners sought
permission to construct a house within Lot 3976. Respondents agreed
on the condition that petitioners will vacate the moment they need
the land. Subsequently, respondents made an oral demand on
petitioners to leave the house and return possession of the lot within
15 days from notice. In a Letter[14] dated May 18, 2004, respondents
reiterated their demand for petitioners to demolish the house, vacate
the 120-square-meter lot on which the house stands and to pay
P1,000 as rent until they have done so.
As respondents' demands remained unheeded, they filed a complaint
for unlawful detainer against petitioners before BarangayMoonwalk
in Parañaque City. The case was docketed as Barangay Case No.
05/04-051. On July 24, 2004, Atty. Wendell E.
Coronel, Lupon/Pangkat Secretary of Barangay Moonwalk issued a
Certification to File Action[15] in said case upon the reasons "Failed
or refused to accept/obey summons to appear for hearing" and
"Settlement has been repudiated."
In their Answer,[16] petitioners sought the dismissal of the complaint
on the ground that respondents had filed a similar case against them
before the MeTC of Parañaque City, Branch 77, docketed as Civil
Case No. 2004-269. The latter case is the subject of the petition in
G.R. No. 184490.
On September 6, 2005, the MeTC of Parañaque City, Branch 78,
rendered judgment in favor of respondents Marcelo. The court a
quoruled out forum shopping upon finding that the house subject of
the present case is different from that in Civil Case No. 2004-269.
The structure involved in the latter case was "originally occupied by
[petitioners'] relative and later taken over by [them]"[17] while the
house subject of the present case was constructed by petitioners
themselves. The MeTC held that petitioners failed to refute the
character of their possession as merely tolerated by respondents and
they became deforciants upon the latter's demand for them to vacate
the subject premises. The court ordered petitioners to pay
respondents P1,000 as reasonable compensation for the use and
occupation of the premises, attorney's fees of P20,000 and P3,000
per appearance of counsel for respondents.
On appeal, the Parañaque RTC, Branch 258, affirmed the ruling of
the MeTC. In a Decision dated November 7, 2006, the RTC
sustained respondents' right to bring action to evict petitioners from
the contested property. It found petitioners' claim of ownership
unsubstantiated and their defense of forum shopping without merit
since the properties involved in Civil Case Nos. 2004-269 and 2004-
271 are different from each other.
Petitioners moved for reconsideration but their motion was denied in
an Order[18] dated February 5, 2007. Thereafter, petitioners filed a
Petition for Review[19] under Rule 42 of the Rules with the CA.
In the assailed Decision dated March 18, 2008, the appellate court
affirmed in toto the RTC judgment. It found no basis to dismiss
respondents' complaint based on either forum shopping or splitting a
cause of action. The CA disregarded petitioners' argument that the
subject property is public land in view of their admission in their
Answer[20] that respondents are the owners and possessors thereof.
Petitioners filed a Motion for Reconsideration[21] which the CA
denied in a Resolution[22] dated August 12, 2008.
G.R. No. 184490
On July 12, 2004, petitioners spouses Ricardo and Evelyn Marcelo
filed a Complaint[23] for unlawful detainer against respondents
Armando Silverio, Sr., and Remedios Silverio. The case was
docketed as Civil Case No. 2004-269 before the MeTC of Parañaque
City, Branch 77.
Petitioners' Complaint bore essentially the same allegations as their
Complaint in Civil Case No. 2004-271 save for two allegations: (1)
respondents requested petitioners' permission to construct a house in
Lot 3976 in May 1986; and (2) respondents "improved the house and
even operated a sari-sari store"[24] in Marcelo Compound.
In their Answer[25] dated August 3, 2004, respondents belied
petitioners' claim of exclusive ownership and possession of the
subject property. According to respondents, the land in dispute was
first occupied by Graciano Marcelo along with his sons Armando
Marcelo, petitioner Ricardo Marcelo and Florante Marcelo.
Respondents anchor their right of possession on Florante Marcelo, in
his capacity as an ostensible co-owner of the contested property.
Florante Marcelo is the husband of Marilou Silverio, the daughter of
respondents spouses Silverio.
Subsequently, petitioners submitted an Amended Complaint[26] dated
August 14, 2004, in which they clarified that it was the spouses
Florante Marcelo and Marilou Silverio, and not the respondents, who
sought their consent to build a house and live in Marcelo Compound.
Petitioners recounted that it was after Florante Marcelo and Marilou
Silverio separated in 1998 and abandoned said house that
respondents asked for permission to stay therein. Petitioners agreed
upon an understanding that respondents shall "dismantle said house
the moment [petitioners] need the premises."[27] However,
respondents refused to move out and surrender possession of the
subject property upon demand.
In a Demand Letter[28] dated May 18, 2004, petitioners insisted on
their demand for respondents to demolish the house they built, vacate
the 80-square-meter lot on which it stands, to surrender peaceful
possession of the same and to pay P1,000 as rent until they have
done so.
As respondents ignored petitioners' demands, the latter brought a
complaint for unlawful detainer against respondents
before BarangayMoonwalk in Parañaque City. The case was
docketed as Barangay Case No. 05/04-070. On July 24, 2004, Atty.
Wendell E. Coronel, Lupon/Pangkat Secretary of Barangay
Moonwalk issued a Certification to File Action[29] in said case upon
the reasons "Failed or refused to accept/obey summons to appear for
hearing" and "Settlement has been repudiated."
In an Answer[30] dated September 8, 2004, respondents assailed the
DENR Decision dated December 12, 1996 for supposedly awarding
ownership of the subject property to petitioners. According to
respondents, Graciano Marcelo, Sr., petitioner Ricardo Marcelo's
father, was a tenant of Fabian Lumbos before the latter sold his land
to Mike Velarde. Subsequently, Velarde fenced the subject property,
which respondents insist is not part of the parcels that Lumbos sold
to Velarde. Upon the belief that Lot 3976 is still government
property, the sons of Graciano Marcelo, Sr., including petitioner
Ricardo Marcelo and Florante Marcelo, divided the land among
themselves and occupied the same. On the tract allotted to Florante,
he took in respondent Remedios Silverio to live with him and his
wife, Marilou.
Respondents averred that it was in 1997 when the Marcelos
conceived the idea of applying for a sales patent over Lot 3976 with
the DENR. The Marcelo siblings appointed petitioner Ricardo
Marcelo to file the Miscellaneous Sales Application (MSA) in their
behalf, sharing the expenses among themselves. However, it was not
until later that the Marcelo siblings learned that Ricardo had filed the
application in his name alone. Respondents revealed that Ricardo had
sold several portions of Lot 3976 even before he could apply for a
sales patent thereon.
On February 3, 2005, respondents filed a Supplemental Answer[31] in
which they charged petitioners with forum shopping for filing
another ejectment case against them, docketed as Civil Case No.
2004-271 before Branch 78 of the Parañaque MeTC.
In a Decision dated April 25, 2006, the MeTC of Parañaque City,
Branch 77, ruled for petitioners Marcelo. The court a quo ordered
respondents to vacate the subject property, to surrender peaceful
possession thereof to petitioners, to give reasonable rent from May
20, 2004 until they have moved out and to pay attorney's fees and
costs.
On the basis of the Decision dated December 12, 1996 of the DENR,
the MeTC declared petitioners the owners of the subject property,
with concomitant right to possess it. The court found no evidence to
support respondents' possessory claim and considered their
occupation of the subject land as merely tolerated by petitioners. The
court a quo discounted forum shopping upon finding that the house
concerned in Civil Case No. 2004-271 was built by petitioners
whereas the house in this case was only taken over by them.
In a Decision dated December 29, 2006, the Parañaque RTC, Branch
257, affirmed in toto the MeTC ruling. The RTC declared petitioners
as the lawful possessors of the subject property by virtue of Tax
Declaration No. E-008-19942 in the name of petitioner Ricardo
Marcelo. It explained that Florante Marcelo's affinity with petitioner
Ricardo, alone, did not automatically make him a co-owner of the
contested property.
Dissatisfied, respondents elevated the case to the CA through a
petition[32] for review under Rule 42.
In the assailed Decision dated March 27, 2008, the CA reversed and
set aside the RTC judgment. It brushed aside the alleged procedural
infirmities that attended the filing of respondents' petition for being
trivial and insufficient to warrant its dismissal. The appellate court
found petitioners guilty of forum shopping and splitting of a cause of
action. It observed that the two cases for unlawful detainer filed by
petitioners are based on a single claim of ownership over Lot 3976
which embraces the subject properties. The CA explains that an
adjudication in either suit that petitioners are entitled to the
possession of Lot No. 3976 would necessarily mean res judicata in
the other case. The appellate court noted that the demand letter in
both cases was served on respondents on the same day.
Issues/Assignment of Errors
On September 29, 2008, spouses Armando Silverio, Sr. and
Remedios Silverio filed a petition for review on certiorari which was
docketed as G.R. No. 184079. Said petition, which seeks to reverse
and set aside the Decision dated March 18, 2008 and Resolution
dated August 12, 2008 of the CA in CA-G.R. SP No. 98105, assigns
a lone error:
THE COURT OF APPEALS, WITH ALL DUE RESPECT,
SERIOUSLY ERRED AND GRAVELY ABUSED ITS
DISCRETION IN DISMISSING THE APPEAL INTERPOSED BY
PETITIONERS IN THE ABOVE-ENTITLED CASE ON
TECHNICALITIES AND HAS DECIDED A QUESTION OF
SUBSTANCE, NOT THERETOFORE DETERMINED BY THE
SUPREME COURT, AND/OR HAS DECIDED IT IN A WAY
PROBABLY NOT IN ACCORD WITH LAW OR WITH THE
APPLICABLE DECISIONS OF THE HONORABLE SUPREME
COURT.[33]
A few days later, on October 2, 2008, spouses Evelyn and Ricardo
Marcelo filed a Petition for Review on Certiorari which was
docketed as G.R. No. 184490. Said petition, in turn, contests the
Decision dated March 27, 2008 and the Resolution dated September
1, 2008 of the CA in CA-G.R. SP No. 98713. Condensed, the issues
presented by petitioners are as follows: (1) Whether the filing of
separate complaints for unlawful detainer against the same lessees
who refuse to vacate, on demand, two different houses constitutes
forum shopping and splitting of a cause of action; (2) Whether the
CA erred in dismissing Civil Case No. 2004-269; and (3) Whether
the instant petition was filed seasonably.
Essentially, the questions that must be addressed in the consolidated
petitions before us are common: (1) Are the spouses Ricardo and
Evelyn Marcelo guilty of forum shopping? and (2) Who between the
spouses Marcelo and the Silverios have better right to the physical
possession of Lot 3976?
The Parties' Arguments
Armando Silverio, Sr. and Remedios Silverio allege mainly that
spouses Ricardo and Evelyn Marcelo engaged in forum shopping and
split a common cause of action when they filed separate complaints
for unlawful detainer based on a single claim of ownership over Lot
No. 3976. The Silverios maintain that the spouses Marcelo are
simply applicants for the issuance of a sales patent over Lot No.
3976 and are actually occupying only 50 square meters of the 5,020-
square-meter property. In support thereof, the Silverios invoke the
Decision[34]dated July 11, 2007 of the DENR which annulled and
canceled the MSA filed by the spouses Marcelo over Lot No. 3976.
Ultimately, the Silverios insist that the subject property remains a
public land.
In their consolidated Memorandum[35] for G.R. Nos. 184079 and
184490, spouses Ricardo and Evelyn Marcelo denied the allegations
of forum shopping and splitting a single cause of action. They assert
the following distinctions between the houses involved in Civil Case
Nos. 2004-269 and 2004-271: (1) the house in Civil Case No. 2004-
271 was built by the Silverios in May 1987 while the house subject
of Civil Case No. 2004-269 was constructed by Florante Marcelo
and Marilou Silverio in May 1986; and (2) the house in Civil Case
No. 2004-271 has been occupied by the Silverios from the beginning
while they merely took over the house referred to in Civil Case No.
2004-269 and put up a sari-sari store therein. The spouses Marcelo
contend that while they claim ownership of Lot No. 3976 as a whole,
the portions thereof on which the two houses stand are distinct -- one
has an area of 80 square meters while the other measures 120 square
meters. In view of this, the spouses Marcelo believe that the refusal
by the Silverios to vacate said houses violated at least two rights and
gave rise to separate causes of action.
The Court's Ruling
Unlawful detainer is an action to recover possession of real property
from one who illegally withholds possession after the expiration or
termination of his right to hold possession under any contract,
express or implied. The possession of the defendant in unlawful
detainer is originally legal but became illegal due to the expiration or
termination of the right to possess.[36] In an unlawful detainer case,
the sole issue for resolution is physical or material possession of the
property involved, independent of any claim of ownership by any of
the parties. Where the issue of ownership is raised by any of the
parties, the courts may pass upon the same in order to determine who
has the right to possess the property. The adjudication is, however,
merely provisional and would not bar or prejudice an action between
the same parties involving title to the property.[37]
Here, the spouses Ricardo and Evelyn Marcelo brought separate
complaints for unlawful detainer against Armando Silverio, Sr. and
Remedios Silverio based on their refusal to vacate two houses inside
the Marcelo Compound. In both Civil Case Nos. 2004-269[38] and
2004-271, the spouses Marcelo anchor their right of possession over
the subject properties on Tax Declaration No. E-008-19942 and on
the Decision dated December 12, 1996 of the DENR in DENR-NCR
Case No. 95-253. The DENR gave due course to the MSA filed by
the spouses Marcelo over Lot 3976, where the Marcelo Compound is
situated.
For their part, the Silverios seek the dismissal of both complaints on
the grounds of forum shopping and splitting a single cause of action.
Forum shopping is a deplorable practice of litigants consisting of
resort to two different fora for the purpose of obtaining the same
relief, to increase the chances of obtaining a favorable
judgment.[39] The grave evil sought to be avoided by the rule against
forum shopping is the rendition by two competent tribunals of two
separate and contradictory decisions.[40]
In Chua v. Metropolitan Bank & Trust Company,[41] the Court
enumerated the ways by which forum shopping may be committed:
Forum shopping can be committed in three ways: (1) filing multiple
cases based on the same cause of action and with the same prayer,
the previous case not having been resolved yet (where the ground for
dismissal is litis pendentia); (2) filing multiple cases based on the
same cause of action and the same prayer, the previous case having
been finally resolved (where the ground for dismissal is res
judicata); and (3) filing multiple cases based on the same cause of
action, but with different prayers (splitting of causes of action, where
the ground for dismissal is also either litis pendentia or res
judicata).[42]
Common to these types of forum shopping is the identity of the cause
of action in the different cases filed. Cause of action is defined as
"the act or omission by which a party violates the right of
another."[43]
In this case, the spouses Marcelo filed two cases for unlawful
detainer against Armando Silverio, Sr. and Remedios Silverio on
July 12, 2004. In Civil Case No. 2004-269, the cause of action is the
alleged unlawful withholding of possession by the Silverios of the
house which Florante Marcelo and Marilou Silverio constructed in
Lot 3976. On the other hand, the cause of action in Civil Case No.
2004-271 for unlawful detainer is the supposed unlawful withholding
of possession by the Silverios of the house which they, themselves,
built in Lot 3976. While the main relief sought in Civil Case No.
2004-269 appears to be different from that in Civil Case No. 2004-
271, the right on which both claims are hinged is the same the
purported ownership by the spouses Marcelo of Lot 3976. Indeed,
paragraph 3 of the spouses Marcelo's Complaint in both cases
similarly read:
3. Plaintiffs are the lawful owners and possessors of a residential lot
containing an area of 5,004 sq. m. known as Lot 3976 Parañaque
Cad. 299 by virtue of a final and executory decision of the [Land]
Management Bureau (DENR) promulgated on Dec. 12, 1996 and
Tax Dec. No. E-008-083-77 issued in their name by the City
Assessor of Parañaque City. Certified true copy of Tax Dec. No. E-
008-19942 is hereto attached as "Annex "A". [44]
Basically, the cause of action in both cases is the unlawful
withholding by the Silverios of Lot 3976.
We find no merit in the contention of the spouses Marcelo that Civil
Case Nos. 2004-269 and 2004-271 present distinct causes of action
since they pertain to separate portions of the Marcelo Compound.
The analogy drawn by the spouses Marcelo between the ejectment of
a tenant leasing several units of a condominium project and the
unlawful detainer cases they brought against the Silverios is
misplaced. In the former, there exists a lessor-lessee relationship
between the owner of the condominium and the tenant, respectively.
Hence, the rights and duties of the condominium owner and the
tenant are defined by the terms of the contract. In contrast, the parties
in this case present adverse possessory claims over those portions of
Lot 3976 in which the houses concerned are situated.
In particular, the spouses Marcelo assert better right of possession
based on their alleged right as "lawful owners and possessors of a
residential lot containing an area of 5,004 sq. m. known as Lot 3976
Parañaque Cad. 299 by virtue of a final and executory decision of the
[Land] Management Bureau (DENR) promulgated on Dec. 12, 1996
and Tax Dec. No. E-008-083-77 issued in their name by the City
Assessor of Parañaque."[45] For their part, the Silverios claim better
right of possession on account of their actual occupation of the
subject properties. In either case, a finding that the spouses Marcelo
have better right to possess the subject property could only be
premised on their lawful possession of the entire Lot No. 3976,
Parañaque Cad. 299. It follows, therefore, that a final adjudication in
favor of the spouses Marcelo in one case would constitute res
judicata in the other.
In Agustin v. Delos Santos,[46] the Court cited three tests to verify
whether there is identity of causes of action for purposes of applying
the principle of res judicata. The first test is the "absence of
inconsistency test" where it is determined whether the judgment
sought will be inconsistent with the prior judgment. If no
inconsistency is shown, the prior judgment shall not constitute a bar
to subsequent actions.[47] The more common approach in ascertaining
identity of causes of action is the "same evidence test," whereby the
following question serves as a sufficient criterion: "would the same
evidence support and establish both the present and former causes of
action?" If the answer is in the affirmative, then the prior judgment is
a bar to the subsequent action; conversely, it is not.[48] Aside from the
"absence of inconsistency test" and "same evidence test," we have
also ruled that a previous judgment operates as a bar to a subsequent
one when it had touched on a matter already decided, or if the parties
are in effect "litigating for the same thing."[49]
The "absence of inconsistency test" finds no application in this case
since it presupposes that a final judgment has been rendered in the
first case. By applying the "same evidence test," however, it becomes
apparent that the proof necessary to obtain affirmative relief in Civil
Case No. 2004-269 is the same as that in Civil Case No. 2004-271.
Since the spouses Marcelo are claiming sole ownership of Lot 3976
in their MSA, the evidence needed to establish better right of
possession over the house constructed by Florante Marcelo and
Marilou Silverio, and the one built by the Silverios is the same,
regardless of the fact that they were built on separate portions of said
lot. We have ruled time and again that "a party cannot, by varying
the form of action, or adopting a different method of presenting his
case, escape the operation of the principle that one and the same
cause of action shall not be twice litigated."[50]
Evidently, the spouses Marcelo engaged in forum shopping by filing
separate cases for unlawful detainer based on a single claim of
ownership over Lot 3976. Said act is likewise tantamount to splitting
a cause of action which, in this case, is a cause for dismissal on the
ground of litis pendentia. On this score alone, the petition for review
on certiorari filed by the spouses Marcelo in G.R. Nos. 184490 must
fail, alongside their averments in G.R. No. 184079.
In any case, even if we confront the issue as to who between the
spouses Marcelo and the Silverios have better right of possession
over the subject properties, the former would still not prevail.
As earlier stated, the DENR-NCR had canceled the MSA filed by the
spouses Marcelo in its Decision[51] dated July 11, 2007. The
Department found that the spouses Marcelo failed to satisfy the
requirements for the acquisition of Lot 3976 under the Public Land
Act. The DENR-NCR clarified that the Decision dated December 12,
1996 gave due course to the application, not only of the spouses
Marcelo, but also those of other applicants. It gave weight to the
findings in the ocular inspection that the spouses Marcelo are
actually occupying only 50 square meters of Lot 3976 while the
remaining portions are inhabited by 111 families. The DENR-NCR
adds that the spouses Marcelo cannot claim the entire Lot No. 3976
since Republic Act No. 730[52] limits the area of land that may be
applied for to 1,000 square meters.[53] In conclusion, the DENR-NCR
held that Lot 3976 remains a public land and its dwellers may apply
for the purchase of those portions that they are actually occupying.
Factual considerations relating to lands of the public domain
properly rest within the administrative competence of the Director of
Lands and the DENR. Findings of administrative agencies, which
have acquired expertise because of their jurisdiction, are confined to
specific matters and are accorded respect, if not finality, by the
courts. Even if they are not binding to civil courts exercising
jurisdiction over ejectment cases, such factual findings deserve great
consideration and are accorded much weight.[54]
Nonetheless, the declaration by the DENR-NCR that Lot 3976 is still
part of the public domain does not mean that neither of the parties is
entitled to the possession of the subject properties. In Pajuyo v.
Court of Appeals,[55] we reiterated the policy behind the summary
action of forcible entry and unlawful detainer, thus:
It must be stated that the purpose of an action of forcible entry and
detainer is that, regardless of the actual condition of the title to the
property, the party in peaceable quiet possession shall not be turned
out by strong hand, violence or terror. In affording this remedy of
restitution the object of the statute is to prevent breaches of the peace
and criminal disorder which would ensue from the withdrawal of the
remedy, and the reasonable hope such withdrawal would create that
some advantage must accrue to those persons who, believing
themselves entitled to the possession of property, resort to force to
gain possession rather than to some appropriate action in the courts
to assert their claims. This is the philosophy at the foundation of all
these actions of forcible entry and detainer which are designed to
compel the party out of possession to respect and resort to the law
alone to obtain what he claims is his.[56]
The parties in Pajuyo were informal settlers on the public land which
was the subject of said case. We ruled that since the government,
which has title or better right over the property was not impleaded in
the case, the Court cannot, on its own, evict the parties. We
recognized better right of possession in favor of the petitioner therein
who began occupying the disputed property ahead of the respondents
in said case.
A case with parallel factual milieu is Modesto v. Urbina.[57] Like the
spouses Marcelo, the respondents in said case relied on a MSA and
tax declarations to substantiate their claim of possession over the
contested land therein. In ruling for the petitioners in said case, the
Court stressed that the mere declaration of land for taxation purposes
does not constitute possession thereof nor is it proof of ownership in
the absence of the claimant's actual possession.[58] We explained that
unless a public land is shown to have been reclassified as alienable or
actually alienated by the State to a private person, that piece of land
remains part of the public domain, and its occupation, in the concept
of owner, no matter how long, cannot confer ownership or
possessory rights.[59] This finds support in Section 88 of the Public
Land Act, which provides:
Section 88. The tract or tracts of land reserved under the provisions
of section eighty-three shall be non-alienable and shall not be subject
to occupation, entry, sale, lease, or other disposition until again
declared alienable under the provisions of this Act or by
proclamation of the President.
In a Certification[60] dated June 8, 2006, Samson G. de Leon, the
Regional Technical Director for Lands of the DENR-NCR stated
that:
This is to certify that Lot 3976 Cad 299, Parañaque Cadastre situated
at San Dionisio, Parañaque, Metro Manila, containing an area of
5,027.00 square meters has been verified based on available records
of this Office to be under Project No. 25, classified asAlienable or
Disposable Public Land, certified as such on 3 January 1968 per
BFD L.C. Map No. 2323.
xxxx
This is to further certify that as per Certification dated 15 December
2005 issued by Records Officer II Anita B. Ibardolasa which is
hereto attached, no land patent has been issued over the same or
any portion thereof.
x x x x. (Emphasis supplied.)
It is undisputed by the spouses Marcelo that the Silverios presently
occupy those portions of Lot 3976 which are the subjects of the
consolidated petitions before us. In particular, the Silverios tie their
possession of the parcel at issue in G.R. No. 184490 to Florante
Marcelo who appropriated a portion of Lot 3976 for himself, and
with his wife, constructed a house thereon in 1986. As regards the
portion of Lot 3976 subject of G.R. No. 184079, the Silverios have
established their dwelling thereon in 1987 - long after Lot 3976 was
classified as alienable and disposable public land on January 3, 1968.
Meanwhile, the spouses Marcelo insist on their better right to possess
the contested parcels as holders of Tax Declaration No. E-008-19942
in the name of Ricardo Marcelo. Said tax declaration, which covers
Lot 3976, was issued for the year 2005 and canceled Tax Declaration
No. E-008-18821, also under the name of Ricardo Marcelo. Other
than said tax declaration, however, we found nothing in the records
of these cases to show that the spouses Marcelo have been
consistently paying taxes on Lot 3976. We note that Tax Declaration
No. E-008-19942 was issued fairly recently, and by itself, is
inadequate to convince the Court that the spouses Marcelo have been
in open, continuous and exclusive possession of the subject portions
of Lot 3976, by themselves or through a successor-in-interest, since
January 3, 1968. More importantly, it is ingrained in our
jurisprudence that the mere declaration of a land for taxation
purposes does not constitute possession thereof nor is it proof of
ownership in the absence of the claimant's actual possession.[61]
Considering that the Silverios are in actual possession of the subject
portions of Lot 3976, they are entitled to remain on the
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-61311 September 2l, 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.
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 stags and sell in the above-
mentioned place. 2 The action was protested 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 constructing 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 G.R. 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 then 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 beginning July 1,
1982. 10The 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, 11 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 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. 19
It does not appear that the decision in this case was appealed or has
been reversed. In Civil Case G.R. 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 vs. Rojas, 23decided 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 or 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 was held that the City of contract.
In Muyot vs. 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:
Appellants claim that they had obtained permit from
the present of the City of Manila, to connect 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
a1, 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 clear for the
use of the public, and the sidewalks and crossings
for the pedestrians, and the same shall only be used
or occupied for other purpose as provided by
ordinance or regulation; ..." (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 fire passage of
pedestrians who had to take the plaza itself which
used to be clogged with vehicular traffic.
Exactly in point is Espiritu vs. 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 common 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
municipalcouncil 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 stags
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 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, 27which 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 an taint of arbitrariness in the action he was caged 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 stags 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 casethrough 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 suffers 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
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 an 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 deference 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.
property until a person who has a title or a better right lawfully ejects
them. The ruling in this case, however, does not preclude the
Silverios and the spouses Marcelo from introducing evidence and
presenting arguments before the proper administrative agency to
establish any right to which they may be entitled under the law.[62]
WHEREFORE, the Court RESOLVES:
(1) To GRANT the petition in G.R. No. 184079. The Decision dated
March 18, 2008 and Resolution dated August 12, 2008 of the Court
of Appeals in CA-G.R. SP No. 98105 are REVERSED and SET
ASIDE;
(2) To DENY the petition in G.R. No. 184490. Consequently, the
Decision dated March 27, 2008 and Resolution dated September 1,
2008 of the Court of Appeals in CA-G.R SP No. 98713 are
AFFIRMED; and
(3) To DISMISS the complaints for unlawful detainer filed by the
spouses Ricardo and Evelyn Marcelo against Armando Silverio, Sr.
and Remedios Silverio for lack of merit.
No pronouncement as to costs.
SO ORDERED.
Laurel vs. Garcia
Facts: The subject property in this case is one of the 4 properties in
Japan acquired by the Philippine government under the Reparations
Agreement entered into with Japan, the Roppongi property. The said
property was acquired from the Japanese government through
Reparations Contract No. 300. It consists of the land and building for
the Chancery of the Philippine Embassy. As intended, it became the
site of the Philippine Embassy until the latter was transferred to
Nampeidai when the Roppongi building needed major repairs.
President Aquino created a committee to study the
disposition/utilization of Philippine government properties in Tokyo
and Kobe, Japan. The President issued EO 296 entitling non-Filipino
citizens or entities to avail of separations' capital goods and services
in the event of sale, lease or disposition.
Issues: Whether or not the Chief Executive, her officers and agents,
have the authority and jurisdiction, to sell the Roppongi property.
Ruling: 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. It is indeed true that
the Roppongi property is valuable not so much because of the inflated
prices fetched by real property in Tokyo but more so because of its
symbolic value to all Filipinos, veterans and civilians alike. Whether
or not the Roppongi and related properties will eventually be sold is a
policy determination where both the President and Congress must
concur. Considering the properties' importance and value, the laws on
conversion and disposition of property of public dominion must be
faithfully followed.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 92013 July 25, 1990
SALVADOR H. LAUREL, petitioner,
vs.
RAMON GARCIA, as head of the Asset Privatization Trust,
RAUL MANGLAPUS, as Secretary of Foreign Affairs, and
CATALINO MACARAIG, as Executive Secretary, respondents.
G.R. No. 92047 July 25, 1990
DIONISIO S. OJEDA, petitioner,
vs.
EXECUTIVE SECRETARY MACARAIG, JR., ASSETS
PRIVATIZATION TRUST CHAIRMAN RAMON T. GARCIA,
AMBASSADOR RAMON DEL ROSARIO, et al., as members of
the PRINCIPAL AND BIDDING COMMITTEES ON THE
UTILIZATION/DISPOSITION PETITION OF PHILIPPINE
GOVERNMENT PROPERTIES IN JAPAN, respondents.
Arturo M. Tolentino for petitioner in 92013.
GUTIERREZ, JR., J.:
These are two petitions for prohibition seeking to enjoin
respondents, their representatives and agents from proceeding
with the bidding for the sale of the 3,179 square meters of land at
306 Roppongi, 5-Chome Minato-ku Tokyo, Japan scheduled on
February 21, 1990. We granted the prayer for a temporary
restraining order effective February 20, 1990. One of the
petitioners (in G.R. No. 92047) likewise prayes for a writ of
mandamus to compel the respondents to fully disclose to the
public the basis of their decision to push through with the sale of
the Roppongi property inspire of strong public opposition and to
explain the proceedings which effectively prevent the
participation of Filipino citizens and entities in the bidding
process.
The oral arguments in G.R. No. 92013, Laurel v. Garcia, et
al. were heard by the Court on March 13, 1990. After G.R. No.
92047, Ojeda v. Secretary Macaraig, et al. was filed, the
respondents were required to file a comment by the Court's
resolution dated February 22, 1990. The two petitions were
consolidated on March 27, 1990 when the memoranda of the
parties in the Laurel case were deliberated upon.
The Court could not act on these cases immediately because the
respondents filed a motion for an extension of thirty (30) days to
file comment in G.R. No. 92047, followed by a second motion for
an extension of another thirty (30) days which we granted on
May 8, 1990, a third motion for extension of time granted on
May 24, 1990 and a fourth motion for extension of time which we
granted on June 5, 1990 but calling the attention of the
respondents to the length of time the petitions have been
pending. After the comment was filed, the petitioner in G.R. No.
92047 asked for thirty (30) days to file a reply. We noted his
motion and resolved to decide the two (2) cases.
I Filipino-owned entities in national development projects.
The subject property in this case is one of the four (4) properties
in Japan acquired by the Philippine government under the
Reparations Agreement entered into with Japan on May 9, 1956,
the other lots being:
(1) The Nampeidai Property at 11-24 Nampeidai-machi,
Shibuya-ku, Tokyo which has an area of approximately 2,489.96
square meters, and is at present the site of the Philippine
Embassy Chancery;
(2) The Kobe Commercial Property at 63 Naniwa-cho, Kobe,
with an area of around 764.72 square meters and categorized as
a commercial lot now being used as a warehouse and parking lot
for the consulate staff; and
(3) The Kobe Residential Property at 1-980-2 Obanoyama-cho,
Shinohara, Nada-ku, Kobe, a residential lot which is now vacant.
The properties and the capital goods and services procured from
the Japanese government for national development projects are
part of the indemnification to the Filipino people for their losses
in life and property and their suffering during World War II.
The Reparations Agreement provides that reparations valued at
$550 million would be payable in twenty (20) years in accordance
with annual schedules of procurements to be fixed by the
Philippine and Japanese governments (Article 2, Reparations
Agreement). Rep. Act No. 1789, the Reparations Law, prescribes
the national policy on procurement and utilization of reparations
and development loans. The procurements are divided into those
for use by the government sector and those for private parties in
projects as the then National Economic Council shall determine.
Those intended for the private sector shall be made available by
sale to Filipino citizens or to one hundred (100%) percent
The Roppongi property was acquired from the Japanese
government under the Second Year Schedule and listed under
the heading "Government Sector", through Reparations
Contract No. 300 dated June 27, 1958. The Roppongi property
consists of the land and building "for the Chancery of the
Philippine Embassy" (Annex M-D to Memorandum for
Petitioner, p. 503). As intended, it became the site of the
Philippine Embassy until the latter was transferred to
Nampeidai on July 22, 1976 when the Roppongi building needed
major repairs. Due to the failure of our government to provide
necessary funds, the Roppongi property has remained
undeveloped since that time.
A proposal was presented to President Corazon C. Aquino by
former Philippine Ambassador to Japan, Carlos J. Valdez, to
make the property the subject of a lease agreement with a
Japanese firm - Kajima Corporation — which shall construct
two (2) buildings in Roppongi and one (1) building in Nampeidai
and renovate the present Philippine Chancery in Nampeidai. The
consideration of the construction would be the lease to the
foreign corporation of one (1) of the buildings to be constructed
in Roppongi and the two (2) buildings in Nampeidai. The other
building in Roppongi shall then be used as the Philippine
Embassy Chancery. At the end of the lease period, all the three
leased buildings shall be occupied and used by the Philippine
government. No change of ownership or title shall occur. (See
Annex "B" to Reply to Comment) The Philippine government
retains the title all throughout the lease period and thereafter.
However, the government has not acted favorably on this
proposal which is pending approval and ratification between the
parties. Instead, on August 11, 1986, President Aquino created a
committee to study the disposition/utilization of Philippine
government properties in Tokyo and Kobe, Japan through
Administrative Order No. 3, followed by Administrative Orders
Numbered 3-A, B, C and D.
On July 25, 1987, the President issued Executive Order No. 296
entitling non-Filipino citizens or entities to avail of separations'
capital goods and services in the event of sale, lease or
disposition. The four properties in Japan including the Roppongi
were specifically mentioned in the first "Whereas" clause.
Amidst opposition by various sectors, the Executive branch of
the government has been pushing, with great vigor, its decision
to sell the reparations properties starting with the Roppongi lot.
The property has twice been set for bidding at a minimum floor
price of $225 million. The first bidding was a failure since only
one bidder qualified. The second one, after postponements, has
not yet materialized. The last scheduled bidding on February 21,
1990 was restrained by his Court. Later, the rules on bidding
were changed such that the $225 million floor price became
merely a suggested floor price.
The Court finds that each of the herein petitions raises distinct
issues. The petitioner in G.R. No. 92013 objects to the alienation
of the Roppongi property to anyone while the petitioner in G.R.
No. 92047 adds as a principal objection the alleged unjustified
bias of the Philippine government in favor of selling the property
to non-Filipino citizens and entities. These petitions have been
consolidated and are resolved at the same time for the objective
is the same - to stop the sale of the Roppongi property.
The petitioner in G.R. No. 92013 raises the following issues:
(1) Can the Roppongi property and others of its kind be
alienated by the Philippine Government?; and
(2) Does the Chief Executive, her officers and agents, have the
authority and jurisdiction, to sell the Roppongi property?
Petitioner Dionisio Ojeda in G.R. No. 92047, apart from
questioning the authority of the government to alienate the
Roppongi property assails the constitutionality of Executive
Order No. 296 in making the property available for sale to non-
Filipino citizens and entities. He also questions the bidding
procedures of the Committee on the Utilization or Disposition of
Philippine Government Properties in Japan for being
discriminatory against Filipino citizens and Filipino-owned
entities by denying them the right to be informed about the
bidding requirements.
II
In G.R. No. 92013, petitioner Laurel asserts that the Roppongi
property and the related lots were acquired as part of the
reparations from the Japanese government for diplomatic and
consular use by the Philippine government. Vice-President
Laurel states that the Roppongi property is classified as one of
public dominion, and not of private ownership under Article 420
of the Civil Code (See infra).
The petitioner submits that the Roppongi property comes under
"property intended for public service" in paragraph 2 of the
above provision. He states that being one of public dominion, no
ownership by any one can attach to it, not even by the State. The
Roppongi and related properties were acquired for "sites for
chancery, diplomatic, and consular quarters, buildings and other
improvements" (Second Year Reparations Schedule). The
petitioner states that they continue to be intended for a necessary
service. They are held by the State in anticipation of an
opportune use. (Citing 3 Manresa 65-66). Hence, it cannot be
appropriated, is outside the commerce of man, or to put it in
more simple terms, it cannot be alienated nor be the subject
matter of contracts (Citing Municipality of Cavite v. Rojas, 30
Phil. 20 [1915]). Noting the non-use of the Roppongi property at
the moment, the petitioner avers that the same remains property
of public dominion so long as the government has not used it for
other purposes nor adopted any measure constituting a removal
of its original purpose or use.
The respondents, for their part, refute the petitioner's contention
by saying that the subject property is not governed by our Civil
Code but by the laws of Japan where the property is located.
They rely upon the rule of lex situs which is used in determining
the applicable law regarding the acquisition, transfer and
devolution of the title to a property. They also invoke Opinion
No. 21, Series of 1988, dated January 27, 1988 of the Secretary of
Justice which used the lex situs in explaining the inapplicability
of Philippine law regarding a property situated in Japan.
The respondents add that even assuming for the sake of
argument that the Civil Code is applicable, the Roppongi
property has ceased to become property of public dominion. It
has become patrimonial property because it has not been used
for public service or for diplomatic purposes for over thirteen
(13) years now (Citing Article 422, Civil Code) and because
the intention by the Executive Department and the Congress to
convert it to private use has been manifested by overt acts, such
as, among others: (1) the transfer of the Philippine Embassy to
Nampeidai (2) the issuance of administrative orders for the
possibility of alienating the four government properties in Japan;
(3) the issuance of Executive Order No. 296; (4) the enactment by
the Congress of Rep. Act No. 6657 [the Comprehensive Agrarian
Reform Law] on June 10, 1988 which contains a provision
stating that funds may be taken from the sale of Philippine
properties in foreign countries; (5) the holding of the public
bidding of the Roppongi property but which failed; (6) the
deferment by the Senate in Resolution No. 55 of the bidding to a
future date; thus an acknowledgment by the Senate of the
government's intention to remove the Roppongi property from
the public service purpose; and (7) the resolution of this Court
dismissing the petition in Ojeda v. Bidding Committee, et al., G.R.
No. 87478 which sought to enjoin the second bidding of the
Roppongi property scheduled on March 30, 1989.
III
In G.R. No. 94047, petitioner Ojeda once more asks this Court to
rule on the constitutionality of Executive Order No. 296. He had
earlier filed a petition in G.R. No. 87478 which the Court
dismissed on August 1, 1989. He now avers that the executive
order contravenes the constitutional mandate to conserve and
develop the national patrimony stated in the Preamble of the
1987 Constitution. It also allegedly violates:
(1) The reservation of the ownership and acquisition of alienable
lands of the public domain to Filipino citizens. (Sections 2 and 3,
Article XII, Constitution; Sections 22 and 23 of Commonwealth
Act 141).i•t•c-aüsl
(2) The preference for Filipino citizens in the grant of rights,
privileges and concessions covering the national economy and
patrimony (Section 10, Article VI, Constitution);
(3) The protection given to Filipino enterprises against unfair
competition and trade practices;
(4) The guarantee of the right of the people to information on all
matters of public concern (Section 7, Article III, Constitution);
(5) The prohibition against the sale to non-Filipino citizens or
entities not wholly owned by Filipino citizens of capital goods
received by the Philippines under the Reparations Act (Sections
2 and 12 of Rep. Act No. 1789); and
(6) The declaration of the state policy of full public disclosure of
all transactions involving public interest (Section 28, Article III,
Constitution).
Petitioner Ojeda warns that the use of public funds in the
execution of an unconstitutional executive order is a
misapplication of public funds He states that since the details of
the bidding for the Roppongi property were never publicly
disclosed until February 15, 1990 (or a few days before the
scheduled bidding), the bidding guidelines are available only in
Tokyo, and the accomplishment of requirements and the
selection of qualified bidders should be done in Tokyo, interested
Filipino citizens or entities owned by them did not have the
chance to comply with Purchase Offer Requirements on the
Roppongi. Worse, the Roppongi shall be sold for a minimum
price of $225 million from which price capital gains tax under
Japanese law of about 50 to 70% of the floor price would still be
deducted.
IV
The petitioners and respondents in both cases do not dispute the
fact that the Roppongi site and the three related properties were
through reparations agreements, that these were assigned to the
government sector and that the Roppongi property itself was
specifically designated under the Reparations Agreement to
house the Philippine Embassy.
The nature of the Roppongi lot as property for public service is
expressly spelled out. It is dictated by the terms of the
Reparations Agreement and the corresponding contract of
procurement which bind both the Philippine government and the
Japanese government.
There can be no doubt that it is of public dominion unless it is
convincingly shown that the property has become patrimonial.
This, the respondents have failed to do.
As property of public dominion, the Roppongi lot is outside the
commerce of man. It cannot be alienated. Its ownership is a
special collective ownership for general use and enjoyment, an
application to the satisfaction of collective needs, and resides in
the social group. The purpose is not to serve the State as a
juridical person, but the citizens; it is intended for the common
and public welfare and cannot be the object of appropration.
(Taken from 3 Manresa, 66-69; cited in Tolentino,
Commentaries on the Civil Code of the Philippines, 1963 Edition,
Vol. II, p. 26).
The applicable provisions of the Civil Code are:
ART. 419. Property is either of public dominion
or of private ownership.
ART. 420. The following things are property of
public dominion
(1) Those intended for public use, such as roads,
canals, rivers, torrents, ports and bridges
constructed by the State, banks shores
roadsteads, and others of similar character;
(2) Those which belong to the State, without
being for public use, and are intended for some
public service or for the development of the
national wealth.
ART. 421. All other property of the State, which
is not of the character stated in the preceding
article, is patrimonial property.
The Roppongi property is correctly classified under paragraph 2
of Article 420 of the Civil Code as property belonging to the
State and intended for some public service.
Has the intention of the government regarding the use of the
property been changed because the lot has been Idle for some
years? Has it become patrimonial?
The fact that the Roppongi site has not been used for a long time
for actual Embassy service does not automatically convert it to
patrimonial property. Any such conversion happens only if the
property is withdrawn from public use (Cebu Oxygen and
Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]). A property
continues to be part of the public domain, not available for
private appropriation or ownership until there is a formal
declaration on the part of the government to withdraw it from
being such (Ignacio v. Director of Lands, 108 Phil. 335 [1960]).
The respondents enumerate various pronouncements by
concerned public officials insinuating a change of intention. We
emphasize, however, that an abandonment of the intention to use
the Roppongi property for public service and to make it
patrimonial property under Article 422 of the Civil Code must be
definiteAbandonment cannot be inferred from the non-use alone
specially if the non-use was attributable not to the government's
own deliberate and indubitable will but to a lack of financial
support to repair and improve the property (See Heirs of Felino
Santiago v. Lazaro, 166 SCRA 368 [1988]). Abandonment must
be a certain and positive act based on correct legal premises.
A mere transfer of the Philippine Embassy to Nampeidai in 1976
is not relinquishment of the Roppongi property's original
purpose. Even the failure by the government to repair the
building in Roppongi is not abandonment since as earlier stated,
there simply was a shortage of government funds. The recent
Administrative Orders authorizing a study of the status and
conditions of government properties in Japan were merely
directives for investigation but did not in any way signify a clear
intention to dispose of the properties.
Executive Order No. 296, though its title declares an "authority
to sell", does not have a provision in its text expressly
authorizing the sale of the four properties procured from Japan
for the government sector. The executive order does not declare
that the properties lost their public character. It merely intends
to make the properties available to foreigners and not to Filipinos
alone in case of a sale, lease or other disposition. It merely
eliminates the restriction under Rep. Act No. 1789 that
reparations goods may be sold only to Filipino citizens and one
hundred (100%) percent Filipino-owned entities. The text of
Executive Order No. 296 provides:
Section 1. The provisions of Republic Act No.
1789, as amended, and of other laws to the
contrary notwithstanding, the above-mentioned
properties can be made available for sale, lease or
any other manner of disposition to non-Filipino
citizens or to entities owned by non-Filipino
citizens.
Executive Order No. 296 is based on the wrong premise or
assumption that the Roppongi and the three other properties
were earlier converted into alienable real properties. As earlier
stated, Rep. Act No. 1789 differentiates the procurements for the
government sector and the private sector (Sections 2 and 12,
Rep. Act No. 1789). Only the private sector properties can be
sold to end-users who must be Filipinos or entities owned by
Filipinos. It is this nationality provision which was amended by
Executive Order No. 296.
Section 63 (c) of Rep. Act No. 6657 (the CARP Law) which
provides as one of the sources of funds for its implementation,
the proceeds of the disposition of the properties of the
Government in foreign countries, did not withdraw the
Roppongi property from being classified as one of public
dominion when it mentions Philippine properties abroad. Section
63 (c) refers to properties which are alienable and not to those
reserved for public use or service. Rep Act No. 6657, therefore,
does not authorize the Executive Department to sell the
Roppongi property. It merely enumerates possible sources of
future funding to augment (as and when needed) the Agrarian
Reform Fund created under Executive Order No. 299. Obviously
any property outside of the commerce of man cannot be tapped
as a source of funds.
The respondents try to get around the public dominion character
of the Roppongi property by insisting that Japanese law and not
our Civil Code should apply.
It is exceedingly strange why our top government officials, of all
people, should be the ones to insist that in the sale of extremely
valuable government property, Japanese law and not Philippine
law should prevail. The Japanese law - its coverage and effects,
when enacted, and exceptions to its provision — is not presented
to the Court It is simply asserted that the lex loci rei sitae or
Japanese law should apply without stating what that law
provides. It is a ed on faith that Japanese law would allow the
sale.
We see no reason why a conflict of law rule should apply when
no conflict of law situation exists. A conflict of law situation
arises only when: (1) There is a dispute over the title or
ownership of an immovable, such that the capacity to take and
transfer immovables, the formalities of conveyance, the essential
validity and effect of the transfer, or the interpretation and effect
of a conveyance, are to be determined (See Salonga, Private
International Law, 1981 ed., pp. 377-383); and (2) A foreign law
on land ownership and its conveyance is asserted to conflict with
a domestic law on the same matters. Hence, the need to
determine which law should apply.
In the instant case, none of the above elements exists.
The issues are not concerned with validity of ownership or title.
There is no question that the property belongs to the Philippines.
The issue is the authority of the respondent officials to validly
dispose of property belonging to the State. And the validity of the
procedures adopted to effect its sale. This is governed by
Philippine Law. The rule of lex situs does not apply.
The assertion that the opinion of the Secretary of Justice sheds
light on the relevance of the lex 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.
(Emphasis supplied)
The requirement has been retained in Section 48, Book I of the
Administrative Code of 1987 (Executive Order No. 292).
SEC. 48. Official Authorized to Convey Real
Property. — Whenever real property of the
Government is authorized by law to be
conveyed, the deed of conveyance shall be
executed in behalf of the government by the
following:
(1) For property belonging to and titled in the
name of the Republic of the Philippines, by the
President, unless the authority therefor is
expressly vested by law in another officer.
(2) For property belonging to the Republic of the
Philippines but titled in the name of any political
subdivision or of any corporate agency or
instrumentality, by the executive head of the
agency or instrumentality. (Emphasis supplied)
It is not for the President to convey valuable real property of the
government on his or her own sole will. Any such conveyance
must be authorized and approved by a law enacted by the
Congress. It requires executive and legislative concurrence.
Resolution No. 55 of the Senate dated June 8, 1989, asking for
the deferment of the sale of the Roppongi property does not
withdraw the property from public domain much less authorize
its sale. It is a mere resolution; it is not a formal declaration
abandoning the public character of the Roppongi property. In
fact, the Senate Committee on Foreign Relations is conducting
hearings on Senate Resolution No. 734 which raises serious
policy considerations and calls for a fact-finding investigation of
the circumstances behind the decision to sell the Philippine
government properties in Japan.
The resolution of this Court in Ojeda v. Bidding Committee, et al.,
supra, did not pass upon the constitutionality of Executive Order
No. 296. Contrary to respondents' assertion, we did not uphold
the authority of the President to sell the Roppongi property. The
Court stated that the constitutionality of the executive order was
not the real issue and that resolving the constitutional question
was "neither necessary nor finally determinative of the case."
The Court noted that "[W]hat petitioner ultimately questions is
the use of the proceeds of the disposition of the Roppongi
property." In emphasizing that "the decision of the Executive to
dispose of the Roppongi property to finance the CARP ... cannot
be questioned" in view of Section 63 (c) of Rep. Act No. 6657, the
Court did not acknowledge the fact that the property became
alienable nor did it indicate that the President was authorized to
dispose of the Roppongi property. The resolution should be read
to mean that in case the Roppongi property is re-classified to be
patrimonial and alienable by authority of law, the proceeds of a
sale may be used for national economic development projects
including the CARP.
Moreover, the sale in 1989 did not materialize. The petitions
before us question the proposed 1990 sale of the Roppongi
property. We are resolving the issues raised in these petitions,
not the issues raised in 1989.
Having declared a need for a law or formal declaration to
withdraw the Roppongi property from public domain to make it
alienable and a need for legislative authority to allow the sale of
the property, we see no compelling reason to tackle the
constitutional issues raised by petitioner Ojeda.
The Court does not ordinarily pass upon constitutional questions
unless these questions are properly raised in appropriate cases
and their resolution is necessary for the determination of the case
(People v. Vera, 65 Phil. 56 [1937]). The Court will not pass upon
a constitutional question although properly presented by the
record if the case can be disposed of on some other ground such
as the application of a statute or general law (Siler v. Louisville
and Nashville R. Co., 213 U.S. 175, [1909], Railroad Commission
v. Pullman Co., 312 U.S. 496 [1941]).
The petitioner in G.R. No. 92013 states why the Roppongi
property should not be sold:
The Roppongi property is not just like any piece
of property. It was given to the Filipino people in
reparation for the lives and blood of Filipinos
who died and suffered during the Japanese
military occupation, for the suffering of widows
and orphans who lost their loved ones and
kindred, for the homes and other properties lost
by countless Filipinos during the war. The Tokyo
properties are a monument to the bravery and
sacrifice of the Filipino people in the face of an
invader; like the monuments of Rizal, Quezon,
and other Filipino heroes, we do not expect
economic or financial benefits from them. But
who would think of selling these monuments?
Filipino honor and national dignity dictate that
we keep our properties in Japan as memorials to
the countless Filipinos who died and suffered.
Even if we should become paupers we should not
think of selling them. For it would be as if we sold
the lives and blood and tears of our countrymen.
(Rollo- G.R. No. 92013, p.147)
The petitioner in G.R. No. 92047 also states:
Roppongi is no ordinary property. It is one ceded
by the Japanese government in atonement for its
past belligerence for the valiant sacrifice of life
and limb and for deaths, physical dislocation and
economic devastation the whole Filipino people
endured in World War II.
It is for what it stands for, and for what it could
never bring back to life, that its significance
 today remains undimmed, inspire of the lapse of
45 years since the war ended, inspire of the
passage of 32 years since the property passed on
to the Philippine government.
Roppongi is a reminder that cannot — should not
— be dissipated ... (Rollo-92047, p. 9)
It is indeed true that the Roppongi property is valuable not so
much because of the inflated prices fetched by real property in
Tokyo but more so because of its symbolic value to all Filipinos
— veterans and civilians alike. Whether or not the Roppongi and
related properties will eventually be sold is a policy
determination where both the President and Congress must
concur. Considering the properties' importance and value, the
laws on conversion and disposition of property of public
dominion must be faithfully followed.
WHEREFORE, IN VIEW OF THE FOREGOING, the petitions
are GRANTED. A writ of prohibition is issued enjoining the
respondents from proceeding with the sale of the Roppongi
property in Tokyo, Japan. The February 20, 1990 Temporary
Restraining Order is made PERMANENT.
SO ORDERED.
Melencio-Herrera, Paras, Bidin, Griño-Aquino and Regalado, JJ.,
concur.
Separate Opinions
CRUZ, J., concurring:
I concur completely with the excellent ponencia of Mr. Justice
Gutierrez and will add the following observations only for
emphasis.
It is clear that the respondents have failed to show the
President's legal authority to sell the Roppongi property. When
asked to do so at the hearing on these petitions, the Solicitor
General was at best ambiguous, although I must add in fairness
that this was not his fault. The fact is that there is -no such
authority. Legal expertise alone cannot conjure that statutory
permission out of thin air.
Exec. Order No. 296, which reads like so much legislative, double
talk, does not contain such authority. Neither does Rep. Act No.
6657, which simply allows the proceeds of the sale of our
properties abroad to be used for the comprehensive agrarian
reform program. Senate Res. No. 55 was a mere request for the
deferment of the scheduled sale of tile Roppongi property,
possibly to stop the transaction altogether; and ill any case it is
not a law. The sale of the said property may be authorized only
by Congress through a duly enacted statute, and there is no such
law.
Once again, we have affirmed the principle that ours is a
government of laws and not of men, where every public official,
from the lowest to the highest, can act only by virtue of a valid
authorization. I am happy to note that in the several cases where
this Court has ruled against her, the President of the Philippines
has submitted to this principle with becoming grace.
PADILLA, J., concurring:
I concur in the decision penned by Mr. Justice Gutierrez, Jr., I
only wish to make a few observations which could help in further
clarifying the issues.
Under our tripartite system of government ordained by the
Constitution, it is Congress that lays down or determines
policies. The President executes such policies. The policies
determined by Congress are embodied in legislative enactments
that have to be approved by the President to become law. The
President, of course, recommends to Congress the approval of
policies but, in the final analysis, it is Congress that is the policy -
determining branch of government.
The judiciary interprets the laws and, in appropriate cases,
determines whether the laws enacted by Congress and approved
by the President, and presidential acts implementing such laws,
are in accordance with the Constitution.
The Roppongi property was acquired by the Philippine
government pursuant to the reparations agreement between the
Philippine and Japanese governments. Under such agreement,
this property was acquired by the Philippine government for a
specific purpose, namely, to serve as the site of the Philippine
Embassy in Tokyo, Japan. Consequently, Roppongi is a property
of public dominion and intended for public service, squarely
falling within that class of property under Art. 420 of the Civil
Code, which provides:
Art. 420. The following things are property of
public dominion :
(1) ...
(2) Those which belong to the State, without
being for public use, and are intended for some
public service or for the development of the
national wealth. (339a)
Public dominion property intended for public service cannot be
alienated unless the property is first transformed into private
property of the state otherwise known as patrimonial property of
the state. 1 The transformation of public dominion property to
state patrimonial property involves, to my mind, a policy
decision. It is a policy decision because the treatment of the
property varies according to its classification. Consequently, it is
Congress which can decide and declare the conversion of
Roppongi from a public dominion property to a state
patrimonial property. Congress has made no such decision or
declaration.
Moreover, the sale of public property (once converted from
public dominion to state patrimonial property) must be
approved by Congress, for this again is a matter of policy (i.e. to
keep or dispose of the property). Sec. 48, Book 1 of the
Administrative Code of 1987 provides:
SEC. 48. Official Authorized to Convey Real
Property. — Whenever real property of the
Government is authorized by law to be conveyed,
the deed of conveyance shall be executed in behalf
of the government by the following:
(1) For property belonging to and
titled in the name of the Republic
of the Philippines, by the
President, unless the authority
therefor is expressly vested by law
in another officer.
(2) For property belonging to the
Republic of the Philippines but
 titled in the name of any political
subdivision or of any corporate
agency or instrumentality, by the
executive head of the agency or
instrumentality. (Emphasis
supplied)
But the record is bare of any congressional decision or approval
to sell Roppongi. The record is likewise bare of any congressional
authority extended to the President to sell Roppongi thru public
bidding or otherwise.
It is therefore, clear that the President cannot sell or order the
sale of Roppongi thru public bidding or otherwise without a
prior congressional approval, first, converting Roppongi from a
public dominion property to a state patrimonial property, and,
second, authorizing the President to sell the same.
ACCORDINGLY, my vote is to GRANT the petition and to
make PERMANENT the temporary restraining order earlier
issued by this Court.
SARMIENTO, J., concurring:
The central question, as I see it, is whether or not the so-called
"Roppongi property' has lost its nature as property of public
dominion, and hence, has become patrimonial property of the
State. I understand that the parties are agreed that it was
property intended for "public service" within the contemplation
of paragraph (2), of Article 430, of the Civil Code, and
accordingly, land of State dominion, and beyond human
commerce. The lone issue is, in the light of supervening
developments, that is non-user thereof by the National
Government (for diplomatic purposes) for the last thirteen years;
the issuance of Executive Order No. 296 making it available for
sale to any interested buyer; the promulgation of Republic Act
No. 6657, the Comprehensive Agrarian Reform Law, making
available for the program's financing, State assets sold; the
approval by the President of the recommendation of the
investigating committee formed to study the property's
utilization; and the issuance of Resolution No. 55 of the
Philippine Senate requesting for the deferment of its disposition
it, "Roppongi", is still property of the public dominion, and if it
is not, how it lost that character.
When land of the public dominion ceases to be one, or when the
change takes place, is a question our courts have debated early.
In a 1906 decision, 1 it was held that property of the public
dominion, a public plaza in this instance, becomes patrimonial
upon use thereof for purposes other than a plaza. In a later
case, 2 this ruling was reiterated. Likewise, it has been held that
land, originally private property, has become of public dominion
upon its donation to the town and its conversion and use as a
public plaza. 3 It is notable that under these three cases, the character
of the property, and any change occurring therein, depends on the
actual use to which it is dedicated. 4
Much later, however, the Court held that "until a formal declaration
on the part of the Government, through the executive department or
the Legislative, to the effect that the land . . . is no longer needed for
[public] service- for public use or for special industries, [it]
continue[s] to be part of the public [dominion], not available for
private expropriation or ownership." 5 So also, it was ruled that a
political subdivision (the City of Cebu in this case) alone may
declare (under its charter) a city road abandoned and thereafter, to
dispose of it. 6
In holding that there is "a need for a law or formal declaration to
withdraw the Roppongi property from public domain to make it
alienable and a land for legislative authority to allow the sale of the
property" 7 the majority lays stress to the fact that: (1) An affirmative
act — executive or legislative — is necessary to reclassify property
of the public dominion, and (2) a legislative decree is required to
make it alienable. It also clears the uncertainties brought about by
earlier interpretations that the nature of property-whether public or
patrimonial is predicated on the manner it is actually used, or not
used, and in the same breath, repudiates the Government's position
that the continuous non-use of "Roppongi", among other arguments,
for "diplomatic purposes", has turned it into State patrimonial
property.
I feel that this view corresponds to existing pronouncements of this
Court, among other things, that: (1) Property is presumed to be State
property in the absence of any showing to the contrary; 8 (2) With
respect to forest lands, the same continue to be lands of the public
dominion unless and until reclassified by the Executive Branch of the
Government; 9 and (3) All natural resources, under the Constitution,
and subject to exceptional cases, belong to the State. 10
I am elated that the Court has banished previous uncertainties.
FELICIANO, J., dissenting
With regret, I find myself unable to share the conclusions reached by
Mr. Justice Hugo E. Gutierrez, Jr.
For purposes of this separate opinion, I assume that the piece of land
located in 306 Roppongi, 5-Chome, Minato-ku Tokyo, Japan
(hereinafter referred to as the "Roppongi property") may be
characterized as property of public dominion, within the meaning of
Article 420 (2) of the Civil Code:
[Property] which belong[s] to the State, without
being for public use, and are intended for some
public service -.
It might not be amiss however, to note that the appropriateness of
trying to bring within the confines of the simple threefold
classification found in Article 420 of the Civil Code ("property for
public use property "intended for some public service" and property
intended "for the development of the national wealth") all
property owned by the Republic of the Philippines whether found
within the territorial boundaries of the Republic or located within the
territory of another sovereign State, is not self-evident. The first item
of the classification property intended for public use — can scarcely
be properly applied to property belonging to the Republic but found
within the territory of another State. The third item of the
classification property intended for the development of the national
wealth is illustrated, in Article 339 of the Spanish Civil Code of
1889, by mines or mineral properties. Again, mineral lands owned by
a sovereign State are rarely, if ever, found within the territorial base
of another sovereign State. The task of examining in detail the
applicability of the classification set out in Article 420 of our Civil
Code to property that the Philippines happens to own outside its own
boundaries must, however, be left to academicians.
For present purposes, too, I agree that there is no question of conflict
of laws that is, at the present time, before this Court. The issues
before us relate essentially to authority to sell the Roppongi
property so far as Philippine law is concerned.
The majority opinion raises two (2) issues: (a) whether or not the
Roppongi property has been converted into patrimonial property or
property of the private domain of the State; and (b) assuming an
affirmative answer to (a), whether or not there is legal authority to
dispose of the Roppongi property.
I
Addressing the first issue of conversion of property of public
dominion intended for some public service, into property of the
private domain of the Republic, it should be noted that the Civil
Code does not address the question of who has authority to effect
such conversion. Neither does the Civil Code set out or refer to
any procedure for such conversion.
Our case law, however, contains some fairly explicit
pronouncements on this point, as Justice Sarmiento has pointed out
in his concurring opinion. In Ignacio v. Director of Lands (108 Phils.
335 [1960]), petitioner Ignacio argued that if the land in question
formed part of the public domain, the trial court should have declared
the same no longer necessary for public use or public purposes and
which would, therefore, have become disposable and available for
private ownership. Mr. Justice Montemayor, speaking for the Court,
said:
Article 4 of the Law of Waters of 1866 provides that
when a portion of the shore is no longer washed by
the waters of the sea and is not necessary for
purposes of public utility, or for the establishment of
special industries, or for coast-guard service, the
government shall declare it to be the property of the
owners of the estates adjacent thereto and as an
increment thereof. We believe that only the executive
and possibly the legislative departments have the
authority and the power to make the declaration that
any land so gained by the sea, is not necessary for
purposes of public utility, or for the establishment of
special industries, or for coast-guard service. If no
such declaration has been made by said
departments, the lot in question forms part of the
public domain. (Natividad v. Director of
Lands, supra.)
The reason for this pronouncement, according to this
Tribunal in the case of Vicente Joven y Monteverde
v. Director of Lands, 93 Phil., 134 (cited in Velayo's
Digest, Vol. 1, p. 52).
... is undoubtedly that the courts are neither primarily
called upon, nor indeed in a position to determine
whether any public land are to be used for the
purposes specified in Article 4 of the Law of Waters.
Consequently, until a formal declaration on the part
of the Government, through the executive
department or the Legislature, to the effect that the
land in question is no longer needed for coast-guard
service, for public use or for special industries, they
continue to be part of the public domain not
available for private appropriation or
ownership. (108 Phil. at 338-339; emphasis
supplied)
Thus, under Ignacio, either the Executive Department or the
Legislative Department may convert property of the State of public
dominion into patrimonial property of the State. No particular
formula or procedure of conversion is specified either in statute law
or in case law. Article 422 of the Civil Code simply states that:
"Property of public dominion, when no longer intended for public
use or for public service, shall form part of the patrimonial property
of the State". I respectfully submit, therefore, that the only
requirement which is legitimately imposable is that the intent to
convert must be reasonably clear from a consideration of the acts or
acts of the Executive Department or of the Legislative Department
which are said to have effected such conversion.
The same legal situation exists in respect of conversion of property
of public dominion belonging to municipal corporations, i.e., local
governmental units, into patrimonial property of such entities.
In Cebu Oxygen Acetylene v. Bercilles (66 SCRA 481 [1975]), the
City Council of Cebu by resolution declared a certain portion of an
existing street as an abandoned road, "the same not being included in
the city development plan". Subsequently, by another resolution, the
City Council of Cebu authorized the acting City Mayor to sell the
land through public bidding. Although there was no formal and
explicit declaration of conversion of property for public use into
patrimonial property, the Supreme Court said:
xxx xxx xxx
(2) Since that portion of the city street subject of
petitioner's application for registration of title was
withdrawn from public use, it follows that such
withdrawn portion becomes patrimonial property
which can be the object of an ordinary contract.
Article 422 of the Civil Code expressly provides that
"Property of public dominion, when no longer
intended for public use of for public service, shall
form part of the patrimonial property of the State."
Besides, the Revised Charter of the City of Cebu
heretofore quoted, in very clear and unequivocal
terms, states that "Property thus withdrawn from
public servitude may be used or conveyed for any
purpose for which other real property belonging to
the City may be lawfully used or conveyed."
Accordingly, the withdrawal of the property in
question from public use and its subsequent sale to
the petitioner is valid. Hence, the petitioner has a
registrable title over the lot in question. (66 SCRA at
484-; emphasis supplied)
Thus, again as pointed out by Sarmiento J., in his separate opinion,
in the case of property owned by municipal corporations simple non-
use or the actual dedication of public property to some use other than
"public use" or some "public service", was sufficient legally to
convert such property into patrimonial property (Municipality of Oas
v. Roa, 7 Phil. 20 [1906]- Municipality of Hinunganan v. Director of
Lands 24 Phil. 124 [1913]; Province of Zamboanga del Norte v. City
of Zamboanga, 22 SCRA 1334 (1968).
I would also add that such was the case not only in respect of'
property of municipal corporations but also in respect of property of
the State itself. Manresa in commenting on Article 341 of the 1889
Spanish Civil Code which has been carried over verbatim into our
Civil Code by Article 422 thereof, wrote:
La dificultad mayor en todo esto estriba,
naturalmente, en fijar el momento en que los bienes
de dominio publico dejan de serlo. Si la
Administracion o la autoridad competente legislative
realizan qun acto en virtud del cual cesa el destino o
uso publico de los bienes de que se trata
naturalmente la dificultad queda desde el primer
momento resuelta. Hay un punto de partida cierto
para iniciar las relaciones juridicas a que pudiera
haber lugar Pero puede ocurrir que no haya
taldeclaracion expresa, legislativa or
administrativa, y, sin embargo, cesar de hecho el
destino publico de los bienes; ahora bien, en este
caso, y para los efectos juridicos que resultan de
entrar la cosa en el comercio de los hombres,' se
entedera que se ha verificado la conversion de los
bienes patrimoniales?
El citado tratadista Ricci opina, respecto del antiguo
Codigo italiano, por la afirmativa, y por nuestra
parte creemos que tal debe ser la soluciion. El
destino de las cosas no depende tanto de una
declaracion expresa como del uso publico de las
 mismas, y cuanda el uso publico cese con respecto
de determinados bienes, cesa tambien su situacion en
el dominio publico. Si una fortaleza en ruina se
abandona y no se repara, si un trozo de la via publica
se abandona tambien por constituir otro nuevo an
mejores condiciones....ambos bienes cesan de estar
Codigo, y leyes especiales mas o memos
administrativas. (3 Manresa, Comentarios al Codigo
Civil Espanol, p. 128 [7a ed.; 1952) (Emphasis
supplied)
The majority opinion says that none of the executive acts pointed to
by the Government purported, expressly or definitely, to convert the
Roppongi property into patrimonial property — of the Republic.
Assuming that to be the case, it is respectfully submitted
that cumulative effect of the executive acts here involved was to
convert property originally intended for and devoted to public
service into patrimonial property of the State, that is, property
susceptible of disposition to and appropration by private persons.
These executive acts, in their totality if not each individual act, make
crystal clear the intent of the Executive Department to effect such
conversion. These executive acts include:
(a) Administrative Order No. 3 dated 11 August 1985, which created
a Committee to study the disposition/utilization of the Government's
property in Japan, The Committee was composed of officials of the
Executive Department: the Executive Secretary; the Philippine
Ambassador to Japan; and representatives of the Department of
Foreign Affairs and the Asset Privatization Trust. On 19 September
1988, the Committee recommended to the President the sale of one
of the lots (the lot specifically in Roppongi) through public bidding.
On 4 October 1988, the President approved the recommendation of
the Committee.
On 14 December 1988, the Philippine Government by diplomatic
note informed the Japanese Ministry of Foreign Affairs of the
Republic's intention to dispose of the property in Roppongi. The
Japanese Government through its Ministry of Foreign Affairs replied
that it interposed no objection to such disposition by the Republic.
Subsequently, the President and the Committee informed the leaders
of the House of Representatives and of the Senate of the Philippines
of the proposed disposition of the Roppongi property.
(b) Executive Order No. 296, which was issued by the President on
25 July 1987. Assuming that the majority opinion is right in saying
that Executive Order No. 296 is insufficient to authorize the sale of
the Roppongi property, it is here submitted with respect that
Executive Order No. 296 is more than sufficient to indicate
an intention to convert the property previously devoted to public
service into patrimonial property that is capable of being sold or
otherwise disposed of
(c) Non-use of the Roppongi lot for fourteen (14) years for
diplomatic or for any other public purposes. Assuming (but
only arguendo) that non-use does not, by itself, automatically convert
the property into patrimonial property. I respectfully urge that
prolonged non-use, conjoined with the other factors here listed, was
legally effective to convert the lot in Roppongi into patrimonial
property of the State. Actually, as already pointed out, case law
involving property of municipal corporations is to the effect that
simple non-use or the actual dedication of public property to some
use other than public use or public service, was sufficient to convert
such property into patrimonial property of the local governmental
entity concerned. Also as pointed out above, Manresa reached the
same conclusion in respect of conversion of property of the public
domain of the State into property of the private domain of the State.
The majority opinion states that "abandonment cannot be inferred
from the non-use alone especially if the non-use was attributable not
to the Government's own deliberate and indubitable will but to lack
of financial support to repair and improve the property" (Majority
Opinion, p. 13). With respect, it may be stressed that there is no
abandonment involved here, certainly no abandonment of property or
of property rights. What is involved is the charge of the classification
of the property from property of the public domain into property of
the private domain of the State. Moreover, if for fourteen (14) years,
the Government did not see fit to appropriate whatever funds were
necessary to maintain the property in Roppongi in a condition
suitable for diplomatic representation purposes, such circumstance
may, with equal logic, be construed as a manifestation of the
crystalizing intent to change the character of the property.
(d) On 30 March 1989, a public bidding was in fact held by the
Executive Department for the sale of the lot in Roppongi. The
circumstance that this bidding was not successful certainly does not
argue against an intent to convert the property involved into property
that is disposable by bidding.
The above set of events and circumstances makes no sense at all if it
does not, as a whole, show at least the intent on the part of the
Executive Department (with the knowledge of the Legislative
Department) to convert the property involved into patrimonial
property that is susceptible of being sold.
II
Having reached an affirmative answer in respect of the first issue, it
is necessary to address the second issue of whether or not there exists
legal authority for the sale or disposition of the Roppongi property.
The majority opinion refers to Section 79(f) of the Revised
Administrative Code of 1917 which reads as follows:
SEC. 79 (f). Conveyances and contracts to which the
Government is a party. — In cases in which the
Government of the Republic of the Philippines is a
party to any deed or other instrument conveying the
title to real estate or to any other property the value
of which is in excess of one hundred thousand pesos,
the respective Department Secretary shall prepare
the necessary papers which, together with the proper
recommendations, shall be submitted to the
Congress of the Philippines for approval by the
same. Such deed, instrument, or contract shall be
executed and signed by the President of the
Philippines on behalf of the Government of the
Philippines unless the authority therefor be expressly
vested by law in another officer. (Emphasis
supplied)
The majority opinion then goes on to state that: "[T]he requirement
has been retained in Section 4, Book I of the Administrative Code of
1987 (Executive Order No. 292)" which reads:
SEC. 48. Official Authorized to Convey Real
Property. — Whenever real property of the
Government is authorized by law to be conveyed, the
deed of conveyance shall be executed in behalf of
the government by the following:
(1) For property belonging to and titled in the name
of the Republic of the Philippines, by the President,
unless the authority therefor is expressly vested by
law in another officer.
(2) For property belonging to the Republic of the
Philippines but titled in the name of any political
subdivision or of any corporate agency or
instrumentality, by the executive head of the agency
or instrumentality. (Emphasis supplied)
Two points need to be made in this connection. Firstly, the
requirement of obtaining specific approval of Congress when the
price of the real property being disposed of is in excess of One
Hundred Thousand Pesos (P100,000.00) under the Revised
Administrative Code of 1917, has been deleted from Section 48 of
the 1987 Administrative Code. What Section 48 of the present
Administrative Code refers to is authorization by law for the
conveyance. Section 48 does not purport to be itself a source of legal
authority for conveyance of real property of the Government. For
Section 48 merely specifies the official authorized to execute and
sign on behalf of the Government the deed of conveyance in case of
such a conveyance.
Secondly, examination of our statute books shows that authorization
by law for disposition of real property of the private domain of the
Government, has been granted by Congress both in the form of (a) a
general, standing authorization for disposition of patrimonial
property of the Government; and (b) specific legislation authorizing
the disposition of particular pieces of the Government's patrimonial
property.
Standing legislative authority for the disposition of land of the
private domain of the Philippines is provided by Act No. 3038,
entitled "An Act Authorizing the Secretary of Agriculture and
Natural Resources to Sell or Lease Land of the Private Domain of the
Government of the Philippine Islands (now Republic of the
Philippines)", enacted on 9 March 1922. The full text of this statute
is as follows:
Be it enacted by the Senate and House of
Representatives of the Philippines in Legislature
assembled and by the authority of the same:
SECTION 1. The Secretary of Agriculture and
Natural Resources (now Secretary of the
Environment and Natural Resources) is hereby
authorized to sell or lease land of the private domain
of the Government of the Philippine Islands, or any
part thereof, to such persons, corporations or
associations as are, under the provisions of Act
Numbered Twenty-eight hundred and seventy-four,
(now Commonwealth Act No. 141, as amended)
known as the Public Land Act, entitled to apply for
the purchase or lease or agricultural public land.
SECTION 2. The sale of the land referred to in the
preceding section shall, if such land is agricultural,
be made in the manner and subject to the limitations
prescribed in chapters five and six, respectively, of
said Public Land Act, and if it be classified
differently, in conformity with the provisions of
chapter nine of said Act: Provided, however, That
the land necessary for the public service shall be
exempt from the provisions of this Act.
SECTION 3. This Act shall take effect on its
approval.
Approved, March 9, 1922. (Emphasis supplied)
Lest it be assumed that Act No. 3038 refers only to agricultural lands
of the private domain of the State, it must be noted that Chapter 9 of
the old Public Land Act (Act No. 2874) is now Chapter 9 of the
present Public Land Act (Commonwealth Act No. 141, as amended)
and that both statutes refer to: "any tract of land of the public domain
which being neither timber nor mineral land, is intended to be used
for residential purposes or for commercial or industrial
purposes other than agricultural" (Emphasis supplied).i•t•c-aüsl In
other words, the statute covers the sale or lease or residential,
commercial or industrial land of the private domain of the State.
Implementing regulations have been issued for the carrying out of
the provisions of Act No. 3038. On 21 December 1954, the then
Secretary of Agriculture and Natural Resources promulgated Lands
Administrative Orders Nos. 7-6 and 7-7 which were entitled,
respectively: "Supplementary Regulations Governing the Sale of
the Lands of the Private Domain of the Republic of the Philippines";
and "Supplementary Regulations Governing the Lease of Lands of
Private Domain of the Republic of the Philippines" (text in 51 O.G.
28-29 [1955]).
It is perhaps well to add that Act No. 3038, although now sixty-eight
(68) years old, is still in effect and has not been repealed. 1
Specific legislative authorization for disposition of particular
patrimonial properties of the State is illustrated by certain earlier
statutes. The first of these was Act No. 1120, enacted on 26 April
1904, which provided for the disposition of the friar lands, purchased
by the Government from the Roman Catholic Church, to bona
fide settlers and occupants thereof or to other persons. In Jacinto v.
Director of Lands (49 Phil. 853 [1926]), these friar lands were held
to be private and patrimonial properties of the State. Act No. 2360,
enacted on -28 February 1914, authorized the sale of the San Lazaro
Estate located in the City of Manila, which had also been purchased
by the Government from the Roman Catholic Church. In January
1916, Act No. 2555 amended Act No. 2360 by including therein all
lands and buildings owned by the Hospital and the Foundation of
San Lazaro theretofor leased by private persons, and which were also
acquired by the Philippine Government.
After the enactment in 1922 of Act No. 3038, there appears, to my
knowledge, to be only one statute authorizing the President to
dispose of a specific piece of property. This statute is Republic Act
No. 905, enacted on 20 June 1953, which authorized the
President to sell an Identified parcel of land of the private domain of
the National Government to the National Press Club of the
Philippines, and to other recognized national associations of
professionals with academic standing, for the nominal price of P1.00.
It appears relevant to note that Republic Act No. 905 was not an
outright disposition in perpetuity of the property involved- it
provided for reversion of the property to the National Government in
case the National Press Club stopped using it for its headquarters.
What Republic Act No. 905 authorized was really a donation, and
not a sale.
The basic submission here made is that Act No. 3038 provides
standing legislative authorization for disposition of the Roppongi
property which, in my view, has been converted into patrimonial
property of the Republic. 2
To some, the submission that Act No. 3038 applies not only to lands
of the private domain of the State located in the Philippines but also
to patrimonial property found outside the Philippines, may appear
strange or unusual. I respectfully submit that such position is not any
more unusual or strange than the assumption that Article 420 of the
Civil Code applies not only to property of the Republic located
within Philippine territory but also to property found outside the
boundaries of the Republic.
It remains to note that under the well-settled doctrine that heads of
Executive Departments are alter egos of the President (Villena v.
Secretary of the Interior, 67 Phil. 451 [1939]), and in view of the
constitutional power of control exercised by the President over
department heads (Article VII, Section 17,1987 Constitution), the
President herself may carry out the function or duty that is
specifically lodged in the Secretary of the Department of
Environment and Natural Resources (Araneta v. Gatmaitan 101 Phil.
328 [1957]). At the very least, the President retains the power to
approve or disapprove the exercise of that function or duty when
done by the Secretary of Environment and Natural Resources.
It is hardly necessary to add that the foregoing analyses and
submissions relate only to the austere question of existence of legal
power or authority. They have nothing to do with much debated
questions of wisdom or propriety or relative desirability either of the
proposed disposition itself or of the proposed utilization of the
anticipated proceeds of the property involved. These latter types of
considerations He within the sphere of responsibility of the political
departments of government the Executive and the Legislative
authorities.
For all the foregoing, I vote to dismiss the Petitions for Prohibition in
both G.R. Nos. 92013 and 92047.
Fernan, C.J., Narvasa, Gancayco, Cortes and Medialdea, JJ.,
concurring.
Separate Opinions
CRUZ, J., concurring:
I concur completely with the excellent ponencia of Mr. Justice
Gutierrez and will add the following observations only for emphasis.
It is clear that the respondents have failed to show the President's
legal authority to sell the Roppongi property. When asked to do so at
the hearing on these petitions, the Solicitor General was at best
ambiguous, although I must add in fairness that this was not his fault.
The fact is that there is -no such authority. Legal expertise alone
cannot conjure that statutory permission out of thin air.
Exec. Order No. 296, which reads like so much legislative, double
talk, does not contain such authority. Neither does Rep. Act No.
6657, which simply allows the proceeds of the sale of our properties
abroad to be used for the comprehensive agrarian reform program.
Senate Res. No. 55 was a mere request for the deferment of the
scheduled sale of tile Roppongi property, possibly to stop the
transaction altogether; and ill any case it is not a law. The sale of the
said property may be authorized only by Congress through a duly
enacted statute, and there is no such law.
Once again, we have affirmed the principle that ours is a government
of laws and not of men, where every public official, from the lowest
to the highest, can act only by virtue of a valid authorization. I am
happy to note that in the several cases where this Court has ruled
against her, the President of the Philippines has submitted to this
principle with becoming grace.
PADILLA, J., concurring:
I concur in the decision penned by Mr. Justice Gutierrez, Jr., I only
wish to make a few observations which could help in further
clarifying the issues.
Under our tripartite system of government ordained by the
Constitution, it is Congress that lays down or determines policies.
The President executes such policies. The policies determined by
Congress are embodied in legislative enactments that have to be
approved by the President to become law. The President, of course,
recommends to Congress the approval of policies but, in the final
analysis, it is Congress that is the policy - determining branch of
government.
The judiciary interprets the laws and, in appropriate cases,
determines whether the laws enacted by Congress and approved by
the President, and presidential acts implementing such laws, are in
accordance with the Constitution.
The Roppongi property was acquired by the Philippine government
pursuant to the reparations agreement between the Philippine and
Japanese governments. Under such agreement, this property was
acquired by the Philippine government for a specific purpose,
namely, to serve as the site of the Philippine Embassy in Tokyo, the deed of conveyance shall be executed in behalf
Japan. Consequently, Roppongi is a property of public dominion and of the government by the following:
intended for public service, squarely falling within that class of
property under Art. 420 of the Civil Code, which provides: (1) For property belonging to and
titled in the name of the Republic of
Art. 420. The following things are property of public the Philippines, by the President,
dominion : unless the authority therefor is
expressly vested by law in another
(1) ... officer.

(2) Those which belong to the State, without being
for public use, and are intended for some public
service or for the development of the national
wealth. (339a)
Public dominion property intended for public service cannot be
alienated unless the property is first transformed into private property
of the state otherwise known as patrimonial property of the
state. 1 The transformation of public dominion property to state
patrimonial property involves, to my mind, a policy decision. It is a
policy decision because the treatment of the property varies
according to its classification. Consequently, it is Congress which
can decide and declare the conversion of Roppongi from a public
dominion property to a state patrimonial property. Congress has
made no such decision or declaration.
Moreover, the sale of public property (once converted from public
dominion to state patrimonial property) must be approved by
Congress, for this again is a matter of policy (i.e. to keep or dispose
of the property). Sec. 48, Book 1 of the Administrative Code of 1987
provides:
SEC. 48. Official Authorized to Convey Real
Property. — Whenever real property of the
Government is authorized by law to be conveyed,
(2) For property belonging to the
Republic of the Philippines but titled
in the name of any political
subdivision or of any corporate
agency or instrumentality, by the
executive head of the agency or
instrumentality. (Emphasis supplied)
But the record is bare of any congressional decision or approval to
sell Roppongi. The record is likewise bare of any congressional
authority extended to the President to sell Roppongi thru public
bidding or otherwise.
It is therefore, clear that the President cannot sell or order the sale of
Roppongi thru public bidding or otherwise without a prior
congressional approval, first, converting Roppongi from a public
dominion property to a state patrimonial property, and, second,
authorizing the President to sell the same.
ACCORDINGLY, my vote is to GRANT the petition and to make
PERMANENT the temporary restraining order earlier issued by this
Court.
SARMIENTO, J., concurring:
The central question, as I see it, is whether or not the so-called
"Roppongi property' has lost its nature as property of public
dominion, and hence, has become patrimonial property of the State. I
understand that the parties are agreed that it was property intended
for "public service" within the contemplation of paragraph (2), of
Article 430, of the Civil Code, and accordingly, land of State
dominion, and beyond human commerce. The lone issue is, in the
light of supervening developments, that is non-user thereof by the
National Government (for diplomatic purposes) for the last thirteen
years; the issuance of Executive Order No. 296 making it available
for sale to any interested buyer; the promulgation of Republic Act
No. 6657, the Comprehensive Agrarian Reform Law, making
available for the program's financing, State assets sold; the approval
by the President of the recommendation of the investigating
committee formed to study the property's utilization; and the
issuance of Resolution No. 55 of the Philippine Senate requesting for
the deferment of its disposition it, "Roppongi", is still property of the
public dominion, and if it is not, how it lost that character.
When land of the public dominion ceases to be one, or when the
change takes place, is a question our courts have debated early. In a
1906 decision, 1 it was held that property of the public dominion, a
public plaza in this instance, becomes patrimonial upon use thereof
for purposes other than a plaza. In a later case, 2 this ruling was
reiterated. Likewise, it has been held that land, originally private
property, has become of public dominion upon its donation to the
town and its conversion and use as a public plaza. 3 It is notable that
under these three cases, the character of the property, and any change
occurring therein, depends on the actual use to which it is
dedicated. 4
Much later, however, the Court held that "until a formal declaration
on the part of the Government, through the executive department or
the Legislative, to the effect that the land . . . is no longer needed for
[public] service- for public use or for special industries, [it]
continue[s] to be part of the public [dominion], not available for
private expropriation or ownership." 5 So also, it was ruled that a
political subdivision (the City of Cebu in this case) alone may
declare (under its charter) a city road abandoned and thereafter, to
dispose of it. 6
In holding that there is "a need for a law or formal declaration to
withdraw the Roppongi property from public domain to make it
alienable and a land for legislative authority to allow the sale of the
property" 7 the majority lays stress to the fact that: (1) An affirmative
act — executive or legislative — is necessary to reclassify property
of the public dominion, and (2) a legislative decree is required to
make it alienable. It also clears the uncertainties brought about by
earlier interpretations that the nature of property-whether public or
patrimonial is predicated on the manner it is actually used, or not
used, and in the same breath, repudiates the Government's position
that the continuous non-use of "Roppongi", among other arguments,
for "diplomatic purposes", has turned it into State patrimonial
property.
I feel that this view corresponds to existing pronouncements of this
Court, among other things, that: (1) Property is presumed to be State
property in the absence of any showing to the contrary; 8 (2) With
respect to forest lands, the same continue to be lands of the public
dominion unless and until reclassified by the Executive Branch of the
Government; 9 and (3) All natural resources, under the Constitution,
and subject to exceptional cases, belong to the State. 10
I am elated that the Court has banished previous uncertainties.
FELICIANO, J., dissenting
With regret, I find myself unable to share the conclusions reached by
Mr. Justice Hugo E. Gutierrez, Jr.
For purposes of this separate opinion, I assume that the piece of land
located in 306 Roppongi, 5-Chome, Minato-ku Tokyo, Japan
(hereinafter referred to as the "Roppongi property") may be
characterized as property of public dominion, within the meaning of
Article 420 (2) of the Civil Code:
[Property] which belong[s] to the State, without
being for public use, and are intended for some
public service -.
It might not be amiss however, to note that the appropriateness of
trying to bring within the confines of the simple threefold
classification found in Article 420 of the Civil Code ("property for
public use property "intended for some public service" and property
intended "for the development of the national wealth") all
property owned by the Republic of the Philippines whether found
within the territorial boundaries of the Republic or located within the
territory of another sovereign State, is not self-evident. The first item
of the classification property intended for public use — can scarcely
be properly applied to property belonging to the Republic but found
within the territory of another State. The third item of the
classification property intended for the development of the national
wealth is illustrated, in Article 339 of the Spanish Civil Code of
1889, by mines or mineral properties. Again, mineral lands owned by
a sovereign State are rarely, if ever, found within the territorial base
of another sovereign State. The task of examining in detail the
applicability of the classification set out in Article 420 of our Civil
Code to property that the Philippines happens to own outside its own
boundaries must, however, be left to academicians.
For present purposes, too, I agree that there is no question of conflict
of laws that is, at the present time, before this Court. The issues
before us relate essentially to authority to sell the Roppongi
property so far as Philippine law is concerned.
The majority opinion raises two (2) issues: (a) whether or not the
Roppongi property has been converted into patrimonial property or
property of the private domain of the State; and (b) assuming an
affirmative answer to (a), whether or not there is legal authority to
dispose of the Roppongi property.
I
Addressing the first issue of conversion of property of public
dominion intended for some public service, into property of the
private domain of the Republic, it should be noted that the Civil
Code does not address the question of who has authority to effect
such conversion. Neither does the Civil Code set out or refer to
any procedure for such conversion.
Our case law, however, contains some fairly explicit
pronouncements on this point, as Justice Sarmiento has pointed out
in his concurring opinion. In Ignacio v. Director of Lands (108 Phils.
335 [1960]), petitioner Ignacio argued that if the land in question
formed part of the public domain, the trial court should have declared
the same no longer necessary for public use or public purposes and
which would, therefore, have become disposable and available for
private ownership. Mr. Justice Montemayor, speaking for the Court,
said:
Article 4 of the Law of Waters of 1866 provides that
when a portion of the shore is no longer washed by
the waters of the sea and is not necessary for
purposes of public utility, or for the establishment of
special industries, or for coast-guard service, the
government shall declare it to be the property of the
owners of the estates adjacent thereto and as an
increment thereof. We believe that only the executive
and possibly the legislative departments have the
authority and the power to make the declaration that
any land so gained by the sea, is not necessary for
 purposes of public utility, or for the establishment of
special industries, or for coast-guard service. If no
such declaration has been made by said
departments, the lot in question forms part of the
public domain. (Natividad v. Director of
Lands, supra.)
The reason for this pronouncement, according to this
Tribunal in the case of Vicente Joven y Monteverde
v. Director of Lands, 93 Phil., 134 (cited in Velayo's
Digest, Vol. 1, p. 52).
... is undoubtedly that the courts are neither primarily
called upon, nor indeed in a position to determine
whether any public land are to be used for the
purposes specified in Article 4 of the Law of Waters.
Consequently, until a formal declaration on the part
of the Government, through the executive
department or the Legislature, to the effect that the
land in question is no longer needed for coast-guard
service, for public use or for special industries, they
continue to be part of the public domain not
available for private appropriation or
ownership. (108 Phil. at 338-339; emphasis
supplied)
Thus, under Ignacio, either the Executive Department or the
Legislative Department may convert property of the State of public
dominion into patrimonial property of the State. No particular
formula or procedure of conversion is specified either in statute law
or in case law. Article 422 of the Civil Code simply states that:
"Property of public dominion, when no longer intended for public
use or for public service, shall form part of the patrimonial property
of the State". I respectfully submit, therefore, that the only
requirement which is legitimately imposable is that the intent to
convert must be reasonably clear from a consideration of the acts or
acts of the Executive Department or of the Legislative Department
which are said to have effected such conversion.
The same legal situation exists in respect of conversion of property
of public dominion belonging to municipal corporations, i.e., local
governmental units, into patrimonial property of such entities.
In Cebu Oxygen Acetylene v. Bercilles (66 SCRA 481 [1975]), the
City Council of Cebu by resolution declared a certain portion of an
existing street as an abandoned road, "the same not being included in
the city development plan". Subsequently, by another resolution, the
City Council of Cebu authorized the acting City Mayor to sell the
land through public bidding. Although there was no formal and
explicit declaration of conversion of property for public use into
patrimonial property, the Supreme Court said:
xxx xxx xxx
(2) Since that portion of the city street subject of
petitioner's application for registration of title was
withdrawn from public use, it follows that such
withdrawn portion becomes patrimonial property
which can be the object of an ordinary contract.
Article 422 of the Civil Code expressly provides that
"Property of public dominion, when no longer
intended for public use of for public service, shall
form part of the patrimonial property of the State."
Besides, the Revised Charter of the City of Cebu
heretofore quoted, in very clear and unequivocal
terms, states that "Property thus withdrawn from
public servitude may be used or conveyed for any
purpose for which other real property belonging to
the City may be lawfully used or conveyed."
 Accordingly, the withdrawal of the property in
question from public use and its subsequent sale to
the petitioner is valid. Hence, the petitioner has a
registrable title over the lot in question. (66 SCRA at
484-; emphasis supplied)
Thus, again as pointed out by Sarmiento J., in his separate opinion,
in the case of property owned by municipal corporations simple non-
use or the actual dedication of public property to some use other than
"public use" or some "public service", was sufficient legally to
convert such property into patrimonial property (Municipality of Oas
v. Roa, 7 Phil. 20 [1906]- Municipality of Hinunganan v. Director of
Lands 24 Phil. 124 [1913]; Province of Zamboanga del Norte v. City
of Zamboanga, 22 SCRA 1334 (1968).
I would also add that such was the case not only in respect of'
property of municipal corporations but also in respect of property of
the State itself. Manresa in commenting on Article 341 of the 1889
Spanish Civil Code which has been carried over verbatim into our
Civil Code by Article 422 thereof, wrote:
La dificultad mayor en todo esto estriba,
naturalmente, en fijar el momento en que los bienes
de dominio publico dejan de serlo. Si la
Administracion o la autoridad competente legislative
realizan qun acto en virtud del cual cesa el destino o
uso publico de los bienes de que se trata
naturalmente la dificultad queda desde el primer
momento resuelta. Hay un punto de partida cierto
para iniciar las relaciones juridicas a que pudiera
haber lugar Pero puede ocurrir que no haya
taldeclaracion expresa, legislativa or
administrativa, y, sin embargo, cesar de hecho el
destino publico de los bienes; ahora bien, en este
caso, y para los efectos juridicos que resultan de
entrar la cosa en el comercio de los hombres,' se
entedera que se ha verificado la conversion de los
bienes patrimoniales?
El citado tratadista Ricci opina, respecto del antiguo
Codigo italiano, por la afirmativa, y por nuestra
parte creemos que tal debe ser la soluciion. El
destino de las cosas no depende tanto de una
declaracion expresa como del uso publico de las
mismas, y cuanda el uso publico cese con respecto
de determinados bienes, cesa tambien su situacion en
el dominio publico. Si una fortaleza en ruina se
abandona y no se repara, si un trozo de la via publica
se abandona tambien por constituir otro nuevo an
mejores condiciones....ambos bienes cesan de estar
Codigo, y leyes especiales mas o memos
administrativas. (3 Manresa, Comentarios al Codigo
Civil Espanol, p. 128 [7a ed.; 1952) (Emphasis
supplied)
The majority opinion says that none of the executive acts pointed to
by the Government purported, expressly or definitely, to convert the
Roppongi property into patrimonial property — of the Republic.
Assuming that to be the case, it is respectfully submitted
that cumulative effect of the executive acts here involved was to
convert property originally intended for and devoted to public
service into patrimonial property of the State, that is, property
susceptible of disposition to and appropration by private persons.
These executive acts, in their totality if not each individual act, make
crystal clear the intent of the Executive Department to effect such
conversion. These executive acts include:
(a) Administrative Order No. 3 dated 11 August 1985, which created
a Committee to study the disposition/utilization of the Government's
property in Japan, The Committee was composed of officials of the
Executive Department: the Executive Secretary; the Philippine
Ambassador to Japan; and representatives of the Department of
Foreign Affairs and the Asset Privatization Trust. On 19 September
1988, the Committee recommended to the President the sale of one
of the lots (the lot specifically in Roppongi) through public bidding.
On 4 October 1988, the President approved the recommendation of
the Committee.
On 14 December 1988, the Philippine Government by diplomatic
note informed the Japanese Ministry of Foreign Affairs of the
Republic's intention to dispose of the property in Roppongi. The
Japanese Government through its Ministry of Foreign Affairs replied
that it interposed no objection to such disposition by the Republic.
Subsequently, the President and the Committee informed the leaders
of the House of Representatives and of the Senate of the Philippines
of the proposed disposition of the Roppongi property.
(b) Executive Order No. 296, which was issued by the President on
25 July 1987. Assuming that the majority opinion is right in saying
that Executive Order No. 296 is insufficient to authorize the sale of
the Roppongi property, it is here submitted with respect that
Executive Order No. 296 is more than sufficient to indicate
an intention to convert the property previously devoted to public
service into patrimonial property that is capable of being sold or
otherwise disposed of
(c) Non-use of the Roppongi lot for fourteen (14) years for
diplomatic or for any other public purposes. Assuming (but
only arguendo) that non-use does not, by itself, automatically convert
the property into patrimonial property. I respectfully urge that
prolonged non-use, conjoined with the other factors here listed, was
legally effective to convert the lot in Roppongi into patrimonial
property of the State. Actually, as already pointed out, case law
involving property of municipal corporations is to the effect that
simple non-use or the actual dedication of public property to some
use other than public use or public service, was sufficient to convert
such property into patrimonial property of the local governmental
entity concerned. Also as pointed out above, Manresa reached the
same conclusion in respect of conversion of property of the public
domain of the State into property of the private domain of the State.
The majority opinion states that "abandonment cannot be inferred
from the non-use alone especially if the non-use was attributable not
to the Government's own deliberate and indubitable will but to lack
of financial support to repair and improve the property" (Majority
Opinion, p. 13). With respect, it may be stressed that there is no
abandonment involved here, certainly no abandonment of property or
of property rights. What is involved is the charge of the classification
of the property from property of the public domain into property of
the private domain of the State. Moreover, if for fourteen (14) years,
the Government did not see fit to appropriate whatever funds were
necessary to maintain the property in Roppongi in a condition
suitable for diplomatic representation purposes, such circumstance
may, with equal logic, be construed as a manifestation of the
crystalizing intent to change the character of the property.
(d) On 30 March 1989, a public bidding was in fact held by the
Executive Department for the sale of the lot in Roppongi. The
circumstance that this bidding was not successful certainly does not
argue against an intent to convert the property involved into property
that is disposable by bidding.
The above set of events and circumstances makes no sense at all if it
does not, as a whole, show at least the intent on the part of the
Executive Department (with the knowledge of the Legislative
Department) to convert the property involved into patrimonial
property that is susceptible of being sold.
II
Having reached an affirmative answer in respect of the first issue, it
is necessary to address the second issue of whether or not there exists
legal authority for the sale or disposition of the Roppongi property.
The majority opinion refers to Section 79(f) of the Revised
Administrative Code of 1917 which reads as follows:
SEC. 79 (f). Conveyances and contracts to which the
Government is a party. — In cases in which the
Government of the Republic of the Philippines is a
party to any deed or other instrument conveying the
title to real estate or to any other property the value
of which is in excess of one hundred thousand pesos,
the respective Department Secretary shall prepare
the necessary papers which, together with the proper
recommendations, shall be submitted to the
Congress of the Philippines for approval by the
same. Such deed, instrument, or contract shall be
executed and signed by the President of the
Philippines on behalf of the Government of the
Philippines unless the authority therefor be expressly
vested by law in another officer. (Emphasis
supplied)
The majority opinion then goes on to state that: "[T]he requirement
has been retained in Section 4, Book I of the Administrative Code of
1987 (Executive Order No. 292)" which reads:
SEC. 48. Official Authorized to Convey Real
Property. — Whenever real property of the
Government is authorized by law to be conveyed, the
deed of conveyance shall be executed in behalf of
the government by the following:
(1) For property belonging to and titled in the name
of the Republic of the Philippines, by the President,
unless the authority therefor is expressly vested by
law in another officer.
(2) For property belonging to the Republic of the
Philippines but titled in the name of any political
subdivision or of any corporate agency or
instrumentality, by the executive head of the agency
or instrumentality. (Emphasis supplied)
Two points need to be made in this connection. Firstly, the
requirement of obtaining specific approval of Congress when the
price of the real property being disposed of is in excess of One
Hundred Thousand Pesos (P100,000.00) under the Revised
Administrative Code of 1917, has been deleted from Section 48 of
the 1987 Administrative Code. What Section 48 of the present
Administrative Code refers to is authorization by law for the
conveyance. Section 48 does not purport to be itself a source of legal
authority for conveyance of real property of the Government. For
Section 48 merely specifies the official authorized to execute and
sign on behalf of the Government the deed of conveyance in case of
such a conveyance.
Secondly, examination of our statute books shows that authorization
by law for disposition of real property of the private domain of the
Government, has been granted by Congress both in the form of (a) a
general, standing authorization for disposition of patrimonial
property of the Government; and (b) specific legislation authorizing
the disposition of particular pieces of the Government's patrimonial
property.
Standing legislative authority for the disposition of land of the
private domain of the Philippines is provided by Act No. 3038,
entitled "An Act Authorizing the Secretary of Agriculture and
Natural Resources to Sell or Lease Land of the Private Domain of the
Government of the Philippine Islands (now Republic of the
Philippines)", enacted on 9 March 1922. The full text of this statute
is as follows:
 Be it enacted by the Senate and House of
Representatives of the Philippines in Legislature
assembled and by the authority of the same:
SECTION 1. The Secretary of Agriculture and
Natural Resources (now Secretary of the
Environment and Natural Resources) is hereby
authorized to sell or lease land of the private domain
of the Government of the Philippine Islands, or any
part thereof, to such persons, corporations or
associations as are, under the provisions of Act
Numbered Twenty-eight hundred and seventy-four,
(now Commonwealth Act No. 141, as amended)
known as the Public Land Act, entitled to apply for
the purchase or lease or agricultural public land.
SECTION 2. The sale of the land referred to in the
preceding section shall, if such land is agricultural,
be made in the manner and subject to the limitations
prescribed in chapters five and six, respectively, of
said Public Land Act, and if it be classified
differently, in conformity with the provisions of
chapter nine of said Act: Provided, however, That
the land necessary for the public service shall be
exempt from the provisions of this Act.
SECTION 3. This Act shall take effect on its
approval.
Approved, March 9, 1922. (Emphasis supplied)
Lest it be assumed that Act No. 3038 refers only to agricultural lands
of the private domain of the State, it must be noted that Chapter 9 of
the old Public Land Act (Act No. 2874) is now Chapter 9 of the
present Public Land Act (Commonwealth Act No. 141, as amended)
and that both statutes refer to: "any tract of land of the public domain
which being neither timber nor mineral land, is intended to be used
for residential purposes or for commercial or industrial
purposes other than agricultural" (Emphasis supplied). In other
words, the statute covers the sale or lease or residential, commercial
or industrial land of the private domain of the State.
Implementing regulations have been issued for the carrying out of
the provisions of Act No. 3038. On 21 December 1954, the then
Secretary of Agriculture and Natural Resources promulgated Lands
Administrative Orders Nos. 7-6 and 7-7 which were entitled,
respectively: "Supplementary Regulations Governing the Sale of
the Lands of the Private Domain of the Republic of the Philippines";
and "Supplementary Regulations Governing the Lease of Lands of
Private Domain of the Republic of the Philippines" (text in 51 O.G.
28-29 [1955]).
It is perhaps well to add that Act No. 3038, although now sixty-eight
(68) years old, is still in effect and has not been repealed. 1
Specific legislative authorization for disposition of particular
patrimonial properties of the State is illustrated by certain earlier
statutes. The first of these was Act No. 1120, enacted on 26 April
1904, which provided for the disposition of the friar lands, purchased
by the Government from the Roman Catholic Church, to bona
fide settlers and occupants thereof or to other persons. In Jacinto v.
Director of Lands (49 Phil. 853 [1926]), these friar lands were held
to be private and patrimonial properties of the State. Act No. 2360,
enacted on -28 February 1914, authorized the sale of the San Lazaro
Estate located in the City of Manila, which had also been purchased
by the Government from the Roman Catholic Church. In January
1916, Act No. 2555 amended Act No. 2360 by including therein all
lands and buildings owned by the Hospital and the Foundation of
San Lazaro theretofor leased by private persons, and which were also
acquired by the Philippine Government.
After the enactment in 1922 of Act No. 3038, there appears, to my
knowledge, to be only one statute authorizing the President to
dispose of a specific piece of property. This statute is Republic Act
No. 905, enacted on 20 June 1953, which authorized the
President to sell an Identified parcel of land of the private domain of
the National Government to the National Press Club of the
Philippines, and to other recognized national associations of
professionals with academic standing, for the nominal price of P1.00.
It appears relevant to note that Republic Act No. 905 was not an
outright disposition in perpetuity of the property involved- it
provided for reversion of the property to the National Government in
case the National Press Club stopped using it for its headquarters.
What Republic Act No. 905 authorized was really a donation, and
not a sale.
The basic submission here made is that Act No. 3038 provides
standing legislative authorization for disposition of the Roppongi
property which, in my view, has been converted into patrimonial
property of the Republic. 2
To some, the submission that Act No. 3038 applies not only to lands
of the private domain of the State located in the Philippines but also
to patrimonial property found outside the Philippines, may appear
strange or unusual. I respectfully submit that such position is not any
more unusual or strange than the assumption that Article 420 of the
Civil Code applies not only to property of the Republic located
within Philippine territory but also to property found outside the
boundaries of the Republic.
It remains to note that under the well-settled doctrine that heads of
Executive Departments are alter egos of the President (Villena v.
Secretary of the Interior, 67 Phil. 451 [1939]), and in view of the
constitutional power of control exercised by the President over
department heads (Article VII, Section 17,1987 Constitution), the
President herself may carry out the function or duty that is
specifically lodged in the Secretary of the Department of
Environment and Natural Resources (Araneta v. Gatmaitan 101 Phil.
328 [1957]). At the very least, the President retains the power to
approve or disapprove the exercise of that function or duty when
done by the Secretary of Environment and Natural Resources.
It is hardly necessary to add that the foregoing analyses and
submissions relate only to the austere question of existence of legal
power or authority. They have nothing to do with much debated
questions of wisdom or propriety or relative desirability either of the
proposed disposition itself or of the proposed utilization of the
anticipated proceeds of the property involved. These latter types of
considerations He within the sphere of responsibility of the political
departments of government the Executive and the Legislative
authorities.
Republic of the Philippines
Supreme Court
Manila
EN BANC
THE SECRETARY OF THE G.R. No. 167707
DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES, THE
REGIONAL EXECUTIVE Present:
DIRECTOR, DENR-REGION VI,
REGIONAL TECHNICAL PUNO, C.J.,
DIRECTOR FOR LANDS, QUISUMBING,
LANDS MANAGEMENT BUREAU, YNARES-SANTIAGO,
REGION VI PROVINCIAL CARPIO,
ENVIRONMENT AND NATURAL AUSTRIA-MARTINEZ, AND NATURAL RESOURCES, THE
RESOURCES OFFICER OF KALIBO, CORONA,* REGIONAL TECHNICAL
AKLAN, REGISTER OF DEEDS, CARPIO MORALES, DIRECTOR FOR LANDS, LANDS
DIRECTOR OF LAND AZCUNA, MANAGEMENT BUREAU,
REGISTRATION AUTHORITY, TINGA, REGION VI, PROVINCIAL
DEPARTMENT OF TOURISM CHICO-NAZARIO, ENVIRONMENT AND NATURAL
SECRETARY, DIRECTOR OF VELASCO, JR., RESOURCES OFFICER, KALIBO,
PHILIPPINE TOURISM NACHURA,** AKLAN,
AUTHORITY, REYES, Respondents.
Petitioners, LEONARDO-DE CASTRO, and
BRION, JJ. x-----------------------------------------------
- versus - ---x

DECISION
MAYOR JOSE S. YAP, LIBERTAD
TALAPIAN, MILA Y. SUMNDAD, and
ANICETO YAP, in their behalf and Promulgated: REYES, R.T., J.:
in behalf of all those similarly situated,
Respondents. October 8, 2008
AT stake in these consolidated cases is the right of the present
x-----------------------------------------------
---x occupants of Boracay Island to secure titles over their occupied lands.

DR. ORLANDO SACAY and G.R. No. 173775

WILFREDO GELITO, joined by There are two consolidated petitions. The first is G.R. No.
THE LANDOWNERS OF 167707, a petition for review on certiorari of the Decision[1] of the
BORACAY SIMILARLY
Court of Appeals (CA) affirming that[2] of the Regional Trial Court
SITUATED NAMED IN A LIST,
ANNEX A OF THIS PETITION, (RTC) in Kalibo, Aklan, which granted the petition for declaratory
Petitioners, relief filed by respondents-claimants Mayor Jose Yap, et al. and
ordered the survey of Boracay for titling purposes. The second is G.R.
- versus - No. 173775, a petition for prohibition, mandamus, and nullification of

THE SECRETARY OF THE Proclamation No. 1064[3] issued by President Gloria Macapagal-
DEPARTMENT OF ENVIRONMENT Arroyo classifying Boracay into reserved forest and agricultural land.
 Claiming that Proclamation No. 1801 and PTA Circular No 3-
The Antecedents 82 precluded them from filing an application for judicial confirmation
of imperfect title or survey of land for titling purposes, respondents-
G.R. No. 167707 claimants
Mayor Jose S. Yap, Jr., Libertad Talapian, Mila Y. Sumndad, and
Boracay Island in the Municipality of Malay, Aklan, with its Aniceto Yap filed a petition for declaratory relief with the RTC in
powdery white sand beaches and warm crystalline waters, is reputedly Kalibo, Aklan.
a premier Philippine tourist destination.The island is also home to
12,003 inhabitants[4] who live in the bone-shaped islands In their petition, respondents-claimants alleged that
three barangays.[5] Proclamation No. 1801 and PTA Circular No. 3-82 raised doubts on
their right to secure titles over their occupied lands. They declared that
On April 14, 1976, the Department of Environment and they themselves, or through their predecessors-in-interest, had been in
Natural Resources (DENR) approved the National open, continuous, exclusive, and notorious possession and occupation
Reservation Survey of Boracay in Boracay since June 12, 1945, or earlier since time
[6]
Island, which identified several lots as being occupied or claimed by immemorial. They declared their lands for tax purposes and paid realty
named persons.[7] taxes on them.[10]

On November 10, 1978, then President Ferdinand Marcos
[8]
issued Proclamation 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
[9]
issuance of PTACircular 3-82 dated September 3, 1982, to
implement Proclamation No. 1801.
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
Commonwealth Act (CA) No. 141, otherwise known as 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 Office of the Solicitor General
(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 Presidential Decree (PD) No. 705 or the
[11]
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 CA No. 141 and PD
No. 705. Since Boracay Island had not been classified as alienable and
disposable, whatever possession they had cannot ripen into ownership.
During pre-trial, respondents-claimants and
the OSG stipulated on the following facts: (1) respondents-claimants
were presently in possession of parcels of land in Boracay Island; (2)
these parcels of land were planted with coconut trees and other natural
growing trees; (3) the coconut trees had heights of more or less twenty
(20) meters and were planted more or less fifty (50) years ago; and (4)
respondents-claimants declared the land they were occupying for tax
purposes.[12]
The parties also agreed that the principal issue for resolution
was purely legal: whether Proclamation No. 1801 posed any legal
hindrance or impediment to the titling of the lands in Boracay. They
decided to forego with the trial and to submit the case for resolution
upon submission of their respective memoranda.[13]
The RTC took judicial notice[14] that certain parcels of land
in Boracay Island, more particularly Lots 1 and 30, Plan PSU-5344,
were covered by Original Certificate of Title No. 19502 (RO 2222) in
the name of the Heirs of Ciriaco S. Tirol. These lots were involved in
Civil Case Nos. 5222 and 5262 filed before
[15]
the RTC of Kalibo, Aklan. The titles were issued on
August 7, 1933.[16]
RTC and CA Dispositions
On July 14, 1999, the RTC rendered a decision in favor of
respondents-claimants, with a fallo reading:
WHEREFORE, in view of the foregoing, the
Court declares that Proclamation No. 1801
and PTA Circular No. 3-82 pose no legal obstacle to
the petitioners and those similarly situated to acquire
title to their lands in Boracay, in accordance with the
applicable laws and in the manner prescribed therein;
and to have their lands surveyed and approved by
respondent Regional Technical Director of Lands as
the approved survey does not in itself constitute a title
to the land.
SO ORDERED.[17]
 The RTC upheld respondents-claimants right to have their
occupied lands titled in their name. It ruled that neither Proclamation
No. 1801 nor PTA Circular No. 3-82 mentioned that lands in Boracay
were inalienable or could not be the subject of disposition.[18] The
[19]
Circular itself recognized private ownership of lands. The trial court
cited Sections 87[20] and 53[21] of the Public Land Act as basis for
acknowledging private ownership of lands in Boracay and that only
those forested areas in public lands were declared as part of the forest
reserve.[22]
The OSG moved for reconsideration but its motion was
denied.[23] The Republic then appealed to the CA.
On December 9, 2004, the appellate court affirmed in
toto the RTC decision, disposing as follows:
WHEREFORE, in view of the foregoing
premises, judgment is hereby rendered by us
DENYING the appeal filed in this case and
AFFIRMING the decision of the lower court.[24]
The CA held that respondents-claimants could not be
prejudiced by a declaration that the lands they occupied since time
immemorial were part of a forest reserve.
Again, the OSG sought reconsideration but it was similarly
denied.[25] Hence, the present petition under Rule 45.
G.R. No. 173775
On May 22, 2006, during the pendency of G.R. No. 167707, President
Gloria Macapagal-Arroyo issued Proclamation No.
1064[26] classifying Boracay Island into four hundred (400) hectares of
reserved forest land (protection purposes) and six hundred twenty-
eight and 96/100 (628.96) hectares of agricultural land (alienable and
disposable). The Proclamation likewise provided for a fifteen-meter
buffer zone on each side of the centerline of roads and trails, reserved
for right-of-way and which shall form part of the area reserved for
forest land protection purposes.
On August 10, 2006, petitioners-claimants Dr. Orlando
Sacay, [27]
Wilfredo Gelito,[28] and other landowners[29] in Boracay
filed with this Court an original petition for prohibition, mandamus,
and nullification of Proclamation No. 1064.[30] 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. They have also invested
billions of pesos in developing their lands and building internationally
renowned first class resorts on their lots.[31]
 Petitioners-claimants contended that there is no need for a The OSG raises the lone issue of whether Proclamation No.
proclamation reclassifying Boracay into agricultural land. Being 1801 and PTA Circular No. 3-82 pose any legal obstacle for
classified as neither mineral nor timber land, the island respondents, and all those similarly situated, to acquire title to their
is deemed agricultural pursuant to the Philippine Bill of 1902 and Act occupied lands in Boracay Island.[34]
No. 926, known as the first Public Land Act.[32] Thus, their possession
in the concept of owner for the required period entitled them to judicial
confirmation of imperfect title.
G.R. No. 173775
Opposing the petition, the OSG argued that petitioners-
claimants do not have a vested right over their occupied portions in Petitioners-claimants hoist five (5) issues, namely:
the island. Boracay is an unclassified public forest land pursuant to
Section 3(a) of PD No. 705. Being public forest, the claimed portions I.
AT THE TIME OF THE ESTABLISHED
of the island are inalienable and cannot be the subject of judicial POSSESSION OF PETITIONERS IN CONCEPT
confirmation of imperfect title. It is only the executive department, not OF OWNER OVER THEIR RESPECTIVE AREAS
IN BORACAY, SINCE TIME IMMEMORIAL OR
the courts, which has authority to reclassify lands of the public domain AT THE LATEST SINCE 30 YRS. PRIOR TO THE
into alienable and disposable lands. There is a need for a positive FILING OF THE PETITION FOR
DECLARATORY RELIEF ON NOV. 19,
government act in order to release the lots for disposition.
1997, WERE THE AREAS OCCUPIED BY THEM
PUBLIC AGRICULTURAL LANDS AS DEFINED
On November 21, 2006, this Court ordered the consolidation BY LAWS THEN ON JUDICIAL
CONFIRMATION OF IMPERFECT TITLES OR
of the two petitions as they principally involve the same issues on PUBLIC FOREST AS DEFINED BY SEC. 3a, PD
the land classification of Boracay Island.[33] 705?

II.
Issues HAVE PETITIONERS OCCUPANTS ACQUIRED
PRIOR VESTED RIGHT OF PRIVATE
OWNERSHIP OVER THEIR OCCUPIED
G.R. No. 167707 PORTIONS OF BORACAY LAND, DESPITE
THE FACT THAT THEY HAVE NOT APPLIED
 YET FOR JUDICIAL CONFIRMATION OF They do not involve their right to secure title under other pertinent
IMPERFECT TITLE?
laws.
III.
IS THE EXECUTIVE DECLARATION OF THEIR
AREAS AS Our Ruling
ALIENABLE AND DISPOSABLE UNDER SEC 6,
CA 141 [AN] INDISPENSABLE PRE-REQUISITE Regalian Doctrine and power of the executive
FOR PETITIONERS TO OBTAIN TITLE UNDER to reclassify lands of the public domain
THE TORRENS SYSTEM?

IV.
IS THE ISSUANCE OF PROCLAMATION 1064
ON MAY 22, 2006, VIOLATIVE OF THE PRIOR
VESTED RIGHTS TO PRIVATE OWNERSHIP OF
PETITIONERS OVER THEIR LANDS IN
BORACAY, PROTECTED BY THE DUE
PROCESS CLAUSE OF THE CONSTITUTION OR
IS PROCLAMATION 1064 CONTRARY TO SEC.
8, CA 141, OR SEC. 4(a) OF RA 6657.
V.
CAN RESPONDENTS BE COMPELLED BY
MANDAMUS TO ALLOW
SURVEY AND TO APPROVE THE SURVEY
PLANS FOR PURPOSES OF THE APPLICATION
FOR TITLING OF THE LANDS OF PETITIONERS
IN BORACAY?[35] (Underscoring supplied)
Private claimants rely on three (3) laws and executive acts in
their bid for judicial confirmation of imperfect title, namely: (a)
Philippine Bill of 1902[36] in relation to Act No. 926, later amended
and/or superseded by Act No. 2874 and CA No. 141;[37] (b)
Proclamation No. 1801[38] issued by then President Marcos; and (c)
Proclamation No. 1064[39] issued by President Gloria Macapagal-
Arroyo. We shall proceed to determine their rights to apply for judicial
confirmation of imperfect title under these laws and executive acts.
THE
But first, a peek at the Regalian principle and the power of the
executive to reclassify lands of the public domain.
The 1935 Constitution classified lands of the public domain

In capsule, the main issue is whether private claimants into agricultural, forest or timber.[40] Meanwhile, the 1973

(respondents-claimants in G.R. No. 167707 and petitioners-claimants Constitution provided the following divisions: agricultural, industrial

in G.R. No. 173775) have a right to secure titles over their occupied or commercial, residential, resettlement, mineral, timber or forest and

portions in Boracay. The twin petitions pertain to their right, if any, to grazing lands, and such other classes as may be provided by

judicial confirmation of imperfect title under CA No. 141, as amended. law,[41] giving the government great leeway for classification.[42] Then
the 1987 Constitution reverted to the 1935 Constitution classification
with one addition: national parks.[43] Of these, onlyagricultural lands
[44]
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.
The Regalian Doctrine dictates that all lands of the public
domain belong to the State, that the State is the source of any asserted
right to ownership of land and charged with the conservation of such
[45]
patrimony. The doctrine has been consistently adopted under the
1935, 1973, and 1987 Constitutions.[46]
All lands not otherwise appearing to be clearly within private
ownership are presumed to belong to the State.[47] Thus, all lands that
have not been acquired from the government, either by purchase or by
grant, belong to the State as part of the inalienable public
domain.[48] Necessarily, it is up to the State to determine if lands of the
public domain will be disposed of for private ownership. The
government, as the agent of the state, is possessed of the plenary power
as the persona in law to determine who shall be the favored recipients
of public lands, as well as under what terms they may be granted such
privilege, not excluding the placing of obstacles in the way of their
exercise of what otherwise would be ordinary acts of ownership.[49]
Our present land law traces its roots to the Regalian
Doctrine. Upon the Spanish conquest of the Philippines, ownership of
all lands, territories and possessions in the Philippines passed to the
Spanish Crown.[50] The Regalian doctrine was first introduced in
the Philippines through the Laws of the Indies and the Royal Cedulas,
which laid the foundation that all lands that were not acquired from
the Government, either by purchase or by grant, belong to the public
domain.[51]
The Laws of the Indies was followed by the Ley
Hipotecaria or the Mortgage Law of 1893. The Spanish Mortgage
Law provided for the systematic registration of titles and deeds as well
as possessory claims.[52]
The Royal Decree of 1894 or the Maura Law[53] partly
amended the Spanish Mortgage Law and the Laws of the Indies. It
established possessory information as the method of legalizing
possession of vacant Crown land, under certain conditions which were
set forth in said decree.[54] Under Section 393 of the Maura Law,
an informacion posesoria or possessory information title,[55] when
duly inscribed in the Registry of Property, is converted into a title of
ownership only after the lapse of twenty (20) years of uninterrupted
possession which must be actual, public, and adverse,[56] from the date
of its inscription.[57] However, possessory information title had to be
perfected one year after the promulgation of the Maura Law, or
until April 17, 1895. Otherwise, the lands would revert to the State.[58]

In sum, private ownership of land under the Spanish regime
could only be founded on royal concessions which took various forms,
namely: (1) titulo real or royal grant; (2) concesion especial or special
grant; (3) composicion con el estado or adjustment title; (4) titulo de
compra or title by purchase; and (5) informacion posesoria or
possessory information title.[59]
The first law governing the disposition of public lands in
the Philippines under American rule was embodied in the Philippine
[60]
Bill of 1902. By this law, lands of the public domain in the
Philippine Islands were classified into three (3) grand divisions, to wit:
[61]
agricultural, mineral, and timber or forest lands. The act provided
for, among others, the disposal of mineral lands by means of absolute
[62]
grant (freehold system) and by lease (leasehold system). It also
provided the definition by exclusion of agricultural public
lands.[63] Interpreting the meaning of agricultural lands under the
Philippine Bill of 1902, the Court declared in Mapa v. Insular
[64]
Government:
x x x In other words, that the
phrase agricultural land as used in Act No. 926
means those public lands acquired
from Spain which are not timber or mineral
lands. x x x[65](Emphasis Ours)
On February 1, 1903, the Philippine Legislature passed Act
No. 496, otherwise known as the Land Registration Act. The act
established a system of registration by which recorded title becomes
absolute, indefeasible, and imprescriptible. This is known as
the Torrens system.[66]
Concurrently, on October 7, 1903, the Philippine
Commission passed Act No. 926, which was the first Public Land
Act. The Act introduced the homestead system and made provisions
for judicial and administrative confirmation of imperfect titles and for
the sale or lease of public lands. It permitted corporations regardless
of the nationality of persons owning the controlling stock to lease or
purchase lands of the public domain.[67] Under the Act, open,
continuous, exclusive, and notorious possession and occupation of
agricultural lands for the next ten (10) years preceding July 26,
1904 was sufficient for judicial confirmation of imperfect title.[68]
On November 29, 1919, Act No. 926 was superseded by Act
No. 2874, otherwise known as the second Public Land Act. This new,
more comprehensive law limited the exploitation of agricultural lands
to Filipinos and Americans and citizens of other countries which gave
Filipinos the same privileges. For judicial confirmation of title,
possession and occupation en concepto dueo since time immemorial,
or since July 26, 1894, was required.[69]
 After the passage of the 1935 Constitution, CA No.
141 amended Act No. 2874 on December 1, 1936. To this day, CA
No. 141, as amended, remains as the existing general law governing
the classification and disposition of lands of the public domain other
than timber and mineral lands,[70] and privately owned lands which
reverted to the State.[71]
Section 48(b) of CA No. 141 retained the requirement under
Act No. 2874 of possession and occupation of lands of the public
domain since time immemorial or since July 26, 1894. However, this
provision was superseded by Republic Act (RA) No. 1942,[72] which
provided for a simple thirty-year prescriptive period for judicial
confirmation of imperfect title. The provision was last amended
by PD No. 1073,[73] which now provides for possession and
occupation of the land applied for since June 12, 1945, or earlier.[74]
[75]
The issuance of PD No. 892 on February
1976 discontinued the use of Spanish titles as evidence in land
[76]
registration proceedings. Under the decree, all holders of Spanish
titles or grants should apply for registration of their lands under Act
No. 496 within six (6) months from the effectivity of the decree
on February 16, 1976. Thereafter, the recording of all unregistered
lands[77] shall be governed by Section 194 of the Revised
Administrative Code, as amended by Act No. 3344.
On June 11, 1978, Act No. 496 was amended and updated
by PD No. 1529, known as the Property Registration Decree. It was
enacted to codify the various laws relative to registration of
property.[78] It governs registration of lands under the Torrens system
as well as unregistered lands, including chattel mortgages.[79]
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 an official proclamation,[80] declassifying
inalienable public land into disposable land for agricultural or other
purposes.[81] In fact, Section 8 of CA No. 141 limits alienable or
disposable lands only to those lands which have been officially
delimited and classified.[82]
The burden of proof in overcoming the presumption of State
16, ownership of the lands of the public domain is on the person applying
for registration (or claiming ownership), who must prove that the land
subject of the application is alienable or disposable.[83] To overcome
this presumption, incontrovertible evidence must be established that
the land subject of the application (or claim) is alienable or
disposable.[84] There must still be a positive act declaring land of the
public domain as alienable and disposable. To prove that the land
subject of an application for registration is alienable, the applicant
must establish the existence of 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.[85] 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
[86]
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.Absent such well-nigh incontrovertible evidence, the Court
cannot accept the submission that lands occupied by private claimants
were already open to disposition before 2006. Matters of land
classification or reclassification cannot be assumed. They call for
proof.[87]
Ankron and De Aldecoa did not make the whole of Boracay
Island, or portions of it, agricultural lands. Private claimants posit
that Boracay was already an agricultural land pursuant to the old
cases Ankron v. Government of the
Philippine Islands (1919)[88] and De Aldecoa v. The Insular
Government (1909). [89]
These cases were decided under the provisions
of the Philippine Bill of 1902 and Act No. 926. There is a statement in
these old cases that in the absence of evidence to the contrary, that in
each case the lands are agricultural lands until the contrary is
shown.[90]
Private claimants reliance on Ankron and De Aldecoa is
misplaced. These cases did not have the effect of converting the whole
of Boracay Island or portions of it into agricultural lands. It should be
stressed that the Philippine Bill of 1902 and Act No. 926 merely
provided the manner through which land registration courts would
classify lands of the public domain. Whether the land would be
classified as timber, mineral, or agricultural depended on proof
presented in each case.
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.[91] This was the Courts ruling
in Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols
Vda. De Palanca v. Republic,[92] in which it stated, through Justice
Adolfo Azcuna, viz.:
x x x Petitioners furthermore insist that a
particular land need not be formally released by an act
of the Executive before it can be deemed open to
private ownership, citing the cases of Ramos v.
 Director of Lands and Ankron v. Government of the alienable agricultural lands. By no stretch of imagination did the
Philippine Islands.
presumption convert all lands of the public domain into agricultural
xxxx lands.
Petitioners reliance upon Ramos v. Director
of Lands and Ankron v. Government is misplaced. If We accept the position of private claimants, the Philippine
These cases were decided under the Philippine Bill of
Bill of 1902 and Act No. 926 would have automatically made all lands
1902 and the first Public Land Act No. 926 enacted
by the Philippine Commission on October 7, 1926, in the Philippines, except those already classified as timber or mineral
under which there was no legal provision vesting in land, alienable and disposable lands. That would take these lands out
the Chief Executive or President of the Philippines the
power to classify lands of the public domain into of State ownership and worse, would be utterly inconsistent with and
mineral, timber and agricultural so that the courts then totally repugnant to the long-entrenched Regalian doctrine.
were free to make corresponding classifications in
justiciable cases, or were vested with implicit power
to do so, depending upon the preponderance of the The presumption in Ankron and De Aldecoa attaches only to
evidence.[93]
land registration cases brought under the provisions of Act No. 926,
or more specifically those cases dealing with judicial and
To aid the courts in resolving land registration cases under Act
administrative confirmation of imperfect titles. The presumption
No. 926, it was then necessary to devise a presumption on land
applies to an applicant for judicial or administrative conformation of
classification. Thus evolved the dictum in Ankron that the courts have
imperfect title under Act No. 926. It certainly cannot apply to
a right to presume, in the absence of evidence to the contrary, that in
landowners, such as private claimants or their predecessors-in-
each case the lands are agricultural lands until the contrary is
interest, who failed to avail themselves of the benefits of Act No.
shown.[94]
926. As to them, their land remained unclassified and, by virtue of the
Regalian doctrine, continued to be owned by the State.

In any case, the assumption in Ankron and De Aldecoa was

But We cannot unduly expand the presumption
not absolute. Land classification was, in the end, dependent on
in Ankron and De Aldecoa to an argument that all lands of the public
proof. If there was proof that the land was better suited for non-
domain had been automatically reclassified as disposable and
agricultural uses, the courts could adjudge it as a mineral or timber
land despite the presumption. In Ankron, this Court stated:
In the case of Jocson vs. Director of
Forestry (supra), the Attorney-General admitted in
effect that whether the particular land in question
belongs to one class or another is a question of
fact. The mere fact that a tract of land has trees upon
it or has mineral within it is not of itself sufficient to
declare that one is forestry land and the other, mineral
land. There must be some proof of the extent and
present or future value of the forestry and of the
minerals. While, as we have just said, many
definitions have been given for agriculture, forestry,
and mineral lands, and that in each case it is a question
of fact, we think it is safe to say that in order to be
forestry or mineral land the proof must show that it is
more valuable for the forestry or the mineral which it
contains than it is for agricultural purposes. (Sec. 7,
Act No. 1148.) It is not sufficient to show that there
exists some trees upon the land or that it bears some
mineral. Land may be classified as forestry or mineral
today, and, by reason of the exhaustion of the timber
or mineral, be classified as agricultural land
tomorrow. And vice-versa, by reason of the rapid
growth of timber or the discovery of valuable
minerals, lands classified as agricultural today may be
differently classified tomorrow. 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. The fact that the land is a manglar [mangrove
swamp] is not sufficient for the courts to decide
whether it is agricultural, forestry, or mineral land. It
may perchance belong to one or the other of said
classes of land. The Government, in the first instance,
under the provisions of Act No. 1148, may, by
reservation, decide for itself what portions of public
land shall be considered forestry land, unless private
interests have intervened before such reservation is
made. In the latter case, whether the land is
agricultural, forestry, or mineral, is a question of
proof. Until private interests have intervened, the
Government, by virtue of the terms of said Act (No.
1148), may decide for itself what portions of the
public domain shall be set aside and reserved as
forestry or mineral land. (Ramos vs. Director of
Lands, 39 Phil. 175; Jocson vs. Director of
Forestry, supra)[95] (Emphasis ours)
Since 1919, courts were no longer free to determine the
classification of lands from the facts of each case, except those that
have already became private lands.[96] Act No. 2874, promulgated in
1919 and reproduced in Section 6 of CA No. 141, gave the Executive
Department, through the President, the exclusive prerogative to
classify or reclassify public lands into alienable or disposable, mineral
or forest.96-a Since then, courts no longer had the authority, whether
express or implied, to determine the classification of lands of the
public domain.[97]
Here, private claimants, unlike the Heirs of Ciriaco Tirol who
[98]
were issued their title in 1933, did not present a justiciable case for
determination by the land registration court of the propertys land
classification. Simply put, there was no opportunity for the courts then
to resolve if the land the Boracay occupants are now claiming were
agricultural lands. When Act No. 926 was supplanted by Act No. 2874
in 1919, without an application for judicial confirmation having been
filed by private claimants or their predecessors-in-interest, the courts
were no longer authorized to determine the propertys land
classification. Hence, private claimants cannot bank on Act No. 926.
[99]
We note that the RTC decision in G.R. No. 167707
mentioned Krivenko v. Register of Deeds of Manila,[100] which was
agricultural lands; and if so, whether an alien could acquire a
residential lot. This Court ruled that as an alien, Krivenko was
prohibited by the 1935 Constitution[104] from acquiring agricultural
land, which included residential lots. Here, the issue is whether
unclassified lands of the public domain are automatically deemed
agricultural.
Notably, the definition of agricultural public lands mentioned
in Krivenko relied on the old cases decided prior to the enactment of
Act No. 2874, including Ankron and De Aldecoa.[105] As We have
already stated, those cases cannot apply here, since they were decided
when the Executive did not have the authority to classify lands as
agricultural, timber, or mineral.
Private claimants continued possession under Act No. 926

decided in 1947 when CA No. 141, vesting the Executive with the sole does not create a presumption that the land is alienable. Private

power to classify lands of the public domain was already in claimants also contend that their continued possession of portions

effect. Krivenko cited the old cases Mapa v. Insular of Boracay Island for the requisite period of ten (10) years under Act

Government,[101] De Aldecoa v. The Insular No. 926[106] ipso facto converted the island into private

Government,[102] and Ankron v. Government of the ownership. Hence, they may apply for a title in their name.

Philippine Islands.[103]
A similar argument was squarely rejected by the Court
in Collado v. Court of Appeals.[107] Collado, citing the separate
Krivenko, however, is not controlling here because it involved
opinion of now Chief Justice Reynato S. Puno in Cruz v. Secretary of
a totally different issue. The pertinent issue in Krivenko was whether
Environment and Natural Resources,107-a ruled:
residential lots were included in the general classification of
 Act No. 926, the first Public
Land Act, was passed in pursuance
of the provisions of the Philippine
Bill of 1902. The law governed the
disposition of lands of the public
domain. It prescribed rules and
regulations for the homesteading,
selling and leasing of portions of the
public domain of the Philippine
Islands, and prescribed the terms and
conditions to enable persons to
perfect their titles to public lands in
the Islands. It also provided for the
issuance of patents to certain native
settlers upon public lands, for the
establishment of town sites and sale
of lots therein, for the completion of
imperfect titles, and for the
cancellation or confirmation of
Spanish concessions and grants in
the Islands. In short, the Public Land
Act operated on the assumption that
title to public lands in the Philippine
Islands remained in the government;
and that the governments title to
public land sprung from the Treaty of
Paris and other subsequent treaties
between Spain and the United States.
The term public land referred to all
lands of the public domain whose
title still remained in the government
and are thrown open to private
appropriation and settlement, and
excluded the patrimonial property of
the government and the friar lands.
Thus, it is plain error for petitioners to argue that
under the Philippine Bill of 1902
and Public Land Act No. 926, mere possession by
private individuals of lands creates the legal
presumption that the lands are alienable and
disposable.[108] (Emphasis Ours)
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. The DENR[109] and the National Mapping and
Resource Information Authority[110] certify that Boracay Island is an
unclassified land of the public domain.
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 Court notes that the classification of Boracay as a forest
land under PD No. 705 may seem to be out of touch with the present
realities in the island. Boracay, no doubt, has been partly stripped of
its forest cover to pave the way for commercial developments. As a
premier tourist destination for local and foreign tourists, Boracay
appears more of a commercial island resort, rather than a forest land.
Nevertheless, that the occupants of Boracay have built multi-
million peso beach resorts on the island;[111] that the island has already
been stripped of its forest cover; or that the implementation of
Proclamation No. 1064 will destroy the islands tourism industry,
do not negate its character as public forest.
Forests, in the context of both the Public Land Act and the
Constitution[112] 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.[113] The
discussion in Heirs of Amunategui v. Director of Forestry[114] 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.[115] (Emphasis
supplied)
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.[116] 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.
Private claimants cannot rely on Proclamation No. 1801 as
basis for judicial confirmation of imperfect title. The proclamation
did not convert Boracay into an agricultural land. However, private
claimants argue that Proclamation No. 1801 issued by then President
Marcos in 1978 entitles them to judicial confirmation of imperfect
title. The Proclamation classified Boracay, among other islands, as a
tourist zone. Private claimants assert that, as a tourist spot, the island
is susceptible of private ownership.

Proclamation No. 1801 or PTA Circular No. 3-82 did not
convert the whole of Boracay into an agricultural land. There is
nothing in the law or the Circular which made Boracay Island an
agricultural land. The reference in Circular No. 3-82 to private
lands[117] and areas declared as alienable and disposable[118] does not
by itself classify the entire island as agricultural. Notably, Circular No.
3-82 makes reference not only to private lands and areas but also to
public forested lands. Rule VIII, Section 3 provides:
No trees in forested private lands may be cut
without prior authority from the PTA. All forested
areas in public lands are declared forest
reserves. (Emphasis supplied)
Clearly, the reference in the Circular to both
private and public lands merely recognizes that the island can be
classified by the Executive department pursuant to its powers under
CA No. 141. In fact, Section 5 of the Circular recognizes the then
Bureau of Forest Developments authority to declare areas in the island
as alienable and disposable when it provides:
Subsistence farming, in areas declared as
alienable and disposable by the Bureau of Forest
Development.
Therefore, Proclamation 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.
The Whereas clauses of Proclamation No. 1801 also explain
the rationale behind the declaration of Boracay Island, together with
other islands, caves and peninsulas in the Philippines, as a tourist zone
and marine reserve to be administered by the PTA to ensure the
concentrated efforts of the public and private sectors in the
development of the areas tourism potential with due regard for
ecological balance in the marine environment. Simply put, the
proclamation is aimed at administering the islands for tourism and
ecological purposes. It does not address the areas alienability.[119]
More importantly, Proclamation No. 1801 covers not only
Boracay Island, but sixty-four (64) other islands, coves, and
peninsulas in the Philippines, such as Fortune and Verde Islands in
Batangas, Port Galera in Oriental Mindoro, Panglao and Balicasag
Islands in Bohol, Coron Island, Puerto Princesa and surrounding areas
in Palawan, Camiguin Island in Cagayan de Oro, and Misamis
Oriental, to name a few. If the designation of Boracay Island as tourist
zone makes it alienable and disposable by virtue of Proclamation No.
1801, all the other areas mentioned would likewise be declared wide
open for private disposition. That could not have been, and is clearly
beyond, the intent of the proclamation.

It was Proclamation No. 1064 of 2006 which positively
declared part of Boracay as alienable and opened the same to private
ownership. Sections 6 and 7 of CA No. 141[120] provide that it is only
the President, upon the recommendation of the proper department
head, who has the authority to classify the lands of the public domain
[121]
into alienable or disposable, timber and mineral lands.
In issuing Proclamation No. 1064, President Gloria
Macapagal-Arroyo merely exercised the authority granted to her to
classify lands of the public domain, presumably subject to existing
vested rights. Classification of public lands is the exclusive
prerogative of the Executive Department, through the Office of the
President. Courts have no authority to do so.[122] Absent such
classification, the land remains unclassified until released and
rendered open to disposition.[123]
Proclamation No. 1064 classifies Boracay into 400 hectares of
reserved forest land and 628.96 hectares of agricultural land. The
Proclamation likewise provides for a 15-meter buffer zone on each
side of the center line of roads and trails, which are reserved for right
of way and which shall form part of the area reserved for forest land
protection purposes.
Contrary to private claimants argument, there was nothing
invalid or irregular, much less unconstitutional, about the
classification of Boracay Island made by the President through
Proclamation No. 1064. It was within her authority to make such
classification, subject to existing vested rights.
Proclamation No. 1064 does not violate the Comprehensive
Agrarian Reform Law. Private claimants further assert that
Proclamation No. 1064 violates the provision of the Comprehensive
Agrarian Reform Law (CARL) or RA No. 6657 barring conversion of
public forests into agricultural lands. They claim that since Boracay is
a public forest under PD No. 705, President Arroyo can no longer
convert it into an agricultural land without running afoul of Section
4(a) of RA No. 6657, thus:
SEC. 4. Scope. The Comprehensive Agrarian
Reform Law of 1988 shall cover, regardless of
tenurial arrangement and commodity produced, all
public and private agricultural lands as provided in
Proclamation No. 131 and Executive Order No. 229,
including other lands of the public domain suitable for
agriculture.
More specifically, the following lands are
covered by the Comprehensive Agrarian Reform
Program:
(a) All alienable and disposable
lands of the public domain
devoted to or suitable for
agriculture. No reclassification
of forest or mineral lands to
agricultural lands shall be
undertaken after the approval of
 this Act until Congress, taking
into account ecological,
developmental and equity
considerations, shall have
determined by law, the specific
limits of the public domain.
That Boracay Island was classified as a public forest under
PD No. 705 did not bar the Executive from later converting it into
agricultural land. Boracay Island still remained an unclassified land of
the public domain despite PD No. 705.
In Heirs of the Late Spouses Pedro S. Palanca and Soterranea
Rafols v. Republic,[124] the Court stated that unclassified lands are
public forests.
While it is true that the land classification
map does not categorically state that the islands
are public forests, the fact that they were
unclassified lands leads to the same result.In the
absence of the classification as mineral or timber land,
the land remains unclassified land until released and
rendered open to disposition.[125] (Emphasis supplied)
Moreover, the prohibition under the CARL applies only to a
reclassification of land. If the land had never been previously
classified, as in the case of Boracay, there can be no prohibited
reclassification under the agrarian law. We agree with the opinion of
the Department of Justice[126] on this point:
Indeed, the key word to the correct
application of the prohibition in Section 4(a) is the
word reclassification. Where there has been no
previous classification of public forest [referring, we
repeat, to the mass of the public domain which has
not been the subject of the present system of
classification for purposes of determining which are
needed for forest purposes and which are not] into
permanent forest or forest reserves or some other
forest uses under the Revised Forestry Code, there
can be no reclassification of forest lands to speak of
within the meaning of Section 4(a).
Thus, obviously, the prohibition in Section
4(a) of the CARL against the reclassification of forest
lands to agricultural lands without a prior law
delimiting the limits of the public domain, does not,
and cannot, apply to those lands of the public domain,
denominated as public forest under the Revised
Forestry Code, which have not been previously
determined, or classified, as needed for forest
purposes in accordance with the provisions of the
Revised Forestry Code.[127]
Private claimants are not entitled to apply for judicial
confirmation of imperfect title under CA No. 141. Neither do they
have vested rights over the occupied lands under the said law. There
are two requisites for judicial confirmation of imperfect or incomplete
title under CA No. 141, namely: (1) open, continuous, exclusive, and
notorious possession and occupation of the subject land by himself or
through his predecessors-in-interest under a bona fide claim of
ownership since time immemorial or from June 12, 1945; and (2) the
classification of the land as alienable and disposable land of the public
[128]
domain.
As discussed, the Philippine Bill of 1902, Act No. 926, and
Proclamation No. 1801 did not convert portions
of Boracay Island into an agricultural land. The island remained an
unclassified land of the public domain and, applying the Regalian
doctrine, is considered State property.
Private claimants bid for judicial confirmation of imperfect
title, relying on the Philippine Bill of 1902, Act No. 926, and
Proclamation No. 1801, must fail because of the absence of the second
element of alienable and disposable land. Their entitlement to a
government grant under our present Public Land Act presupposes that
the land possessed and applied for is already alienable and
[129]
disposable. This is clear from the wording of the law itself. Where
the land is not alienable and disposable, possession of the land, no
[130]
matter how long, cannot confer ownership or possessory rights.
Neither may private claimants apply for judicial confirmation
of imperfect title under Proclamation No. 1064, with respect to those
lands which were classified as agricultural lands. Private claimants
failed to prove the first element of open, continuous, exclusive, and
notorious possession of their lands in Boracay since June 12, 1945.
We cannot sustain the CA and RTC conclusion in the petition
for declaratory relief that private claimants complied with the requisite
period of possession.
The tax declarations in the name of private claimants are
insufficient to prove the first element of possession. We note that the
earliest of the tax declarations in the name of private claimants were
issued in 1993. Being of recent dates, the tax declarations are not
sufficient to convince this Court that the period of possession and
occupation commenced on June 12, 1945.
Private claimants insist that they have a vested right in
Boracay, having been in possession of the island for a long time. They
have invested millions of pesos in developing the island into a tourist
spot. They say their continued possession and investments give them
a vested right which cannot be unilaterally rescinded by Proclamation
No. 1064.
The continued possession and considerable investment of
private claimants do not automatically give them a vested right in
Boracay. Nor do these give them a right to apply for a title to the land
they are presently occupying. This Court is constitutionally bound to
decide cases based on the evidence presented and the laws
applicable. As the law and jurisprudence stand, private claimants are
ineligible to apply for a judicial confirmation of title over their
occupied portions in Boracay even with their continued possession
and considerable investment in the island.
One Last Note
The Court is aware that millions of pesos have been invested
for the development of Boracay Island, making it a by-word in the
local and international tourism industry. The Court also notes that for
a number of years, thousands of people have called the island their
home. While the Court commiserates with private claimants plight,
We are bound to apply the law strictly and judiciously. This is the law
and it should prevail. Ito ang batas at ito ang dapat umiral.
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[131] or sales patent,[132] 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[133] now pending in the House of Representatives. Whether that
bill or a similar bill will become a law is for Congress to decide.
In issuing Proclamation No. 1064, the government has taken
the step necessary to open up the island to private ownership. This
gesture may not be sufficient to appease some sectors which view the
classification of the island partially into a forest reserve as
absurd. That the island is no longer overrun by trees, however, does
not becloud the vision to protect its remaining forest cover and to strike
a healthy balance between progress and ecology. Ecological
conservation is as important as economic progress.
To be sure, forest lands are fundamental to our nations
survival. Their promotion and protection are not just fancy rhetoric for
politicians and activists. These are needs that become more urgent as
destruction of our environment gets prevalent and difficult to
control. As aptly observed by Justice Conrado Sanchez in 1968
in Director of Forestry v. Munoz:[134]
 The view this Court takes of the cases at bar SO ORDERED.
is but in adherence to public policy that should be
followed with respect to forest lands. Many have
written much, and many more have spoken, and quite
often, about the pressing need for forest preservation,
conservation, protection, development and [G.R. No. 133250. July 9, 2002]
reforestation. Not without justification. For, forests
constitute a vital segment of any country's natural
resources. It is of common knowledge by now that
absence of the necessary green cover on our lands FRANCISCO I. CHAVEZ, petitioner, vs. PUBLIC ESTATES
produces a number of adverse or ill effects of serious AUTHORITY and AMARI COASTAL BAY
proportions. Without the trees, watersheds dry up; DEVELOPMENT CORPORATION, respondents.
rivers and lakes which they supply are emptied of
their contents. The fish disappear. Denuded areas DECISION
become dust bowls. As waterfalls cease to function, CARPIO, J.:
so will hydroelectric plants. With the rains, the fertile
topsoil is washed away; geological erosion results.
This is an original Petition for Mandamus with prayer for a writ
With erosion come the dreaded floods that wreak
of preliminary injunction and a temporary restraining order. The
havoc and destruction to property crops, livestock,
petition seeks to compel the Public Estates Authority (PEA for
houses, and highways not to mention precious human
brevity) to disclose all facts on PEAs then on-going renegotiations
lives. Indeed, the foregoing observations should be
with Amari Coastal Bay and Development Corporation (AMARI for
written down in a lumbermans decalogue.[135]
brevity) to reclaim portions of Manila Bay. The petition further seeks
to enjoin PEA from signing a new agreement with AMARI involving
WHEREFORE, judgment is rendered as follows: such reclamation.

1. The petition for certiorari in G.R. No. 167707 The Facts

is GRANTED and the Court of Appeals Decision in CA-G.R. CV No.
71118 REVERSED AND SET ASIDE. 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
2. The petition for certiorari in G.R. No. 173775 for brevity) to reclaim certain foreshore and offshore areas of Manila
is DISMISSED for lack of merit. 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, 1981
which have not yet been sold, transferred or otherwise disposed of by
CDCP as of said date, which areas consist of approximately Ninety-
Nine Thousand Four Hundred Seventy Three (99,473) square meters
in the Financial Center Area covered by land pledge No. 5 and
approximately Three Million Three Hundred Eighty Two Thousand
Eight Hundred Eighty Eight (3,382,888) square meters of reclaimed
areas at varying elevations above Mean Low Water Level located
outside the Financial Center Area and the First Neighborhood Unit.[3]
On January 19, 1988, then President Corazon C. Aquino issued
Special Patent No. 3517, granting and transferring to PEA the parcels
of land so reclaimed under the Manila-Cavite Coastal Road and
Reclamation Project (MCCRRP) containing a total area of one million
nine hundred fifteen thousand eight hundred ninety four (1,915,894)
square meters. Subsequently, on April 9, 1988, the Register of Deeds
of the Municipality of Paraaque issued Transfer Certificates of Title
Nos. 7309, 7311, and 7312, in the name of PEA, covering the three
reclaimed islands known as the Freedom Islands located at the
southern portion of the Manila-Cavite Coastal Road, Paraaque
City. The Freedom Islands have a total land area of One Million Five
Hundred Seventy Eight Thousand Four Hundred and Forty One
(1,578,441) square meters or 157.841 hectares.
On April 25, 1995, PEA entered into a Joint Venture Agreement
(JVA for brevity) with AMARI, a private corporation, to develop the
Freedom Islands. The JVA also required the reclamation of an
additional 250 hectares of submerged areas surrounding these islands
to complete the configuration in the Master Development Plan of the
Southern Reclamation Project-MCCRRP. PEA and AMARI entered
into the JVA through negotiation without public bidding.[4] On April
28, 1995, the Board of Directors of PEA, in its Resolution No. 1245,
confirmed the JVA. [5] On June 8, 1995, then President Fidel V.
Ramos, through then Executive Secretary Ruben Torres, approved the
JVA.[6]
On November 29, 1996, then Senate President Ernesto Maceda
delivered a privilege speech in the Senate and denounced the JVA as
the grandmother of all scams. As a result, the Senate Committee on
Government Corporations and Public Enterprises, and the Committee
on Accountability of Public Officers and Investigations, conducted a
joint investigation. The Senate Committees reported the results of
their investigation in Senate Committee Report No. 560 dated
September 16, 1997.[7] Among the conclusions of their report are: (1)
the reclaimed lands PEA seeks to transfer to AMARI under the JVA
are lands of the public domain which the government has not classified
as alienable lands and therefore PEA cannot alienate these lands; (2)
the certificates of title covering the Freedom Islands are thus void, and
(3) the JVA itself is illegal.
On December 5, 1997, then President Fidel V. Ramos issued
Presidential Administrative Order No. 365 creating a Legal Task
Force to conduct a study on the legality of the JVA in view of Senate
Committee Report No. 560. The members of the Legal Task Force
were the Secretary of Justice,[8] the Chief Presidential Legal
Counsel,[9] and the Government Corporate Counsel.[10] The Legal Task
Force upheld the legality of the JVA, contrary to the conclusions
reached by the Senate Committees.[11]
On April 4 and 5, 1998, the Philippine Daily
Inquirer and Today published reports that there were on-going
renegotiations between PEA and AMARI under an order issued by
then President Fidel V. Ramos. According to these reports, PEA
Director Nestor Kalaw, PEA Chairman Arsenio Yulo and retired Navy
Officer Sergio Cruz composed the negotiating panel of PEA.
On April 13, 1998, Antonio M. Zulueta filed before the Court
a Petition for Prohibition with Application for the Issuance of a
Temporary Restraining Order and Preliminary Injunction docketed as
G.R. No. 132994 seeking to nullify the JVA. The Court dismissed the
petition for unwarranted disregard of judicial hierarchy, without
prejudice to the refiling of the case before the proper court.[12]
On April 27, 1998, petitioner Frank I. Chavez (Petitioner for
brevity) as a taxpayer, filed the instant Petition for Mandamus with
Prayer for the Issuance of a Writ of Preliminary Injunction and
Temporary Restraining Order. Petitioner contends the government
stands to lose billions of pesos in the sale by PEA of the reclaimed
lands to AMARI. Petitioner prays that PEA publicly disclose the terms
of any renegotiation of the JVA, invoking Section 28, Article II, and
Section 7, Article III, of the 1987 Constitution on the right of the
people to information on matters of public concern. Petitioner assails
the sale to AMARI of lands of the public domain as a blatant violation
of Section 3, Article XII of the 1987 Constitution prohibiting the sale
of alienable lands of the public domain to private corporations.
Finally, petitioner asserts that he seeks to enjoin the loss of billions of
pesos in properties of the State that are of public dominion.
After several motions for extension of time,[13] PEA and AMARI
filed their Comments on October 19, 1998 and June 25, 1998,
respectively. Meanwhile, on December 28, 1998, petitioner filed an
Omnibus Motion: (a) to require PEA to submit the terms of the
renegotiated PEA-AMARI contract; (b) for issuance of a temporary
restraining order; and (c) to set the case for hearing on oral
argument. Petitioner filed a Reiterative Motion for Issuance of a TRO
dated May 26, 1999, which the Court denied in a Resolution dated
June 22, 1999.
In a Resolution dated March 23, 1999, the Court gave due course
to the petition and required the parties to file their respective
memoranda.
On March 30, 1999, PEA and AMARI signed the Amended Joint
Venture Agreement (Amended JVA, for brevity). On May 28, 1999,
the Office of the President under the administration of then President
Joseph E. Estrada approved the Amended JVA.
Due to the approval of the Amended JVA by the Office of the
President, petitioner now prays that on constitutional and statutory
grounds the renegotiated contract be declared null and void.[14]
The Issues
The issues raised by petitioner, PEA[15] and AMARI[16] are as
follows:
 I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR
IN THE PETITION ARE MOOT AND ACADEMIC
BECAUSE OF SUBSEQUENT EVENTS;
II. WHETHER THE PETITION MERITS DISMISSAL
FOR FAILING TO OBSERVE THE PRINCIPLE
GOVERNING THE HIERARCHY OF COURTS;
III. WHETHER THE PETITION MERITS DISMISSAL
FOR NON-EXHAUSTION OF ADMINISTRATIVE
REMEDIES;
IV. WHETHER PETITIONER HAS LOCUS STANDI TO
BRING THIS SUIT;
V. WHETHER THE CONSTITUTIONAL RIGHT TO
INFORMATION INCLUDES OFFICIAL
INFORMATION ON ON-GOING NEGOTIATIONS
BEFORE A FINAL AGREEMENT;
VI. WHETHER THE STIPULATIONS IN THE
AMENDED JOINT VENTURE AGREEMENT FOR
THE TRANSFER TO AMARI OF CERTAIN LANDS,
RECLAIMED AND STILL TO BE RECLAIMED,
VIOLATE THE 1987 CONSTITUTION; AND
VII. WHETHER THE COURT IS THE PROPER FORUM
FOR RAISING THE ISSUE OF WHETHER THE
AMENDED JOINT VENTURE AGREEMENT IS
GROSSLY DISADVANTAGEOUS TO THE
GOVERNMENT.
The Courts 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 petitioners prayer
for a public disclosure of the renegotiations. Likewise, petitioners
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. Petitioners principal
basis in assailing the renegotiation of the JVA is its violation of
Section 3, Article XII of the Constitution, which prohibits the
government from alienating lands of the public domain to private
corporations. If the Amended JVA indeed violates the Constitution, it
is the duty of the Court to enjoin its implementation, and if already
implemented, to annul the effects of such unconstitutional contract.
The Amended JVA is not an ordinary commercial contract but
one which seeks to transfer title and ownership to 367.5 hectares of
reclaimed lands and submerged areas of Manila Bay to a single
private corporation. It now becomes more compelling for the Court
to resolve the issue to insure the government itself does not violate a
provision of the Constitution intended to safeguard the national
patrimony. Supervening events, whether intended or accidental,
cannot prevent the Court from rendering a decision if there is a grave
violation of the Constitution. In the instant case, if the Amended JVA
runs counter to the Constitution, the Court can still prevent the transfer
of title and ownership of alienable lands of the public domain in the
name of AMARI. Even in cases where supervening events had made
the cases moot, the Court did not hesitate to resolve the legal or
constitutional issues raised to formulate controlling principles to guide
the bench, bar, and the public.[17]
Also, the instant petition is a case of first impression. All previous
decisions of the Court involving Section 3, Article XII of the 1987
Constitution, or its counterpart provision in the 1973
Constitution,[18] covered agricultural 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[19] under Title II of
Commonwealth Act. 141 (CA No. 141 for brevity). In the instant case,
AMARI seeks to acquire from PEA, a public corporation,
reclaimed lands and submerged areas for non-agricultural purposes
by purchase under PD No. 1084 (charter of PEA) and Title III of CA
No. 141. Certain undertakings by AMARI under the Amended JVA
constitute the consideration for the purchase. Neither AMARI nor
PEA can claim judicial confirmation of their titles because the lands
covered by the Amended JVA are newly reclaimed or still to be
reclaimed. Judicial confirmation of imperfect title requires open,
continuous, exclusive and notorious occupation of agricultural lands
of the public domain for at least thirty years since June 12, 1945 or
earlier. Besides, the deadline for filing applications for judicial
confirmation of imperfect title expired on December 31, 1987.[20]
Lastly, there is a need to resolve immediately the constitutional
issue raised in this petition because of the possible transfer at any time
by PEA to AMARI of title and ownership to portions of the reclaimed
lands. Under the Amended JVA, PEA is obligated to transfer to
AMARI the latters 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 originaljurisdiction 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 petitioners direct
resort to the Court violates the principle of exhaustion of
administrative remedies. It also violates the rule that mandamus may
issue only if there is no other plain, speedy and adequate remedy in
the ordinary course of law.
 PEA distinguishes the instant case from Taada v.
Tuvera[23] where the Court granted the petition for mandamus even if
the petitioners there did not initially demand from the Office of the
President the publication of the presidential decrees. PEA points out
that in Taada, the Executive Department had an affirmative statutory
duty under Article 2 of the Civil Code[24] and Section 1 of
Commonwealth Act No. 638[25] to publish the presidential decrees.
There was, therefore, no need for the petitioners in Taada to make an
initial demand from the Office of the President. In the instant case,
PEA claims it has no affirmative statutory duty to disclose publicly
information about its renegotiation of the JVA. Thus, PEA asserts that
the Court must apply the principle of exhaustion of administrative
remedies to the instant case in view of the failure of petitioner here to
demand initially from PEA the needed information.
The original JVA sought to dispose to AMARI public lands held
by PEA, a government corporation. Under Section 79 of the
Government Auditing Code,[26]2 the disposition of government lands
to private parties requires public bidding. PEA was under a positive
legal duty to disclose to the public the terms and conditions for the
sale of its lands. The law obligated PEA to make this public disclosure
even without demand from petitioner or from anyone. PEA failed to
make this public disclosure because the original JVA, like the
Amended JVA, was the result of a negotiated contract, not of a public
bidding. Considering that PEA had an affirmative statutory duty to
make the public disclosure, and was even in breach of this legal duty,
petitioner had the right to seek direct judicial intervention.
Moreover, and this alone is determinative of this issue, the
principle of exhaustion of administrative remedies does not apply
when the issue involved is a purely legal or constitutional
question.[27] The principal issue in the instant case is the capacity of
AMARI to acquire lands held by PEA in view of the constitutional ban
prohibiting the alienation of lands of the public domain to private
corporations. We rule that the principle of exhaustion of
administrative remedies does not apply in the instant case.
Fourth issue: whether petitioner has locus standi to bring this suit
PEA argues that petitioner has no standing to
institute mandamus proceedings to enforce his constitutional right to
information without a showing that PEA refused to perform an
affirmative duty imposed on PEA by the Constitution. PEA also
claims that petitioner has not shown that he will suffer any concrete
injury because of the signing or implementation of the Amended
JVA. Thus, there is no actual controversy requiring the exercise of the
power of judicial review.
The petitioner has standing to bring this taxpayers suit because
the petition seeks to compel PEA to comply with its constitutional
duties. There are two constitutional issues involved here. First is the
right of citizens to information on matters of public concern. Second
is the application of a constitutional provision intended to insure the
equitable distribution of alienable lands of the public domain among
Filipino citizens. The thrust of the first issue is to compel PEA to
disclose publicly information on the sale of government lands worth
billions of pesos, information which the Constitution and statutory law
mandate PEA to disclose. The thrust of the second issue is to prevent
PEA from alienating hundreds of hectares of alienable lands of the
public domain in violation of the Constitution, compelling PEA to
comply with a constitutional duty to the nation.
Moreover, the petition raises matters of transcendental
importance to the public. In Chavez v. PCGG,[28] the Court upheld the
right of a citizen to bring a taxpayers suit on matters of transcendental
importance to the public, thus -
Besides, petitioner emphasizes, the matter of recovering the ill-gotten
wealth of the Marcoses is an issue of transcendental importance to
the public. He asserts that ordinary taxpayers have a right to initiate
and prosecute actions questioning the validity of acts or orders of
government agencies or instrumentalities, if the issues raised are of
paramount public interest, and if they immediately affect the social,
economic and moral well being of the people.
Moreover, the mere fact that he is a citizen satisfies the requirement
of personal interest, when the proceeding involves the assertion of a
public right, such as in this case. He invokes several decisions of this
Court which have set aside the procedural matter of locus standi,
when the subject of the case involved public interest.
xxx
In Taada v. Tuvera, the Court asserted that when the issue concerns a
public right and the object of mandamus is to obtain the enforcement
of a public duty, the people are regarded as the real parties in
interest; and because it is sufficient that petitioner is a citizen and as
such is interested in the execution of the laws, he need not show that
he has any legal or special interest in the result of the action. In the
aforesaid case, the petitioners sought to enforce their right to be
informed on matters of public concern, a right then recognized in
Section 6, Article IV of the 1973 Constitution, in connection with the
rule that laws in order to be valid and enforceable must be published
in the Official Gazette or otherwise effectively promulgated. In
ruling for the petitioners' legal standing, the Court declared that the
right they sought to be enforced is a public right recognized by no
less than the fundamental law of the land.
Legaspi v. Civil Service Commission, while reiterating Taada, further
declared that when a mandamus proceeding involves the assertion of
a public right, the requirement of personal interest is satisfied by the
mere fact that petitioner is a citizen and, therefore, part of the general
'public' which possesses the right.
Further, in Albano v. Reyes, we said that while expenditure of public
funds may not have been involved under the questioned contract for
the development, management and operation of the Manila
International Container Terminal, public interest [was] definitely
involved considering the important role [of the subject contract] . . .
in the economic development of the country and the magnitude of
the financial consideration involved. We concluded that, as a
consequence, the disclosure provision in the Constitution would
constitute sufficient authority for upholding the petitioner's standing.
Similarly, the instant petition is anchored on the right of the people
to information and access to official records, documents and papers a
right guaranteed under Section 7, Article III of the 1987 Constitution.
Petitioner, a former solicitor general, is a Filipino citizen. Because of
the satisfaction of the two basic requisites laid down by decisional
law to sustain petitioner's legal standing, i.e. (1) the enforcement of a
public right (2) espoused by a Filipino citizen, we rule that the
petition at bar should be allowed.
We rule that since the instant petition, brought by a citizen,
involves the enforcement of constitutional rights - to information and
to the equitable diffusion of natural resources - matters of
transcendental public importance, the petitioner has the requisite locus
standi.
Fifth issue: whether the constitutional right to information
includes official information on on-going negotiations before a
final agreement.
Section 7, Article III of the Constitution explains the peoples
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 peoples 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 peoples will. Yet, this open
dialogue can be effective only to the extent that the citizenry is
informed and thus able to formulate its will intelligently. Only when
the participants in the discussion are aware of the issues and have
access to information relating thereto can such bear fruit.
PEA asserts, citing Chavez v. PCGG,[31] that in cases of on-going
negotiations the right to information is limited to definite propositions
of the government. PEA maintains the right does not include access to
intra-agency or inter-agency recommendations or communications
during the stage when common assertions are still in the process of
being formulated or are in the exploratory stage.
Also, AMARI contends that petitioner cannot invoke the right at
the pre-decisional stage or before the closing of the transaction. To
support its contention, AMARI cites the following discussion in the
1986 Constitutional Commission:
Mr. Suarez. And when we say transactions which should be
distinguished from contracts, agreements, or treaties or whatever,
does the Gentleman refer to the steps leading to the consummation of
the contract, or does he refer to the contract itself?
Mr. Ople: The transactions used here, I suppose is generic and
therefore, it can cover both steps leading to a contract and already
a consummated contract, Mr. Presiding Officer.
Mr. Suarez: This contemplates inclusion of negotiations leading to
the consummation of the transaction.
Mr. Ople: Yes, subject only to reasonable safeguards on the
national interest.
Mr. Suarez: Thank you.[32] (Emphasis supplied)
AMARI argues there must first be a consummated contract before
petitioner can invoke the right. Requiring government officials to
reveal their deliberations at the pre-decisional stage will degrade the
quality of decision-making in government agencies. Government
officials will hesitate to express their real sentiments during
deliberations if there is immediate public dissemination of their
discussions, putting them under all kinds of pressure before they
decide.
 We must first distinguish between information the law on public
bidding requires PEA to disclose publicly, and information the
constitutional right to information requires PEA to release to the
public. Before the consummation of the contract, PEA must, on its
own and without demand from anyone, disclose to the public matters
relating to the disposition of its property.These include the size,
location, technical description and nature of the property being
disposed of, the terms and conditions of the disposition, the parties
qualified to bid, the minimum price and similar information. PEA
must prepare all these data and disclose them to the public at the start
of the disposition process, long before the consummation of the
contract, because the Government Auditing Code requires public
bidding. If PEA fails to make this disclosure, any citizen can demand
from PEA this information at any time during the bidding process.
Information, however, on on-going evaluation or review of bids
or proposals being undertaken by the bidding or review committee is
not immediately accessible under the right to information. While the
evaluation or review is still on-going, there are no official acts,
transactions, or decisions on the bids or proposals. However, once the
committee makes its official recommendation, there arises a definite
proposition on the part of the government. From this moment, the
publics right to information attaches, and any citizen can access all the
non-proprietary information leading to such definite
[33]
proposition. In Chavez v. PCGG, the Court ruled as follows:
Considering the intent of the framers of the Constitution, we believe
that it is incumbent upon the PCGG and its officers, as well as other
government representatives, to disclose sufficient public information
on any proposed settlement they have decided to take up with the
ostensible owners and holders of ill-gotten wealth. Such information,
though, must pertain to definite propositions of the government, not
necessarily to intra-agency or inter-agency recommendations or
communications during the stage when common assertions are still
in the process of being formulated or are in the exploratory stage.
There is need, of course, to observe the same restrictions on
disclosure of information in general, as discussed earlier such as on
matters involving national security, diplomatic or foreign relations,
intelligence and other classified information. (Emphasis supplied)
Contrary to AMARIs 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.
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 some specific public service and open only to those
authorized to use the property.
Property of public dominion referred not only to property devoted
to public use, but also to property not so used but employed to develop
the national wealth. This class of property constituted property of
public dominion although employed for some economic or
commercial activity to increase the national wealth.
Article 341 of the Civil Code of 1889 governed the re-
classification of property of public dominion into private property, to
wit:
Art. 341. Property of public dominion, when no longer devoted to
public use or to the defense of the territory, shall become a part of
the private property of the State.
This provision, however, was not self-executing. The legislature, or
the executive department pursuant to law, must declare the property
no longer needed for public use or territorial defense before the
government could lease or alienate the property to private parties.[45]
Act No. 1654 of the Philippine Commission
On May 8, 1907, the Philippine Commission enacted Act No.
1654 which regulated the lease of reclaimed and foreshore lands. The
salient provisions of this law were as follows:
Section 1. The control and disposition of the foreshore as defined in
existing law, and the title to all Government or public lands made or
reclaimed by the Government by dredging or filling or otherwise
throughout the Philippine Islands, shall be retained by the
Government without prejudice to vested rights and without prejudice
to rights conceded to the City of Manila in the Luneta Extension.
Section 2. (a) The Secretary of the Interior shall cause all
Government or public lands made or reclaimed by the Government
by dredging or filling or otherwise to be divided into lots or blocks,
with the necessary streets and alleyways located thereon, and shall
cause plats and plans of such surveys to be prepared and filed with
the Bureau of Lands.
(b) Upon completion of such plats and plans the Governor-General
shall give notice to the public that such parts of the lands so made
or reclaimed as are not needed for public purposes will be leased
for commercial and business purposes, x x x.
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
Sec. 55. Any tract of land of the public domain which, being neither
timber nor mineral land, shall be classified as suitable for residential
purposes or for commercial, industrial, or other productive
purposes other than agricultural purposes, and shall be open to
disposition or concession, shall be disposed of under the provisions
of this chapter, and not otherwise.
Sec. 56. The lands disposable under this title shall be classified as
follows:
(a) Lands reclaimed by the Government by dredging,
filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering
upon the shores or banks of navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
x x x.
Sec. 58. The lands comprised in classes (a), (b), and (c) of section
fifty-six shall be disposed of to private parties by lease only and not
otherwise, as soon as the Governor-General, upon recommendation
by the Secretary of Agriculture and Natural Resources, shall
declare that the same are not necessary for the public service and
are open to disposition under this chapter. The lands included in
class (d) may be disposed of by sale or lease under the provisions of
this Act. (Emphasis supplied)
Section 6 of Act No. 2874 authorized the Governor-General to
classify lands of the public domain into x x x alienable or
disposable[47] lands. Section 7 of the Act empowered the Governor-
General to declare what lands are open to disposition or concession.
Section 8 of the Act limited alienable or disposable lands only to those
lands which have been officially delimited and classified.
Section 56 of Act No. 2874 stated that lands disposable under this
title[48] shall be classified as government reclaimed, foreshore and
marshy lands, as well as other lands. All these lands, however, must
be suitable for residential, commercial, industrial or other
productive non-agricultural purposes. These provisions vested upon
the Governor-General the power to classify inalienable lands of the
public domain into disposable lands of the public domain. These
provisions also empowered the Governor-General to classify further
such disposable lands of the public domain into government
reclaimed, foreshore or marshy lands of the public domain, as well as
other non-agricultural lands.
Section 58 of Act No. 2874 categorically mandated that
disposable lands of the public domain classified as government
reclaimed, foreshore and marshy lands shall be disposed of to private
parties by lease only and not otherwise. The Governor-General,
before allowing the lease of these lands to private parties, must
formally declare that the lands were not necessary for the public
service. Act No. 2874 reiterated the State policy to lease and not to sell
government reclaimed, foreshore and marshy lands of the public
domain, a policy first enunciated in 1907 in Act No.
1654. Government reclaimed, foreshore and marshy lands
remained sui generis, as the only alienable or disposable lands of the
public domain that the government could not sell to private parties.
The rationale behind this State policy is obvious. Government
reclaimed, foreshore and marshy public lands for non-agricultural
purposes retain their inherent potential as areas for public service. This
is the reason the government prohibited the sale, and only allowed the
lease, of these lands to private parties. The State always reserved these
lands for some future public service.
Act No. 2874 did not authorize the reclassification of government
reclaimed, foreshore and marshy lands into other non-agricultural
lands under Section 56 (d). Lands falling under Section 56 (d) were
the only lands for non-agricultural purposes the government could sell
to private parties. Thus, under Act No. 2874, the government could
not sell government reclaimed, foreshore and marshy lands to private
parties, unless the legislature passed a law allowing their sale.[49]
Act No. 2874 did not prohibit private parties from reclaiming
parts of the sea pursuant to Section 5 of the Spanish Law of Waters of
1866. Lands reclaimed from the sea by private parties with
government permission remained private lands.
Dispositions under the 1935 Constitution
On May 14, 1935, the 1935 Constitution took effect upon its
ratification by the Filipino people. The 1935 Constitution, in adopting
the Regalian doctrine, declared in Section 1, Article XIII, that
Section 1. All agricultural, timber, and mineral lands of the public
domain, waters, minerals, coal, petroleum, and other mineral oils, all
forces of potential energy and other natural resources of the
Philippines belong to the State, and their disposition, exploitation,
development, or utilization shall be limited to citizens of the
Philippines or to corporations or associations at least sixty per
centum of the capital of which is owned by such citizens, subject to
any existing right, grant, lease, or concession at the time of the
inauguration of the Government established under this
Constitution. Natural resources, with the exception of public
agricultural land, shall not be alienated, and no license, concession,
or lease for the exploitation, development, or utilization of any of the
natural resources shall be granted for a period exceeding twenty-five
years, renewable for another twenty-five years, except as to water
rights for irrigation, water supply, fisheries, or industrial uses other
than the development of water power, in which cases beneficial use
may be the measure and limit of the grant. (Emphasis supplied)
The 1935 Constitution barred the alienation of all natural
resources except public agricultural lands, which were the only natural
resources the State could alienate. Thus, foreshore lands, considered
part of the States natural resources, became inalienable by
constitutional fiat, available only for lease for 25 years, renewable for
another 25 years. The government could alienate foreshore lands only
after these lands were reclaimed and classified as alienable agricultural
lands of the public domain. Government reclaimed and marshy lands
of the public domain, being neither timber nor mineral lands, fell under
the classification of public agricultural lands.[50] However,
government reclaimed and marshy lands, although subject to
classification as disposable public agricultural lands, could only be
leased and not sold to private parties because of Act No. 2874.
The prohibition on private parties from acquiring ownership of
government reclaimed and marshy lands of the public domain was
only a statutory prohibition and the legislature could therefore remove
such prohibition. The 1935 Constitution did not prohibit individuals
and corporations from acquiring government reclaimed and marshy
lands of the public domain that were classified as agricultural lands
under existing public land laws. Section 2, Article XIII of the 1935
Constitution provided as follows:
Section 2. No private corporation or association may acquire, lease,
or hold public agricultural lands in excess of one thousand and
twenty four hectares, nor may any individual acquire such lands by
purchase in excess of one hundred and forty hectares, or by lease
in excess of one thousand and twenty-four hectares, or by homestead
in excess of twenty-four hectares. Lands adapted to grazing, not
exceeding two thousand hectares, may be leased to an individual,
private corporation, or association. (Emphasis supplied)
Still, after the effectivity of the 1935 Constitution, the legislature did
not repeal Section 58 of Act No. 2874 to open for sale to private parties
government reclaimed and marshy lands of the public domain. On the
contrary, the legislature continued the long established State policy of
retaining for the government title and ownership of government
reclaimed and marshy lands of the public domain.
Commonwealth Act No. 141 of the Philippine National Assembly
On November 7, 1936, the National Assembly approved
Commonwealth Act No. 141, also known as the Public Land Act,
which compiled the then existing laws on lands of the public
domain. CA No. 141, as amended, remains to this day the existing
general law governing the classification and disposition of lands of
the public domain other than timber and mineral lands.[51]
Section 6 of CA No. 141 empowers the President to classify lands
of the public domain into alienable or disposable[52] lands of the public
domain, which prior to such classification are inalienable and outside
the commerce of man. Section 7 of CA No. 141 authorizes the
President to declare what lands are open to disposition or concession.
Section 8 of CA No. 141 states that the government can declare open
for disposition or concession only lands that are officially delimited
and classified. Sections 6, 7 and 8 of CA No. 141 read as follows:
Sec. 6. The President, upon the recommendation of the Secretary
of Agriculture and Commerce, shall from time to time classify the
lands of the public domain into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands,
and may at any time and in like manner transfer such lands from one
class to another,[53] for the purpose of their administration and
disposition.
Sec. 7. For the purposes of the administration and disposition of
alienable or disposable public lands, the President, upon
recommendation by the Secretary of Agriculture and
Commerce, shall from time to time declare what lands are open to
disposition or concession under this Act.
Sec. 8. Only those lands shall be declared open to disposition or
concession which have been officially delimited and classified and,
when practicable, surveyed, and which have not been reserved for
public or quasi-public uses, nor appropriated by the Government,
nor in any manner become private property, nor those on which a
private right authorized and recognized by this Act or any other valid
law may be claimed, or which, having been reserved or appropriated,
have ceased to be so. x x x.
Thus, before the government could alienate or dispose of lands of the
public domain, the President must first officially classify these lands
as alienable or disposable, and then declare them open to disposition
or concession. There must be no law reserving these lands for public
or quasi-public uses.
The salient provisions of CA No. 141, on government reclaimed,
foreshore and marshy lands of the public domain, are as follows:
Sec. 58. Any tract of land of the public domain which, being
neither timber nor mineral land, is intended to be used for
residential purposes or for commercial, industrial, or other
productive purposes other than agricultural, and is open to
disposition or concession, shall be disposed of under the provisions
of this chapter and not otherwise.
Sec. 59. The lands disposable under this title shall be classified as
follows:
(a) Lands reclaimed by the Government by dredging,
filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering
upon the shores or banks of navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
Sec. 60. Any tract of land comprised under this title may be leased or
sold, as the case may be, to any person, corporation, or association
authorized to purchase or lease public lands for agricultural
purposes. x x x.
Sec. 61. The lands comprised in classes (a), (b), and (c) of section
fifty-nine shall be disposed of to private parties by lease only and
not otherwise, as soon as the President, upon recommendation by
the Secretary of Agriculture, shall declare that the same are not
necessary for the public service and are open to disposition under
this chapter. The lands included in class (d) may be disposed of by
sale or lease under the provisions of this Act. (Emphasis supplied)
Section 61 of CA No. 141 readopted, after the effectivity of the
1935 Constitution, Section 58 of Act No. 2874 prohibiting the sale of
government reclaimed, foreshore and marshy disposable lands of the
public domain. All these lands are intended for residential,
commercial, industrial or other non-agricultural purposes. As before,
Section 61 allowed only the lease of such lands to private parties. The
government could sell to private parties only lands falling under
Section 59 (d) of CA No. 141, or those lands for non-agricultural
purposes not classified as government reclaimed, foreshore and
marshy disposable lands of the public domain. Foreshore lands,
however, became inalienable under the 1935 Constitution which only
allowed the lease of these lands to qualified private parties.
Section 58 of CA No. 141 expressly states that disposable lands
of the public domain intended for residential, commercial, industrial
or other productive purposes other than agricultural shall be disposed
of under the provisions of this chapter and not otherwise. Under
Section 10 of CA No. 141, the term disposition includes lease of the
land. Any disposition of government reclaimed, foreshore and marshy
disposable lands for non-agricultural purposes must comply with
Chapter IX, Title III of CA No. 141,[54] unless a subsequent law
amended or repealed these provisions.
In his concurring opinion in the landmark case of Republic Real
Estate Corporation v. Court of Appeals,[55] Justice Reynato S. Puno
summarized succinctly the law on this matter, as follows:
Foreshore lands are lands of public dominion intended for public
use. So too are lands reclaimed by the government by dredging,
filling, or other means. Act 1654 mandated that the control and
disposition of the foreshore and lands under water remained in the
national government. Said law allowed only the leasing of reclaimed
land. The Public Land Acts of 1919 and 1936 also declared that the
foreshore and lands reclaimed by the government were to be
disposed of to private parties by lease only and not otherwise. Before
leasing, however, the Governor-General, upon recommendation of
the Secretary of Agriculture and Natural Resources, had first to
determine that the land reclaimed was not necessary for the public
service. This requisite must have been met before the land could be
disposed of. But even then, the foreshore and lands under water
were not to be alienated and sold to private parties. The disposition
of the reclaimed land was only by lease. The land remained
property of the State. (Emphasis supplied)
As observed by Justice Puno in his concurring opinion,
Commonwealth Act No. 141 has remained in effect at present.
The State policy prohibiting the sale to private parties of
government reclaimed, foreshore and marshy alienable lands of the
public domain, first implemented in 1907 was thus reaffirmed in CA
No. 141 after the 1935 Constitution took effect. The prohibition on the
sale of foreshore lands, however, became a constitutional edict under
the 1935 Constitution. Foreshore lands became inalienable as natural
resources of the State, unless reclaimed by the government and
classified as agricultural lands of the public domain, in which case
they would fall under the classification of government reclaimed
lands.
After the effectivity of the 1935 Constitution, government
reclaimed and marshy disposable lands of the public domain
continued to be only leased and not sold to private parties.[56]These
lands remained sui generis, as the only alienable or disposable lands
of the public domain the government could not sell to private parties.
Since then and until now, the only way the government can sell
to private parties government reclaimed and marshy disposable lands
of the public domain is for the legislature to pass a law authorizing
such sale. CA No. 141 does not authorize the President to reclassify
government reclaimed and marshy lands into other non-agricultural
lands under Section 59 (d). Lands classified under Section 59 (d) are
the only alienable or disposable lands for non-agricultural purposes
that the government could sell to private parties.
Moreover, Section 60 of CA No. 141 expressly requires
congressional authority before lands under Section 59 that the
government previously transferred to government units or entities
could be sold to private parties. Section 60 of CA No. 141 declares
that
Sec. 60. x x x The area so leased or sold shall be such as shall, in the
judgment of the Secretary of Agriculture and Natural Resources, be
reasonably necessary for the purposes for which such sale or lease is
requested, and shall not exceed one hundred and forty-four hectares:
Provided, however, That this limitation shall not apply to grants,
donations, or transfers made to a province, municipality or branch or
subdivision of the Government for the purposes deemed by said
entities conducive to the public interest; but the land so granted,
donated, or transferred to a province, municipality or branch or
subdivision of the Government shall not be alienated, encumbered,
or otherwise disposed of in a manner affecting its title, except when
authorized by Congress: x x x. (Emphasis supplied)
The congressional authority required in Section 60 of CA No. 141
mirrors the legislative authority required in Section 56 of Act No.
2874.
One reason for the congressional authority is that Section 60 of
CA No. 141 exempted government units and entities from the
maximum area of public lands that could be acquired from the
State. These government units and entities should not just turn around
and sell these lands to private parties in violation of constitutional or
statutory limitations. Otherwise, the transfer of lands for non-
agricultural purposes to government units and entities could be used
to circumvent constitutional limitations on ownership of alienable or
disposable lands of the public domain. In the same manner, such
transfers could also be used to evade the statutory prohibition in CA
No. 141 on the sale of government reclaimed and marshy lands of the
public domain to private parties. Section 60 of CA No. 141 constitutes
by operation of law a lien on these lands.[57]
In case of sale or lease of disposable lands of the public domain
falling under Section 59 of CA No. 141, Sections 63 and 67 require
a public bidding. Sections 63 and 67 of CA No. 141 provide as
follows:
Sec. 63. Whenever it is decided that lands covered by this chapter are
not needed for public purposes, the Director of Lands shall ask the
Secretary of Agriculture and Commerce (now the Secretary of
Natural Resources) for authority to dispose of the same. Upon receipt
of such authority, the Director of Lands shall give notice by public
advertisement in the same manner as in the case of leases or sales of
agricultural public land, x x x.
Sec. 67. The lease or sale shall be made by oral bidding; and
adjudication shall be made to the highest bidder. x x x. (Emphasis
supplied)
Thus, CA No. 141 mandates the Government to put to public auction
all leases or sales of alienable or disposable lands of the public
domain.[58]
Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did
not repeal Section 5 of the Spanish Law of Waters of 1866. Private
parties could still reclaim portions of the sea with government
permission. However, the reclaimed land could become private land
only if classified as alienable agricultural land of the public
domain open to disposition under CA No. 141. The 1935 Constitution
prohibited the alienation of all natural resources except public
agricultural lands.
The Civil Code of 1950
The Civil Code of 1950 readopted substantially the definition of
property of public dominion found in the Civil Code of 1889. Articles
420 and 422 of the Civil Code of 1950 state that
Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals,
rivers, torrents, ports and bridges constructed by the
State, banks, shores, roadsteads, and others of similar
character;
 (2) Those which belong to the State, without being for public
use, and are intended for some public service or for the
development of the national wealth.
x x x.
Art. 422. Property of public dominion, when no longer intended for
public use or for public service, shall form part of the patrimonial
property of the State.
Again, the government must formally declare that the property of
public dominion is no longer needed for public use or public service,
before the same could be classified as patrimonial property of the
State.[59] In the case of government reclaimed and marshy lands of the
public domain, the declaration of their being disposable, as well as the
manner of their disposition, is governed by the applicable provisions
of CA No. 141.
Like the Civil Code of 1889, the Civil Code of 1950 included as
property of public dominion those properties of the State which,
without being for public use, are intended for public service or
the development of the national wealth. Thus, government reclaimed
and marshy lands of the State, even if not employed for public use or
public service, if developed to enhance the national wealth, are
classified as property of public dominion.
Dispositions under the 1973 Constitution
The 1973 Constitution, which took effect on January 17, 1973,
likewise adopted the Regalian doctrine. Section 8, Article XIV of the
1973 Constitution stated that
Sec. 8. All lands of the public domain, waters, minerals, coal,
petroleum and other mineral oils, all forces of potential energy,
fisheries, wildlife, and other natural resources of the Philippines
belong to the State. With the exception of agricultural, industrial or
commercial, residential, and resettlement lands of the public
domain, natural resources shall not be alienated, and no license,
concession, or lease for the exploration, development, exploitation,
or utilization of any of the natural resources shall be granted for a
period exceeding twenty-five years, renewable for not more than
twenty-five years, except as to water rights for irrigation, water
supply, fisheries, or industrial uses other than the development of
water power, in which cases, beneficial use may be the measure and
the limit of the grant. (Emphasis supplied)
The 1973 Constitution prohibited the alienation of all natural
resources with the exception of agricultural, industrial or commercial,
residential, and resettlement lands of the public domain. In contrast,
the 1935 Constitution barred the alienation of all natural resources
except public agricultural lands. However, the term public agricultural
lands in the 1935 Constitution encompassed industrial, commercial,
residential and resettlement lands of the public domain.[60] If the land
of public domain were neither timber nor mineral land, it would fall
under the classification of agricultural land of the public domain. Both
the 1935 and 1973 Constitutions, therefore, prohibited the alienation
of all natural resources except agricultural lands of the public
domain.
The 1973 Constitution, however, limited the alienation of lands
of the public domain to individuals who were citizens of the
Philippines. Private corporations, even if wholly owned by Philippine
citizens, were no longer allowed to acquire alienable lands of the
public domain unlike in the 1935 Constitution. Section 11, Article
XIV of the 1973 Constitution declared that
Sec. 11. The Batasang Pambansa, taking into account conservation,
ecological, and development requirements of the natural resources,
shall determine by law the size of land of the public domain which
may be developed, held or acquired by, or leased to, any qualified
individual, corporation, or association, and the conditions
therefor. No private corporation or association may hold alienable
lands of the public domain except by lease not to exceed one
thousand hectares in area nor may any citizen hold such lands by
lease in excess of five hundred hectares or acquire by purchase,
homestead or grant, in excess of twenty-four hectares. No private
corporation or association may hold by lease, concession, license or
permit, timber or forest lands and other timber or forest resources in
excess of one hundred thousand hectares. However, such area may
be increased by the Batasang Pambansa upon recommendation of the
National Economic and Development Authority. (Emphasis
supplied)
Thus, under the 1973 Constitution, private corporations could
hold alienable lands of the public domain only through lease. Only
individuals could now acquire alienable lands of the public domain,
and private corporations became absolutely barred from acquiring
any kind of alienable land of the public domain. The constitutional
ban extended to all kinds of alienable lands of the public domain, while
the statutory ban under CA No. 141 applied only to government
reclaimed, foreshore and marshy alienable lands of the public domain.
PD No. 1084 Creating the Public Estates Authority
On February 4, 1977, then President Ferdinand Marcos issued
Presidential Decree No. 1084 creating PEA, a wholly government
owned and controlled corporation with a special charter. Sections 4
and 8 of PD No. 1084, vests PEA with the following purposes and
powers:
Sec. 4. Purpose. The Authority is hereby created for the following
purposes:
(a) To reclaim land, including foreshore and submerged
areas, by dredging, filling or other means, or to acquire
reclaimed land;
(b) To develop, improve, acquire, administer, deal in,
subdivide, dispose, lease and sell any and all kinds of
lands, buildings, estates and other forms of real property,
owned, managed, controlled and/or operated by the
government;
(c) To provide for, operate or administer such service as may be
necessary for the efficient, economical and beneficial utilization of
the above properties.
Sec. 5. Powers and functions of the Authority. The Authority shall,
in carrying out the purposes for which it is created, have the
following powers and functions:
(a)To prescribe its by-laws.
xxx
(i) To hold lands of the public domain in excess of the
area permitted to private corporations by statute.
(j) To reclaim lands and to construct work across, or
otherwise, any stream, watercourse, canal, ditch, flume x x
x.
xxx
(o) To perform such acts and exercise such functions as may be
necessary for the attainment of the purposes and objectives herein
specified. (Emphasis supplied)
PD No. 1084 authorizes PEA to reclaim both foreshore and
submerged areas of the public domain. Foreshore areas are those
covered and uncovered by the ebb and flow of the tide.[61] Submerged
areas are those permanently under water regardless of the ebb and flow
of the tide.[62] Foreshore and submerged areas indisputably belong to
the public domain[63] and are inalienable unless reclaimed, classified
as alienable lands open to disposition, and further declared no longer
needed for public service.
The ban in the 1973 Constitution on private corporations from
acquiring alienable lands of the public domain did not apply to PEA
since it was then, and until today, a fully owned government
corporation. The constitutional ban applied then, as it still applies
now, only to private corporations and associations. PD No. 1084
expressly empowers PEA to hold lands of the public domain even in
excess of the area permitted to private corporations by statute. Thus,
PEA can hold title to private lands, as well as title to lands of the
public domain.
In order for PEA to sell its reclaimed foreshore and submerged
alienable lands of the public domain, there must be legislative
authority empowering PEA to sell these lands. This legislative
authority is necessary in view of Section 60 of CA No.141, which
states
Sec. 60. x x x; but the land so granted, donated or transferred to a
province, municipality, or branch or subdivision of the Government
shall not be alienated, encumbered or otherwise disposed of in a
manner affecting its title, except when authorized by Congress; x x
x. (Emphasis supplied)
Without such legislative authority, PEA could not sell but only lease
its reclaimed foreshore and submerged alienable lands of the public
domain. Nevertheless, any legislative authority granted to PEA to sell
its reclaimed alienable lands of the public domain would be subject to
the constitutional ban on private corporations from acquiring alienable
lands of the public domain. Hence, such legislative authority could
only benefit private individuals.
Dispositions under the 1987 Constitution
The 1987 Constitution, like the 1935 and 1973 Constitutions
before it, has adopted the Regalian doctrine. The 1987 Constitution
declares that all natural resources are owned by the State, and except
for alienable agricultural lands of the public domain, natural resources
cannot be alienated. Sections 2 and 3, Article XII of the 1987
Constitution state that
Section 2. All lands of the public domain, waters, minerals, coal,
petroleum and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other
natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be
alienated. The exploration, development, and utilization of natural
resources shall be under the full control and supervision of the State.
x x x.
Section 3. Lands of the public domain are classified into agricultural,
forest or timber, mineral lands, and national parks. Agricultural lands
of the public domain may be further classified by law according to
the uses which they may be devoted. Alienable lands of the public
domain shall be limited to agricultural lands. Private corporations
or associations may not hold such alienable lands of the public
domain except by lease, for a period not exceeding twenty-five
years, renewable for not more than twenty-five years, and not to
exceed one thousand hectares in area. Citizens of the Philippines
may lease not more than five hundred hectares, or acquire not more
than twelve hectares thereof by purchase, homestead, or grant.
Taking into account the requirements of conservation, ecology, and
development, and subject to the requirements of agrarian reform, the
Congress shall determine, by law, the size of lands of the public
domain which may be acquired, developed, held, or leased and the
conditions therefor. (Emphasis supplied)
The 1987 Constitution continues the State policy in the 1973
Constitution banning private corporations 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 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 AMARIs 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 PEAs 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 AMARIs 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
AMARIs 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 AMARIs 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 PEAs 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 such alienable lands of the public domain except by lease, x x
x.(Emphasis supplied)
Classification of Reclaimed Foreshore and Submerged Areas
PEA readily concedes that lands reclaimed from foreshore or
submerged areas of Manila Bay are alienable or disposable lands of
the public domain. In its Memorandum,[67] PEA admits that
Under the Public Land Act (CA 141, as amended), reclaimed lands
are classified as alienable and disposable lands of the public
domain:
Sec. 59. The lands disposable under this title shall be classified as
follows:
(a) Lands reclaimed by the government by
dredging, filling, or other means;
x x x. (Emphasis supplied)
Likewise, the Legal Task Force[68] constituted under Presidential
Administrative Order No. 365 admitted in its Report and
Recommendation to then President Fidel V. Ramos, [R]eclaimed
lands are classified as alienable and disposable lands of the public
domain.[69] The Legal Task Force concluded that
D. Conclusion
Reclaimed lands are lands of the public domain. However, by
statutory authority, the rights of ownership and disposition over
reclaimed lands have been transferred to PEA, by virtue of which
PEA, as owner, may validly convey the same to any qualified person
without violating the Constitution or any statute.
The constitutional provision prohibiting private corporations from
holding public land, except by lease (Sec. 3, Art. XVII,[70] 1987
Constitution), does not apply to reclaimed lands whose ownership
has passed on to PEA by statutory grant.
Under Section 2, Article XII of the 1987 Constitution, the
foreshore and submerged areas of Manila Bay are part of the lands of
the public domain, waters x x x and other natural resources and
consequently owned by the State. As such, foreshore and submerged
areas shall not be alienated, unless they are classified as agricultural
lands of the public domain. The mere reclamation of these areas by
PEA does not convert these inalienable natural resources of the State
into alienable or disposable lands of the public domain. There must be
a law or presidential proclamation officially classifying these
reclaimed lands as alienable or disposable and open to disposition or
concession. Moreover, these reclaimed lands cannot be classified as
alienable or disposable if the law has reserved them for some public
or quasi-public use.[71]
Section 8 of CA No. 141 provides that only those lands shall be
declared open to disposition or concession which have been officially
delimited and classified.[72] The President has the authority to classify
inalienable lands of the public domain into alienable or disposable
lands of the public domain, pursuant to Section 6 of CA No.
141. In Laurel vs. Garcia,[73] the Executive Department attempted to
sell the Roppongi property in Tokyo, Japan, which was acquired by
the Philippine Government for use as the Chancery of the Philippine
Embassy.Although the Chancery had transferred to another location
thirteen years earlier, the Court still ruled that, under Article 422[74] of
the Civil Code, a property of public dominion retains such character
until formally declared otherwise. The Court ruled that
The fact that the Roppongi site has not been used for a long time for
actual Embassy service does not automatically convert it to
patrimonial property. Any such conversion happens only if the
property is withdrawn from public use (Cebu Oxygen and Acetylene
Co. v. Bercilles, 66 SCRA 481 [1975]. A property continues to be
part of the public domain, not available for private appropriation
or ownership until there is a formal declaration on the part of the
government to withdraw it from being such (Ignacio v. Director of
Lands, 108 Phil. 335 [1960]. (Emphasis supplied)
PD No. 1085, issued on February 4, 1977, authorized the issuance
of special land patents for lands reclaimed by PEA from the foreshore
or submerged areas of Manila Bay. On January 19, 1988 then
President Corazon C. Aquino issued Special Patent No. 3517 in the
name of PEA for the 157.84 hectares comprising the partially
reclaimed Freedom Islands.Subsequently, on April 9, 1999 the
Register of Deeds of the Municipality of Paranaque issued TCT Nos.
7309, 7311 and 7312 in the name of PEA pursuant to Section 103 of
PD No. 1529 authorizing the issuance of certificates of title
corresponding to land patents. To this day, these certificates of title are
still in the name of PEA.
PD No. 1085, coupled with President Aquinos 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
Aquinos issuance of a land patent also constitute a declaration that the
Freedom Islands are no longer needed for public service. The
Freedom Islands are thus alienable or disposable lands of the public
domain, open to disposition or concession to qualified parties.
At the time then President Aquino issued Special Patent No.
3517, PEA had already reclaimed the Freedom Islands although
subsequently there were partial erosions on some areas. The
government had also completed the necessary surveys on these
islands. Thus, the Freedom Islands were no longer part of Manila Bay
but part of the land mass. Section 3, Article XII of the 1987
Constitution classifies lands of the public domain into agricultural,
forest or timber, mineral lands, and national parks. Being neither
timber, mineral, nor national park lands, the reclaimed Freedom
Islands necessarily fall under the classification of agricultural lands of
the public domain. Under the 1987 Constitution, agricultural lands of
the public domain are the only natural resources that the State may
alienate to qualified private parties. All other natural resources, such
as the seas or bays, are waters x x x owned by the State forming part
of the public domain, and are inalienable pursuant to Section 2, Article
XII of the 1987 Constitution.
AMARI claims that the Freedom Islands are private lands
because CDCP, then a private corporation, reclaimed the islands under
a contract dated November 20, 1973 with the Commissioner of Public
Highways. AMARI, citing Article 5 of the Spanish Law of Waters of
1866, argues that if the ownership of reclaimed lands may be given to
the party constructing the works, then it cannot be said that reclaimed
lands are lands of the public domain which the State may not
alienate.[75] Article 5 of the Spanish Law of Waters reads as follows:
Article 5. Lands reclaimed from the sea in consequence of works
constructed by the State, or by the provinces, pueblos or private
persons, with proper permission, shall become the property of the
party constructing such works, unless otherwise provided by the
terms of the grant of authority. (Emphasis supplied)
Under Article 5 of the Spanish Law of Waters of 1866, private
parties could reclaim from the sea only with proper permission from
the State. Private parties could own the reclaimed land only if not
otherwise provided by the terms of the grant of authority. This clearly
meant that no one could reclaim from the sea without permission from
the State because the sea is property of public dominion. It also meant
that the State could grant or withhold ownership of the reclaimed land
because any reclaimed land, like the sea from which it emerged,
belonged to the State. Thus, a private person reclaiming from the sea
without permission from the State could not acquire ownership of the
reclaimed land which would remain property of public dominion like
the sea it replaced.[76] Article 5 of the Spanish Law of Waters of 1866
adopted the time-honored principle of land ownership that all lands
that were not acquired from the government, either by purchase or by
grant, belong to the public domain.[77]
Article 5 of the Spanish Law of Waters must be read together
with laws subsequently enacted on the disposition of public lands. In
particular, CA No. 141 requires that lands of the public domain must
first be classified as alienable or disposable before the government can
alienate them. These lands must not be reserved for public or quasi-
public purposes.[78]Moreover, the contract between CDCP and the
government was executed after the effectivity of the 1973
Constitution which barred private corporations from acquiring any
kind of alienable land of the public domain. This contract could not
have converted the Freedom Islands into private lands of a private
corporation.
Presidential Decree No. 3-A, issued on January 11, 1973, revoked
all laws authorizing the reclamation of areas under water and revested
solely in the National Government the power to reclaim lands. Section
1 of PD No. 3-A declared that
The provisions of any law to the contrary notwithstanding, the
reclamation of areas under water, whether foreshore or inland, shall
be limited to the National Government or any person authorized by
it under a proper contract. (Emphasis supplied)
x x x.
PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866
because reclamation of areas under water could now be undertaken
only by the National Government or by a person contracted by the
National Government. Private parties may reclaim from the sea only
under a contract with the National Government, and no longer by grant
or permission as provided in Section 5 of the Spanish Law of Waters
of 1866.
Executive Order No. 525, issued on February 14, 1979,
designated PEA as the National Governments implementing arm to
undertake all reclamation projects of the government, which shall be
undertaken by the PEA or through a proper contract executed by it
with any person or entity. Under such contract, a private party
receives compensation for reclamation services rendered to
PEA. Payment to the contractor may be in cash, or in kind consisting
of portions of the reclaimed land, subject to the constitutional ban on
private corporations from acquiring alienable lands of the public
domain. The reclaimed land can be used as payment in kind only if the
reclaimed land is first classified as alienable or disposable land open
to disposition, and then declared no longer needed for public service.
The Amended JVA covers not only the Freedom Islands, but also
an additional 592.15 hectares which are still submerged and forming
part of Manila Bay. There is no legislative or Presidential act
classifying these submerged areas as alienable or disposable lands
of the public domain open to disposition. These submerged areas are
not covered by any patent or certificate of title. There can be no
dispute that these submerged areas form part of the public domain, and
in their present state are inalienable and outside the commerce of
man. Until reclaimed from the sea, these submerged areas are, under
the Constitution, waters x x x owned by the State, forming part of the
public domain and consequently inalienable.Only when actually
reclaimed from the sea can these submerged areas be classified as
public agricultural lands, which under the Constitution are the only
natural resources that the State may alienate. Once reclaimed and
transformed into public agricultural lands, the government may then
officially classify these lands as alienable or disposable lands open to
disposition.Thereafter, the government may declare these lands no
longer needed for public service. Only then can these reclaimed lands
be considered alienable or disposable lands of the public domain and
within the commerce of man.
The classification of PEAs 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, impose appropriate taxes, fees, charges,
rentals and any such form of levy and collect such revenues for the
exploration, development, utilization or gathering of such resources;
xxx
(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 countrys marine, freshwater, and brackish water and over all
aquatic resources of the country and shall continue to oversee,
supervise and police our natural resources; cancel or cause to
cancel such privileges upon failure, non-compliance or violations of
any regulation, order, and for all other causes which are in
furtherance of the conservation of natural resources and supportive
of the national interest;
(15) Exercise exclusive jurisdiction on the management and
disposition of all lands of the public domain and serve as the sole
agency responsible for classification, sub-classification, surveying
and titling of lands in consultation with appropriate
agencies.[80] (Emphasis supplied)
As manager, conservator and overseer of the natural resources of
the State, DENR exercises supervision and control over alienable and
disposable public lands. DENR also exercises exclusive jurisdiction
on the management and disposition of all lands of the public
domain. Thus, DENR decides whether areas under water, like
foreshore or submerged areas of Manila Bay, should be reclaimed or
not. This means that PEA needs authorization from DENR before
PEA can undertake reclamation projects in Manila Bay, or in any part
of the country.
DENR also exercises exclusive jurisdiction over the disposition
of all lands of the public domain. Hence, DENR decides whether
reclaimed lands of PEA should be classified as alienable under
Sections 6[81] and 7[82] of CA No. 141. Once DENR decides that the
reclaimed lands should be so classified, it then recommends to the
President the issuance of a proclamation classifying the lands as
alienable or disposable lands of the public domain open to
disposition. We note that then DENR Secretary Fulgencio S. Factoran,
Jr. countersigned Special Patent No. 3517 in compliance with the
Revised Administrative Code and Sections 6 and 7 of CA No. 141.
In short, DENR is vested with the power to authorize the
reclamation of areas under water, while PEA is vested with the power
to undertake the physical reclamation of areas under water, whether
directly or through private contractors. DENR is also empowered to
classify lands of the public domain into alienable or disposable lands
subject to the approval of the President. On the other hand, PEA is
tasked to develop, sell or lease the reclaimed alienable lands of the
public domain.
Clearly, the mere physical act of reclamation by PEA of foreshore
or submerged areas does not make the reclaimed lands alienable or
disposable lands of the public domain, much less patrimonial lands of
PEA. Likewise, the mere transfer by the National Government of
lands of the public domain to PEA does not make the lands alienable
or disposable lands of the public domain, much less patrimonial lands
of PEA.
Absent two official acts a classification that these lands are
alienable or disposable and open to disposition and a declaration that
these lands are not needed for public service, lands reclaimed by PEA
remain inalienable lands of the public domain. Only such an official
classification and formal declaration can convert reclaimed lands into
alienable or disposable lands of the public domain, open to disposition
under the Constitution, Title I and Title III[83] of CA No. 141 and other
applicable laws.[84]
PEAs Authority to Sell Reclaimed Lands
PEA, like the Legal Task Force, argues that as alienable or
disposable lands of the public domain, the reclaimed lands shall be
disposed of in accordance with CA No. 141, the Public Land
Act. PEA, citing Section 60 of CA No. 141, admits that reclaimed
lands transferred to a branch or subdivision of the government shall
not be alienated, encumbered, or otherwise disposed of in a manner
affecting its title, except when authorized by Congress: x x
x.[85] (Emphasis by PEA)
In Laurel vs. Garcia,[86] the Court cited Section 48 of the Revised
Administrative Code of 1987, which states that
Sec. 48. Official Authorized to Convey Real Property. Whenever real
property of the Government is authorized by law to be conveyed, the
deed of conveyance shall be executed in behalf of the government by
the following: x x x.
Thus, the Court concluded that a law is needed to convey any real
property belonging to the Government. The Court declared that -
It is not for the President to convey real property of the government
on his or her own sole will. Any such conveyance must be
authorized and approved by a law enacted by the Congress. It
requires executive and legislative concurrence. (Emphasis supplied)
PEA contends that PD No. 1085 and EO No. 525 constitute the
legislative authority allowing PEA to sell its reclaimed lands. PD No.
1085, issued on February 4, 1977, provides that
The land reclaimed in the foreshore and offshore area of Manila
Bay pursuant to the contract for the reclamation and construction of
the Manila-Cavite Coastal Road Project between the Republic of the
Philippines and the Construction and Development Corporation of
the Philippines dated November 20, 1973 and/or any other contract
or reclamation covering the same area is hereby transferred,
conveyed and assigned to the ownership and administration of the
Public Estates Authority established pursuant to PD No.
1084; Provided, however, That the rights and interests of the
Construction and Development Corporation of the Philippines
pursuant to the aforesaid contract shall be recognized and respected.
Henceforth, the Public Estates Authority shall exercise the rights and
assume the obligations of the Republic of the Philippines
(Department of Public Highways) arising from, or incident to, the
aforesaid contract between the Republic of the Philippines and the
Construction and Development Corporation of the Philippines.
In consideration of the foregoing transfer and assignment, the Public
Estates Authority shall issue in favor of the Republic of the
Philippines the corresponding shares of stock in said entity with an
issued value of said shares of stock (which) shall be deemed fully
paid and non-assessable.
The Secretary of Public Highways and the General Manager of the
Public Estates Authority shall execute such contracts or agreements,
including appropriate agreements with the Construction and
Development Corporation of the Philippines, as may be necessary to
implement the above.
Special land patent/patents shall be issued by the Secretary of
Natural Resources in favor of the Public Estates Authority without
prejudice to the subsequent transfer to the contractor or his
assignees of such portion or portions of the land reclaimed or to be
reclaimed as provided for in the above-mentioned contract. On the
basis of such patents, the Land Registration Commission shall
issue the corresponding certificate of title. (Emphasis supplied)
On the other hand, Section 3 of EO No. 525, issued on February
14, 1979, provides that -
Sec. 3. All lands reclaimed by PEA shall belong to or be owned by
the PEA which shall be responsible for its administration,
development, utilization or disposition in accordance with the
provisions of Presidential Decree No. 1084. Any and all income that
the PEA may derive from the sale, lease or use of reclaimed lands
shall be used in accordance with the provisions of Presidential
Decree No. 1084.
 There is no express authority under either PD No. 1085 or EO
No. 525 for PEA to sell its reclaimed lands. PD No. 1085 merely
transferred ownership and administration of lands reclaimed from
Manila Bay to PEA, while EO No. 525 declared that lands reclaimed
by PEA shall belong to or be owned by PEA. EO No. 525 expressly
states that PEA should dispose of its reclaimed lands in accordance
with the provisions of Presidential Decree No. 1084, the charter of
PEA.
PEAs 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 PEAs
patrimonial lands.
PEA may also sell its alienable or disposable lands of the public
domain to private individuals since, with the legislative authority,
there is no longer any statutory prohibition against such sales and the
constitutional ban does not apply to individuals. PEA, however,
cannot sell any of its alienable or disposable lands of the public
domain to private corporations since Section 3, Article XII of the 1987
Constitution expressly prohibits such sales. The legislative authority
benefits only individuals. Private corporations remain barred from
acquiring any kind of alienable land of the public domain, including
government reclaimed lands.
The provision in PD No. 1085 stating that portions of the
reclaimed lands could be transferred by PEA to the contractor
or his assignees (Emphasis supplied) would not apply to private
corporations but only to individuals because of the constitutional
ban. Otherwise, the provisions of PD No. 1085 would violate both the
1973 and 1987 Constitutions.
The requirement of public auction in the sale of reclaimed lands
Assuming the reclaimed lands of PEA are classified as alienable
or disposable lands open to disposition, and further declared no longer
needed for public service, PEA would have to conduct a public
bidding in selling or leasing these lands. PEA must observe the
provisions of Sections 63 and 67 of CA No. 141 requiring public
auction, in the absence of a law exempting PEA from holding a public
auction.[88] Special Patent No. 3517 expressly states that the patent is
issued by authority of the Constitution and PD No. 1084,
supplemented by Commonwealth Act No. 141, as amended. This is an
acknowledgment that the provisions of CA No. 141 apply to the
disposition of reclaimed alienable lands of the public domain unless
otherwise provided by law. Executive Order No. 654,[89] which
authorizes PEA to determine the kind and manner of payment for the
transfer of its assets and properties, does not exempt PEA from the
requirement of public auction. EO No. 654 merely authorizes PEA to
decide the mode of payment, whether in kind and in installment, but
does not authorize PEA to dispense with public auction.
Moreover, under Section 79 of PD No. 1445, otherwise known as
the Government Auditing Code, the government is required to sell
valuable government property through public bidding. Section 79 of
PD No. 1445 mandates that
Section 79. When government property has become unserviceable
for any cause, or is no longer needed, it shall, upon application of
the officer accountable therefor, be inspected by the head of the
agency or his duly authorized representative in the presence of the
auditor concerned and, if found to be valueless or unsaleable, it may
be destroyed in their presence. If found to be valuable, it may be
sold at public auction to the highest bidder under the supervision of
the proper committee on award or similar body in the presence of the
auditor concerned or other authorized representative of the
Commission, after advertising by printed notice in the Official
Gazette, or for not less than three consecutive days in any
newspaper of general circulation, or where the value of the property
does not warrant the expense of publication, by notices posted for a
like period in at least three public places in the locality where the
property is to be sold. In the event that the public auction fails, the
property may be sold at a private sale at such price as may be fixed
by the same committee or body concerned and approved by the
Commission.
It is only when the public auction fails that a negotiated sale is allowed,
in which case the Commission on Audit must approve the selling
price.[90] The Commission on Audit implements Section 79 of the
Government Auditing Code through Circular No. 89-296[91] dated
January 27, 1989. This circular emphasizes that government assets
must be disposed of only through public auction, and a negotiated sale
can be resorted to only in case of failure of public auction.
At the public auction sale, only Philippine citizens are qualified
to bid for PEAs 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
In case of land reclamation or construction of industrial estates, the
repayment plan may consist of the grant of a portion or percentage of
the reclaimed land or the industrial estate constructed.
Although Section 302 of the Local Government Code does not contain
a proviso similar to that of the BOT Law, the constitutional restrictions
on land ownership automatically apply even though not expressly
mentioned in the Local Government Code.
Thus, under either the BOT Law or the Local Government Code,
the contractor or developer, if a corporate entity, can only be paid with
leaseholds on portions of the reclaimed land. If the contractor or
developer is an individual, portions of the reclaimed land, not
exceeding 12 hectares[96] of non-agricultural lands, may be conveyed
to him in ownership in view of the legislative authority allowing such
conveyance. This is the only way these provisions of the BOT Law
and the Local Government Code can avoid a direct collision with
Section 3, Article XII of the 1987 Constitution.
Registration of lands of the public domain
Finally, PEA theorizes that the act of conveying the ownership of
the reclaimed lands to public respondent PEA transformed such lands
of the public domain to private lands. This theory is echoed by
AMARI which maintains that the issuance of the special patent
leading to the eventual issuance of title takes the subject land away
from the land of public domain and converts the property into
patrimonial or private property. In short, PEA and AMARI contend
that with the issuance of Special Patent No. 3517 and the
corresponding certificates of titles, the 157.84 hectares comprising the
Freedom Islands have become private lands of PEA. In support of
their theory, PEA and AMARI cite the following rulings of the Court:
1. Sumail v. Judge of CFI of Cotabato,[97] where the Court
held
Once the patent was granted and the corresponding
certificate of title was issued, the land ceased to be part
of the public domain and became private property over
which the Director of Lands has neither control nor
jurisdiction.
2. Lee Hong Hok v. David,[98] where the Court declared -
After the registration and issuance of the certificate and
duplicate certificate of title based on a public land patent,
the land covered thereby automatically comes under the
operation of Republic Act 496 subject to all the
safeguards provided therein.
3. Heirs of Gregorio Tengco v. Heirs of Jose
Aliwalas,[99] where the Court ruled -
While the Director of Lands has the power to review
homestead patents, he may do so only so long as the land
remains part of the public domain and continues to be
under his exclusive control; but once the patent is
registered and a certificate of title is issued, the land
ceases to be part of the public domain and becomes
private property over which the Director of Lands has
neither control nor jurisdiction.
4. Manalo v. Intermediate Appellate Court,[100] where the
Court held
When the lots in dispute were certified as disposable on
May 19, 1971, and free patents were issued covering the
same in favor of the private respondents, the said lots
ceased to be part of the public domain and, therefore, the
Director of Lands lost jurisdiction over the same.
5.Republic v. Court of Appeals,[101] where the Court stated
 Proclamation No. 350, dated October 9, 1956, of
President Magsaysay legally effected a land grant to the
Mindanao Medical Center, Bureau of Medical Services,
Department of Health, of the whole lot, validly sufficient
for initial registration under the Land Registration
Act. Such land grant is constitutive of a fee simple title
or absolute title in favor of petitioner Mindanao Medical
Center.Thus, Section 122 of the Act, which governs the
registration of grants or patents involving public lands,
provides that Whenever public lands in the Philippine
Islands belonging to the Government of the United States
or to the Government of the Philippines are alienated,
granted or conveyed to persons or to public or private
corporations, the same shall be brought forthwith under
the operation of this Act (Land Registration Act, Act
496) and shall become registered lands.
The first four cases cited involve petitions to cancel the land
patents and the corresponding certificates of 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.
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 PEAs patent or certificates of title. In
fact, the thrust of the instant petition is that PEAs certificates of title
should remain with PEA, and the land covered by these certificates,
being alienable lands of the public domain, should not be sold to a
private corporation.
Registration of land under Act No. 496 or PD No. 1529 does not
vest in the registrant private or public ownership of the
land. Registration is not a mode of acquiring ownership but is merely
evidence of ownership previously conferred by any of the recognized
modes of acquiring ownership. Registration does not give the
registrant a better right than what the registrant had prior to the
registration.[102] The registration of lands of the public domain under
the Torrens system, by itself, cannot convert public lands into private
lands.[103]
Jurisprudence holding that upon the grant of the patent or
issuance of the certificate of title the alienable land of the public
domain automatically becomes private land cannot apply to
government units and entities like PEA. The transfer of the Freedom
Islands to PEA was made subject to the provisions of CA No. 141 as
expressly stated in Special Patent No. 3517 issued by then President
Aquino, to wit:
NOW, THEREFORE, KNOW YE, that by authority of the
Constitution of the Philippines and in conformity with the provisions
of Presidential Decree No. 1084, supplemented by Commonwealth
Act No. 141, as amended, there are hereby granted and conveyed
unto the Public Estates Authority the aforesaid tracts of land
containing a total area of one million nine hundred fifteen thousand
eight hundred ninety four (1,915,894) square meters; the technical
description of which are hereto attached and made an integral part
hereof. (Emphasis supplied)
Thus, the provisions of CA No. 141 apply to the Freedom Islands
on matters not covered by PD No. 1084. Section 60 of CA No. 141
prohibits, except when authorized by Congress, the sale of alienable
lands of the public domain that are transferred to government units or
entities. Section 60 of CA No. 141 constitutes, under Section 44 of PD
No. 1529, a statutory lien affecting title of the registered land even if
not annotated on the certificate of title.[104] Alienable lands of the
public domain held by government entities under Section 60 of CA
No. 141 remain public lands because they cannot be alienated or
encumbered unless Congress passes a law authorizing their
disposition. Congress, however, cannot authorize the sale to private
corporations of reclaimed alienable lands of the public domain
because of the constitutional ban. Only individuals can benefit from
such law.
The grant of legislative authority to sell public lands in
accordance with Section 60 of CA No. 141 does not automatically
convert alienable lands of the public domain into private or
patrimonial lands. The alienable lands of the public domain must be
transferred to qualified private parties, or to government entities not
tasked to dispose of public lands, before these lands can become
private or patrimonial lands. Otherwise, the constitutional ban will
become illusory if Congress can declare lands of the public domain as
private or patrimonial lands in the hands of a government agency
tasked to dispose of public lands. This will allow private corporations
to acquire directly from government agencies limitless areas of lands
which, prior to such law, are concededly public lands.
Under EO No. 525, PEA became the central implementing
agency of the National Government to reclaim foreshore and
submerged areas of the public domain. Thus, EO No. 525 declares that
EXECUTIVE ORDER NO. 525
Designating the Public Estates Authority as the Agency Primarily
Responsible for all Reclamation Projects
Whereas, there are several reclamation projects which are ongoing or
being proposed to be undertaken in various parts of the country
which need to be evaluated for consistency with national programs;
Whereas, there is a need to give further institutional support to the
Governments declared policy to provide for a coordinated,
economical and efficient reclamation of lands;
Whereas, Presidential Decree No. 3-A requires that all reclamation
of areas shall be limited to the National Government or any person
authorized by it under proper contract;
Whereas, a central authority is needed to act on behalf of the
National Government which shall ensure a coordinated and
integrated approach in the reclamation of lands;
Whereas, Presidential Decree No. 1084 creates the Public Estates
Authority as a government corporation to undertake reclamation of
lands and ensure their maximum utilization in promoting public
welfare and interests; and
Whereas, Presidential Decree No. 1416 provides the President with
continuing authority to reorganize the national government including
the transfer, abolition, or merger of functions and offices.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of
the Philippines, by virtue of the powers vested in me by the
Constitution and pursuant to Presidential Decree No. 1416, do
hereby order and direct the following:
Section 1. The Public Estates Authority (PEA) shall be primarily
responsible for integrating, directing, and coordinating all
reclamation projects for and on behalf of the National
Government. All reclamation projects shall be approved by the
President upon recommendation of the PEA, and shall be undertaken
by the PEA or through a proper contract executed by it with any
person or entity; Provided, that, reclamation projects of any national
government agency or entity authorized under its charter shall be
undertaken in consultation with the PEA upon approval of the
President.
xxx.
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, PEAs 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 PEAs 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 supplied)
Based on its legislative history, the phrase conveyed to any person in
Section 103 of PD No. 1529 includes conveyances of public lands to
public corporations.
Alienable lands of the public domain granted, donated, or
transferred to a province, municipality, or branch or subdivision of the
Government, as provided in Section 60 of CA No. 141, may be
registered under the Torrens System pursuant to Section 103 of PD
No. 1529. Such registration, however, is expressly subject to the
condition in Section 60 of CA No. 141 that the land shall not be
alienated, encumbered or otherwise disposed of in a manner affecting
its title, except when authorized by Congress. This provision refers to
government reclaimed, foreshore and marshy lands of the public
domain that have been titled but still cannot be alienated or
encumbered unless expressly authorized by Congress. The need for
legislative authority prevents the registered land of the public domain
from becoming private land that can be disposed of to qualified private
parties.
The Revised Administrative Code of 1987 also recognizes that
lands of the public domain may be registered under the Torrens
System. Section 48, Chapter 12, Book I of the Code states
Sec. 48. Official Authorized to Convey Real Property. Whenever real
property of the Government is authorized by law to be conveyed, the
deed of conveyance shall be executed in behalf of the government by
the following:
(1) x x x
(2) For property belonging to the Republic of the Philippines, but
titled in the name of any political subdivision or of any corporate
agency or instrumentality, by the executive head of the agency or
instrumentality. (Emphasis supplied)
Thus, private property purchased by the National Government for
expansion of a public wharf may be titled in the name of a government
corporation regulating port operations in the country. Private property
purchased by the National Government for expansion of an airport
may also be titled in the name of the government agency tasked to
administer the airport.Private property donated to a municipality for
use as a town plaza or public school site may likewise be titled in the
name of the municipality.[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 de-registration of land from the
Torrens System.
Private lands taken by the Government for public use under its
power of eminent domain become unquestionably part of the public
domain. Nevertheless, Section 85 of PD No. 1529 authorizes the
Register of Deeds to issue in the name of the National Government
new certificates of title covering such expropriated lands. Section 85
of PD No. 1529 states
Sec. 85. Land taken by eminent domain. Whenever any registered
land, or interest therein, is expropriated or taken by eminent domain,
the National Government, province, city or municipality, or any
other agency or instrumentality exercising such right shall file for
registration in the proper Registry a certified copy of the judgment
which shall state definitely by an adequate description, the particular
property or interest expropriated, the number of the certificate of
title, and the nature of the public use. A memorandum of the right or
interest taken shall be made on each certificate of title by the
Register of Deeds, and where the fee simple is taken, a new
certificate shall be issued in favor of the National Government,
province, city, municipality, or any other agency or instrumentality
exercising such right for the land so taken. The legal expenses
incident to the memorandum of registration or issuance of a new
certificate of title shall be for the account of the authority taking the
land or interest therein. (Emphasis supplied)
Consequently, lands registered under Act No. 496 or PD No. 1529 are
not exclusively private or patrimonial lands. Lands of the public
domain may also be registered pursuant to existing laws.
AMARI makes a parting shot that the Amended JVA is not a sale
to AMARI of the Freedom Islands or of the lands to be reclaimed from
submerged areas of Manila Bay. In the words of AMARI, the
Amended JVA is not a sale but a joint venture with a stipulation for
reimbursement of the original cost incurred by PEA for the earlier
reclamation and construction works performed by the CDCP under its
1973 contract with the Republic. Whether the Amended JVA is a sale
or a joint venture, the fact remains that the Amended JVA requires
PEA to cause the issuance and delivery of the certificates of title
conveying AMARIs 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 domain and are also inalienable, unless
converted pursuant to law into alienable or disposable lands of the
public domain. Historically, lands reclaimed by the government
are sui generis, not available for sale to private parties unlike other
alienable public lands. Reclaimed lands retain their inherent potential
as areas for public use or public service. Alienable lands of the public
domain, increasingly becoming scarce natural resources, are to be
distributed equitably among our ever-growing population. To insure
such equitable distribution, the 1973 and 1987 Constitutions have
barred private corporations from acquiring any kind of alienable land
of the public domain. Those who attempt to dispose of inalienable
natural resources of the State, or seek to circumvent the constitutional
ban on alienation of lands of the public domain to private corporations,
do so at their own risk.
We can now summarize our conclusions as follows:
1. The 157.84 hectares of reclaimed lands comprising the
Freedom Islands, now covered by certificates of title in
the name of PEA, are alienable lands of the public
domain. PEA may lease these lands to private
corporations but may not sell or transfer ownership of
these lands to private corporations. PEA may only sell
these lands to Philippine citizens, subject to the
ownership limitations in the 1987 Constitution and
existing laws.
2. The 592.15 hectares of submerged areas of Manila Bay
remain inalienable natural resources of the public domain
until classified as alienable or disposable lands open to
disposition and declared no longer needed for public
service. The government can make such classification
and declaration only after PEA has reclaimed these
submerged areas. Only then can these lands qualify as
agricultural lands of the public domain, which are the
only natural resources the government can alienate. In
their present state, the 592.15 hectares of submerged
areas are inalienable and outside the commerce of man.
3. Since the Amended JVA seeks to transfer to AMARI, a
private corporation, ownership of 77.34 hectares[110] of
the Freedom Islands, such transfer is void for being
contrary to Section 3, Article XII of the 1987
Constitution which prohibits private corporations from
acquiring any kind of alienable land of the public
domain.
4. Since the Amended JVA also seeks to transfer to AMARI
ownership of 290.156 hectares[111] of still submerged
 areas of Manila Bay, such transfer is void for being Joint Venture Agreement which is hereby declared NULL and
contrary to Section 2, Article XII of the 1987 VOID ab initio.
Constitution which prohibits the alienation of natural
resources other than agricultural lands of the public SO ORDERED.
domain. PEA may reclaim these submerged areas.
Thereafter, the government can classify the reclaimed
lands as alienable or disposable, and further declare them
no longer needed for public service. Still, the transfer of
such reclaimed alienable lands of the public domain to
AMARI will be void in view of Section 3, Article XII of
the 1987 Constitution which prohibits private
corporations from acquiring any kind of alienable land of
the public domain.
Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article
XII of the 1987 Constitution. Under Article 1409[112] 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