1.
Both parties recognize the existence of the Deed of Sale over the
G.R. No. 74833 January 21, 1991
THOMAS C. CHEESMAN, petitioner,
vs.
INTERMEDIATE APPELLATE COURT and ESTELITA PADILLA, respondents.
Estanislao L. Cesa, Jr. for petitioner.
Benjamin I. Fernandez for private respondent.
NARVASA, J.:p
This appeal concerns the attempt by an American citizen (petitioner Thomas Cheesman) to
annul — for lack of consent on his part — the sale by his Filipino wife (Criselda) of a
residential lot and building to Estelita Padilla, also a Filipino.
Thomas Cheesman and Criselda P. Cheesman were married on December 4, 1970 but have
been separated since February 15,1981. 1
On June 4, 1974, a "Deed of Sale and Transfer of Possessory Rights" was executed by
Armando Altares conveying a parcel of unregistered land and the house thereon (at No. 7
Neptune Street, Gordon Heights, Olongapo City) in favor of "Criselda P. Cheesman, of legal
age, Filipino citizen, married to Thomas Cheesman, and residing at Lot No. 1, Blk. 8,
Filtration Road, Sta. Rita, Olongapo City . . ." 2 Thomas Cheesman, although aware of the
deed, did not object to the transfer being made only to his wife. 3
Thereafter—and again with the knowledge of Thomas Cheesman and also without any protest
by him—tax declarations for the property purchased were issued in the name only of Criselda
Cheesman and Criselda assumed exclusive management and administration of said property,
leasing it to tenants. 4 On July 1, 1981, Criselda Cheesman sold the property to Estelita M.
Padilla, without the knowledge or consent of Thomas Cheesman. 5 The deed described
Criselda as being" . . . of legal age, married to an American citizen,. . ." 6
Thirty days later, or on July 31, 1981, Thomas Cheesman brought suit in the Court of First
Instance at Olongapo City against his wife, Criselda, and Estelita Padilla, praying for the
annulment of the sale on the ground that the transaction had been executed without his
knowledge and consent. 7 An answer was filed in the names of both defendants, alleging that
(1) the property sold was paraphernal, having been purchased by Criselda with funds
exclusively belonging to her ("her own separate money"); (2) Thomas Cheesman, being an
American, was disqualified to have any interest or right of ownership in the land; and (3)
Estelita Padilla was a buyer in good faith. 8
During the pre-trial conference, the parties agreed upon certain facts which were subsequently
set out in a pre-trial Order dated October 22, 1981, 9 as follows:
residential house located at No. 7 Granada St., Gordon Heights, Olongapo
City, which was acquired from Armando Altares on June 4, 1974 and sold
by defendant Criselda Cheesman to Estelita Padilla on July 12, 1981; and
2. That the transaction regarding the transfer of their property took place
during the existence of their marriage as the couple were married on
December 4, 1970 and the questioned property was acquired sometime on
June 4,1974.
The action resulted in a judgment dated June 24, 1982, 10 declaring void ab initio the sale
executed by Criselda Cheesman in favor of Estelita M. Padilla, and ordering the delivery of
the property to Thomas Cheesman as administrator of the conjugal partnership property, and
the payment to him of P5,000.00 as attorney's fees and expenses of litigation. 11
The judgment was however set aside as regards Estelita Padilla on a petition for relief filed by
the latter, grounded on "fraud, mistake and/or excusable negligence" which had seriously
impaired her right to present her case adequately. 12 "After the petition for relief from
judgment was given due course," according to petitioner, "a new judge presided over the
case." 13
Estelita Padilla filed a supplemental pleading on December 20, 1982 as her own answer to the
complaint, and a motion for summary judgment on May 17, 1983. Although there was initial
opposition by Thomas Cheesman to the motion, the parties ultimately agreed on the rendition
by the court of a summary judgment after entering into a stipulation of facts, at the hearing of
the motion on June 21, 1983, the stipulation being of the following tenor: 14
(1) that the property in question was bought during the existence of the
marriage between the plaintiff and the defendant Criselda P. Cheesman;
(2) that the property bought during the marriage was registered in the
name of Criselda Cheesman and that the Deed of Sale and Transfer of
Possessory Rights executed by the former owner-vendor Armando Altares
in favor of Criselda Cheesman made no mention of the plaintiff;
(3) that the property, subject of the proceedings, was sold by defendant
Criselda Cheesman in favor of the other defendant Estelita M. Padilla,
without the written consent of the plaintiff.
Obviously upon the theory that no genuine issue existed any longer and there was hence no
need of a trial, the parties having in fact submitted, as also stipulated, their respective
memoranda each praying for a favorable verdict, the Trial Court 15 rendered a "Summary
Judgment" dated August 3, 1982 declaring "the sale executed by . . . Criselda Cheesman in
favor of . . . Estelita Padilla to be valid," dismissing Thomas Cheesman's complaint and
ordering him "to immediately turn over the possession of the house and lot subject of . . . (the)
case to . . . Estelita Padilla . . ." 16
The Trial Court found that —
 1) the evidence on record satisfactorily overcame the disputable
presumption in Article 160 of the Civil Code—that all property of the
marriage belongs to the conjugal partnership "unless it be proved that it
pertains exclusively to the husband or to the wife"—and that the
immovable in question was in truth Criselda's paraphernal property;
2) that moreover, said legal presumption in Article 160 could not apply
"inasmuch as the husband-plaintiff is an American citizen and therefore
disqualified under the Constitution to acquire and own real properties; and
3) that the exercise by Criselda of exclusive acts of dominion with the
knowledge of her husband "had led . . . Estelita Padilla to believe that the
properties were the exclusive properties of Criselda Cheesman and on the
faith of such a belief she bought the properties from her and for value,"
and therefore, Thomas Cheesman was, under Article 1473 of the Civil
Code, estopped to impugn the transfer to Estelita Padilla.
Thomas Cheesman appealed to the Intermediate Appellate Court. There he assailed the Trial
Court acts (1) of granting Estelita Padilla's petition for relief, and its resolution of matters not
subject of said petition; (2) of declaring valid the sale to Estelita Padilla despite the lack of
consent thereto by him, and the presumption of the conjugal character of the property in
question pursuant to Article 160 of the Civil Code; (3) of disregarding the judgment of June
24, 1982 which, not having been set aside as against Criselda Cheesman, continued to be
binding on her; and (4) of making findings of fact not supported by evidence. All of these
contentions were found to be without merit by the Appellate Tribunal which, on January 7,
1986, promulgated a decision (erroneously denominated, "Report") 17 affirming the "Summary
Judgment complained of," "having found no reversible error" therein.
Once more, Thomas Cheesman availed of the remedy of appeal, this time to this Court. Here,
he argues that it was reversible error for the Intermediate Appellate Court —
1) to find that the presumption that the property in question is conjugal in accordance with
Article 160 had been satisfactorily overcome by Estelita Padilla; 18
2) to rule that Estelita Padilla was a purchaser of said property in good faith, it appearing:
a) that the deed by which the property was conveyed to Criselda
Cheesman described her as "married to Thomas C. Cheesman," as well as
the deed by which the property was later conveyed to Estelita Padilla by
Criselda Cheesman also described her as "married to an American citizen,"
and both said descriptions had thus "placed Estelita on knowledge of the
conjugal nature of the property;" and
b) that furthermore, Estelita had admitted to stating in the deed by which
she acquired the property a price much lower than that actually paid "in
order to avoid payment of more obligation to the government;" 19
3) to decline to declare that the evidence did not warrant the grant of Estelita Padilla's petition
for relief on the ground of "fraud, mistake and/or excusable negligence;" 20
4) to hold that Thomas Cheesman had waived his objection to Estelita's petition for relief by
failing to appeal from the order granting the same;
5) to accord to Estelita Padilla a relief other than that she had specifically prayed for in her
petition for relief, ie., "the restoration of the purchase price which Estelita allegedly paid to
Criselda;" 21 and
6) to fail to declare that Thomas Cheesman's citizenship is not a bar to his action to recover the
lot and house for the conjugal partnership. 22
Such conclusions as that (1) fraud, mistake or excusable negligence existed in the premises
justifying relief to Estelita Padilla under Rule 38 of the Rules of Court, or (2) that Criselda
Cheesman had used money she had brought into her marriage to Thomas Cheesman to
purchase the lot and house in question, or (3) that Estelita Padilla believed in good faith that
Criselda Cheesman was the exclusive owner of the property that she (Estelita) intended to and
did in fact buy—derived from the evidence adduced by the parties, the facts set out in the
pleadings or otherwise appearing on record—are conclusions or findings of fact. As
distinguished from a question of law—which exists "when the doubt or difference arises as to
what the law is on a certain state of facts" — "there is a question of fact when the doubt or
difference arises as to the truth or the falsehood of alleged facts;" 23 or when the "query
necessarily invites calibration of the whole evidence considering mainly the credibility of
witnesses, existence and relevancy of specific surrounding circumstances, their relation; to
each other and to the whole and the probabilities of the situation." 24
Now, it is axiomatic that only questions of law, distinctly set forth, may be raised in a petition
for the review oncertiorari of a decision of the Court of Appeals presented to this Court. 25 As
everyone knows or ought to know, the appellate jurisdiction of this Court is limited to
reviewing errors of law, accepting as conclusive the factual findings of the lower court upon
its own assessment of the evidence. 26 The creation of the Court of Appeals was precisely
intended to take away from the Supreme Court the work of examining the evidence, and
confine its task to the determination of questions which do not call for the reading and study of
transcripts containing the testimony of witnesses. 27 The rule of conclusiveness of the factual
findings or conclusions of the Court of Appeals is, to be sure, subject to certain
exceptions, 28none of which however obtains in the case at bar.
It is noteworthy that both the Trial Court and the Intermediate Appellate Court reached the
same conclusions on the three (3) factual matters above set forth, after assessment of the
evidence and determination of the probative value thereof. Both Courts found that the facts on
record adequately proved fraud, mistake or excusable negligence by which Estelita Padilla's
rights had been substantially impaired; that the funds used by Criselda Cheesman was money
she had earned and saved prior to her marriage to Thomas Cheesman, and that Estelita Padilla
did believe in good faith that Criselda Cheesman was the sole owner of the property in
question. Consequently, these determinations of fact will not be here disturbed, this Court
having been cited to no reason for doing so.
These considerations dispose of the first three (3) points that petitioner Cheesman seeks to
make in his appeal. They also make unnecessary an extended discussion of the other issues
raised by him. As to them, it should suffice to restate certain fundamental propositions.
An order of a Court of First Instance (now Regional Trial Court) granting a petition for relief SO ORDERED.
under Rule 38 is interlocutory and is not appealable. Hence, the failure of the party who
opposed the petition to appeal from said order, or his participation in the proceedings Cruz, Gancayco, Griño-Aquino and Medialdea, JJ., concur.
subsequently had, cannot be construed as a waiver of his objection to the petition for relief so
as to preclude his raising the same question on appeal from the judgment on the merits of the
main case. Such a party need not repeat his objections to the petition for relief, or perform any
act thereafter (e.g., take formal exception) in order to preserve his right to question the same
Barsobia vs. Cuenco, No. L-33048, 113 SCRA 547 , April 16, 1982
eventually, on appeal, it being sufficient for this purpose that he has made of record "the action
which he desires the court to take or his objection to the action of the court and his grounds
therefor." 29

Again, the prayer in a petition for relief from judgment under Rule 38 is not necessarily the Barsobia vs. Cuenco, 113 SCRA 547, G.R. No. L-33048 April 16, 1982
same prayer in the petitioner's complaint, answer or other basic pleading. This should be
obvious. Equally obvious is that once a petition for relief is granted and the judgment subject
thereof set aside, and further proceedings are thereafter had, the Court in its judgment on the
merits may properly grant the relief sought in the petitioner's basic pleadings, although EPIFANIA SARSOSA VDA. DE BARSOBIA and PACITA W. VALLAR, petitioners,
different from that stated in his petition for relief.
vs.
Finally, the fundamental law prohibits the sale to aliens of residential land. Section 14, Article
XIV of the 1973 Constitution ordains that, "Save in cases of hereditary succession, no private VICTORIANO T. CUENCO, respondent.
land shall be transferred or conveyed except to individuals, corporations, or associations
qualified to acquire or hold lands of the public domain." 30 Petitioner Thomas Cheesman was,
of course, charged with knowledge of this prohibition. Thus, assuming that it was his intention
that the lot in question be purchased by him and his wife, he acquired no right whatever over
the property by virtue of that purchase; and in attempting to acquire a right or interest in land,
vicariously and clandestinely, he knowingly violated the Constitution; the sale as to him was
MELENCIO-HERRERA, J.:
null and void. 31 In any event, he had and has no capacity or personality to question the
subsequent sale of the same property by his wife on the theory that in so doing he is merely
exercising the prerogative of a husband in respect of conjugal property. To sustain such a
theory would permit indirect controversion of the constitutional prohibition. If the property
were to be declared conjugal, this would accord to the alien husband a not insubstantial Sought to be reviewed herein is the judgment dated August 18, 1970, of the Court of Appeals,
interest and right over land, as he would then have a decisive vote as to its transfer or 1 rendered in CA-G.R. No. 41318-R, entitled "Victoriano T. Cuenco, Plaintiff-appellant, vs.
disposition. This is a right that the Constitution does not permit him to have. Epifania Sarsosa Vda. de Barsobia and Pacita W. Vallar, Defendants- appellees, " declaring
Victoriano T. Cuenco (now the respondent) as the absolute owner of the coconut land in
As already observed, the finding that his wife had used her own money to purchase the question.
property cannot, and will not, at this stage of the proceedings be reviewed and overturned. But
even if it were a fact that said wife had used conjugal funds to make the acquisition, the
considerations just set out militate, on high constitutional grounds, against his recovering and
holding the property so acquired or any part thereof. And whether in such an event, he may The lot in controversy is a one-half portion (on the northern side) of two adjoining parcels of
recover from his wife any share of the money used for the purchase or charge her with coconut land located at Barrio Mancapagao, Sagay, Camiguin, Misamis Oriental (now
unauthorized disposition or expenditure of conjugal funds is not now inquired into; that would Camiguin province), with an area of 29,150 square meters, more or less. 2
be, in the premises, a purely academic exercise. An equally decisive consideration is that
Estelita Padilla is a purchaser in good faith, both the Trial Court and the Appellate Court
having found that Cheesman's own conduct had led her to believe the property to be exclusive
property of the latter's wife, freely disposable by her without his consent or intervention. An The entire land was owned previously by a certain Leocadia Balisado, who had sold it to the
innocent buyer for value, she is entitled to the protection of the law in her purchase, spouses Patricio Barsobia (now deceased) and Epifania Sarsosa, one of the petitioners herein.
particularly as against Cheesman, who would assert rights to the property denied him by both They are Filipino citizens.
letter and spirit of the Constitution itself.

WHEREFORE, the appealed decision is AFFIRMED, with costs against petitioner.

On September 5, 1936, Epifania Sarsosa then a widow, sold the land in controversy to a 2. Declaring the two Deeds of Sale, Exhibits A and B, respectively, inexistent and void from
Chinese, Ong King Po, for the sum of P1,050.00 (Exhibit "B"). Ong King Po took actual the beginning; and
possession and enjoyed the fruits thereof.

3. Declaring defendant Pacita W. Vallar as the lawful owner and possessor of the portion of
On August 5, 1961, Ong King Po sold the litigated property to Victoriano T. Cuenco land she bought from Emeteria Barsobia (pp. 57, 67, Record.) 3
(respondent herein), a naturalized Filipino, for the sum of P5,000.00 (Exhibit "A").
Respondent immediately took actual possession and harvested the fruits therefrom.

On appeal, the Court of Appeals reversed the aforementioned Decision and decreed instead
that respondent was the owner of the litigated property, thus:
On March 6, 1962, Epifania "usurped" the controverted property, and on July 26, 1962,
Epifania (through her only daughter and child, Emeteria Barsobia), sold a one-half (1/2)
portion of the land in question to Pacita W. Vallar, the other petitioner herein (Exhibit "2").
Epifania claimed that it was not her intention to sell the land to Ong King Po and that she xxx xxx xxx
signed the document of sale merely to evidence her indebtedness to the latter in the amount of
P1,050.00. Epifania has been in possession ever since except for the portion sold to the other
petitioner Pacita.
In view of all the foregoing considerations, the judgment appealed from is hereby reversed. In
lieu thereof, we render judgment:
On September 19, 1962, respondent filed a Forcible Entry case against Epifania before the
Municipal Court of Sagay, Camiguin. The case was dismissed for lack of jurisdiction since, as
the laws then stood, the question of possession could not be properly determined without first
settling that of ownership. (a) Declaring the plaintiff-appellant Victoriano T. Cuenco the absolute owner of the land in
question, with the right of possession thereof;

On December 27, 1966, respondent instituted before the Court of First Instance of Misamis
Oriental a Complaint for recovery of possession and ownership of the litigated land, against (b) Ordering the defendants-appellees to restore the possession of said land to the plaintiff;
Epifania and Pacita Vallar (hereinafter referred to simply as petitioners).

(c) Dismissing the defendants' counterclaim;

In their Answer below, petitioners insisted that they were the owners and possessors of the
litigated land; that its sale to Ong King Po, a Chinese, was inexistent and/or void ab initio; and
that the deed of sale between them was only an evidence of Epifania's indebtedness to Ong
King Po. (d) Condemning the defendants to pay to the plaintiff the sum of

P10,000.00 representing the latter's share from the sale of copra which he failed to receive
since March, 1962 when he was deprived of his possession over the land, and which
The trial Court rendered judgment: defendants illegally appropriated it to their own use and benefit, plus legal interest from the
filing of the complaint until fully paid; plus P2,000.00 representing expenses and attorney's
fees;

1. Dismissing the complaint with costs against plaintiff (respondent herein).

(e) Sentencing the defendants to pay the costs.


SO ORDERED. 4
Following the denial of their Motion for Reconsideration, petitioners filed the instant Petition
for Review on certiorari with this Court on January 21, 1971. Petitioners claim that the Court
of Appeals erred:
I. ... when it reversed the judgment of the trial court declaring petitioner Pacita W. Vallar as the
lawful possessor and owner of the portion of land she purchased from Emeteria Barsobia, not
a party to this case, there being no evidence against her.
II ... when it included petitioner Pacita W. Vallar to pay P10,000.00, with legal interest from
the filing of the complaint, representing respondent's share in the harvest and to pay the costs,
there being no evidence against her.
III. ... when it condemned petitioners to pay P2,000.00 representing expenses and attorney's
fees, there being no factual, legal and equitable justification.
IV. ... in not applying the rule on pari delicto to the facts of the case or the doctrine
enunciated ... in the case of Philippine Banking Corporation vs. Lui She, L-17587, September
12, 1967, to ... Petitioner Epifania Sarsosa Vda. de Barsobia.
V. ... in denying, for lack of sufficient merits, petitioners' motion for rehearing or
reconsideration of its decision. 5
As the facts stand, a parcel of coconut land was sold by its Filipino owner, petitioner Epifania,
to a Chinese, Ong King Po, and by the latter to a naturalized Filipino, respondent herein. In the
meantime, the Filipino owner had unilaterally repudiated the sale she had made to the Chinese
and had resold the property to another Filipino. The basic issue is: Who is the rightful owner
of the property?
There should be no question that the sale of the land in question in 1936 by Epifania to Ong
King Po was inexistent and void from the beginning (Art. 1409 [7], Civil Code) 6 because it
was a contract executed against the mandatory provision of the 1935 Constitution, which is an
expression of public policy to conserve lands for the Filipinos. Said provision reads:
Save in cases of hereditary succession, no private agricultural land shall be transferred or
assigned except to individuals, corporations, or associations, qualified to acquire or hold lands
of the public domain. 7
Had this been a suit between Epifania and Ong King Po, she could have been declared entitled
to the litigated land on the basis, as claimed, of the ruling in Philippine Banking Corporation
vs. Lui She, 8 reading:
... For another thing, and this is not only cogent but also important. Article 1416 of the Civil
Code provides as an exception to the rule on pari delicto that when the agreement is not illegal
per se but is merely prohibited, and the prohibition by the law is designed for the protection of
the plaintiff, he may, if public policy is thereby enhanced, recover what he has sold or
delivered. ...
But the factual set-up has changed. The litigated property is now in the hands of a naturalized
Filipino. It is no longer owned by a disqualified vendee. Respondent, as a naturalized citizen,
was constitutionally qualified to own the subject property. There would be no more public
policy to be served in allowing petitioner Epifania to recover the land as it is already in the
hands of a qualified person. Applying by analogy the ruling of this Court in Vasquez vs. Giap
and Li Seng Giap & Sons: 9
... if the ban on aliens from acquiring not only agricultural but also urban lands, as construed
by this Court in the Krivenko case, is to preserve the nation's lands for future generations of
Filipinos, that aim or purpose would not be thwarted but achieved by making lawful the
acquisition of real estate by aliens who became Filipino citizens by naturalization.
While, strictly speaking, Ong King Po, private respondent's vendor, had no rights of ownership
to transmit, it is likewise inescapable that petitioner Epifania had slept on her rights for 26
years from 1936 to 1962. By her long inaction or inexcusable neglect, she should be held
barred from asserting her claim to the litigated property (Sotto vs. Teves, 86 SCRA 157
[1978]).
Laches has been defined as the failure or neglect, for an unreasonable and unexplained length
of time, to do that which by exercising due diligence could or should have been done earlier; it
is negligence or omission to assert a right within a reasonable time, warranting a presumption
that the party entitled to assert it either has abandoned it or declined to assert it. (Tijam, et al. G.R. No. L-3676, Vasquez v. Li Seng Giap and Sons, 96 Phil. 447
vs. Sibonghanoy, et al., No. L-21450, April 15, 1968, 23 SCRA 29, 35). (cited in Sotto vs.
Teves, 86 SCRA 154 [1978]).
Republic of the Philippines

SUPREME COURT
Respondent, therefore, must be declared to be the rightful owner of the property. Manila

EN BANC
The award of actual damages in respondent's favor of P10,000.00, as well as of attorney's fees
and expenses of litigation of P2,000.00, is justified. Respondent was deprived of the
possession of his land and the enjoyment of its fruits from March, 1962. The Court of Appeals January 31, 1955
fixed respondent's share of the sale of copra at P10,000.00 for eight years at four (4) harvests a
year. The accuracy of this finding has not been disputed.
G.R. No. L-3676

SOCORRO VASQUEZ, plaintiff-appellant,

However, we find merit in the assigned error that petitioner, Pacita Vallar, should not be held
vs.
also liable for actual damages to respondent. In the absence of contrary proof, she, too, must
be considered as a vendee in good faith of petitioner Epifania. LI SENG GIAP and LI SENG GIAP & SONS, defendants-appellees.

Jose S. Sarte for appellant.

The award of attorney's fees and litigation expenses in the sum of P2,000.00 in respondent's
favor is in order considering that both petitioners compelled respondent to litigate for the Lee, Orendain and Guzman for appellees.
protection of his interests. Moreover, the amount is reasonable. 10

PADILLA, J.:

WHEREFORE, except for that portion holding petitioner, Pacita W. Vallar, also liable for
damages of P10,000.00, the appealed judgment is hereby affirmed. This is an action to rescind the sale of a parcel of land together with the improvements erected

thereon, described in the complaint, which was sold by the plaintiff to the defendant Li Seng

Giap on 22 January 1940, on the ground that the vendee was an alien and under the
Costs against petitioners.
Constitution incapable to own and hold title to lands. The case was decided upon the following

stipulation of facts:
SO ORDERED.
Plaintiff and defendants in the above-entitled case, by their respective attorneys, hereby

stipulate and agree that the facts involved in this litigation are as follows:
Teehankee (Chairman), Makasiar, Fernandez, Guerrero and Plana, JJ., concur.
That plaintiff and defendant Li Seng Giap are, and were at all times mentioned herein, of legal That defendant Li Seng Giap was duly naturalized as a Filipino citizen on May 10,

age and residents of the City of Manila, Philippines; that defendant Li Seng Giap & Sons, Inc., 1941, under Certificate of Naturalization No. 515, the records of which were duly

is a corporation duly organized and existing under and by virtue of the laws of the Philippines, reconstituted under an order of this Honorable Court in Case No. R-603 dated May

with principal office in the City of Manila, Philippines. 24, 1946.

II. V.

That on January 22, 1940, plaintiff sold and transferred to defendant Li Seng Giap, then That defendant Li Seng Giap & Sons, Inc., is now a Filipino corporation, 96.67 per

Chinese citizen, for the sum of P14,500, a parcel of land together with a house of strong cent of its stock being owned by Filipinos, and duly authorized by its articles of

materials existing thereon, more particularly bounded and described as follows: incorporation to own, acquire or dispose of real properties.

A PARCEL OF LAND (Lot No. 22-A of the subdivision plan Psd-15360, being a VI.

portion of Lot No. 22, Block No. 2809 of the Cadastral survey of Manila, G.L.R.O.
That the following are the names and respective citizenship and shareholdings of the
Cadastral Record No. 192), situated in the District of Tondo, City of Manila.
present stockholders of Li Seng Giap & Sons, Inc:
Bounded on the NE. by lot No. 23, Block No. 2809, on the SE. by Lot No. 22-B,

Block No. 2809; on the SW. by Lot No. 21, Block No. 2809; and on the NW. by Names Citizenship No. of Shares Per cent Total Amount.
Calle Magdalena; * * * containing an area of four hundred twenty-three square

meters and forty-five square decimeters (423.45) more or less. (Assessed Value — Li Seng Giap Filipino 3,400 56.67 P340,000.00 Tang Ho de Li Seng Giap Filipino

P15,579.00). 1,200 20.00 120,000.00 William Lee Filipino 200 3.33 20,000.00 Henry Lee

Filipino 200 3.33 20,000.00 Thomas J. Lee Filipino 200 3.33 20,000.00 Sofia Lee
III. Teehankee Filipino 200 3.33 20,000.00 Julian M. Lee Filipino 200 3.33 20,000.00

Anthony P. Lee Chinese 200 3.33 20,000.00 6,000 100.00% P600,000.00.

That on August 21, 1940, defendant Li Seng Giap sold and transferred unto

defendant Li Seng Giap & Sons, Inc., whose shareholdings then were owned by VII.
Chinese citizens, for the same sum of P14,500, the above-mentioned parcel, together

with the improvements thereon, and duly registered under Transfer Certificate of That Henry Lee was duly naturalized as a Filipino citizen on October 21, 1936,

Title No. 59684 of the Office of the Register of Deeds for the city of Manila on under Certificate of Naturalization No. 352, the records of which were duly

August 23, 1940. reconstituted under an order of this Honorable Court in Case No. R-407 dated May

24, 1946.
IV.
 VIII. LEE, ORENDAIN, & GUZMAN Counsel for the Defendants 60 Novaliches St.,

Manila.
That Thomas J. Lee was duly naturalized as a Filipino citizen on May 10, 1941,

under Certificate of Naturalization No. 516, the records of which were duly By: (Sgd.) LEONARDO M. GUZMAN

reconstituted under an order of this Honorable Court in Case No. R-604 dated May
The Court rendered judgment dismissing the complaint with cost against the plaintiff. She has
24, 1946.
appealed.

IX.
In Caoile vs. Yu Chiao, 49 Off. Gaz., 4321; Talento vs. Makiki, 49 Off. Gaz., 4331; Bautista

That William Lee was duly naturalized as a Filipino citizen on November 1, 1948, vs. Uy49 Off. Gaz., 4331; Rellosa vs. Gaw Chee, 49 Off. Gaz., 4345 and Mercado vs. Go Bio,

under Certificate of Naturalization No. 2 of the Court of First Instance of Daet, 49 Off. Gaz., 5360, the majority of this Court has ruled that in Sales of real estate to aliens

Camarines Norte. incapable of holding title thereto by virtue of the provisions of the Constitution [[1]]both the

vendor and the vendee are deemed to have committed the constitutional violation and being
X.
thus in pari delicto the courts will not afford protection to either party.[[2]] From this ruling

three Justices dissented.[[3]]

That Sofia Lee Teehankee is a Filipino citizen being married to Dr. Rafael

Teehankee, a Filipino citizen.

The action is not of rescission because it is not postulated upon any of the grounds provided

XI.
That Julia M. Lee and Charles Lee are both Filipinos by operation of law as they
were both minors when their father, Li Seng Giap, became a Filipino citizen on May
10, 1941.
for in Article 1291 of the old Civil Code and because the action of rescission involves lesion
or damage and seeks to repair it. It is an action for annulment under Chapter VI, Title II, Book
II, on nullity of contracts, based on a defect in the contract which invalidates it independently
of such lesion or damages. [[4]] It is very likely that the majority of this Court proceeded upon
that theory when it applied the in pari delictorule referred to above.

Manila, Philippines, September 7, 1949. In the United States the rule is that in a sale of real estate to an alien disqualified to hold title

thereto the vendor divests himself of the title to such real estate and has no recourse against
Respectfully Submitted:
the vendee despite the latter's disability on account of alienage to hold title to such real estate

(Sgd.) JOSE S. SARTE Counsel for the Plaintiff Room 213 Central Hotel, Manila. and the vendee may hold it against the whole except as against the State. It is only the State

that is entitled by proceedings in the nature ofoffice found to have a forfeiture or escheat
declared against the vendee who is incapable of holding title to the real estate sold and Appellant argues that if at the time of the conveyance of the real property the appellee was

conveyed to him.[[5]] incapable of holding title to such real estate, the contract of sale was null or void and may be

annulled, and his subsequent naturalization as a Filipino citizen cannot retroact to the date of
However, if the State does not commence such proceedings and in the meantime the alien
the conveyance to make it lawful and valid. However, if the ban on aliens from acquiring not
becomes naturalized citizen the State is deemed to have waived its right to escheat the real
only agricultural but also urban lands, as construed by this Court in the Krivenko case, is to
property and the title of the alien thereto becomes lawful and valid as of the date of its
preserve the nation's lands for future generations of Filipinos, that aim or purpose would not
conveyance or transfer to him. [[6]] The Rule in the United States that in a sale of real estate to
be thwarted but achieved by making lawful the acquisition of real estate by aliens who became
an alien disqualified to hold title thereto, the vendor divests himself of the title to such real
Filipino citizens by naturalization. The title to the parcel of land of the vendee, a naturalized
estate and is not permitted to sue for the annulment of his contract, is also the rule under the
Filipino citizen, being valid that of the domestic corporation to which the parcel of land has
Civil Code. * * *Article 1302 of the old Civil Code provides: * * *Persons sui juris cannot,
been transferred, must also be valid, 96.67 per cent of its capital stock being owned by
however, avail themselves of the incapacity of those with whom they contracted; * * *.".
Filipinos.

Manresa's comment on this clause of article 1302 of the Civil Code is as follows:
The judgment appealed from is affirmed, without costs.

Irresponsabilidad del defecto alegada.— Es la segunda de las condiciones necesarias para el

Paras, C.J., Pablo, Bengzon, Montemayor, Reyes, A., Jugo, Bautista Angelo, and Labrador,
ejercicio de la accion. Algunos la expresan diciendo que solo puede intrenar aquella el
JJ., concur.
perjudicado, pero esta expresion puede conducir a ideas equivocadas, ya quela nulidad es

independiente de la lesion, como declara el art. 1.300, y es licito al favorecido Separate Opinions

economicamente por el contrato pedir la nulidad basandose en causas a el no imputables, y en

REYES, J.B.L., J., concurring:
cambio no autoriza la ley el caso inverso.

I fully concur with the opinion of Justice Padilla, but wish to stress, as an additional reason for
Sencilla la regla contenida en el parrafo segundo de este articulo,puede complicarse cuando
the decision in the present case, that when this action was instituted in 1948, the disability of
coexisten dos defectos del contrato, comopuede suceder, derivandose a veces de un mismo
the original vendee had been already removed, since he was naturalized in 1941; and that the
hecho, verbigracia,el contrato celebrado con un incapaz por quien ignora que lo es: eneste
stockholders of the second transferee, Li Seng Giap & Sons, Inc., who hold more than 60 per
ejemplo es indudable que la persona capaz no podra pedir lanulidad fundado en la incapacidad
cent of its capital stock, had likewise become Filipino citizens before, and not after, the action
de la otra, pero si alegar elerror o el dolo que padeciera si las circunstancias del sujetoeran de
to annul was filed.
decisiva influencia en el contrato. (Supra, pp.709-709.)

G.R. No. L-29663 August 20, 1990

GREGORIO LLANTINO and BELINDA LLANTINO assisted by husband Napoleon
Barba, plaintiffs-appellants,
vs.
CO LIONG CHONG alias JUAN MOLINA, defendant-appellee.
Delfin de Vera for plaintiffs-appellants.
Antonio G. Sosito for defendant-appellee.
PARAS, J.:
This is an appeal perfected before the effectivity of Republic Act 5440, from the decision * of
the Court of First Instance of Catanduanes in Civil Case No. 611, to quiet title with damages,
entitled Gregorio Llantino, et al. vs. Cong Liong Chong alias Juan Molina, dismissing the
complaint and declaring that the contract of lease entered into between the plaintiffs and the
defendant valid and in accordance with law.
The facts of the case as summarized by the trial court are as follows:
Plaintiffs (petitioners herein) aver that they are the owners of a commercial-residential land
situated in the municipality of Virac, Catanduanes, described in paragraph 2 of the complaint,
which sometime in 1954 they leased to the defendant (private respondent) who was then a
Chinese national and went by the name of Co Liong Chong for a period of thirteen (13) years
for the sum of P6,150.00 for the whole period. The defendant was placed in possession of the
property but knowing that the period of the least would end with the year 1967, petitioners
requested private respondent for a conference but the latter did not honor the request and
instead he informed the petitioners that he had already constructed a commercial building on
the land worth P50,000.00; that the lease contract was for a period of sixty (60) years, counted
from 1954; and that he is already a Filipino citizen. The claim of Chong came as a surprise to
the Llantinos because they did not remember having agreed to a sixty-year lease agreement as
that would virtually make Chong the owner of the realty which, as a Chinese national, he had
no right to own and neither could he have acquired such ownership after naturalization
subsequent to 1954. On December 16, 1967, in order to avoid a court litigation the Llantinos
once more invited Chong to a conference about the matter but again Chong ignored the
invitation. (Rollo, p. 48; Appellant's Brief, p. 12)
Hence, on January 10, 1968, the Llantinos filed their complaint to quiet title with damages
before the Court of First Instance of Catanduanes (Rollo, p. 12; Record on Appeal, pp. 1-4).
After Chong has filed an answer to the complaint and the Llantinos their reply, (Rollo, p. 12;
Record on Appeal, pp. 9-10) the trial court set the case for pre-trial and trial for April 2, 1968
(Rollo, p. 12; Record on Appeal, pp. 10-11).
At the pre-trial, both parties agreed upon the identity of the land as described in the complaint.
It was mutually admitted that the defendants original name was Co Liong Chong who was
then a Chinese national in 1954, when he approached the plaintiffs and offered to lease the
land in question. It was also admitted by the counsel for the defendant that prior to the filing of
the case, the plaintiffs have in fact invited the defendant to a conference about the matter
(Rollo, p. 12; Record on Appeal; p. 14).
Chong's counsel produced the carbon original of the contract of lease entered into between
Chong and the Llantinos and the existence of the contract of lease as a public instrument was
admitted (Rollo, p. 12; Record on Appeal, pp. 14-15).
It was also admitted that Chong had in fact constructed a building of strong materials on the
land worth P40,000.00 (Rollo, p. 12; Record on Appeal, p. 15); that Chong has become a
naturalized Filipino citizen in 1961 and that his name is no longer Co Liong Chong but Juan
Molina (Rollo, p. 12; Record on Appeal, p. 15).
On May 17, 1968, the trial court rendered a Decision the dispositive portion of which reads:
WHEREFORE, in view of the foregoing considerations, the Court finds
the contract of lease entered into between the plaintiffs and the defendant
on October 5, 1954, valid and in accordance with law and the complaint is
dismissed with costs against the plaintiffs.
The Court, however, feels that there is no sufficient ground to award moral
damages or attorney's fees as claimed by the defendant because the Court
is fairly convinced that the institution of the suit sprung from an honest
conviction on the part of the plaintiffs that on account of the period fixed
in the contract of lease and the fact that the defendant was a Chinese
national at the time of its celebration constituted valid grounds for
annulment.
SO ORDERED. (Rollo, p. 12; Record on Appeal, p. 24).
From this judgment, plaintiffs appealed directly to this Court on a pure question of law (Rollo,
p. 12; Record on Appeal, pp. 24-25).
The plaintiffs-appellants filed their brief on May 26, 1969 (Rollo, p. 48). The defendant-
appellee filed his corresponding brief on July 22, 1969 (Rollo, p. 59).
The appellants raised the following assignment of errors:
I
THE LOWER COURT ERRED IN DECLARING THE CONTRACT ENTERED INTO BY
AND BETWEEN THE APPELLANTS AND THE DEFENDANTS ON OCTOBER 5, 1954
VALID.
II
THE LOWER COURT ERRED IN REFUSING TO DECLARE THAT CONTRACT NOT A
LEASE.
Stripping the case of irrelevant allegations, the pivotal issue in this case is whether or not the
contract of lease entered into by and between the petitioners including Virgilio Llantino now
deceased and private respondent on October 5, 1954 for a period of sixty (60) years is valid.
Petitioners contend that when the contract which is sought to be declared void was entered
into by and between the parties, private respondent was still a Chinese national (Rollo, p. 48;
Appellants' Brief, p. 2). However, petitioners also stated that they do not dispute the right of
private respondent to hold the landholding in dispute under a contract of lease but they cannot
fathom how Congress could have thought of a lease contract which shall be for an indefinite
period and yet say that the period to be valid should not exceed 99 years (Rollo, p. 48;
Appellant's Brief, p. 4; Article 1643 of the New Civil Code of the Philippines).
On the other hand, private respondent argued that even though he was still an alien when he
entered into the contract of lease (on October 5, 1954), he was not prohibited by law to do so.
In fact, prior to his becoming a naturalized Filipino citizen in 1961, the appellants did not
question his right to enter into that contract so that the parties are in pari delicto. He
constructed a building on the property worth P40,000.00 and prays that he be awarded
P30,000.00 for moral damages and P2,000.00 for Attorney's fees. (Rollo, p. 48; Appellant's
Brief, p. 2).
The position of private respondent is well taken.
The lower court correctly ruled that the defendant-appellee Chong had at the time of the
execution of the contract, the right to hold by lease the property involved in the case although
at the time of the execution of the contract, he was still a Chinese national (Rollo, p. 59;
Appellee's Brief, pp. 10-11).
In the present case, it has been established that there is only one contract and there is no option
to buy the leased property in favor of Chong. There is nothing in the record, either in the lease
contract or in the complaint itself, to indicate any scheme to circumvent the constitutional
prohibition. On the contrary, the Llantinos themselves admit openly that right from the start
and before entering into the contract, Chong had merely asked them for a lease of the premises
to which they agreed. Admittedly under the terms of the contract there is nothing to prevent
the Llantinos from disposing of their title to the land to any qualified party but subject to the
rights of the lessee Chong. Neither is there under the terms of the said contract to indicate that
the ownership of the Llantinos of the leased premises has been virtually transferred to the
lessee (Rollo, p. 59; Appellee's Brief, p. 14).
Under the circumstances, a lease to an alien for a reasonable period is valid. So is an option
giving an alien the right to buy real property on condition that he is granted Philippine
citizenship. Aliens are not completely excluded by the Constitution from use of lands for
residential purposes. Since their residence in the Philippines is temporary, they may be granted
temporary rights such as a lease contract which is not forbidden by the Constitution. Should
they desire to remain here forever and share our fortune and misfortune, Filipino citizenship is
not impossible to acquire (Philippine Banking Corporation vs. Lui She, 21 SCRA 52 [1967],
citing Krivenko vs. Register of Deeds, 79 Phil. 461 [1947]).
The only instance where a contract of lease may be considered invalid is, if there are
circumstances attendant to its execution, which are used as a scheme to circumvent the
constitutional prohibition.
If an alien is given not only a lease of, but also an option to buy, a piece of land, by virtue of
which the Filipino owner cannot sell or otherwise dispose of his property, this to last for 50
years, then it becomes clear that the arrangement is a virtual transfer of ownership whereby the
owner divests himself in stages not only of the right to enjoy the land (jus possidendi, jus
utendi, jus fruendi, and jus abutendi) — rights, the sum of which make up ownership. It is just
as if today the possession is transferred, tomorrow the use, the next day the disposition, and so
on, until ultimately all the rights of which ownership is made up are consolidated in an alien
(Philippine Banking Corporation vs. Lui She, 21 SCRA 52 [1967]).
Coming back to the case at bar, even assuming, arguendo, that the subject contract is
prohibited, the same can no longer be questioned presently upon the acquisition by the private
respondent of Filipino citizenship. It was held that sale of a residential land to an alien which
is now in the hands of a naturalized Filipino citizen is valid (De Castro vs. Tan, 129 SCRA 85
[1984]).
A contract is the law between the contracting parties, and when there is nothing in it which is
contrary to law, morals, good customs, public policy or public order, the validity of the
contract must be sustained (Marimperio Compania Naviera, S.A. vs. Court of Appeals, 156
SCRA 358 [1987]).
The issue of the nature of the contract in the case at bar was never raised in the basic pleadings
or in the pre-trial (Rollo, p. 59-1; Appellee's Brief, p. 22).
It is too late to raise an issue on appeal in the Supreme Court when it has not been raised in the
lower court (Espadera vs. Court of Appeals, 165 SCRA 364 [1988]).
Moreover, contracts which are not ambiguous are to be interpreted according to their literal
meaning and should not be interpreted beyond their obvious intendment (Plastic Town Center
Corporation vs. NLRC, 172 SCRA 580 [1989]; Herrera vs. Petrophil Corp., 146 SCRA 385
[1986]).
PREMISES CONSIDERED, the decision appealed from is hereby AFFIRMED with costs
against the plaintiffs-appellants.
SO ORDERED.
Melencio-Herrera (Chairperson), Padilla and Regalado, JJ., concur.
Sarmiento, J., is on leave.
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 leased buildings shall be occupied and used by the Philippine government. No change of
The subject property in this case is one of the four (4) properties in Japan acquired by
the Philippine government under the Reparations Agreement entered into with Japan on
May 9, 1956, the other lots being:
(1) The Nampeidai Property at 11-24 Nampeidai-machi, Shibuya-ku, Tokyo which has an
area of approximately 2,489.96 square meters, and is at present the site of the Philippine
Embassy Chancery;
(2) The Kobe Commercial Property at 63 Naniwa-cho, Kobe, with an area of around
764.72 square meters and categorized as a commercial lot now being used as a warehouse
and parking lot for the consulate staff; and
(3) The Kobe Residential Property at 1-980-2 Obanoyama-cho, Shinohara, Nada-ku,
Kobe, a residential lot which is now vacant.
The properties and the capital goods and services procured from the Japanese
government for national development projects are part of the indemnification to the
Filipino people for their losses in life and property and their suffering during World War
II.
The Reparations Agreement provides that reparations valued at $550 million would be
payable in twenty (20) years in accordance with annual schedules of procurements to be
fixed by the Philippine and Japanese governments (Article 2, Reparations Agreement).
Rep. Act No. 1789, the Reparations Law, prescribes the national policy on procurement
and utilization of reparations and development loans. The procurements are divided into
those for use by the government sector and those for private parties in projects as the then
National Economic Council shall determine. Those intended for the private sector shall
be made available by sale to Filipino citizens or to one hundred (100%) percent Filipino-
owned entities in national development projects.
The Roppongi property was acquired from the Japanese government under the Second
Year Schedule and listed under the heading "Government Sector", through Reparations
Contract No. 300 dated June 27, 1958. The Roppongi property consists of the land and
building "for the Chancery of the Philippine Embassy" (Annex M-D to Memorandum
for Petitioner, p. 503). As intended, it became the site of the Philippine Embassy until the
latter was transferred to Nampeidai on July 22, 1976 when the Roppongi building
needed major repairs. Due to the failure of our government to provide necessary funds,
the Roppongi property has remained undeveloped since that time.
A proposal was presented to President Corazon C. Aquino by former Philippine
Ambassador to Japan, Carlos J. Valdez, to make the property the subject of a lease
agreement with a Japanese firm - Kajima Corporation — which shall construct two (2)
buildings in Roppongi and one (1) building in Nampeidai and renovate the present
Philippine Chancery in Nampeidai. The consideration of the construction would be the
lease to the foreign corporation of one (1) of the buildings to be constructed in Roppongi
and the two (2) buildings in Nampeidai. The other building in Roppongi shall then be
used as the Philippine Embassy Chancery. At the end of the lease period, all the three
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 definite Abandonment cannot be
inferred from the non-use alone specially if the non-use was attributable not to the
government's own deliberate and indubitable will but to a lack of financial support to
repair and improve the property (See Heirs of Felino Santiago v. Lazaro, 166 SCRA 368
[1988]). Abandonment must be a certain and positive act based on correct legal premises.
A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not relinquishment of
the Roppongi property's original purpose. Even the failure by the government to repair
the building in Roppongi is not abandonment since as earlier stated, there simply was a
shortage of government funds. The recent Administrative Orders authorizing a study of
the status and conditions of government properties in Japan were merely directives for
investigation but did not in any way signify a clear intention to dispose of the properties.
Executive Order No. 296, though its title declares an "authority to sell", does not have a
provision in its text expressly authorizing the sale of the four properties procured from
Japan for the government sector. The executive order does not declare that the
properties lost their public character. It merely intends to make the
properties available to foreigners and not to Filipinos alone in case of a sale, lease or
other disposition. It merely eliminates the restriction under Rep. Act No. 1789 that
reparations goods may be sold only to Filipino citizens and one hundred (100%) percent
Filipino-owned entities. The text of Executive Order No. 296 provides:
 Section 1. The provisions of Republic Act No. 1789, as amended, and
of other laws to the contrary notwithstanding, the above-mentioned
properties can be made available for sale, lease or any other manner
of disposition to non-Filipino citizens or to entities owned by non-
Filipino citizens.
Executive Order No. 296 is based on the wrong premise or assumption that the Roppongi
and the three other properties were earlier converted into alienable real properties. As
earlier stated, Rep. Act No. 1789 differentiates the procurements for the government
sector and the private sector (Sections 2 and 12, Rep. Act No. 1789). Only the private
sector properties can be sold to end-users who must be Filipinos or entities owned by
Filipinos. It is this nationality provision which was amended by Executive Order No. 296.
Section 63 (c) of Rep. Act No. 6657 (the CARP Law) which provides as one of the sources
of funds for its implementation, the proceeds of the disposition of the properties of the
Government in foreign countries, did not withdraw the Roppongi property from being
classified as one of public dominion when it mentions Philippine properties abroad.
Section 63 (c) refers to properties which are alienable and not to those reserved for
public use or service. Rep Act No. 6657, therefore, does not authorize the Executive
Department to sell the Roppongi property. It merely enumerates possible sources of
future funding to augment (as and when needed) the Agrarian Reform Fund created
under Executive Order No. 299. Obviously any property outside of the commerce of man
cannot be tapped as a source of funds.
The respondents try to get around the public dominion character of the Roppongi
property by insisting that Japanese law and not our Civil Code should apply.
It is exceedingly strange why our top government officials, of all people, should be the
ones to insist that in the sale of extremely valuable government property, Japanese law
and not Philippine law should prevail. The Japanese law - its coverage and effects, when
enacted, and exceptions to its provision — is not presented to the Court It is simply
asserted that the lex loci rei sitae or Japanese law should apply without stating what that
law provides. It is a ed on faith that Japanese law would allow the sale.
We see no reason why a conflict of law rule should apply when no conflict of law
situation exists. A conflict of law situation arises only when: (1) There is a dispute over
the title or ownership of an immovable, such that the capacity to take and transfer
immovables, the formalities of conveyance, the essential validity and effect of the
transfer, or the interpretation and effect of a conveyance, are to be determined (See
Salonga, Private International Law, 1981 ed., pp. 377-383); and (2) A foreign law on land
ownership and its conveyance is asserted to conflict with a domestic law on the same
matters. Hence, the need to determine which law should apply.
In the instant case, none of the above elements exists.
The issues are not concerned with validity of ownership or title. There is no question that
the property belongs to the Philippines. The issue is the authority of the respondent
officials to validly dispose of property belonging to the State. And the validity of the
procedures adopted to effect its sale. This is governed by Philippine Law. The rule of lex
situs does not apply.
The assertion that the opinion of the Secretary of Justice sheds light on the relevance of
the lex situsrule is misplaced. The opinion does not tackle the alienability of the real
properties procured through reparations nor the existence in what body of the authority
to sell them. In discussing who are capableof acquiring the lots, the Secretary merely
explains that it is the foreign law which should determinewho can acquire the
properties so that the constitutional limitation on acquisition of lands of the public
domain to Filipino citizens and entities wholly owned by Filipinos is inapplicable. We see
no point in belaboring whether or not this opinion is correct. Why should we discuss who
can acquire the Roppongi lot when there is no showing that it can be sold?
The subsequent approval on October 4, 1988 by President Aquino of the
recommendation by the investigating committee to sell the Roppongi property was
premature or, at the very least, conditioned on a valid change in the public character of
the Roppongi property. Moreover, the approval does not have the force and effect of law
since the President already lost her legislative powers. The Congress had already
convened for more than a year.
Assuming for the sake of argument, however, that the Roppongi property is no longer of
public dominion, there is another obstacle to its sale by the respondents.
There is no law authorizing its conveyance.
Section 79 (f) of the Revised Administrative Code of 1917 provides
Section 79 (f ) Conveyances and contracts to which the Government is a
party. — In cases in which the Government of the Republic of the
Philippines is a party to any deed or other instrument conveying the
title to real estate or to any other property the value of which is in
excess of one hundred thousand pesos, the respective Department
Secretary shall prepare the necessary papers which, together with the
proper recommendations, shall be submitted to the Congress of the
Philippines for approval by the same. Such deed, instrument, or
contract shall be executed and signed by the President of the
Philippines on behalf of the Government of the Philippines unless the
Government of the Philippines unless the authority therefor be
expressly vested by law in another officer. (Emphasis supplied)
The requirement has been retained in Section 48, Book I of the Administrative Code of
1987 (Executive Order No. 292).
SEC. 48. Official Authorized to Convey Real Property. — Whenever
real property of the Government is authorized by law to be
conveyed, the deed of conveyance shall be executed in behalf of the
government by the following:
(1) For property belonging to and titled in the name of the Republic of
the Philippines, by the President, unless the authority therefor is
expressly vested by law in another officer.
 (2) For property belonging to the Republic of the Philippines but titled
in the name of any political subdivision or of any corporate agency or
instrumentality, by the executive head of the agency or
instrumentality. (Emphasis supplied)
It is not for the President to convey valuable real property of the government on his or
her own sole will. Any such conveyance must be authorized and approved by a law
enacted by the Congress. It requires executive and legislative concurrence.
Resolution No. 55 of the Senate dated June 8, 1989, asking for the deferment of the sale
of the Roppongi property does not withdraw the property from public domain much less
authorize its sale. It is a mere resolution; it is not a formal declaration abandoning the
public character of the Roppongi property. In fact, the Senate Committee on Foreign
Relations is conducting hearings on Senate Resolution No. 734 which raises serious
policy considerations and calls for a fact-finding investigation of the circumstances
behind the decision to sell the Philippine government properties in Japan.
The resolution of this Court in Ojeda v. Bidding Committee, et al., supra, did not pass
upon the constitutionality of Executive Order No. 296. Contrary to respondents'
assertion, we did not uphold the authority of the President to sell the Roppongi property.
The Court stated that the constitutionality of the executive order was not the real issue
and that resolving the constitutional question was "neither necessary nor finally
determinative of the case." The Court noted that "[W]hat petitioner ultimately questions
is the use of the proceeds of the disposition of the Roppongi property." In emphasizing
that "the decision of the Executive to dispose of the Roppongi property to finance the
CARP ... cannot be questioned" in view of Section 63 (c) of Rep. Act No. 6657, the Court
did not acknowledge the fact that the property became alienable nor did it indicate that
the President was authorized to dispose of the Roppongi property. The resolution should
be read to mean that in case the Roppongi property is re-classified to be patrimonial and
alienable by authority of law, the proceeds of a sale may be used for national economic
development projects including the CARP.
Moreover, the sale in 1989 did not materialize. The petitions before us question the
proposed 1990 sale of the Roppongi property. We are resolving the issues raised in these
petitions, not the issues raised in 1989.
Having declared a need for a law or formal declaration to withdraw the Roppongi
property from public domain to make it alienable and a need for legislative authority to
allow the sale of the property, we see no compelling reason to tackle the constitutional
issues raised by petitioner Ojeda.
The Court does not ordinarily pass upon constitutional questions unless these questions
are properly raised in appropriate cases and their resolution is necessary for the
determination of the case (People v. Vera, 65 Phil. 56 [1937]). The Court will not pass
upon a constitutional question although properly presented by the record if the case can
be disposed of on some other ground such as the application of a statute or general law
(Siler v. Louisville and Nashville R. Co., 213 U.S. 175, [1909], Railroad Commission v.
Pullman Co., 312 U.S. 496 [1941]).
The petitioner in G.R. No. 92013 states why the Roppongi property should not be sold:
The Roppongi property is not just like any piece of property. It was
given to the Filipino people in reparation for the lives and blood of
Filipinos who died and suffered during the Japanese military
occupation, for the suffering of widows and orphans who lost their
loved ones and kindred, for the homes and other properties lost by
countless Filipinos during the war. The Tokyo properties are a
monument to the bravery and sacrifice of the Filipino people in the
face of an invader; like the monuments of Rizal, Quezon, and other
Filipino heroes, we do not expect economic or financial benefits from
them. But who would think of selling these monuments? Filipino
honor and national dignity dictate that we keep our properties in
Japan as memorials to the countless Filipinos who died and suffered.
Even if we should become paupers we should not think of selling
them. For it would be as if we sold the lives and blood and tears of our
countrymen. (Rollo- G.R. No. 92013, p.147)
The petitioner in G.R. No. 92047 also states:
Roppongi is no ordinary property. It is one ceded by the Japanese
government in atonement for its past belligerence for the valiant
sacrifice of life and limb and for deaths, physical dislocation and
economic devastation the whole Filipino people endured in World
War II.
It is for what it stands for, and for what it could never bring back to
life, that its significance today remains undimmed, inspire of the lapse
of 45 years since the war ended, inspire of the passage of 32 years
since the property passed on to the Philippine government.
Roppongi is a reminder that cannot — should not — be dissipated ...
(Rollo-92047, p. 9)
It is indeed true that the Roppongi property is valuable not so much because of the
inflated prices fetched by real property in Tokyo but more so because of its symbolic
value to all Filipinos — veterans and civilians alike. Whether or not the Roppongi and
related properties will eventually be sold is a policy determination where both the
President and Congress must concur. Considering the properties' importance and value,
the laws on conversion and disposition of property of public dominion must be faithfully
followed.
WHEREFORE, IN VIEW OF THE FOREGOING, the petitions are GRANTED. A writ
of prohibition is issued enjoining the respondents from proceeding with the sale of the
Roppongi property in Tokyo, Japan. The February 20, 1990 Temporary Restraining
Order is made PERMANENT.
SO ORDERED.
Melencio-Herrera, Paras, Bidin, 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. 1The 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, 2this 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 notself-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 reasonably clear from a consideration of the acts or acts of the Executive Department or
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
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. InCebu 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 besubmitted 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 isauthorization 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
Estatelocated 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, 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. 1The 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, 2this 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 notself-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. InCebu 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 besubmitted 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 isauthorization 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
Estatelocated 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.