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G.R. No. 103882 November 25, 1998

REPUBLIC OF THE PHILIPPINES, petitioner,vs.THE HONORABLE COURT OF APPEALS AND REPUBLIC REAL ESTATE CORPORATION,respondents, CULTURAL CENTER OF THE PHILIPPINES, intervenor.

G.R. No. 105276 November 25, 1998

PASAY CITY AND REPUBLIC REAL ESTATE CORPORATION, petitioners,vs.COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES, respondents.

PURISIMA, J .:

At bar are two consolidated petitions for review oncertiorari under Rule 45 of the Revised Rules of

Court. Here, the Court is confronted with a case commenced before the then Court of First Instance(now Regional Trial Court) of Rizal in Pasay City, in 1961, more than 3 decades back, that hasspanned six administrations of the Republic and outlasted the tenure of ten (10) Chief Justices of theSupreme Court.

In G.R. No. 103882, the Republic of the Philippines, as petitioner, assails the Decision, datedJanuary 29, 1992 and Amended Decision, dated April 28, 1992, of the Court of Appeals 1whichaffirmed with modification the Decision of the former Court of First Instance of Rizal (Branch 7, PasayCity) in Civil Case No. 2229-P, entitled "Republic of the Philippines vs. Pasay City and Republic RealEstate Corporation".

The facts that matter are, as follows:

Republic Act No. 1899 ("RA 1899"), which was approved on June 22, 1957, authorized thereclamation of foreshore lands by chartered cities and municipalities. Section I of said law, reads:

Sec. 1. Authority is hereby granted to all municipalities and chartered cities toundertake and carry out at their own expense the reclamation by dredging, filling, orother means, of any foreshore lands bordering them, and to establish, provide,construct, maintain and repair proper and adequate docking and harbor facilities assuch municipalities and chartered cities may determine in consultation with theSecretary of Finance and the Secretary of Public Works and Communications.

On May 6, 1958, invoking the a forecited provision of RA 1899, the Pasay City Council passedOrdinance No. 121, for the reclamation of Three Hundred (300) hectares of foreshore lands in PasayCity, empowering the City Mayor to award and enter into reclamation contracts, and prescribingterms and conditions therefor. The said Ordinance was amended on April 21, 1959 by OrdinanceNo. 158, which authorized the Republic Real Estate Corporation ("RREC") to reclaim foreshorelands of Pasay City under certain terms and conditions.

On April 24, 1959, Pasay City and RREC entered into an Agreement 2for the reclamation of theforeshore lands in Pasay City.


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On December 19, 1961, the Republic of the Philippines ("Republic") filed a Complaint 3for Recoveryof Possession and Damages with Writ of Preliminary Preventive injunction and Mandatory Injunction,docketed as Civil Case No. 2229-P before the former Court of First Instance of Rizal, (Branch 7, PasayCity).

On March 5, 1962, the Republic of the Philippines filed an Amended Complaint 4questioning subject

Agreement between Pasay City and RREC (Exhibit "P") on the grounds that the subject-matter of suchAgreement is outside the commerce of man, that its terms and conditions are violative of RA 1899, andthat the said Agreement was executed without any public bidding.

The Answers 5of RREC and Pasay City, dated March 10 and March 14, 1962, respectively, averred thatthe subject-matter of said Agreement is within the commerce of man, that the phrase "foreshore lands"within the contemplation of RA 1899 has a broader meaning than the cited definition of the term in theWords and Phrases and in the Webster's Third New International Dictionary and the plans andspecifications of the reclamation involved were approved by the authorities concerned.

On April 26,1962, Judge Angel H. Mojica, (now deceased) of the former Court of First Instance ofRizal (Branch 7, Pasay City) issued an Order6the dispositive portion of which was to the followingeffect:

WHEREFORE, the court hereby orders the defendants, their agents, and all personsclaiming under them, to refrain from "further reclaiming or committing acts ofdispossession or dispoilation over any area within the Manila Bay or the Manila BayBeach Resort", until further orders of the court.

On the following day, the same trial court issued a writ of preliminary injunction 7which enjoined thedefendants, RREC and Pasay City, their agents, and all persons claiming under them "from furtherreclaiming or committing acts of dispossession."

Thereafter, a Motion to Intervene8, dated June 27, 1962, was filed by Jose L. Bautista, EmilianoCustodio, Renato Custodio, Roger de la Rosa, Belen Gonzales, Norma Martiner, Emilia E. Paez,

Ambrosio R. Parreno, Antolin M. Oreta, Sixto L. Orosa, Pablo S. Sarmiento, Jesus Yujuico, ZamoraEnterprises, Inc., Industrial and Commercial Factors, Inc., Metropolitan Distributors of the Philippines, andBayview Hotel, Inc. statinginter alia that they were buyers of lots in the Manila Bay area being reclaimedby RREC, whose rights would be affected by whatever decision to be rendered in the case. The Motionwas granted by the trial court and the Answer attached thereto admitted. 9

The defendants and the intervenors then moved to dismiss 10the Complaint of the Republic, placingreliance on Section 3 of Republic Act No. 5187, which reads:

Sec. 3. Miscellaneous Projects

xxx xxx xxx

m. For the construction of seawall and limited access highway from the southboundary of the City of Manila to Cavite City, to the south, and from the northboundary of the City of Manila to the municipality of Mariveles, province of Bataan, tothe north, including the reclamation of the foreshore and submerged areas: Provided,That priority in the construction of such seawalls, highway and attendant reclamationworks shall be given to any corporation and/or corporations that may offer toundertake at its own expense such projects, in which case the President of thePhilippines may, after competitive didding, award contracts for the construction ofsuch project, with the winning bidder shouldering all costs thereof, the same to be


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paid in terms of percentage fee of the contractor which shall not exceed fifty percentof the area reclaimed by the contractor and shall represent full compensation for thepurpose, the provisions of the Public Land Law concerning disposition of reclaimedand foreshore lands to the contrary notwithstanding:Provided, finally, that theforegoing provisions and those of other laws, executive orders, rules and regulationsto the contrary notwithstanding, existing rights, projects and/or contracts of city or

municipal governments for the reclamation of foreshore and submerged lands shallbe respected. . . . . (emphasis ours).

Since the aforecited law provides that existing contracts shall be respected, movantscontended that the issues raised by the pleadings have become "moot, academic and of nofurther validity or effect."

Meanwhile, the Pasay Law and Conscience Union, Inc. ("PLCU") moved to intervene 11, alleging aslegal interest in the matter in litigation the avowed purpose of the organization for the promotion of goodgovernment in Pasay City. In its Order of June 10, 1969, the lower court of origin allowed the saidintervention 12.

On March 24, 1972, the trial court of origin came out with a Decision, disposing, thus:

WHEREFORE, after carefully considering (1) the original complaint, (2) the firstAmended Complaint, (3) the Answer of Defendant Republic Real Estate Corporationto the first Amended Complaint, (4) the Answer of Defendant Pasay City to the first

Amended Complaint, (5) the Second Amended Complaint, (6) the Answer ofDefendant Republic Real Estate Corporation to the Second Amended Complaint, (7)the Answer of Defendant Pasay City to the Second Amended Complaint, (8) theMemorandum in Support of Preliminary Injunction of Plaintiff, (9) the Memorandum InSupport of the Opposition to the Issuance of Preliminary Injunction of DefendantPasay City and Defendant Republic Real Estate Corporation, (10) the Answer inIntervention of Intervenors Bautista, et. al., (11) Plaintiff's Opposition to Motion toIntervene, (12) the Reply to Opposition to Motion to Intervene of Intervenors

Bautista,et. al., (13) the Stipulation of Facts by all the parties, (14) the Motion forLeave to Intervene of Intervenor Pasay Law and Conscience Union, Inc., (15) theOpposition to Motion For Leave to Intervene of Intervenors Bautista, et. al., (16) theReply of Intervenor Pasay Law and Conscience Union, Inc., (17) the Supplement toOpposition to Motion to Intervene of Defendant Pasay City and Republic Real EstateCorporation (18) the Complain in Intervention of Intervenor Pasay Law andConscience Union, Inc., (19) the Answer of Defendant Republic Real EstateCorporation, (20) the Answer of Intervenor Jose L. Bautista,et. al., to Complaint inIntervention, (21) the Motion to Dismiss of Defendant Republic Real EstateCorporation, and Intervenors Bautista,et. al., (22) the Opposition of Plaintiff to saidMotion to Dismiss, (23) the Opposition of Intervenor Pasay Law and ConscienceUnion, Inc., (24) the Memorandum of the Defendant Republic Real EstateCorporation, (25) the Memorandum for the Intervenor Pasay Law and ConscienceUnion, Inc., (26) the Manifestation of Plaintiff filed by the Office of the SolicitorGeneral, and all the documentary evidence by the parties to wit: (a) Plaintiff'sExhibits "A" to "YYY- 4", (b) Defendant Republic Real Estate Corporation's Exhibits"1-RREC" to "40-a" and (c) Intervenor Pasay Law and Conscience Union, Inc's.,Exhibits "A-PLACU" to "C-PLACU", the Court hereby:

(1) Denies the "Motion to Dismiss" filed on January 10, 1968, by Defendant RepublicReal Estate Corporation and Intervenors Bautista,et. al., as it is the finding of thisCourt that Republic Act No. 5187 was not passed by Congress to cure any defect in


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the ordinance and agreement in question and that the passage of said Republic ActNo. 5187 did not make the legal issues raised in the pleadings "moot, academic andof no further validity or effect;" and

(2) Renders judgment:

(a) dismissing the Plaintiff's Complaint;

(b) Dismissing the Complaint in Intervention of Intervenor Pasay Law andConscience Union, Inc.,

(c) Enjoining Defendant Republic Real Estate Corporation and Defendant Pasay Cityto have all the plans and specifications in the reclamation approved by the Director ofPublic Works and to have all the contracts and sub-contracts for said reclamationawarded by means of, and only after, public bidding; and

(d) Lifting the preliminary Injunction issued by the Court on April 26, 1962, as soon asDefendant Republic Real Estate Corporation and Defendant Pasay City shall have

submitted the corresponding plans and specifications to the Director of Public Works,and shall have obtained approval thereof, and as soon as the corresponding publicbidding for the award to the contractor and sub-contractor that will undertake thereclamation project shall have been effected.

No pronouncement as to costs.

SO ORDERED. (See Court of Appeals' Decision dated January 28, 1992; pp. 6-8)

Dissatisfied with the said judgment, the Republic appealed therefrom to the Court of Appeals.However, on January 11, 1973, before the appeal could be resolved, Presidential Decree No. 3-Aissued, amending Presidential Decree No. 3, thus:

Sec. 1. Section 7 of Presidential Decree No. 3, dated September 26, 1972, is herebyamended by the addition of the following paragraphs:

The provisions of any law to the contrary notwithstanding, the reclamation of areasunder water, whether foreshore or inland, shall be limited to the National Governmentor any person authorized by it under a proper contract.

All reclamations made in violation of this provision shall be forfeited to the Statewithout need of judicial action.

Contracts for reclamation still legally existing or whose validity has been accepted by

the National Government shall be taken over by the National Government on thebasis ofquantum meruit, for proper prosecution of the project involved byadministration.

On November 20, 1973, the Republic and the Construction Development Corporation of thePhilippines ("CDCP") signed a Contract13for the Manila-Cavite Coastal Road Project (Phases I and II)which contract included the reclamation and development of areas covered by the Agreement betweenPasay City and RREC. Then, there was issued Presidential Decree No. 1085 which transferred to the


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2. Ordering plaintiff-appellant to turn over to Pasay City the ownership andpossession of the above enumerated lots (1 to 9).

3. Sustaining RREC's irrevocable option to purchase sixty (60%) percent of the landreferred to in No. 2 of this dispositive portion, to be exercised within one (1) year fromthe finality of this Decision, at the same terms and condition embodied in the Pasay

City-RREC reclamation contract, and enjoining Pasay City to respect RREC'sirrevocable option.

SO ORDERED.

From the Decision and Amended Decision of the Court of Appeals aforementioned, the Republic ofthe Philippines, as well as Pasay City and RREC, have come to this Court to seek relief, albeit withdifferent prayers.

On September 10, 1997, the Court commissioned the former thirteenth Division of Court of Appealsto hear and receive evidence on the controversy. The corresponding Commissioner's Report, datedNovember 25, 1997, was submitted and now forms part of the records.

On October 11, 1997, the Cultural Center of the Philippines ("CCP") filed a Petition in Intervention,theorizing that it has a direct interest in the case being the owner of subject nine (9) lots titled in its(CCP) name, which the respondent Court of Appeals ordered to be turned over to Pasay City. TheCCP, as such intervenor, was allowed to present its evidence, as it did, before the Court of Appeals,which evidence has been considered in the formulation of this disposition.

In G.R. No. 103882, the Republic of the Philippines theorizes, by way of assignment of errors, that:

I

THE COURT OF APPEALS ERRED IN UPHOLDING THE VALIDITY

OF PASAY CITY ORDINANCE NO. 158 DATED APRIL 21, 1959AND THE RECLAMATION CONTRACT ENTERED INTO BETWEENPASAY CITY AND RREC;

II

THE COURT OF APPEALS ERRED IN FINDING THAT RREC HADRECLAIMED 55 HECTARES AND IN ORDERING THE TURN-OVERTO PASAY CITY OF THE OWNERSHIP AND POSSESSION OFNINE (9) LOTS TITLED IN THE NAME OF CCP.

In G.R. No. 105276, the petitioners, Pasay City and RREC, contend, that:

I

THE COURT OF APPEALS ERRED IN NOT DECLARINGPRESIDENTIAL DECREE NO. 3-A UNCONSTITUTIONAL;

II


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THE COURT OF APPEALS ERRED IN NOT AWARDING DAMAGESIN FAVOR OF PASAY CITY AND RREC.

Let us first tackle the issues posed in G.R. No. 103882.

On the first question regarding the validity of Pasay City Ordinance No. 158 dated April 21, 1959 and

the Agreement dated April 24, 1959 between Pasay City and RREC, we rule in the negative.

Sec. 1 of RA 1899, reads:

Sec. 1. Authority is hereby granted to all municipalities and charteredcities to undertake and carry out at their own expense the reclamationby dredging, filling, or other means, of any foreshore lands borderingthem, and to establish, provide, construct, maintain and repair properand adequate docking and harbor facilities as such municipalities andchartered cities may determine in consultation with the Secretary ofFinance and the Secretary of Public Works and Communications.

It is the submission of the petitioner, Republic of the Philippines, that there are no foreshorelands along the seaside of Pasay City 15; that what Pasay City has are submerged or offshoreareas outside the commerce of man which could not be a proper subject matter of the Agreementbetween Pasay City and RREC in question as the area affected is within the National Park, knownas Manila Bay Beach

Resort, established under Proclamation No. 41, dated July 5, 1954, pursuant to Act No. 3915, of which area it(Republic) has been in open, continuous and peaceful possession since time immemorial.

Petitioner faults the respondent court for unduly expanding what may be considered "foreshore land"through the following disquisition:

The former Secretary of Justice Alejo Mabanag, in response to arequest for an opinion from the then Secretary of Public Works andCommunications as to whether the term, "foreshore areas" as used inSection I of the immediately aforequoted law is that defined inWebster's Dictionary and the Law of Waters so as to make anydredging or filling beyond its prescribed limit illegal, opined:

According to the basic letter of the Director of PublicWorks, the law of Waters speaks of "shore" anddefines it thus: "that space movement of the tide. Itsinterior or terrestrial limit in the line reached byhighest equinoctial tides."

Webster's definition of foreshore reads as follows:

That part of the shore between high water and low-water marks usually fixed at the line to which theordinary means tide flows: also, by extension, thebeach, the shore near the water's edge.


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If we were to be strictly literal the term foreshore orforeshore lands should be confined to but a portion ofthe shore, in itself a very limited area. (p. 6,Intervenors-appellees' brief).

Bearing in mind the (Webster's and Law of Waters)

definitions of "shore" and of foreshore lands, one isstruck with the apparent inconsistency between theareas thus described and the purpose to which thatarea, when reclaimed under the provision of Republic

Act No. 1899, shall be devoted. Section I (of saidLaw) authorizes the construction thereat of "adequatedocking and harbor facilities". This purpose isrepeated in Sections 3 and 4 of the Act.

And yet, it is well known fact that foreshore landsnormally extend only from 10 to 20 meters along thecoast. Not very much more if at all. In fact certainparts in Manila bordering on Manila Bay, has noforeshore to speak of since the sea washes the seawall.

It does not seem logical, then, that Congress had inmind. Webster's limited concept of foreshore when itenacted Republic Act No. 1899, unless it intends thatthe wharves, piers, docks,etc.should be constructedparallel to the shore, which is impractical.

Since it is to be presumed that Congress could nothave intended to enact an ineffectual measure notone that would lead to absurd consequences, it would

seem that it used "foreshore" in a sense wider inscope that defined by Webster. . . .

To said opinion on the interpretation of the R.A. 1899, plaintiff-appellant could not offer any refutation or contrary opinion. Neithercan we. In fact, the above construction is consistent with the "rule oncontext" in statutory construction which provides that in construing astatute, the same must be construed as a whole. The particularwords, clauses and phrases should not be studied as detached andisolated expressions, but the whole and every part of the statute mustbe considered in fixing the meaning of any of its parts in order toproduce a harmonious whole (seeAraneta vs. Concepcion, 99 Phil.

709). There are two reasons for this. Firstly, the force andsignificance of particular expressions will largely depend upon theconnection in which they are found and their relation to the generalsubject-matter of the law. The legislature must be understood to haveexpressed its whole mind on the special object to which thelegislative act is directed but the vehicle for the expressions of thatmeaning is the statute, considered as one entire and continuous act,and not as an agglomeration of unrelated clauses. Each clause orprovision will be illuminated by those which are cognate to it and by


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the general tenor of the whole statute and thus obscurities endambiguities may often be cleared up by the most direct and naturalmeans. Secondly effect must be given, if it is possible, to every wordand clause of the statute, so that nothing shall be left devoid ofmeaning or destitute of force. To this end, each provision of thestatute should be read in the light of the whole. For the general

meaning of the legislature, as gathered from the entire act, may oftenprevail over the construction which would appear to be the mostnatural and obvious on the face of a particular clause. If is by thismeans that contradiction and repugnance between the different partsof the statute may be avoided. (See Black, Interpretation of Laws,2nd Ed., pp. 317-319).

Resorting to extrinsic aids, the "Explanatory Note" to House Bill No.3830, which was subsequently enacted as Republic Act No. 1899,reads:

In order to develop and expand the MaritimeCommerce of the Philippines, it is necessary thatharbor facilities be correspondingly improved and,where necessary, expanded and developed. Thenational government is not in a financial position tohandle all this work. On the other hand, with a greaterautonomy many chartered cities and provinces arefinancially able to have credit position which will allowthem to undertake these projects. Some cities, suchas the City of Bacolod under R.A. 161, has beenauthorized to reclaim foreshore lands bordering it.

Other cities end provinces have continuously beenrequesting for authority to reclaim foreshore lands on

the basis of the Bacolod City pattern, and toundertake work to establish, construct on thereclaimed area and maintain such port facilities asmay be necessary. In order not to unduly delay theundertaking of these projects, and inorder to obviatethe passage of individual pieces of legislation forevery chartered city and province, it is herebyrecommended that the accompanying bill beapproved. It covers Authority for All chartered citiesand provinces to undertake this work. . . . (emphasissupplied)

Utilizing the above explanatory note in interpreting and construing theprovisions of R.A. 1899, then Secretary of Justice Mabanag opined:

It is clear that the "Bacolod City pattern" was the basisof the enactment of the aforementioned bill of generalapplication. This so-called "Bacolod City pattern"appears to be composed of 3 parts, namely: Republic

Ad No. 161, which grants authority to Bacolod City toundertake or carry out . . . the reclamation . . . of any


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[sic] carry out the reclamation project conformablywith Republic Act No. 161; and Republic Act No. 1132authorizing Bacolod City to contract indebtedness orto issue bonds in the amount not exceeding six millionpesos to finance the reclamation of land in said city.

Republic Act No. 161 did not in itself specify theprecise space therein referred to as "foreshore" lands,but it provided that docking and harbor facilitiesshould be erected on the reclaimed portions thereof,while not conclusive would indicate that Congressused the word "foreshore" in its broadest sense.Significantly, the plan of reclamation of foreshoredrawn up by the Bureau of Public Works maps out anarea of approximately 1,600,000 square meters, theboundaries of which clearly extend way beyondWebster's limited concept of the term "foreshore". Asa contemporaneous construction by that branch of theGovernment empowered to oversee at least, theconduct of the work, such an interpretation deservesgreat weight. Finally, Congress in enacting Republic

Act No. 1132 (supplement to RA 161), tacitlyconfirmed and approved the Bureau's interpretation ofthe term 'foreshore' when instead of taking theoccasion to correct the Bureau of over extending itsplan, it authorized the city of Bacolod to raise the fullestimated cost of reclaiming the total area covered bythe plan. The explanatory note to House Bill No. 1249which became Republic Act No. 1132 states amongthe things:

The Bureau of Public Works already prepared a planfor the reclamation of about 1,600,000 square metersof land at an estimated costs of about P6,000,000.00.The project is self-supporting because the proceedsfrom the sales or leases of lands so reclaimed will bemore than sufficient to cover the cost of the project.

Consequently, when Congress passed Republic ActNo. 1899 in order to facilitate the reclamation by localgovernments of foreshore lands on the basis of theBacolod City pattern and in order to obviate thepassage of individual pieces of legislation for everychartered city and provinces requesting authority toundertake such projects, the lawmaking body couldnot have had in mind the limited area described byWebster as "foreshore" lands. . . . .

If it was really the intention of Congress to limit the area to the strictliteral meaning of "foreshore" lands which may be reclaimed bychartered cities and municipalities, Congress would have excludedthe cities of Manila, Iloilo, Cebu, Zamboanga and Davao from theoperation of RA 1899 as suggested by Senator Cuenco during the


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construction given to RA 1899. If Congress was in accord with theinterpretation and construction made by the Supreme Court on RA1899, it would have mentioned reclamation of "foreshore lands" onlyin RA 5187, but Congress included "submerged lands" in order toclarify the intention on the grant of authority to cities andmunicipalities in the reclamation of lands bordering them as provided

in RA 1899. It is, therefore, our opinion that it is actually the intentionof Congress in RA 1899 not to limit the authority granted to cities andmunicipalities to reclaim foreshore lands in its strict dictionarymeaning but rather in its wider scope as to include submerged lands.

The Petition is impressed with merit.

To begin with, erroneous and unsustainable is the opinion of respondent court that under RA 1899,the term "foreshore lands" includes submerged areas. As can be gleaned from its disquisition andrationalization aforequoted, the respondent court unduly stretched and broadened the meaning of"foreshore lands", beyond the intentment of the law, and against the recognized legal connotation of"foreshore lands". Well entrenched, to the point of being elementary, is the rule that when the lawspeaks in clear and categorical language, there is no reason for interpretation or construction, butonly for application. 16So also, resort to extrinsic aids, like the records of the constitutional convention, isunwarranted, the language of the law being plain and unambiguous. 17Then, too, opinions of theSecretary of Justice are unavailing to supplant or rectify any mistake or omission in the law. 18To repeat,the term "foreshore lands" refers to:

The strip of land that lies between the high and low water marks andthat is alternately wet and dry according to the flow of the tide.(Words and Phrases, "Foreshore")

A strip of land margining a body of water (as a lake or stream); thepart of a seashore between the low-water line usually at the seawardmargin of a low-tide terrace and the upper limit of wave wash at high

tide usually marked by a beach scarp or berm. (Webster's Third NewInternational Dictionary)

The duty of the court is to interpret the enabling Act, RA 1899. In so doing, we cannot broaden itsmeaning, much less widen the coverage thereof. If the intention of Congress were to includesubmerged areas, it should haveprovided expressly. That Congress did not so provide could onlysignify the exclusion of submerged areas from the term "foreshore lands".

Neither is there any valid ground to disregard the Resolution of this Court dated February 3, 1965inPonce v. Gomez (L-21870) andPonce v. City of Cebu (L-22669) despite the enactment ofRepublic Act No. 5187 ("RA 5187"), the relevant portion of which, reads:

Sec. 3. Miscellaneous Projects

xxx xxx xxx

m. For the construction of seawall and limited access highway fromthe south boundary of the City of Manila to Cavite City, to the south,and from the north boundary of the City of Manila to the municipalityof Mariveles, province of Bataan, to the north, including thereclamation of the foreshore and submerged areas:Provided, That


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priority in the construction of such seawalls, highway and attendantreclamation works shell be given to any corporation and/orcorporations that may offer to undertake at its own expense suchprojects, in which case the President of the Philippines may, aftercompetitive bidding, award contracts for the construction of suchprojects, with the winning bidder shouldering all costs thereof, the

same to be paid in terms of percentage fee of the contractor whichshall not exceed fifty percent of the area reclaimed by the contractorand shall represent full compensation for the purpose, the provisionsof the Public Land Law concerning disposition of reclaimed andforeshore lands to the contrary notwithstanding:Provided, finally, thatthe foregoing provisions and those of other laws, executive orders,rules and regulations to the contrary notwithstanding, existing rights,projects and/or contracts of city or municipal governments for thereclamation of foreshore and submerged lands shall be respected. . .. .

There is nothing in the foregoing provision of RA 5187 which can be interpreted to broaden thescope of "foreshore lands." The said law is not amendatory to RA 1899. It is an Appropriations Act,entitled "AN ACT APPROPRIATING FUNDS FOR PUBLIC WORKS, SYNCHRONIZING THESAME WITH PREVIOUS PUBLIC WORKS APPROPRIATIONS."

All things viewed in proper perspective, we reiterate what was said inPonce v. Gomez(L-21870)andPonce v. City of Cebu (L-22669) that the term "foreshore" refers to "that part of the landadjacent to the sea which is alternately covered and left dry by the ordinary flow of the tides." Asopined by this Court in said cases:

WHEREAS, six (6) members of the Court (Justices Bautista Angelo,Concepcion, Reyes, Barrera, Dizon and Jose P. Bengzon) opine thatsaid city ordinance and contracts areultra vires and hence, null andvoid, insofar as the remaining 60% of the area aforementioned,

because the term "foreshore lands" as used in Republic Act No. 1899should be understood in the sense attached thereto by common

parlance; (emphasis ours)

The aforesaid ruling was applied by then Secretary of Justice Claudio Teehankee, in his opiniondated December 22, 1966, in a case with analogous facts as the present one, to wit:

December 22,1966

The Secretary of Agriculture

and Natural Resources

Diliman, Quezon City

Sir:

xxx xxx xxx


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I. Facts

1. On January 19, 1961, pursuant to the provisions of Republic ActNo. 1899, the Municipality of Navotas enacted Ordinance No. 1authorizing the Municipal Mayor to enter into a reclamation contractwith Mr. Chuanico.

2. On March 15, 1961, a reclamation contract was concludedbetween the Municipality of Navotas, represented by the MunicipalMayor, and Mr. Chuanico in accordance with the above ordinance.Thereunder, Mr. Chuanico shall be the attorney-in-fact of theMunicipality in prosecuting the reclamation project and shall advancethe money needed therefor; that the actual expenses incurred shallbe deemed a loan to the Municipality; that Mr. Chuanico shall havethe irrevocable option to buy 70% of the reclaimed area at P7.00 persquare meter; that he shall have the full and irrevocable powers to doany and all things necessary and proper in and about the premises,"including the power to hire necessary personnel for the prosecution ofthe work, purchase materials and supplies, and purchase or leaseconstruction machineries and equipment, but any and all contracts tobe concluded by him in behalf of the Municipality shall be submittedto public bidding.

xxx xxx xxx

3. On March 16, 1961, the Municipal Council of Navotas passedResolution No. 22 approving and ratifying the contract.

xxx xxx xxx

III. Comments

1. The above reclamation contract was concluded on the basis ofNavotas Ordinance No. 1 which, in turn, had been enacted avowedlypursuant to Republic Act No. 1899. This being so, the contract, inorder to be valid, must conform to the provisions of the said law.

By authorizing local governments "to executeby administrationanyreclamation work," (Republic Act No. 1899 impliedly forbids theexecution of said project bycontract. Thus, in the case orPonce etal. vs. Gomez (February 3, 1966), five justices of the Supreme Courtvoted to annul the contract between Cebu Development Corporationand Cebu City for the reclamation of foreshore lands because "the

provisions of said . . . contract are not . . . in accordance with theprovisions of Republic Act No. 1899," as against one Justice whoopined that the contract substantially complied with the provisions ofthe said law. (Five Justices expressed no opinion on this point.)

Inasmuch as the Navotas reclamation contract is substantially similarto the Cebu reclamation contract, it is believed that the former islikewise fatally defective.


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2. The Navotas reclamation project envisages the construction of achannel along the Manila Bay periphery of that town and thereclamation of approximately 650 hectares of land from said channelto a seaward distance of one kilometer. In the basic letter it is statedthat "practically, all the 650 hectares of lands proposed to bereclaimed under the agreement" do not constitute foreshore lands

and that "the greater portion of the area . . . is in fact navigable andpresently being used as a fishing harbor by deep-sea fishingoperators as well as a fishing ground of sustenance fisherman.

Assuming the correctness of these averments, the Navotasreclamation contract evidently transcends the authority granted underRepublic Act No. 1899, which empowers the local governments toreclaim nothing more than "foreshore lands,i.e., "that part of the landadjacent to the see which is alternately covered and left dry by theordinary flow of the tides." (26 C.J. 890.) It was for this reason that inthe cited casePoncecase, the Supreme Court, by a vote of 6-0 withfive Justices abstaining, declared ultra vires and void the contractualstipulation for the reclamation of submerged lands off Cebu City, andpermanently enjoined its execution under Republic Act No. 1899.

xxx xxx xxx

In accordance with the foregoing, I have the honor to submit the viewthat the Navotas reclamation contract is not binding and should bedisregarded for non-compliance with law.

Verytrulyyours,

(SGD)

CLAUDIOTEEHANKEE

Secretary ofJustice

The said opinion of Justice Secretary Teehankee who became Associate Justice, and later ChiefJustice, of this Court, did, in our considered view, supersede the earlier opinion of former justiceSecretary Alejo Mabanag, aforestated, as the cases, in connection with which subject opinions were

sought, were with similar facts. The said Teehankee opinion accords with RA 1899.

It bears stressing that the subject matter of Pasay City Ordinance No. 121, as amended byOrdinance No. 158, and the Agreement under attack, have been found to be outside the intendmentand scope of RA 1899, and thereforeultra viresand null and void.

What is worse, the same Agreement was vitiated by the glaring absence of a public bidding.


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Obviously, there is a complete dearth of evidence to prove that RREC had really reclaimed 55hectares. The letter of Minister Baltazar Aquino relied upon by RREC is no proof at all that RREChad reclaimed 55 hectares. Said letter was just referring to a tentative schedule of work to be doneby RREC, even as it required RREC to submit the pertinent papers to show its supposedaccomplishment, to secure approval by the Ministry of Public Works and Highways to thereclamation plan, and to submit to a public bidding all contracts and sub-contracts for subject

reclamation project but RREC never complied with such requirements and conditionssine qua non.

No contracts or sub-contracts or agreements, plans, designs, and/or specifications of thereclamation project were presented to reflect any accomplishment. Not even any statement oritemization of works accomplished by contractors or subcontractors or vouchers and other relevantpapers were introduced to describe the extent of RREC's accomplishment. Neither was the requisitecertification from the City Engineer concerned that "portions of the reclamation project not less than50 hectares in area shall have been accomplished or completed" obtained and presented by RREC.

As a matter of fact, no witness ever testified on any reclamation work done by RREC, and extentthereof, as of April 26, 1962. Not a single contractor, sub-contractor, engineer, surveyor, or any otherwitness involved in the alleged reclamation work of RREC testified on the 55 hectares supposedlyreclaimed by RREC. What work was done, who did the work, where was it commenced, and whenwas it completed, was never brought to light by any witness before the court. Certainly,onus

probandi was on RREC and Pasay City to show and point out the as yet unidentified 55 hectaresthey allegedly reclaimed. But this burden of proof RREC and Pasay City miserably failed todischarge.

So also, in the decision of the Pasay Court of First Instance dismissing the complaint of plaintiff-appellant, now petitioner Republic of the Philippines, the lifting of the writ of Preliminary Injunctionissued on April 26, 1962 would become effective only "as soon as Defendant Republic Real EstateCorporation and Defendant Pasay City shall have submitted the corresponding plans andspecifications to the Director of Public Work, and shall have obtained approval thereof, and as soonas corresponding public bidding for the award to the contractor and sub-contractor that willundertake the reclamation project shall have been effected." (Rollo, pp. 127-129, G.R. No. 103882)

From the records on hand, it is abundantly clear that RREC and Pasay City never complied withsuch prerequisites for the lifting of the writ of Preliminary Injunction. Consequently, RREC had noauthority to resume its reclamation work which was stopped by said writ of preliminary injunctionissued on April 26, 1962.

From the Contract for Dredging Work, dated November 26, 1960, marked Exhibit "21-A" for RRECbefore the lower court, and Exhibit "EE" for CCP before the Court of Appeals, it can be deduced thatonly on November 26, 1960 did RREC contract out the dredging work to C and A ConstructionCompany, Inc., for the reclamation of the 55 hectares initially programmed to be reclaimed by it. But,as stated by RREC itself in the position paper filed with this Court on July 15, 1997, with reference toCDCP's reclamation work, mobilization of the reclamation team would take one year before a

reclamation work could actually begin. Therefore, the reclamation work undertaker by RREC couldnot have started before November 26, 1961.

Considering that on April 26, 1962 RREC was enjoined from proceeding any further with itsreclamation work, it had barely five (5) months, from November, 1961 to April, 1962, to work onsubject reclamation project. It was thus physically impossible for RREC to reclaim 55 hectares, withthe stipulated specifications and elevation, in such a brief span of time. In the report of RREC(Exhibit "DD" for CCP), it was conceded that due to the writ of preliminary injunction issued on April26, 1962, C and A Construction Co., Inc. had suspended its dredging operation since May, 1962.


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The "graphical report" on the Pasay Reclamation project, as of April 30, 1962, attached to theProgress Report marked Exhibit "DD", is a schematic representation of the work accomplishmentreferred to in such Progress Report, indicating the various elevations of the land surface itembraced, ranging from 0.00 meters to the highest elevation of 2.5 meters above MLLW. Suchportrayal of work accomplished is crucial in our determination of whether or not RREC had actually"reclaimed" any land as under its Contract for Dredging Work with C and A Construction Company

(Exhibit "EE", the required final elevation for a completely reclaimed land was 3.5 meters aboveMLLW, as explicitly provided in said Contract for Dredging Work. So, the irresistible conclusion is when the work on subject RREC-Pasay City reclamation project stopped in April, 1962 incompliance with the writ of preliminary injunction issued by the trial court of origin, no portion of thereclamation project worked on by RREC had reached the stipulated elevation of 3.5 meters aboveMLLW. The entire area it worked on was only at sea level or 0.00 meter above MLLW. In short,RREC had not yet reclaimed any area when the writ of preliminary injunction issued in April 1962.

On this point, the testimonies of Architect Ruben M. Protacio, Architect and Managing partner ofLeandro V. Locsin and partners, Architect and City Planner Manuel T. Maoza, Jr. of PlanningResources and Operation System, Inc., Rose D. Cruz, Executive Assistant, Office of the President,from 1966 to 1970, and Dr. Lucrecia Kasilag, National Artist and member of CCP AdvisoryCommittee, come to the fore. These credible, impartial and knowledgeable witnesses recounted onthe witness stand that when the construction of the Main Building of the Cultural Center of thePhilippines (CCP) began in 1966, the only surface land available was the site for the said building(TSN, Sept. 29, 1997, pages 8, 14 and 50), what could be seen in front of and behind it was all water(TSN, Sept. 29, 1997 pages 127-128). When the CCP Main Building was being constructed, from1968 to 1969, the land above sea level thereat was only where the CCP Main Building was erectedand the rest of the surroundings were all under water, particularly the back portion fronting the bay.(TSN, Sept. 13, 1997, pp. 181, 182, 185, 186, 188). Dr. Lucrecia R. Kasilag stressed that on April16, 1966, during the ground breaking for the CCP Main Building, it was water all around (TSN, Sept.30, 1997, pp. 320, 324, 325).

There was indeed no legal and factual basis for the Court of Appeals to order and declare that "therequirement by the trial court on public bidding and the submission of RREC's plans and

specification to the Department of Public Works and Highways in order that RREC may continue theimplementation of the reclamation work is deleted for being moot and academic." Said requirementhas never become moot and academic. It has remained indispensable, as ever, and non-compliancetherewith restrained RREC from lawfully resuming the reclamation work under controversy,notwithstanding the rendition below of the decision in its favor.

Verily, contrary to what the Court of Appeals found, RREC had not reclaimed any area with theprescribed elevation of 3.5 meters above MLLW, so much so that in 1978, it (RREC) opted to filewith the former Ministry of Public Highways, a claim for compensation of P30,396,878.20, forreclamation work allegedly done before the CDCP started working on the reclamation of the CCPgrounds. On September 7, 1979, RREC asked the Solicitor General to settle its subject claim forcompensation at the same amount of P30,396,878.20. But on June 10, 1981, guided by the costdata, work volume accomplished and other relevant information gathered by the former Ministry ofPublic Highways, the Solicitor General informed RREC that the value of what it had accomplished,based on 1962 price levels, was only P8,344,741.29, and the expenses for mobilization ofequipment amounted to P2,581,330.00. The aforesaid evaluation made by the government, throughthe then Minister of Public Highways, is factual and realistic, so much so that on June 25, 1981,RREC, in its reply letter to the Solicitor General, stated:

We regret that we are not agreeable to the amount ofP10,926,071.29, based on 1962 cost data,etc., as compensationbased on quantum meruit. The least we would consider is the amount


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of P10,926,071.29 plus interest at the rate of 6% per annum from1962 to the time of payment. We feel that 6% is very much less thanthe accepted rate of inflation that has supervened since 1962 to thepresent, and even less than the present legal rate of 12% perannum. 19

Undoubtedly, what RREC claimed for was compensation for what it had done, and for the dredge fillof 1,558,395 cubic meters it used, on subject reclamation project.

Respondent Court likewise erred in ordering the turn-over to Pasay City of the following titled lots, towit:

LOT NO. BUILDING AREA OCT/TCT

42 Gloria Maris 9,516 sq.m. OCT 159 in the

Restaurant name of GSIS

3 Asean Garden 76,299 sq.m. OCT 10251 in the

name of CCP

12 Folk Arts Theater 1.7503 hec. TCT 18627 in the

and PICC parking name of CCP

space

22 landscaped with 132,924 sq.m. TCT 75676 in the

sculpture of Asean name of CCP

Artists-site of

Boom na Boom

23 open space, back 34,346 sq.m. TCT 75677 in the

of Philcite name of CCP

24 Parking space for 10,352 sq.m. TCT 75678 in the

Star City, CCP, name of CCP

Philcite

25 open space 11,323 sq.m. TCT 75679 in the

occupied by Star name of CCP


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City

28 open space, 27,689 sq.m. TCT 75684 in the

beside PICC name of CCP

29 open space, 106,067 sq.m. TCT 75681 in the

leased by El name of CCP

Shaddai

We discern no factual basis nor any legal justification therefor. In the first place, in theiranswer to the Complaint and Amended Complaint below, RREC and Pasay City neverprayed for the transfer to Pasay City of subject lots, title to which had long becomeindefeasible in favor of the rightful title holders, CCP and GSIS, respectively.

The annotation of a notice oflis pendens on the certificates of title covering the said lots is of no

moment. It did not vest in Pasay City and RREC any real right superior to the absolute ownershipthereover of CCP and GSIS. Besides, the nature of the action did not really warrant the issuance ofa notice oflis pendens.

Sec. 14 of Rule 13, Revised Rules of Civil Procedure, reads:

Sec. 14. Notice of lis pendens. In an action affecting the title or theright of possession of real properly, the plaintiff and the defendant,when affirmative relief is claimed in his answer, may record in theoffice of the registry of deeds of the province in which the property issituated a notice of the pendency of the action. Said notice shallcontain the names of the parties and the object of the action or

defense, and a description of the property in that province affectedthereby. Only from the time of filing such notice for record shall apurchaser, or encumbrancer of the property affected thereby, bedeemed to have constructive notice of the pendency of the action,and only of its pendency against the parties designated by their realnames.

The notice oflis pendens herein above mentioned may be cancelledonly upon order of the court, after proper showing that the notice isfor the purpose of molesting the adverse party, or that it is notnecessary to protect the rights of the party who caused it to berecorded.

Under the aforecited provision of law in point, a notice oflis pendens is necessary when the action isfor recovery of possession or ownership of a parcel of land. In the present litigation, RREC andPasay City, as defendants in the main case, did not counterclaim for the turnover to Pasay City ofthe titled lots aforementioned.

What is more, a torrens title cannot be collaterally attacked. The issue of validity of a torrens title,whether fraudulently issued or not, may be posed only in an action brought to impugn or annul it.(Halili vs. National Labor Relations Commission, 257 SCRA 174, Cimafranca vs. Intermediate


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G.R. No. L40474 August 29, 1975

CEBU OXYGEN & ACETYLENE CO., INC., petitioner,vs.HON. PASCUAL A. BERCILLES Presiding Judge, Branch XV, 14th Judicial District, and JOSEL. ESPELETA, Assistant Provincial Fiscal, Province of Cebu, representing the Solicitor

General's Office and the Bureau of Lands, respondents.

Jose Antonio R Conde for petitioner.

Office of the Acting Solicitor General Hugo E. Gutierrez, Jr., Assistant Solicitor General Octavio R.Ramirez and Trial Attorney David R. Hilario for respondents. .

CONCEPCION, Jr., J.:

This is a petition for the review of the order of the Court of First Instance of Cebu dismissing

petitioner's application for registration of title over a parcel of land situated in the City of Cebu.

The parcel of land sought to be registered was only a portion of M. Borces Street, Mabolo, CebuCity. On September 23, 1968, the City Council of Cebu, through Resolution No. 2193, approved onOctober 3, 1968, declared the terminal portion of M. Borces Street, Mabolo, Cebu City, as anabandoned road, the same not being included in the City Development Plan.1Subsequently, onDecember 19, 1968, the City Council of Cebu passed Resolution No. 2755, authorizing the Acting CityMayor to sell the land through a public bidding. 2Pursuant thereto, the lot was awarded to the hereinpetitioner being the highest bidder and on March 3, 1969, the City of Cebu, through the Acting CityMayor, executed a deed of absolute sale to the herein petitioner for a total consideration ofP10,800.00.3By virtue of the aforesaid deed of absolute sale, the petitioner filed an application with theCourt of First instance of Cebu to have its title to the land registered. 4

On June 26, 1974, the Assistant Provincial Fiscal of Cebu filed a motion to dismiss the applicationon the ground that the property sought to be registered being a public road intended for public use isconsidered part of the public domain and therefore outside the commerce of man. Consequently, itcannot be subject to registration by any private individual.5

After hearing the parties, on October 11, 1974 the trial court issued an order dismissing thepetitioner's application for registration of title.6Hence, the instant petition for review.

For the resolution of this case, the petitioner poses the following questions:

(1) Does the City Charter of Cebu City (Republic Act No. 3857) under Section 31,paragraph 34, give the City of Cebu the valid right to declare a road as abandoned?and

(2) Does the declaration of the road, as abandoned, make it the patrimonial propertyof the City of Cebu which may be the object of a common contract?

(1) The pertinent portions of the Revised Charter of Cebu City provides:


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Section 31. Legislative Powers. Any provision of law and executive order to thecontrary notwithstanding, the City Council shall have the following legislative powers:

xxx xxx xxx

(34) ...; to close any city road, street or alley, boulevard, avenue, park or square.

Property thus withdrawn from public servitude may be used or conveyed for anypurpose for which other real property belonging to the City may be lawfully used orconveyed.

From the foregoing, it is undoubtedly clear that the City of Cebu is empowered to close a city road orstreet. In the case of Favis vs. City of Baguio,7where the power of the city Council of Baguio City toclose city streets and to vacate or withdraw the same from public use was similarly assailed, this courtsaid:

5. So it is, that appellant may not challenge the city council's act of withdrawing astrip of Lapu-Lapu Street at its dead end from public use and converting theremainder thereof into an alley. These are acts well within the ambit of the power to

close a city street. The city council, it would seem to us, is the authority competent todetermine whether or not a certain property is still necessary for public use.

Such power to vacate a street or alley is discretionary. And the discretion will notordinarily be controlled or interfered with by the courts, absent a plain case of abuseor fraud or collusion. Faithfulness to the public trust will be presumed. So the fact thatsome private interests may be served incidentally will not invalidate the

vacationordinance.

(2) Since that portion of the city street subject of petitioner's application for registration oftitle was withdrawn from public use, it follows that such withdrawn portion becomespatrimonial 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 longerintended for public use or for public service, shall form part of the patrimonial property of the State."

Besides, the Revised Charter of the City of Cebu heretofore quoted, in very clear and unequivocalterms, states that: "Property thus withdrawn from public servitude may be used or conveyed for anypurpose 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 tothe petitioner is valid. Hence, the petitioner has a registerable title over the lot in question.

WHEREFORE, the order dated October 11, 1974, rendered by the respondent court in Land Reg.Case No. N-948, LRC Rec. No. N-44531 is hereby set aside, and the respondent court is herebyordered to proceed with the hearing of the petitioner's application for registration of title.

SO ORDERED.

Makalintal, C.J, Fernando, Barredo and Aquino, JJ., concur.


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G.R. No. 92013 July 25, 1990

SALVADOR H. LAUREL, petitioner,vs.RAMON GARCIA, as head of the Asset Privatization Trust, RAUL MANGLAPUS, as Secretaryof 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 CHAIRMANRAMON T. GARCIA, AMBASSADOR RAMON DEL ROSARIO, et al., as members of thePRINCIPAL AND BIDDING COMMITTEES ON THE UTILIZATION/DISPOSITION PETITION OFPHILIPPINE GOVERNMENT PROPERTIES IN JAPAN,respondents.

Artu ro M. Tolentino for peti t io ner in 92013.

GUTIERREZ, JR., J.:

These are two petitions for prohibition seeking to enjoin respondents, their representativesand agents from proceeding with the bidding for the sale of the 3,179 square meters of landat 306 Roppongi, 5-Chome Minato-ku Tokyo, Japan scheduled on February 21, 1990. Wegranted the prayer for a temporary restraining order effective February 20, 1990. One of thepetitioners (in G.R. No. 92047) likewise prayes for a writ of mandamus to compel therespondents to fully disclose to the public the basis of their decision to push through withthe sale of the Roppongi property inspire of strong public opposition and to explain theproceedings 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 onMarch 13, 1990. After G.R. No. 92047,Ojeda v . Secretary Macaraig, et al. was filed, therespondents 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 theparties in the Laurelcase were deliberated upon.

The Court could not act on these cases immediately because the respondents filed a motionfor an extension of thirty (30) days to file comment in G.R. No. 92047, followed by a secondmotion for an extension of another thirty (30) days which we granted on May 8, 1990, a thirdmotion for extension of time granted on May 24, 1990 and a fourth motion for extension oftime which we granted on June 5, 1990 but calling the attention of the respondents to thelength of time the petitions have been pending. After the comment was filed, the petitioner inG.R. No. 92047 asked for thirty (30) days to file a reply. We noted his motion and resolved todecide the two (2) cases.

I


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The subject property in this case is one of the four (4) properties in Japan acquired by thePhilippine 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 areaof 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 764.72square meters and categorized as a commercial lot now being used as a warehouse andparking lot for the consulate staff; and

(3) The Kobe Residential Property at 1-980-2 Obanoyama-cho, Shinohara, Nada-ku, Kobe, aresidential lot which is now vacant.

The properties and the capital goods and services procured from the Japanese governmentfor national development projects are part of the indemnification to the Filipino people fortheir losses in life and property and their suffering during World War II.

The Reparations Agreement provides that reparations valued at $550 million would bepayable in twenty (20) years in accordance with annual schedules of procurements to befixed by the Philippine and Japanese governments (Article 2, Reparations Agreement). Rep.Act No. 1789, the Reparations Law, prescribes the national policy on procurement andutilization of reparations and development loans. The procurements are divided into those foruse by the government sector and those for private parties in projects as the then NationalEconomic Council shall determine. Those intended for the private sector shall be madeavailable by sale to Filipino citizens or to one hundred (100%) percent Filipino-owned entitiesin national development projects.

The Roppongi property was acquired from the Japanese government under the Second YearSchedule and listed under the heading "Government Sector", through Reparations ContractNo. 300 dated June 27, 1958. The Roppongi property consists of the land and building "forthe 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 toNampeidai on July 22, 1976 when the Roppongi building needed major repairs. Due to thefailure of our government to provide necessary funds, the Roppongi property has remainedundeveloped since that time.

A proposal was presented to President Corazon C. Aquino by former Philippine Ambassadorto Japan, Carlos J. Valdez, to make the property the subject of a lease agreement with aJapanese firm - Kajima Corporation which shall construct two (2) buildings in Roppongiand one (1) building in Nampeidai and renovate the present Philippine Chancery inNampeidai. 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 PhilippineEmbassy Chancery. At the end of the lease period, all the three leased buildings shall beoccupied and used by the Philippine government. No change of ownership or title shalloccur. (See Annex "B" to Reply to Comment) The Philippine government retains the title allthroughout the lease period and thereafter. However, the government has not acted favorablyon this proposal which is pending approval and ratification between the parties. Instead, onAugust 11, 1986, President Aquino created a committee to study the disposition/utilization of


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Philippine government properties in Tokyo and Kobe, Japan through Administrative OrderNo. 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 citizensor entities to avail of separations' capital goods and services in the event of sale, lease ordisposition. 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 beenpushing, with great vigor, its decision to sell the reparations properties starting with theRoppongi lot. The property has twice been set for bidding at a minimum floor price of $225million. The first bidding was a failure since only one bidder qualified. The second one, afterpostponements, has not yet materialized. The last scheduled bidding on February 21, 1990was restrained by his Court. Later, the rules on bidding were changed such that the $225million 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 Philippinegovernment in favor of selling the property to non-Filipino citizens and entities. Thesepetitions have been consolidated and are resolved at the same time for the objective is thesame - 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 PhilippineGovernment?; and

(2) Does the Chief Executive, her officers and agents, have the authority and jurisdiction, tosell the Roppongi property?

Petitioner Dionisio Ojeda in G.R. No. 92047, apart from questioning the authority of thegovernment to alienate the Roppongi property assails the constitutionality of Executive OrderNo. 296 in making the property available for sale to non-Filipino citizens and entities. He alsoquestions the bidding procedures of the Committee on the Utilization or Disposition ofPhilippine Government Properties in Japan for being discriminatory against Filipino citizensand Filipino-owned entities by denying them the right to be informed about the biddingrequirements.

II

In G.R. No. 92013, petitioner Laurel asserts that the Roppongi property and the related lotswere acquired as part of the reparations from the Japanese government for diplomatic andconsular use by the Philippine government. Vice-President Laurel states that the Roppongiproperty is classified as one of public dominion, and not of private ownership under Article420 of the Civil Code(See infra).

The petitioner submits that the Roppongi property comes under "property intended for publicservice" 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 relatedproperties were acquired for "sites for chancery, diplomatic, and consular quarters, buildingsand other improvements" (Second Year Reparations Schedule). The petitioner states that


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they continue to be intended for a necessary service. They are held by the State inanticipation 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 norbe 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 thesame 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 oruse.

The respondents, for their part, refute the petitioner's contention by saying that the subjectproperty is not governed by our Civil Code but by the laws of Japan where the property islocated. They rely upon the rule of lex si tus which is used in determining the applicable lawregarding the acquisition, transfer and devolution of the title to a property. They also invokeOpinion No. 21, Series of 1988, dated January 27, 1988 of the Secretary of Justice which usedthe lex si tus in explaining the inapplicability of Philippine law regarding a property situated inJapan.

The respondents add that even assuming for the sake of argument that the Civil Code isapplicable, the Roppongi property has ceased to become property of public dominion. It hasbecome patrimonial property because it has not been used for public service or fordiplomatic purposes for over thirteen (13) years now (Citing Article 422, Civil Code) andbecause the in tent ion by the Executive Department and the Congress to con vert i t to privateuse has been manifested by overt acts, such as, among others: (1) the transfer of thePhilippine Embassy to Nampeidai (2) the issuance of administrative orders for the possibilityof alienating the four government properties in Japan; (3) the issuance of Executive OrderNo. 296; (4) the enactment by the Congress of Rep. Act No. 6657 [the ComprehensiveAgrarian Reform Law] on June 10, 1988 which contains a provision stating that funds may betaken from the sale of Philippine properties in foreign countries; (5) the holding of the publicbidding of the Roppongi property but which failed; (6) the deferment by the Senate inResolution No. 55 of the bidding to a future date; thus an acknowledgment by the Senate ofthe 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. BiddingCommittee, et al., G.R. No. 87478 which sought to enjoin the second bidding of the Roppongiproperty scheduled on March 30, 1989.

III

In G.R. No. 94047, petitioner Ojeda once more asks this Court to rule on the constitutionalityof Executive Order No. 296. He had earlier filed a petition in G.R. No. 87478 which the Courtdismissed on August 1, 1989. He now avers that the executive order contravenes theconstitutional mandate to conserve and develop the national patrimony stated in thePreamble of the 1987 Constitution. It also allegedly violates:

(1) The reservation of the ownership and acquisition of alienable lands of the public domainto Filipino citizens. (Sections 2 and 3, Article XII, Constitution; Sections 22 and 23 ofCommonwealth Act 141). itc-asl

(2) The preference for Filipino citizens in the grant of rights, privileges and concessionscovering the national economy and patrimony (Section 10, Article VI, Constitution);

(3) The protection given to Filipino enterprises against unfair competition and tradepractices;


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(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 byFilipino 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 involvingpublic interest (Section 28, Article III, Constitution).

Petitioner Ojeda warns that the use of public funds in the execution of an unconstitutionalexecutive order is a misapplication of public funds He states that since the details of thebidding for the Roppongi property were never publ ic ly disclosed until February 15, 1990 (or afew 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 bedone in Tokyo, interested Filipino citizens or entities owned by them did not have the chanceto comply with Purchase Offer Requirements on the Roppongi. Worse, the Roppongi shall besold 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 siteand the three related properties were through reparations agreements, that these wereassigned to the government sector and that the Roppongi property itself was specificallydesignated 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 isdictated by the terms of the Reparations Agreement and the corresponding contract ofprocurement 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 theproperty 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 cannotbe 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. Thepurpose is not to serve the State as a juridical person, but the citizens; it is intended for thecommon and public welfare and cannot be the object of appropration. (Taken from 3Manresa, 66-69; cited in Tolentino, Commentaries on the Civil Code of the Philippines, 1963Edition, 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, portsand bridges constructed by the State, banks shores roadsteads, and others ofsimilar character;


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(2) Those which belong to the State, without being for public use, and areintended 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 inthe preceding article, is patrimonial property.

The Roppongi property is correctly classified under paragraph 2 of Article 420 of the CivilCode 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 becausethe 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 servicedoes not automatically convert it to patrimonial property. Any such conversion happens onlyif the property is withdrawn from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66SCRA 481 [1975]). A property continues to be part of the public domain, not available forprivate appropriation or ownership until there is a formal declaration on the part of thegovernment to withdraw it from being such (Ignacio v. Director of Lands, 108 Phil. 335

[1960]).

The respondents enumerate various pronouncements by concerned public officialsinsinuating a change of intention. We emphasize, however, that an abandonment of theintention to use the Roppongi property for public service and to make it patrimonial propertyunder Article 422 of the Civil Code mus t be defin iteAbandonment cannot be inferred from thenon-use alone specially if the non-use was attributable not to the government's owndeliberate and indubitable will but to a lack of financial support to repair and improve theproperty (See Heirs of Felino Santiago v. Lazaro, 166 SCRA 368 [1988]). Abandonment mustbe 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 theRoppongi property's original purpose. Even the failure by the government to repair thebuilding in Roppongi is not abandonment since as earlier stated, there simply was a shortageof government funds. The recent Administrative Orders authorizing a study of the status andconditions of government properties in Japan were merely directives for investigation but didnot 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 aprovision in its text expressly authorizing the sale of the four properties procured from Japanfor the government sector. The executive order does not declare that the properties lost theirpublic character. It merely intends to make the properties avai lable to foreigners and not toFilipinos alone in case of a sale, lease or other disposition. It merely eliminates the restrictionunder Rep. Act No. 1789 that reparations goods may be sold only to Filipino citizens and onehundred (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 otherlaws to the contrary notwithstanding, the above-mentioned properties can bemade 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 andthe three other properties were earlier converted into alienable real properties. As earlier


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The subsequent approval on October 4, 1988 by President Aquino of the recommendation bythe 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 herlegislative 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 ofpublic dominion, there is another obstacle to its sale by the respondents.

There is no law authoriz ing i ts con veyance.

Section 79 (f) of the Revised Administrative Code of 1917 provides

Section 79 (f ) Conveyances and contracts to w hich the Government is a party.In cases in which the Government of the Republic of the Philippines is aparty to any deed or other instrument conveying the title to real estate or toany other property the value of which is in excess of one hundred thousandpesos, the respective Department Secretary shall prepare the necessary

papers which, together with the proper recommendations,shal l be submittedto the Congr ess of the Phi l ippines for approval by the same.Such deed,instrument, or contract shall be executed and signed by the President of thePhilippines on behalf of the Government of the Philippines unless theGovernment of the Philippines unless the authority therefor be expresslyvested 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. Off ic ial Au thorized to Con vey Real Property. Whenever realproperty of the Government is authorized by law to be con veyed,the deed ofconveyance 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 thePhilippines, by the President, unless the authority therefor is expressly vestedby law in another officer.

(2) For property belonging to the Republic of the Philippines but titled in thename of any political subdivision or of any corporate agency orinstrumentality, 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 herown sole will. Any such conveyance must be authorized and approved by a law enacted bythe Congress. It requires executive and legislative concurrence.

Resolution No. 55 of the Senate dated June 8, 1989, asking for the deferment of the sale ofthe Roppongi property does not withdraw the property from public domain much lessauthorize its sale. It is a mere resolution; it is not a formal declaration abandoning the publiccharacter of the Roppongi property. In fact, the Senate Committee on Foreign Relations isconducting hearings on Senate Resolution No. 734 which raises serious policyconsiderations and calls for a fact-finding investigation of the circumstances behind thedecision to sell the Philippine government properties in Japan.


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The resolution of this Court inOjeda v. Bidd ing Committee, et al., sup ra, did not pass uponthe constitutionality of Executive Order No. 296. Contrary to respondents' assertion, we didnot uphold the authority of the President to sell the Roppongi property. The Court stated thatthe constitutionality of the executive order was not the real issue and that resolving theconstitutional question was "neither necessary nor finally determinative of the case." TheCourt 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 todispose of the Roppongi property to finance the CARP ... cannot be questioned" in view ofSection 63 (c) of Rep. Act No. 6657, the Court did not acknowledge the fact that the propertybecame alienable nor did it indicate that the President was authorized to dispose of theRoppongi property. The resolution should be read to mean that in case the Roppongiproperty is re-classified to be patrimonial and alienable by authority of law, the proceeds of asale 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 proposed1990 sale of the Roppongi property. We are resolving the issues raised in these petitions, notthe issues raised in 1989.

Having declared a need for a law or formal declaration to withdraw the Roppongi propertyfrom public domain to make it alienable and a need for legislative authority to allow the saleof the property, we see no compelling reason to tackle the constitutional issues raised bypetitioner Ojeda.

The Court does not ordinarily pass upon constitutional questions unless these questions areproperly raised in appropriate cases and their resolution is necessary for the determinationof the case (People v. Vera, 65 Phil. 56 [1937]). The Court will not pass upon a constitutionalquestion although properly presented by the record if the case can be disposed of on someother ground such as the application of a statute or general law (Siler v. Louisville andNashville 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 theFilipino people in reparation for the lives and blood of Filipinos who died andsuffered during the Japanese military occupation, for the suffering of widowsand orphans who lost their loved ones and kindred, for the homes and otherproperties lost by countless Filipinos during the war. The Tokyo properties area monument to the bravery and sacrifice of the Filipino people in the face of aninvader; like the monuments of Rizal, Quezon, and other Filipino heroes, we donot expect economic or financial benefits from them. But who would think ofselling these monuments? Filipino honor and national dignity dictate that wekeep 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 sellingthem. For it would be as if we sold the lives and blood and tears of ourcountrymen. (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 governmentin atonement for its past belligerence for the valiant sacrifice of life and limb


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G.R. No. L-66807 January 26, 1989

REPUBLIC OF THE PHILIPPINES, represented by the DIRECTOR OF LANDS, petitioner,vs.MELITONA ALAGAD, SPOUSES CARMEN ALAGAD AND ESPIRIDION KOLIMLIM, JUSTOALAGAD, CARLOS ALAGAD, SPOUSES LIBRADA ALAGAD AND EMERSON ABANO,

DEMETRIO ALAGAD, ANTONIO ALAGAD, REGISTER OF DEEDS OF LAGUNA, and theINTERMEDIATE APPELLATE COURT (Fourth Civil Cases Division), respondents.

The Solicitor General for petitioner.

Alberto, Salazar & Associates for private respondents.

SARMIENTO,J.:

The Republic appeals from the decision of the Court of Appeals 1affirming two orders of the defunct

Court of First Instance of Laguna 2dismissing its petition for "annulment of title and reversion. 3The factsappear in the decision appealed from:

On or about October 11, 1951, defendants filed an application for registration of theirtitle over a parcel of land situated at Linga, Pila, Laguna, with an area of 8.1263hectares, reflected in survey plan Psu-116971, which was amended after the landwas divided into two parcels, namely, Lot 1 with an area of 5.2476 hectares and Lot2 with an area of 2.8421 hectares, reflected in survey plan Psu-226971, amd. 2.

The Republic opposed the application on the stereo-typed ground that applicants andtheir predecessors have not been in possession of the land openly, continuously,publicly and adversely under a bona fideclaim of ownership since July 26, 1894 and

the land has not ceased to be a part of the public domain. It appears that barrio folkalso opposed the application. (LRC Case No. 189. G.L.R.O. Rec. No. 4922 of theCourt of First Instance of Laguna).

By virtue of a final judgment in said case, promulgated January 16, 1956,supplemented by orders issued on March 21, 1956 and August 13, 1956, defendantswere declared owners of Lot 1 and the remaining portion, or Lot 2, was declaredpublic land. Decree No. N-51479 was entered and Original Certificate of Title No. 0-40 1, dated October 18, 1956, was issued in the names of defendants.

In August, 1966, Civil Case No. 52 of the Municipal Court of Pila, Laguna, was filedby defendants to evict the barrio folk occupying portions of Lot 1. On August 8, 1968,

judgment was rendered in the eviction case ordering the defendants therein to returnpossession of the premises to herein defendants, as plaintiffs therein. Thedefendants therein did not appeal.

The foregoing anterior proceedings triggered the filing of the instant case. OnOctober 6, 1970, as prayed for in the complaint, a writ of preliminary injunction wasissued enjoining the Provincial Sheriff of Laguna or his deputies from enforcing thewrit of execution issued in Civil Case No. 52, and the defendants from selling,mortgaging, disposing or otherwise entering into any transaction affecting the area.


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With respect to the first question, we hold that the Court of Appeals has been guilty of grave abuseof discretion. It is well-established that the State cannot be bound by, or estopped from, the mistakesor negligent acts of its official or agents, 7much more, non-suited as a result thereof.

This is so because:

... [T]he state as a persona in law is the judicial entity, which is the source of anyasserted right to ownership in land under the basic doctrine embodied in the 1935Constitution as well as the present charter. It is charged moreover with theconservation of such patrimony. There is need therefore of the most rigorous scrutinybefore private claims to portions thereof are judicially accorded recognition,especially so where the matter is sought to be raked up anew after almost fifty years.Such primordial consideration, not the apparent carelessness, much less theacquiescense of public officials, is the controlling norm . . . 8

The cases of Ramos v. Centra l Bank of the Philippines 9and Nilo v. Romero,10cited by the Court ofAppeals in support of its decision, are not applicable. In Ramos, we applied estoppel upon finding of badfaith on the part of the State (the Central Bank) in deliberately reneging on its promises. In Nilo, wedenied efforts to impugn the jurisdiction of the court on the ground that the defendant had been"erroneously' represented in the complaint by the City Attorney when it should have been the City Mayor,on a holding that the City Attorney, in any event, could have ably defended the City (Davao City). In bothcases, it is seen that the acts that gave rise to estoppel were voluntary and intentional in character, inwhich cases, it could not be said that the Government had been prejudiced by some negligent act oromission.

There is no merit either, in claims that res judicata is an impediment to reversion of property.In Republic v. Court of Appeals, 11this Court stated:

... [a] certificate of title may be ordered cancelled (Republic v Animas, et al., . supra),and the cancellation may be pursued through an ordinary action therefor. This actioncannot be barred by the prior judgment of the land registration court, since the said

court had no jurisdiction over the subject matter. And if there was no suchjurisdiction, then the principle of res judicatadoes not apply. For it is a well-settledrule that for a prior judgment to constitute a bar to a subsequent case, the followingrequisites must concur; (1) it must be a final judgment; (2) it must have beenrendered by a court having jurisdiction over the subject matter and over the parties;(3) it must be a judgment on the merits; and (4) there must be, between the first andsecond actions, identity of parties, identity of subject matter and identity of cause ofaction (Municipality of Daet vs. CA, 93 SCRA 503; Mendoza vs. Arrieta, et al., 91SCRA 113)...12

In the case at bar, if the parcel registered in the names of the private respondents were foreshoreland, the land registration court could not have validly awarded title thereto. It would have beenwithout the authority to do so. The fact that the Bureau of Lands had failed to appeal from the decreeof registration could not have validated the court's decision, rendered without jurisdiction.

II.

"Property, according to the Civil Code, is either of public dominion or of private ownership." 13Property is of public dominion if it is:


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(1) ... intended for public use, such as roads, canals, rivers, torrents, ports andbridges constructed by the State, banks, shores, roadsteads and others of similarcharacter; 14or if it:

(2) . . . belong[s] to the State, without being for public use, and are intended for somepublic service or for the development of the national wealth. 15

All other property of the State, it is provided further, which is not of the charactermentioned in ... article [4201, is patrimonial property,16meaning to say, property 'open todisposition17by the Government, or otherwise, property pertaining to the nationaldomain, or public lands.18Property of the public dominion, on the other hand, refers tothings held by the State by regalian right. They are things res publicaein nature andhence, incapable of private appropriation. Thus, under the present Constitution, [w]ith theexception of agricultural lands, all other natural resources shall not be alienated.' 19

Specifically:

ART. 502. The following are of public dominion:

(1) Rivers and their natural beds;

(2) Continuous or intermittent waters of springs and brooks running intheir natural beds and the beds themselves;

(3) Waters rising continuously or intermittently on lands of publicdominion;

(4) Lakes and lagoons formed by Nature on public lands, and theirbeds;

(5) Rain waters running through ravines or sand beds, which are alsoof public dominion;

(6) Subterranean waters on public lands;

(7) Waters found within the zone of operation of public works, even ifcons

cases 2nd batch

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