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    SALVADOR H. LAUREL,petitioner,vs.RAMON GARCIA, as head of the Asset Privatization Trust, RAUL MANGLAPUS, asSecretary of Foreign Affairs, and CATALINO MACARAIG, as ExecutiveSecretary, respondents.

    G.R. No. 92047 July 25, 1990

    DIONISIO S. OJEDA, petitioner,vs.EXECUTIVE SECRETARY MACARAIG, JR., ASSETS PRIVATIZATION TRUSTCHAIRMAN RAMON T. GARCIA, AMBASSADOR RAMON DEL ROSARIO, et al., asmembers of the PRINCIPAL AND BIDDING COMMITTEES ON THEUTILIZATION/DISPOSITION PETITION OF PHILIPPINE GOVERNMENTPROPERTIES IN JAPAN,respondents.

    Ar turo M. Tolentino for petiti oner i n 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 ofthe 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 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 inthe 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, athird motion for extension of time granted on May 24, 1990 and a fourth motion forextension of time which we granted on June 5, 1990 but calling the attention of therespondents to the length of time the petitions have been pending. After the comment wasfiled, the petitioner in G.R. No. 92047 asked for thirty (30) days to file a reply. We noted hismotion and resolved to decide the two (2) cases.

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    I

    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 May9, 1956, the other lots being:

    (1) The Nampeidai Property at 11-24 Nampeidai-machi, Shibuya-ku, Tokyo which has anarea of approximately 2,489.96 square meters, and is at present the site of the PhilippineEmbassy 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,a residential 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 procurementand utilization of reparations and development loans. The procurements are divided intothose for use by the government sector and those for pri vate parties in projects as the then

    National Economic Council shall determine. Those intended for the private sector shall bemade 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 SecondYear Schedule and listed under the heading "Government Sector", through ReparationsContract No. 300 dated June 27, 1958. The Roppongi property consists of the land andbuilding "for the Chancery of the Philippine Embassy" (Annex M-D to Memorandum forPetitioner, p. 503). As intended, it became the site of the Philippine Embassy until the latterwas transferred to Nampeidai on July 22, 1976 when the Roppongi building needed majorrepairs. 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 PhilippineAmbassador to Japan, Carlos J. Valdez, to make the property the subject of a leaseagreement with a Japanese firm - Kajima Corporation which shall construct two (2)buildings in Roppongi and one (1) building in Nampeidai and renovate the presentPhilippine Chancery in Nampeidai. The consideration of the construction would be thelease to the foreign corporation of one (1) of the buildings to be constructed in Roppongi

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    and the two (2) buildings in Nampeidai. The other building in Roppongi shall then be usedas the Philippine Embassy Chancery. At the end of the lease period, all the three leasedbuildings shall be occupied and used by the Philippine government. No change ofownership or title shall occur. (See Annex "B" to Reply to Comment) The Philippinegovernment retains the title all throughout the lease period and thereafter. However, the

    government has not acted favorably on this proposal which is pending approval andratification between the parties. Instead, on August 11, 1986, President Aquino created acommittee to study the disposition/utilization of Philippine government properties in Tokyoand Kobe, Japan through Administrative Order No. 3, followed by Administrative OrdersNumbered 3-A, B, C and D.

    On July 25, 1987, the President issued Executive Order No. 296 entitling non-Filipinocitizens 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 specificallymentioned 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,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 inG.R. No. 92013 objects to the alienation of the Roppongi property to anyone while thepetitioner 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 objectiveis 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 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 ExecutiveOrder No. 296 in making the property available for sale to non-Filipino citizens andentities. He also questions the bidding procedures of the Committee on the Utilization orDisposition of Philippine Government Properties in Japan for being discriminatory againstFilipino citizens and Filipino-owned entities by denying them the right to be informedabout the bidding requirements.

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    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 Roppongi

    property 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 forpublic service" in paragraph 2 of the above provision. He states that being one of publicdominion, no ownership by any one can attach to it, not even by the State. The Roppongiand related properties were acquired for "sites for chancery, diplomatic, and consularquarters, buildings and other improvements" (Second Year Reparations Schedule). Thepetitioner states that they continue to be intended for a necessary service. They are held bythe State in anticipation of an opportune use. (Citing 3 Manresa 65-66). Hence, it cannot beappropriated, 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, thepetitioner avers that the same remains property of public dominion so long as thegovernment has not used it for other purposes nor adopted any measure constituting aremoval of its original purpose or use.

    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 situswhich is used in determining the applicable lawregarding the acquisition, transfer and devolution of the title to a property. They alsoinvoke 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 aproperty situated in Japan.

    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. Ithas become 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 intention by the Executive Department and the Congress to convert i t to pr ivateuse 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 thepossibility of alienating the four government properties in Japan; (3) the issuance ofExecutive Order No. 296; (4) the enactment by the Congress of Rep. Act No. 6657 [theComprehensive Agrarian Reform Law] on June 10, 1988 which contains a provision statingthat funds may be taken from the sale of Philippine properties in foreign countries; (5) theholding of the public bidding of the Roppongi property but which failed; (6) the defermentby the Senate in Resolution No. 55 of the bidding to a future date; thus an acknowledgmentby the Senate of the government's intention to remove the Roppongi property from thepublic service purpose; and (7) the resolution of this Court dismissing the petition in Ojeda

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    v. Bidding Committee, et al., G.R. No. 87478 which sought to enjoin the second bidding ofthe Roppongi property scheduled on March 30, 1989.

    III

    In G.R. No. 94047, petitioner Ojeda once more asks this Court to rule on theconstitutionality 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 ordercontravenes the constitutional mandate to conserve and develop the national patrimonystated in the Preamble of the 1987 Constitution. It also allegedly violates:

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

    (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 tradepractices;

    (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 icly disclosed until February 15, 1990 (ora few days before the scheduled bidding), the bidding guidelines are available only inTokyo, and the accomplishment of requirements and the selection of qualified biddersshould be done in Tokyo, interested Filipino citizens or entities owned by them did not havethe 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 gainstax 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 were

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    assigned 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 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 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. Itcannot be alienated. Its ownership is a special collective ownership for general use andenjoyment, an application to the satisfaction of collective needs, and resides in the socialgroup. The purpose is not to serve the State as a juridical person, but the citizens; it isintended 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, andothers of similar character;

    (2) Those which belong to the State, without being for public use, and areintended for some public service or for the development of the nationalwealth.

    ART. 421. All other property of the State, which is not of the character statedin the 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 changedbecause 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 Embassyservice does not automatically convert it to patrimonial property. Any such conversionhappens only if the property is withdrawn from public use (Cebu Oxygen and AcetyleneCo. v. Bercilles, 66 SCRA 481 [1975]). A property continues to be part of the publicdomain, not available for private appropriation or ownership until there is a formal

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    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 officialsinsinuating 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 patrimonialproperty under Article 422 of the Civil Code must be defi ni te Abandonment cannot beinferred from the non-use alone specially if the non-use was attributable not to thegovernment's own deliberate and indubitable will but to a lack of financial support torepair 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 ofthe Roppongi 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 ashortage of government funds. The recent Administrative Orders authorizing a study of

    the status and conditions of government properties in Japan were merely directives forinvestigation 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 aprovision in its text expressly authorizing the sale of the four properties procured fromJapan for the government sector. The executive order does not declare that the propertieslost their public character. It merely intends to make the properties available to foreignersand not to Filipinos alone in case of a sale, lease or other disposition. It merely eliminatesthe restriction under Rep. Act No. 1789 that reparations goods may be sold only to Filipinocitizens and one hundred (100%) percent Filipino-owned entities. The text of ExecutiveOrder 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 Roppongiand the three other properties were earlier converted into alienable real properties. Asearlier stated, Rep. Act No. 1789 differentiates the procurements for the government sectorand the private sector (Sections 2 and 12, Rep. Act No. 1789). Only the private sectorproperties can be sold to end-users who must be Filipinos or entities owned by Filipinos. Itis 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 offunds for its implementation, the proceeds of the disposition of the properties of theGovernment in foreign countries, did not withdraw the Roppongi property from beingclassified as one of public dominion when it mentions Philippine properties abroad. Section63 (c) refers to properties which are alienable and not to those reserved for public use orservice. Rep Act No. 6657, therefore, does not authorize the Executive Department to sell

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    the Roppongi property. It merely enumerates possible sources of future funding toaugment (as and when needed) the Agrarian Reform Fund created under Executive OrderNo. 299. Obviously any property outside of the commerce of man cannot be tapped as asource of funds.

    The respondents try to get around the public dominion character of the Roppongi propertyby 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 onesto insist that in the sale of extremely valuable government property, Japanese law and notPhilippine 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 thatthe lex loci rei sitaeor Japanese law should apply without stating what that law provides. Itis 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 titl e orownership of an immovable, such that the capacity to take and transfer immovables, theformalities of conveyance, the essential validity and effect of the transfer, or theinterpretation and effect of a conveyance, are to be determined (See Salonga, PrivateI nternational Law, 1981 ed., pp. 377-383); and (2) A foreign law on land ownership and itsconveyance is asserted to conflict with a domestic law on the same matters. Hence, the needto 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 respondentofficials to validly dispose of property belonging to the State. And the validity of theprocedures adopted to effect its sale. This is governed by Philippine Law. The rule of lexsitus does not apply.

    The assertion that the opinion of the Secretary of Justice sheds light on the relevance ofthe lex situsrule is misplaced. The opinion does not tackle the alienabilityof the realproperties procured through reparations nor the existence in what body of the authority tosell them. In discussing who are capableof acquiri ngthe lots, the Secretary merely explainsthat it is the foreign law which should determinewho can acqui re the properties so that theconstitutional 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 belaboringwhether or not this opinion is correct. Why should we discuss who can acquire theRoppongi lot when there is no showing that it can be sold?

    The subsequent approval on October 4, 1988 by President Aquino of the recommendationby the investigating committee to sell the Roppongi property was premature or, at the veryleast, 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

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    already lost her legislative powers. The Congress had already convened for more than ayear.

    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 author izing its conveyance.

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

    Section 79 (f ) Conveyances and contracts to whi ch 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 necessarypapers which, together with the proper recommendations,shal l be submi tted

    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 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 of1987 (Executive Order No. 292).

    SEC. 48. Official Authorized to Convey Real Property. Whenever realproperty of the Government is author ized 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 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 thepublic character of the Roppongi property. In fact, the Senate Committee on Foreign

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    Relations is conducting 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.

    The resolution of this Court inOjeda v. Bidding Committee, et al., supra, did not pass upon

    the constitutionality of Executive Order No. 296. Contrary to respondents' assertion, wedid not uphold the authority of the President to sell the Roppongi property. The Courtstated that the constitutionality of the executive order was not the real issue and thatresolving the constitutional question was "neither necessary nor finally determinative ofthe case." The Court noted that "[W]hat petitioner ultimately questions is the use of theproceeds of the disposition of the Roppongi property." In emphasizing that "the decision ofthe Executive to dispose of the Roppongi property to finance the CARP ... cannot bequestioned" in view of Section 63 (c) of Rep. Act No. 6657, the Court did not acknowledgethe fact that the property became alienable nor did it indicate that the President wasauthorized to dispose of the Roppongi property. The resolution should be read to meanthat 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 developmentprojects including the CARP.

    Moreover, the sale in 1989 did not materialize. The petitions before us question theproposed 1990 sale of the Roppongi property. We are resolving the issues raised in thesepetitions, not the 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 thesale of the property, we see no compelling reason to tackle the constitutional issues raisedby petitioner 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 aconstitutional question although properly presented by the record if the case can bedisposed of on some other ground such as the application of a statute or general law (Silerv. Louisville and Nashville R. Co., 213 U.S. 175, [1909], Railroad Commission v. PullmanCo., 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 tothe Filipino people in reparation for the lives and blood of Filipinos who diedand suffered during the Japanese military occupation, for the suffering ofwidows and orphans who lost their loved ones and kindred, for the homesand other properties lost by countless Filipinos during the war. The Tokyoproperties are a monument to the bravery and sacrifice of the Filipino peoplein the face of an invader; like the monuments of Rizal, Quezon, and otherFilipino heroes, we do not expect economic or financial benefits from them.

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    But who would think of selling these monuments? Filipino honor andnational dignity dictate that we keep our properties in Japan as memorials tothe countless Filipinos who died and suffered. Even if we should becomepaupers we should not think of selling them. For it would be as if we sold thelives 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 Japanesegovernment in atonement for its past belligerence for the valiant sacrifice oflife and limb and for deaths, physical dislocation and economic devastationthe 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, thatits significance today remains undimmed, inspire of the lapse of 45 yearssince 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 notbe dissipated ... (Rollo-92047, p. 9)

    It is indeed true that the Roppongi property is valuable not so much because of the inflatedprices fetched by real property in Tokyo but more so because of its symbolic value to allFilipinos veterans and civilians alike. Whether or not the Roppongi and relatedproperties will eventually be sold is a policy determination where both the President andCongress must concur. Considering the properties' importance and value, the laws onconversion and disposition of property of public dominion must be faithfully followed.

    WHEREFORE, IN VIEW OF THE FOREGOING, the petitions are GRANTED. A writ ofprohibition is issued enjoining the respondents from proceeding with the sale of theRoppongi property in Tokyo, Japan. The February 20, 1990 Temporary Restraining Orderis made PERMANENT.

    SO ORDERED.

    Melencio-Herrera, Paras, Bidin, Grio-Aquino and Regalado, JJ., concur .

    G.R. No. L-24661 February 28, 1974

    BENJAMIN RABUCO, VENANCIO G. GUIRNALDA, LEODEGARIO ALOBA,ELEUTERIO IBAES, ROGELIO ARAGONES, ASENCIO ABANCO, BENEDICTOBAUTISTA, MAXIMO AQUINO, PAULINA DALUMIAS, NENITA RAMOS,GUILLERMO VARIAS, EMELDA ARELLANO, PEDRO BILBAO, ERNESTOBONBALES, ROSITA OCA BAUTISTA, TERESITA ESTEBAN, JOSE BENJAMIN,

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    LORENZO BELDEVER, LEODEGARIO TUMLOS, PATRICIO MALATE, ANSELMOCORTEJOS, ANACLETA ADUCA, SALOME BARCELONA, ENRICO CELSO, IRENECAMBA, MARIA COLLADO, RUFINO CANTIL, ANANIAS CANILLO, MAXIMO DECASTRO, CEFERINO SALAZAR, PATRIA ANAYA, FELISA VELASCO, IGNACIOSARASPI, FLAVIO DINAGUIT, REMEDIOS BAROMETRO, PEDRO GEBANIA,

    RUBEN GEGABALEN, EMETRIO EDAO, LUCIANO ARAGONES, ADRIANOESTRELLADO, BONIFACIO EVARISTO, ISIDORO EDORIA, TIMOTEA ECARUAN,BIENVENIDO COLLADO, CENON DAJUYA, RAFAELA FERNANDEZ, ALFONSOFAUSTINO, AVELINO GARCIA, RICARDO GUIRNALDA, FRANCISCO HENERAL,CARMEN KIONESALA, FELICIANO LUMACTOD, DOLORES VILLACAMPA,NARCISO LIM, EUFEMIO LEGASPI, MATILDE MABAQUIAO, EULOGIO VIA,MACARIO ANTONIO, JEREMIAS DE LA CRUZ, MARTIN MANGABAN, SIMEONMANGABA T., CARIDAD MER MILLA, FELIX MAHINAY, NAPOLEON MARZAN,ISAIAS MANALASTAS, JOSEFA CORVERA, JOSE APRUEDO, ARSENIO REYES,EUGENIA A. ONO, CORNELIO OPOLENCIA, SEDECIAS PASCUA, ABUNDIOPAGUNTALAN, ESPERANZA DE QUIROS, CRESENCIO SALEM, MOISES

    FERNANDEZ, FORTUNATO GONZALES, SOCORRO R. VALEN, RODOLFOCOLLADO, VENERIO CELSO, GREGORIO DE LA CRUZ, CELSO ALCERA,NICOLAS ARAGONES, JOSEFINA MANANSALA, ADELAIDA CALASIN , JOSEAGUSTIN, TOMAS JOSEPH, MANUEL DADOR, SERGIO LIPATON, ERNESTOSUMAYDING, MARCELINO DIOSO, MIGUEL ALCERA, CRISANTA ENAMER,JUAN VIADO HILARION CHIOCO, EUROPIA CABAHUG, VICTORIA DUERO,CONSORCIO ENOC, MAMERTO GAMONIDO, BONIFACIO SABADO, MARIAINTROLIZO, HENRY ENOLBA, REYNALDO LIM, FORTUNATO LIPON, ERNESTOMALLOS, FLORENTINA PATRICIO, MAMERTO PALAPALA, RAMON DEPERALTA, JOSE PARRAS, APOLINARIO YAP, JUAN ROQUE, FELIX ROQUE,GLICERIA SALAZAR, MIGUELA SABIO, AGAPITO SAYAS, PAULINO SARROZA,PACIFICO JUANICO, LIBERADO TULAWAN, LIGAYA LAUS, ERNESTOVERZOSA, LEOPOLDO BERNALES, JAIME VISTA, ISAIAS AMURAO, BENITA M.BARENG, and BRIGIDA SANCHEZ,petitioners,vs.

    HON. ANTONIO J. VILLEGAS substituted by HON. RAMON BAGATSING as CITYMAYOR OF MANILA, HON. LADISLAO J. TOLENTINO, City Engineer of Manila,their agents, employees, assistants and all persons acting under them; HON. BENJAMINGOZON, Administrator, Land Reform Authority substituted by HON CONRADOESTRELLA as Secretary of the Department of Agrarian Reforms and his agents,employees, assistants and all persons acting under his orders, respondent.1

    G.R. No. L-24915 February 28, 1974

    BENJAMIN RABUCO, et al., (the same co-petitioners in L-24661),petitioners,vs.

    HON. ANTONIO J. VILLEGAS substituted by HON. RAMON BAGATSING as CITYMAYOR OF MANILA, et al., (the same co-respondents in L-24661), respondents.

    G.R. No. L-24916 February 28, 1974

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    BENJAMIN RABUCO, et al. (the same co-petitioners in L-24661),petitioners-appellants,vs.

    HON. ANTONIO J. VILLEGAS substituted by HON. RAMON BAGATSING as CITYMAYOR OF MANILA, et al., (the same co-respondents in L-24661), respondents-appellees.

    Manuel D. Melotindos and Ricardo M. Guirnalda for petitioners.

    Second Assistant City Fiscal Manuel T. Reyes for respondents.

    TEEHANKEE, J.:p

    The Court herein upholds the constitutionality of Republic Act 3120 on the strength of theestablished doctrine that the subdivision of communal land of the State (although titled in the

    name of the municipal corporation) and conveyance of the resulting subdivision lots by sale on

    installment basis to bona fideoccupants by Congressional authorization and disposition does notconstitute infringements of the due process clause or the eminent domain provisions of theConstitution but operates simply as a manifestation of the legislature's right of control and power

    to deal with State property.

    The origin and background of the cases at bar which deal with the decisive issue of

    constitutionality of Republic Act 3120 enacted onJune 17, 1961, as raised by respondent mayorof Manila in resisting petitioners' pleas that respondent mayor not only lacks the authority to

    demolish their houses or eject them as tenants and bona fide occupants of a parcel of land in San

    Andres, Malate2

    but is also expressly prohibited from doing so by section 2 of the Act, may be

    summarized from the Court of Appeals'3

    certification of resolution of May 31, 1965 as follows:

    CaseL-24916involves petitioners' appeal to the Court of Appeals 4 from the decision of the

    Manila court of first instance dismissing their petition for injunction and mandamusto enjoin thedemolition of their houses and the ejectment from the public lots in question and to direct

    respondent administrator of the Land Authority (now Secretary of Agrarian Reform) to

    implement the provisions of Republic Act 3120 for the subdivision and sale on installment basisof the subdivided lots to them as the tenants and bona fide occupants thereof, and instead

    ordering their ejectment.

    CaseL-24915involves petitioners' independent petition for injunction filed directly with the

    Court of Appeals January 29, 19655

    to forestall the demolition overnight of their houses

    pursuant to the order of demolition set for January 30, 1965 at 8 a.m. issued by respondents cityofficials pending the elevation of their appeal. The appellate court gave due course thereto andissued the writ of preliminary injunction as prayed for.

    The two cases were ordered "consolidated into one" since they were "unavoidably interlaced."

    The appellate court, finding that the constitutionality of Republic Act 3120 was "the dominant

    and inextricable issue in the appeal" over which it had no jurisdiction and that the trial court

    incorrectly "sidetracked" the issue, thereafter certified the said cases to this Court, as follows:

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    The validity of Republic Act 3120 which was seasonably posed in issue in the

    court below was sidetracked by the trial court, thus:

    The constitutionality of Republic Act No. 3120 need not be passed

    upon as the principal question in issue is whether the houses of the

    petitioners are public nuisances, which the court resolved in theaffirmative. As a matter of fact even if the petitioners were already

    the owners of the land on which their respected houses are erected,

    the respondent city officials could cause the removal thereof asthey were constructed in violation of city ordinances and constitute

    public nuisance.

    It is significant to note, however, that what is sought by the respondent City

    Mayor and City Engineer of Manila is not only the demolition of the petitioners'

    houses in the premises in controversy, but their ejectment as well. Moreover,

    Republic Act 3120 does intend not only the dismissal of the ejectment

    proceedings against the petitioners from the land in controversy upon theirmotion, but as well that any demolition order issued against them shall also have

    to be dismissed. The law says:

    Upon approval of this Act no ejectment proceedings against any

    tenants or bona fide occupant shall be instituted and anyproceedings against any such tenant or bona fideoccupant shall be

    dismissed upon motion of the defendant.Provided, That any

    demolition order directed against any tenant or bona fideoccupant

    thereof, shall be dismissed. (Sec. 2, R. A. 3120).

    Indeed, the petitioners-appellants, who contended in the court below that it wasnot necessary to decide on the validity or constitutionality of the law, nowasseverate that 'Republic Act No. 3120 expressly prohibits ejectment and

    demolition of petitioners' home.' The petitioners' argument in their appeal to this

    Court runs as follows:

    1. Petitioners-appellants are entitled to the remedies of injunctionand mandamus, being vested with lawful possession over Lot 21-

    B, Block 610, granted by law, Republic Act No. 3120.

    2. Civil Case No. 56092 has not been barred by any priorjudgment, as wrongly claimed by respondents-appellees.

    3. Ejectment and demolition against petitioners-appellants areunlawful and clearly prohibited by Republic Act No. 3120.

    The defense of the respondents Mayor and City Engineer of Manila to arguments

    2 and 3 is the invalidity of the said Republic Act 3120 for being in violation of the

    Constitutional prohibition against the deprivation of property without due process

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    of law and without just compensation. So that even if argument 2 interposed by

    the petitioners-appellants should be rejected, still they may claim a right, by virtue

    of the aforesaid provisions of Republic Act 3120, to continue possession andoccupation of the premises and the lifting of the order of demolition issued

    against them. The constitutionality of the said Republic Act 3120, therefore,

    becomes the dominant and inextricable issue of the appeal.

    CaseL-24661for the continuation and maintenance of the writ of preliminary injunction

    previously issued by the Court of Appeals for preservation of thestatus quo was filed bypetitioners directly with this Court on June 21, 1965, pending transmittal of the records of Cases

    L-24915 and L-24916 to this Court as certified by the Court of Appeals which declared itself

    without jurisdiction over the principal and decisive issue of constitutionality of Republic Act

    3120.

    The Court gave due course thereto and on August 17, 1965 issued upon a P1,000 bond the

    writ of preliminary injunction as prayed for enjoining respondents "from demolishing and/or

    continuing to demolish the houses of herein petitioners situated in Lot No. 21-B, Block No. 610of the Cadastral Survey of the City of Manila, or from performing any act constituting an

    interference in or disturbance of their present possession."

    The records of two cases certified by the appellate court, L-24915 and L-24916, were eventually

    forwarded to this Court which per its resolution of August 24, 1965 ordered that they bedocketed and be considered together with case L-24661.

    In the early morning of April 19, 1970, a large fire of undetermined origin gutted the Malate areaincluding the lot on which petitioners had built their homes and dwellings. Respondents city

    officials then took over the lot and kept petitioners from reconstructing or repairing their burned

    dwellings. At petitioners' instance, the Court issued on June 17, 1970 a temporary restrainingorder enjoining respondents city officials "from performing any act constituting an interferencein or disturbance of herein petitioners' possession of Lot No. 21-B, Block No. 610, of the

    Cadastral Survey of the City of Manila" as safeguarded them under the Court's subsisting

    preliminary injunction of August 17, 1965.

    The "dominant and inextricable issue" at bar, as correctly perceived by the appellate court is theconstitutionality of Republic Act 3120 whereby Congress converted the lot in question together

    with another lot in San Andres, Malate "which are reserved as communal property" into

    "disposable or alienable lands of the State to be placed under the administration and disposal of

    the Land Tenure Administration" for subdivision into small lots not exceeding 120 square metersper lot for sale on installment basis to the tenants or bona fide occupants thereof

    6and expressly

    prohibited ejectment and demolition of petitioners' homes under section 2 of the Act as quoted in

    the appellate court's certification resolution,supra.

    The incidental issue seized upon by the trial court as a main issue for "sidetracking" the decisive

    issue of constitutionality, to wit, that petitioners' houses as they stood at the time of its judgmentin 1965 "were constructed in violation of city ordinances and constituted public nuisances"

    whose removal could be ordered "even if petitioners were already the owners of the land on

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    which their respective houses are erected" has become moot with the burning down of the

    petitioners' houses in the fire of April 19, 1970.

    If the Act is invalid and unconstitutional for constituting deprivation of property without due

    process of law and without just compensation as contended by respondents city officials, then the

    trial court's refusal to enjoin ejectment and demolition of petitioners' houses may be upheld.Otherwise, petitioners' right under the Act to continue possession and occupation of the premises

    and to the lifting and dismissal of the order of demolition issued against them must be enforced

    and the trial court's judgment must be set aside.

    Respondents city officials' contention that the Act must be stricken down as unconstitutional for

    depriving the city of Manila of the lots in question and providing for their sale in subdividedsmall lots to bona fide occupants or tenants without payment of just compensation is untenable

    and without basis, since the lots in question are manifestly owned by the city in

    itspublicandgovernmentalcapacity and are therefore public property over which Congress had

    absolute control as distinguished from patrimonial property owned by it in

    itsprivateorproprietarycapacity of which it could not be deprived without due process andwithout just compensation.7

    Here, Republic Act 3120 expressly declared that the properties were "reserved as communal

    property" and ordered their conversion into "disposable and alienable lands of the State" for sale

    in small lots to the bona fide occupants thereof. It is established doctrine that the act ofclassifying State property calls for the exercise of wide discretionary legislative power which

    will not be interfered with by the courts.

    The case of Salas vs. Jarencio8

    wherein the Court upheld the constitutionality of Republic Act

    4118 whereby Congress in identical terms as in Republic Act 3120 likewise converted another

    city lot (Lot 1-B-2-B of Block 557 of the cadastral survey of Manila also in Malate) which wasreserved as communal property into disposable land of the State for resale in small lots by theLand Tenure, Administration to the bona fide occupants is controlling in the case at bar.

    The Court therein reaffirmed the established general rule that "regardless of the source or

    classification of land in the possession of a municipality, exceptingthose acquired with its own

    funds in its private or corporate capacity, such property is held in trust for the State for thebenefit of its inhabitants, whether it be for governmental or proprietary purposes. It holds such

    lands subject to theparamount power of the legislature to dispose of the same, for after all it

    owes its creationto it as an agentfor the performance of a part of itspublic work, the

    municipality being but a subdivision or instrumentality thereof for purposes of localadministration. Accordingly, the legal situation is the same as if the State itself holds the

    property and puts it to a different use"9and stressed that "the property, as has been previously

    shown, was not acquired by the City of Manila with its own funds in its private or proprietary

    capacity. That it has in its name a registered title is not questioned, but this title should bedeemed to be held in trust for the Stateas the land covered thereby was part of the territory of the

    City of Manila granted by the sovereign upon its creation."10

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    There as here, the Court holds that the Acts in question (Republic Acts 4118 in Salasand

    Republic Act 3120 in the case at bar) were intended to implement the social justice policy of the

    Constitution and the government program of land for the landless and that theywere not"intended to expropriate the property involved but merely to confirmits character

    as communal landof the State and to make it available for disposition by the National

    Government: ... The subdivision of the land and conveyane of the resulting subdivision lots tothe occupants by Congressional authorization does not operate as an exercise of the power ofeminent domain without just compensation in violation of Section 1, subsection (2), Article III of

    the Constitution,11

    but simply as a manifestationof its rightandpowerto deal withstate

    property."12

    Since the challenge of respondents city officials against the constitutionality of Republic Act

    3120 must fail as the City was notdeprived thereby of anything it owns by acquisition with itsprivate or corporate funds either under the due process clause or under the eminent domain

    provisions of the Constitution, the provisions of said Act must be enforced and petitioners are

    entitled to the injunction as prayed for implementing the Act's prohibition against their ejectment

    and demolition of their houses.

    WHEREFORE, the appealed decision of the lower court (in Case No. L-24916) is hereby setaside, and the preliminary injunction heretofore issued on August 17, 1965 is hereby made

    permanent. The respondent Secretary of Agrarian Reform as successor agency of the Land

    Tenure Administration may now proceed with the due implementation of Republic Act 3120 in

    accordance with its terms and provisions. No costs.

    Makalintal, C.J., Zaldivar, Castro, Barredo, Makasiar, Antonio, Esguerra, Muoz Palma and

    Aquino, JJ., concur.

    Fernandez, J., took no part.

    G.R. No. 97764 August 10, 1992

    LEVY D. MACASIANO, Brigadier General/PNP Superintendent, Metropolitan TrafficCommand,petitioner,vs.

    HONORABLE ROBERTO C. DIOKNO, Presiding Judge, Branch 62, Regional TrialCourt of Makati, Metro Manila, MUNICIPALITY OF PARAAQUE, METRO MANILA,PALANYAG KILUSANG BAYAN FOR SERVICE,respondents.

    Ceferino, Padua Law Office for Palanyag Kilusang Bayan for service.

    Manuel de Guia for Municipality of Paraaque.

    MEDIALDEA, J.:

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    This is a petition for certiorariunder Rule 65 of the Rules of Court seeking the annulment of the

    decision of the Regional Trial Court of Makati, Branch 62, which granted the writ of preliminary

    injunction applied for by respondents Municipality of Paraaque and Palanyag Kilusang Bayanfor Service (Palanyag for brevity) against petitioner herein.

    The antecedent facts are as follows:

    On June 13, 1990, the respondent municipality passed Ordinance No. 86, Series of 1990 which

    authorized the closure of J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and OpenaStreets located at Baclaran, Paraaque, Metro Manila and the establishment of a flea market

    thereon. The said ordinance was approved by the municipal council pursuant to MMC Ordinance

    No. 2, Series of 1979, authorizing and regulating the use of certain city and/or municipal streets,roads and open spaces within Metropolitan Manila as sites for flea market and/or vending areas,

    under certain terms and conditions.

    On July 20, 1990, the Metropolitan Manila Authority approved Ordinance No. 86, s. 1990 of the

    municipal council of respondent municipality subject to the following conditions:

    1. That the aforenamed streets are not used for vehicular traffic, and that the

    majority of the residents do not oppose the establishment of the flea

    market/vending areas thereon;

    2. That the 2-meter middle road to be used as flea market/vending area shall be

    marked distinctly, and that the 2 meters on both sides of the road shall be used bypedestrians;

    3. That the time during which the vending area is to be used shall be clearly

    designated;

    4. That the use of the vending areas shall be temporary and shall be closed oncethe reclaimed areas are developed and donated by the Public Estate Authority.

    On June 20, 1990, the municipal council of Paraaque issued a resolution authorizing ParaaqueMayor Walfrido N. Ferrer to enter into contract with any service cooperative for the

    establishment, operation, maintenance and management of flea markets and/or vending areas.

    On August 8, 1990, respondent municipality and respondent Palanyag, a service cooperative,

    entered into an agreement whereby the latter shall operate, maintain and manage the flea market

    in the aforementioned streets with the obligation to remit dues to the treasury of the municipalgovernment of Paraaque. Consequently, market stalls were put up by respondent Palanyag on

    the said streets.

    On September 13, 1990, petitioner Brig. Gen. Macasiano, PNP Superintendent of the

    Metropolitan Traffic Command, ordered the destruction and confiscation of stalls along G.G.

    Cruz and J. Gabriel St. in Baclaran. These stalls were later returned to respondent Palanyag.

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    On October 16, 1990, petitioner Brig. General Macasiano wrote a letter to respondent Palanyag

    giving the latter ten (10) days to discontinue the flea market; otherwise, the market stalls shall be

    dismantled.

    Hence, on October 23, 1990, respondents municipality and Palanyag filed with the trial court a

    joint petition for prohibition and mandamus with damages and prayer for preliminary injunction,to which the petitioner filed his memorandum/opposition to the issuance of the writ of

    preliminary injunction.

    On October 24, 1990, the trial court issued a temporary restraining order to enjoin petitioner

    from enforcing his letter-order of October 16, 1990 pending the hearing on the motion for writ of

    preliminary injunction.

    On December 17, 1990, the trial court issued an order upholding the validity of Ordinance No.

    86 s. 1990 of the Municipality' of Paraaque and enjoining petitioner Brig. Gen. Macasiano fromenforcing his letter-order against respondent Palanyag.

    Hence, this petition was filed by the petitioner thru the Office of the Solicitor General alleginggrave abuse of discretion tantamount to lack or excess of jurisdiction on the part of the trial judge

    in issuing the assailed order.

    The sole issue to be resolved in this case is whether or not an ordinance or resolution issued by

    the municipal council of Paraaque authorizing the lease and use of public streets or

    thoroughfares as sites for flea markets is valid.

    The Solicitor General, in behalf of petitioner, contends that municipal roads are used for public

    service and are therefore public properties; that as such, they cannot be subject to private

    appropriation or private contract by any person, even by the respondent Municipality ofParaaque. Petitioner submits that a property already dedicated to public use cannot be used for

    another public purpose and that absent a clear showing that the Municipality of Paraaque hasbeen granted by the legislature specific authority to convert a property already in public use to

    another public use, respondent municipality is, therefore, bereft of any authority to close

    municipal roads for the establishment of a flea market. Petitioner also submits that assuming that

    the respondent municipality is authorized to close streets, it failed to comply with the conditionsset forth by the Metropolitan Manila Authority for the approval of the ordinance providing for

    the establishment of flea markets on public streets. Lastly, petitioner contends that by allowing

    the municipal streets to be used by market vendors the municipal council of respondent

    municipality violated its duty under the Local Government Code to promote the general welfareof the residents of the municipality.

    In upholding the legality of the disputed ordinance, the trial court ruled:

    . . . that Chanter II Section 10 of the Local Government Code is a statutory grantof power given to local government units, the Municipality of Paraaque as such,

    is empowered under that law to close its roads, streets or alley subject to

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    limitations stated therein (i.e., that it is in accordance with existing laws and the

    provisions of this code).

    xxx xxx xxx

    The actuation of the respondent Brig. Gen. Levi Macasiano, though apparentlywithin its power is in fact an encroachment of power legally vested to the

    municipality, precisely because when the municipality enacted the ordinance in

    questionthe authority of the respondent as Police Superintendent ceases to beoperative on the ground that the streets covered by the ordinance ceases to be a

    public thoroughfare. (pp. 33-34,Rollo)

    We find the petition meritorious. In resolving the question of whether the disputed municipal

    ordinance authorizing the flea market on the public streets is valid, it is necessary to examine the

    laws in force during the time the said ordinance was enacted, namely, Batas Pambansa Blg. 337,otherwise known as Local Government Code, in connection with established principles

    embodied in the Civil Code an property and settled jurisprudence on the matter.

    The property of provinces, cities and municipalities is divided into property for public use and

    patrimonial property (Art. 423, Civil Code). As to what consists of property for public use,

    Article 424 of Civil Code states:

    Art. 424. Property for public use, in the provinces, cities and municipalities,

    consists of the provincial roads, city streets, the squares, fountains, public waters,promenades, and public works for public service paid for by said provinces, cities

    or municipalities.

    All other property possessed by any of them is patrimonial and shall be governedby this Code, without prejudice to the provisions of special laws.

    Based on the foregoing, J. Gabriel G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena

    streets are local roads used for public service and are therefore considered public properties of

    respondent municipality. Properties of the local government which are devoted to public serviceare deemed public and are under the absolute control of Congress (Province of Zamboanga del

    Norte v. City of Zamboanga, L-24440, March 28, 1968, 22 SCRA 1334). Hence, local

    governments have no authority whatsoever to control or regulate the use of public properties

    unless specific authority is vested upon them by Congress. One such example of this authoritygiven by Congress to the local governments is the power to close roads as provided in Section

    10, Chapter II of the Local Government Code, which states:

    Sec. 10. Closure of roads. A local government unit may likewise, through its

    head acting pursuant to a resolution of its sangguniang and in accordance with

    existing law and the provisions of this Code, close any barangay, municipal, cityor provincial road, street, alley, park or square.No such way or place or any part

    of thereof shall be close without indemnifying any person prejudiced thereby. A

    property thus withdrawn from public use may be used or conveyed for any

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    purpose for which other real property belonging to the local unit concerned might

    be lawfully used or conveyed. (Emphasis ours).

    However, the aforestated legal provision which gives authority to local government units to close

    roads and other similar public places should be read and interpreted in accordance with basic

    principles already established by law. These basic principles have the effect of limiting suchauthority of the province, city or municipality to close a public street or thoroughfare. Article

    424 of the Civil Code lays down the basic principle that properties of public dominion devoted to

    public use and made available to the public in general are outside the commerce of man andcannot be disposed of or leased by the local government unit to private persons. Aside from the

    requirement of due process which should be complied with before closing a road, street or park,

    the closure should be for the sole purpose of withdrawing the road or other public property from

    public use when circumstances show that such property is no longer intended or necessary forpublic use or public service. When it is already withdrawn from public use, the property then

    becomes patrimonial property of the local government unit concerned (Article 422, Civil Code;

    Cebu Oxygen, etc. et al. v. Bercilles, et al., G.R. No. L-40474, August 29, 1975, 66 SCRA 481).

    It is only then that the respondent municipality can "use or convey them for any purpose forwhich other real property belonging to the local unit concerned might be lawfully used or

    conveyed" in accordance with the last sentence of Section 10, Chapter II of Blg. 337, known asLocal Government Code. In one case, the City Council of Cebu, through a resolution, declaredthe terminal road of M. Borces Street, Mabolo, Cebu City as an abandoned road, the same not

    being included in the City Development Plan. Thereafter, the City Council passes another

    resolution authorizing the sale of the said abandoned road through public bidding. We heldtherein that the City of Cebu is empowered to close a city street and to vacate or withdraw the

    same from public use. Such withdrawn portion becomes patrimonial property which can be the

    object of an ordinary contract (Cebu Oxygen and Acetylene Co., Inc. v. Bercilles, et al., G.R. No.

    L-40474, August 29, 1975, 66 SCRA 481). However, those roads and streets which are availableto the public in general and ordinarily used for vehicular traffic are still considered public

    property devoted to public use. In such case, the local government has no power to use it for

    another purpose or to dispose of or lease it to private persons. This limitation on the authority of

    the local government over public properties has been discussed and settled by this Court enbancin "Francisco V. Dacanay, petitioner v. Mayor Macaria Asistio, Jr., et al., respondents, G.R.

    No. 93654, May 6, 1992." This Court ruled:

    There is no doubt that the disputed areas from which the private respondents'

    market stalls are sought to be evicted are public streets, as found by the trial courtin Civil Case No. C-12921. A public street is property for public use hence

    outside the commerce of man (Arts. 420, 424, Civil Code). Being outside the

    commerce of man, it may not be the subject of lease or others contract

    (Villanueva, et al. v. Castaeda and Macalino, 15 SCRA 142 citing theMunicipality of Cavite v. Rojas, 30 SCRA 602; Espiritu v. Municipal Council of

    Pozorrubio, 102 Phil. 869; And Muyot v. De la Fuente, 48 O.G. 4860).

    As the stallholders pay fees to the City Government for the right to occupy

    portions of the public street, the City Government, contrary to law, has been

    leasing portions of the streets to them. Such leases or licenses are null and void

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    for being contrary to law. The right of the public to use the city streets may not be

    bargained away through contract. The interests of a few should not prevail over

    the good of the greater number in the community whose health, peace, safety,good order and general welfare, the respondent city officials are under legal

    obligation to protect.

    The Executive Order issued by acting Mayor Robles authorizing the use of

    Heroes del '96 Street as a vending area for stallholders who were granted licenses

    by the city government contravenes the general law that reserves city streets androads for public use. Mayor Robles' Executive Order may not infringe upon the

    vested right of the public to use city streets for the purpose they were intended to

    serve: i.e., as arteries of travel for vehicles and pedestrians.

    Even assuming,in gratia argumenti, that respondent municipality has the authority to pass the

    disputed ordinance, the same cannot be validly implemented because it cannot be considered

    approved by the Metropolitan Manila Authority due to non-compliance by respondent

    municipality of the conditions imposed by the former for the approval of the ordinance, to wit:

    1. That the aforenamed streets are not used for vehicular traffic, and that themajority of the residents do(es) not oppose the establishment of the flea

    market/vending areas thereon;

    2. That the 2-meter middle road to be used as flea market/vending area shall be

    marked distinctly, and that the 2 meters on both sides of the road shall be used by

    pedestrians;

    3. That the time during which the vending area is to be used shall be clearly

    designated;

    4. That the use of the vending areas shall be temporary and shall be closed oncethe reclaimed areas are developed and donated by the Public Estate Authority. (p.

    38,Rollo)

    Respondent municipality has not shown any iota of proof that it has complied with the foregoing

    conditions precedent to the approval of the ordinance. The allegations of respondent municipality

    that the closed streets were not used for vehicular traffic and that the majority of the residents do

    not oppose the establishment of a flea market on said streets are unsupported by any evidencethat will show that this first condition has been met. Likewise, the designation by respondents of

    a time schedule during which the flea market shall operate is absent.

    Further, it is of public notice that the streets along Baclaran area are congested with people,

    houses and traffic brought about by the proliferation of vendors occupying the streets. To license

    and allow the establishment of a flea market along J. Gabriel, G.G. Cruz, Bayanihan, Lt. GarciaExtension and Opena streets in Baclaran would not help in solving the problem of congestion.

    We take note of the other observations of the Solicitor General when he said:

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    . . . There have been many instances of emergencies and fires where ambulances

    and fire engines, instead of using the roads for a more direct access to the fire

    area, have to maneuver and look for other streets which are not occupied by stallsand vendors thereby losing valuable time which could, otherwise, have been spent

    in saving properties and lives.

    Along G.G. Cruz Street is a hospital, the St. Rita Hospital. However, its

    ambulances and the people rushing their patients to the hospital cannot pass

    through G.G. Cruz because of the stalls and the vendors. One can only imaginethe tragedy of losing a life just because of a few seconds delay brought about by

    the inaccessibility of the streets leading to the hospital.

    The children, too, suffer. In view of the occupancy of the roads by stalls and

    vendors, normal transportation flow is disrupted and school children have to get

    off at a distance still far from their schools and walk, rain or shine.

    Indeed one can only imagine the garbage and litter left by vendors on the streetsat the end of the day. Needless to say, these cause further pollution, sickness and

    deterioration of health of the residents therein. (pp. 21-22,Rollo)

    Respondents do not refute the truth of the foregoing findings and observations of petitioners.Instead, respondents want this Court to focus its attention solely on the argument that the use ofpublic spaces for the establishment of a flea market is well within the powers granted by law to a

    local government which should not be interfered with by the courts.

    Verily, the powers of a local government unit are not absolute. They are subject to limitations

    laid down by toe Constitution and the laws such as our Civil Code. Moreover, the exercise of

    such powers should be subservient to paramount considerations of health and well-being of themembers of the community. Every local government unit has the sworn obligation to enact

    measures that will enhance the public health, safety and convenience, maintain peace and order,

    and promote the general prosperity of the inhabitants of the local units. Based on this objective,the local government should refrain from acting towards that which might prejudice or adversely

    affect the general welfare.

    As what we have said in the Dacanay case, the general public have a legal right to demand the

    demolition of the illegally constructed stalls in public roads and streets and the officials of

    respondent municipality have the corresponding duty arising from public office to clear the city

    streets and restore them to their specific public purpose.

    The instant case as well as the Dacanay case, involves an ordinance which is void and illegal for

    lack of basis and authority in laws applicable during its time. However, at this point, We find itworthy to note that Batas Pambansa Blg. 337, known as Local Government Lode, has already

    been repealed by Republic Act No. 7160 known as Local Government Code of 1991 which took

    effect on January 1, 1992. Section 5(d) of the new Code provides that rights and obligationsexisting on the date of effectivity of the new Code and arising out of contracts or any other

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    source of prestation involving a local government unit shall be governed by the original terms

    and conditions of the said contracts or the law in force at the time such rights were vested.

    ACCORDINGLY, the petition is GRANTED and the decision of the respondent Regional Trial

    Court dated December 17, 1990 which granted the writ of preliminary injunction enjoining

    petitioner as PNP Superintendent, Metropolitan Traffic Command from enforcing the demolitionof market stalls along J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena streets

    is hereby RESERVED and SET ASIDE.

    SO ORDERED.

    [G.R. No. 100709. November 14, 1997]

    REPUBLIC OF THE PHILIPPINES, represented by the DIRECTOR OFLANDS, petitioner, vs.COURT OF APPEALS, JOSEFINA L. MORATO,SPOUSES NENITA CO and ANTONIO QUILATAN AND THE REGISTER OFDEEDS OF QUEZON PROVINCE, respondents.

    D E C I S I O N

    PANGANIBAN, J.:

    Will the lease and/or mortgage of a portion of a realty acquired through free patent

    constitute sufficient ground for the nullification of such land grant? Should such property revert

    to the State once it is invaded by the sea and thus becomes foreshore land?

    The Case

    These are the two questions raised in the petition before us assailing the Court of

    Appeals[1]

    Decision in CA-G.R. CV No. 02667 promulgated on June 13, 1991 which answered

    the said questions in the negative.[2]

    Respondent Courts Decision dismissed[3]

    petitioners appealand affirmed in totothe decision of the Regional Trial Court

    [4]of Calauag, Quezon, dated

    December 28, 1983 in Civil Case No. C-608. In turn, the Regional Trial Courts decision

    dismissed petitioners complaint for cancellation of the Torrens Certificate of Title of

    Respondent Morato and for reversion of the parcel of land subject thereof to the public domain.

    The Facts

    The petition of the solicitor general, representing the Republic of the Philippines, recites the

    following facts:[5]

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    Sometime in December, 1972, respondent Morato filed a Free Patent Application No. III-3-

    8186-B on a parcel of land with an area of 1,265 square meters situated at Pinagtalleran,

    Calauag, Quezon. On January 16, 1974, the patent was approved and the Register of Deeds ofQuezon at Lucena City issued on February 4, 1974 Original Certificate of Title No. P-

    17789. Both the free patent and the title specifically mandate that the land shall not

    be alienated nor encumbered within five (5) years from the date of the issuance of the patent(Sections 118 and 124 of CA No. 141, as amended).

    Subsequently, the District Land Officer in Lucena City, acting upon reports that respondentMorato had encumbered the land in violation of the condition of the patent, conducted an

    investigation. Thereafter, it was established that the subject land is a portion of the Calauag Bay,

    five (5) to six (6) feet deep under water during high tide and two (2) feet deep at low tide, and

    not suitable to vegetation. Moreover, on October 24, 1974, a portion of the land was mortgagedby respondent Morato to respondents Nenita Co and Antonio Quilatan for P10,000.00 (pp. 2, 25,

    Folder of Exhibits). The spouses Quilatan constructed a house on the land. Another portion of

    the land was leased to Perfecto Advincula on February 2, 1976 at P100.00 a month, where a

    warehouse was constructed.

    On November 5, 1978, petitioner filed an amended complaint against respondents Morato,spouses Nenita Co and Antonio Quilatan, and the Register of Deeds of Quezon for the

    cancellation of title and reversion of a parcel of land to the public domain, subject of a free

    patent in favor of respondent Morato, on the grounds that the land is a foreshore land and was

    mortgaged and leased within the five-year prohibitory period (p. 46, Records).

    After trial, the lower court, on December 28, 1983, rendered a decision dismissing petitioners

    complaint. In finding for private respondents, the lower court ruled that there was no violation ofthe 5-year period ban against alienating or encumbering the land, because the land was merely

    leased and not alienated. It also found that the mortgage to Nenita Co and Antonio Quilatancovered only the improvement and not the land itself.

    On appeal, the Court of Appeals affirmed the decision of the trial court. Thereafter, the

    Republic of the Philippines filed the present petition.[6]

    The Issues

    Petitioner alleges that the following errors were committed by Respondent Court:[7]

    I

    Respondent Court erred in holding that the patent granted and certificate of title issued toRespondent Morato cannot be cancelled and annulled since the certificate of title becomes

    indefeasible after one year from the issuance of the title.

    II

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    Respondent Court erred in holding that the questioned land is part of a disposable public land

    and not a foreshore land.

    The Courts Ruling

    The petition is meritorious.

    First Issue: I ndefeasibil ity of a Free Patent T itl e

    In resolving the first issue against petitioner, Respondent Court held:[8]

    x x x. As ruled in Heirs of Gregorio Tengco vs.Heirs of Jose Alivalas, 168 SCRA 198. x

    x. The rule is well-settled that an original certificate of title issued on the strength of a

    homestead patent partakes of the nature of a certificate of title issued in a judicial proceeding, aslong as the land disposed of is really part of the disposable land of the public domain, and

    becomes indefeasible and incontrovertible upon the expiration of one year from the date of

    promulgation of the order of the Director of Lands for the issuance of the patent. (Republicv.Heirs of Carle, 105 Phil. 1227 (1959); Ingaran v.Ramelo, 107 Phil. 498 (1960); Lopez

    v.Padilla, (G.R. No. L-27559, May 18, 1972, 45 SCRA 44). A homestead patent, one registered

    under the Land Registration Act, becomes as indefeasible as a Torrens Title. (Pamintuan v.SanAgustin, 43 Phil. 558 (1982); El Hogar Filipino v.Olviga, 60 Phil. 17 (1934); Duran v.Oliva,

    113 Phil. 144 (1961); Pajomayo v.Manipon, G.R. No. L-33676, June 30, 1971, 39 SCRA 676).

    (p. 203).

    Again, in Lopez vs.Court of Appeals, 169 SCRA 271, citing Iglesia ni Cristo v .Hon. Judge, CFIof Nueva Ecija, Branch I, (123 SCRA 516 (1983) and Pajomayo, et al. v. Manipon, et al. (39

    SCRA 676 (1971) held that once a homestead patent granted in accordance with the Public LandAct is registered pursuant to Section 122 of Act 496, the certificate of title issued in virtue of said

    patent has the force and effect of a Torrens Title issued under the Land Registration Act.

    Indefeasibility of the title, however, may not bar the State, thru the Solicitor General, from filing

    an action for reversion, as ruled in Heirs of Gregorio Tengo v .Heirs of Jose Aliwalas, (supra), asfollows:

    But, as correctly pointed out by the respondent Court of Appeals, Dr. Aliwalas title to the

    property having become incontrovertible, such may no longer be collaterally attacked. If indeedthere had been any fraud or misrepresentation in obtaining the title, an action for reversion

    instituted by the Solicitor General would be the proper remedy (Sec. 101, C.A. No. 141; Director

    of Lands v.Jugado, G.R. No. L-14702, May 21, 1961, 2 SCRA 32; Lopez v.Padilla,supra). (p.204).

    Petitioner contends that the grant of Free Patent (IV-3) 275 and the subsequent issuance ofOriginal Certificate of Title No. P-17789 to Respondent Josefina L. Morato were subject to the

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    conditions provided for in Commonwealth Act (CA) No. 141. It alleges that on October 24,

    1974, or nine (9) months and eight (8) days after the grant of the patent, Respondent Morato, in

    violation of the terms of the patent, mortgaged a portion of the land to Respondent Nenita Co,who thereafter constructed a house thereon. Likewise, on February 2, 1976 and within the five-

    year prohibitory period, Respondent Morato leased a portion of the land to Perfecto Advincula

    at a monthly rent of P100.00 who, shortly thereafter, constructed a house of concrete materialson the subject land.[9]

    Further, petitioner argues that the defense of indefeasibility of title isinaccurate. The original certificate of title issued to Respondent Morato contains the seeds of

    its own cancellation: such certificate specifically states on its face that it is subject to the

    provisions of Sections 118, 119, 121, 122, 124 of CA No. 141, as amended.[10]

    Respondent Morato counters by stating that although a portion of the land waspreviously

    leased, it resulted from the fact that Perfecto Advincula built a warehouse in the subject land

    without [her] prior consent. The mortgage executed over the improvement cannot be

    considered a violation of the said grant since it can never affect the ownership.[11]

    She statesfurther:

    x x x. the appeal of the petitioner was dismissed not because of the principle of indefeasibilityof title but mainly due to failure of the latter to support and prove the alleged violations of

    respondent Morato. The records of this case will readily show that although petitioner was ableto establish that Morato committed some acts during the prohibitory period of 5 years, a perusalthereof will also show that what petitioner was able to prove never constituted a violation of the

    grant.[12]

    Respondent-Spouses Quilatan, on the other hand, state that the mortgage contract they

    entered into with Respondent Morato can never be considered as [an] alienation inasmuch as

    the ownership over the property remains with the owner.[13]

    Besides, it is the director of lands

    and not the Republic of the Philippines who is the real party in interest in this case, contrary to

    the provision of the Public Land Act which states that actions for reversion should be institutedby the solicitor general in the name of Republic of the Philippines.

    [14]

    We find for petitioner.

    Quoted below are relevant sections of Commonwealth Act No. 141, otherwise known as the

    Public Land Act:

    Sec. 118. Except in favor of the Government or any of its branches, units or institutions, or

    legally constituted banking corporations, lands acquired under free patent or homestead

    provisions shall not be subject to encumbrance or alienation from the date of the approval of the

    application and for a term of five years from and after the date of issuance of the patent or

    grant nor shall they become liable to the satisfaction of any debt contracted prior to theexpiration of said period; but the improvements or crops on the land may be mortgaged or

    pledged to qualified persons, associations, or corporations.

    No alienation, transfer, or conveyance of any homestead after five years and before twenty-five

    years after issuance of title shall be valid without the approval of the Secretary of Agricultureand Natural Resources, which approval shall not be denied except on constitutional and legal

    grounds. (As amended by Com. Act No. 456, approved June 8, 1939.)

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    x x x x x x x x x

    Sec. 121. Except with the consent of the grantee and the approval of the Secretary ofAgriculture and Natural Resources, and solely for educational, religious, or charitable purposes

    or for a right of way, no corporation, association, or partnership may acquire or have any right,

    title, interest, or property right whatsoever to any land granted under the free patent, homestead,or individual sale provisions of this Act or to any permanent improvement on such land. (As

    amended by Com. Act No. 615, approved May 5, 1941)

    Sec. 122. No land originally acquired in any manner under the provisions of this Act, nor any

    permanent improvement on such land, shall be encumbered, alienated or transferred, except to

    persons, corporations, association, or partnerships who may acquire lands of the public domainunder this Act or to corporations organized in the Philippines authorized therefore by their

    charters.

    Except in cases of hereditary successions, no land or any portion thereof originally acquired

    under the free patent, homestead, or individual sale provisions of this Act, or any permanentimprovement on such land, shall be transferred or assigned to any individual, nor shall such land

    or any permanent improvement thereon be leased to such individual, when the area of said land,added to that of his own, shall exceed one hundred and forty-four hectares. Any transfer,

    assignment, or lease made in violation hereto shall be null and void. (As amended by Com. Act

    No. 615, Id.)

    x x x x x x x x x

    Sec. 124. Any acquisition, conveyance, alienation, transfer, or other contract made or executed

    in violation of any of the provisions of sections one hundred and eighteen, one hundred and

    twenty, one hundred and twenty-one, one hundred and twenty-two, and one hundred and twenty-three of this Act shall be unlawful and null and void from its execution and shall produce the

    effect of annulling and cancelling the grant, title, patent, or permit originally issued, recognized

    or confirmed, actually or presumptively, and cause the reversion of the property and itsimprovements to the State. (Underscoring supplied.)

    The foregoing legal provisions clearly proscribe the encumbrance of a parcel of landacquired under a free patent or homestead within five years from the grant of such patent.

    Furthermore, such encumbrance results in the cancellation of the grant and the reversion of the

    land to the public domain. Encumbrance has been defined as [a]nything that impairs the use or

    transfer of property; anything which constitutes a burden on the title; a burden or charge uponproperty; a claim or lien upon property. It may be a legal claim on an estate for the discharge

    of which the estate is liable; an embarrassment of the estate or property so that it cannot be

    disposed of without being subject to it; an estate, interest, or right in lands, diminishing theirvalue to the general owner; a liability resting upon an estate.

    [15]Do the contracts of lease and

    mortgage executed within five (5) years from the issuance of the patent constitute an

    encumbrance and violate the terms and conditions of such patent? Respondent Court answeredin the negative:

    [16]

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