COLLEGE OF LAW, AUSL

CHAVEZ V. PUBLIC ESTATES AUTHORITY

384 SCRA 152

FACTS:
President Marcos through a presidential
decree created PEA, which was tasked with
the
development,
improvement,
and
acquisition, lease, and sale of all kinds of
lands. The then president also transferred to
PEA the foreshore and offshore lands of Manila
Bay under the
Manila-Cavite Coastal
Road
and
Reclamation
Project.
Thereafter, PEA was granted patent to the
reclaimed areas of land and then, years later,
PEA entered into a JVA with AMARI for the
development of the Freedom Islands. These
two entered into a joint venture in the
absence
of
any
public
bidding.
Later, a privilege speech was given by
Senator President Maceda denouncing the JVA
as the grandmother of all scams.
An
investigation was conducted and it was
concluded that the lands that PEA was conveying
to AMARI were lands of the public domain;
the
certificates
of
title
over
the
Freedom Islands were void; and the JVA itself
was illegal. This prompted Ramos to form an
investigatory committee on the legality of the
JVA.
Petitioner now comes and contends that the
government stands to lose billions by the
conveyance or sale of the reclaimed areas
to AMARI. He also asked for the full disclosure
of the renegotiations happening between the
parties.

ISSUE:
W/N stipulations in the amended JVA for the
transfer to AMARI of the lands, reclaimed or to
be reclaimed, violate the Constitution.

HELD:

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The ownership of lands reclaimed from foreshore

and submerged areas is rooted in the Regalian
doctrine, which holds that the State owns all
lands and waters of the public domain.
The 1987 Constitution recognizes the Regalian
doctrine. It declares that all natural resources
are owned by the State and except for
alienable agricultural lands of the public
domain,
natural
resources
cannot
be
alienated.
The Amended JVA covers a reclamation area of
750 hectares. Only 157.84 hectares of the 750
hectare
reclamation
project
have
been
reclaimed, and the rest of the area are
stillsubmerged areas forming part of Manila
Bay. Further, it is provided that AMARI will
reimburse the actual costs in reclaiming the
areas of land and it will shoulder the other
reclamation
costs
to
be
incurred.
The foreshore and submerged areas of Manila
Bay are part of the lands of the public domain,
waters and other natural resources and
consequently owned by the State. As such,
foreshore and submerged areas shall not be
alienable unless they are classified as
agricultural lands of the public domain. The
mere reclamation of these areas by the PEA
doesnt convert these inalienable natural
resources of the State into alienable and
disposable lands of the public domain. There
must
be
a
law
or
presidential
proclamation
officially
classifying
these
reclaimed lands as alienable and disposable
if the law has reserved them for some
public or quasi-public use.

Macasiano v. Diokno
[G.R. No. 97764. August 10, 1992.]
En Banc, Medialdea (J): 12 concur
Facts: On 13 June 1990, the Municipality of
Paranaque passed Ordinance 86, s. 1990 which
authorized the closure of J. Gabrielle, G.G. Cruz,
Bayanihan, Lt. Garcia Extension and Opena
Streets located at Baclaran, Paraaque, Metro

COLLEGE OF LAW, AUSL

Manila and the establishment of a flea market

thereon. The said ordinance was approved by
the municipal council pursuant to MCC
Ordinance 2, s. 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 20
July 1990, the Metropolitan Manila Authority
approved Ordinance 86, s. 1990 of the municipal
council subject to conditions. On 20 June 1990,
the municipal council issued a resolution
authorizing the Paraaque Mayor to enter into
contract with any service cooperative for the
establishment, operation, maintenance and
management of flea markets and/or vending
areas. On 8 August 1990, the municipality and
Palanyag, a service cooperative, entered into an
agreement whereby the latter shall operate,
maintain and manage the flea market with the
obligation to remit dues to the treasury of the
municipal
government
of
Paraaque.
Consequently, market stalls were put up by
Palanyag on the said streets. On 13 September
1990 Brig. Gen. Macasiano, PNP Superintendent
of the Metropolitan Traffic Command, ordered
the destruction and confiscation of stalls along
G.G. Cruz and J. Gabrielle St. in Baclaran. These
stalls were later returned to Palanyag. On 16
October 1990, Macasiano wrote a letter to
Palanyag giving the latter 10 days to discontinue
the flea market; otherwise, the market stalls
shall be dismantled.
On 23 October 1990, the municipality and
Palanyag filed with the trial court a joint petition
for prohibition and mandamus with damages and
prayer for preliminary injunction. On 17
December 1990, the trial court issued an order
upholding the validity of Ordinance 86 s. 1990 of
the Municipality of Paraaque and enjoining
Macasiano from enforcing his letter-order
against Palanyag. Hence, a petition for certiorari
under Rule 65 was filed by Macasiano thru the
OSG.
The Supreme Court granted the petition, and
reversed and set aside the 17 December 1990
decision of the RTC which granted the writ of
preliminary injunction enjoining the PNP
Superintendent, Metropolitan Traffic Command

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from enforcing the demolition of market stalls

along J. Gabrielle, G.G. Cruz, Bayanihan, Lt.
Garcia Extension and Opena streets.
1. Property of provinces, cities and
municipalities; Property for public use
The
property
of
provinces,
cities
and
municipalities is divided into property for public
use and patrimonial property (Art. 423, Civil
Code). As to property for public use, Article 424
of Civil Code provides that "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 governed by this Code,
without prejudice to the provisions of special
laws." In the present case, thus, J. Gabrielle G.G.
Cruz, Bayanihan, Lt. Gacia Extension and Opena
streets are local roads used for public service
and are therefore considered public properties of
the municipality.
2. Properties for public service deemed
public and under absolute control of
Congress
Properties of the local government which are
devoted to public service are deemed public and
are under the absolute control of Congress
(Province of Zamboanga del Norte v. City of
Zamboanga, 22 SCRA 1334 [1968]).
3. Local governments have no authority to
regulate use of public properties unless
authority is vested upon by Congress; e.g.
Closure
of
roads
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 authority given by Congress to
the local governments is the power to close
roads as provided in Section 10, Chapter II of the
Local Government Code (BP 337), which states
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, city or provincial road,
street, alley, park or square. No such way or

COLLEGE OF LAW, AUSL

place or any part thereof shall be closed without

indemnifying any person prejudiced thereby. A
property thus withdrawn from public use may be
used or conveyed for any purpose for which
other real property belonging to the local unit
concerned might be lawfully used or conveyed."
4. Legal provision should be read and
interpreted in accordance with basic
principles already established by law; LGU
has no power to lease a road available to
public and ordinarily used for vehicular
traffic
The legal provision (Chapter II, Section 10 of the
LGC) 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 such authority of the
province, city or municipality to close a public
street or thoroughfare. Article 424 NCC 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 and cannot 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 for public use or
public service. When it is already withdrawn
from public use, the property then becomes
patrimonial property of the local government
unit (LGU) (Article 422 NCC; Cebu Oxygen v.
Bercilles, 66 SCRA 481 [1975]). It is only then
that the LGU can "use or convey them for any
purpose for which other real property belonging
to the local unit concerned might be lawfully
used or conveyed." However, those roads and
streets which are available to the public in
general and ordinarily used for vehicular traffic
are still considered public property devoted to
public use. In such case, the LGU has no power
to use it for another purpose or to dispose of or
lease it to private persons.

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5. Related case, Cebu Oxygen v. Bercilles

In Cebu Oxygen v. Bercilles, the City Council of
Cebu, through a resolution, declared the
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 passed another
resolution authorizing the sale of the said
abandoned road through public bidding. The
Court held 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
6. Related case, Dacanay v. Asistio
In Dacanay v. Asistio, the disputed areas from
which the market stalls are sought to be evicted
are public streets. 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 other contract (Villanueva, et al. v.
Castaeda and Macalino, 15 SCRA 142 citing the
Municipality 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). 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 leases or licenses granted by the City
Government to stallholders are null and void for
being contrary to law. The Executive Order
issued by the acting Mayor authorizing the use
of Heroes del '96 Street as a vending area for
stallholders contravenes the general law that
reserves city streets and roads for public use.
The 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.
7. In gratia argumenti, ordinance cannot be
validly implemented as municipality has
not complied with conditions imposed by
the MMA for the approval of the ordinance
Even assuming, in gratia argumenti, that the

COLLEGE OF LAW, AUSL

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 the municipality of the
conditions imposed by the former for the
approval of the ordinance. The allegations of the
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 evidence that will show that the first
condition has been met. Likewise, the
designation by the Municipality of a time
schedule during which the flea market shall
operate is absent (fourth condition).
8. Baclaran area congested; establishment
of flea market on municipality streets does
not help solve problem of congestion
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.
Gabrielle, G.G. Cruz, Bayanihan, Lt. Garcia
Extension and Opena streets in Baclaran would
not help in solving the problem of congestion but
rather leads to inconvenience to children as the
normal transportation flow is disrupted, to
pollution and deterioration of health of residents
due to the garbage left by the vendors on the
streets. Further, ambulances and fire engines
are not able to use the roads for a more direct
access to the fire area and thus lose valuable
time that should have been spent in saving
properties
and
lives.
And
further,
the
ambulances and people rushing patients to St.
Rita Hospital located along GG Cruz Street are
delayed as they are unable to pass through said
street due to the stalls and vendors.
9. Powers of local government unit not
absolute
The powers of a local government unit are not
absolute. They are subject to limitations laid
down by the 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 the
members of the community. Every local

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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.
10. General public has legal right to
demand the restoration of city streets to
their
specific
public
purpose
As 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 municipality have the
corresponding duty arising from public office to
clear the city streets and restore them to their
specific public purpose.
11. Applicability of the Dacanay case;
Contracts by Local Government governed
by the original terms and conditions, and
the law in force at time the rights were
vested
As in the Dacanay case, both cases involve an
ordinance which is void and illegal for lack of
basis and authority in laws applicable during its
time. However, BP 337 (Local Government
Code), has already been repealed by RA7160
(Local Government Code of 1991) which took
effect on 1 January 1992. Section 5(d) of the new
Code provides that rights and obligations
existing on the date of effectivity of the new
Code and arising out of contracts or any other
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.

COLLEGE OF LAW, AUSL

Case Digests on Property

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Cebu Oxygen vs Bercilles

66 SCRA 481
Facts:
This is a case on 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, Cebu
City. On September 23, 1968, the City Council of
Cebu, through Resolution No. 2193, approved on
October 3, 1968, declared the terminal portion of
M. Borces Street, Mabolo, Cebu City, as an
abandoned road, the same not being included in
the City Development Plan.
Assistant Provincial Fiscal of Cebu filed a motion
to dismiss the application on the ground that the
property sought to be registered being a public
road intended for public use is considered part of
the public domain and therefore outside the
commerce of man. Consequently, it cannot be
subject to registration by any private individual.
Issue:
Whether or not the declaration of the road as
abandoned make it patrimonial property which
may be the object of a common contract.
Held:
Since that portion of the city street subject of
petitioner's application for registration of title
was withdrawn from public use, it follows that
such withdrawn portion becomes patrimonial
property which can be the object of an ordinary
contract.
Article 422 of the Civil Code expressly provides
that "Property of public dominion, when no
longer intended for public use or for public
service, shall form part of the patrimonial
property of the State."
Property thus withdrawn from public servitude
may be used or conveyed for any purpose for
which other real property belonging to the City
may be lawfully used or conveyed.

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Province of Zamboanga
Zamboanga City
22 SCRA 1334

del

Norte

vs

Facts:
Prior to its incorporation as a chartered city, the
Municipality of Zamboanga used to be the
provincial capital of the then Zamboanga
Province. On October 12, 1936, Commonwealth
Act 39 was approved converting the Municipality
of Zamboanga into Zamboanga City. Sec. 50 of
the Act also provided that Buildings and
properties which the province shall abandon
upon the transfer of the capital to another place
will be acquired and paid for by the City of
Zamboanga at a price to be fixed by the Auditor
General.
The properties and buildings referred to
consisted of 50 lots and some buildings
constructed thereon, located in the City of
Zamboanga and covered individually by Torrens
certificates of title in the name of Zamboanga
Province.
On June 6, 1952, Republic Act 711 was approved
dividing the province of Zamboanga into two (2):
Zamboanga del Norte and Zamboanga del Sur.
Properties and the obligations of the province of
Zamboanga shall be divided equitably between
the Province of Zamboanga del Norte and the
Province of Zamboanga del Sur by the President
of the Philippines, upon the recommendation of
the Auditor General.
However, on June 17, 1961, Republic Act 3039
was
approved
amending
Sec.
50
of
Commonwealth Act 39 by providing that All
buildings, properties and assets belonging to the
former province of Zamboanga and located
within the City of Zamboanga are hereby

COLLEGE OF LAW, AUSL

transferred, free of charge, in favor of the said

City of Zamboanga.
Issue:
WON Zamboanga del Norte is deprived of its
private properties without due process and just
compensation.

Ruling:
The fact that the 26 lots are registered
strengthens the proposition that they are truly
private in nature. On the other hand, that the 24
lots used for governmental purposes are also
registered is of no significance since registration
cannot convert public property to private.
Applying Art. 424 of NCC, all the properties in
question, except the two (2) lots used as High
School playgrounds, could be considered as
patrimonial properties of the former Zamboanga
province. Even the capital site, the hospital and
leprosarium sites, and the school sites will be
considered patrimonial for they are not for public
use. They would fall under the phrase "public
works for public service"

Salas vs Jarencio
46 SCRA 734

Facts:
On February 24, 1919, the 4th Branch of the
Court of First Instance of Manila, acting as a land
registration court, rendered judgment declaring
the City of Manila the owner in fee simple of a
parcel of land containing an area of 9,689.8
square meters, more or less. On various dates in
1924, the City of Manila sold portions of the
aforementioned parcel of land in favor of Pura
Villanueva.
On September 21, 1960, the Municipal Board of
Manila, presided by then Vice-Mayor Antono J.
Villegas, adopted a resolution requesting His

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Excellency, the President of the Philippines to

consider the feasibility of declaring the City
property bounded by Florida, San Andres, and
Nebraska Streets, containing a total area of
7,450 square meters as a patrimonial property of
the City of Manila for the purpose of reselling
these lots to the actual occupants thereof. There
is therefore a precedent that this parcel of land
could be subdivided and sold to bona fide
occupants. The bill was passed by the Senate
and approved by the President and became RA
4118.
Issue:
WON the property involved in RA 4118 is a
private or patrimonial property of the City of
Manila.
Ruling:
The conclusion of the respondent court that
Republic Act No. 4118 converted a patrimonial
property of the City of Manila into a parcel of
disposable land of the State and took it away
from the City without compensation is, therefore,
unfounded. In the last analysis the land in
question pertains to the State and the City of
Manila merely acted as trustee for the benefit of
the people therein for whom the State can
legislate in the exercise of its legitimate powers.
If it were its patrimonial property why should the
City of Manila be requesting the President to
make representation to the legislature to declare
it as such so it can be disposed of in favor of the
actual occupants? There could be no more
blatant recognition of the fact that said land
belongs to the State and was simply granted in
usufruct to the City of Manila for municipal
purposes.