G.R. No.

104235 November 18, 1993

appointed date, however, petitioners checked in at 10:00 a.m., an

hour earlier than the scheduled flight at 11:00 a.m. but were placed
on the wait-list because the number of passengers who had checked
in before them had already taken all the seats available on the flight.
Liana Zalamea appeared as the No. 13 on the wait-list while the two
other Zalameas were listed as "No. 34, showing a party of two." Out
of the 42 names on the wait list, the first 22 names were eventually
allowed to board the flight to Los Angeles, including petitioner Cesar
Zalamea. The two others, on the other hand, at No. 34, being ranked
lower than 22, were not able to fly. As it were, those holding full-fare
tickets were given first priority among the wait-listed passengers. Mr.
Zalamea, who was holding the full-fare ticket of his daughter, was
allowed to board the plane; while his wife and daughter, who
presented the discounted tickets were denied boarding. According to
Mr. Zalamea, it was only later when he discovered the he was
holding his daughter's full-fare ticket.

SPOUSES CESAR & SUTHIRA ZALAMEA and LIANA

ZALAMEA, petitioners,
vs.
HONORABLE COURT OF APPEALS and TRANSWORLD
AIRLINES, INC., respondents.
NOCON, J.:
Disgruntled over TransWorld Airlines, Inc.'s refusal to accommodate
them in TWA Flight 007 departing from New York to Los Angeles on
June 6, 1984 despite possession of confirmed tickets, petitioners
filed an action for damages before the Regional Trial Court of Makati,
Metro Manila, Branch 145. Advocating petitioner's position, the trial
court categorically ruled that respondent TransWorld Airlines (TWA)
breached its contract of carriage with petitioners and that said breach
was "characterized by bad faith." On appeal, however, the appellate
court found that while there was a breach of contract on respondent
TWA's part, there was neither fraud nor bad faith because under the
Code of Federal Regulations by the Civil Aeronautics Board of the
United States of America it is allowed to overbook flights.

Even in the next TWA flight to Los Angeles Mrs. Zalamea and her
daughter, could not be accommodated because it was also fully
booked. Thus, they were constrained to book in another flight and
purchased two tickets from American Airlines at a cost of Nine
Hundred Eighteen ($918.00) Dollars.
Upon their arrival in the Philippines, petitioners filed an action for
damages based on breach of contract of air carriage before the
Regional Trial Court of Makati, Metro Manila, Branch 145. As
aforesaid, the lower court ruled in favor of petitioners in its
decision 1 dated January 9, 1989 the dispositive portion of which
states as follows:

The factual backdrop of the case is as follows:

Petitioners-spouses Cesar C. Zalamea and Suthira Zalamea, and
their daughter, Liana Zalamea, purchased three (3) airline tickets
from the Manila agent of respondent TransWorld Airlines, Inc. for a
flight to New York to Los Angeles on June 6, 1984. The tickets of
petitioners-spouses were purchased at a discount of 75% while that
of their daughter was a full fare ticket. All three tickets represented
confirmed reservations.

WHEREFORE, judgment is hereby rendered

ordering the defendant to pay plaintiffs the following
amounts:

While in New York, on June 4, 1984, petitioners received notice of

the reconfirmation of their reservations for said flight. On the

(1) US $918.00, or its peso equivalent at the time of

payment representing the price of the tickets bought
by Suthira and Liana Zalamea from American
Airlines, to enable them to fly to Los Angeles from
New York City;

Moreover, while respondent TWA was remiss in not informing

petitioners that the flight was overbooked and that even a person
with a confirmed reservation may be denied accommodation on an
overbooked flight, nevertheless it ruled that such omission or
negligence cannot under the circumstances be considered to be so
gross as to amount to bad faith.

(2) US $159.49, or its peso equivalent at the time of

payment, representing the price of Suthira
Zalamea's ticket for TWA Flight 007;

Finally, it also held that there was no bad faith in placing petitioners
in the wait-list along with forty-eight (48) other passengers where fullfare first class tickets were given priority over discounted tickets.

(3) Eight Thousand Nine Hundred Thirty-Four Pesos

and Fifty Centavos (P8,934.50, Philippine Currency,
representing the price of Liana Zalamea's ticket for
TWA Flight 007,

The dispositive portion of the decision of respondent Court of

Appeals 3 dated October 25, 1991 states as follows:
WHEREFORE, in view of all the foregoing, the
decision under review is hereby MODIFIED in that
the award of moral and exemplary damages to the
plaintiffs is eliminated, and the defendant-appellant
is hereby ordered to pay the plaintiff the following
amounts:

(4) Two Hundred Fifty Thousand Pesos

(P250,000.00), Philippine Currency, as moral
damages for all the plaintiffs'
(5) One Hundred Thousand Pesos (P100,000.00),
Philippine Currency, as and for attorney's fees; and

(1) US$159.49, or its peso equivalent at the time of

the payment, representing the price of Suthira
Zalamea's ticket for TWA Flight 007;

(6) The costs of suit.

SO ORDERED. 2

(2) US$159.49, or its peso equivalent at the time of

the payment, representing the price of Cesar
Zalamea's ticket for TWA Flight 007;

On appeal, the respondent Court of Appeals held that moral

damages are recoverable in a damage suit predicated upon a breach
of contract of carriage only where there is fraud or bad faith. Since it
is a matter of record that overbooking of flights is a common and
accepted practice of airlines in the United States and is specifically
allowed under the Code of Federal Regulations by the Civil
Aeronautics Board, no fraud nor bad faith could be imputed on
respondent TransWorld Airlines.

(3) P50,000.00 as and for attorney's fees.

(4) The costs of suit.
SO ORDERED. 4

Not satisfied with the decision, petitioners raised the case on petition
for review on certiorari and alleged the following errors committed by
the respondent Court of Appeals, to wit:

the Philippines stationed in the foreign country in which the record is

kept, and authenticated by the seal of his office. 7
Respondent TWA relied solely on the statement of Ms. Gwendolyn
Lather, its customer service agent, in her deposition dated January
27, 1986 that the Code of Federal Regulations of the Civil
Aeronautics Board allows overbooking. Aside from said statement,
no official publication of said code was presented as evidence. Thus,
respondent court's finding that overbooking is specifically allowed by
the US Code of Federal Regulations has no basis in fact.

I.
. . . IN HOLDING THAT THERE WAS NO FRAUD
OR BAD FAITH ON THE PART OF RESPONDENT
TWA BECAUSE IT HAS A RIGHT TO OVERBOOK
FLIGHTS.

Even if the claimed U.S. Code of Federal Regulations does exist, the
same is not applicable to the case at bar in accordance with the
principle of lex loci contractus which require that the law of the place
where the airline ticket was issued should be applied by the court
where the passengers are residents and nationals of the forum and
the ticket is issued in such State by the defendant airline. 8 Since the
tickets were sold and issued in the Philippines, the applicable law in
this case would be Philippine law.

II.
. . . IN ELIMINATING
EXEMPLARY DAMAGES.

THE

AWARD

OF

III.
. . . IN NOT ORDERING THE REFUND OF LIANA
ZALAMEA'S TWA TICKET AND PAYMENT FOR
THE
AMERICAN
AIRLINES
TICKETS. 5

Existing jurisprudence explicitly states that overbooking amounts to

bad faith, entitling the passengers concerned to an award of moral
damages. In Alitalia Airways v. Court of Appeals, 9 where passengers
with confirmed bookings were refused carriage on the last minute,
this Court held that when an airline issues a ticket to a passenger
confirmed on a particular flight, on a certain date, a contract of
carriage arises, and the passenger has every right to expect that he
would fly on that flight and on that date. If he does not, then the
carrier opens itself to a suit for breach of contract of carriage. Where
an airline had deliberately overbooked, it took the risk of having to
deprive some passengers of their seats in case all of them would
show up for the check in. For the indignity and inconvenience of
being refused a confirmed seat on the last minute, said passenger is
entitled to an award of moral damages.

That there was fraud or bad faith on the part of respondent airline
when it did not allow petitioners to board their flight for Los Angeles
in spite of confirmed tickets cannot be disputed. The U.S. law or
regulation allegedly authorizing overbooking has never been proved.
Foreign laws do not prove themselves nor can the courts take
judicial notice of them. Like any other fact, they must be alleged and
proved. 6 Written law may be evidenced by an official publication
thereof or by a copy attested by the officer having the legal custody
of the record, or by his deputy, and accompanied with a certificate
that such officer has custody. The certificate may be made by a
secretary of an embassy or legation, consul general, consul, viceconsul, or consular agent or by any officer in the foreign service of

Similarly, in Korean Airlines Co., Ltd. v. Court of Appeals, 10 where

private respondent was not allowed to board the plane because her
seat had already been given to another passenger even before the
allowable period for passengers to check in had lapsed despite the
fact that she had a confirmed ticket and she had arrived on time, this
Court held that petitioner airline acted in bad faith in violating private
respondent's rights under their contract of carriage and is therefore
liable for the injuries she has sustained as a result.

beforehand that it could breach the contract of carriage even if they

have confirmed tickets if there was overbooking. Respondent TWA
should have incorporated stipulations on overbooking on the tickets
issued or to properly inform its passengers about these policies so
that the latter would be prepared for such eventuality or would have
the choice to ride with another airline.
Respondent TWA contends that Exhibit I, the detached flight coupon
upon which were written the name of the passenger and the points of
origin and destination, contained such a notice. An examination of
Exhibit I does not bear this out. At any rate, said exhibit was not
offered for the purpose of showing the existence of a notice of
overbooking but to show that Exhibit I was used for flight 007 in first
class of June 11, 1984 from New York to Los Angeles.

In fact, existing jurisprudence abounds with rulings where the breach

of contract of carriage amounts to bad faith. In Pan American World
Airways, Inc. v. Intermediate Appellate Court, 11 where a would-be
passenger had the necessary ticket, baggage claim and clearance
from immigration all clearly and unmistakably showing that she was,
in fact, included in the passenger manifest of said flight, and yet was
denied accommodation in said flight, this Court did not hesitate to
affirm the lower court's finding awarding her damages.

Moreover, respondent TWA was also guilty of not informing its

passengers of its alleged policy of giving less priority to discounted
tickets. While the petitioners had checked in at the same time, and
held confirmed tickets, yet, only one of them was allowed to board
the plane ten minutes before departure time because the full-fare
ticket he was holding was given priority over discounted tickets. The
other two petitioners were left behind.

A contract to transport passengers is quite different in kind and

degree from any other contractual relation. So ruled this Court
in Zulueta v. Pan American World Airways, Inc. 12 This is so, for a
contract of carriage generates a relation attended with public duty
a duty to provide public service and convenience to its passengers
which must be paramount to self-interest or enrichment. Thus, it was
also held that the switch of planes from Lockheed 1011 to a smaller
Boeing 707 because there were only 138 confirmed economy class
passengers who could very well be accommodated in the smaller
planes, thereby sacrificing the comfort of its first class passengers for
the sake of economy, amounts to bad faith. Such inattention and lack
of care for the interest of its passengers who are entitled to its utmost
consideration entitles the passenger to an award of moral
damages. 13

It is respondent TWA's position that the practice of overbooking and

the airline system of boarding priorities are reasonable policies,
which when implemented do not amount to bad faith. But the issue
raised in this case is not the reasonableness of said policies but
whether or not said policies were incorporated or deemed written on
petitioners' contracts of carriage. Respondent TWA failed to show
that there are provisions to that effect. Neither did it present any
argument of substance to show that petitioners were duly apprised of
the overbooked condition of the flight or that there is a hierarchy of
boarding priorities in booking passengers. It is evident that
petitioners had the right to rely upon the assurance of respondent
TWA, thru its agent in Manila, then in New York, that their tickets

Even on the assumption that overbooking is allowed, respondent

TWA is still guilty of bad faith in not informing its passengers

represented confirmed seats without any qualification. The failure of

respondent TWA to so inform them when it could easily have done
so thereby enabling respondent to hold on to them as passengers up
to the last minute amounts to bad faith. Evidently, respondent TWA
placed its self-interest over the rights of petitioners under their
contracts of carriage. Such conscious disregard of petitioners' rights
makes respondent TWA liable for moral damages. To deter breach of
contracts by respondent TWA in similar fashion in the future, we
adjudge respondent TWA liable for exemplary damages, as well.

reimbursed for the cost of the tickets he had to buy for a flight to
another airline. Thus, instead of simply being refunded for the cost of
the unused TWA tickets, petitioners should be awarded the actual
cost of their flight from New York to Los Angeles. On this score, we
differ from the trial court's ruling which ordered not only the
reimbursement of the American Airlines tickets but also the refund of
the unused TWA tickets. To require both prestations would have
enabled petitioners to fly from New York to Los Angeles without any
fare being paid.

Petitioners also assail the respondent court's decision not to require

the refund of Liana Zalamea's ticket because the ticket was used by
her father. On this score, we uphold the respondent court. Petitioners
had not shown with certainty that the act of respondent TWA in
allowing Mr. Zalamea to use the ticket of her daughter was due to
inadvertence or deliberate act. Petitioners had also failed to establish
that they did not accede to said agreement. The logical conclusion,
therefore, is that both petitioners and respondent TWA agreed, albeit
impliedly, to the course of action taken.

The award to petitioners of attorney's fees is also justified under

Article 2208(2) of the Civil Code which allows recovery when the
defendant's act or omission has compelled plaintiff to litigate or to
incur expenses to protect his interest. However, the award for moral
damages and exemplary damages by the trial court is excessive in
the light of the fact that only Suthira and Liana Zalamea were
actually "bumped off." An award of P50,000.00 moral damages and
another P50,000.00 exemplary damages would suffice under the
circumstances obtaining in the instant case.

The respondent court erred, however, in not ordering the refund of

the American Airlines tickets purchased and used by petitioners
Suthira and Liana. The evidence shows that petitioners Suthira and
Liana were constrained to take the American Airlines flight to Los
Angeles not because they "opted not to use their TWA tickets on
another TWA flight" but because respondent TWA could not
accommodate them either on the next TWA flight which was also
fully booked. 14 The purchase of the American Airlines tickets by
petitioners Suthira and Liana was the consequence of respondent
TWA's unjustifiable breach of its contracts of carriage with
petitioners. In accordance with Article 2201, New Civil Code,
respondent TWA should, therefore, be responsible for all damages
which may be reasonably attributed to the non-performance of its
obligation. In the previously cited case of Alitalia Airways v. Court of
Appeals, 15 this Court explicitly held that a passenger is entitled to be

WHEREFORE, the petition is hereby GRANTED and the decision of

the respondent Court of Appeals is hereby MODIFIED to the extent
of adjudging respondent TransWorld Airlines to pay damages to
petitioners in the following amounts, to wit:
(1) US$918.00 or its peso equivalent at the time of payment
representing the price of the tickets bought by Suthira and Liana
Zalamea from American Airlines, to enable them to fly to Los Angeles
from New York City;
(2) P50,000.00 as moral damages;
(3) P50,000.00 as exemplary damages;
(4) P50,000.00 as attorney's fees; and

(5) Costs of suit.

SO ORDERED.

G.R. No. 76714 June 2, 1994

SALUD
TEODORO
VDA.
DE
PEREZ, petitioner,
vs.
HON. ZOTICO A. TOLETE in his capacity as Presiding Judge,
Branch 18, RTC, Bulacan, respondent.

QUIASON, J.:
This is a petition for certiorari under Rule 65 of the Revised Rules of
Court to set aside the Order dated November 19, 1986 of the
Regional Trial Court, Branch 18, Bulacan presided by respondent
Judge Zotico A. Tolete, in Special Proceedings No. 1793-M.
We grant the petition.
II
Dr. Jose F. Cunanan and his wife, Dr. Evelyn Perez-Cunanan, who
became American citizens, established a successful medical practice
in New York, U.S.A. The Cunanans lived at No. 2896 Citation Drive,
Pompey, Syracuse, New York, with their children, Jocelyn, 18;
Jacqueline, 16; and Josephine, 14.
On August 23, 1979, Dr. Cunanan executed a last will and testament,
bequeathing to his wife "all the remainder" of his real and personal

property at the time of his death "wheresoever situated" (Rollo, p.

35). In the event he would survive his wife, he bequeathed all his
property to his children and grandchildren with Dr. Rafael G.
Cunanan, Jr. as trustee. He appointed his wife as executrix of his last
will and testament and Dr. Rafael G. Cunanan, Jr. as substitute
executor. Article VIII of his will states:

On February 21, 1983, Salud Teodoro Perez, the mother of Dr.

Evelyn P. Cunanan, and petitioner herein, filed with the Regional P.
Cunanan, and petitioner herein, filed with the Regional Trial Court,
Malolos, Bulacan a petition for the reprobate of the two bills ancillary
to the probate proceedings in New York. She also asked that she be
appointed the special administratrix of the estate of the deceased
couple consisting primarily of a farm land in San Miguel, Bulacan.

If my wife, EVELYN PEREZ-CUNANAN, and I shall

die under such circumstances that there is not
sufficient evidence to determine the order of our
deaths, then it shall be presumed that I predeceased
her, and my estate shall be administered and
distributed, in all respects, in accordance with such
presumption (Rollo, p. 41).

On March 9, the Regional Trial Court, Branch 16, Malolos, Bulacan,

presided by Judge Gualberto J. de la Llana, issued an order,
directing the issuance of letters of special administration in favor of
petitioner upon her filing of a P10,000.00 bond. The following day,
petitioner posted the bond and took her oath as special
administration.

Four days later, on August 27, Dr. Evelyn P. Cunanan executed her
own last will and testament containing the same provisions as that of
the will of her husband. Article VIII of her will states:

As her first act of administration, petitioner filed a motion, praying

that the Philippine Life Insurance Company be directed to deliver the
proceeds in the amount of P50,000.00 of the life insurance policy
taken by Dr. Jose F. Cunanan with Dr. Evelyn Perez-Cunanan and
their daughter Jocelyn as beneficiaries. The trial court granted the
motion.

If my husband, JOSE F. CUNANAN, and I shall die

under such circumstances that there is not sufficient
evidence to determine the order of our deaths, then
it shall be presumed that he predeceased me, and
my estate shall be administered and distributed in all
respects, in accordance with such presumption.
(Rollo, p. 31).

Counsel for the Philippine American Life Insurance Company then

filed a manifestation, stating that said company then filed a
manifestation, stating that said company had delivered to petitioner
the amount of P49,765.85, representing the proceeds of the life
insurance policy of Dr. Jose F. Cunanan.

On January 9, 1982, Dr. Cunanan and his entire family perished

when they were trapped by fire that gutted their home. Thereafter, Dr.
Rafael G. Cunanan, Jr. as trustee and substitute executor of the two
wills, filed separate proceedings for the probate thereof with the
Surrogate Court of the County of Onondaga, New York. On April 7,
these two wills were admitted to probate and letters testamentary
were issued in his favor.

In a motion dated May 19, 1983, petitioner asked that Dr. Rafael
Cunanan, Sr. be ordered to deliver to her a Philippine Trust
Company passbook with P25,594.00 in savings deposit, and the
Family Savings Bank time deposit certificates in the total amount of
P12,412.52.

On May 31, Atty. Federico Alday filed a notice of appearance as

counsel for the heirs of Dr. Jose F. Cunanan, namely, Dr. Rafael
Cunanan, Sr., Priscilla Cunanan Bautista, Lydia Cunanan Ignacio,
Felipe F. Cunanan and Loreto Cunanan Concepcion (Cunanan
heirs). He also manifested that before receiving petitioner's motion of
May 19, 1983, his clients were unaware of the filing of the testate
estate case and therefore, "in the interest of simple fair play," they
should be notified of the proceedings (Records, p. 110). He prayed
for deferment of the hearing on the motions of May 19, 1983.

"misrepresentation" deprived them of their right to "due process in

violation of Section 4, Rule 76 of the Revised Rules of Court; (2) that
Dr. Rafael G. Cunanan, Jr., the executor of the estate of the
Cunanan spouses, was likewise not notified of the hearings in the
Bulacan court; (3) that the "misrepresentation and concealment
committed by" petitioner rendered her unfit to be a special
administratrix; (4) that Dr. Rafael G. Cunanan, Jr. had, by virtue of a
verified
power
of
attorney,
authorized
his
father,
Dr. Rafael Cunanan, Sr., to be his attorney-in-fact; and (5) that Dr.
Rafael Cunanan, Sr. is qualified to be a regular administrator "as
practically all of the subject estate in the Philippines belongs to their
brother, Dr. Jose F. Cunanan" (Records, pp. 118-122). Hence, they
prayed: (1) that the proceedings in the case be declared null and
void; (2) that the appointment of petitioner as special administratrix
be set aside; and (3) that Dr. Rafael Cunanan, Sr. be appointed the
regular administrator of the estate of the deceased spouses.

Petitioner then filed a counter manifestation dated June 13, 1983,

asserting: (1) that the "Cunanan collaterals are neither heirs nor
creditors of the late Dr. Jose F. Cunanan" and therefore, they had "no
legal or proprietary interests to protect" and "no right to intervene";
(2) that the wills of Dr. Jose F. Cunanan and Dr. Evelyn PerezCunanan, being American citizens, were executed in accordance
with the solemnities and formalities of New York laws, and produced
"effects in this jurisdiction in accordance with Art. 16 in relation to Art.
816 of the Civil Code"; (3) that under Article VIII of the two wills, it
was presumed that the husband predeceased the wife; and (4) that
"the Cunanan collaterals are neither distributees, legatees or
beneficiaries, much less, heirs as heirship is only by institution"
under a will or by operation of the law of New York (Records, pp.
112-113).

Thereafter, the Cunanan heirs filed a motion requiring petitioner to

submit an inventory or accounting of all monies received by her in
trust for the estate.
In her opposition, petitioner asserted: (1) that she was the "sole and
only heir" of her daughter, Dr. Evelyn Perez-Cunanan to the
exclusion of the "Cunanan collaterals"; hence they were complete
strangers to the proceedings and were not entitled to notice; (2) that
she could not have "concealed" the name and address of Dr. Rafael
G. Cunanan, Jr. because his name was prominently mentioned not
only in the two wills but also in the decrees of the American
surrogate court; (3) that the rule applicable to the case is Rule 77,
not Rule 76, because it involved the allowance of wills proved
outside of the Philippines and that nowhere in Section 2 of Rule 77 is
there a mention of notice being given to the executor who, by the
same provision, should himself file the necessary ancillary
proceedings in this country; (4) that even if the Bulacan estate came
from the "capital" of Dr. Jose F. Cunanan, he had willed all his

On June 23, the probate court granted petitioner's motion of May 19,
1983. However, on July 21, the Cunanan heirs filed a motion to
nullify the proceedings and to set aside the appointment of, or to
disqualify, petitioner as special administratrix of the estates of Dr.
Jose F. Cunanan and Dr. Evelyn Perez-Cunanan. The motion stated:
(1) that being the "brothers and sisters and the legal and surviving
heirs" of Dr. Jose F. Cunanan, they had been "deliberately excluded"
in the petition for the probate of the separate wills of the Cunanan
spouses thereby misleading the Bulacan court to believe that
petitioner was the sole heir of the spouses; that such

worldly goods to his wife and nothing to his brothers and sisters; and
(5) that Dr. Rafael G. Cunanan, Jr. had unlawfully disbursed
$215,000.00 to the Cunanan heirs, misappropriated $15,000.00 for
himself and irregularly assigned assets of the estates to his
American lawyer (Records, pp. 151-160).

Petitioner filed a rejoinder, stating that in violation of the April 13,

1983 decision of the American court Dr. Rafael G. Cunanan, Jr.
made "unauthorized disbursements from the estates as early as July
7, 1982" (Records, p. 231). Thereafter, petitioner moved for the
suspension of the proceedings as she had "to attend to the
settlement proceedings" of the estate of the Cunanan spouses in
New York (Records, p. 242). The Cunanans heirs opposed this
motion and filed a manifestation, stating that petitioner had received
$215,000.00 "from the Surrogates Court as part of legacy" based on
the aforesaid agreement of November 24, 1982 (Records, p. 248).

In their reply, the Cunanan heirs stressed that on November 24,

1982, petitioner and the Cunanan heirs had entered into an
agreement in the United States "to settle and divide equally the
estates," and that under Section 2 of Rule 77 the "court shall fix a
time and place for the hearing and cause notice thereof to be given
as in case of an original will presented for allowance" (Records, pp.
184-185).

On February 21, 1984, Judge de la Llana issued an order,

disallowing the reprobate of the two wills, recalling the appointment
of petitioner as special administratrix, requiring the submission of
petitioner of an inventory of the property received by her as special
administratrix and declaring all pending incidents moot and
academic. Judge de la Llana reasoned out that petitioner failed to
prove the law of New York on procedure and allowance of wills and
the court had no way of telling whether the wills were executed in
accordance with the law of New York. In the absence of such
evidence, the presumption is that the law of succession of the foreign
country is the same as the law of the Philippines. However, he noted,
that there were only two witnesses to the wills of the Cunanan
spouses and the Philippine law requires three witnesses and that the
wills were not signed on each and every page, a requirement of the
Philippine law.

Petitioner asked that Dr. Rafael G. Cunanan, Jr. be cited for

contempt of court for failure to comply with the Order of June 23,
1983 and for appropriating money of the estate for his own benefit.
She also alleged that she had impugned the agreement of November
24, 1982 before the Surrogate Court of Onondaga, New York which
rendered a decision on April 13, 1983, finding that "all assets are
payable to Dr. Evelyn P. Cunanans executor to be then distributed
pursuant to EPTL4-1.1 subd [a] par [4]" (Rollo, p. 52).
On their part, the Cunanan heirs replied that petitioner was estopped
from claiming that they were heirs by the agreement to divide equally
the estates. They asserted that by virtue of Section 2 of Rule 77 of
the Rules of Court, the provisions of Sections 3, 4 and 5 of Rule 76
on the requirement of notice to all heirs, executors, devisees and
legatees must be complied with. They reiterated their prayer: (1) that
the proceedings in the case be nullified; (2) that petitioner be
disqualified as special administratrix; (3) that she be ordered to
submit an inventory of all goods, chattels and monies which she had
received and to surrender the same to the court; and (4) that Dr.
Rafael Cunanan, Sr. be appointed the regular administrator.

On August 27, 1985, petitioner filed a motion for reconsideration of

the Order dated February 21, 1984, where she had sufficiently
proven the applicable laws of New York governing the execution of
last wills and testaments.
On the same day, Judge de la Llana issued another order, denying
the motion of petitioner for the suspension of the proceedings but
gave her 15 days upon arrival in the country within which to act on

the other order issued that same day. Contending that the second
portion of the second order left its finality to the discretion of counsel
for petitioner, the Cunanans filed a motion for the reconsideration of
the objectionable portion of the said order so that it would conform
with the pertinent provisions of the Judiciary Reorganization Act of
1980 and the Interim Rules of Court.

which all refer to the offer and admission to probate of the last wills of
the Cunanan spouses including all procedures undertaken and
decrees issued in connection with the said probate" (Records, pp.
313-323).
Thereafter, the Cunanans heirs filed a motion for reconsideration of
the Order of August 19, 1985, alleging lack of notice to their counsel.

On April 30, 1985, the respondent Judge of Branch 18 of the

Regional Trial Court, Malolos, to which the reprobate case was
reassigned, issued an order stating that "(W)hen the last will and
testament . . . was denied probate," the case was terminated and
therefore all orders theretofore issued should be given finality. The
same Order amended the February 21, 1984 Order by requiring
petitioner to turn over to the estate the inventoried property. It
considered the proceedings for all intents and purposes, closed
(Records,
p. 302).

On March 31, 1986, respondent Judge to which the case was

reassigned denied the motion for reconsideration holding that the
documents submitted by petitioner proved "that the wills of the
testator domiciled abroad were properly executed, genuine and
sufficient to possess real and personal property; that letters
testamentary were issued; and that proceedings were held on a
foreign tribunal and proofs taken by a competent judge who inquired
into all the facts and circumstances and being satisfied with his
findings issued a decree admitting to probate the wills in question."
However, respondent Judge said that the documents did not
establish the law of New York on the procedure and allowance of
wills (Records, p. 381).

On August 12, petitioner filed a motion to resume proceedings on

account of the final settlement and termination of the probate cases
in New York. Three days later, petitioner filed a motion praying for the
reconsideration of the Order of April 30, 1985 on the strength of the
February 21, 1984 Order granting her a period of 15 days upon
arrival in the country within which to act on the denial of probate of
the wills of the Cunanan spouses. On August 19, respondent Judge
granted the motion and reconsidered the Order of April 30, 1985.

On April 9, 1986, petitioner filed a motion to allow her to present

further evidence on the foreign law. After the hearing of the motion
on April 25, 1986, respondent Judge issued an order wherein he
conceded that insufficiency of evidence to prove the foreign law was
not a fatal defect and was curable by adducing additional evidence.
He granted petitioner 45 days to submit the evidence to that effect.

On August 29, counsel for petitioner, who happens to be her

daughter, Natividad, filed a motion praying that since petitioner was
ailing in Fort Lee, New Jersey, U.S.A. and therefore incapacitated to
act as special administratrix, she (the counsel) should be named
substitute special administratrix. She also filed a motion for the
reconsideration of the Order of February 21, 1984, denying probate
to the wills of the Cunanan spouses, alleging that respondent Judge
"failed to appreciate the significant probative value of the exhibits . . .

However, without waiting for petitioner to adduce the additional

evidence, respondent Judge ruled in his order dated June 20, 1986
that he found "no compelling reason to disturb its ruling of March 31,
1986" but allowed petitioner to "file anew the appropriate probate
proceedings for each of the testator" (Records, p. 391).

10

The Order dated June 20, 1986 prompted petitioner to file a second
motion for reconsideration stating that she was "ready to submit
further evidence on the law obtaining in the State of New York" and
praying that she be granted "the opportunity to present evidence on
what the law of the State of New York has on the probate and
allowance of wills" (Records, p. 393).

On November 19, respondent Judge issued an order, denying the

motion for reconsideration filed by petitioner on the grounds that "the
probate of separate wills of two or more different persons even if they
are husband and wife cannot be undertaken in a single petition"
(Records, pp. 376-378).
Hence, petitioner instituted the instant petition, arguing that the
evidence offered at the hearing of April 11, 1983 sufficiently proved
the laws of the State of New York on the allowance of wills, and that
the separate wills of the Cunanan spouses need not be probated in
separate proceedings.

On July 18, respondent Judge denied the motion holding that to

allow the probate of two wills in a single proceeding "would be a
departure from the typical and established mode of probate where
one petition takes care of one will." He pointed out that even in New
York "where the wills in question were first submitted for probate,
they were dealt with in separate proceedings" (Records, p. 395).

II

On August 13, 1986, petitioner filed a motion for the reconsideration

of the Order of July 18, 1986, citing Section 3, Rule 2 of the Rules of
Court, which provides that no party may institute more than one suit
for a single cause of action. She pointed out that separate
proceedings for the wills of the spouses which contain basically the
same provisions as they even named each other as a beneficiary in
their respective wills, would go against "the grain of inexpensive, just
and speedy determination of the proceedings" (Records, pp. 405407).

Petitioner contends that the following pieces of evidence she had

submitted before respondent Judge are sufficient to warrant the
allowance of the wills:
(a) two certificates of authentication of the respective
wills of Evelyn and Jose by the Consulate General of
the Philippines (Exhs. "F" and "G");
(b) two certifications from the Secretary of State of
New York and Custodian of the Great Seal on the
facts that Judge Bernard L. Reagan is the Surrogate
of the Country of Onondaga which is a court of
record, that his signature and seal of office are
genuine, and that the Surrogate is duly authorized to
grant copy of the respective wills of Evelyn and
Jose
(Exhs. "F-1" and "G-1");

On September 11, 1986, petitioner filed a supplement to the motion

for reconsideration, citing Benigno v. De La Pea, 57 Phil. 305
(1932)
(Records,
p. 411), but respondent Judge found that this pleading had been filed
out of time and that the adverse party had not been furnished with a
copy thereof. In her compliance, petitioner stated that she had
furnished a copy of the motion to the counsel of the Cunanan heirs
and reiterated her motion for a "final ruling on her supplemental
motion" (Records, p. 421).

(c) two certificates of Judge Reagan and Chief Clerk

Donald E. Moore stating that they have in their

11

records and files the said wills which were recorded

on April 7, 1982 (Exhs. "F-2" and "G-2");

(j) the decrees on probate of the two wills specifying

that proceedings were held and proofs duly taken
(Exhs. "H-4" and "I-5");

(d) the respective wills of Evelyn and Jose (Exhs. "F3", "F-6" and Exh. "G-3" "G-6");

(k) decrees on probate of the two wills stating that

they were properly executed, genuine and valid and
that the said instruments were admitted to probate
and established as wills valid to pass real and
personal property (Exhs. "H-5" and "I-5"); and

(e) certificates of Judge Reagan and the Chief Clerk

certifying to the genuineness and authenticity of the
exemplified copies of the two wills (Exhs. "F-7" and
"F-7");

(l) certificates of Judge Reagan and the Chief Clerk

on the genuineness and authenticity of each others
signatures in the exemplified copies of the decrees
of probate, letters testamentary and proceedings
held in their court (Exhs. "H-6" and "I-6") (Rollo, pp.
13-16).

(f) two certificates of authentication from the

Consulate General of the Philippines in New York
(Exh. "H" and "F").
(g) certifications from the Secretary of State that
Judge Reagan is duly authorized to grant
exemplified copies of the decree of probate, letters
testamentary and all proceedings had and proofs
duly
taken
(Exhs. "H-1" and "I-1");

Petitioner adds that the wills had been admitted to probate in the
Surrogate Courts Decision of April 13, 1983 and that the
proceedings were terminated on November 29, 1984.
The respective wills of the Cunanan spouses, who were American
citizens, will only be effective in this country upon compliance with
the following provision of the Civil Code of the Philippines:

(h) certificates of Judge Reagan and the Chief Clerk

that letters testamentary were issued to Rafael G.
Cunanan (Exhs. "H-2" and "I-2");

Art. 816. The will of an alien who is abroad produces

effect in the Philippines if made with the formalities
prescribed by the law of the place in which he
resides, or according to the formalities observed in
his country, or in conformity with those which this
Code prescribes.

(i) certification to the effect that it was during the

term of Judge Reagan that a decree admitting the
wills to probate had been issued and appointing
Rafael G. Cunanan as alternate executor (Exhs. "H3"
and
"I-10");

Thus, proof that both wills conform with the formalities prescribed by
New York laws or by Philippine laws is imperative.

12

The evidence necessary for the reprobate or allowance of wills which

have been probated outside of the Philippines are as follows: (1) the
due execution of the will in accordance with the foreign laws; (2) the
testator has his domicile in the foreign country and not in the
Philippines; (3) the will has been admitted to probate in such country;
(4) the fact that the foreign tribunal is a probate court, and (5) the
laws of a foreign country on procedure and allowance of wills (III
Moran Commentaries on the Rules of Court, 1970 ed., pp. 419-429;
Suntay v. Suntay, 95 Phil. 500 [1954]; Fluemer v. Hix, 54 Phil. 610
[1930]). Except for the first and last requirements, the petitioner
submitted all the needed evidence.

their object and to assist the parties in obtaining just, speedy, and
inexpensive determination of every action and proceeding."
A literal application of the Rules should be avoided if they would only
result in the delay in the administration of justice (Acain v.
Intermediate Appellate Court, 155 SCRA 100 [1987]; Roberts v.
Leonidas, 129 SCRA 33 [1984]).
What the law expressly prohibits is the making of joint wills either for
the testators reciprocal benefit or for the benefit of a third person
(Civil Code of the Philippines, Article 818). In the case at bench, the
Cunanan spouses executed separate wills. Since the two wills
contain essentially the same provisions and pertain to property which
in all probability are conjugal in nature, practical considerations
dictate their joint probate. As this Court has held a number of times, it
will always strive to settle the entire controversy in a single
proceeding leaving no root or branch to bear the seeds of future
litigation (Motoomull v. Dela Paz, 187 SCRA 743 [1990]).

The necessity of presenting evidence on the foreign laws upon which

the probate in the foreign country is based is impelled by the fact that
our courts cannot take judicial notice of them (Philippine Commercial
and Industrial Bank v. Escolin, 56 SCRA 266 [1974]).
Petitioner must have perceived this omission as in fact she moved
for more time to submit the pertinent procedural and substantive
New York laws but which request respondent Judge just glossed
over. While the probate of a will is a special proceeding wherein
courts should relax the rules on evidence, the goal is to receive the
best evidence of which the matter is susceptible before a purported
will is probated or denied probate (Vda. de Ramos v. Court of
Appeals, 81 SCRA 393 [1978]).

This petition cannot be completely resolved without touching on a

very glaring fact petitioner has always considered herself the sole
heir
of
Dr. Evelyn Perez Cunanan and because she does not consider
herself an heir of Dr. Jose F. Cunanan, she noticeably failed to notify
his heirs of the filing of the proceedings. Thus, even in the instant
petition, she only impleaded respondent Judge, forgetting that a
judge whose order is being assailed is merely a nominal or formal
party (Calderon v. Solicitor General, 215 SCRA 876 [1992]).

There is merit in petitioners insistence that the separate wills of the

Cunanan spouses should be probated jointly. Respondent Judges
view that the Rules on allowance of wills is couched in singular terms
and therefore should be interpreted to mean that there should be
separate probate proceedings for the wills of the Cunanan spouses
is too literal and simplistic an approach. Such view overlooks the
provisions of Section 2, Rule 1 of the Revised Rules of Court, which
advise that the rules shall be "liberally construed in order to promote

The rule that the court having jurisdiction over the reprobate of a will
shall "cause notice thereof to be given as in case of an original will
presented for allowance" (Revised Rules of Court, Rule 27, Section
2) means that with regard to notices, the will probated abroad should
be treated as if it were an "original will" or a will that is presented for
probate for the first time. Accordingly, compliance with Sections 3

13

and 4 of Rule 76, which require publication and notice by mail or

personally to the "known heirs, legatees, and devisees of the testator
resident in the Philippines" and to the executor, if he is not the
petitioner, are required.

G.R. No. L-23145

November 29, 1968

TESTATE ESTATE OF IDONAH SLADE PERKINS, deceased.

RENATO
D.
TAYAG, ancillary
administrator-appellee,
vs.
BENGUET CONSOLIDATED, INC., oppositor-appellant.

The brothers and sisters of Dr. Jose F. Cunanan, contrary to

petitioner's claim, are entitled to notices of the time and place for
proving the wills. Under Section 4 of Rule 76 of the Revised Rules of
Court, the "court shall also cause copies of the notice of the time and
place fixed for proving the will to be addressed to the designated or
other known heirs, legatees, and devisees of the testator, . . . "

FERNANDO, J.:
Confronted by an obstinate and adamant refusal of the domiciliary
administrator, the County Trust Company of New York, United States
of America, of the estate of the deceased Idonah Slade Perkins, who
died in New York City on March 27, 1960, to surrender to the
ancillary administrator in the Philippines the stock certificates owned
by her in a Philippine corporation, Benguet Consolidated, Inc., to
satisfy the legitimate claims of local creditors, the lower court, then
presided by the Honorable Arsenio Santos, now retired, issued on
May 18, 1964, an order of this tenor: "After considering the motion of
the ancillary administrator, dated February 11, 1964, as well as the
opposition filed by the Benguet Consolidated, Inc., the Court hereby
(1) considers as lost for all purposes in connection with the
administration and liquidation of the Philippine estate of Idonah
Slade Perkins the stock certificates covering the 33,002 shares of
stock standing in her name in the books of the Benguet
Consolidated, Inc., (2) orders said certificates cancelled, and (3)
directs said corporation to issue new certificates in lieu thereof, the
same to be delivered by said corporation to either the incumbent
ancillary administrator or to the Probate Division of this Court." 1

WHEREFORE, the questioned Order is SET ASIDE. Respondent

Judge shall allow petitioner reasonable time within which to submit
evidence needed for the joint probate of the wills of the Cunanan
spouses and see to it that the brothers and sisters of Dr. Jose F.
Cunanan are given all notices and copies of all pleadings pertinent to
the probate proceedings.
SO ORDERED.

From such an order, an appeal was taken to this Court not by the
domiciliary administrator, the County Trust Company of New York,
but by the Philippine corporation, the Benguet Consolidated, Inc. The
appeal cannot possibly prosper. The challenged order represents a

14

response and expresses a policy, to paraphrase Frankfurter, arising

out of a specific problem, addressed to the attainment of specific
ends by the use of specific remedies, with full and ample support
from legal doctrines of weight and significance.

possession of the domiciliary administrator, the County Trust

Company, in New York, U.S.A...."4
It is its view, therefore, that under the circumstances, the stock
certificates cannot be declared or considered as lost. Moreover, it
would allege that there was a failure to observe certain requirements
of its by-laws before new stock certificates could be issued. Hence,
its appeal.

The facts will explain why. As set forth in the brief of appellant
Benguet Consolidated, Inc., Idonah Slade Perkins, who died on
March 27, 1960 in New York City, left among others, two stock
certificates covering 33,002 shares of appellant, the certificates
being in the possession of the County Trust Company of New York,
which as noted, is the domiciliary administrator of the estate of the
deceased.2 Then came this portion of the appellant's brief: "On
August 12, 1960, Prospero Sanidad instituted ancillary administration
proceedings in the Court of First Instance of Manila; Lazaro A.
Marquez was appointed ancillary administrator, and on January 22,
1963, he was substituted by the appellee Renato D. Tayag. A dispute
arose between the domiciary administrator in New York and the
ancillary administrator in the Philippines as to which of them was
entitled to the possession of the stock certificates in question. On
January 27, 1964, the Court of First Instance of Manila ordered the
domiciliary administrator, County Trust Company, to "produce and
deposit" them with the ancillary administrator or with the Clerk of
Court. The domiciliary administrator did not comply with the order,
and on February 11, 1964, the ancillary administrator petitioned the
court to "issue an order declaring the certificate or certificates of
stocks covering the 33,002 shares issued in the name of Idonah
Slade Perkins by Benguet Consolidated, Inc., be declared [or]
considered as lost."3

As was made clear at the outset of this opinion, the appeal lacks
merit. The challenged order constitutes an emphatic affirmation of
judicial authority sought to be emasculated by the wilful conduct of
the domiciliary administrator in refusing to accord obedience to a
court decree. How, then, can this order be stigmatized as illegal?
As is true of many problems confronting the judiciary, such a
response was called for by the realities of the situation. What cannot
be ignored is that conduct bordering on wilful defiance, if it had not
actually reached it, cannot without undue loss of judicial prestige, be
condoned or tolerated. For the law is not so lacking in flexibility and
resourcefulness as to preclude such a solution, the more so as
deeper reflection would make clear its being buttressed by
indisputable principles and supported by the strongest policy
considerations.
It can truly be said then that the result arrived at upheld and
vindicated the honor of the judiciary no less than that of the country.
Through this challenged order, there is thus dispelled the
atmosphere of contingent frustration brought about by the
persistence of the domiciliary administrator to hold on to the stock
certificates after it had, as admitted, voluntarily submitted itself to the
jurisdiction of the lower court by entering its appearance through
counsel on June 27, 1963, and filing a petition for relief from a
previous order of March 15, 1963.

It is to be noted further that appellant Benguet Consolidated, Inc.

admits that "it is immaterial" as far as it is concerned as to "who is
entitled to the possession of the stock certificates in question;
appellant opposed the petition of the ancillary administrator because
the said stock certificates are in existence, they are today in the

15

Thus did the lower court, in the order now on appeal, impart vitality
and effectiveness to what was decreed. For without it, what it had
been decided would be set at naught and nullified. Unless such a
blatant disregard by the domiciliary administrator, with residence
abroad, of what was previously ordained by a court order could be
thus remedied, it would have entailed, insofar as this matter was
concerned, not a partial but a well-nigh complete paralysis of judicial
authority.

administered in the nature of assets of the deceased liable for his

individual debts or to be distributed among his heirs." 7
It would follow then that the authority of the probate court to require
that ancillary administrator's right to "the stock certificates covering
the 33,002 shares ... standing in her name in the books of [appellant]
Benguet Consolidated, Inc...." be respected is equally beyond
question. For appellant is a Philippine corporation owing full
allegiance and subject to the unrestricted jurisdiction of local courts.
Its shares of stock cannot therefore be considered in any wise as
immune from lawful court orders.

1. Appellant Benguet Consolidated, Inc. did not dispute the power of

the appellee ancillary administrator to gain control and possession of
all assets of the decedent within the jurisdiction of the Philippines.
Nor could it. Such a power is inherent in his duty to settle her estate
and satisfy the claims of local creditors. 5 As Justice Tuason speaking
for this Court made clear, it is a "general rule universally recognized"
that administration, whether principal or ancillary, certainly "extends
to the assets of a decedent found within the state or country where it
was granted," the corollary being "that an administrator appointed in
one state or country has no power over property in another state or
country."6

Our holding in Wells Fargo Bank and Union v. Collector of Internal

Revenue8 finds application. "In the instant case, the actual situs of
the shares of stock is in the Philippines, the corporation being
domiciled [here]." To the force of the above undeniable proposition,
not even appellant is insensible. It does not dispute it. Nor could it
successfully do so even if it were so minded.
2. In the face of such incontrovertible doctrines that argue in a rather
conclusive fashion for the legality of the challenged order, how does
appellant, Benguet Consolidated, Inc. propose to carry the extremely
heavy burden of persuasion of precisely demonstrating the contrary?
It would assign as the basic error allegedly committed by the lower
court its "considering as lost the stock certificates covering 33,002
shares of Benguet belonging to the deceased Idonah Slade
Perkins, ..."9 More specifically, appellant would stress that the "lower
court could not "consider as lost" the stock certificates in question
when, as a matter of fact, his Honor the trial Judge knew, and does
know, and it is admitted by the appellee, that the said stock
certificates are in existence and are today in the possession of the
domiciliary administrator in New York."10

It is to be noted that the scope of the power of the ancillary

administrator was, in an earlier case, set forth by Justice Malcolm.
Thus: "It is often necessary to have more than one administration of
an estate. When a person dies intestate owning property in the
country of his domicile as well as in a foreign country, administration
is had in both countries. That which is granted in the jurisdiction of
decedent's last domicile is termed the principal administration, while
any other administration is termed the ancillary administration. The
reason for the latter is because a grant of administration does not ex
proprio vigore have any effect beyond the limits of the country in
which it is granted. Hence, an administrator appointed in a foreign
state has no authority in the [Philippines]. The ancillary
administration is proper, whenever a person dies, leaving in a
country other than that of his last domicile, property to be

There may be an element of fiction in the above view of the lower

court. That certainly does not suffice to call for the reversal of the

16

appealed order. Since there is a refusal, persistently adhered to by

the domiciliary administrator in New York, to deliver the shares of
stocks of appellant corporation owned by the decedent to the
ancillary administrator in the Philippines, there was nothing
unreasonable or arbitrary in considering them as lost and requiring
the appellant to issue new certificates in lieu thereof. Thereby, the
task incumbent under the law on the ancillary administrator could be
discharged and his responsibility fulfilled.

What cannot be disputed, therefore, is the at times indispensable

role that fictions as such played in the law. There should be then on
the part of the appellant a further refinement in the catholicity of its
condemnation of such judicial technique. If ever an occasion did call
for the employment of a legal fiction to put an end to the anomalous
situation of a valid judicial order being disregarded with apparent
impunity, this is it. What is thus most obvious is that this particular
alleged error does not carry persuasion.

Any other view would result in the compliance to a valid judicial order
being made to depend on the uncontrolled discretion of the party or
entity, in this case domiciled abroad, which thus far has shown the
utmost persistence in refusing to yield obedience. Certainly,
appellant would not be heard to contend in all seriousness that a
judicial decree could be treated as a mere scrap of paper, the court
issuing it being powerless to remedy its flagrant disregard.

3. Appellant Benguet Consolidated, Inc. would seek to bolster the

above contention by its invoking one of the provisions of its by-laws
which would set forth the procedure to be followed in case of a lost,
stolen or destroyed stock certificate; it would stress that in the event
of a contest or the pendency of an action regarding ownership of
such certificate or certificates of stock allegedly lost, stolen or
destroyed, the issuance of a new certificate or certificates would
await the "final decision by [a] court regarding the ownership
[thereof]."15

It may be admitted of course that such alleged loss as found by the

lower court did not correspond exactly with the facts. To be more
blunt, the quality of truth may be lacking in such a conclusion arrived
at. It is to be remembered however, again to borrow from Frankfurter,
"that fictions which the law may rely upon in the pursuit of legitimate
ends have played an important part in its development." 11

Such reliance is misplaced. In the first place, there is no such

occasion to apply such by-law. It is admitted that the foreign
domiciliary administrator did not appeal from the order now in
question. Moreover, there is likewise the express admission of
appellant that as far as it is concerned, "it is immaterial ... who is
entitled to the possession of the stock certificates ..." Even if such
were not the case, it would be a legal absurdity to impart to such a
provision conclusiveness and finality. Assuming that a contrariety
exists between the above by-law and the command of a court
decree, the latter is to be followed.

Speaking of the common law in its earlier period, Cardozo could

state fictions "were devices to advance the ends of justice, [even if]
clumsy and at times offensive."12 Some of them have persisted even
to the present, that eminent jurist, noting "the quasi contract, the
adopted child, the constructive trust, all of flourishing vitality, to attest
the empire of "as if" today." 13 He likewise noted "a class of fictions of
another order, the fiction which is a working tool of thought, but which
at times hides itself from view till reflection and analysis have brought
it to the light."14

It is understandable, as Cardozo pointed out, that the Constitution

overrides a statute, to which, however, the judiciary must yield
deference, when appropriately invoked and deemed applicable. It
would be most highly unorthodox, however, if a corporate by-law

17

would be accorded such a high estate in the jural order that a court
must not only take note of it but yield to its alleged controlling force.

association of human beings granted legal personality by the state,

puts the matter neatly.20

The fear of appellant of a contingent liability with which it could be

saddled unless the appealed order be set aside for its inconsistency
with one of its by-laws does not impress us. Its obedience to a lawful
court order certainly constitutes a valid defense, assuming that such
apprehension of a possible court action against it could possibly
materialize. Thus far, nothing in the circumstances as they have
developed gives substance to such a fear. Gossamer possibilities of
a future prejudice to appellant do not suffice to nullify the lawful
exercise of judicial authority.

There is thus a rejection of Gierke's genossenchaft theory, the basic

theme of which to quote from Friedmann, "is the reality of the group
as a social and legal entity, independent of state recognition and
concession."21 A corporation as known to Philippine jurisprudence is
a creature without any existence until it has received the imprimatur
of the state according to law. It is logically inconceivable therefore
that it will have rights and privileges of a higher priority than that of its
creator. More than that, it cannot legitimately refuse to yield
obedience to acts of its state organs, certainly not excluding the
judiciary, whenever called upon to do so.

4. What is more the view adopted by appellant Benguet

Consolidated, Inc. is fraught with implications at war with the basic
postulates of corporate theory.

As a matter of fact, a corporation once it comes into being, following

American law still of persuasive authority in our jurisdiction, comes
more often within the ken of the judiciary than the other two
coordinate branches. It institutes the appropriate court action to
enforce its right. Correlatively, it is not immune from judicial control in
those instances, where a duty under the law as ascertained in an
appropriate legal proceeding is cast upon it.

We start with the undeniable premise that, "a corporation is an

artificial being created by operation of law...." 16 It owes its life to the
state, its birth being purely dependent on its will. As Berle so aptly
stated: "Classically, a corporation was conceived as an artificial
person, owing its existence through creation by a sovereign
power."17As a matter of fact, the statutory language employed owes
much to Chief Justice Marshall, who in the Dartmouth College
decision defined a corporation precisely as "an artificial being,
invisible, intangible, and existing only in contemplation of law." 18

To assert that it can choose which court order to follow and which to
disregard is to confer upon it not autonomy which may be conceded
but license which cannot be tolerated. It is to argue that it may, when
so minded, overrule the state, the source of its very existence; it is to
contend that what any of its governmental organs may lawfully
require could be ignored at will. So extravagant a claim cannot
possibly merit approval.

The well-known authority Fletcher could summarize the matter thus:

"A corporation is not in fact and in reality a person, but the law treats
it as though it were a person by process of fiction, or by regarding it
as an artificial person distinct and separate from its individual
stockholders.... It owes its existence to law. It is an artificial person
created by law for certain specific purposes, the extent of whose
existence, powers and liberties is fixed by its charter." 19 Dean
Pound's terse summary, a juristic person, resulting from an

5. One last point. In Viloria v. Administrator of Veterans Affairs, 22 it

was shown that in a guardianship proceedings then pending in a
lower court, the United States Veterans Administration filed a motion
for the refund of a certain sum of money paid to the minor under
guardianship, alleging that the lower court had previously granted its

18

petition to consider the deceased father as not entitled to guerilla

benefits according to a determination arrived at by its main office in
the United States. The motion was denied. In seeking a
reconsideration of such order, the Administrator relied on an
American federal statute making his decisions "final and conclusive
on all questions of law or fact" precluding any other American official
to examine the matter anew, "except a judge or judges of the United
States court."23 Reconsideration was denied, and the Administrator
appealed.

imagine of a situation more offensive to the dignity of the bench or

the honor of the country.
Yet that would be the effect, even if unintended, of the proposition to
which appellant Benguet Consolidated seems to be firmly committed
as shown by its failure to accept the validity of the order complained
of; it seeks its reversal. Certainly we must at all pains see to it that it
does not succeed. The deplorable consequences attendant on
appellant prevailing attest to the necessity of negative response from
us. That is what appellant will get.

In an opinion by Justice J.B.L. Reyes, we sustained the lower court.

Thus: "We are of the opinion that the appeal should be rejected. The
provisions of the U.S. Code, invoked by the appellant, make the
decisions of the U.S. Veterans' Administrator final and conclusive
when made on claims property submitted to him for resolution; but
they are not applicable to the present case, where the Administrator
is not acting as a judge but as a litigant. There is a great difference
between actions against the Administrator (which must be filed
strictly in accordance with the conditions that are imposed by the
Veterans' Act, including the exclusive review by United States
courts), and those actions where the Veterans' Administrator seeks a
remedy from our courts and submits to their jurisdiction by filing
actions therein. Our attention has not been called to any law or treaty
that would make the findings of the Veterans' Administrator, in
actions where he is a party, conclusive on our courts. That, in effect,
would deprive our tribunals of judicial discretion and render them
mere subordinate instrumentalities of the Veterans' Administrator."

That is all then that this case presents. It is obvious why the appeal
cannot succeed. It is always easy to conjure extreme and even
oppressive possibilities. That is not decisive. It does not settle the
issue. What carries weight and conviction is the result arrived at, the
just solution obtained, grounded in the soundest of legal doctrines
and distinguished by its correspondence with what a sense of
realism requires. For through the appealed order, the imperative
requirement of justice according to law is satisfied and national
dignity and honor maintained.
WHEREFORE, the appealed order of the Honorable Arsenio Santos,
the Judge of the Court of First Instance, dated May 18, 1964, is
affirmed. With costs against oppositor-appelant Benguet
Consolidated, Inc.

It is bad enough as the Viloria decision made patent for our judiciary
to accept as final and conclusive, determinations made by foreign
governmental agencies. It is infinitely worse if through the absence of
any coercive power by our courts over juridical persons within our
jurisdiction, the force and effectivity of their orders could be made to
depend on the whim or caprice of alien entities. It is difficult to

19

Petitioner is the Holy See who exercises sovereignty over the

Vatican City in Rome, Italy, and is represented in the Philippines by
the Papal Nuncio.
Private respondent, Starbright Sales Enterprises, Inc., is a domestic
corporation engaged in the real estate business.
This petition arose from a controversy over a parcel of land
consisting of 6,000 square meters (Lot 5-A, Transfer Certificate of
Title No. 390440) located in the Municipality of Paraaque, Metro
Manila and registered in the name of petitioner.
Said Lot 5-A is contiguous to Lots 5-B and 5-D which are covered by
Transfer Certificates of Title Nos. 271108 and 265388 respectively
and registered in the name of the Philippine Realty Corporation
(PRC).

G.R. No. 101949 December 1, 1994

THE
HOLY
SEE, petitioner,
vs.
THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of
the Regional Trial Court of Makati, Branch 61 and STARBRIGHT
SALES ENTERPRISES, INC., respondents.

The three lots were sold to Ramon Licup, through Msgr. Domingo A.
Cirilos, Jr., acting as agent to the sellers. Later, Licup assigned his
rights to the sale to private respondent.

QUIASON, J.:

In view of the refusal of the squatters to vacate the lots sold to

private respondent, a dispute arose as to who of the parties has the
responsibility of evicting and clearing the land of squatters.
Complicating the relations of the parties was the sale by petitioner of
Lot 5-A to Tropicana Properties and Development Corporation
(Tropicana).

This is a petition for certiorari under Rule 65 of the Revised Rules of

Court to reverse and set aside the Orders dated June 20, 1991 and
September 19, 1991 of the Regional Trial Court, Branch 61, Makati,
Metro Manila in Civil Case No. 90-183.
The Order dated June 20, 1991 denied the motion of petitioner to
dismiss the complaint in Civil Case No. 90-183, while the Order
dated September 19, 1991 denied the motion for reconsideration of
the June 20,1991 Order.

I
On January 23, 1990, private respondent filed a complaint with the
Regional Trial Court, Branch 61, Makati, Metro Manila for annulment
of the sale of the three parcels of land, and specific performance and
damages against petitioner, represented by the Papal Nuncio, and
three other defendants: namely, Msgr. Domingo A. Cirilos, Jr., the

20

PRC
90-183).

and

Tropicana

(Civil

Case

No.

into a townhouse project, but in view of the sellers' breach, it lost

profits of not less than P30,000.000.00.

The complaint alleged that: (1) on April 17, 1988, Msgr. Cirilos, Jr.,
on behalf of petitioner and the PRC, agreed to sell to Ramon Licup
Lots 5-A, 5-B and 5-D at the price of P1,240.00 per square meters;
(2) the agreement to sell was made on the condition that earnest
money of P100,000.00 be paid by Licup to the sellers, and that the
sellers clear the said lots of squatters who were then occupying the
same; (3) Licup paid the earnest money to Msgr. Cirilos; (4) in the
same month, Licup assigned his rights over the property to private
respondent and informed the sellers of the said assignment; (5)
thereafter, private respondent demanded from Msgr. Cirilos that the
sellers fulfill their undertaking and clear the property of squatters;
however, Msgr. Cirilos informed private respondent of the squatters'
refusal to vacate the lots, proposing instead either that private
respondent undertake the eviction or that the earnest money be
returned to the latter; (6) private respondent counterproposed that if
it would undertake the eviction of the squatters, the purchase price of
the lots should be reduced from P1,240.00 to P1,150.00 per square
meter; (7) Msgr. Cirilos returned the earnest money of P100,000.00
and wrote private respondent giving it seven days from receipt of the
letter to pay the original purchase price in cash; (8) private
respondent sent the earnest money back to the sellers, but later
discovered that on March 30, 1989, petitioner and the PRC, without
notice to private respondent, sold the lots to Tropicana, as evidenced
by two separate Deeds of Sale, one over Lot 5-A, and another over
Lots 5-B and 5-D; and that the sellers' transfer certificate of title over
the lots were cancelled, transferred and registered in the name of
Tropicana; (9) Tropicana induced petitioner and the PRC to sell the
lots to it and thus enriched itself at the expense of private
respondent; (10) private respondent demanded the rescission of the
sale to Tropicana and the reconveyance of the lots, to no avail; and
(11) private respondent is willing and able to comply with the terms of
the contract to sell and has actually made plans to develop the lots

Private respondent thus prayed for: (1) the annulment of the Deeds
of Sale between petitioner and the PRC on the one hand, and
Tropicana on the other; (2) the reconveyance of the lots in question;
(3) specific performance of the agreement to sell between it and the
owners of the lots; and (4) damages.
On June 8, 1990, petitioner and Msgr. Cirilos separately moved to
dismiss the complaint petitioner for lack of jurisdiction based on
sovereign immunity from suit, and Msgr. Cirilos for being an improper
party. An opposition to the motion was filed by private respondent.
On June 20, 1991, the trial court issued an order denying, among
others, petitioner's motion to dismiss after finding that petitioner
"shed off [its] sovereign immunity by entering into the business
contract in question" (Rollo, pp. 20-21).
On July 12, 1991, petitioner moved for reconsideration of the order.
On August 30, 1991, petitioner filed a "Motion for a Hearing for the
Sole Purpose of Establishing Factual Allegation for claim of Immunity
as a Jurisdictional Defense." So as to facilitate the determination of
its defense of sovereign immunity, petitioner prayed that a hearing be
conducted to allow it to establish certain facts upon which the said
defense is based. Private respondent opposed this motion as well as
the motion for reconsideration.
On October 1, 1991, the trial court issued an order deferring the
resolution on the motion for reconsideration until after trial on the
merits and directing petitioner to file its answer (Rollo, p. 22).
Petitioner forthwith elevated the matter to us. In its petition, petitioner
invokes the privilege of sovereign immunity only on its own behalf
and on behalf of its official representative, the Papal Nuncio.

21

On December 9, 1991, a Motion for Intervention was filed before us

by the Department of Foreign Affairs, claiming that it has a legal
interest in the outcome of the case as regards the diplomatic
immunity of petitioner, and that it "adopts by reference, the
allegations contained in the petition of the Holy See insofar as they
refer to arguments relative to its claim of sovereign immunity from
suit" (Rollo, p. 87).

requests the Foreign Office of the state where it is sued to convey to

the court that said defendant is entitled to immunity.
In the United States, the procedure followed is the process of
"suggestion," where the foreign state or the international organization
sued in an American court requests the Secretary of State to make a
determination as to whether it is entitled to immunity. If the Secretary
of State finds that the defendant is immune from suit, he, in turn,
asks the Attorney General to submit to the court a "suggestion" that
the defendant is entitled to immunity. In England, a similar procedure
is followed, only the Foreign Office issues a certification to that effect
instead of submitting a "suggestion" (O'Connell, I International Law
130 [1965]; Note: Immunity from Suit of Foreign Sovereign
Instrumentalities and Obligations, 50 Yale Law Journal 1088 [1941]).

Private respondent opposed the intervention of the Department of

Foreign Affairs. In compliance with the resolution of this Court, both
parties and the Department of Foreign Affairs submitted their
respective memoranda.
II

In the Philippines, the practice is for the foreign government or the

international organization to first secure an executive endorsement of
its claim of sovereign or diplomatic immunity. But how the Philippine
Foreign Office conveys its endorsement to the courts varies.
In International Catholic Migration Commission v. Calleja, 190 SCRA
130 (1990), the Secretary of Foreign Affairs just sent a letter directly
to the Secretary of Labor and Employment, informing the latter that
the respondent-employer could not be sued because it enjoyed
diplomatic immunity. In World Health Organization v. Aquino, 48
SCRA 242 (1972), the Secretary of Foreign Affairs sent the trial court
a telegram to that effect. In Baer v. Tizon, 57 SCRA 1 (1974), the
U.S. Embassy asked the Secretary of Foreign Affairs to request the
Solicitor General to make, in behalf of the Commander of the United
States Naval Base at Olongapo City, Zambales, a "suggestion" to
respondent Judge. The Solicitor General embodied the "suggestion"
in a Manifestation and Memorandum as amicus curiae.

A preliminary matter to be threshed out is the procedural issue of

whether the petition for certiorari under Rule 65 of the Revised Rules
of Court can be availed of to question the order denying petitioner's
motion to dismiss. The general rule is that an order denying a motion
to dismiss is not reviewable by the appellate courts, the remedy of
the movant being to file his answer and to proceed with the hearing
before the trial court. But the general rule admits of exceptions, and
one of these is when it is very clear in the records that the trial court
has no alternative but to dismiss the complaint (Philippine National
Bank v. Florendo, 206 SCRA 582 [1992]; Zagada v. Civil Service
Commission, 216 SCRA 114 [1992]. In such a case, it would be a
sheer waste of time and energy to require the parties to undergo the
rigors of a trial.
The other procedural question raised by private respondent is the
personality or legal interest of the Department of Foreign Affairs to
intervene in the case in behalf of the Holy See (Rollo, pp. 186-190).

In the case at bench, the Department of Foreign Affairs, through the

Office of Legal Affairs moved with this Court to be allowed to
intervene on the side of petitioner. The Court allowed the said

In Public International Law, when a state or international agency

wishes to plead sovereign or diplomatic immunity in a foreign court, it

22

Department to file its memorandum in support of petitioner's claim of

sovereign immunity.

In 1929, Italy and the Holy See entered into the Lateran Treaty,
where Italy recognized the exclusive dominion and sovereign
jurisdiction of the Holy See over the Vatican City. It also recognized
the right of the Holy See to receive foreign diplomats, to send its own
diplomats to foreign countries, and to enter into treaties according to
International Law (Garcia, Questions and Problems In International
Law, Public and Private 81 [1948]).

In some cases, the defense of sovereign immunity was submitted

directly to the local courts by the respondents through their private
counsels (Raquiza v. Bradford, 75 Phil. 50 [1945]; Miquiabas v.
Philippine-Ryukyus Command, 80 Phil. 262 [1948]; United States of
America v. Guinto, 182 SCRA 644 [1990] and companion cases). In
cases where the foreign states bypass the Foreign Office, the courts
can inquire into the facts and make their own determination as to the
nature of the acts and transactions involved.

The Lateran Treaty established the statehood of the Vatican City "for
the purpose of assuring to the Holy See absolute and visible
independence and of guaranteeing to it indisputable sovereignty also
in the field of international relations" (O'Connell, I International Law
311 [1965]).

III

In view of the wordings of the Lateran Treaty, it is difficult to

determine whether the statehood is vested in the Holy See or in the
Vatican City. Some writers even suggested that the treaty created
two international persons the Holy See and Vatican City (Salonga
and Yap, supra, 37).

The burden of the petition is that respondent trial court has no

jurisdiction over petitioner, being a foreign state enjoying sovereign
immunity. On the other hand, private respondent insists that the
doctrine of non-suability is not anymore absolute and that petitioner
has divested itself of such a cloak when, of its own free will, it
entered into a commercial transaction for the sale of a parcel of land
located in the Philippines.

The Vatican City fits into none of the established categories of states,
and the attribution to it of "sovereignty" must be made in a sense
different from that in which it is applied to other states (Fenwick,
International Law 124-125 [1948]; Cruz, International Law 37 [1991]).
In a community of national states, the Vatican City represents an
entity organized not for political but for ecclesiastical purposes and
international objects. Despite its size and object, the Vatican City has
an independent government of its own, with the Pope, who is also
head of the Roman Catholic Church, as the Holy See or Head of
State, in conformity with its traditions, and the demands of its mission
in the world. Indeed, the world-wide interests and activities of the
Vatican City are such as to make it in a sense an "international state"
(Fenwick, supra., 125; Kelsen, Principles of International Law 160
[1956]).

A. The Holy See

Before we determine the issue of petitioner's non-suability, a brief
look into its status as a sovereign state is in order.
Before the annexation of the Papal States by Italy in 1870, the Pope
was the monarch and he, as the Holy See, was considered a subject
of International Law. With the loss of the Papal States and the
limitation of the territory under the Holy See to an area of 108.7
acres, the position of the Holy See in International Law became
controversial (Salonga and Yap, Public International Law 36-37
[1992]).

23

One authority wrote that the recognition of the Vatican City as a state
has significant implication that it is possible for any entity pursuing
objects essentially different from those pursued by states to be
invested with international personality (Kunz, The Status of the Holy
See in International Law, 46 The American Journal of International
Law 308 [1952]).

There are two conflicting concepts of sovereign immunity, each

widely held and firmly established. According to the classical or
absolute theory, a sovereign cannot, without its consent, be made a
respondent in the courts of another sovereign. According to the
newer or restrictive theory, the immunity of the sovereign is
recognized only with regard to public acts or acts jure imperii of a
state, but not with regard to private acts or acts jure gestionis
(United States of America v. Ruiz, 136 SCRA 487 [1987]; Coquia and
Defensor-Santiago, Public International Law 194 [1984]).

Inasmuch as the Pope prefers to conduct foreign relations and enter

into transactions as the Holy See and not in the name of the Vatican
City, one can conclude that in the Pope's own view, it is the Holy See
that is the international person.

Some states passed legislation to serve as guidelines for the

executive or judicial determination when an act may be considered
as jure gestionis. The United States passed the Foreign Sovereign
Immunities Act of 1976, which defines a commercial activity as
"either a regular course of commercial conduct or a particular
commercial transaction or act." Furthermore, the law declared that
the "commercial character of the activity shall be determined by
reference to the nature of the course of conduct or particular
transaction or act, rather than by reference to its purpose." The
Canadian Parliament enacted in 1982 an Act to Provide For State
Immunity in Canadian Courts. The Act defines a "commercial activity"
as any particular transaction, act or conduct or any regular course of
conduct that by reason of its nature, is of a "commercial character."

The Republic of the Philippines has accorded the Holy See the
status of a foreign sovereign. The Holy See, through its Ambassador,
the Papal Nuncio, has had diplomatic representations with the
Philippine government since 1957 (Rollo, p. 87). This appears to be
the universal practice in international relations.
B. Sovereign Immunity
As expressed in Section 2 of Article II of the 1987 Constitution, we
have adopted the generally accepted principles of International Law.
Even without this affirmation, such principles of International Law are
deemed incorporated as part of the law of the land as a condition
and consequence of our admission in the society of nations (United
States of America v. Guinto, 182 SCRA 644 [1990]).

The restrictive theory, which is intended to be a solution to the host of

problems involving the issue of sovereign immunity, has created
problems of its own. Legal treatises and the decisions in countries
which follow the restrictive theory have difficulty in characterizing
whether a contract of a sovereign state with a private party is an
act jure gestionis or an act jure imperii.
The restrictive theory came about because of the entry of sovereign
states into purely commercial activities remotely connected with the
discharge of governmental functions. This is particularly true with

24

respect to the Communist states which took control of nationalized

business activities and international trading.

start of the inquiry. The logical question is whether the foreign state is
engaged in the activity in the regular course of business. If the
foreign state is not engaged regularly in a business or trade, the
particular act or transaction must then be tested by its nature. If the
act is in pursuit of a sovereign activity, or an incident thereof, then it
is an act jure imperii, especially when it is not undertaken for gain or
profit.

This Court has considered the following transactions by a foreign

state with private parties as acts jure imperii: (1) the lease by a
foreign government of apartment buildings for use of its military
officers (Syquia v. Lopez, 84 Phil. 312 [1949]; (2) the conduct of
public bidding for the repair of a wharf at a United States Naval
Station (United States of America v. Ruiz, supra.); and (3) the change
of employment status of base employees (Sanders v. Veridiano, 162
SCRA 88 [1988]).

As held in United States of America v. Guinto, (supra):

There is no question that the United States of
America, like any other state, will be deemed to have
impliedly waived its non-suability if it has entered
into a contract in its proprietary or private capacity. It
is only when the contract involves its sovereign or
governmental capacity that no such waiver may be
implied.

On the other hand, this Court has considered the following

transactions by a foreign state with private parties as acts jure
gestionis: (1) the hiring of a cook in the recreation center, consisting
of three restaurants, a cafeteria, a bakery, a store, and a coffee and
pastry shop at the John Hay Air Station in Baguio City, to cater to
American servicemen and the general public (United States of
America v. Rodrigo, 182 SCRA 644 [1990]); and (2) the bidding for
the operation of barber shops in Clark Air Base in Angeles City
(United States of America v. Guinto, 182 SCRA 644 [1990]). The
operation of the restaurants and other facilities open to the general
public is undoubtedly for profit as a commercial and not a
governmental activity. By entering into the employment contract with
the cook in the discharge of its proprietary function, the United States
government impliedly divested itself of its sovereign immunity from
suit.

In the case at bench, if petitioner has bought and sold lands in the
ordinary course of a real estate business, surely the said transaction
can be categorized as an act jure gestionis. However, petitioner has
denied that the acquisition and subsequent disposal of Lot 5-A were
made for profit but claimed that it acquired said property for the site
of its mission or the Apostolic Nunciature in the Philippines. Private
respondent failed to dispute said claim.
Lot 5-A was acquired by petitioner as a donation from the
Archdiocese of Manila. The donation was made not for commercial
purpose, but for the use of petitioner to construct thereon the official
place of residence of the Papal Nuncio. The right of a foreign
sovereign to acquire property, real or personal, in a receiving state,
necessary for the creation and maintenance of its diplomatic mission,
is recognized in the 1961 Vienna Convention on Diplomatic
Relations (Arts. 20-22). This treaty was concurred in by the

In the absence of legislation defining what activities and transactions

shall be considered "commercial" and as constituting acts jure
gestionis, we have to come out with our own guidelines, tentative
they may be.
Certainly, the mere entering into a contract by a foreign state with a
private party cannot be the ultimate test. Such an act can only be the

25

Philippine Senate and entered into force in the Philippines on

November 15, 1965.

government that a state or instrumentality is entitled to sovereign or

diplomatic immunity is a political question that is conclusive upon the
courts (International Catholic Migration Commission v. Calleja, 190
SCRA 130 [1990]). Where the plea of immunity is recognized and
affirmed by the executive branch, it is the duty of the courts to accept
this claim so as not to embarrass the executive arm of the
government in conducting the country's foreign relations (World
Health Organization v. Aquino, 48 SCRA 242 [1972]). As
in International Catholic Migration Commission and in World Health
Organization, we abide by the certification of the Department of
Foreign Affairs.

In Article 31(a) of the Convention, a diplomatic envoy is granted

immunity from the civil and administrative jurisdiction of the receiving
state over any real action relating to private immovable property
situated in the territory of the receiving state which the envoy holds
on behalf of the sending state for the purposes of the mission. If this
immunity is provided for a diplomatic envoy, with all the more reason
should immunity be recognized as regards the sovereign itself, which
in this case is the Holy See.

Ordinarily, the procedure would be to remand the case and order the
trial court to conduct a hearing to establish the facts alleged by
petitioner in its motion. In view of said certification, such procedure
would however be pointless and unduly circuitous (Ortigas & Co. Ltd.
Partnership v. Judge Tirso Velasco, G.R. No. 109645, July 25, 1994).

The decision to transfer the property and the subsequent disposal

thereof are likewise clothed with a governmental character. Petitioner
did
not
sell
Lot
5-A for profit or gain. It merely wanted to dispose off the same
because the squatters living thereon made it almost impossible for
petitioner to use it for the purpose of the donation. The fact that
squatters have occupied and are still occupying the lot, and that they
stubbornly refuse to leave the premises, has been admitted by
private respondent in its complaint (Rollo, pp. 26, 27).

IV
Private respondent is not left without any legal remedy for the
redress of its grievances. Under both Public International Law and
Transnational Law, a person who feels aggrieved by the acts of a
foreign sovereign can ask his own government to espouse his cause
through diplomatic channels.

The issue of petitioner's non-suability can be determined by the trial

court without going to trial in the light of the pleadings, particularly
the admission of private respondent. Besides, the privilege of
sovereign immunity in this case was sufficiently established by the
Memorandum and Certification of the Department of Foreign Affairs.
As the department tasked with the conduct of the Philippines' foreign
relations (Administrative Code of 1987, Book IV, Title I, Sec. 3), the
Department of Foreign Affairs has formally intervened in this case
and officially certified that the Embassy of the Holy See is a duly
accredited diplomatic mission to the Republic of the Philippines
exempt from local jurisdiction and entitled to all the rights, privileges
and immunities of a diplomatic mission or embassy in this country
(Rollo, pp. 156-157). The determination of the executive arm of

Private respondent can ask the Philippine government, through the

Foreign Office, to espouse its claims against the Holy See. Its first
task is to persuade the Philippine government to take up with the
Holy See the validity of its claims. Of course, the Foreign Office shall
first make a determination of the impact of its espousal on the
relations between the Philippine government and the Holy See
(Young, Remedies of Private Claimants Against Foreign States,
Selected Readings on Protection by Law of Private Foreign
Investments 905, 919 [1964]). Once the Philippine government

26

decides to espouse the claim, the latter ceases to be a private

cause.
According to the Permanent Court of International Justice, the
forerunner of the International Court of Justice:
By taking up the case of one of its subjects and by
reporting to diplomatic action or international judicial
proceedings on his behalf, a State is in reality
asserting its own rights its right to ensure, in the
person of its subjects, respect for the rules of
international law (The Mavrommatis Palestine
Concessions, 1 Hudson, World Court Reports 293,
302 [1924]).
WHEREFORE, the petition for certiorari is GRANTED and the
complaint in Civil Case No. 90-183 against petitioner is DISMISSED.
SO ORDERED.

27

participation of Filipino citizens and entities in the bidding

process.
G.R. No. 92013 July 25, 1990
The oral arguments in G.R. No. 92013, Laurel v. Garcia, et
al. were heard by the Court on March 13, 1990. After G.R. No.
92047, Ojeda v. Secretary Macaraig, et al. was filed, the
respondents were required to file a comment by the Court's
resolution dated February 22, 1990. The two petitions were
consolidated on March 27, 1990 when the memoranda of the
parties in the Laurel case were deliberated upon.

SALVADOR
H.
LAUREL, petitioner,
vs.
RAMON GARCIA, as head of the Asset Privatization Trust, RAUL
MANGLAPUS, as Secretary of Foreign Affairs, and CATALINO
MACARAIG, as Executive Secretary, respondents.
G.R. No. 92047 July 25, 1990

The Court could not act on these cases immediately because

the respondents filed a motion for an extension of thirty (30)
days to file comment in G.R. No. 92047, followed by a second
motion for an extension of another thirty (30) days which we
granted on May 8, 1990, a third motion for extension of time
granted on May 24, 1990 and a fourth motion for extension of
time which we granted on June 5, 1990 but calling the attention
of the respondents to the length of time the petitions have been
pending. After the comment was filed, the petitioner in G.R. No.
92047 asked for thirty (30) days to file a reply. We noted his
motion and resolved to decide the two (2) cases.

DIONISIO
S.
OJEDA, petitioner,
vs.
EXECUTIVE
SECRETARY
MACARAIG,
JR.,
ASSETS
PRIVATIZATION TRUST CHAIRMAN RAMON T. GARCIA,
AMBASSADOR RAMON DEL ROSARIO, et al., as members of
the PRINCIPAL AND BIDDING COMMITTEES ON THE
UTILIZATION/DISPOSITION
PETITION
OF
PHILIPPINE
GOVERNMENT PROPERTIES IN JAPAN,respondents.
GUTIERREZ, JR., J.:

These are two petitions for prohibition seeking to enjoin

respondents, their representatives and agents from proceeding
with the bidding for the sale of the 3,179 square meters of land
at 306 Roppongi, 5-Chome Minato-ku Tokyo, Japan scheduled
on February 21, 1990. We granted the prayer for a temporary
restraining order effective February 20, 1990. One of the
petitioners (in G.R. No. 92047) likewise prayes for a writ of
mandamus to compel the respondents to fully disclose to the
public the basis of their decision to push through with the sale
of the Roppongi property inspire of strong public opposition
and to explain the proceedings which effectively prevent the

The subject property in this case is one of the four (4)

properties in Japan acquired by the Philippine government
under the Reparations Agreement entered into with Japan on
May 9, 1956, the other lots being:
(1) The Nampeidai Property at 11-24 Nampeidai-machi, Shibuyaku, Tokyo which has an area of approximately 2,489.96 square
meters, and is at present the site of the Philippine Embassy
Chancery;

28

(2) The Kobe Commercial Property at 63 Naniwa-cho, Kobe, with

an area of around 764.72 square meters and categorized as a
commercial lot now being used as a warehouse and parking lot
for the consulate staff; and

Embassy until the latter was transferred to Nampeidai on July

22, 1976 when the Roppongi building needed major repairs. Due
to the failure of our government to provide necessary funds, the
Roppongi property has remained undeveloped since that time.

(3) The Kobe Residential Property at 1-980-2 Obanoyama-cho,

Shinohara, Nada-ku, Kobe, a residential lot which is now vacant.

A proposal was presented to President Corazon C. Aquino by

former Philippine Ambassador to Japan, Carlos J. Valdez, to
make the property the subject of a lease agreement with a
Japanese firm - Kajima Corporation which shall construct
two (2) buildings in Roppongi and one (1) building in Nampeidai
and renovate the present Philippine Chancery in Nampeidai.
The consideration of the construction would be the lease to the
foreign corporation of one (1) of the buildings to be constructed
in Roppongi and the two (2) buildings in Nampeidai. The other
building in Roppongi shall then be used as the Philippine
Embassy Chancery. At the end of the lease period, all the three
leased buildings shall be occupied and used by the Philippine
government. No change of ownership or title shall occur. (See
Annex "B" to Reply to Comment) The Philippine government
retains the title all throughout the lease period and thereafter.
However, the government has not acted favorably on this
proposal which is pending approval and ratification between the
parties. Instead, on August 11, 1986, President Aquino created a
committee to study the disposition/utilization of Philippine
government properties in Tokyo and Kobe, Japan through
Administrative Order No. 3, followed by Administrative Orders
Numbered 3-A, B, C and D.

The properties and the capital goods and services procured

from the Japanese government for national development
projects are part of the indemnification to the Filipino people for
their losses in life and property and their suffering during World
War II.
The Reparations Agreement provides that reparations valued at
$550 million would be payable in twenty (20) years in
accordance with annual schedules of procurements to be fixed
by the Philippine and Japanese governments (Article 2,
Reparations Agreement). Rep. Act No. 1789, the Reparations
Law, prescribes the national policy on procurement and
utilization of reparations and development loans. The
procurements are divided into those for use by the government
sector and those for private parties in projects as the then
National Economic Council shall determine. Those intended for
the private sector shall be made available by sale to Filipino
citizens or to one hundred (100%) percent Filipino-owned
entities in national development projects.

On July 25, 1987, the President issued Executive Order No. 296
entitling non-Filipino citizens or entities to avail of separations'
capital goods and services in the event of sale, lease or
disposition. The four properties in Japan including the
Roppongi were specifically mentioned in the first "Whereas"
clause.

The Roppongi property was acquired from the Japanese

government under the Second Year Schedule and listed under
the heading "Government Sector", through Reparations
Contract No. 300 dated June 27, 1958. The Roppongi property
consists of the land and building "for the Chancery of the
Philippine Embassy" (Annex M-D to Memorandum for Petitioner,
p. 503). As intended, it became the site of the Philippine

29

Amidst opposition by various sectors, the Executive branch of

the government has been pushing, with great vigor, its decision
to sell the reparations properties starting with the Roppongi lot.
The property has twice been set for bidding at a minimum floor
price of $225 million. The first bidding was a failure since only
one bidder qualified. The second one, after postponements, has
not yet materialized. The last scheduled bidding on February 21,
1990 was restrained by his Court. Later, the rules on bidding
were changed such that the $225 million floor price became
merely a suggested floor price.

Philippine Government Properties in Japan for being

discriminatory against Filipino citizens and Filipino-owned
entities by denying them the right to be informed about the
bidding requirements.
II
In G.R. No. 92013, petitioner Laurel asserts that the Roppongi
property and the related lots were acquired as part of the
reparations from the Japanese government for diplomatic and
consular use by the Philippine government. Vice-President
Laurel states that the Roppongi property is classified as one of
public dominion, and not of private ownership under Article 420
of the Civil Code (See infra).

The Court finds that each of the herein petitions raises distinct
issues. The petitioner in G.R. No. 92013 objects to the alienation
of the Roppongi property to anyone while the petitioner in G.R.
No. 92047 adds as a principal objection the alleged unjustified
bias of the Philippine government in favor of selling the
property to non-Filipino citizens and entities. These petitions
have been consolidated and are resolved at the same time for
the objective is the same - to stop the sale of the Roppongi
property.

The petitioner submits that the Roppongi property comes under

"property intended for public service" in paragraph 2 of the
above provision. He states that being one of public dominion,
no ownership by any one can attach to it, not even by the State.
The Roppongi and related properties were acquired for "sites
for chancery, diplomatic, and consular quarters, buildings and
other improvements" (Second Year Reparations Schedule). The
petitioner states that they continue to be intended for a
necessary service. They are held by the State in anticipation of
an opportune use. (Citing 3 Manresa 65-66). Hence, it cannot be
appropriated, is outside the commerce of man, or to put it in
more simple terms, it cannot be alienated nor be the subject
matter of contracts (Citing Municipality of Cavite v. Rojas, 30
Phil. 20 [1915]). Noting the non-use of the Roppongi property at
the moment, the petitioner avers that the same remains
property of public dominion so long as the government has not
used it for other purposes nor adopted any measure
constituting a removal of its original purpose or use.

The petitioner in G.R. No. 92013 raises the following issues:

(1) Can the Roppongi property and others of its kind be
alienated by the Philippine Government?; and
(2) Does the Chief Executive, her officers and agents, have the
authority and jurisdiction, to sell the Roppongi property?
Petitioner Dionisio Ojeda in G.R. No. 92047, apart from
questioning the authority of the government to alienate the
Roppongi property assails the constitutionality of Executive
Order No. 296 in making the property available for sale to nonFilipino citizens and entities. He also questions the bidding
procedures of the Committee on the Utilization or Disposition of

30

The respondents, for their part, refute the petitioner's

contention by saying that the subject property is not governed
by our Civil Code but by the laws of Japan where the property is
located. They rely upon the rule of lex situs which is used in
determining the applicable law regarding the acquisition,
transfer and devolution of the title to a property. They also
invoke Opinion No. 21, Series of 1988, dated January 27, 1988 of
the Secretary of Justice which used the lex situs in explaining
the inapplicability of Philippine law regarding a property
situated in Japan.

III
In G.R. No. 94047, petitioner Ojeda once more asks this Court to
rule on the constitutionality of Executive Order No. 296. He had
earlier filed a petition in G.R. No. 87478 which the Court
dismissed on August 1, 1989. He now avers that the executive
order contravenes the constitutional mandate to conserve and
develop the national patrimony stated in the Preamble of the
1987 Constitution. It also allegedly violates:
(1) The reservation of the ownership and acquisition of
alienable lands of the public domain to Filipino citizens.
(Sections 2 and 3, Article XII, Constitution; Sections 22 and 23
of Commonwealth Act 141).itc-asl

The respondents add that even assuming for the sake of

argument that the Civil Code is applicable, the Roppongi
property has ceased to become property of public dominion. It
has become patrimonial property because it has not been used
for public service or for diplomatic purposes for over thirteen
(13) years now (Citing Article 422, Civil Code) and because
the intention by the Executive Department and the Congress to
convert it to private use has been manifested by overt acts,
such as, among others: (1) the transfer of the Philippine
Embassy to Nampeidai (2) the issuance of administrative orders
for the possibility of alienating the four government properties
in Japan; (3) the issuance of Executive Order No. 296; (4) the
enactment by the Congress of Rep. Act No. 6657 [the
Comprehensive Agrarian Reform Law] on June 10, 1988 which
contains a provision stating that funds may be taken from the
sale of Philippine properties in foreign countries; (5) the holding
of the public bidding of the Roppongi property but which failed;
(6) the deferment by the Senate in Resolution No. 55 of the
bidding to a future date; thus an acknowledgment by the Senate
of the government's intention to remove the Roppongi property
from the public service purpose; and (7) the resolution of this
Court dismissing the petition in Ojeda v. Bidding Committee, et
al., G.R. No. 87478 which sought to enjoin the second bidding of
the Roppongi property scheduled on March 30, 1989.

(2) The preference for Filipino citizens in the grant of rights,

privileges and concessions covering the national economy and
patrimony (Section 10, Article VI, Constitution);
(3) The protection given to Filipino enterprises against unfair
competition and trade practices;
(4) The guarantee of the right of the people to information on all
matters of public concern (Section 7, Article III, Constitution);
(5) The prohibition against the sale to non-Filipino citizens or
entities not wholly owned by Filipino citizens of capital goods
received by the Philippines under the Reparations Act (Sections
2 and 12 of Rep. Act No. 1789); and
(6) The declaration of the state policy of full public disclosure of
all transactions involving public interest (Section 28, Article III,
Constitution).

31

Petitioner Ojeda warns that the use of public funds in the

execution of an unconstitutional executive order is a
misapplication of public funds He states that since the details of
the bidding for the Roppongi property were never publicly
disclosed until February 15, 1990 (or a few days before the
scheduled bidding), the bidding guidelines are available only in
Tokyo, and the accomplishment of requirements and the
selection of qualified bidders should be done in Tokyo,
interested Filipino citizens or entities owned by them did not
have the chance to comply with Purchase Offer Requirements
on the Roppongi. Worse, the Roppongi shall be sold for a
minimum price of $225 million from which price capital gains
tax under Japanese law of about 50 to 70% of the floor price
would still be deducted.

As property of public dominion, the Roppongi lot is outside the

commerce of man. It cannot be alienated. Its ownership is a
special collective ownership for general use and enjoyment, an
application to the satisfaction of collective needs, and resides
in the social group. The purpose is not to serve the State as a
juridical person, but the citizens; it is intended for the common
and public welfare and cannot be the object of appropration.
(Taken from 3 Manresa, 66-69; cited in Tolentino, Commentaries
on the Civil Code of the Philippines, 1963 Edition, Vol. II, p. 26).
The applicable provisions of the Civil Code are:
ART. 419. Property is either of public dominion
or of private ownership.

IV

ART. 420. The following things are property of

public dominion

The petitioners and respondents in both cases do not dispute

the fact that the Roppongi site and the three related properties
were through reparations agreements, that these were assigned
to the government sector and that the Roppongi property itself
was specifically designated under the Reparations Agreement
to house the Philippine Embassy.

(1) Those intended for public use, such as roads,

canals, rivers, torrents, ports and bridges
constructed by the State, banks shores
roadsteads, and others of similar character;
(2) Those which belong to the State, without
being for public use, and are intended for some
public service or for the development of the
national wealth.

The nature of the Roppongi lot as property for public service is

expressly spelled out. It is dictated by the terms of the
Reparations Agreement and the corresponding contract of
procurement which bind both the Philippine government and
the Japanese government.

ART. 421. All other property of the State, which is

not of the character stated in the preceding
article, is patrimonial property.

There can be no doubt that it is of public dominion unless it is

convincingly shown that the property has become patrimonial.
This, the respondents have failed to do.

The Roppongi property is correctly classified under paragraph 2

of Article 420 of the Civil Code as property belonging to the
State and intended for some public service.

32

Has the intention of the government regarding the use of the

property been changed because the lot has been Idle for some
years? Has it become patrimonial?

A mere transfer of the Philippine Embassy to Nampeidai in 1976

is not relinquishment of the Roppongi property's original
purpose. Even the failure by the government to repair the
building in Roppongi is not abandonment since as earlier
stated, there simply was a shortage of government funds. The
recent Administrative Orders authorizing a study of the status
and conditions of government properties in Japan were merely
directives for investigation but did not in any way signify a clear
intention to dispose of the properties.

The fact that the Roppongi site has not been used for a long
time for actual Embassy service does not automatically convert
it to patrimonial property. Any such conversion happens only if
the property is withdrawn from public use (Cebu Oxygen and
Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]). A property
continues to be part of the public domain, not available for
private appropriation or ownership until there is a formal
declaration on the part of the government to withdraw it from
being such (Ignacio v. Director of Lands, 108 Phil. 335 [1960]).

Executive Order No. 296, though its title declares an "authority

to sell", does not have a provision in its text expressly
authorizing the sale of the four properties procured from Japan
for the government sector. The executive order does not declare
that the properties lost their public character. It merely intends
to make the properties available to foreigners and not to
Filipinos alone in case of a sale, lease or other disposition. It
merely eliminates the restriction under Rep. Act No. 1789 that
reparations goods may be sold only to Filipino citizens and one
hundred (100%) percent Filipino-owned entities. The text of
Executive Order No. 296 provides:

The respondents enumerate various pronouncements by

concerned public officials insinuating a change of intention. We
emphasize, however, that an abandonment of the intention to
use the Roppongi property for public service and to make it
patrimonial property under Article 422 of the Civil Code must be
definite Abandonment cannot be inferred from the non-use
alone specially if the non-use was attributable not to the
government's own deliberate and indubitable will but to a lack
of financial support to repair and improve the property (See
Heirs of Felino Santiago v. Lazaro, 166 SCRA 368 [1988]).
Abandonment must be a certain and positive act based on
correct legal premises.

Section 1. The provisions of Republic Act No.

1789, as amended, and of other laws to the
contrary notwithstanding, the above-mentioned
properties can be made available for sale, lease
or any other manner of disposition to nonFilipino citizens or to entities owned by nonFilipino citizens.
Executive Order No. 296 is based on the wrong premise or
assumption that the Roppongi and the three other properties
were earlier converted into alienable real properties. As earlier
stated, Rep. Act No. 1789 differentiates the procurements for the
government sector and the private sector (Sections 2 and 12,

33

Rep. Act No. 1789). Only the private sector properties can be
sold to end-users who must be Filipinos or entities owned by
Filipinos. It is this nationality provision which was amended by
Executive Order No. 296.

We see no reason why a conflict of law rule should apply when

no conflict of law situation exists. A conflict of law situation
arises only when: (1) There is a dispute over the title or
ownership of an immovable, such that the capacity to take and
transfer immovables, the formalities of conveyance, the
essential validity and effect of the transfer, or the interpretation
and effect of a conveyance, are to be determined (See
Salonga, Private International Law, 1981 ed., pp. 377-383); and
(2) A foreign law on land ownership and its conveyance is
asserted to conflict with a domestic law on the same matters.
Hence, the need to determine which law should apply.

Section 63 (c) of Rep. Act No. 6657 (the CARP Law) which
provides as one of the sources of funds for its implementation,
the proceeds of the disposition of the properties of the
Government in foreign countries, did not withdraw the
Roppongi property from being classified as one of public
dominion when it mentions Philippine properties abroad.
Section 63 (c) refers to properties which are alienable and not to
those reserved for public use or service. Rep Act No. 6657,
therefore, does not authorize the Executive Department to sell
the Roppongi property. It merely enumerates possible sources
of future funding to augment (as and when needed) the Agrarian
Reform Fund created under Executive Order No. 299. Obviously
any property outside of the commerce of man cannot be tapped
as a source of funds.

In the instant case, none of the above elements exists.

The issues are not concerned with validity of ownership or title.
There is no question that the property belongs to the
Philippines. The issue is the authority of the respondent
officials to validly dispose of property belonging to the State.
And the validity of the procedures adopted to effect its sale.
This is governed by Philippine Law. The rule of lex situs does
not apply.

The respondents try to get around the public dominion

character of the Roppongi property by insisting that Japanese
law and not our Civil Code should apply.

The assertion that the opinion of the Secretary of Justice sheds

light on the relevance of the lex situsrule is misplaced. The
opinion does not tackle the alienability of the real properties
procured through reparations nor the existence in what body of
the authority to sell them. In discussing who are capableof
acquiring the lots, the Secretary merely explains that it is the
foreign law which should determine who can acquire the
properties so that the constitutional limitation on acquisition of
lands of the public domain to Filipino citizens and entities
wholly owned by Filipinos is inapplicable. We see no point in
belaboring whether or not this opinion is correct. Why should
we discuss who can acquire the Roppongi lot when there is no
showing that it can be sold?

It is exceedingly strange why our top government officials, of all

people, should be the ones to insist that in the sale of extremely
valuable government property, Japanese law and not Philippine
law should prevail. The Japanese law - its coverage and effects,
when enacted, and exceptions to its provision is not
presented to the Court It is simply asserted that the lex loci rei
sitae or Japanese law should apply without stating what that
law provides. It is a ed on faith that Japanese law would allow
the sale.

34

The subsequent approval on October 4, 1988 by President

Aquino of the recommendation by the investigating committee
to sell the Roppongi property was premature or, at the very
least, conditioned on a valid change in the public character of
the Roppongi property. Moreover, the approval does not have
the force and effect of law since the President already lost her
legislative powers. The Congress had already convened for
more than a year.

Section 79 (f ) Conveyances and contracts to

which the Government is a party. In cases in
which the Government of the Republic of the
Philippines is a party to any deed or other
instrument conveying the title to real estate or to
any other property the value of which is in
excess of one hundred thousand pesos, the
respective Department Secretary shall prepare
the necessary papers which, together with the
proper recommendations, shall be submitted to
the Congress of the Philippines for approval by
the same. Such deed, instrument, or contract
shall be executed and signed by the President of
the Philippines on behalf of the Government of
the Philippines unless the Government of the
Philippines unless the authority therefor be
expressly vested by law in another officer.
(Emphasis supplied)

Assuming for the sake of argument, however, that the Roppongi

property is no longer of public dominion, there is another
obstacle to its sale by the respondents.
There is no law authorizing its conveyance.
Section 79 (f) of the Revised Administrative Code of 1917
provides

The requirement has been retained in Section 48, Book I of the

Administrative Code of 1987 (Executive Order No. 292).
SEC. 48. Official Authorized to Convey Real
Property. Whenever real property of the
Government is authorized by law to be
conveyed, the deed of conveyance shall be
executed in behalf of the government by the
following:
(1) For property belonging to and titled in the
name of the Republic of the Philippines, by the
President, unless the authority therefor is
expressly vested by law in another officer.

35

(2) For property belonging to the Republic of the

Philippines but titled in the name of any political
subdivision or of any corporate agency or
instrumentality, by the executive head of the
agency or instrumentality. (Emphasis supplied)

fact that the property became alienable nor did it indicate that
the President was authorized to dispose of the Roppongi
property. The resolution should be read to mean that in case the
Roppongi property is re-classified to be patrimonial and
alienable by authority of law, the proceeds of a sale may be
used for national economic development projects including the
CARP.

It is not for the President to convey valuable real property of the

government on his or her own sole will. Any such conveyance
must be authorized and approved by a law enacted by the
Congress. It requires executive and legislative concurrence.

Moreover, the sale in 1989 did not materialize. The petitions

before us question the proposed 1990 sale of the Roppongi
property. We are resolving the issues raised in these petitions,
not the issues raised in 1989.

Resolution No. 55 of the Senate dated June 8, 1989, asking for

the deferment of the sale of the Roppongi property does not
withdraw the property from public domain much less authorize
its sale. It is a mere resolution; it is not a formal declaration
abandoning the public character of the Roppongi property. In
fact, the Senate Committee on Foreign Relations is conducting
hearings on Senate Resolution No. 734 which raises serious
policy considerations and calls for a fact-finding investigation
of the circumstances behind the decision to sell the Philippine
government properties in Japan.

Having declared a need for a law or formal declaration to

withdraw the Roppongi property from public domain to make it
alienable and a need for legislative authority to allow the sale of
the property, we see no compelling reason to tackle the
constitutional issues raised by petitioner Ojeda.
The Court does not ordinarily pass upon constitutional
questions unless these questions are properly raised in
appropriate cases and their resolution is necessary for the
determination of the case (People v. Vera, 65 Phil. 56 [1937]).
The Court will not pass upon a constitutional question although
properly presented by the record if the case can be disposed of
on some other ground such as the application of a statute or
general law (Siler v. Louisville and Nashville R. Co., 213 U.S.
175, [1909], Railroad Commission v. Pullman Co., 312 U.S. 496
[1941]).

The resolution of this Court in Ojeda v. Bidding Committee, et

al., supra, did not pass upon the constitutionality of Executive
Order No. 296. Contrary to respondents' assertion, we did not
uphold the authority of the President to sell the Roppongi
property. The Court stated that the constitutionality of the
executive order was not the real issue and that resolving the
constitutional question was "neither necessary nor finally
determinative of the case." The Court noted that "[W]hat
petitioner ultimately questions is the use of the proceeds of the
disposition of the Roppongi property." In emphasizing that "the
decision of the Executive to dispose of the Roppongi property
to finance the CARP ... cannot be questioned" in view of Section
63 (c) of Rep. Act No. 6657, the Court did not acknowledge the

The petitioner in G.R. No. 92013 states why the Roppongi

property should not be sold:
The Roppongi property is not just like any piece
of property. It was given to the Filipino people in

36

reparation for the lives and blood of Filipinos

who died and suffered during the Japanese
military occupation, for the suffering of widows
and orphans who lost their loved ones and
kindred, for the homes and other properties lost
by countless Filipinos during the war. The Tokyo
properties are a monument to the bravery and
sacrifice of the Filipino people in the face of an
invader; like the monuments of Rizal, Quezon,
and other Filipino heroes, we do not expect
economic or financial benefits from them. But
who would think of selling these monuments?
Filipino honor and national dignity dictate that
we keep our properties in Japan as memorials to
the countless Filipinos who died and suffered.
Even if we should become paupers we should
not think of selling them. For it would be as if we
sold the lives and blood and tears of our
countrymen. (Rollo- G.R. No. 92013, p.147)

It is for what it stands for, and for what it could

never bring back to life, that its significance
today remains undimmed, inspire of the lapse of
45 years since the war ended, inspire of the
passage of 32 years since the property passed
on to the Philippine government.
Roppongi is a reminder that cannot should
not be dissipated ... (Rollo-92047, p. 9)
It is indeed true that the Roppongi property is valuable not so
much because of the inflated prices fetched by real property in
Tokyo but more so because of its symbolic value to all Filipinos
veterans and civilians alike. Whether or not the Roppongi
and related properties will eventually be sold is a policy
determination where both the President and Congress must
concur. Considering the properties' importance and value, the
laws on conversion and disposition of property of public
dominion must be faithfully followed.

The petitioner in G.R. No. 92047 also states:

WHEREFORE, IN VIEW OF THE FOREGOING, the petitions are

GRANTED. A writ of prohibition is issued enjoining the
respondents from proceeding with the sale of the Roppongi
property in Tokyo, Japan. The February 20, 1990 Temporary
Restraining Order is made PERMANENT.

Roppongi is no ordinary property. It is one ceded

by the Japanese government in atonement for its
past belligerence for the valiant sacrifice of life
and limb and for deaths, physical dislocation
and economic devastation the whole Filipino
people endured in World War II.

SO ORDERED.

37