SALVADOR H. LAUREL v. RAMON GARCIA, et al.

G.R. Nos. 92013 and 92047; July 25, 1990

Gutierrez, Jr., J

FACTS:
Roppongi is one of the 4 properties in Japan acquired by the Philippine government under the
Reparation Agreement entered into with Japan. The other 3 properties include Nampeidai
Property (present site of the Philippine Embassy Chancery), Kobe Commercial Property
(commercial lot being used as a warehouse and parking lot for consulate staff) and Kobe
Residential Property (resident lot which is now vacant). The Reparations Agreement provides that
reparations valued at $550M would be payable in 20 years in accordance with annual schedules
of procurements to be fixed by the Philippine and Japanese governments. The procurements are
to be divided into government sector and those for private parties in projects -the latter shall be
made available only to Filipino citizens or to 100% Filipino-owned entities in national development
projects.

The Roppongi property was acquired under the heading Government Sector for the Chancery
of the Philippine Embassy until the latter was transferred to Nampeida due to the need for major
repairs. However, the Roppongi property has remained under-developed since that time.
Although there was a proposal to lease the property with the provision to have buildings built at
the expense of the lessee, the same was not acted favorably upon by the government. Instead,
President Aquino issued EO No. 296 entitling non-Filipino citizens or entities to avail of
separations capital goods and services in the event of sale, lease or dispositions. Thereafter,
amidst the oppositions by various sectors, the Executive branch pushed for the sale of reparation
properties, starting with the Roppongi lot. The property has twice been set for bidding at a
minimum floor price of $225M. The first was a failure, while the second has been postponed and
later restrained by the SC.

Amongst the arguments of the respondents is that the subject property is not governed by our
Civil Code, but rather by the laws of Japan where the property is located. They relied 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.

ISSUE: Can the Roppongi property and others of its kind be alienated by the Philippine
Government?

HELD:
NO. The property is of public dominion and the respondents failed to show that it has become
patrimonial.

The property is correctly classified under Article 420 of the Civil Code as property belonging to
the State and intended for some public service. The fact that it has not been used for actual
Embassy service does not automatically convert it to patrimonial property. Such conversion
happens only if property is withdrawn from public use, through an abandonment of the intention
to use the Roppongi property for public service and to make it patrimonial property. Abandonment
must be a certain and positive act based on correct legal premises. The EO does not declare that
the properties lost their public character, merely intending the properties to be made available to
foreigners and not to Filipinos alone, in case of sale, lease or other disposition. Further, it is based
on the wrong premise that the Japan properties can be sold to end-users, when in fact it cannot.
Neither does the CARP Law re-classify the properties into patrimonial properties, merely stating
that sources of funds for its implementation be sourced from proceeds of the disposition of the
Government in foreign countries, but not that the Roppongi property be withdrawn from being
classified as a property of public dominion.