Art. 422. Property of public dominion, whenno longer intended for public use or for public service, shall form part of the patrimonial property of the State. (341a)

Municipality of Cavite v. Rojas

FACTS: A parcel of land forming a part of the public plaza was leased to the defendants on which their house has been constructed and had been occupying the same. The plaintiff ordered the defendants to vacate the said land as it formed integral part of the public plaza. The defendants refused to vacate the said land because they had acquired the right of possession to it and further alleged that the lease agreement provided that they can only be ordered to vacate the said property if the municipality needed it for decoration or public use.The trial court held that the municipality had no legal claim to the property. This case was appealed through bill of exceptions.

ISSUE: WON the lease agreement between the parties was valid

Ruling: The lease was null and void.Ratio Decidendi: The defendant has no right to continue to occupy the land for it is an integral part of the plaza which is for public use and is reserved for the common benefit. Property for public use in provinces and in towns comprises the provincial and town roads, the squares, streets, fountains, and public waters, the promenades, and public works of general service supported by said towns or provinces.The said Plaza being a promenade for public use, the municipal council of Cavite could not in 1907 withdraw or exclude from public use a portion thereof in order to lease it for the sole benefit of the defendant Hilaria Rojas. The plaintiff municipality exceeded its authority in the exercise of its powers by executing a contract over a thing of which it could not dispose, nor is it empowered so to do. The Civil Code, articles 1271, prescribes that everything which is not outside the commerce of man may be the object of a contract, and plazas and streets are outside of this commerce. Therefore, it must be concluded that the said lease is null and void.

Public plazas and streets are of public character and may not be leased out by the municipality.

Maneclang v. Intermediate Appellate CourtFacts:Adriano Maneclang in this case filed a complaint for quieting of title over a certain fishpond located within the 4 parcels of land belonging to them situated in Pangasinan but the trial court dismissed it by saying that the body of water is a creek constituting a tributary to Agno River therefore public in nature and not subject to private appropriation. They appealed it to the IAC, which affirmed the aforementioned decision. Hence, this is a review on certiorari. However, after having been asked to comment to the case thereon, they manifested their lack of interest and the parties to the case (the complainant and the awardee in the public bidding Maza) decided to amicably settle the case saying that judgment be rendered and that the court recognize the ownership of the petitioners over the land the body of water found within their titled properties. They say that there would be no benefit since the NIA already constructed a dike and no water now gets in and out of the land.

Issue: Whether or not the fishpond is public in nature.

Held: Yes. A creek is defined as a recess or arm extending from a river and participating in the ebb and flow of the sea. It is a property belonging to the

public domain and is not susceptible to private appropriation and acquisitive prescription. The mere construction of the dikes by NIA nor its conversion to a fishpond altered or changed the nature of the creek as property of the public domain. The compromise agreement is null and void and of no legal effect because it is contrary to law and public policy.

 Faustino Ignacio vs Director of Lands  Facts: Ignacio applied for the registration of a parcel of a mangrove land in Rizal. It was stated in the application that he owned the parcelby right of accretion. The director of land opposed the registration for the reason that the land to be registered is an area of public domain and that the applicant nor his predecessor-in-interes possessed sufficient title for the land. The parcel of landappliedwas acquired from the government by the virtue of a free patent title. However, the landin question was formed by accretion and alluvial deposists caused by the action of the Manila bay. The petition was denied by the lower court and decided that the land to be registered are part of the public domain. Faustino, however, contended that the court could have declared theland not to be part of the public domain. Issue: Whether or not the courts have the power to reclassify a land Ruling: No, the courts do not have the power to reclassify a land. The courts are primarily calledupon to determine whether a land is to be used for public purpose. However, it is only limitedthere. A formal declaration of reclassification of land should come from the government,specifically from the executive department or the legislature. These bodies should declare that aland in question is no longer needed for public use, some public use or for the improvement ofnational wealth.

 IGNACIO VS. DIRECTOR OF LANDS AND VALERIANO:Case Doctrine: Article 457 of the New Civil Code (Article 366, Old Civil Code), which provides that: To the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the current of the waters. The article cited is clearly inapplicable because it refers to accretion or deposits on the banks of rivers, while the accretion in the present case was caused by action of the Manila Bay.FACTS:Ignacio applied for registration of a parcel of land adjacent to his land, claiming that he has acquired the land by right of accretion. Director of Lands, Valeriano opposed, instead it avers that portion sought to be registered is property of public domain.ARGUMENTS:1.Appellant contends that the parcel belongs to him by the law of accretion, having been formed by gradual deposit by action of the Manila Bay, and he cites Article 457 of the New Civil Code2. Appellant next contends that Articles 1, 4 and 5 of the Law of Waters are not applicable because they refer to accretions formed by the sea, and that Manila Bay cannot be considered as a sea.

ISSUE/S:WON the land subject of the dispute can be acquired by right of accretion of Ignacio.HELD:NO. The land cannot be acquired by right of accretion.Article 457 is not applicable.The article cited is clearly inapplicable because it refers to accretion or deposits on the banks of rivers, while the accretion in the present case was caused by action of the Manila Bay.Manila bay is not a river. A bay is a part of the sea, being a mere indentation of the same:Bay. - An opening into the land where the water is shut in on all sides except at the entrance; an inlet of  the sea; an arm of the sea, distinct from a river, a bending or curbing of the shore of the sea or of a lake. MACASIANO vs. DIOKNOFacts:Respondent Municipality passed Ordinance No. 86 which authorized the closure of J.Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena Streets and the establishment of a flea market thereon. This was passed pursuant to MMC Ordinance No.2 and was approved by the Metropolitan Manila Authority on July 20, 1990.On August 8, 1990, respondent municipality and Palanyag entered into a contract agreement whereby the latter shall operate, maintain & manage the flea markets and/or vending areas in the aforementioned streets with the obligation to remit dues to the treasury of the municipal government of Parañaque.On September 13, 1990 Brig. Gen. Macasiano ordered the destruction and confiscation of stalls along G.G. Cruz & Gabriel Street in Baclaran. He also wrote a letter to Palanyag ordering the destruction of the flea market.Hence, respondent filed a joint petition praying for preliminary injunction. The trial court upheld the assailed Ordinance and enjoined petitioner from enforcing his letter-order against Palanyag. Issues:WON an ordinance/resolution issued by the municipal council of Parañaque authorizing the lease & use of public streets/thoroughfares as sites for the flea market is valid.

Held:No.J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena Streets are local roads used for public service and are therefore considered public properties of respondent municipality. Properties of the local government devoted to public service are deemed public and are under the absolute control of Congress. Hence, local governments have no authority to control/regulate the use of public properties unless specific authority is vested upon them by Congress.Sec. 10, Chapter II of the LGC should be read and interpreted in accordance with basic principles already established by law.The closure should be for the sole purpose of withdrawing the road or other public property from public use when circumstances show that such property is no longer intended/necessary for public use/service. Once withdrawn, the property then becomes patrimonial property of the LGU concerned and only then can said LGU use the property as an object of an ordinary contract. Roads and streets available to the public and ordinarily used for vehicular traffic are still considered public property devoted to public use. The LGU has no power to use it for another purpose or to dispose of or lease it to private persons.Also, the disputed ordinance cannot be validly implemented because it can’t be considered approved by the Metropolitan Manila Authority due to non-compliance with the conditions it imposed for the approval of said ordinance.The powers of an LGU are not absolute, but subject to the limitations laid down by the Constitution and laws such as the Civil Code. Every LGU has the sworn obligation

to enact measures that will enhance the public health, safety & convenience, maintain peace & order and promiote the general prosperity of the inhanbitants pf the local units.As in the Dacanay case, the general public have the right to demand the demolition of the illegally constructed stalls in public roads & streets. The officials of the respondent municipality have the corresponding duty arising from public office to clear the city streets and restore them to their specific public purpose.The ordinance is void and illegal for lack of basis in authority in laws applicable during its time.

Cebu Oxygen and Acetylene Co., Inc. v. BercillesL-40474, August 29, 1975

FACTS: The City Council of Cebu, in 1968, considered as an abandoned road, the terminal portion of one of its streets. Later it authorized the sale through public bidding of the property. The Cebu Oxygen and Acetylene Co. was able to purchase the same. It then petitioned the RTC of Cebu for the registration of the land. The petition was opposed by the Provincial Fiscal (Prosecutor) who argued that the lot is still part of the public domain, and cannot therefore be registered. 

ISSUE: May the lot be registered in the name of the buyer? 

HELD: Yes, the land can be registered in the name of the buyer, because the street in question has already been withdrawn from public use, and accordingly has become patrimonial property. The sale of the lot was therefore valid. 

LAUREL VS GARCIAFacts:Petitioners seek to stop the Philippine Government to sell the Roppongi Property, which is located in Japan. It is one of the properties given by the Japanese Government as reparations for damage done by the latter to the former during the war.Petitioner argues that under Philippine Law, the subject property is property of public dominion. As such, it is outside the commerce of men. Therefore, it cannot be alienated.Respondents aver that Japanese Law, and not Philippine Law, shall apply to the case because the property is located in Japan. They posit that the principle of lex situs applies.

Issues and Held:1. WON the subject property cannot be alienated.The answer is in the affirmative.Under Philippine Law, 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. As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot be alienated.2. WON Philippine Law applies to the case at bar.The answer is in the affirmative.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; 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.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 assertion that the opinion of the Secretary of Justice sheds light on the relevance of the lex situs rule 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 capable of 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.

PHILIPPINE PORTS AUTHORITY v. CITY OF ILOILO

The exemption of public property from taxation does not extend to improvements made thereon by homesteaders or occupants at their own expense, it also held the taxability of the warehouse in this case, it being a mere improvement built on an alleged property of public dominion.

FACTS:Petitioner Philippine Ports Authority (PPA) is asking the court on Petition for Review on Certiorari to set aside the ruling ordering it to pay real property and business taxes to respondent City of Iloilo. The City of Iloilo filed an action for recovery of sum of money against PPA, seeking to collect real property taxes as well as business taxes, computed from the last quarter of 1984 to the fourth quarter of 1988. It was alleged that the PPA is engaged in the business of arrastre services, stevedoring services, leasing of real estate, and a registered owner of a wharehouse which is used in the operation of its business. From these, PPA was alleged to be obligated to pay business taxes and real property taxes. The Regional Trial Court (RTC) of Iloilo held PPA liable for the payment of real property taxes and for business taxes. However, it held that the City of Iloilo may not collect business taxes on PPA’s arrastre and stevedoring services, as these form part of PPA’s governmental functions. The following issues were raised on appeal: Whether or not the RTC erred in decreeing a property of public dominion (port facility) as subject to realty taxes just because the mentioned property is being administered by what it perceives to be a taxable government corporation. Whether or not the petitioner is subject to business taxes for leasing to private entities real estate without considering that the petitioner is not engaged in business. The City countered by stating in its Comment that PPA changed its theory of the case on appeal citing that the allegation regarding the subject property as public dominion which was never raised during trial nor in its memorandum filed with the lower court. ISSUES: 1. Whether or not a party can change its theory of the case on appeal. 2. Whether or noti mprovements introduced by PPA on publicproperties are exempted from tax.

HELD: As a rule, a party who deliberately adopts a certain theory upon which the case is tried and decided by the lower court will not be permitted to change theory on appeal. Points of law, theories, issues and arguments not brought to the attention of the lower court need not be, and ordinarily will not be, considered by a reviewing court, as these cannot be raised for the first time at such late stage. However, there is an exception to the rule as enunciated in Lianga Lumber Co. vs. Lianga Timber Co. Inc., 76 SCRA 197, where the court said; “In the interest of justice and within the sound discretion of the appellate court, a party may change theory on appeal only when the factual bases thereof would not require presentation of any further evidence by the adverse party in order to enable it to properly meet the issue raised in the new theory.” But this exception is not applicable in this case. It must be emphasized that the enumeration of properties of public dominion under Article 420 of the New Civil Code specifically states “ports” constructed by the State. Thus, in order to consider the port in this case as falling under the said classification, the fact that the port was constructed by the State must first be established by sufficient evidence. Here, there was no proof adduced to establish that the port was constructed by the State, hence, the court cannot just automatically conclude that the property is of public dominion. It is also noted that the PPA failed to raise the issue of ownership during the pre-trial. The pre- trial is primarily intended to make certain that all issues necessary to the disposition of the case are properly raised. Consequently, the determination of issues at a pre-trial conference bars the consideration of other questions on appeal. In the case at bar, the fact that the issue of ownership is outside of what has been delimited during the pre-trial further justifies the disallowance of PPA’s new theory. Hence, PPA may not be permitted to change its theory on appeal. Granting that the petitioner’s present theory is allowed, the court still found its contentions untenable. It must be stressed that what is being taxed in the present case is PPA’s warehouse, which, although located within the port is distinct from the port itself. Considering the warehouse’s separable nature as an improvement upon the port, and the fact that it is not open for use by everyone and freely accessible to the public, it is not part of the port as stated in Article 420 of the Civil Code. In the same way that it was ruled that the exemption of public property from taxation does not extend to improvements made thereon by homesteaders or occupants at their own expense. Also, it was held that the taxability of the warehouse in this case, it being a mere improvement built on an alleged property of public dominion. As regards the second issue raised by PPA regarding the lease of its property to private persons, the Court ruled that its own admission that it leases out to private persons for convenience and not necessarily as part of its governmental function of administering port operations is an admission that the act was a corporate power, which, is actually expressly stated as so in its charter. Any income or profit generated by an entity, even of a corporation organized without any intention of realizing profit in the conduct of its activities, is subject to tax (CIR vs. CA, 329 SCRA 237). What matters is the established fact that it leased out it’s building to private entities from which it regularly earned substantial income. Thus, in the absence of any proof of exemption therefrom, PPA is declared liable for the assessed business taxes. The petition is denied.

PHILIPPINE FISHERIES DEVELOPMENT AUTHORITY vs. CENTRAL BOARD OF ASSESSMENT APPEALS- Real Property Tax

FACTS:Petitioner owned the Iloilo Fishing Port Complex which was on reclaimed land and consisted of a breakwater, landing quay, water and fuel oil supply system,

refrigeration building, market hall and a municipal shed. Petitioner then leased portions of the IFPC to private firms engaged in the fishing business. Iloilo city then assessed the entire IFPC for Real Property Tax.

ISSUE:Is the entirety of the IFPC subject to the Real Property Tax?

HELD:NO. The Real Property Tax liability of the IFPC is only on portions leased out to private entities. PFDA is not a GOCC but is actually an instrumentality of the national government exempt from Real Property Tax. Given this, it will only be subject to Real Property Tax on the portions of the IFPC which is leased to private entities. It is not a GOCC since a GOCC must satisfy two requirements: (i) capital stock divided into shares and (ii) authorized to distribute dividends/profits. PFDA does have capital stock but the same is not divided into shares and neither is it a non-stock corporation because it does not have members.(Note: This was the same decision reached in MIAA vs. Paranaque (July 20, 2006) and again in MIAA vs. Pasay (April 2, 2009) where the property in question was the airport premises. In those cases, the Court additionally provided that other examples of government instrumentalities vested with corporate powers or what are know as “government corporate entities” are Philippine Ports Authority, BSP and University of the Philippines.)   

Republic vs. City of Paranaque

FACTS: This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, on pure questions of law, assailing the January 8, 2010 Order of the Regional Trial Court, Branch 195, Parafiaque City (RTC), which ruled that petitioner Philippine Reclamation Authority (PRA) is a government-owned and controlled corporation (GOCC), a taxable entity, and, therefore,. not exempt from payment of real property taxes. The pertinent portion of the said order reads: In view of the finding of this court that petitioner is not exempt from payment of real property taxes, respondent Parañaque City Treasurer Liberato M. Carabeo did not act xxx without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or in excess of jurisdiction in issuing the warrants of levy on the subject properties. On August 3, 2009, after an exchange of several pleadings and the failure of both parties to arrive at a compromise agreement, PRA filed a Motion for Leave to File and Admit Attached Supplemental Petition which sought to declare as null and void the assessment for real property taxes, the levy based on the said assessment, the public auction sale conducted on April 7, 2003, and the Certificates of Sale issued pursuant to the auction sale. On January 8, 2010, the RTC rendered its decision dismissing PRA’s petition. In ruling that PRA was not exempt from payment of real property taxes, the RTC reasoned out that it was a GOCC under Section 3 of P.D. No. 1084. It was organized as a stock corporation because it had an authorized capital stock divided into no par value shares. Not in conformity, PRA filed this petition for certiorari assailing the January 8, 2010 RTC Order based on the following GROUNDS

Issue: Is the Philippine Reclamation Authority a government-owned and controlled corporation (GOCC) under Sec. 16, Article XII?

Ruling: A GOCC must have been organized as a stock or non-stock corporation. The Philippine Reclamation Authority is neither. It is not a GOCC. When the law vests in government instrumentality corporate powers, the instrumentality does not necessarily become a corporation. Unless the government instrumentality is organized as a stock or non-stock corporation, it remains a government instrumentality exercising not only governmental but also corporate powers. In the case at bench, PRA is not a GOCC because it is neither a stock nor a non-stock

corporation. Furthermore, there is another reason why the PRA cannot be classified as a GOCC.Section 16, Article XII of the 1987 Constitution provides as follows: ―Section 16. The Congress shall not, except by general law, provide for the formation, organization, or regulation of private corporations. Government-owned or controlled corporations may be created or established by special charters in the interest of the common good and subject to the test of economic viability.‖**The fundamental provision above authorizes Congress to create GOCCs through special charters on two conditions: 1) the GOCC must be established for the common good; and 2) the GOCC must meet the test of economic viability. In this case, PRA may have passed the first condition of common good but failed the second one – economic viability. Undoubtedly, the purpose behind the creation of PRA was not for economic or commercial activities. Neither was it created to compete in the market place considering that there were no other competing reclamation companies being operated by the private sector. As mentioned earlier, PRA was created essentially to perform a public service considering that it was primarily responsible for a coordinated, economical and efficient reclamation, administration and operation of lands belonging to the government with the object of maximizing their utilization and hastening their development consistent with the public interest.

JEAN TAN, ROSELLER C. ANACINTO, CARLO LOILO ESPINEDA and DAISY ALIADO MANAOIS, represented in this act by their Attorney-in-Fact, MA. WILHELMINA E. TOBIAS Petitioners - versus – REPUBLIC OF THE PHILIPPINES, Respondent. Facts:On June 14, 2001, the petitioners filed with the Regional Trial Court (RTC) of Naic, Cavite , an application for land registration covering a parcel of land identified as Lot 9972, Cad-459-D of Indang Cadastre, situated in  Barangay Bancod, Indang, Cavite and with an area of 6,920 square meters. The petitioners alleged that theyacquired the subject property from Gregonio Gatdula pursuant to a Deed of Absolute Sale dated April 25, 1996; and they and their predecessors-in-interest have been in open, continuous and exclusive possession of the subject property in the concept of an owner for more than 30 years. RTC issued a decision granting petitioners application. CA ruled that the petitioners failed to prove that they and their predecessors-in-interest have been in possession of the subject property for the requisite period of 30 years.Issue:Whether the petitioners have proven themselves qualified to the benefits under the relevant laws on the confirmation of imperfect or incomplete titles.Property; acquisition by prescription; confirmation of incomplete or imperfect titles; requirements

Held: There must be an express declaration by the State that the public dominion property is no longer intended for public service or the development of the national wealth or that the property has been converted into patrimonial. Without such express declaration, the property, even if classified as alienable or disposable, remains property of the public dominion, pursuant to Article 420(2), and thus incapable of acquisition by prescription. It is only when such alienable and disposable lands are expressly declared by the State to be no longer intended for public service or for the development of the national wealth that the period of acquisitive prescription can begin to run. Such declaration shall be in the form of a law duly enacted by Congress or a Presidential Proclamation in cases where the President is duly authorized by law. For one to invoke the provisions of Section 14(2) and set up acquisitive prescription against the State, it is primordial that the status of the property as patrimonial be first established. Furthermore, the period of possession preceding the classification of the property as patrimonial cannot be considered in determining the completion of the prescriptive period. Adverse, continuous, open, public possession in the concept of an owner is a conclusion of law and the burden to prove it by clear, positive and convincing evidence is on the

applicant. A claim of ownership will not proper on the basis of tax declarations if unaccompanied by proof of actual possession. The counting of the thirty (30) -year prescriptive periods for purposes of acquiring ownership of a public land under Section 14(2) can only start from the issuance of DARCO Conversion Order. Before the property was declared patrimonial by virtue of such conversion order, it cannot be acquired by prescription.