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Laurel vs. Garcia

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  7/20/2018G.R. No. 92013https://www.lawphil.net/judjuris/juri1990/jul1990/gr_92013_1990.html1/17 Today is Friday, July 20, 2018 Custom SearchRepublic of the Philippines  SUPREME COURT  ManilaEN BANC G.R. No. 92013 July 25, 1990SALVADOR H. LAUREL, petitioner,  vs. RAMON GARCIA, as head of the Asset Privatization Trust, RAUL MANGLAPUS, as Secretary of ForeignAffairs, and CATALINO MACARAIG, as Executive Secretary, respondents.G.R. No. 92047 July 25, 1990DIONISIO 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 COMMITTEESON THE UTILIZATION/DISPOSITION PETITION OF PHILIPPINE GOVERNMENT PROPERTIES IN JAPAN,respondents.  Arturo M. Tolentino for petitioner in 92013.  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 atemporary restraining order effective February 20, 1990. One of the petitioners (in G.R. No. 92047) likewise prayes for a writ of mandamus to compel therespondents to fully disclose to the public the basis of their decision to push through with the sale of the Roppongi property inspire of strong publicopposition and to explain the proceedings which effectively prevent the participation of Filipino citizens and entities in the bidding process. 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 acomment by the Court's resolution dated February 22, 1990. The two petitions were consolidated on March27, 1990 when the memoranda of the parties in the Laurel   case were deliberated upon.The Court could not act on these cases immediately because the respondents filed a motion for anextension of thirty (30) days to file comment in G.R. No. 92047, followed by a second motion for anextension of another thirty (30) days which we granted on May 8, 1990, a third motion for extension of timegranted on May 24, 1990 and a fourth motion for extension of time which we granted on June 5, 1990 butcalling the attention of the respondents to the length of time the petitions have been pending. After thecomment was filed, the petitioner in G.R. No. 92047 asked for thirty (30) days to file a reply. We noted hismotion and resolved to decide the two (2) cases.IThe subject property in this case is one of the four (4) properties in Japan acquired by the Philippinegovernment 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, Shibuya-ku, Tokyo which has an area of approximately 2,489.96 square meters, and is at present the site of the Philippine Embassy Chancery;(2) The Kobe Commercial Property at 63 Naniwa-cho, Kobe, with an area of around 764.72 square metersand categorized as a commercial lot now being used as a warehouse and parking lot for the consulate staff;and(3) The Kobe Residential Property at 1-980-2 Obanoyama-cho, Shinohara, Nada-ku, Kobe, a residential lotwhich is now vacant.The properties and the capital goods and services procured from the Japanese government for nationaldevelopment projects are part of the indemnification to the Filipino people for their losses in life andproperty 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 Japanesegovernments (Article 2, Reparations Agreement). Rep. Act No. 1789, the Reparations Law, prescribes thenational policy on procurement and utilization of reparations and development loans. The procurements aredivided into those for use by the government sector and those for  private parties in projects as the thenNational Economic Council shall determine. Those intended for the private sector shall be made availableby sale to Filipino citizens or to one hundred (100%) percent Filipino-owned entities in nationaldevelopment projects.The Roppongi property was acquired from the Japanese government under the Second Year Schedule andlisted 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 PhilippineEmbassy until the latter was transferred to Nampeidai on July 22, 1976 when the Roppongi building needed  7/20/2018G.R. No. 92013https://www.lawphil.net/judjuris/juri1990/jul1990/gr_92013_1990.html2/17 major repairs. Due to the failure of our government to provide necessary funds, the Roppongi property hasremained undeveloped since that time.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 - KajimaCorporation — which shall construct two (2) buildings in Roppongi and one (1) building in Nampeidai andrenovate the present Philippine Chancery in Nampeidai. The consideration of the construction would be thelease to the foreign corporation of one (1) of the buildings to be constructed in Roppongi and the two (2)buildings in Nampeidai. The other building in Roppongi shall then be used as the Philippine EmbassyChancery. At the end of the lease period, all the three leased buildings shall be occupied and used by thePhilippine 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, thegovernment has not acted favorably on this proposal which is pending approval and ratification betweenthe parties. Instead, on August 11, 1986, President Aquino created a committee to study thedisposition/utilization of Philippine government properties in Tokyo and Kobe, Japan throughAdministrative Order No. 3, followed by Administrative Orders Numbered 3-A, B, C and D.On July 25, 1987, the President issued Executive Order No. 296 entitling non-Filipino citizens or entities toavail 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.Amidst opposition by various sectors, the Executive branch of the government has been pushing, withgreat vigor, its decision to sell the reparations properties starting with the Roppongi lot. The property hastwice been set for bidding at a minimum floor price of $225 million. The first bidding was a failure since onlyone bidder qualified. The second one, after postponements, has not yet materialized. The last scheduledbidding on February 21, 1990 was restrained by his Court. Later, the rules on bidding were changed suchthat the $225 million floor price became merely a suggested floor price.The Court finds that each of the herein petitions raises distinct issues. The petitioner in G.R. No. 92013objects to the alienation of the Roppongi property to anyone while the petitioner in G.R. No. 92047 adds as aprincipal objection the alleged unjustified bias of the Philippine government in favor of selling the propertyto non-Filipino citizens and entities. These petitions have been consolidated and are resolved at the sametime for the objective is the same - to stop the sale of the Roppongi property.The petitioner in G.R. No. 92013 raises the following issues:(1) Can the Roppongi property and others of its kind be alienated by the Philippine Government?; and(2) Does the Chief Executive, her officers and agents, have the authority and jurisdiction, to sell theRoppongi property?Petitioner Dionisio Ojeda in G.R. No. 92047, apart from questioning the authority of the government toalienate the Roppongi property assails the constitutionality of Executive Order No. 296 in making theproperty available for sale to non-Filipino citizens and entities. He also questions the bidding procedures of the Committee on the Utilization or Disposition of Philippine Government Properties in Japan for beingdiscriminatory against Filipino citizens and Filipino-owned entities by denying them the right to be informedabout the bidding requirements.IIIn G.R. No. 92013 , petitioner Laurel asserts that the Roppongi property and the related lots were acquired aspart of the reparations from the Japanese government for diplomatic and consular use by the Philippinegovernment. Vice-President Laurel states that the Roppongi property is classified as one of publicdominion, and not of private ownership under Article 420 of the Civil Code (See infra).The petitioner submits that the Roppongi property comes under property intended for public service inparagraph 2 of the above provision. He states that being one of public dominion, no ownership by any onecan 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 ReparationsSchedule). The petitioner states that they continue to be intended for a necessary service. They are held bythe State in anticipation of an opportune use. (Citing 3 Manresa 65-66). Hence, it cannot be appropriated, isoutside the commerce of man, or to put it in more simple terms, it cannot be alienated nor be the subjectmatter of contracts (Citing Municipality of Cavite v. Rojas, 30 Phil. 20 [1915]). Noting the non-use of theRoppongi property at the moment, the petitioner avers that the same remains property of public dominionso long as the government has not used it for other purposes nor adopted any measure constituting aremoval of its srcinal purpose or use.The respondents, for their part, refute the petitioner's contention by saying that the subject property is notgoverned by our Civil Code but by the laws of Japan where the property is located. They rely upon the ruleof lex situs which is used in determining the applicable law regarding the acquisition, transfer anddevolution of the title to a property. They also invoke Opinion No. 21, Series of 1988, dated January 27, 1988of the Secretary of Justice which used the lex situs in explaining the inapplicability of Philippine lawregarding a property situated in Japan.The respondents add that even assuming for the sake of argument that the Civil Code is applicable, theRoppongi property has ceased to become property of public dominion. It has become patrimonial propertybecause 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 toconvert it to private use has been manifested by overt acts, such as, among others: (1) the transfer of thePhilippine Embassy to Nampeidai (2) the issuance of administrative orders for the possibility of alienatingthe four government properties in Japan; (3) the issuance of Executive Order No. 296; (4) the enactment bythe Congress of Rep. Act No. 6657 [the Comprehensive Agrarian Reform Law] on June 10, 1988 whichcontains a provision stating that funds may be taken from the sale of Philippine properties in foreigncountries; (5) the holding of the public bidding of the Roppongi property but which failed; (6) the defermentby the Senate in Resolution No. 55 of the bidding to a future date; thus an acknowledgment by the Senate of the government's intention to remove the Roppongi property from the public service purpose; and (7) the  7/20/2018G.R. No. 92013https://www.lawphil.net/judjuris/juri1990/jul1990/gr_92013_1990.html3/17 resolution of this Court dismissing the petition in Ojeda v. Bidding Committee, et al  ., G.R. No. 87478 whichsought to enjoin the second bidding of the Roppongi property scheduled on March 30, 1989.IIIIn G.R. No. 94047  , petitioner Ojeda once more asks this Court to rule on the constitutionality of ExecutiveOrder 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 thenational 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 Filipinocitizens. (Sections 2 and 3, Article XII, Constitution; Sections 22 and 23 of Commonwealth Act 141). iãtãc-aüsl  (2) The preference for Filipino citizens in the grant of rights, privileges and concessions covering thenational 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 citizensof 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).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 propertywere never publicly disclosed until February 15, 1990 (or a few days before the scheduled bidding), thebidding guidelines are available only in Tokyo, and the accomplishment of requirements and the selectionof qualified bidders should be done in Tokyo, interested Filipino citizens or entities owned by them did nothave the chance to comply with Purchase Offer Requirements on the Roppongi. Worse, the Roppongi shallbe sold for a minimum price of $225 million from which price capital gains tax under Japanese law of about50 to 70% of the floor price would still be deducted.IVThe petitioners and respondents in both cases do not dispute the fact that the Roppongi site and the threerelated 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 tohouse the Philippine Embassy.The nature of the Roppongi lot as property for public service is expressly spelled out. It is dictated by theterms of the Reparations Agreement and the corresponding contract of procurement which bind both thePhilippine government and the Japanese government.There can be no doubt that it is of public dominion unless it is convincingly shown that the property hasbecome 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. Itsownership is a special collective ownership for general use and enjoyment, an application to thesatisfaction 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 objectof appropration. (Taken from 3 Manresa, 66-69; cited in Tolentino, Commentaries on the Civil Code of thePhilippines, 1963 Edition, Vol. II, p. 26).The applicable provisions of the Civil Code are:ART. 419. Property is either of public dominion or of private ownership.ART. 420. The following things are property of public dominion(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridgesconstructed 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 somepublic service or for the development of the national wealth.ART. 421. All other property of the State, which is not of the character stated in the precedingarticle, is patrimonial property.The Roppongi property is correctly classified under paragraph 2 of Article 420 of the Civil Code as propertybelonging to the State and intended for some public service.Has the intention of the government regarding the use of the property been changed because the lot hasbeen Idle for some years? Has it become patrimonial?The fact that the Roppongi site has not been used for a long time for actual Embassy service does notautomatically convert it to patrimonial property. Any such conversion happens only if the property iswithdrawn from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]). A propertycontinues to be part of the public domain, not available for private appropriation or ownership until there isa formal declaration on the part of the government to withdraw it from being such (Ignacio v. Director of Lands, 108 Phil. 335 [1960]).The respondents enumerate various pronouncements by concerned public officials insinuating a change of intention. We emphasize, however, that an abandonment of the intention to use the Roppongi property for   7/20/2018G.R. No. 92013https://www.lawphil.net/judjuris/juri1990/jul1990/gr_92013_1990.html4/17 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 thegovernment's own deliberate and indubitable will but to a lack of financial support to repair and improve theproperty (See Heirs of Felino Santiago v. Lazaro, 166 SCRA 368 [1988]). Abandonment must be a certain andpositive act based on correct legal premises.A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not relinquishment of the Roppongiproperty's srcinal purpose. Even the failure by the government to repair the building in Roppongi is notabandonment since as earlier stated, there simply was a shortage of government funds. The recentAdministrative Orders authorizing a study of the status and conditions of government properties in Japanwere merely directives for investigation but did not in any way signify a clear intention to dispose of theproperties.Executive Order No. 296, though its title declares an authority to sell , does not have a provision in its textexpressly authorizing the sale of the four properties procured from Japan for the government sector. Theexecutive order does not declare that the properties lost their public character. It merely intends to makethe 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 toFilipino citizens and one hundred (100%) percent Filipino-owned entities. The text of Executive Order No.296 provides:Section 1. The provisions of Republic Act No. 1789, as amended, and of other laws to thecontrary notwithstanding, the above-mentioned properties can be made available for sale, leaseor any other manner of disposition to non-Filipino citizens or to entities owned by non-Filipinocitizens.Executive Order No. 296 is based on the wrong premise or assumption that the Roppongi and the threeother properties were earlier converted into alienable real properties. As earlier stated, Rep. Act No. 1789differentiates the procurements for the government sector and the private sector (Sections 2 and 12, Rep.Act No. 1789). Only the private sector properties can be sold to end-users who must be Filipinos or entitiesowned by Filipinos. It is this nationality provision which was amended by Executive Order No. 296.Section 63 (c) of Rep. Act No. 6657 (the CARP Law) which provides as one of the sources of funds for itsimplementation, 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 mentionsPhilippine properties abroad. Section 63 (c) refers to properties which are alienable and not to thosereserved for public use or service. Rep Act No. 6657, therefore, does not authorize the ExecutiveDepartment to sell the Roppongi property. It merely enumerates possible sources of future funding toaugment (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.The respondents try to get around the public dominion character of the Roppongi property by insisting thatJapanese law and not our Civil Code should apply.It is exceedingly strange why our top government officials, of all people, should be the ones to insist that inthe 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 notpresented to the Court It is simply asserted that the lex loci rei sitae  or Japanese law should apply withoutstating what that law provides. It is a ed on faith that Japanese law would allow the sale.We see no reason why a conflict of law rule should apply when no conflict of law situation exists. A conflictof law situation arises only when: (1) There is a dispute over the title or ownership of an immovable, suchthat the capacity to take and transfer immovables, the formalities of conveyance, the essential validity andeffect 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 itsconveyance is asserted to conflict with a domestic law on the same matters. Hence, the need to determinewhich 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 propertybelongs 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 isgoverned 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 ismisplaced. The opinion does not tackle the alienability   of the real properties procured through reparationsnor the existence in what body of the authority to sell them. In discussing who are capable of acquiring   thelots, 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 Filipinocitizens and entities wholly owned by Filipinos is inapplicable. We see no point in belaboring whether or notthis opinion is correct. Why should we discuss who can acquire the Roppongi lot when there is no showingthat it can be sold?The subsequent approval on October 4, 1988 by President Aquino of the recommendation by theinvestigating committee to sell the Roppongi property was premature or, at the very least, conditioned on avalid change in the public character of the Roppongi property. Moreover, the approval does not have theforce and effect of law since the President already lost her legislative powers. The Congress had alreadyconvened for more than a year.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
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