Land Title and Deeds: Chapter 2 — Property in Relation to the Persons Whom it Belongs

Property in Relation to the Persons Whom it Belongs

• There are three (3) kinds of ownership of property under the Civil Code in relation to the person to whom it belongs:
1. Property of public dominion; 
2. Patrimonial property; or
3. Property of private ownership.

1. Property of public dominion 

• Property of public dominion are those lands which, under existing legislation, are not the subject of private ownership and are reserved for public purposes. 
• It is also property owned by the State in its public capacity. 
• Such properties are those intended for public use, for some public service, or for the development of the national wealth. 
• Tan Toco vs. Municipality of Iloilo, 49 PHIL 52: 
• Property of public dominion was described as having the following characteristics: ASPAV
1. They cannot be appropriated; 
2. They cannot be the subject matter of contracts; hence, they cannot be alienated or encumbered;
3. They cannot be acquired by prescription;
4. They cannot be subject to attachment or execution; 
5. They cannot be burdened by voluntary easement.

Enumeration provided by the Civil Code of the Philippines on lands that are property of public dominion 

•  Article 420 of the Civil Code classifies the following as property of public dominion: 
• Art. 420. The following things are property of public dominion: 
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.
• PNOC-AFC vs. NGCP, G.R. No. 224936, 04 September 2019:
• Hence, based on Article 420 of the Civil Code, there are three kinds of property of public dominion:
1. those for public use, which may be used by anybody, such as roads and canals;
2. those for public service, which may be used only by certain duly authorized persons, although used for the benefit of the public; and
3. those used for the development of national wealth, such as our natural resources.

Enumeration provided by the Civil Code on land that are property of public dominion; Properties intended for public use; Reclaimed lands 

• Along the same lines being considered as properties of public dominion are reclaimed lands; which jurisprudence considers to be having the nature of properties of public dominion. 
• Republic vs. City of Paranaque, G.R. No. 1911109, July 18, 2012: 
• Here, the subject lands are reclaimed lands, specifically portions of the foreshore and offshore areas of Manila Bay. 
• As such, these lands remain public lands and form part of the public domain. 
• Chavez v. Public Estates Authority and AMARI Coastal Development Corporation:
• The Court held that foreshore and submerged areas irrefutably belonged to the public domain and were inalienable unless reclaimed, classified as alienable lands open to disposition and further declared no longer needed for public service. 
• The fact that alienable lands of the public domain were transferred to the PEA (now PRA) and issued land patents or certificates of title in PEA's name did not automatically make such lands private. 
• This Court also held therein that reclaimed lands retained their inherent potential as areas for public use or public service.

Enumeration provided by the Civil Code on land that are property of public dominion; Liability for taxes 

• As mentioned in the above enumeration, properties of public dominion take different forms, effectively creating a dividing line vis-a-vis patrimonial properties as well as properties of private ownership. 
• The importance of this determination arises when the question on obligations on payment of taxes and benefits of susceptibility of the property to alienability — among others in particular — come to mind. 
• MIAA vs. CA, G.R. No. 155650, July 20, 2006:
• In this case, after the MIAA failed to pay real property taxes to the City Government of Paranaque for several years, suit was instituted by the latter seeking to compel payment of realty taxes. 
• In response, MIAA alleged the defense that the subject properties are properties of public dominion; hence, exempted from realty taxes. 
• When the case ultimately reached the Supreme Court, the following ruling was handed down: 
• No one can dispute that properties of public dominion mentioned in Article 420 of the Civil Code, like "roads, canals, rivers, torrents, ports and bridges constructed by the State," are owned by the State. The term "ports" includes seaports and airports. The MIAA Airport Lands and Buildings constitute a "port" constructed by the State. Under Article 420 of the Civil Code, the MIAA Airport Lands and Buildings are properties of public dominion and thus owned by the State or the Republic of the Philippines.
• The Airport Lands and Buildings are devoted to public use because they are used by the public for international and domestic travel and transportation. The fact that the MIAA collects terminal fees and other charges from the public does not remove the character of the Airport Lands and Buildings as properties for public use. The operation by the government of a tollway does not change the character of the road as one for public use. Someone must pay for the maintenance of the road, either the public indirectly through the taxes they pay the government, or only those among the public who actually use the road through the toll fees they pay upon using the road. The tollway system is even a more efficient and equitable manner of taxing the public for the maintenance of public roads.
• The charging of fees to the public does not determine the character of the property whether it is of public dominion or not. Article 420 of the Civil Code defines property of public dominion as one "intended for public use." Even if the government collects toll fees, the road is still "intended for public use" if anyone can use the road under the same terms and conditions as the rest of the public. The charging of fees, the limitation on the kind of vehicles that can use the road, the speed restrictions and other conditions for the use of the road do not affect the public character of the road.
• The terminal fees MIAA charges to passengers, as well as the landing fees MIAA charges to airlines, constitute the bulk of the income that maintains the operations of MIAA. The collection of such fees does not change the character of MIAA as an airport for public use. Such fees are often termed user's tax. This means taxing those among the public who actually use a public facility instead of taxing all the public including those who never use the particular public facility. A user's tax is more equitable — a principle of taxation mandated in the 1987 Constitution.
• The Airport Lands and Buildings of MIAA, which its Charter calls the "principal airport of the Philippines for both international and domestic air traffic," are properties of public dominion because they are intended for public use. As properties of public dominion, they indisputably belong to the State or the Republic of the Philippines.
• The properties of the MIAA were ruled by the Court to be properties of public dominion due to the nature of the property as being devoted for public use, being a port airport. In order to further solidify this classification, though, t he law requires that the airport had been duly constructed b y the State and thereafter, devoting the structures constructed f or public use. 
• City of Pasig vs. the Republic of the Philippines, G.R. No. 185023, August 24, 2011:
• In Philippine Fisheries Development Authority v. Central Board of Assessment Appeals, the Court held:
• In the 2007 case of Philippine Fisheries Development Authority v. Court of Appeals, the Court resolved the issue of whether the PFDA is a government-owned or controlled corporation or an instrumentality of the national government. In that case, the City of Iloilo assessed real property taxes on the Iloilo Fishing Port Complex (IFPC), which was managed and operated by PFDA. The Court held that PFDA is an instrumentality of the government and is thus exempt from the payment of real property tax, thus:
• The Court rules that the Authority is not a GOCC but an instrumentality of the national government which is generally exempt from payment of real property tax. However, said exemption does not apply to the portions of the IFPC which the Authority leased to private entities. With respect to these properties, the Authority is liable to pay property tax. Nonetheless, the IFPC, being a property of public dominion cannot be sold at public auction to satisfy the tax delinquency.
• x x x x
• This ruling was affirmed by the Court in a subsequent PFDA case involving the Navotas Fishing Port Complex, which is also managed and operated by the PFDA. In consonance with the previous ruling, the Court held in the subsequent PFDA case that the PFDA is a government instrumentality not subject to real property tax except those portions of the Navotas Fishing Port Complex that were leased to taxable or private persons and entities for their beneficial use.
• Similarly, we hold that as a government instrumentality, the PFDA is exempt from real property tax imposed on the Lucena Fishing Port Complex, except those portions which are leased to private persons or entities.
• In Government Service Insurance System v. City Treasurer of the City of Manila, the Court held:
• x x x The tax exemption the property of the Republic or its instrumentalities carries ceases only if, as stated in Sec. 234(a) of the LGC of 1991, "beneficial use thereof has been granted, for a consideration or otherwise, to a taxable person." GSIS, as a government instrumentality, is not a taxable juridical person under Sec. 133(o) of the LGC. GSIS, however, lost in a sense that status with respect to the Katigbak property when it contracted its beneficial use to MHC, doubtless a taxable person. 
• Thus, the real estate tax assessment of Php 54,826,599.37 covering 1992 to 2002 over the subject Katigbak property is valid insofar as said tax delinquency is concerned as assessed over said property.
• In Manila International Airport Authority v. Court of Appeals, the Court held:
• x x x Section 234(a) of the Local Government Code states that real property owned by the Republic loses its tax exemption only if the "beneficial use thereof has been granted, for consideration or otherwise, to a taxable person." MIAA, as a government instrumentality, is not a taxable person under Section 133(o) of the local Government Code. Thus, even if we assume that the Republic has granted to MIAA the beneficial use of the Airport Lands and Buildings, such fact does not make these real properties subject to real estate tax.
• However, portions of the Airport Lands and Buildings that MIAA leases to private entities are not exempt from real estate tax. For example, the land area occupied by hangars that MIAA leases to private corporations is subject to real estate tax. In such a case, MIAA has granted the beneficial use of such land area for a consideration to a taxable person and therefore such land area is subject to real estate tax.
• In Lung Center of the Philippines v. Quezon City, the Court held:
• x x x While portions of the hospital are used for the treatment of patients and the dispensation of medical services to them, whether paying or non-paying, other portions thereof are being leased to private individuals for their clinics and a canteen. Further, a portion of the land is being leased to a private individual for her business enterprise under the business name "Elliptical Orchids and Garden Center." Indeed, the petitioner’s evidence shows that it collected ₱1,136,483.45 as rentals in 1991 and ₱1,679,999.28 for 1992 from the said lessees.
• Accordingly, we hold that the portions of the land leased to private entities as well as those parts of the hospital leased to private individuals are not exempt from such taxes. On the other hand, the portions of the land occupied by the hospital and portions of the hospital used for its patients, whether paying or non-paying, are exempt from real property taxes.
• Article 420 of the Civil Code classifies as properties of public dominion those that are "intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads" and those that "are intended for some public service or for the development of the national wealth." Properties of public dominion are not only exempt from real estate tax, they are exempt from sale at public auction. 
• In Heirs of Mario Malabanan v. Republic, the Court held that, "It is clear that property of public dominion, which generally includes property belonging to the State, cannot be x x x subject of the commerce of man."

2. Patrimonial Property

• The main takeaway from the discussion on properties of public dominion has to do with the fact that it is not susceptible to the commerce of man. 
• Hence, properties of public dominion may not be taxed, may not be foreclosed, and may furthermore, not be acquired. 
• Much like lands of the public domain, the relevance of alienability in favor of private individuals comes to fore because only when property of public dominion has been converted to patrimonial property may the former lands be susceptible of alienation. 
• From Articles 421 and 422 of the Civil Code, the road to becoming patrimonial property from properties of public dominion comes either from: 
1. the property not being of the character stated in the enumeration provided by Article 420; and
2. the property no longer being intended for public use or for public service. 
• The pertinent provisions of Articles 420, 421 and 422 are quoted as follows: 
• Art. 420. The following things are property of public dominion: 
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.
• Art. 421. All other property of the State, which is not of the character stated in the preceding article, is patrimonial property.
• Art. 422. Property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State. (341a) 
• Thus, as provided by Article 421, if the property of the State is not among the enumerations provided by Article 420, the same shall be considered as patrimonial property.
• As further provided by Article 422, if the property is no longer intended for public use or public service, the said property of the State shall form part of the patrimonial property.

Property not being of the character stated in the enumeration provided by Article 420 

• The case of City of Pasig vs. the Republic of the Philippines, G.R. No. 185023, August 24, 2011 gives an example of property that is patrimonial for not being of the character stated in Article 420 of the Civil Code. 
• In other words, these were properties that no longer needed to be classified as patrimonial coming from property of public dominion. 
• MPDLC voluntarily surrendered two parcels of land to the Republic, through the PCGG. 
• Portions of this property were leased to different business establishments. 
• Later, the Pasig City Assessor's Office sought to collect realty taxes on the said property. 
• The PCGG contested the assessment, alleging that the property was exempt from taxation. 
• Thereafter, a levy on the property was made by the City of Pasig.
• In response, the Republic filed a Petition for Prohibition on the same allegation stated above. 
• Was the property exempt from taxes? The Court ruled:
• Even as the Republic of the Philippines is now the owner of the properties in view of t he voluntary surrender of MPLDC by its former registered owner, Campos, to the State, such transfer does not prevent a third party with a better right from claiming such properties in the proper forum. In the meantime, the Republic of the Philippines is the presumptive owner of the properties for taxation purposes. 
• Section 234(a) of Republic Act No. 7160 states that properties owned by the Republic of the Philippines are exempt from real property tax "except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person."
• Thus, the portions of the properties not leased to taxable entities are exempt from real estate tax while the portions of the properties leased to taxable entities are subject to real estate tax. The law imposes the liability to pay real estate tax on the Republic of the Philippines for the portions of the properties leased to taxable entities. It is, of course, assumed that the Republic of the Philippines passes on the real estate tax as part of the rent to the lessees.
• In Manila International Airport Authority, the Court held:
• x x x [T]he Airport Lands and Buildings of MIAA are properties devoted to public use and thus are properties of public dominion. Properties of public dominion are owned by the State or the Republic. Article 420 of the Civil Code provides:
• Art. 420. The following things are property of public dominion:
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 term "ports x x x constructed by the Sate" includes airports and seaports. The Airport Lands and Buildings of MIAA are intended for public use, and at the very least intended for public service. Whether intended for public use or public service, the Airport Lands and Buildings are properties of public dominion. As properties of public dominion, the the Airport lands and Buildings are owned by the Republic and thus exempt from real estate tax under Section 234(a) of the Local Government Code.
• x x x x
• Under Article 420 of the Civil Code, the Airport Lands and Buildings of MIAA, being devoted to public use, are properties of public dominion and thus owned by the State or the Republic of the Philippines. Article 420 specifically mentions "ports x x x constructed by the State," which includes public airports and seaports, as properties of public dominion and owned by the Republic. As properties of public dominion owned by the Republic, there is no doubt whatsoever that the Airport Lands and Buildings are expressly exempt from real estate tax under Section 234(a) of the local Government Code. This Court has also repeatedly ruled that properties of public dominion are not subject to execution or foreclosure sale.
• In the present case, the parcels of land are not properties of public dominion because they are not "intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads." Neither are they "intended for some public service or for the development of the national wealth." MPLDC leases portions of the properties to different business establishments. Thus, the portions of the properties leased to taxable entities are not only subject to real estate tax, they can also be sold at public auction to satisfy the tax delinquency.
• In sum, only those portions of the properties leased to taxable entities are subject to real estate tax for the period of such leases. Pasig City must, therefore, issue to respondent new real property tax assessments covering the portions of the properties leased to taxable entities. If the Republic of the Philippines fails to pay the real property tax on the portions of the properties leased to taxable entities, then such portions may be sold at public auction to satisfy the tax delinquency.

Property of public dominion when no longer intended for public use or for public service 

• Proceeding from the discussion above, sufficient authority must be given for properties of public dominion to be released to patrimonial property. 
• As expressed from Article 422, the operative word is "intention." 
• In several provisions of law and jurisprudence, the overarching theme is singular: intention to withdraw the property from public use or public service is not communicated by mere words or thoughts but rather, through express declarations. 
•  An example can be found in the Local Government Code on the closure and opening of roads for public use or for public service:  
• Section 21. Closure and Opening of Roads. 
• (a) A local government unit may, pursuant to an ordinance, permanently or temporarily close or open any local road, alley, park, or square falling within its jurisdiction: Provided, however, That in case of permanent closure, such ordinance must be approved by at least two-thirds (2/3) of all the members of the sanggunian, and when necessary, an adequate substitute for the public facility that is subject to closure is provided. 
• (b) No such way or place or any part thereof shall be permanently closed without making provisions for the maintenance of public safety therein. A property thus permanently withdrawn from public use may be used or conveyed for any purpose for which other real property belonging to the local government unit concerned may be lawfully used or conveyed: Provided, however, That no freedom park shall be closed permanently without provision for its transfer or relocation to a new site.
• The requirement of an express declaration before properties of public dominion are converted to patrimonial properties is clear from the Local Government Code. 

Property of public dominion when no longer intended for public use or for public service; Illustrative case 

• Illustration of patrimonial property that is no longer intended for public use or for public service.
• PNOC AFC vs. NGCP, G.R. No. 224396, September 4, 2019:
• The NGCP attempted to expropriate the property belonging to PNOC-AFC for its transmission lines. 
• The latter opposed the same on the ground that because of the public dominion nature of the property, it can no longer be subject of expropriation proceedings. 
• To which, NGCP countered that the leasing out of the property resulted in the same being patrimonial in nature. 
• When elevated, the Court ruled:
• The Court disagrees with petitioner PAFC. The subject property, though owned by a State instrumentality, is considered patrimonial property that assumes the nature of private property.
• First and foremost, it is admitted by all parties that the subject property, sitting within the Petrochemical Industrial Park, is an industrial zone. In fact, the crux of petitioner PAFC's Petition is the argument that since the Petrochemical Industrial Park has been declared by law as an industrial zone dedicated to the development of the petrochemical industry, it should be deemed a land dedicated to public use, i.e., a land of public dominion.
• However, in Republic v. East Silverlane Realty Development Corp., the Court held that when the subject property therein was classified by the government as an industrial zone, the subject property therein "had been declared patrimonial and it is only then that the prescriptive period began to run."
• Further, it is apparent from R.A. No. 10516 and its IRR that the industrial estate is being owned, managed, and operated by the State, not in its sovereign capacity, but rather in its private capacity. Simply stated, the management and operation of the industrial estate is proprietary in character, serving the economic ends of the State.
• P.D. No. 949, as amended by R.A. No. 10516, calls for the development of the industrial estate by introducing "business activities that will promote its best economic use." In addition, in the IRR of the said law, the Petrochemical Industrial Park was described as an industrial and commercial estate, wherein private sector investment is encouraged in the development of "industrial and commercial activities/enterprises in said Industrial Estate." According to the IRR, the industrial estate may be used in any manner to achieve its best economic use, allowing "any activity or series of activities regularly engaged in as a means of livelihood or with a view to profit."  Hence, it is crystal clear that the management of the land where the subject property is located is commercial in nature and that the State, through petitioner PAFC, is operating the said property in its proprietary capacity, in order to serve economic, and not sovereign, ends.
• Petitioner PAFC's insistence that the petrochemical industry is an industry endowed with national interest is unconvincing. The sheer fact that one of the allowable activities inside the industrial estate pertains to the development of the petrochemical industry is not enough to characterize the subject property as land of the public domain. To reiterate, the Court has previously characterized waterworks as patrimonial property despite the fact that such properties deal with the management of an important natural resource and an essential public utility, for the reason that the operations of waterworks by municipal corporations are often in the nature of a business venture. In the instant case, it is apparent from P.D. No. 949, as amended by R.A. No. 10516, that the Petrochemical Industrial Park is intended and accordingly devoted by law as a commercial and business venture.
• Furthermore, as already discussed at length, the defining characteristic of land of public domain is inalienability. To reiterate, upon the explicit declaration of alienability and disposability, the land ceases to possess the characteristics inherent in properties of public dominion, namely, that they are outside the commerce of man, cannot be acquired by prescription, and cannot be registered under the land registration law, and accordingly assume the nature of patrimonial property of the State, that is property owned by the State in its private capacity. Hence, an express declaration of alienability and disposability by the State negates the characterization of property as land of public dominion.
• Applying the foregoing in the instant case, the laws governing the subject property have unequivocally declared that the subject property is alienable, disposable, appropriable, may be conveyed to private persons or entities, and is subject to private rights.
• Under P.D. No. 949, the Petrochemical Industrial Park was explicitly made alienable and disposable for lease, sale, and conveyance to private entities or persons for the conduct of related industrial activities: x x x
• Hence, with the subject property expressly declared by law, i.e., P.D. No. 949, as amended by R.A. No. 10516, to be an industrial and commercial estate that may be transferred or conveyed to private persons so that business activities may be conducted therein, there is no doubt in the mind of the Court that the subject property is patrimonial property. In other words respondent NGCP has the authority under Section 4 of R.A. No. 9511 to expropriate the subject property.

Property of public dominion when no longer intended for public use or for public ser vice; The case of Laurel vs. Garcia on the Roppongi properties 

• Laurel vs. Garcia, G.R. No. 92013, 25 July 1990:
• It discusses the stringent requirements imposed by law for a parcel of land to be converted to patrimonial property coming from properties of public dominion. 
• 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 (located in Roponggi and Kobe). 
• The Roppongi property was acquired from the Japanese government and became the site of the Philippine 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.
• 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 proper ties in Japan including the Roppongi were specifically mentioned in the first "Whereas" clause. 
• Two cases were the offshoot of this controversy, whereby their petitions involved the following issues: 
1. The petitioners object to the alienation of the Roppongi property to anyone
2. The sale of the property to non Filipino citizens and entities
• 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 non-Filipino citizens and entities. 
• 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 
•  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 anyone 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. 
• 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 contract.
• 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 Supreme Court ruled on the following issues of: 
1. 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?
2. Was there a sufficient authority given for the sale of the land?
• On the first issue to be discussed, the Court had the following pronouncement(s):
• 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. 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.
  
  
  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. Abandonment must be a certain and positive act based on correct legal premises.
  
  
  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.
• Anent the second issue, the Court ruled on the absence of the proper authority to dispose of the same:
• 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:
  
  
  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 non-Filipino citizens or to entities owned by non-Filipino 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, 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.
  
  
  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.
  
  
  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.
  
  
  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.
  
  
  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. 

   
• 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
  
  
  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. 
  
  
  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.
  
  
  (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. 
  
  
  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.
  
  
  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.
  
  
  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 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.
  
  
  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.
  
  
  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.
  
  

Property of public dominion when no longer intended f or public use or for public service; Distinctions between property of public dominion and lands of the public domain and alienable and disposable lands of the public domain with patrimonial lands; Republic vs. Pasig Rizal Co., Inc., G.R. NO. 213207, February 15, 2022, Caguioa, J.

• The Supreme Court has had the opportunity to reconcile a distinction that had long been needing of an appropriate closure. 
• Republic vs. Pasig Rizal Co., Inc., G.R. No. 213207, February 15, 2022:
• Sometime in 1958, a parcel of unregistered land was caused to be surveyed by Manuel. Thereafter, a tax declaration was issued in his name. 
• Upon his death, the beneficial ownership of the subject land was transferred to PRCI. 
• Later, a petition for registration was filed by Esperanza for original registration of the land. The RTC granted the same. 
• The OSG appealed to the CA and the latter denied the appeal. In particular, the CA found that the Regional Director of NCR was duly authorized to issue a certification on the status of the land as alienable and disposable and furthermore, private in nature. 
• Thus, allowing the land to be susceptible of acquisition via prescription; and that the requisite period of possession had been duly complied with.
• Hence, an appeal by certiorari was lodged before the SC. 
• Was the property proven to be alienable and disposable land? 
• Distinctions between property of public dominion and lands of the public domain: 
• As the quoted exchange shows, it was initially suggested that the term "lands of the public domain" under then Section 6, Article XII be qualified with the term "agricultural" in order to clarify that only private agricultural lands of the public domain may be acquired and/or held by individuals, corporations, or associations.
  
  
  This initial suggestion, albeit not pursued, clearly shows that the concept of public domain under the Constitution is indeed broader than the concept of public dominion under the Civil Code.
  
  
  Hence, while lands of the public domain under the Constitution pertain to all lands owned or held by the State both in its public and private capacity, lands forming part of the public dominion under the Civil Code pertain only to those which are intended for public use, public service, or the development of national wealth, and excludes patrimonial property. Therefore, property of public dominion and patrimonial property, as defined by the Civil Code, both fall within the scope of public domain contemplated under the 1987 Constitution. Excepted from the scope of public domain are lands subject of a claim of ownership based on native title as explicitly recognized in Cariño v. Insular Government.
  
  
  Patrimonial property
  
  
  As stated, the Civil Code classifies property into two (2) categories:
  1. property of public dominion
  • that held by the State in its public capacity for:
  • public use
  • public service 
  • development of national wealth for the common and public welfare
  2. patrimonial property
  • that held by the State in its private capacity to attain economic ends.
  Being private in nature, patrimonial property is subject to alienation and disposition in the same way as properties owned by private individuals, and may thus be subject to prescription and be the object of ordinary contracts or agreements. 
  
  
  Examples of patrimonial property of the State include:
  1. those acquired by the government in execution sales and tax sales
  2. friar lands
  3. mangrove lands and mangrove swamps.
  Article 420 suggests that at any given point in time, all property of the State may either be classified as property of public dominion or patrimonial property. The Republic recognizes this dichotomy inasmuch as it asserts that "the classifications of land pertaining to the State under the Civil Code are mutually exclusive."
  
  
  In turn, patrimonial property of the State may be further classified into two sub-categories: 
  1. those which are not property of public dominion or imbued with public purpose based on the State's current or intended use, and may thus be classified as patrimonial property "by nature" pursuant to Article 421; and 
  2. those which previously assumed the nature of property of public dominion by virtue of the State's use, but which are no longer being used or intended for said purpose, and may thus be classified as "converted" patrimonial property pursuant to Article 422.
  Thus, the proper interpretation of Article 422 in relation to Articles 420 and 421 is that "converted" patrimonial property can only come from property of public dominion under Article 420. Hence, "converted" patrimonial property should not be understood as a subset of patrimonial property "by nature" under Article 421.
  
  
  There is no doubt that forest lands, timber lands, mineral lands, and national parks which are lands of the public domain under the Constitution fall under property of public dominion under Article 420(2) of the Civil Code, as do agricultural lands. It is also clear that land classified as agricultural and subject to the State's current or intended use remains property of public dominion. However, these agricultural lands, once declared as alienable and disposable, become "converted" patrimonial property of the State.
  
  
  In effect, the classification of agricultural land as alienable and disposable serves as unequivocal proof of the withdrawal by the State of the said land from the public dominion, and its "conversion" to patrimonial property. The clear intention of such conversion is to open the land to private acquisition or ownership. Again, as keenly observed by Justice Gaerlan, such converted patrimonial property remains within the broader constitutional concept of public domain precisely as alienable and disposable land of the public domain.
  
  
  To recall, property of public dominion is outside the commerce of man. Consequently, it can neither be appropriated nor be the subject of contracts; hence, they cannot be alienated or encumbered. Property falling under Article 420 is outside the commerce of man precisely because it is property of public dominion. Conversely, those falling under Articles 421 and 422 are necessarily within the commerce of man, as they are not property of public dominion.
  
  
  Clearly, any specific property of the State may either be outside or within the commerce of man; it cannot be both. Prior to the classification of such property to alienable and disposable, agricultural lands (being property of public dominion) are beyond the commerce of man. It is the classification of agricultural lands as alienable and disposable which places them within the commerce of man, and renders them capable of being the subject matter of contracts (such as a patent, the latter being a contract between the State and the grantee). In turn, the power to classify (and re-classify) land is vested solely in the Executive Department. Once a parcel of land forming part of public dominion is classified as alienable and disposable, they become subject to private acquisition but only through the prescribed modes of acquisition of ownership.
  
  
• The statement of the foregoing case arises from the nature of land of the public domain as being property of public dominion. 
• Thus, it follows that once land of the public domain has been converted into alienable and disposable land of the public domain, the same shall be considered as patrimonial land. 
• A distinction that is necessary in order to outline a demarcation line between the two concepts. 
• This is a proper statement that [the author] has been waiting for to be made by the Supreme Court. 
• For there has been previously confusion on why there are two seemingly different concepts of land in the Philippines presented by either the 1987 Constitution or the Civil Code. 
• Now, at least, the classification is clearer between lands of the public domain/properties of public dominion and alienable and disposable lands and patrimonial property.

3. Property of private ownership 

•  As discussed in the case of PNOC-AF, properties of private ownership are not necessarily limited to private individuals; 
• instead, it connotes the nature of the ownership and possession of the property. 
• Whereas the ownership by a private individual of property is clearly within the realm of private ownership;
• The ownership by the State of property either connotes possession for public use or for private use (for economic ends/purposes of the State).