46 SCRA 734 / G.R. No. L-29788. August 30, 1972
City of Manila was owner in fee simple a parcel of land known as Lot 1, Block 557 of Cadastral Survey of City of Manila, with an area of 9,689 square meters. On September 1960, the Municipal Board of Manila adopted a resolution requesting the President to consider the feasibility of declaring a land as patrimonial property of Manila for the purpose of selling these lots to its actual occupants. The resolution was then transmitted to the Congress, approved by the President Republic Act 4118 which converted the land from communal property to disposable and alienable land of State.
The City of Manila delivered the TCT to Land Authority which it canceled the TCT 22547 and issuing TCT 80876 in the name of Land Authority, with the knowledge and consent of the Mayor.
However, for some reason, the City of Manila brought an action to restrain, prohibit, and enjoin Land Authority and Register of Deeds from implementing RA 4118, and praying for the declaration of RA 4118 as unconstitutional. Trial court declared RA 4118 to be unconstitutional and invalid on the ground that it deprived City of its property without due process of law and payment of just compensation.
Land Authority and Register of Deeds argued that the land is a communal land, or a portion of public domain owned by State; that the land has not been used by City of Manila for any public purpose; that it was originally a communal land not because it was needed in connection with its organisation as a municipality but rather for the common use of its inhabitants; that the City mayor merely enjoys the usufruct over said land and its exercise of acts of ownership by selling parts thereof did not necessarily convert the land into a patrimonial property of City of Manila nor divert the State of its paramount title.
Whether or not the land is a private or patrimonial property of the City of Manila.
The land is public property.
As a general rule, regardless of the source or classification of land in the possession of a municipality, excepting those acquired with its own funds in its private or corporate capacity, such property is held in trust for the State for the benefit of its inhabitants, whether it be for governmental or proprietary purposes. It holds such lands subject to the paramount power of the legislature to dispose of the same, for after all it owes its creation to it as an agent for the performance of a part of its public work, the municipality being but a subdivision or instrumentality thereof for purposes of local administration. Accordingly, the legal situation is the same as if the State itself holds the property and puts it to a different use.
When it comes to property of municipality which it did not acquire in its private or corporate capacity with its own funds (the land was originally given to City by Spain), the legislature can transfer its administration and disposition to an agency of the National Government to be disposed of according to its discretion. Here it did so in obedience to the constitutional mandate of promoting social justice to insure the well-being and economic security of the people.
The alleged patrimonial character of the land under the ownership of the City of Manila is totally belied by the City’s own official act, which is fatal to its claim since the Congress did not do as bidden. If it were its patrimonial property why should the City of Manila be requesting the President to make representation to the legislature to declare it as such so it can be disposed of in favor of the actual occupants? There could be no more blatant recognition of the fact that said land belongs to the State and was simply granted in usufruct to the City of Manila for municipal purposes.
The property was not acquired by the City of Manila with its own funds in its private or proprietary capacity. It has in its name a registered title is not questioned, but this title should be deemed to be held in trust for the State as the land covered thereby was part of the territory of the City of Manila granted by the sovereign upon its creation.