GR 41001; (September, 1976) (Digest)
G.R. No. L-41001 & L-41012 September 30, 1976
Manila Lodge No. 761, Benevolent and Protective Order of Elks, Inc. vs. The Honorable Court of Appeals, City of Manila, and Tarlac Development Corporation; Tarlac Development Corporation vs. Honorable Court of Appeals, City of Manila, Lodge No. 761, Benevolent and Protective Order of Elks, Inc.
FACTS
The property in dispute is a portion of the Luneta Extension, reclaimed from Manila Bay under Act No. 1360 (1905), which declared the reclaimed area as property of the City of Manila. The Act authorized the city to set aside a tract for a hotel site, which could be leased or sold. In 1911, the City sold a 5,543.07-square-meter parcel to Manila Lodge No. 761, BPOE. The Torrens title issued to BPOE contained an annotation reserving to the City a right to repurchase the property for public purposes after fifty years. BPOE later sold the property to Tarlac Development Corporation (TDC) in 1963. The City subsequently sought and obtained a court order to re-annotate its repurchase right on TDC’s title.
TDC filed a complaint seeking cancellation of the repurchase annotation, claiming it was a purchaser in good faith and for value. The City of Manila defended its right, asserting the land was part of a public park or plaza from the beginning, making the original sale void. The trial court and the Court of Appeals ruled in favor of the City, declaring the property a public park.
ISSUE
The principal issue is whether the subject property forms part of a public park or plaza, which would render the original sale by the City of Manila to BPOE null and void ab initio.
RULING
The Supreme Court affirmed the decision of the Court of Appeals, holding the property is a public park. The legal logic rests on statutory construction and the nature of public dominion property. Act No. 1360, which authorized the reclamation, explicitly stated its purpose was to form part of the “Luneta extension.” The term “Luneta” is historically and commonly understood as a public park or plaza. Subsequent legislation, Act No. 1657, while authorizing the lease or sale of a hotel site, did not convert the character of the entire reclaimed area from public to patrimonial property. The law must be construed as a whole, and the dominant intent was to create a public space.
Property of public dominion, intended for public use, is outside the commerce of man. The City of Manila, therefore, had no authority to alienate it. A void contract produces no effect whatsoever. Since the original sale was void, BPOE acquired no valid title, and could not transmit any to TDC. The annotation of the repurchase right was merely a recognition of an inherent legal condition, not the creation of a new lien. Consequently, TDC, despite being a purchaser in good faith, acquired nothing. The property remains part of the public domain, dedicated to public use as a park or plaza.