THE PROVINCE OF ZAMBOANGA DEL NORTE, plaintiff-appellee, vs. CITY OF ZAMBOANGA, SECRETARY OF FINANCE and COMMISSIONER OF INTERNAL REVENUE, defendants-appellants.
FACTS
Prior to its incorporation as a chartered city, the Municipality of Zamboanga was the provincial capital of the then Zamboanga Province. Commonwealth Act 39, approved on October 12, 1936, converted the municipality into Zamboanga City. Section 50 of the Act provided that buildings and properties which the province would abandon upon the transfer of the capital to another place would be acquired and paid for by the City of Zamboanga at a price fixed by the Auditor General. These properties consisted of 50 lots and buildings in Zamboanga City, titled in the name of Zamboanga Province, used for various purposes such as capitol, school, hospital, leprosarium sites, and vacant lots. The provincial capital was transferred to Dipolog in 1945. On May 26, 1949, an Appraisal Committee fixed the value of these properties at P1,294,244.00. Republic Act 711, approved on June 6, 1952, divided Zamboanga Province into Zamboanga del Norte and Zamboanga del Sur. The Auditor General apportioned the assets of the old province, with Zamboanga del Norte entitled to 54.39% of the value of the properties, or P704,220.05, payable by Zamboanga City. The Secretary of Finance authorized deductions from Zamboanga City’s internal revenue allotments, crediting P57,373.46 to Zamboanga del Norte. However, Republic Act 3039, approved on June 17, 1961, amended Section 50 of Commonwealth Act 39, transferring all said buildings, properties, and assets to Zamboanga City free of charge. Consequently, the Secretary of Finance ordered the stoppage of further payments and the return of the deducted amount to Zamboanga City. Zamboanga del Norte filed a complaint for declaratory relief, seeking to declare Republic Act 3039 unconstitutional for depriving it of property without due process and just compensation. The lower court declared the law unconstitutional and ordered Zamboanga City to pay the balance. Defendants appealed.
ISSUE
The principal issue is the validity of Republic Act 3039, which depends on the nature of the 50 lots and buildings-whether they are public or patrimonial properties of the former province. If patrimonial, the law depriving the province of them without compensation would be unconstitutional.
RULING
The Supreme Court set aside the lower court’s decision. It ruled that the classification of municipal property must follow the norm under the law of Municipal Corporations, not the Civil Code. Under this norm, property held for governmental or public purposes is public, while that held for proprietary or private purposes is patrimonial. Applying this, the Court found that 24 of the 50 lots (the capitol site, school sites, hospital site, leprosarium site, trade school site, and hydro-electric site) were devoted to public service and were therefore public property. As public property, Congress had absolute control over them, and Republic Act 3039 validly transferred them to Zamboanga City without compensation. However, the remaining 26 lots (the Burleigh lots, Curuan school site, San Roque lot, and vacant lots) were not shown to be devoted to public use and were thus patrimonial. Over these, the province had a proprietary right. Republic Act 3039, in transferring these patrimonial properties without compensation, was unconstitutional as to them. The Court ordered Zamboanga City to return the amount of P43,030.11 it had taken back from Zamboanga del Norte and to continue paying the balance of the latter’s share in the value of the 26 patrimonial properties through quarterly deductions from its internal revenue allotments.
