G.R. No. L-29788 August 30, 1972
RAFAEL S. SALAS, Executive Secretary; CONRADO F. ESTRELLA, Governor of the Land Authority; and LORENZO GELLA, Register of Deeds of Manila, petitioners-appellants, vs. HON. HILARION U. JARENCIO, Presiding Judge, CFI Manila; ANTONIO J. VILLEGAS, Mayor of Manila; and the CITY OF MANILA, respondents-appellees.

FACTS

The City of Manila was the registered owner of a parcel of land under TCT No. 22547. On September 21, 1960, the Municipal Board of Manila adopted a resolution requesting the President and Congress to consider declaring this property as patrimonial (alienable) city property for the purpose of reselling it to the actual occupants. This resolution was transmitted to Congress. Subsequently, Congress enacted Republic Act No. 4118 , which declared the land as part of the disposable and alienable lands of the public domain, directing its subdivision and sale by the Land Authority to bona fide occupants. The Register of Deeds cancelled the City’s title and issued a new one in the name of the Land Tenure Administration. The City of Manila then filed suit, and the Court of First Instance declared RA 4118 unconstitutional, ruling it deprived the City of its property without due process and just compensation. The national government officials appealed.

ISSUE

Whether Republic Act No. 4118 is unconstitutional for depriving the City of Manila of its property without due process and just compensation.

RULING

The Supreme Court reversed the lower court and upheld the constitutionality of RA 4118. The legal logic rests on the fundamental distinction between property of a municipal corporation owned in its governmental or public capacity and property owned in its proprietary or patrimonial capacity. Property held for public use (e.g., plazas, streets) is deemed public property of the state and is subject to the state’s absolute control. The Court found the land in question was still classified as communal or public land, originally acquired by the City for public use. As such, it remained property of the state, with the City merely holding it in trust for public service. Congress, representing the state, has the plenary power to reclassify such public land and determine its disposition. The enactment of RA 4118 was a legitimate exercise of this sovereign power over state property, not an exercise of eminent domain requiring compensation. The Court emphasized that the law was passed upon the formal petition of the City’s own Municipal Board, and the City Mayor and Treasurer had voluntarily surrendered the duplicate certificate of title, indicating the City’s recognition of congressional authority. Therefore, there was no deprivation of private property, and the due process and just compensation clauses were not violated. The law was a valid implementation of social justice policy to provide land to landless occupants.