G.R. No. L-73831 February 27, 1987
REPUBLIC OF THE PHILIPPINES (Board of Liquidators), petitioner, vs. HON. INTERMEDIATE APPELLATE COURT and CITY OF ZAMBOANGA, respondents.

FACTS

The property in dispute is a parcel of land in Zamboanga City, originally registered in 1930 under Transfer Certificate of Title No. 9509 in the name of Kantiro Koyama, a Japanese national who has not been heard from since World War II. Under the Philippine Property Act of 1946 enacted by the U.S. Congress, enemy properties located in the Philippines and vested in the U.S. President or the Alien Property Custodian were to be transferred to the Republic of the Philippines after satisfying certain claims. Although this specific property was among those taken over, the formal deed of transfer was never executed, and the title remained in Koyama’s name. Nevertheless, since 1978, the lot has been covered by a tax declaration in the name of the Republic, with the Board of Liquidators as administrator.
In 1976, the Republic initiated escheat proceedings, alleging the registered owner’s absence for over ten years, his presumptive death, and the lack of heirs, thereby warranting escheat to the State under Rule 91 of the Rules of Court. The trial court, after publication and hearing, declared the property escheated to the State in favor of the City of Zamboanga. The Intermediate Appellate Court affirmed, applying Section 3, Rule 91, which directs that escheated real estate be assigned to the city or municipality where it is situated.

ISSUE

Whether the property, which was subject to transfer to the Republic under the Philippine Property Act of 1946 but never formally deeded, should be escheated to the City of Zamboanga under the Rules of Court or should be deemed owned by the Republic of the Philippines.

RULING

The Supreme Court reversed the appellate court and ruled in favor of the Republic. The legal logic centers on the supremacy of the specific statutory mandate of the Philippine Property Act of 1946 over the general provisions on escheat under Rule 91. The Court held that the obvious purpose of the Act was to transfer title of enemy properties in the Philippines to the Republic as an acknowledgment of Philippine sovereignty. The mere inadvertence or lack of a formal deed of transfer does not negate the legal effect intended by the Act. The Court applied the presumption of regularity in the performance of official functions, stating it is more reasonable to presume compliance with the Act’s mandate. The lack of records does not mean the transfer was not effected; Section 3 of the Act itself legally accomplished the transfer, with the deed being merely a subsequent formality.
The general escheat proceedings under Rule 91 apply to ordinary properties where the owner dies intestate without heirs. It does not govern properties categorically required by a special law (the Philippine Property Act) to be vested in the Republic. Thus, the disputed land belongs to the Philippine government by virtue of the Act, not through escheat. While the City of Zamboanga may administer the property for public use, this must be through a subsequent grant from the Republic, the rightful owner. Title is declared vested in the Republic of the Philippines.