G. R. No.

L-41001 September 30, 1976 for a hotel site, and to lease the same, with the approval of the
Governor General, to a responsible person or corporation for a term
MANILA LODGE NO. 761, BENEVOLENT AND PROTECTIVE not exceed ninety-nine years."
ORDER OF THE ELKS, INC., petitioner,
vs. Subsequently, the Philippine Commission passed on May 18, 1907 Act
THE HONORABLE COURT OF APPEALS, CITY OF MANILA, and No. 1657, amending Act No. 1360, so as to authorize the City of'
TARLAC DEVELOPMENT CORPORATION, respondents. Manila either to lease or to sell the portion set aside as a hotel site.

No. L-41012 September 30, 1976 The total area reclaimed was a little over 25 hectares. The City of
Manila applied for the registration of the reclaimed area, and on
TARLAC DEVELOPMENT CORPORATION, petitioner, January 20, 1911, O.C.T. No. 1909 was issued in the name of the City
vs. of Manila. The title described the registered land as "un terreno
HONORABLE COURT OF APPEALS, CITY OF MANILA, LODGE conocido con el nombre de Luneta Extension, situato en el distrito de
NO. 761, BENEVOLENT AND PROTECTIVE ORDER OF ELKS, la Ermita x x x." The registration was "subject, however to such of the
INC., respondents. incumbrances mentioned in Article 39 of said law (Land Registration
Act) as may be subsisting" and "sujeto a las disposiciones y
condiciones impuestas en la Ley No. 1360; y sujeto tambein a los
contratos de venta, celebrados y otorgados por la Ciudad de Manila a
favor del Army and Navy Club y la Manila Lodge No. 761, Benevolent
CASTRO, C.J.:
and Protective Order of Elks, fechados respectivamente, en 29 de
têñ.£îhqwâ£

Diciembre de 1908 y 16 de Enero de 1909." 1

STATEMENT OF THE CASE AND STATEMENTOF THE FACTS
On July 13, 1911 the City of Manila, affirming a prior sale dated
These two cases are petitions on certiorari to review the decision dated January 16, 1909 cancelled 5,543.07 square meters of the reclaimed
June 30, 1975 of the Court of Appeals in CA-G.R. No. 51590-R entitled area to the Manila Lodge No. 761, Benevolent and Protective Order of
"Tarlac Development Corporation vs. City of Manila, and Manila Lodge Elks of the U.S.A. (BPOE, for short) on the basis of which TCT No.
No. 761, Benevolent and Protective Order of Elks, Inc.," affirming the 2195 2 was issued to the latter over the Marcela de terreno que es
trial court's finding in Civil Case No. 83009 that the property subject of parte de la Luneta Extension, Situada en el Distrito le la Ermita ... ." At
the decision a quo is a "public park or plaza." the back of this title vas annotated document 4608/T-1635, which in
part reads as follows: "que la citada Ciusdad de Manila tendra derecho
On June 26, 1905 the Philippine Commission enacted Act No. l360 a su opcion, de recomparar la expresada propiedad para fines
which authorized the City of Manila to reclaim a portion of Manila Bay. publicos solamete in cualquier tiempo despues de cincuenta anos
The reclaimed area was to form part of the Luneta extension. The Act desde el 13 le Julio le 1911, precio de la misma propiedad, mas el
provided that the reclaimed area "Shall be the property of the City of valor que entonces tengan las mejoras."
Manila" and that "the City of Manila is hereby authorized to set aside a
tract of the reclaimed land formed by the Luneta extension x x x at the
north end not to exceed five hundred feet by six hundred feet in size,

1
For the remainder of the Luneta Extension, that is, after segregating As a consequence of such reservation, TDC filed on April 28, 1971
therefrom the portion sold to the Manila Lodge No. 761, PBOE, a new against the City of Manila and the Manila Lodge No. 761, BPOE, a
Certificate of Title No. 2196 3 was issued on July 17, 1911 to the City of complaint, docketed as Civil Case No. 83009 of the Court of First
Manila. Instance of Manila, containing three causes of action and praying -

Manila Lodge No. 761, BPOE, subsequently sold the said 5,543.07 a) On the first cause of action, that the plaintiff TDC be declared to
square meters to the Elks Club, Inc., to which was issued TCT No. have purchased the parcel of land now in question with the buildings
67488. 4 The registered owner, "The Elks Club, Inc.," was later and improvements thereon from the defendant BPOE for value and in
changed by court oder to "Manila Lodge No. 761, Benevolent and good faith, and accordingly ordering the cancellation of Entry No.
Protective Order of Elks, Inc." 4608/T-1635 on Transfer Certificate of Title No. 73444 in the name of
the Plaintiff;
In January 1963 the BPOE. petitioned the Court of First Instance of
Manila, Branch IV, for the cancellation of the right of the City of Manila b) On the second cause of action, ordering the defendant City of
to repurchase the property This petition was granted on February 15, Manila to pay the plaintiff TDC damages in the sum of note less than
1963. one hundred thousand pesos (P100,000.00);

On November 19, 1963 the BPOE sold for the sum of P4,700,000 the c) On the third cause of action, reserving to the plaintiff TDC the right
land together with all the improvements thereon to the Tarlac to recover from the defendant BPOE the amounts mentioned in par.
Development Corporation (TDC, for short) which paid P1,700.000 as XVI of the complaint in accordance with Art. 1555 of the Civil Code, in
down payment and mortgaged to the vendor the same realty to secure the remote event that the final judgment in this case should be that the
the payment of the balance to be paid in quarterly installments.5At the parcel of land now in question is a public park; and
time of the sale,, there was no annotation of any subsisting lien on the title to the property. On
December 12, 1963 TCT No. 73444 was issued to TDC over the subject land still described as
"UNA PARCELA DE TERRENO, que es parte de la Luneta Extension, situada en el Distrito de d) For costs, and for such other and further relief as the Court may
Ermita ... ." deem just and equitable. 6

In June 1964 the City of Manila filed with the Court of First Instance of Therein defendant City of Manila, in its answer dated May 19, 1971,
Manila a petition for the reannotation of its right to repurchase; the admitted all the facts alleged in the first cause of action except the
court, after haering, issued an order, dated November 19, 1964, allegation that TDC purchased said property "for value and in good
directing the Register of Deeds of the City of Manila to reannotate in faith," but denied for lack of knowledge or information the allegations in
toto the entry regarind the right of the City of Manila to repurchase the the second and third causes of action. As, special and affirmative
property after fifty years. From this order TDC and BPOE appealed to defense, the City of Manila claimed that TDC was not a purchaser in
this Court which on July 31, 1968 affirmed in G.R. Nos. L-24557 and L- good faith for it had actual notice of the City's right to repurchase which
24469 the trial court's order of reannotation, but reserved to TDC the was annotated at the back of the title prior to its cancellation, and that,
right to bring another action for the clarification of its rights. assuming arguendo that TDC had no notice of the right to repurchase,
it was, nevertheless, under obligation to investigate inasmuch as its
title recites that the property is a part of the Luneta extension. 7

2
The Manila Lodge No. 761, BPOE, in its answer dated June 7, 1971, complaint in accordance with Article 1555 of the Civil
admitted having sold the land together with the improvements thereon Code, the Court makes no pronouncement on this
for value to therein plaintiff which was in good faith, but denied for lack point. 10
of knowledge as to their veracity the allegations under the second
cause of action. It furthermore admitted that TDC had paid the From said decision the therein plaintiff TDC as well as the defendant
quarterly installments until October l5, 1964 but claimed that the latter Manila Lodge No. 761, BPOE, appealed to the Court of Appeals.
failed without justifiable cause to pay the subsequent installments. It
also asserted that it was a seller for value in good faith without having In its appeal docketed as CA-G.R. No. 51590-R, the Manila Lodge No.
misrepresented or concealed tacts relative to the title on the property. 761, BPOE, avers that the trial court committed the following errors,
As counterclaim, Manila Lodge No. 761 (BPOE) sought to recover the namely:
balance of the purchase price plus interest and costs. 8
1. In holding that the property subject of the action is not patrimonial
On June 15, 1971 TDC answered the aforesaid counterclaim, alleging property of the City of Manila; and
that its refusal to make further payments was fully justified.9
2. In holding that the Tarlac Development Corporation may recover and
After due trial the court a quo rendered on July 14, 1972 its decision enforce its right against the defendant BPOE. 11
finding the subject land to be part of the "public park or plaza" and,
therefore, part of the public domain. The court consequently declared
The Tarlac Development Corporation, on the other hand, asserts that
that the sale of the subject land by the City of Manila to Manila Lodge
the trial court erred:
No. 761, BPOE, was null and void; that plaintiff TDC was a purchaser
thereof in g faith and for value from BPOE and can enforce its rights
against the latter; and that BPOE is entitled to recover from the City of (1) In finding that the property in question is or was a public park and in
Manila whatever consideration it had 'paid the latter. 'The dispositive consequently nullifying the sale thereof by the City of Manila to BPOE;
part of the decision reads: ñé+.£ª wph!1

(2) In applying the cases of Municipality of Cavite vs. Rojas, 30 Phil.

WHEREFORE, the Court hereby declares that the 602, and Government vs. Cabangis, 53 Phil. 112, to the case at bar;
parcel of land formerly covered by Transfer Certificate and
of Title Nos 2195 and 67488 in the name of BPOE and
now by Transfer Certificate of Title No. 73444 in the (3) In not holding that the plaintiff-appellant is entitled to ,recover
name of Tarlac Development Corporation is a public' damages from the defendant City of Manila. 12
park or plaza, and, consequently, instant complaint is
dimissed, without pronouncement as to costs. Furthermore, TDC as appellee regarding the second assignment of
error raised by BPOE, maintained that it can recover and enforce its
In view of the reservation made by plaintiff Tarlac rigth against BPOE in the event that the land in question is declared a
Development Corporation to recover from defendant public park or part thereof.13
BPOE the amounts mentioned in paragraph XVI of the

3
In its decision promulgated on June 30, 1975, the Court of Appeals FIRST ISSUE
concur ed in the findings and conclusions of the lower court upon the
ground that they are supported by he evidence and are in accordance Upon the first issue, both petitioners claim that the property subject of
with law, and accordingly affirmed the lower court's judgment. the action, pursuant to the provisions of Act No. 1360, as amended by
Act No. 1657, was patrimonial property of the City of Manila and not a
Hence, the present petitions for review on certiorari. park or plaza.

G.R. No. L-41001 Arguments of Petitioners

The Manila Lodge No. 761, BPOE, contends, in its petition for review In G.R. No. L-41001, the Manila Lodge No. 761, BPOE, admits that
on certiorari docketed as G.R. No. L-41001, that the Court of Appeals "there appears to be some logic in the conclusion" of the Court of
erred in (1) disregarding the very enabling acts and/or statutes Appeals that "neither Act No. 1360 nor Act No. 1657 could have meant
according to which the subject property was, and still is, patrimonial to supply the City of Manila the authority to sell the subject property
property of the City of Manila and could therefore be sold and/or which is located at the south end not the north — of the reclaimed
disposed of like any other private property; and (2) in departing from area." 16 It argues, however, that when Act No. 1360, as amended,
the accepted and usual course of judicial proceedings when it simply authorized the City of Manila to undertake the construction of the
made a general affirmance of the court a quo's findings and Luneta extension by reclaimed land from the Manila Bay, and declared
conclusions without bothering to discuss or resolve several vital points that the reclaimed land shall be the "property of the City of Manila," the
stressed by the BPOE in its assigned errrors. 14 State expressly granted the ownership thereof to the City of Manila
which. consequently. could enter into transactions involving it; that
G.R. No. L-41012 upon the issuance of O.C.T. No. 1909, there could he no doubt that the
reclaimed area owned by the City was its patrimonial property;" that
The Tarlac Development Corporation, in its petition for review on the south end of the reclaimed area could not be for public use for. as
certiorari docketed as G.R. No. L-41012, relies on the following argued by TDC a street, park or promenade can be property for public
grounds for the allowance of its petition: use pursuant to Article 344 of the Spanish Civil Code only when it has
already been so constructed or laid out, and the subject land, at the
time it was sold to the Elk's Club, was neither actually constructed as a
1. that the Court of Appeals did not correctly interpret Act No. 1360, as
street, park or promenade nor laid out as a street, park or promenade;"
amended by Act No. 1657, of the Philippine Commission; and
that even assuming that the subject property was at the beginning
property of public dominion, it was subsequently converted into
2. that the Court of Appeals has departed from the accepted and usual patrimonial property pursuant to Art. 422 of the Civil Code, inasmuch
course of judicial proceedings in that it did not make its own findings as it had never been used, red or utilized since it was reclaimed in
but simply recited those of the lower court. 15 1905 for purpose other than this of an ordinary real estate for sale or
lease; that the subject property had never been intended for public
ISSUES AND ARGUMENTS use, is further shown by the fact that it was neither included as a part of
the Luneta Park under Plan No. 30 of the National Planning

4
Commission nor considered a part of the Luneta National Park (now the express statutory authority to lease or sell the northern part of the
Rizal Park) by Proclamation No. 234 dated December 19, 1955 of reclaimed area cannot be interpreted to mean that the remaining area
President Ramon Magsaysay or by Proclamation Order No. 274 dated could not be sold inasmuch as the purpose of the statute was not
October 4, 1967 of President Ferdinand E. Marcos;" 19 that, such being merely to confer authority to sell the northern portion but rather to limit
the case, there is no reason why the subject property should -not be the city's power of disposition thereof, to wit: to prevent disposition of
considered as having been converted into patrimonial property, the northern portion for any purpose other than for a hotel site that the
pursuant to the ruling in Municipality vs. Roa 7 Phil. 20, inasmuch as northern and southern ends of the reclaimed area cannot be
the City of Manila has considered it as its patrimonial property not only considered as extension of the Luneta for they lie beyond the sides of
bringing it under the operation of the Land Registration Act but also by the original Luneta when extended in the direction of the sea, and that
disposing of it; 20 and that to consider now the subject property as a is the reason why the law authorized the sale of the northern portion for
public plaza or park would not only impair the obligations of the parties hotel purposes, and, for the same reason, it is implied that the southern
to the contract of sale (rated July 13, 1911, but also authorize portion could likewise be disposed of.26
deprivation of property without due process of law.21
TDC argues likewise that there are several items of uncontradicted
G.R. No. L-410112 circumstantial evidence which may serve as aids in construing the
legislative intent and which demonstrate that the subject property is
In L-41012, the petitioner TDC stresses that the principal issue is the patrimonial in nature, to wit: (1) Exhibits "J" and "J-1", or Plan No. 30 of
interpretation of Act No. 1360, as amended by. Act No. 1657 of the the National Planning Commission showing the Luneta and its vicinity,
Philippine Commission, 22 and avers that inasmuch as Section 6 of Act do not include the subject property as part of the Luneta Park; (2)
No. 1360, as amended by Act 1657, provided that the reclamation of Exhibit "K", which is the plan of the subject property covered by TCT
the Luneta extension was to be paid for out of the funds of the City of No. 67488 of BPOE, prepared on November 11, 1963, indicates that
Manila which was authorized to borrow P350,000 "to be expended in said property is not a public park; (3) Exhibit "T", which is a certified
the construction of Luneta Extension," the reclaimed area became copy of Proclamation No. 234 issued on December 15, 1955 is
"public land" belonging to the City of Manila that spent for the President Magsaysay, and Exhibit "U" which is Proclamation Order No.
reclamation, conformably to the holding in Cabangis,23 and 273 issued on October 4, 1967 by President Marcos, do not include
consequently, said land was subject to sale and other disposition; that the subject property in the Luneta Park-, (4) Exhibit "W", which is the
the Insular Government itself considered the reclaimed Luneta location plan of the Luneta National Park under Proclamations Nos.
extension as patrimonial property subject to disposition as evidenced 234 and 273, further confirms that the subject property is not a public
by the fact that See. 3 of Act 1360 declared that "the land hereby park; and (5) Exhibit "Y", which is a copy of O.C.T. No. 7333 in the
reclaimed shall be the property of the City of Manila;" that this property name of the United States of America covering the land now occupied
cannot be property for public use for according to Article 344 of the by the America covering the land now occupied by the American
Civil Code, the character of property for public use can only attach to Embassy, the boundaries of which were delineated by the Philippine
roads and squares that have already been constructed or at least laid Legislature, states that the said land is bounded on the northwest by
out as such, which conditions did not obtain regarding the subject land, properties of the Army and Navy Club (Block No. 321) and the Elks
that Sec. 5 of Act 1360 authorized the City of Manila to lease the Club (Block No. 321), and this circumstance shows that even the
northern part of the reclaimed area for hotel purposes; that Act No. Philippine Legislature recognized the subject property as private
1657 furthermore authorized the City of Manila to sell the same; 24 that property of the Elks Club. 27

5
TDC furthermore contends that the City of Manila is estopped from amount of P100,000 caused by the City's petition for- reannotation of
questioning the validity of the sale of the subject property that it its right to repurchase.
executed on July 13, 1911 to the Manila Lodge No. 761, BPOE, for
several reasons, namely: (1) the City's petition for the reannotation of DISCUSSION AND RESOLUTION OF FIRST ISSUE
Entry No. 4608/T-1635 was predicated on the validity of said sale; (2)
when the property was bought by the petitioner TDC it was not a public It is a cardinal rule of statutory construction that courts must give effect
plaza or park as testified to by both Pedro Cojuanco, treasurer of TDC, to the general legislative intent that can be discovered from or is
and the surveyor, Manuel Añoneuvo, according to whom the subject unraveled by the four corners of the statute, 31 and in order to discover
property was from all appearances private property as it was enclosed said intent, the whole statute, and not only a particular provision
by fences; (3) the property in question was cadastrally surveyed and thereof, should be considered.32 It is, therefore, necessary to analyze
registered as property of the Elks Club, according to Manuel all the provisions of Act No. 1360, as amended, in order to unravel the
Anonuevo; (4) the property was never used as a public park, for, since legislative intent.
the issuance of T.C.T. No. 2165 on July 17, 1911 in the name of the
Manila Lodge NO. 761, the latter used it as private property, and as
Act No. 1360 which was enacted by the Philippine Commission on
early as January 16, 1909 the City of Manila had already executed a
June 26, 1905, as amended by Act No. 1657 enacted on May 18,
deed of sale over the property in favor of the Manila Lodge No. 761;
1907, authorized the "construction of such rock and timber bulkheads
and (5) the City of Manila has not presented any evidence to show that
or sea walls as may be necessary for the making of an extension to the
the subject property has ever been proclaimed or used as a public
Luneta" (Sec. 1 [a]), and the placing of the material dredged from the
park. 28
harbor of Manila "inside the bulkheads constructed to inclose the
Luneta extension above referred to" (Sec. 1 [a]). It likewise provided
TDC, moreover, contends that Sec. 60 of Com. Act No. 141 cannot that the plan of Architect D. H. Burnham as "a general outline for the
apply to the subject land, for Com. Act No. 141 took effect on extension and improvement of the Luneta in the City of Manila" be
December 1, 1936 and at that time the subject land was no longer part adopted; that "the reclamation from the Bay of Manila of the land
of the part of the public domain. 29 included in said projected Luneta extension... is hereby authorized
and the land thereby reclaimed shall be the property of the City of
TDC also stresses that its rights as a purchaser in good faith cannot be Manila" (Sec. 3); that "the City of Manila is hereby authorized to set
disregarded, for the mere mention in the certificate of title that the lot it aside a tract of the reclaimed land formed by the Luneta extension
purchased was "part of the Luneta extension" was not a sufficient authorized by this Act at the worth end of said tract, not to exceed five
warning that tile title to the City of Manila was invalid; and that although hundred feet by six hundred feet in size, for a hotel site, and to lease
the trial court, in its decision affirmed by the Court of Appeals, found the same with the approval of the Governor General, ... for a term not
the TDC -to has been an innocent purchaser for value, the court exceeding ninety-nine years; that "should the Municipal Board ... deem
disregarded the petitioner's rights as such purchaser that relied on it advisable it is hereby authorized to advertise for sale to sell said tract
Torrens certificate of title. 30 of land ... ;" "that said tract shall be used for hotel purposes as herein
prescribed, and shall not be devoted to any other purpose or object
The Court, continues the petitioner TDC erred in not holding that the whatever;" "that should the grantee x x x fail to maintain on said tract a
latter is entitled to recover from the City of Manila damages in the first-class hotel x x x then the title to said tract of land sold, conveyed,

6
and transferred, and shall not be devoted to any other purpose or is the reclaimed land? Is it of public ownership (dominion) or of private
object whatever;" "that should the grantee x x x fail to maintain on said ownership?
tract a first-class hotel x x x then the title to said tract of land sold,
conveyed, and transferred to the grantee shall revert to the City of We hold that it is of public dominion, intended for public use.
Manila, and said City of Manila shall thereupon become entitled to
immediate possession of said tract of land" (Sec. 5); that the Firstly, if the reclaimed area was granted to the City of Manila as its
construction of the rock and timber bulkheads or sea wall "shall be paid patrimonial property, the City could, by virtue of its ownership, dispose
for out of the funds of the City of Manila, but the area to be reclaimed of the whole reclaimed area without need of authorization to do so from
by said proposed Luneta extension shall be filled, without cost to the the lawmaking body. Thus Article 348 of the Civil Code of Spain
City of Manila, with material dredged from Manila Bay at the expense provides that "ownership is the right to enjoy and dispose of a thing
of the Insular Government" (Sec. 6); and that "the City of Manila is without further limitations than those established by law." 36 The right to
hereby authorized to borrow from the Insular Government ... the sum of dispose (jus disponendi) of one's property is an attribute of ownership.
three hundred thousand pesos, to be expended in the construction of Act No. 1360, as amended, however, provides by necessary
Luneta extension provided for by paragraph (a) of section one hereof" implication, that the City of Manila could not dispose of the reclaimed
(Sec.7). area without being authorized by the lawmaking body. Thus the statute
provides that "the City of Manila is hereby authorized to set aside a
The grant made by Act No. 1360 of the reclaimed land to the City of tract ... at the north end, for a hotel site, and to lease the same ...
Manila is a grant of "public" nature, the same having been made to a should the municipal board ... deem it advisable, it is hereby
local political subdivision. Such grants have always authorized ...to sell said tract of land ... " (Sec. 5). If the reclaimed area
been strictly construed against the grantee.33 One compelling reason were patrimonial property of the City, the latter could dispose of it
given for the strict interpretation of a public grant is that there is in such without need of the authorization provided by the statute, and the
grant a gratuitous donation of, public money or resources which results authorization to set aside ... lease ... or sell ... given by the statute
in an unfair advantage to the grantee and for that reason, the grant would indeed be superfluous. To so construe the statute s to render
should be narrowly restricted in favor of the public.34 This reason for the term "authorize," which is repeatedly used by the statute,
strict interpretation obtains relative to the aforesaid grant, for, although superfluous would violate the elementary rule of legal hermeneutics
the City of Manila was to pay for the construction of such work and that effect must be given to every word, clause, and sentence of the
timber bulkheads or sea walls as may be necessary for the making of statute and that a statute should be so interpreted that no part thereof
the Luneta extension, the area to be reclaimed would be filled at the becomes inoperative or superfluous. 37 To authorize means to
expense of the Insular Government and without cost to the City of empower, to give a right to act. 38 Act No. 1360 furthermore qualifies
Manila, with material dredged from Manila Bay. Hence, the letter of the the verb it authorize" with the adverb "hereby," which means "by
statute should be narrowed to exclude maters which if included would means of this statue or section," Hence without the authorization
defeat the policy of the legislation. expressly given by Act No. 1360, the City of Manila could not lease or
sell even the northern portion; much less could it dispose of the whole
The reclaimed area, an extension to the Luneta, is declared to be reclaimed area. Consequently, the reclaimed area was granted to the
property of the City of Manila. Property, however, is either of public City of Manila, not as its patrimonial property. At most, only the
ownership or of private ownership. 35 What kind of property of the City northern portion reserved as a hotel site could be said to be patrimonial
property for, by express statutory provision it could be disposed of, and

7
the title thereto would revert to the City should the grantee fail to Section 859 of the Revised Ordinances of the City of Manila.42 Hence
comply with the terms provided by the statute. the "extension to the Luneta" must be also a public park or plaza and
for public use.
TDC however, contends that the purpose of the authorization provided
in Act No. 1360 to lease or sell was really to limit the City's power of TDC, however, contends that the subject property cannot be
disposition. To sustain such contention is to beg the question. If the considered an extension of the old Luneta because it is outside of the
purpose of the law was to limit the City's power of disposition then it is limits of the old Luneta when extended to the sea. This is a strained
necessarily assumed that the City had already the power to dispose, interpretation of the term "extension," for an "extension," it has been
for if such power did not exist, how could it be limited? It was precisely held, "signifies enlargement in any direction — in length, breadth, or
Act 1360 that gave the City the power to dispose for it was hereby circumstance." 43
authorized by lease of sale. Hence, the City of Manila had no power to
dispose of the reclaimed land had such power not been granted by Act Thirdly, the reclaimed area was formerly a part of the manila Bay. A
No. 1360, and the purpose of the authorization was to empower the bay is nothing more than an inlet of the sea. Pursuant to Article 1 of the
city to sell or lease the northern part and not, as TDC claims, to limit Law of Waters of 1866, bays, roadsteads, coast sea, inlets and shores
only the power to dispose. Moreover, it is presumed that when the are parts of the national domain open to public use. These are also
lawmaking body enacted the statute, it had full knowledge of prior and property of public ownership devoted to public use, according to Article
existing laws and legislation on the subject of the statute and acted in 339 of the Civil Code of Spain.
accordance or with respect thereto.39 If by another previous law, the
City of Manila could already dispose of the reclaimed area, which it When the shore or part of the bay is reclaimed, it does not lose its
could do if such area were given to it as its patrimonial property, would character of being property for public use, according to Government of
it then not be a superfluity for Act No. 1360 to authorize the City to the Philippine Islands vs. Cabangis.44 The predecessor of the claimants
dispose of the reclaimed land? Neither has petitioner TDC pointed to in this case was the owner of a big tract of land including the lots in
any other law that authorized the City to do so, nor have we come question. From 1896 said land began to wear away due to the action of
across any. What we do know is that if the reclaimed land were the waters of Manila Bay. In 1901 the lots in question became
patrimonial property, there would be no need of giving special completely submerged in water in ordinary tides. It remained in such a
authorization to the City to dispose of it. Said authorization was given state until 1912 when the Government undertook the dredging of the
because the reclaimed land was not intended to be patrimonial Vitas estuary and dumped the Sand and - silt from estuary on the low
property of the City of Manila, and without the express authorization to lands completely Submerged in water thereby gradually forming the
dispose of the northern portion, the City could not dispose of even that lots in question. Tomas Cabangis took possession thereof as soon as
part. they were reclaimed hence, the claimants, his successors in interest,
claimed that the lots belonged to them. The trial court found for the
Secondly, the reclaimed area is an "extension to the Luneta in the City claimants and the Government appealed. This Court held that when
of Manila." 40 If the reclaimed area is an extension of the Luneta, then it the lots became a part of the shore. As they remained in that condition
is of the same nature or character as the old Luneta. Anent this matter, until reclaimed by the filling done by the Government, they belonged to
it has been said that a power to extend (or continue an act or business) the public domain. for public use .4' Hence, a part of the shore, and for
cannot authorize a transaction that is totally distinct. 41 It is not disputed
that the old Luneta is a public park or plaza and it is so considered by

8
that purpose a part of the bay, did not lose its character of being for refuted by Manresa himself who said, in his comments", on Article 344,
public use after it was reclaimed. that:ñé+.£ªwph!1

Fourthly, Act 1360, as amended, authorized the lease or sale of the Las plazas, calles y paseos publicos correspondent sin
northern portion of the reclaimed area as a hotel sites. The subject duda aiguna aldominio publico municipal ), porque se
property is not that northern portion authorized to be leased or sold; hallan establecidos sobre suelo municipal y estan
the subject property is the southern portion. Hence, applying the rule destinadas al uso de todos Laurent presenta tratando
of expresio unius est exlusio alterius, the City of Manila was not de las plazas, una question relativa a si deben
authorized to sell the subject property. The application of this principle conceptuarse como de dominio publico los lugares
of statutory construction becomes the more imperative in the case at vacios libres, que se encuenttan en los Municipios
bar inasmuch as not only must the public grant of the reclaimed area to rurales ... Laurent opina contra Pioudhon que toda vez
the City of Manila be, as above stated, strictly construed against the que estan al servicio de todos pesos lugares, deben
City of Manila, but also because a grant of power to a municipal considerable publicos y de dominion publico.
corporation, as happens in this case where the city is author ized to Realmente, pala decidir el punto, bastara siempre
lease or sell the northern portion of the Luneta extension, is strictly fijarse en el destino real y efectivo de los citados
limited to such as are expressly or impliedly authorized or necessarily lugares, y si este destino entraña un uso comun de
incidental to the objectives of the corporation. todos, no hay duda que son de dominio publico
municipal si no patrimoniales.
Fifthly, Article 344 of the Civil Code of Spain provides that to property
of public use, in provinces and in towns, comprises the provincial and It is not necessary, therefore, that a plaza be already constructed of-
town roads, the squares streets fountains, and public waters the laid out as a plaza in order that it be considered property for public use.
promenades, and public works of general service paid for by such It is sufficient that it be intended to be such In the case at bar, it has
towns or provinces." A park or plaza, such as the extension to the been shown that the intention of the lawmaking body in giving to the
Luneta, is undoubtedly comprised in said article. City of Manila the extension to the Luneta was not a grant to it of
patrimonial property but a grant for public use as a plaza.
The petitioners, however, argue that, according to said Article 344, in
order that the character of property for public use may be so attached We have demonstrated ad satietatem that the Luneta extension as
to a plaza, the latter must be actually constructed or at least laid out as intended to be property of the City of Manila for public use. But, could
such, and since the subject property was not yet constructed as a not said property-later on be converted, as the petitioners contend, to
plaza or at least laid out as a plaza when it was sold by the City, it patrimonial property? It could be. But this Court has already said,
could not be property for public use. It should be noted, however, that in Ignacio vs. The Director of Lands, 49 the executive and possibly the
properties of provinces and towns for public use are governed by the legislation department that has the authority and the power to make
same principles as properties of the same character belonging to the the declaration that said property, is no longer required for public use,
public domain.46 In order to be property of public domain an intention to and until such declaration i made the property must continue to form
devote it to public use is sufficient. 47 The, petitioners' contention is paint of the public domain. In the case at bar, there has been no such
explicit or unequivocal declaration It should be noted, furthermore,

9
anent this matter, that courts are undoubted v not. primarily called plan knew that the subject property was occupied by Elks and that Elks
upon, and are not in a position, to determine whether any public land is had a Torrens title thereto. But this in no way proves that the subject
still needed for the purposes specified in Article 4 of the Law of Waters property was originally intended to be patrimonial property of the City
.50 of Manila or that the sale to Elks or that the Torrens-title of the latter is
valid.
Having disposed of the petitioners' principal arguments relative to the
main issue, we now pass to the items of circumstantial evidence which Exhibit "K" is the "Plan of land covered by T.C.T . No ----, as prepared
TDC claims may serve as aids in construing the legislative intent in the for Tarlac Development Company." It was made on November 11,
enactment of Act No. 1360, as amended. It is noteworthy that all these 1963 by Felipe F. Cruz, private land surveyor. This surveyor is
items of alleged circumstantial evidence are acts far removed in time admittedly a surveyor for TDC. 51 This plan cannot be expected to show
from the date of the enactment of Act No.1360 such that they cannot that the subject property is a part of the Luneta Park, for he plan was
be considered contemporaneous with its enactment. Moreover, it is not made to show the lot that "was to be sold to petitioner." This plan must
farfetched that this mass of circumstantial evidence might have been have also assumed the existence of a valid title to the land in favor of
influenced by the antecedent series of invalid acts, to wit: the City's Elks.
having obtained over the reclaimed area OCT No. 1909 on January
20,1911; the sale made by the City of the subject property to Manila Exhibits "T" and "U" are copies of Presidential Proclamations No. 234
Lodge No. 761; and the issuance to the latter of T.C.T. No. 2195. It issued on November 15, 1955 and No. 273 issued on October 4, 1967,
cannot gainsaid that if the subsequent acts constituting the respectively. The purpose of the said Proclamations was to reserve
circumstantial evidence have been base on, or at least influenced, by certain parcels of land situated in the District of Ermita, City of Manila,
those antecedent invalid acts and Torrens titles S they can hardly be for park site purposes. Assuming that the subject property is not within
indicative of the intent of the lawmaking body in enacting Act No. 1360 the boundaries of the reservation, this cannot be interpreted to mean
and its amendatory act. that the subject property was not originally intended to be for public use
or that it has ceased to be such. Conversely, had the subject property
TDC claims that Exhs. "J," "J-l" "K," "T," "U," "W" and "Y" show that the been included in the reservation, it would mean, if it really were private
subject property is not a park. property, that the rights of the owners thereof would be extinguished,
for the reservations was "subject to private rights, if any there be." That
Exhibits "J" and "J-1," the "Luneta and vicinity showing proposed the subject property was not included in the reservation only indicates
development" dated May 14, 1949, were prepared by the National that the President knew of the existence of the Torrens titles mentioned
Urban Planning Commission of the Office of the President. It cannot be above. The failure of the Proclamations to include the subject property
reasonably expected that this plan for development of the Luneta in the reservation for park site could not change the character of the
should show that the subject property occupied by the ElksClub is a subject property as originally for public use and to form part of the
public park, for it was made 38 years after the sale to the Elks, and Luneta Park. What has been said here applies to Exhibits "V", "V-1" to
after T.C.T. No. 2195 had been issued to Elks. It is to be assumed that "V-3," and "W" which also refer to the area and location of the
the Office of the President was cognizant of the Torrens title of BPOE. reservation for the Luneta Park.
That the subject property was not included as a part of the Luneta only
indicated that the National Urban Planning Commission that made the

10
Exhibit "Y" is a copy of O.C.T. No. 7333 dated November 13, 1935, the obligations of contracts, for there was it, contemplation of law, no
covering the lot where now stands the American Embassy [Chancery]. contract at all.
It states that the property is "bounded ... on the Northwest by
properties of Army and Navy Club (Block No.321) and Elks Club (Block The inexistence of said sale can be set up against anyone who asserts
No. 321)." Inasmuch as the said bounderies delineated by the a right arising from it, not only against the first vendee, the Manila
Philippine Legislature in Act No. 4269, the petitioners contend that the Lodge No. 761, BPOE, but also against all its suceessors, including the
Legislature recognized and conceded the existence of the Elks Club TDC which are not protected the doctrine of bona fide ii purchaser
property as a primate property (the property in question) and not as a without notice, being claimed by the TDC does not apply where there is
public park or plaza. This argument is non sequitur plain and simple a total absence of title in the vendor, and the good faith of the
Said Original Certificate of Title cannot be considered as an purchaser TDC cannot create title where none exists. 55
incontrovertible declaration that the Elks Club was in truth and in fact
the owner of such boundary lot. Such mention as boundary owner is The so-called sale of the subject property having been executed, the
not a means of acquiring title nor can it validate a title that is null and restoration or restitution of what has been given is order 56
void.
SECOND ISSUE
TDC finally claims that the City of Manila is estopped from questioning
the validity of the sale it executed on July 13,'1911 conconveying the
The second ground alleged in support of the instant petitions for review
subject property to the Manila Lodge No. 761, BPOE. This contention
on certiorari is that the Court of Appeals has departed from the
cannot be seriously defended in the light of the doctrine repeatedly
accepted and usual course of judicial proceedings as to call for an
enunciated by this Court that the Government is never estopped by
exercise of the power of supervision. TDC in L-41012, argues that the
mistakes or errors on the pan of its agents, and estoppel does not
respondent Court did not make its own findings but simply recited
apply to a municipal corporation to validate a contract that is prohibited
those of the lower court and made a general affirmance, contrary to the
by law or its against Republic policy, and the sale of July 13, 1911
requirements of the Constitution; that the respondent Court made
executed by the City of Manila to Manila Lodge was certainly a contract
glaring and patent mistakes in recounting even the copied findings,
prohibited by law. Moreover, estoppel cannot be urged even if the City
palpably showing lack of deliberate consideration of the matters
of Manila accepted the benefits of such contract of sale and the Manila
involved, as, for example, when said court said that Act No. 1657
Lodge No. 761 had performed its part of the agreement, for to apply
authorized the City of Manila to set aside a portion of the reclaimed
the doctrine of estoppel against the City of Manila in this case would be
land "formed by the Luneta Extension of- to lease or sell the same for
tantamount to enabling it to do indirectly what it could not do directly. 52
park purposes;" and that respondent Court. further more, did not
resolve or dispose of any of the assigned errors contrary to the
The sale of the subject property executed by the City of Manila to the mandate of the Judiciary Act..57
Manila Lodge No. 761, BPOE, was void and inexistent for lack of
subject matter. 53 It suffered from an incurable defect that could not be
The Manila Lodge No. 761, in L-41001, likewise alleges, as one of the
ratified either by lapse of time or by express ratification. The Manila
reasons warranting review, that the Court of Appeals departed from the
Lodge No. 761 therefore acquired no right by virtue of the said sale.
accepted and usual course of Judicial proceedings by simply making a
Hence to consider now the contract inexistent as it always has seen,
general affirmance of the court a quo findings without bothering to
cannot be, as claimed by the Manila Lodge No. 761, an impairment of

11
resolve several vital points mentioned by the BPOE in its assigned
errors. 58

COMMENTS ON SECOND ISSUE

We have shown in our discussion of the first issue that the decision of
the trial court is fully in accordance with law. To follows that when such
decision was affirmed by the Court of Appeals, the affirmance was
likewise in accordance with law. Hence, no useful purpose will be
served in further discussing the second issue.

CONCLUSION

ACCORDINGLY, the petitions in both G.R. Nos. L-41001 and L-41012

are denied for lack of merit, and the decision of the Court of Appeals of
June 30, 1975, is hereby affirmed, at petitioner's cost.

Makasiar, Munoz Palma and Martin, JJ., concur. 1äw phï1.ñët

Teehankee, concurs in the result which is wholly consistent with the

basic rulings and jugdment of this Court in its decision of July 31, 1968.

Footnotes ñé+.£ªwph! 1

12