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165 Phil 161-190 

Laws

Res
Par
Lan
Priv
FIRST DIVISION
Dom
Proclamation Gov
[G.R. No. L-41001. September 30, 1976.] No. 273 Situ
the
MANILA LODGE NO. 761, Erm
BENEVOLENT AND PROTECTIVE Man
ORDER OF THE ELKS, INC., Par
Pur
petitioner, vs. THE HONORABLE
COURT OF APPEALS, CITY OF Esta
MANILA, and TARLAC of B
DEVELOPMENT CORPORATION, Republic Act Stat
respondents. No. 4269 Mal
Sou
Ley
[G.R. No. L-41012. September 30, 1976.]
Cre

TARLAC DEVELOPMENT Cer

CORPORATION, petitioner, vs.

HONORABLE COURT OF APPEALS,
CITY OF MANILA, LODGE NO. 761,
BENEVOLENT AND PROTECTIVE
ORDER OF ELKS, INC., respondents.

Quasha, Asperilla, Zafra, Tayag & Ancheta,

for Manila Lodge No. 761, Benevolent and Protective
Order of the ELKS, Inc.
 Jose P. Bengzon, Villegas, Zarraga, Narciso
& Cudala and Emmanuel G. Cochico, for Tarlac
Development Corporation.

S.M. Artiaga Jr. and Restituto R. Villanueva,

Office of the City Legal Officer for City of Manila.

DECISION

CASTRO, J : p

STATEMENT OF THE CASE AND STATEMENT

OF THE FACTS

These two cases are petitions on certiorari to

review the decision dated June 30, 1975 of the Court
of Appeals in CA-G.R. No. 51590-R entitled "Tarlac
Development Corporation vs. City of Manila, and
Manila Lodge No. 761, Benevolent and Protective
Order of Elks, Inc.," affirming the trial court's finding
in Civil Case No. 83009 that the property subject of
the decision a quo is a "public park or plaza." LibLex

On June 26, 1905 the Philippine Commission

enacted Act No. 1.360 which authorized the City of
Manila to reclaim a portion of Manila Bay. The
reclaimed area was to form part of the Luneta
extension. The Act provided that the reclaimed area
"shall be the property of the City of Manila" and that
"the City of Manila is hereby authorized to set aside
a tract of the reclaimed land formed by the Luneta
extension . . . at the north end not to exceed five
hundred feet by six hundred feet in size, 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 not to exceed ninety-ninety
years."

Subsequently, the Philippine Commission

passed on May 18, 1907 Act No. 1657, amending Act
No. 1360, so as to authorize the City of Manila either
to lease or to sell the portion set aside as a hotel site.

The total area reclaimed was a little over 25

hectares. The City of Manila applied for the
registration of the reclaimed area, and on January
20, 1911, O.C.T. No. 1909 was issued in the name of
the City of Manila. The title described the registered
land as "un terreno conocido con el nombre de
Luneta Extension, situado en el distrito de la Ermita .
. .." The registration was "subject, however, to such
of the incumbrances mentioned in Article 39 or said
law (Land Registration Act) as may be subsisting"
and "sujeto a las disposiciones y condiciones
impuestas en la Ley No. 1360; y sujeto tambien 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 and Protective
Order of Elks, fechados respectivamente, en 29 de
Diciembre de 1908 y 16 de Enero de 1909." [1]

On July 13, 1911 the City of Manila, affirming

a prior sale dated January 16, 1909, conveyed
5,543.07 square meters of the reclaimed area to the
Manila Lodge No. 761, Benevolent and Protective
Order of Elks of the U.S.A. (BPOE, for short) on the
basis of which TCT No. 2195 [2] was issued to the
latter over the "parcela de terreno que es parte de la
Luneta Extension, Situada en el Distrito de la Ermita
. . .." At the back of this title was annotated document
4608/T-1635, which in part reads as follows: "que la
citada Ciudad de Manila tendra derecho a su opcion,
de recomprar la expresada propiedad para fines
publicos solamente, en cualquier tiempo despues de
cincuenta anos desde el 13 de Julio de 1911, previo
pago a la entidad compradora, o a sus sucesores del
precio de la venta de la misma propiedad, mas el
valor que entonces tengan las mejoras."

For the remainder of the Luneta Extension,

that is, after segregating therefrom the portion sold to
the Manila Lodge No. 761, BPOE, a new Certificate
of Title No. 2196 [3] was issued on July 17, 1911 to
the City of Manila.

Manila Lodge No. 761, BPOE, subsequently

sold the said 5,543.07 square meters to the Elks
Club, Inc., to which was issued TCT No. 67488. [4]
The registered owner, "The Elks Club, Inc.," was
later changed by court order to "Manila Lodge No.
761, Benevolent and Protective Order of Elks, Inc."
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 to
repurchase the property. This petition was granted
on February 15, 1963.

On November 19, 1963 the BPOE sold for the

sum of P4,700,000 the land together with all the
improvements thereon to the Tarlac Development
Corporation (TDC, for short) which paid P1,700,000
as down payment and mortgaged to the vendor the
same realty to secure the payment of the balance to
be paid in quarterly installments. [5] At the 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 as 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 Ermita . . .."
In June 1964 the City of Manila filed with the
Court of First Instance of Manila a petition for the
reannotation of its right to repurchase; the court, after
hearing, issued an order, dated November 19, 1964,
directing the Register of Deeds of the City of Manila
to reannotate in toto the entry regarding the right of
the City of Manila to repurchase the property after
fifty years. From this order TDC and BPOE appealed
to this Court which on July 31, 1968 affirmed in G.R.
Nos. L-24557 and L-24469 the trial court's order of
reannotation, but reserved to TDC the right to bring
another action for the clarification of its rights. LLphil

As a consequence of such reservation, TDC

filed on April 28, 1971 against the City of Manila and
the Manila Lodge No. 761, BPOE, a complaint,
docketed as Civil Case No. 83009 of the Court of
First Instance of Manila, containing three causes of
action and praying —

"a) On the first cause of

action, that the plaintiff TDC be
declared to have purchased the parcel
 of land now in question with the
buildings and improvements thereon
from the defendant BPOE for value
and in good faith, and accordingly
ordering the cancellation of Entry No.
4608/T-1635 on Transfer Certificate of
Title No. 73444 in the name of the
Plaintiff.

"b) On the second cause

of action, ordering the defendant of
Manila to pay the plaintiff TDC
damages in the sum of not less than
one hundred thousand pesos
(P100,000.00);

"c) on the third cause of

action, reserving to the plaintiff TDC
the right to recover from the defendant
BPOE the amounts mentioned in par.
XVI of the complaint in accordance
with Art. 1555 of the Civil Code, in the
remote event that the final judgment in
this case should be that the parcel of
land now in question is a public park;
and

"d) For costs, and for such

other and further relief as the Court
may deem just and equitable." [6]

Therein defendant City of Manila, in its

answer dated May 19, 1971, admitted all the facts
alleged in the first cause of action except the
allegation that TDC purchased said property "for
value and in good faith," but denied for lack of
knowledge or information the allegations in the
second and third causes of action. As special and
affirmative defense, the City of Manila claimed that
TDC was not a purchaser in good faith for it had
actual notice of the City's right to repurchase which
was annotated at the back of the title prior to its
cancellation, and that, 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]
The Manila Lodge No. 761, BPOE, in its
answer dated June 7, 1971, admitted having sold the
land together with the improvements thereon for
value to therein plaintiff which was in good faith, but
denied for lack of knowledge as to their veracity the
allegations under the second cause of action. It
furthermore admitted that TDC had paid the quarterly
installments until October 15, 1964 but claimed that
the latter failed without justifiable cause to pay the
subsequent installments. It also asserted that it was
a seller for value in good faith without having
misrepresented or concealed facts relative to the title
on the property. As counterclaim, Manila Lodge No.
761 (BPOE) sought to recover the balance of the
purchase price plus interest and costs. [8]

On June 15, 1971 TDC answered the

aforesaid counterclaim, alleging that its refusal to
make further payments was fully justified. [9]

After due trial the court a quo rendered on

July 14, 1972 its decision finding the subject land to
be part of the "public park or plaza" and, therefore,
part of the public domain. The court consequently
declared that the sale of the subject land by the City
of Manila to Manila Lodge No. 761, BPOE, was null
and void; that plaintiff TDC was a purchaser thereof
in good 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 Manila whatever
consideration it had paid the latter. The dispositive
part of the decision reads:

"WHEREFORE, the Court

hereby declares that the parcel of land
formerly covered by Transfer
Certificate of Title Nos. 2195 and
67488 in the name of BPOE and now
by Transfer Certificate of Title No.
73444 in the name of Tarlac
Development Corporation is a public
park or plaza, and, consequently,
 instant complaint is dismissed, without
pronouncement as to costs.

"In view of the reservation

made by plaintiff Tarlac Development
Corporation to recover from defendant
BPOE the amounts mentioned in
paragraph XVI of the complaint in
accordance with Article 1555 of the
Civil Code, the Court makes no
pronouncement on this point." [10]

From said decision the therein plaintiff TDC

as well as the defendant Manila Lodge No. 761,
BPOE, appealed to the Court of Appeals.

In its appeal docketed as CA-G.R. No. 51590-

R, the Manila Lodge No. 761, BPOE, avers that the
trial court committed the following errors, namely:

1. In holding that the

property subject of the action is not
patrimonial property of the City of
Manila; and
2. In holding that the
Tarlac Development Corporation may
recover and enforce its right against
the defendant BPOE. [11]

The Tarlac Development Corporation, on the

other hand, asserts that the trial court erred:

(1) In finding that the

property in question is or was a public
park and in consequently nullifying the
sale thereof by the City of Manila to
BPOE;

(2) In applying the cases

of Municipality of Cavite vs. Rojas, 30
Phil. 602, and Government vs.
Cabangis, 53 Phil. 112, to the case at
bar; and

(3) In not holding that the

plaintiff-appellant is entitled to recover
damages from the defendant City of
Manila. [12]
 Furthermore, TDC, as appellee regarding the
second assignment of error raised by BPOE,
maintained that it can recover and enforce its right
against BPOE in the event that the land in question
is declared a public park or part thereof. [13]

In its decision promulgated on June 30, 1975,

the Court of Appeals concurred in the findings and
conclusions of the lower court upon the ground that
they are supported by the evidence and are in
accordance with law, and accordingly affirmed the
lower court's judgment.

Hence, the present petitions for review on

certiorari.

G.R. No. L-41001

The Manila Lodge No. 761, BPOE, contends,

in its petition for review on certiorari docketed as
G.R. No. L-41001, that the Court of Appeals erred in
(1) disregarding the very enabling acts and/or
statutes according to which the subject property was,
and still is, patrimonial property of the City of Manila
and could therefore be sold and/or disposed of like
any other private property; and (2) in departing from
the accepted and usual course of judicial
proceedings when it simply made a general
affirmance of the court a quo's findings and
conclusions without bothering to discuss or resolve
several vital points stressed by the BPOE in its
assigned errors. [14]

G.R. No. L-41012

The Tarlac Development Corporation, in its

petition for review on certiorari docketed as G.R. No.
L-41012, relies on the following grounds for the
allowance of its petition:

1. that the Court of

Appeals did not correctly interpret Act
No. 1360, as amended by Act No.
1657, of the Philippine Commission;
and
2. that the Court of
Appeals has departed from the
 accepted and usual course of judicial
proceedings in that it did not make its
own findings but simply recited those
of the lower court. [15]

ISSUES AND ARGUMENTS

FIRST ISSUE

Upon the first issue, both petitioners claim

that the property subject of 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 park or plaza.

Arguments of Petitioners

In G.R. No. L-41001, the Manila Lodge No.

761, BPOE, admits that "there appears to be some
logic in the conclusion" of the Court of Appeals that
"neither Act No. 1360 nor Act No. 1657 could have
meant to supply the City of Manila the authority to
sell the subject property which is located at the south
end — not the north — of the reclaimed area." [16] It
argues, however, that when Act No. 1360, as
amended, authorized the City of Manila to undertake
the construction of the Luneta extension by
reclaiming land from the Manila Bay, and declared
that the reclaimed land shall be the "property of the
City of Manila," the State expressly granted the
ownership thereof to the City of Manila which.
consequently, could enter into transactions involving
it; that upon the issuance of O.C.T. No. 1909, there
could be no doubt that the reclaimed area owned by
the City was its patrimonial property; [17] that the
south end of the reclaimed area could not be for
public use for. as argued by TDC, a street, park or
promenade can be property for public 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 street, park or
promenade nor laid out as a street, park or
promenade; [18] that even assuming that the subject
property was at the beginning property of public
dominion, it was subsequently converted into
patrimonial property pursuant to Art. 422 of the Civil
Code, inasmuch as it had never been used,
regarded, or utilized since it was reclaimed in 1905
for purposes other than that of an ordinary real
estate for sale or lease; that the subject property had
never been intended for public 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 Commission nor considered a part of the
Luneta National Park (now Rizal Park) by
Proclamation No. 234 dated December 19, 1955 of
President Ramon Magsaysay or by Proclamation
Order No. 274 dated October 4, 1967 of President
Ferdinand E. Marcos; [19] that, such being the case,
there is no reason why the subject property should
not be considered as having been converted into
patrimonial property, pursuant to the ruling in
Municipality vs. Roa, 7 Phil. 20, inasmuch as the City
of Manila has considered it as its patrimonial
property not only bringing it under the operation of
the Land Registration Act but also by disposing of it;
[20]
and that to consider now the subject property as
a public plaza or park would not only impair the
obligations of the parties to the contract of sale dated
July 13, 1911, but also authorize deprivation of
property without due process of law. [21]

G.R. No. L-41012

In L-41012, the petitioner TDC stresses that

the principal issue is the interpretation of Act No.
1360, as amended by Act No. 1657 of the Philippine
Commission, [22] and avers that inasmuch as
Section 6 of Act No. 1360, as amended by Act 1657,
provided that the reclamation of the Luneta extension
was to be paid for out of the funds of the City of
Manila which was authorized to borrow P350,000 "to
be expended in the construction of Luneta
Extension," the reclaimed area became "public land"
belonging to the City of Manila that spent for the
reclamation, conformably to the holding in Cabangis,
[23]
and consequently, said land was subject to sale
and other disposition; that the Insular Government
itself considered the reclaimed Luneta extension as
patrimonial property subject to disposition as
evidenced by the fact that Sec. 3 of Act 1360
declared that "the land hereby reclaimed shall be the
property of the City of Manila;" that this property
cannot be property for public use for, according to
Article 344 of the Civil Code, the character of
property for public use can only attach to roads and
squares that have already been constructed or at
least laid out as such, which conditions did not obtain
regarding the subject land; that Sec. 5 of Act 1360
authorized the City of Manila to lease the northern
part of the reclaimed area for hotel purposes; that Act
No. 1657 furthermore authorized the City of Manila to
sell the same; [24] that the express statutory authority
to lease or sell the northern part of the reclaimed
area cannot be interpreted to mean that the
remaining area could not be sold inasmuch as the
purpose of the statute was not merely to confer
authority to sell the northern portion but rather to limit
the city's power of disposition thereof, to wit: to
prevent disposition of the northern portion for any
purpose other than for a hotel site; [25] that the
northern and southern ends of the reclaimed area
cannot be considered as extension of the Luneta for
they lie beyond the-sides of the original Luneta when
extended in the direction of the sea, and that is the
reason why the law authorized the sale of the
northern portion for hotel purposes, and, for the
same reason, it is implied that the southern portion
could likewise be disposed of. [26]

TDC argues likewise that there are several

items of uncontradicted circumstantial evidence
which may serve as aids in construing the legislative
intent and which demonstrate that the subject
property is patrimonial in nature, to wit: (1) Exhibits
"J" and "J-1", or Plan No. 30 of the National Planning
Commission showing the Luneta and its vicinity, do
not include the subject property as part of the Luneta
Park; (2) Exhibit "K", which is the plan of the subject
property covered by TCT No. 67488 of BPOE,
prepared on November 11, 1963, indicates that said
property is not a public park; (3) Exhibit "T", which is
a certified copy of Proclamation No. 234 issued on
December 15, 1955 by President Magsaysay, and
Exhibit "U" which is Proclamation Order No. 273
issued on October 4, 1967 by President Marcos, do
not include the subject property in the Luneta Park;
(4) Exhibit "W", which is the location plan of the
Luneta National Park under Proclamations Nos. 234
and 273, further confirms that the subject property is
not a public park; and (5) Exhibit "y", which is a copy
of O.C.T. No. 7333 in the name of the United States
of America covering the land now occupied by the
American Embassy, the boundaries of which were
delineated by the Philippine Legislature, states that
the said land is bounded on the northwest by
properties of the Army and Navy Club (Block No.
321) and the Elks Club (Block No. 321), and this
circumstance shows that even the Philippine
Legislature recognized the subject property as
private property of the Elks Club. [27]

TDC furthermore contends that the City of

Manila is estopped from questioning the validity of
the sale of the subject property that it 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 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 plaza or park as testified to by both Pedro
Cojuangco, treasurer of TDC, and the surveyor,
Manuel Añonuevo; (4) the property was never used
as a public park, for, since 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 early as January 16, 1909 the City of Manila
had already executed a deed of sale over the
property in favor of the Manila Lodge No. 761; and
(5) the City of Manila has not presented any
evidence to show that the subject property has ever
been proclaimed or used as a public park. [28]
 TDC, moreover, contends that Sec. 60 of
Com. Act No. 141 cannot apply to the subject land,
for Com. Act No. 141 took effect on December 1,
1936 and at that time the subject land was no longer
part of the public domain. [29]

TDC also stresses that its rights as a

purchaser in good faith cannot be disregarded, for
the mere mention in the certificate of title that the lot
it purchased was "part of the Luneta extension" was
not a sufficient warning that the title of the City of
Manila was invalid; and that although the trial court,
in its decision affirmed by the Court of Appeals,
found the TDC to have been an innocent purchaser
for value, the court disregarded the petitioner's rights
as such purchaser that relied on a Torrens certificate
of title. [30]

The Court, continues the petitioner TDC,

erred in not holding that the latter is entitled to
recover from the City of Manila damages in the
amount of P100,000 caused by the City's petition for
reannotation of its right to repurchase.

DISCUSSION AND RESOLUTION OF FIRST ISSUE

It is a cardinal rule of statutory construction

that courts must give effect to the general legislative
intent that can be discovered from or is unraveled by
the four corners of the statute, [31] and in order to
discover said intent, the whole statute, and not only a
particular provision thereof, should be considered.
[32]
It is, therefore, necessary to analyze all the
provisions of Act No. 1360, as amended, in order to
unravel the legislative intent.

Act No. 1360 which was enacted by the

Philippine Commission on June 26, 1905, as
amended by Act No. 1657 enacted on May 18, 1907,
authorized the "construction of such rock and timber
bulkheads or sea walls as may be necessary for the
making of an extension to the Luneta" (Sec. 1[a]),
and the placing of the material dredged from the
harbor of Manila "inside the bulkheads constructed to
inclose the Luneta extension above referred to" (Sec.
1[c]). It likewise provided that the plan of Architect D.
H. Burnham as "a general outline for the extension
and improvement of the Luneta in the City of Manila"
be adopted; that "the reclamation from the Bay of
Manila of the land included in said projected Luneta
extension . . . is hereby authorized and the land
thereby reclaimed shall be the property of the City of
Manila" (Sec. 3); that "the City of Manila is hereby
authorized to set aside a tract of the reclaimed land
formed by the Luneta extension authorized by this
Act at the north end of said tract, not to exceed five
hundred feet by six hundred feet in size, for a hotel
site, and to lease the same with the approval of the
Governor General, . . . for a term not exceeding
ninety-nine years;" that "should the Municipal Board .
. . deem it advisable it is hereby authorized to
advertise for sale to sell said tract 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 whatever;" "that should the grantee
. . . fail to maintain on said tract a first-class hotel . . .
then the title to said tract of land sold, conveyed, and
transferred to the grantee shall revert to the City of
Manila, and said City of Manila shall thereupon
become entitled to the immediate possession of said
tract of land" (Sec. 3); that the construction of the
rock and timber bulkheads or sea wall "shall be paid
for out of the funds of the City of Manila, but the area
to be reclaimed by said proposed Luneta extension
shall be filled, without cost to the City of Manila, with
material dredged from Manila Bay at the expense of
the Insular Government" (Sec. 6); and that "the City
of Manila is hereby authorized to borrow from the
Insular Government . . . the sum of three hundred
thousand pesos, to be expended in the construction
of the Luneta extension provided for by paragraph
(a) of section one hereof" (Sec. 7).

The grant made by Act No. 1360 of the

reclaimed land to the City of Manila is a grant of a
"public" nature, the same having been made to a
local political subdivision. Such grants have always
been strictly construed against the grantee. [33] One
compelling reason given for the strict interpretation of
a public grant is that there is in such grant a
gratuitous donation of, public money or resources
which results in an unfair advantage to the grantee
and for that reason, the grant should be narrowly
restricted in favor of the public. [34] This reason for
strict interpretation obtains relative to the aforesaid
grant for although the City of Manila was to pay for
the construction of such work and timber bulkheads
or sea walls as may be necessary for the making of
the Luneta extension, the area to be reclaimed would
be filled at the expense of the Insular Government
and without cost to the City of Manila, with material
dredged from Manila Bay. Hence, the letter of the
statute should be narrowed to exclude matters which
if included would defeat the policy of the legislation. cdll

The reclaimed area, an extension to the

Luneta, is declared to be property of the City of
Manila. Property, however, is either of public
ownership or of private ownership. [35] What kind of
property of the City is the reclaimed land? Is it of
public ownership (dominion) or of private ownership?

We hold that it is of public dominion, intended

for public use.

Firstly, if the reclaimed area was granted to

the City of Manila as its patrimonial property, the City
could, by virtue of its ownership, dispose of the
whole reclaimed area without need of authorization
to do so from the lawmaking body. Thus Article 348
of the Civil Code of Spain provides that "ownership is
the right to enjoy and dispose of a thing without
further limitations than those established by law." [36]
The right to dispose ( jus disponendi) of one's
property is an attribute of ownership. Act No. 1360,
as amended, however, provides by necessary
implication, that the City of Manila could not dispose
of the reclaimed area without being authorized by the
lawmaking body. Thus the statute provides that "the
City of Manila is hereby authorized to set aside a
tract . . . at the north end, for a hotel site, and to
lease the same . . . should the municipal board . . .
deem it advisable, it is hereby authorized . . . to sell
said tract of land . . ." (Sec. 5). If the reclaimed area
were patrimonial property of the City, the latter could
dispose of it without need of the authorization
provided by the statute, and the authorization to set
aside . . . lease . . . or sell . . . given by the statute
would indeed be superfluous. To so construe the
statute as to render the term "authorize," which is
repeatedly used by the statute, superfluous would
violate the elementary rule of legal hermeneutics that
effect must be given to every word, clause, and
sentence of the statute and that a statute should be
so interpreted that no part thereof becomes
inoperative or superflous. [37] To authorize means to
empower, to give a right to act. [38] Act No. 1360
furthermore qualifies the verb "authorize" with the
adverb "hereby," which means "by means of this
statue or section." Hence without the authorization
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 reclaimed
area. Consequently, the reclaimed area was granted
to the City of Manila, not as its patrimonial property.
At most, only the 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 the title thereto would revert to the City should
the grantee fail to comply with the terms provided by
the statute. LLpr

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 disposition.
To sustain such contention is to beg the question. If
the purpose of the law was to limit the City's power of
disposition, then it is necessarily assumed that the
City had already the power to dispose, for if such
power did not exist, how could it be limited? It was
precisely Act 1360 that gave the City the power to
dispose — for it was "hereby authorized" — by lease
or sale. Hence, the City of Manila had no power to
dispose of the reclaimed land had such power not
been granted by Act No. 1360, and the purpose of
the authorization was to empower the city to sell or
lease the northern part and not, as TDC claims, to
limit only the power to dispose. Moreover, it is
presumed that when the lawmaking body enacted
the statute, it had full knowledge of prior and existing
laws and legislation on the subject of the statute and
acted in accordance or with respect thereto. [39] If by
another previous law, the City of Manila could
already dispose of the reclaimed area, which it could
do if such area were given to it as its patrimonial
property, would it then not be a superfluity for Act No.
1360 to authorize the City to dispose of the
reclaimed land? Neither has petitioner TDC pointed
to any other law that authorized the City to do so, nor
have we come across any. What we do know is that
if the reclaimed land were patrimonial property, there
would be no need of giving special authorization to
the City to dispose of it. Said authorization was given
because the reclaimed land was not intended to be
patrimonial property of the City of Manila, and
without the express authorization to dispose of the
northern portion, the City could not dispose of even
that part. LibLex

Secondly, the reclaimed area is an "extension

to the Luneta in the City of Manila." [40] If the
reclaimed area is an extension of the Luneta, then it
is of the same nature or character as the old Luneta.
Anent this matter, it has been said that a power to
extend (or continue an act or business) 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 Section 859 of the
Revised Ordinances of the City of Manila. [42] Hence
the "extension to the Luneta" must be also a public
park or plaza and for public use.

TDC, however, contends that the subject

property cannot be considered an extension of the
old Luneta because it is outside of the limits of the
old Luneta when extended to the sea. This is a
strained interpretation of the term "extension," for an
"extension," it has been held, "signifies enlargement
in any direction — in length, breadth, or
circumstance." [43]
 Thirdly, the reclaimed area was formerly a
part of the Manila Bay. A by is nothing more than an
inlet of the sea. Pursuant to Article 1 of the Law of
Waters of 1866, bays, roadsteads, coast sea, inlets
and shores are parts of the national domain open to
public use. These are also property of public
ownership devoted to public use, according to Article
339 of the Civil Code of Spain.

When the shore or part of the bay is

reclaimed, it does not lose its character of being
property for public use, according to Government of
the Philippine Islands vs. Cabangis. [44] The
predecessor of the claimants in this case was the
owner of a big tract of land including the lots is
question. From 1896 said land began to wear away
due to the action of the water of Manila Bay. In 1901
the lots in question became completely submerged in
water in ordinary tides. It remained in such a state
until 1912 when the Government undertook the
dredging of the Vitas estuary and dumped the sand
and silt from estuary on the low lands completely
submerged in water, thereby gradually forming the
lots in question. Tomas Cabangis took possession
thereof as soon as they were reclaimed; hence, the
claimants, his successors in interest, claimed that the
lots belonged to them. The trial court found for the
claimants and the Government appealed. This Court
held that when the lots became a part of the shore.
As they remained in that condition until reclaimed by
the filling done by the Government, they belonged to
the public domain for public use. [45] Hence, a part of
the shore, and for that purpose, a part of the bay, did
not lose its character of being for public use after it
was reclaimed.
Fourthly, Act 1360, as amended, authorized
the lease or sale of the northern portion of the
reclaimed area as a hotel site. The subject property
is not that northern portion authorized to be leased or
sold; the subject property is the southern portion.
Hence, applying the rule of expresio unius est
exlusio alterius, the City of Manila was not authorized
to sell the subject property. The application of this
principle of statutory construction becomes the more
imperative in the case at bar inasmuch as not only
must the public grant of the reclaimed area to the
City of Manila be, as above stated, strictly construed
against the City of Manila, but also because a grant
of power to a municipal corporation, as happens in
this case where the city is authorized to lease or sell
the northern portion of the Luneta extension, is
strictly limited to such as are expressly or impliedly
authorized or necessarily incidental to the objectives
of the corporation.

Fifthly, Article 344 of the Civil Code of Spain

provides that "property of public use, in provinces
and in towns, comprises the provincial and town
roads, the squares, streets, fountains, and public
waters, the promenades, and public works of general
service paid for by such towns or provinces." A park
or plaza, such as the extension to the Luneta, is
undoubtedly comprised in said article.

The petitioners, however, argue that,

according to said Article 344, in order that the
character of property for public use may be so
attached to a plaza, the latter must be actually
constructed or at least laid out as such, and since the
subject property was not yet constructed as a plaza
or at least laid out as a plaza when it was sold by the
City, it could not be property for public use. It should
be noted, however, that properties of provinces and
towns for public use are governed by the same
principles as properties of the same character
belonging to the public domain. [46] In order to be
property of public domain an intention to devote it to
[47]
public use is sufficient. The petitioners'
contention is refuted by Manresa himself who said, in
his comments [48] on Article 344, that:

"Las plazas, calles y paseos

publicos corresponden, sin duda
alguna, aldominio publico municipal,
porque se hallan establecidos sobre
suelo municipal y estan destinadas al
uso de todos. Laurent presenta,
tratando de las Plazas, una cuestion
 relativa a si deben conceptuarse como
de dominio publico los lugares vacios,
libres, que se encuentran en los
Municipios rurales. . . . Laurent opina
contra Proudhon, que toda vez que
estan al servicio de todos esos
lugares, deben considerarse publicos
y de dominio publico. Realmente, para
decidir el punto, bastara siempre
fijarse en el destino real y efectivo de
los citados lugares, y si este destino
entraña un uso comun de todos, no
hay duda que son de dominio
municipal si no patrimoniales."

It is not necessary, therefore, that a plaza be

already construed or laid out as a plaza in order that
it be considered property for public use. It is sufficient
that it be intended to be such. In the case at bar, it
has been shown that the intention of the lawmaking
body in giving to the 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.

We have demonstrated ad satietatem that the

Luneta extension was intended to be property of the
City of Manila for public use. But, could not said
property later on be converted, as the petitioners
contend, to patrimonial property? It could be. But this
Court has already said, in Ignacio vs. The Director of
Lands, [49] that it is only the executive and possibly
the legislative department that has the authority and
the power to make the declaration that said property
is no longer required for public use, and until such
declaration is made the property must continue to
form part of the public domain. In the case at bar,
there has been no such explicit or unequivocal
declaration. It should be noted, furthermore, anent
this matter, that courts are undoubtedly not primarily
called upon, and are not in a position, to determine
whether any public land is still needed for the
purposes specified in Article 4 of the Law of Waters.
[50]
 Having disposed of the petitioners' principal
arguments relative to the main issue, we now pass to
the items of circumstantial evidence which TDC
claims may serve as aids in construing the legislative
intent in the enactment of Act No. 1360, as amended.
It is noteworthy that all these items of alleged
circumstantial evidence are acts far removed in time
from the date of the enactment of Act No. 1360 such
that they cannot be considered contemporaneous
with its enactment. Moreover, it is not far-fetched that
this mass of circumstantial evidence might have
been influenced by the antecedent series of invalid
acts, to wit: the City's 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 Lodge No. 761; and the issuance to the latter
of T.C.T. No. 2195. It cannot be gainsaid that if the
subsequent acts constituting the circumstantial
evidence have been based on, or at least influenced,
by those antecedent invalid acts and Torrens titles,
they can hardly be indicative of the intent of the
lawmaking body in enacting Act No. 1360 and its
amendatory act. LexLib

TDC claims that Exhs. "J," "J-1," "K," "T," "U,"

"W" and "Y" show that the subject property is not a
park.
Exhibits "J" and "J-1," the "Luneta and vicinity
showing proposed development" dated May 14,
1949, were prepared by the National Urban Planning
Commission of the Office of the President. It cannot
be reasonably expected that this plan for
development of the Luneta should show that the
subject property occupied by the Elks Club is a
public park, for it was made 38 years after the sale to
the Elks, and after T.C.T. No. 2195 had been issued
to Elks. It is to be assumed that the Office of the
President was cognizant of the Torrens title of BPOE.
That the subject property was not included as a part
of the Luneta only indicates that the National Urban
Planning Commission that made the plan knew that
the subject property was occupied by Elks and that
Elks had a Torrens title thereto. But this in no way
proves that the subject property was originally
intended to be patrimonial property of the City of
Manila or that the sale to Elks or that the Torrens title
of the latter is valid.

Exhibit "K" is the "Plan of land covered by

T.C.T. No. ____, as prepared for Tarlac Development
Company." It was made on November 11, 1963 by
Felipe F. Cruz, private land surveyor. This surveyor is
admittedly a surveyor for TDC. [51] This plan cannot
be expected to show that the subject property is a
part of the Luneta Park, for the plan was made to
show the lot that "was to be sold to petitioner " This
plan must have also assumed the existence of a
valid title to the land in favor of Elks.

Exhibits "T" and "U" are copies of Presidential

Proclamations No. 234 issued on November 15,
1955 and No. 273 issued on October 4, 1967,
respectively. The purpose of the said Proclamations
was to reserve certain parcels of land situated in the
District of Ermita, City of Manila, for park site
purposes. Assuming that the subject property is not
within the boundaries of the reservation, this cannot
be interpreted to mean 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 been included in the reservation, it would
not mean, if it really were private property, that the
rights of the owners thereof would be extinguished,
for the reservations was "subject to private rights, if
any there be." That the subject property was not
included in the reservation only indicates that the
President knew of the existence of the Torrens titles
mentioned above. The failure of the Proclamations to
include the subject property in the reservation for
park site could not change the character of the
subject property as originally for public use and to
form part of the Luneta Park. What has been said
here applies to Exhibits "V", "V-1" to "V-3," and "W"
which also refer to the area and location of the
reservation for the Luneta Park. LLjur

Exhibit "Y" is a copy of O.C.T. No. 7333 dated

November 13, 1935, covering the lot where now
stands the American Embassy [Chancery]. It states
that the property is "bounded . . . on the Northwest
by properties of Army and Navy Club (Block No. 321)
and Elks Club (Block No. 321)." Inasmuch as the
said boundaries were delineated by the Philippine
Legislature in Act No. 4269, the petitioners contend
that the Legislature "recognized and conceded the
existence of the Elks Club property as a private
property (the property is question) and not as a
public park or plaza. This argument is non sequitur,
plain and simple. Said Original Certificate of Title
cannot be considered as an inconvertible declaration
that the Elks Club was in truth and in fact the owner
of such boundary lot. Such mention as boundary
owner is not a means of acquiring title nor can it
validate a title that is null and void.

TDC finally claims that the City of Manila is

estopped from questioning the validity of the sale it
executed on July 13, 1911 conveying the subject
property to the Manila Lodge No. 761, BPOE. This
contention cannot be seriously defended in the light
of the doctrine repeatedly enunciated by this Court
that the Government is never estopped by mistakes
or errors on the part. of its agents, and estoppel does
not apply to a municipal corporation to validate a
contract that is prohibited by law or its against public
policy, and the sale of July 13, 1911 executed by the
city of Manila to Manila Lodge was certainly a
contract prohibited by law. Moreover, estoppel
cannot be urged even if the City of Manila accepted
the benefits of such contract of sale and the Manila
Lodge No. 761 had performed its part of the
agreement, for to apply the doctrine of estoppel
against the City of Manila in this case would be
tantamount to enabling it to do indirectly what it could
not do directly. [52]

The sale of the subject property executed by

the City of Manila to the 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 ratified either by lapse of time or by
express ratification. The Manila Lodge No. 761
therefore acquired no right by virtue of the said sale.
Hence to consider now the contract inexistent as it
always has been, cannot be, as claimed by the
Manila Lodge No. 761, an impairment of the
obligations of contracts, for there was in
contemplation of law, no contract at all. Cdpr

The inexistence of said sale can be set up

against anyone who asserts a right arising from it,
not only against the first vendee, the Manila Lodge
No. 761, BPOE, but also against all its successors,
including, the TDC, which are not protected by law.
[54] The doctrine of bona fide purchaser without
notice, being claimed by the TDC, does not apply
where there is a total absence of title in the vendor,
and the good faith of the purchaser TDC cannot
create title where none exists. [55]

The so-called sale of the subject property

having been executed, the restoration or restitution
of what has been given is in order. [56]

SECOND ISSUE

The second ground alleged in support of the

instant petitions for review on certiorari is that the
Court of Appeals has departed from the accepted
and usual course of judicial proceedings as to call for
an exercise of the power of supervision TDC, in L-
41012, argues that the respondent Court did not
make its own findings but simply recited those of the
lower court and made a general affirmance, contrary
to the requirements of the Constitution; that the
respondent Court made glaring and patent mistakes
in recounting even the copied findings, palpably
showing lack of deliberate consideration of the
matters involved, as, for example, when said court
said that Act No. 1657 authorized the City of Manila
to set aside a portion of the reclaimed land "formed
by the Luneta Extension or to lease or sell the same
for park purposes;" and that respondent Court,
furthermore, did not resolve or dispose of any of the
assigned errors contrary to the mandate of the
Judiciary Act. [57]
 The Manila Lodge No. 761, in L-41001,
likewise alleges, as one of the reasons warranting
review, that the Court of Appeals departed from the
accepted and usual course of judicial proceedings by
simply making a general affirmance of the court a
quo's findings without bothering to 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. It 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 petitioners'
cost.

Makasiar, Muñoz Palma and Martin, JJ.,

concur.

Teehankee, J., concurs in the result which is

wholly consistent with the basic rulings and judgment
of this Court in its decision of July 31, 1968.

Footnotes

1. Exh. "H," Exh. "13-Elks."

2. Exh. "I."

3. Exh. "X."

4. Exh. "B".

5. Exh. "C."

6. Joint Record on Appeal of the Plaintiff and the

Defendant Manila Lodge No. 761, Benevolent
 and Protective Order of Elks, Inc., pp. 33-34.

7. Ibid., pp. 49-63.

8. Ibid., pp. 64-71.

9. Ibid., pp. 87-88.

10. Ibid., pp.92-110.

11. Record, L-41001, p. 7.

12. Record, L-41012, p. 11; Brief for Plaintiff-

Appellant in CA-G.R. No. 51590-R, pp. 1-2.

13. Brief for the Plaintiff-Appellant Tarlac

Development Corporation in CA-G.R. No.
51590-R, p. 2.

14. Record, L-41001. pp. 14-16.

15. Record, L-41012, pp. 16, 46.

16. L-41001, Record, p. 17.

17. Ibid., p. 19.

18. Ibid., pp. 19-20.

19. Ibid., p. 21.

20. Ibid., pp. 21-22.

21. Ibid., pp. 22-23.

22. L-41012, Record, pp. 16-17.

23. 53 Phil. 112 (1930).

24. L-41012, Record, pp. 22-23, 25-26.

25. Ibid., pp. 23-25.

26. Ibid., pp. 27-28.

27. Ibid., pp. 28-34.

28. Ibid., pp. 34-41.

29. Ibid., pp. 42-43.

30. Ibid., pp. 44-45.

31. Borromeo vs. Mariano, 41 Phil. 322.

32. Aboitiz Shipping Corporation vs. The City of

Cebu, L-14526, March 31, 1965, 13 SCRA 449,
453.

33. Sutherland, Statutes and Statutory

Construction, 3rd ed., vol. II, p. 240.

34. Ibid., Vol. III, pp. 204-208.

35. Art. 338, Civil Code of Spain; Art. 419 of the

Philippines provides: "Property is either of
public dominion or of private ownership.".

36. Art. 428, Civil Code.

37. Sutherland, op. cit., p. 339.

38. 4 Words and Phrases, p. 830, citing State vs.

Board of Com'rs of Franklin County, 114 p. 247,
248; 24 Kan. 404.

39. Tamiami Trial Tours vs. Lee, 194 So. 305, 306.

40. Sec. 1, Act. No. 1360.

41. See 15-A Words and Phrases, p. 602, citing

Clements' Ex'rs vs. Dickey, 5 Fed. Cas. 1025,
1027.

42. Bureau of Printing, 1908, p. 281.

43. 15-A Words and Phrases, p. 614, citing Mayor,

etc. of Monroe vs. Quachita Parish, 17 So. 498,
499, 47 La. Ann. 1061.

44. 53 Phil. 112.

45. Syllabus, citing Aragon vs. Insular

Government, 19 Phil. 223; Francisco vs.
Government of the Philippine Islands, 28 Phil.
505.

46. Viuda de Tan Toco vs. Municipal Council of

Iloilo, 49 Phil. 52, 55.
 47. Art. 420, Civil Code.

48. 3 Codigo Civil Español, 6a edicion, p. 106.

49. 108 Phil. 335, 339.

50. Monteverde vs. Director of Lands, 93 Phil.

134, cited in Ignacio vs. The Director of Lands,
supra.

51. L-41012, Record, p. 29.

52. Republic vs. Go Bon Lee, L-11499, April 29,

1961, 1 SCRA 1166, 1170; Go Tian An vs.
Republic, L-19833, August 31, 1966, 17 SCRA
1053, 1055; Pechueco Sons Company vs.
Provincial Board of Antique, L-27038, January
30, 1970, 31 SCRA 320, 327, citing San Diego
vs. Municipality of Naujan, L-9920, 29 February
1960, cited in Favis vs. Municipality of
Sabangan, L-26522, 27 February 1969, 27
SCRA 92; see also City of Manila vs. Tarlac
Development Corporation, L-24557, L-24469
and L-24481, 31 July 1968, 24 SCRA 466.

53. Arts. 1409 and 1458, Civil Code.

54. 4 Tolentino, Civil Code, p. 575, citing 1 Von

Tuhr, Obligaciones, p. 164.

55. 92 CJS p. 219, citing Chestnut vs. Weekes,

188 S.E. 714, 183 Ga. 367; Bradbury vs.
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Kahn, 240 P. 2d 757, 206 Okl. 13, 35 A.L.R. 2d
reserved.
119.

56. 4 Tolentino, Civil Code, p. 576, citing Perez

Gonzales and Alguer; I-II Enneccerus, Kipp and
Wolff, 364-366; 3 Von Tuhr 311; 3 Fabres 231.
See also 92 CJS p. 550, citing Bologna Bros.
vs. Stephens, 18 So. 2d 944, 206 La. 112;
Partlow vs. Mulligan, 76 N.Y.S. 2d 181.

57. L-41012, Record pp. 40-49.

58. L-41001, Record, p. 15.