CARIDAD O. DE GALLEGO, PETITIONER-APPELLANT, VS. LAND AUTHORITY (FORMERLY LAND TENURE ADMINISTRATION), OPPOSITOR-APPELLEE.

The petitioner herein, who is the registered owner of a parcel of
land situated in the Municipality of Parañaque, Rizal and covered by TCT No.
46402 of the Registry of Deeds of Rizal, seeks the cancellation of the
following ‘CONDITIONS’ appearing in the Memorandum of Encumbrances of the
aforementioned Transfer Certi­ficate of Title No. 46402, to wit:

“1.    That the parcel of land described in this
certificate of title, shall not be sold, assigned, encumbered, mortgaged or
transferred, within the period of five (5) years from the date hereof without
first obtaining the written consent of the Secretary of Agriculture and Natural
Re­sources;

2.   That except by hereditary suc­cession, it
shall not be conveyed, trans­ferred to, assigned in favor of any person who is
not landless and disqualified to acquire or own land in the Philippines;

3.   That violation of either of the next two
preceding paragraph shall be sufficient ground for the Secretary of Agriculture
and Natural Resources or his duly authorized representative to take such action
as may be necessary for the reversion of the land to the government.”
(Doc. No. 1858, page 57, Book XXVI, S. of 1954 of Notary Public of Manila,
Andres Urrutia) Date of instrument – June 28, 1954.  Date of the inscription – June 30, 1954 –
10:10 a.m.”

In her Petition for Cancellation of Encumbrance filed with the
Court of First Instance of Rizal, Branch 7, in LRC Case No. 458, it is alleged
that the said conditions were entered on June 30, 1954 and a period of five (5)
years have since then elapsed so that Con­dition No. 1 has long become
academic; that the aforestated parcel of land formerly formed part of a tract
of land which the Government acquired for subdivision into residential lots
with the principal objective of distributing the same to the landless and
thereby allow more people to have their own homes for which reason, Conditions
Nos. 2 and 3 above were entered as encum­brances on the said certificate of
title; that the area wherein the above-mentioned parcel of land is comprised
has since become commercial community, fronting, as it does, the Manila Bay,
and not only said parcel of land but the immediate vicinity thereof now contain
improvements devoted purely to commercial purposes; that by reason of the
foregoing, the objective of the Government in imposing Conditions Nos. (2) and
(3) above has lost its meaning inasmuch as the value of said property has
become prohibitive to any landless who desire to establish his home therein;
that to allow the said Conditions to remain and to affect said parcel of land
will only be a deterrent to the economic development and progress of the
country; and that in line with the country’s program of economic development,
therefore, said Conditions should be eliminated.

Respondent opposed the Petition for Cancellation insofar as
Conditions Nos. (2) and (3) are concerned on the ground that Condition No. 2
carries with it no prescriptive period at all and the same is considered
perpetual in character and any subsequent transactions or dealings involving
the land in question must necessarily be with the written consent and
permission of the Land Authority, and that Condition No. 3 is like­wise
perpetual in character.  Respondent,
however, agrees that Condition No. 1 may be cancelled since it carries the
five-year prescriptive period.

In his Order dated July 19, 1966, Presiding Judge Francisco dela
Rosa, finding the grounds relied upon in the Opposition to be well-taken,
denied the Petition for lack of merit.

Petitioner thru Counsel filed a Motion for Re­consideration,
alleging among others, that subsequent to the filing of the Opposition, counsel
made repre­sentations with the respondent for a withdrawal of the Opposition in
line with the position taken by the same office in connection with G.L.R.O. Record
No. 7672 of the Court of First Instance of Rizal, Pasig, Branch X entitled,
“Sotera Duavit Vda. de Bautista, et al., petitioners,” wherein no
opposition was filed by the Land Authority to a similar petition for the reason
that the property involved was already commercial so that the Land Authority
cannot maintain inconsistent position, otherwise it may be guilty of
discrimination, arbitrariness, or grave abuse of its official discre­tion.

Petitioner further pointed out that as to the fact that the land in
question is a commercial property and is situated in a commercial territory,
namely, fronting the Roxas Boulevard, Parañaque, Rizal, there has been no
controversy and the court can take judicial notice thereof as a matter of
common knowledge, as in fact the property is presently occupied by the
night-club “EL MUNDO” and is classified for real estate taxation as
commercial.

It is likewise insisted by petitioner that the primary intention
of the restriction against transfers or conveyances of the property except to
the landless and except by hereditary succession in order to insure that more
people shall own residential homes, has been lost by the transformation of the
property from resi­dential to commercial since the landless who may want to
establish their residential homes can no longer afford to pay the commercial
price of this commercial property and following the principle that “when
the reason for the law ceases, the law ceases,” the said restriction
should be eliminated to allow the afore­mentioned property to contribute to the
economic deve­lopment of the country.

The attention of the court a quo was also called to
the fact that the petitioner who is the wife of former Ambassador Manuel
Gallego, is not a landless individual, nor was she landless at the time when
the said property was acquired by her, the fact being that the restriction
refers only to voluntary conve­yances and did not comprehend sales by public
auction, as in the particular case, where the petitioner came to own the
property as the highest bidder in a foreclosure sale by reason of a mortgage
thereon.  Peti­tioner concludes that
accordingly, the restriction can­not be intrinsically intended to limit the
ownership of this type of property to only the landless where it may be
acquired by a landed owner thru an involuntary sale.

The court denied the Motion for Reconsideration in its Order of
September 8, 1966, hence the present appeal to this Court.

Petitioner submits a lone assignment of error, and that is, that
the trial court erred in denying the petition for cancellation and in denying
the motion for reconsideration.

In Petitioner’s Brief, it is pointed out that the Order dated
July 19, 1966 denying the Petition for Can­cellation, as well as the Order of
September 8, 1966 denying the Motion for Reconsideration, did not express the
reasons in support of said Order. 
Petitioner argues that Condition No. (1) in the Memorandum of
Encumbrances of TCT No. 46402 had long become academic because five years have
already elapsed from the date the said anno­tation was made on June 30, 1954,
inasmuch as the Peti­tion for Cancellation was filed on February 11, 1966,
almost twelve years after the entry of such condition.

Oppositor Land Authority does not oppose the cancel­lation of
Condition No. (1), hence, finding the said cancellation to be in order, the
said condition is hereby ordered cancelled.

Petitioner further contends that Conditions No. (2) and (3) have
lost any sound basis in that while the subject parcel of land was originally a
residential lot, the classification of the property had been changed to that of
commercial, as evidenced by the present tax declaration thereof (Exhibit
“B”).  According to petitioner,
the original intention of the controverted con­dition to restrict ownership of
subject property by people who could utilize the same as their residence has
lost its meaning for the said property has gone beyond the reach of any
individual to acquire for purely resi­dential purposes.

It is likewise claimed that the inhibition in Condition No. (2)
is not entirely absolute because a person who is not landless may still
properly acquire the said property in a foreclosure of a mortgage thereon, as
in the instant case where petitioner, who is the wife of former Ambassador
Manuel V. Gallego, is not landless and had acquired the subject property, not
by voluntary conveyance in her favor but as the highest bidder in the public
auction sale thereof in relation to a fore­closure of a mortgage involving the
said property, which argument assumes that Condition No. (2) limits the res­triction
only to a conventional or voluntary sale, trans­fer or assignment of the
property, excluding mortgage or encumbrance whereas Condition No. (1) inhibits
not only the sale but also the encumbrance or mortgage of the subject land.

Petitioner’s contentions are without merit and We reject the
same.

Conditions No. (2) and (3) are found or provided in Section 17
and 18 of Land Registration Order No. R-3 under the subject “Rules and
Regulations Governing the Acquisition and Disposition of Landed Estate,”
approved November 15, 1951 by the Secretary of Agriculture and Natural
Resources.  These sections provide as
follows:

“16.   Prohibition to Alienate.  – The applicant shall not sell, assign,
encumber, mortgage or transfer, his rights under the agreement to sell or in
the property sub­ject thereof without first obtaining the written consent of
the Secretary of Agri­culture and Natural Resources and this condition shall
subsist until the lapse of five (5) years from the date of the execution of the
final deed of sale in his favor and shall be annotated as an encum­brance on
the certificate of title of the property that may be issued in his favor.

“17.   Conveyance of Lands, Covered by Final Deeds
of Sale.  – Except by hereditary succession,
no lands acquired hereunder shall be transferred or assigned to any individual
unless he be landless and not otherwise disqualified from acquiring and owning
lands in the Philippines.  This
prohibition shall be made a condition in all deeds of sale and shall be
annotated as encumbrance in the certificate of title.

“18.   Violation of the two preceding
paragraphs:  its effect.  – Any sale, assignment, encumbrance,
mortgage, or transfer made in violation of the provisions of the next two
preceding paragraphs hereof is null and void, and shall be sufficient ground
for the Secretary of Agriculture and Natural Resources to cancel the deed of
sale and to order the reversion of the land to the government and the
forfeiture of whatever payments made on account thereof.  In case, however, a deed of sale has already
been issued, the violation of the said provisions shall be sufficient ground
for the Secretary of Agriculture and Natural Resources to take appropriate action
in court with a view to obtaining the reversion of the land involved to the
government.  All lands reverted to the
government shall be disposed of as vacant lot.”

It is pertinent to state here that pursuant to the provisions of
Section 4, Article XIII of the 1935 Cons­titution of the Philippines which
mandated that Congress may authorize, upon payment of just compensation, the
expropriation of land to be subdivided into small lots and conveyed at cost to
individuals, Commonwealth Act 539 enacted May 26, 1940, authorized the
President of the Philippines to acquire private lands or any interest therein,
thru purchase or expropriation and to subdivide the same into home lots or
small farms for resale at reasonable prices and under such conditions as he may
fix to their bonafide tenants or occupants or to private individuals who will
work the lands themselves and who are qualified to acquire and own lands in the
Philippines (Section 1, Commonwealth Act 539). 
And under Section 2 of the same Act, the President may designate any
department, bureau, office, or instrumentality of the National Government, or
he may organize a new agency to carry out the objectives of the Act, and for
this purpose, the agency so created or designated shall be considered a public
corporation.  Commonwealth Act 539
amended Commonwealth Act No. 20, as amended by Commonwealth Act 260, and
Commonwealth Act No. 378, as amended by Commonwealth Act 420.

As indicated earlier, Sections 16, 17 and 18 of Lands
Administrative Order No. R-3 dated October 19, 1951 are the sources which gave
rise to the annotation of Conditions Nos. 1, 2 and 3 on the title of subject
pro­perty.  The said Order was published
in the Official Gazette of December, 1951, pp. 6075 to 6078, Volume 47, No. 12,
and has the force and effect of law. 
(Javillonar vs. Land Tenure Administration, G.R. No. 10303, Aug. 22,
1958, 104 Phil. 323)

As the Administrative Order itself provides, the rules and
regulations governing the acquisition and dis­position of private estates were
promulgated for the information and guidance of all concerned “(p)ursuant
to the provisions of section 4, article XIII of the Constitution of the
Philippines, section 79 (B) of the Revised Administrative Code, and Executive
Order No. 376, dated November 28, 1950.”

Conditions Nos. 2 and 3, having been imposed pursuant to an
Administrative Order which has the force and effect of the law, are therefore
binding upon any person who acquires title to the same, it appearing that said
Condi­tions are annotated as encumbrances on the back of the Certificate of
Title of the land.  Moreover, the said
Conditions are not contrary to law, morals, customs, or public policy.  In fact, these Conditions had been im­posed
in order to implement more effectively the main purpose of the constitutional
provision which is to break up landed estates into reasonably small portions
and to discourage the concentration of excessive landed wealth in an entity or
a few individuals.  (Republic vs.
Baylosis, 96 Phil. 461) Incidentally, the New Constitution of 1973 provided a
modification of the original provision in the 1935 Constitution, thus:  “The National Assembly may authorize,
upon payment of just compensation, the expropriation of private lands to be
subdivided into small lots and conveyed at cost to deserving citizens.”

These two encumbrances or Conditions annotated on the back of TCT
46402 imposed by and pursuant to the Administrative Order of the Secretary of
Agriculture and Natural Resources may not, therefore, be cancelled for under
Section 39 of the Land Registration Act,

“Every person receiving a certificate
of title in pursuance of a decree of registration, and every subsequent
purchaser of registered land who takes a certificate of title for value in good
faith shall hold the same free of all encumbrance except those noted on said
certificate, and any of the following encumbrances which may be subsisting,
namely:

First.  Liens, claims, or
rights arising or existing under the laws or Constitution of the United States
or of the Philippine Islands which the statutes of the Philippine Islands
cannot require to appear of record in the registry;

Second.  Taxes within two
years after same become due and payable;

Third.  Any public highway,
way, private way established by law, or any Government irrigation canal or
lateral thereof, where the certificate of title does not state that the
boundaries of such highway, way, or irrigation canal or lateral thereof, have
been determined.

But if there are easements or other rights appurtenant to a parcel
of registered land which for any reason have failed to be registered, such
easements or rights shall remain so appurtenant notwithstanding such failure,
and shall be held to pass with the land until cut off or extinguished by the
registration of the servient estate, or in any other manner.  (As amended by Act No. 2011, and Sec. 4, Act
No. 3621.)”

Presidential Decree No. 1529, amending and codifying the laws
relative to registration of pro­perty and for other purposes, promulgated June
11, 1978, substantially contains the same provision under Section 44 thereof,
which provides:

“Every registered owner receiving a certificate of title in
pursuance of a decree of registration, and every subsequent purchaser of
registered land taking a certificate of title for value and in good faith,
shall hold the same free from all encumbrances except those noted on said
certificate and any of the following encumbrances which may be sub­sisting,
namely:

First.  Liens, claims or
rights arising or existing under the laws and Constitution of the Philippines
which are not by law required to appear of record in the Registry of Deeds in
order to be valid against subsequent purchasers or encumbrancers of record;

Second.  Unpaid real estate
taxes levied and assessed within two years immediately preceding the
acquisition of any right over the land by an innocent purchaser for value,
without pre­judice to the right of the government to collect taxes payable
before that period from the delinquent taxpayer alone;

Third.  Any public highway or
private way established or recognized by law, or any government irrigation
canal or la­teral thereof, if the certificate of title does not state that the
boundaries of such highway or irrigation canal or lateral thereof have been
determined;

Fourth.  Any disposition of
the property or limitation on the use thereof by virtue of, or pursuant to,
Presidential Decree No. 27 or any other law or regula­tions on agrarian
reform.”

Until and unless the law, or the Administrative Order which has
the force and effect of law, is re­pealed, amended, or otherwise altered or
modified, the said encumbrances must remain, notwithstanding the contention of
petitioner that a previous governor of the Land Authority had not opposed a
similar peti­tion for cancellation in Sotera Duavit Vda. de Bau­tista and Jaime
Bautista, G.L.R.O. Record No. 7672 of the Court of First Instance of Rizal,
Branch X, for a wrong act cannot be cured by the commission of another
wrong.  Laws are repealed only by
subsequent ones and their violation or non-observance shall not be excused by disuse,
or custom or practice to the contrary. 
(Article 7, New Civil Code)

Neither can petitioner’s arguments that the lot in question
contains improvements, a nightclub devoted to a purely commercial purpose, that
the value of the land has become prohibitive to any landless who desires to
establish his house thereon, that to allow the said Conditions to remain and to
affect said parcel of land will only be a deterrent to the economic development
and progress of the country and that in line with the country’s program of
economic development, said Conditions should be eliminated, be sustained.  The courts are not concerned with the wisdom,
necessity or propriety of the law, for these are the particular province of the
legislative.  As this Court said in Morfe
vs. Mutuc, L-20387, January 31, 1968, 22 SCRA 424, 450, speaking thru
Justice (now Chief Justice) Fernando, citing Angara vs. Electoral Commission,
63 Phil. 139, “It is well to remember, that this Court, in the language of
Justice Laurel, ‘does not pass upon questions of wisdom, justice or expediency
of legislation.'”

WHEREFORE, IN VIEW OF THE FOREGOING, the Orders appealed
from dated July 19, 1966 and September 8, 1966 are hereby MODIFIED in the sense
that Condition No. (1) inscribed as an encumbrance in Transfer Certificate of
Title No. 46402 (Rizal Registry) covering Lot 4, Block 4, Psd-10988 Baclaran
Estate, Baclaran, Parañaque, Rizal, under the name of petitioner Caridad O. de
Gallego, is hereby ordered cancelled, the five-year period stated therein having
already expired, and that Conditions No. (2) and (3) shall remain as they are.

No costs.

SO ORDERED.

Makasiar, Fernandez, and Melencio-Herrera,
JJ., concur.

Teehankee, Acting C.J., in the
result.