G.R. No. L-41351. October 28, 1977

REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. HON. LUIS LARDIZABAL, AS MAYOR OF BAGUIO CITY, PEDRO Z. CLARAVALL, BERT FLORESCA, ANTONIO S. ROMERO, TEOFISTO RONDEZ, CLEMENTE CALPU…

Decisions / Signed Resolutions October 28, 1977 FIRST DIVISION FERNANDEZ, J.:
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FERNANDEZ, J.:


This is an appeal by certiorari from the decision of the
Court of First Instance of Baguio and Benguet in Civil Case
No. 2437, entitled “Republic of the Philippines v. Hon. Luis L. Lardizabal, et al.”, the dispositive
part of which reads:

“Consequently, finding the leases under Resolutions Nos.
12-70, 355-71 and 535-71 of public respondent City of Baguio
and the contracts executed pur­suant thereto to be within the intendment of
Proclamation No. 312, and in the exercise of the public respondents’
governmental and police powers, the said
leases are hereby declared legal and valid and the action (Petition) is
hereby dismissed without costs.

SO ORDERED.

Done in the City of Laoag for Baguio City, this 6th day of May, 1975.

RICARDO Y. NAVARRO

Judge”[1]

The petitioner, Republic
of the Philippines, instituted in the Court of First Instance of Baguio and Benguet Civil Case No.
2437 against the City of Baguio, Mayor Luis L. Lardizabal and Councilors Pedro Z. Claravall,
Bert Floresca, Antonio S. Romero, Teopisto
Rondez, Clemente Calputora and Leonides Bautista
(public respondents), Times Transportation Co., Inc., Dacanay
Express, Inc., and Anas­tacio Imson
(private respondents), seeking the following reliefs:

“WHEREFORE, it is respect­fully prayed of this Honorable
Court:

1)  Pending consideration on the merits of this
petition, a writ of preliminary injunction be issued ex-parte
and without bond (peti­tioner is exempt from posting a bond), restraining
respondents and all persons under them or acting upon their orders from
executing, enforcing and carrying out in any manner Resolution Nos. 12-70,
355-71 and 535-71;

2)  After hearing, to issue a writ of prohibition
commanding respondents to refrain from further executing, enforcing and
carrying out said Resolutions which are null and void, making the writ of pre­liminary
injunction permanent; and

3)  To order respondents to return to petitioner
the physical possession and use of such portions of the Baguio
Sanitation Camp and Slaughterhouse Reservation as may have been leased to
private respon­dents, with costs.

Petitioner prays for such other reliefs
as are just and equitable in the premises.”[2]

In their answers, the
respondents alleged as defenses that prohibition is not the proper remedy
because the acts sought to be stopped have already been performed; that the
leases are mere acts of administration within public respondents’ authority to
perform as administrators of the Slaughterhouse Compound; that at any rate,
Executive Proclamation No. 312 vested upon public respondents authority to
exercise acts of dominion over the Slaughterhouse Compound; that the leases are
necessary to save the reser­vation from imminent danger of erosion; that
private res­pondents acted in good faith; and that petitioner is estopped from questioning the validity of the Council
resolutions and the leases.
[3]

By Executive Proclamation
No. 312 dated April 23, 1930, the area in Baguio City
known as the Slaughterhouse Compound was reserved as a sanitary camp and
livestock yard of the city and placed under its administration.  On January 7, 1970, the City Council of Baguio passed Resolution No. 12-70 authorizing the lease of
9,195 square meters of the Slaughterhouse Compound to respondent Times
Transportation Co. Inc. for a period of twenty-five (25) years renewable for a
like period at the option of both parties. 
The resolution was approved by respondent Mayor Luis L. Lardizabal
on January
20, 1970.  Said resolution was later
amended by Resolution No. 71-71 dated April 7, 1971.  By virtue of Resolutions No. 12-70 and No.
71-71, a contract of lease was executed on December 15, 1971 by and between
respondent City of Baguio, through respondent Luis L.
Lardizabal and the Times Transportation Co.,
Inc. for a period of 25 years renewable for a like period at the option of
both parties over a reduced area of 5,982 square meters which is now used as a
bus terminal by the said lessee, respondent Times Transportation Co. Inc..

On July 8, 1971, the City
Council of Baguio City passed Resolution No. 355-71
authorizing the lease of 3,214 square meters of the Slaughterhouse Compound to
res­pondent Anastacio Imson
for a period of 25 years renewable for a like period at the option of both
parties.  The re­solution was approved by
respondent Luis L. Lardizabal on July 29, 1971.  Pursuant to said Resolution No. 355-71, a
lease contract was executed on February 25, 1972 by and between respondent Anastacio Imson and respondent
City of Baguio through respondent Luis L. Lardizabal over said area of 3,214 square meters on which a
hotel was constructed.

On September 8, 1971, the
City Council of Baguio City passed Resolution No.
535-71 authorizing the lease of 2,411 square meters of the Slaughterhouse
Compound to respondent Dacanay Express, Inc. for a
period of twenty-five (25) years renewable for a like period at the option of
both parties.  The resolution was
approved by respondent Luis L. Lardiza­bal on October
14, 1971.  Pursuant to said Resolution
No. 535-71, a contract of lease was executed on April 3, 1972 by and between
respondent Dacanay Express, Inc. and respondent City
of Baguio through respondent Luis L. Lardizabal, over a reduced area of 2,160 square meters
which is now used by said lessee as a bus terminal.

The resolutions and
leases in question were objected to by the City Health Officer of Baguio on the ground that the deviation of portions of the
reservation to uses other than as a sanitary camp and livestock yard will
endanger public health and safety.  The
City Legal Officer also rendered an opinion that the leases were invalid
because they are acts of dominion beyond the power of public respondents as
administrators of the reservation to execute.
[4]

The main issue is whether
the Council resolutions and leases executed pursuant thereto are valid.  The peti­tioner contends that they are null
and void because the subjects thereof are portions of the Slaughterhouse Com­pound
which was set aside by Executive Proclamation No. 312 as sanitary camp and
livestock yard reservation.

Executive Proclamation
No. 312 dated April 23, 1930 expressly provides:

“De conformidad con las disposiciones del articulo ochenta y uno de la Ley Numero
dos mil ocho cientos y cuatro, tal como
quedo reformado por la Ley Numero
tres mil dos cientos diez y nueve,
por la presente reserva, bajo la administracion de la ciudad de Baguio,
para solares para campa­mento de sanidad y vivero de la ciudad,
con sujecion a los dere­chos privados, si los hubiera
excluyendolas de venta o coloni­zacion, situadas las ciudad de Baguio, Provincia Montañoza, Isla de Luzon, y descritas en el plano IR-306 de la Oficina de Terrenos, a saber:  x
x x“[5]

It
is clear from the foregoing that the area in question has been reserved for
sanitary camp and livestock yard under the administration of the City of Baguio.  The pro­clamation
expressly prohibits the disposition of the re­served area.  The public respondents admit this fact but
state in their brief the following:

“Public respondents-appellees admit
that the land embraced by Proclamation No. 312 is a reserva­tion and therefore
may not be alienated to private persons. 
How­ever portions of the said area under Proclamation No. 312 were never
alienated to the private respondents-appellees.  Ownership re­mains still with the
Republic.  A contract of lease does not
trans­fer ownership of the thing leased to
the lessee as lease is not a mode of transfering
ownership. 
There is no private
appropria­tion or alienation.”[6]

The petitioner, Republic
of the Philippines, con­tends that:

“Respondents try to justify the Council resolutions and the
leases by arguing that they are mere acts of administration with­in their
authority, as administrators of the lands, to execute.

This argument is without merit. 
It should be noted that the leases are uniformly for a period of
twenty-five (25) years.  Under Ar­ticle
1878 of the Civil Code, a lease of a parcel of land for a period of more than
one (1) year requires a special power of at­torney from the principal.  This is
because a 1-year lease is deemed an act of administration while a long term
lease, such as a 25-year lease, is deemed an act of dominion.

It should also be pointed out that the leases contain an option to
renew for a like period of twenty-five (25) years at the option of both
parties.  This makes it more obvious that
the contracts are acts of dominion.”[7]

We sustain the contention
of the petitioner.  A lease for a period
of twenty-five (25) years renewable for another twenty-five (25) years at the
option of both parties is not a mere act of administration.  During the period of the lease of twenty-five
(25) years, the pro­perty cannot be used as sanitary camp or livestock yard
reservation.  Indeed, the public
respondent, City of Baguio, has requested that a
portion of the reservation be released. 
The public appellees state the following:

“It will be noted that the President of the Republic deli­mited
the area embraced by Proclamation No. 312 which areas lifted from the
reservation were set aside for
residential purposes and a school site (Proclamation No. 1228 dated January 31,
1974).  Precisely,
the city of Baguio
thru the city mayor, addressed a letter to the President of the Republic to
lift a portion of the area embraced by Proclamation No. 312 and transfer the
same in ownership to the city of Baguio which area
applied for is the very same area now under lease to the private respondents-appellees (Exhibit ‘2’ City).  This letter has not yet been acted upon for
or against the city of
Baguio and is pending in the office of the
President of the Re­public.”
[8]

The City of Baguio must have realized
its lack of authority to execute the leases in question.  As an administrator, the City of Baguio cannot perform any act inconsistent with the object
of Executive Proclamation No. 312.  By leasing portions of the reservation for a
period of twenty-five (25) years, said City has violated the proclamation.

In view of the foregoing, it is obvious that the reso­lutions in
question and the leases executed pursuant thereto are null and void.

WHEREFORE, the decision of the Court of First Instance of Baguio and Benguet in Civil Case No.
2437 is hereby set aside and judgment is rendered declaring Resolutions Nos.
12-70, 355-71 and 535-71, and the leases executed pursuant thereto in favor of
the respondents Times Transportation Co. Inc., Dacanay
Express, Inc., and Anastacio Imson,
null and void, with costs against the private respondents.

The respondents are ordered to return the use and pos­session of
the leased lands to the petitioner.

SO ORDERED.

Teehankee, (Chairman), Makasiar, Muñoz Palma, Martin, and Guerrero, JJ., concur.


[1] Rollo, p. 74.

[2] Rollo, p. 3.

[3] Rollo, pp. 3-4.

[4] Rollo, pp. 6-8.

[5] Brief for the Public Appellees,
p. 2, Rollo, p. 236.

[6] Brief for the Public Appellees,
pp. 5-6, Rollo, p. 236.

[7] Brief for the Appellant, p. 11, Rollo, p. 224.

[8] Brief
for the Public Appellees, p. 7., Rollo, p. 236