City of Naga v. Court of Appeals
REITERATIONFacts
The Antecedents: In the November 1959 elections, Apolonio G. Maleniza defeated the incumbent Provincial Governor Juan Trivino of Camarines Sur. Before vacating office, the outgoing provincial administration passed Resolution No. 1103, authorizing Governor Trivino to execute deeds of sale without consideration in favor of the City of Naga for two parcels of land belonging to the province. On November 23, 1959, Governor Trivino executed two deeds of sale, each for P1.00, conveying title and possession of a parcel of 80,000 square meters (housing the Camarines Sur High School complex) and another parcel of 19,044 square meters (devoted to horticulture, farming, etc.). The City of Naga subsequently moved its offices to the Athletes' Quarters and the ground floor of the new grandstand within the High School complex, spending P14,901.14 for improvements. Procedural History: On December 9, 1959, Apolonio G. Maleniza, as taxpayer and governor-elect, filed a complaint against the Province of Camarines Sur and the City of Naga, praying for the annulment of the deeds of sale and for damages. The complaint alleged that the properties were devoted to public use, outside the commerce of man, and that the donations were not accepted in public documents. The Province of Camarines Sur (old Provincial Board) moved to dismiss, which was denied. The old board was declared in default. The City of Naga filed an answer, raising similar defenses. A writ of preliminary injunction was issued, enjoining the City of Naga from occupying the properties except for the Athletes' Quarters and the ground floor of the grandstand. The Republic of the Philippines intervened, waiving the Province's rights over a portion occupied by the Camarines Sur Trade School. The Court of First Instance (CFI) of Camarines Sur, in a decision dated June 27, 1962, declared Resolution No. 1103 and the deeds of sale null and void, ordered the City of Naga to vacate, pay damages for the use of the premises, made the injunction permanent, and ordered the City to pay costs. The City of Naga appealed to the Court of Appeals (CA). The CA, in a decision dated July 30, 1973, affirmed the CFI decision with a modification, granting indemnity to the City of Naga for improvements made on the Athletes' Quarters and the ground floor of the grandstand. The CA also ordered the amendment of the complaint and answer to reflect Maleniza's capacity as Provincial Governor and to join the Province as co-plaintiff. The Petition: The City of Naga filed a Petition for Review by certiorari with the Supreme Court, assailing the CA's decision nullifying the conveyances and awarding damages.
Issue(s)
Whether the deeds of sale conveying provincial properties to the City of Naga were valid without Presidential approval. Whether the Court of Appeals erred in awarding damages against the City of Naga.
Ruling
The petition is denied for lack of merit. The decision of the Court of Appeals is affirmed, with the modification regarding indemnity for improvements already granted by the CA.
Ratio Decidendi
On the validity of the conveyances: The Supreme Court affirmed the ruling that the deeds of sale were null and void ab initio. Section 2068 of the Revised Administrative Code explicitly requires that when the government of a province is a party to a deed or instrument conveying the title of real property, such deed or instrument shall be executed on behalf of the province by the Provincial Governor, upon resolution of the provincial board, and with the approval of the President. In this case, the conveyances were made without the required Presidential approval, and this approval has not been obtained up to the time of the decision. Therefore, the deeds of sale were void from the beginning. The Court reiterated that properties devoted to public use are outside the commerce of man and cannot be the subject of contracts, further supporting the nullity of the conveyances. The Court found no error in the appellate court's decision nullifying these transactions due to the lack of statutory compliance. On the award of damages: The Supreme Court found no fault with the Court of Appeals awarding damages to the City of Naga for the improvements it had introduced on the premises. The Court reasoned that to eliminate this award would be less than fair, considering the City's expenditure. These damages were intended to be set off against the rentals to be paid by the City for its occupation of the properties. The Court acknowledged the factual nature of the improvements and the City's investment, deeming it equitable to compensate the City for these expenditures, even though the underlying conveyances were declared void.
Main Doctrine
Conveyances of real property belonging to a province, executed by the Provincial Governor pursuant to a resolution of the provincial board, require the approval of the President to be valid. Without such approval, the conveyances are void ab initio.