Macasiano vs. Diokno

Public streets devoted to public use are property for public dominion, outside the commerce of man, and may not be leased or disposed of by the local government unit to private persons; a municipality may only close and convert a road to patrimonial property when circumstances show it is no longer necessary for public use, and even its statutory authority to close roads is subject to compliance with conditions imposed by higher authority and the overriding duty to promote the general welfare.

Petitioner Brigadier General Levy D. Macasiano was the PNP Superintendent of the Metropolitan Traffic Command, responsible for traffic management in Metro Manila. Respondent Municipality of Parañaque is a local government unit that, acting pursuant to MMC Ordinance No. 2, Series of 1979 (authorizing and regulating the use of certain streets within Metropolitan Manila as sites for flea markets), enacted its own Ordinance No. 86, Series of 1990, closing several Baclaran streets for flea market use. Respondent Palanyag Kilusang Bayan for Service is a service cooperative that entered into an agreement with the municipality to operate, maintain, and manage the flea market. The legal framework in force at the time was Batas Pambansa Blg. 337 (the Local Government Code), together with the Civil Code provisions on property of public dominion.

On June 13, 1990, the municipal council of Parañaque passed Ordinance No. 86, Series of 1990, authorizing the closure of J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena Streets in Baclaran, Parañaque, and the establishment of a flea market thereon. The ordinance was enacted pursuant to MMC Ordinance No. 2, Series of 1979, which authorized and regulated the use of certain city and municipal streets, roads, and open spaces within Metropolitan Manila as sites for flea markets and vending areas, subject to certain terms and conditions. On July 20, 1990, the Metropolitan Manila Authority approved Ordinance No. 86 subject to four conditions: that the streets are not used for vehicular traffic and the majority of residents do not oppose the flea market; that a 2-meter middle road be distinctly marked for vending and 2 meters on both sides be reserved for pedestrians; that the operating time schedule be clearly designated; and that the vending area's use be temporary, to be closed once reclaimed areas are developed and donated by the Public Estate Authority.

On June 20, 1990, the municipal council issued a resolution authorizing Parañaque Mayor Walfrido N. Ferrer to enter into a contract with any service cooperative for the establishment, operation, maintenance, and management of flea markets. On August 8, 1990, the municipality and respondent Palanyag Kilusang Bayan for Service, a service cooperative, executed an agreement whereby Palanyag would operate, maintain, and manage the flea market on the aforementioned streets, with the obligation to remit dues to the municipal treasury. Market stalls were subsequently erected by Palanyag on those streets.

On September 13, 1990, petitioner Brigadier General Macasiano, as PNP Superintendent of the Metropolitan Traffic Command, ordered the destruction and confiscation of stalls along G.G. Cruz and J. Gabriel Streets in Baclaran; the stalls were later returned to Palanyag. On October 16, 1990, petitioner wrote Palanyag giving it ten days to discontinue the flea market, failing which the stalls would be dismantled. On October 23, 1990, respondents municipality and Palanyag filed with the RTC of Makati, Branch 62, a joint petition for prohibition and mandamus with damages and a prayer for preliminary injunction. The trial court issued a temporary restraining order on October 24, 1990, and on December 17, 1990, issued an order upholding the validity of Ordinance No. 86 and enjoining petitioner from enforcing his demolition order. The RTC reasoned that Section 10, Chapter II of the Local Government Code empowered the municipality to close its roads, and that once the ordinance was enacted, petitioner's authority as Police Superintendent ceased to be operative because the streets ceased to be public thoroughfares.

• Public Streets Outside Commerce of Man: Petitioner contended that municipal roads are used for public service and are therefore public properties which cannot be subject to private appropriation or private contract by any person, even by the respondent municipality.
• No Authority to Convert Public Use Property: Petitioner submitted that a property already dedicated to public use cannot be used for another public purpose, and absent a clear showing that the Municipality of Parañaque had been granted by the legislature specific authority to convert a property already in public use to another public use, the municipality was bereft of authority to close municipal roads for the establishment of a flea market.
• Non-Compliance with Conditions: Petitioner argued that even assuming the municipality was authorized to close streets, it failed to comply with the conditions set forth by the Metropolitan Manila Authority for the approval of the ordinance providing for the establishment of flea markets on public streets.
• Violation of General Welfare Duty: Petitioner contended that by allowing municipal streets to be used by market vendors, the municipal council violated its duty under the Local Government Code to promote the general welfare of the residents, citing congestion, obstruction of emergency vehicles, and public health hazards.

• Statutory Grant of Power: Respondents argued that Section 10, Chapter II of the Local Government Code is a statutory grant of power to local government units, empowering the Municipality of Parañaque to close its roads, streets, or alleys subject to the limitations stated therein.
• Non-Interference by Courts: Respondents maintained that the use of public spaces for the establishment of a flea market is well within the powers granted by law to a local government and should not be interfered with by the courts.

• Validity of Ordinance: Whether a municipal ordinance authorizing the lease and use of public streets or thoroughfares as sites for flea markets is valid.

• Validity of Ordinance: No. The ordinance is void because public streets still used for vehicular traffic are property for public use, outside the commerce of man, and cannot be leased or disposed of to private persons; the municipality also failed to comply with the conditions precedent imposed by the Metropolitan Manila Authority for the ordinance's approval.

• Validity of Ordinance: The Court examined the laws in force at the time the ordinance was enacted, namely Batas Pambansa Blg. 337 (the Local Government Code) in connection with the Civil Code provisions on property and settled jurisprudence. Under Article 424 of the Civil Code, provincial roads, city streets, squares, and public works for public service are property for public use. Properties of local government devoted to public service are deemed public and under the absolute control of Congress; local governments have no authority to control or regulate the use of public properties unless specific authority is vested by Congress. Section 10, Chapter II of the Local Government Code grants local government units the power to close roads, but this authority must be read in light of established legal principles. Article 424 of the Civil Code provides that properties of public dominion devoted to public use are outside the commerce of man and cannot be disposed of or leased by the local government unit to private persons. The closure of a road should be for the sole purpose of withdrawing it from public use when circumstances show it is no longer necessary for public service; only then does it become patrimonial property that may be used or conveyed for other purposes. The streets in question — J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension, and Opena — are ordinarily used for vehicular traffic and are still considered public property devoted to public use. The municipality therefore had no power to lease them to private persons for flea market purposes. This principle was settled in Dacanay vs. Asistio, where the Court held that public streets may not be bargained away through contract and that the right of the public to use city streets may not be impaired by local ordinance. Even assuming the municipality had authority to pass the ordinance, it could not be validly implemented because the municipality failed to comply with the conditions imposed by the Metropolitan Manila Authority for the ordinance's approval. No evidence was presented that the streets were not used for vehicular traffic, that the majority of residents did not oppose the flea market, or that a time schedule for operations was designated. The Court further noted the public congestion in Baclaran, the obstruction of ambulances to St. Rita Hospital along G.G. Cruz Street, the disruption of school children's transportation, and the pollution caused by vendor litter, all of which contravened the municipality's sworn obligation to enhance public health, safety, and convenience.

• Property of Public Dominion Outside Commerce of Man — Property for public use, such as provincial roads, city streets, squares, and public works for public service, is outside the commerce of man and cannot be disposed of or leased by the local government unit to private persons. A public street may not be the subject of lease or other contract. The right of the public to use city streets may not be bargained away through contract, and the interests of a few should not prevail over the good of the greater number.
• Conversion of Public Property to Patrimonial Property — A local government unit may close a road only for the purpose of withdrawing it from public use when circumstances show it is no longer necessary for public use or public service. Only upon such withdrawal does the property become patrimonial, after which it may be used or conveyed for any purpose for which other real property belonging to the local unit might be lawfully used or conveyed. Roads and streets still available to the public and ordinarily used for vehicular traffic remain public property devoted to public use and cannot be used for another purpose or leased to private persons.
• Limitations on Local Government Powers — The powers of a local government unit are not absolute; they are subject to limitations laid down by the Constitution and the laws, including the Civil Code. The exercise of such powers must be subservient to paramount considerations of the health and well-being of the community. Every local government unit has a sworn obligation to enact measures that enhance public health, safety, and convenience, maintain peace and order, and promote general prosperity, and should refrain from acting towards that which might prejudice or adversely affect the general welfare.

• "A public street is property for public use hence outside the commerce of man (Arts. 420, 424, Civil Code). Being outside the commerce of man, it may not be the subject of lease or others contract." — This passage, quoted from Dacanay vs. Asistio, states the controlling doctrine that public streets cannot be leased or made the subject of contract, forming the ratio decidendi for voiding the ordinance.
• "The right of the public to use the city streets may not be bargained away through contract. The interests of a few should not prevail over the good of the greater number in the community whose health, peace, safety, good order and general welfare, the respondent city officials are under legal obligation to protect." — This formulation articulates the principle that public streets are held in trust for public use and that local officials cannot bargain away the public's right to use them, a principle frequently cited in subsequent local government jurisprudence.
• "However, those roads and streets which are available to the public in general and ordinarily used for vehicular traffic are still considered public property devoted to public use. In such case, the local government has no power to use it for another purpose or to dispose of or lease it to private persons." — This passage defines the boundary between the municipality's statutory authority to close roads and the Civil Code limitation that streets still in active public use cannot be converted or leased.

• Province of Zamboanga del Norte vs. City of Zamboanga, 22 SCRA 1334 (1968) — Cited for the proposition that properties of local government devoted to public service are deemed public and under the absolute control of Congress, and local governments have no authority to control or regulate the use of public properties unless specific authority is vested by Congress.
• Cebu Oxygen and Acetylene Co., Inc. vs. Bercilles, 66 SCRA 481 (1975) — Cited as controlling precedent for the principle that a city may close a street and withdraw it from public use, after which the withdrawn portion becomes patrimonial property that can be the object of an ordinary contract — but only when the road is no longer necessary for public use.
• Dacanay vs. Asistio, G.R. No. 93654 (May 6, 1992) — Cited as directly controlling precedent. The Court held that public streets are property for public use, outside the commerce of man, and may not be leased; that the right of the public to use city streets may not be bargained away through contract; and that the general public has a legal right to demand demolition of illegally constructed stalls on public roads. The instant case was treated as on all fours with Dacanay.
• Villanueva vs. Castañeda, 15 SCRA 142 — Cited within the Dacanay quotation for the proposition that public streets may not be the subject of lease or other contract.
• Municipality of Cavite vs. Rojas, 30 SCRA 602 — Cited within the Dacanay quotation in support of the rule that property for public use is outside the commerce of man.

• Article 423, Civil Code — Classifies the property of provinces, cities, and municipalities into property for public use and patrimonial property.
• Article 424, Civil Code — Defines property for public use in provinces, cities, and municipalities as including provincial roads, city streets, squares, fountains, public waters, promenades, and public works for public service paid for by said local government units; all other property is patrimonial. Applied to classify the Baclaran streets as property for public use.
• Article 420, Civil Code — Cited in the Dacanay quotation for the principle that property for public use is outside the commerce of man.
• Article 422, Civil Code — Provides that property withdrawn from public use becomes patrimonial property of the local government unit, cited to explain the conversion process required before a closed road can be used or conveyed for other purposes.
• Section 10, Chapter II, Batas Pambansa Blg. 337 (Local Government Code) — Grants local government units the authority to close barangay, municipal, city, or provincial roads, streets, alleys, parks, or squares, provided it is in accordance with existing law and the provisions of the Code, with indemnification to persons prejudiced, and with the proviso that property withdrawn from public use may be used or conveyed for any lawful purpose. The Court interpreted this provision as subject to the Civil Code limitations on property of public dominion.
• MMC Ordinance No. 2, Series of 1979 — Authorized and regulated the use of certain streets within Metropolitan Manila as sites for flea markets and vending areas, under certain terms and conditions. The municipality's ordinance was enacted pursuant to this MMC ordinance.
• Section 5(d), Republic Act No. 7160 (Local Government Code of 1991) — Provides that rights and obligations existing on the date of effectivity of the new Code and arising out of contracts or any other source of prestation involving a local government unit shall be governed by the original terms and conditions of the said contracts or the law in force at the time such rights were vested. Noted by the Court as the transitional provision governing the case, since the new Code had already taken effect on January 1, 1992.

Narvasa, C.J., Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Griño-Aquino, Regalado, Davide, Jr., Romero, Nocon, and Bellosillo, JJ., concur.