Philippine Navy Golf Club, Inc. vs. Abaya

The exclusionary clause in a presidential proclamation declaring public lands alienable and disposable applies only to areas that are being used or earmarked for public or quasi-public purposes at the time of the proclamation's issuance; a subsequent unilateral development by a government agency, not ratified by any presidential proclamation, cannot shield the land from disposition to qualified awardees.

The Fort Andres Bonifacio Military Reservation, formerly Fort William McKinley, was established in 1957 by President Carlos Garcia through Proclamation No. 423 as a military reservation, rendering the lands therein inalienable and non-disposable. In 1965, President Diosdado Macapagal issued Proclamation No. 461, which excluded portions of the reservation and declared them as the AFP Officers' Village, to be disposed of under Republic Act Nos. 274 and 730 in relation to Commonwealth Act No. 141, the Public Land Act. The proclamation contained an exclusionary clause providing that areas "being used or earmarked for public or quasi-public purposes" shall be excluded from disposition. In 1976, the Philippine Navy developed a portion of the village into a golf course, managed and controlled by the Philippine Navy Golf Club, Inc. The Department of Environment and Natural Resources later awarded lots within the village to former military officers, who were unable to occupy their lots because the Navy and the Golf Club were already in possession.

In 1957, President Carlos Garcia established the Fort William McKinley Military Reservation through Proclamation No. 423, reserving certain parcels of public domain in Pasig, Taguig, Parañaque, and Pasay City for military purposes. The reservation was later renamed Fort Andres Bonifacio Military Reservation. The lands within the reservation were initially inalienable and non-disposable under Section 88 of the Public Land Act (Commonwealth Act No. 141).

In 1965, President Diosdado Macapagal issued Proclamation No. 461, which excluded portions of the reservation and declared them as the AFP Officers' Village, to be disposed of under Republic Act Nos. 274 and 730 in relation to the Public Land Act. The proclamation covered an area of 2,455,310 square meters. It contained an exclusionary clause providing that areas "being used or earmarked for public or quasi-public purposes" shall be excluded from disposition. It also imposed a ten-year restriction on alienation and encumbrance of lands disposed of under the proclamation.

In 1976, the Philippine Navy developed a portion of the AFP Officers' Village into a golf course, upon the proposal of then Navy Flag Officer-in-Command Admiral Ogbinar. The golf course was managed and controlled by the Philippine Navy Golf Club, Inc. No subsequent law or proclamation was issued allocating the land for the construction of the golf course.

The Department of Environment and Natural Resources subsequently awarded lots within the village to former military officers: to Merardo Abaya and Ruben Follosco in December 1996, and to Angelito Maglonzo and Elias Sta. Clara in November 1998. The appraised value of the lots was set at ₱15.00 per square meter, a public auction was held, and the awardees were the highest bidders. However, Abaya, et al. were unable to introduce any improvement on their lots because the Philippine Navy and the Golf Club were already occupying the lands.

Unable to take possession, Abaya, et al. filed an accion reinvindicatoria against the Philippine Navy and the Golf Club before the RTC of Pasig City, Branch 266, docketed as Civil Case No. 67458. The Philippine Navy and the Golf Club invoked the exclusionary clause in Proclamation No. 461, claiming that the land developed as a golf course was not included in the alienable and disposable lots. They also argued that the Philippine Navy could not be sued without its consent.

On June 24, 2015, the RTC granted the complaint and ordered the Philippine Navy and the Golf Club to turn over the lots to Abaya, et al. and to pay rental fees of ₱5,000.00 per month on each parcel of land, computed from the date of filing of the complaint until actual vacation, with 12% interest per annum from finality of judgment to full satisfaction. The RTC denied the plaintiffs' claim for moral and exemplary damages and attorney's fees, as well as the defendants' counterclaim for reimbursement of expenses.

The Philippine Navy and the Golf Club appealed to the CA, claiming that the lots were being used for public or quasi-public purposes and should not have been awarded to Abaya, et al. They also argued that the disposition violated Memorandum Order No. 172, which prohibited the sale of certain areas of the military reservation. On July 10, 2017, the CA affirmed the RTC's findings, holding that Proclamation No. 461 declared the lots available for disposition and that no subsequent proclamation reserved the lands for the Golf Club. The CA ruled that Memorandum Order No. 172 was inapplicable because it prohibited only the issuance of deeds of sale, not orders of award. The CA also held that the doctrine of non-suability could not be utilized to perpetrate an injustice against the retired AFP members, but reduced the legal interest on the monetary award to 6% per annum from finality of judgment until full satisfaction.

• Exclusionary Clause: Petitioners argued that the golf course land is excluded from disposition under Proclamation No. 461's exclusionary clause because the golf course serves as a security buffer and training ground for the navy, thus serving a public or quasi-public purpose.
• Invalidity of Orders of Award: Petitioners insisted that the DENR orders of award in favor of Abaya, et al. are invalid for violating Memorandum Order No. 172, which prohibited the sale of certain areas of the military reservation. They further alleged that Abaya, et al. made false declarations in their applications, that there was no approving authority in the valuation, and that the auction sale was dubious.
• State Immunity: Petitioners contended that the Philippine Navy cannot be sued without its consent, invoking the doctrine of state immunity from suit.

• Classification of Public Land: Whether the land developed by the Philippine Navy into a golf course remains part of the alienable and disposable public land of the AFP Officers' Village or is excluded from disposition under the exclusionary clause of Proclamation No. 461.
• Validity of Orders of Award: Whether the DENR orders of award in favor of Abaya, et al. are invalid for violating Memorandum Order No. 172, and whether this proceeding is the proper forum to assail those orders.
• State Immunity: Whether the Philippine Navy can validly invoke the doctrine of state immunity from suit to shield itself from the accion reinvindicatoria.
• Liability for Rental Fees: Whether the Philippine Navy and the Golf Club are liable to turn over the lots and pay rental fees, and from what date the rental fees should be computed.

• Classification of Public Land: No. The land on which the golf course stands remains part of the alienable and disposable public land of the AFP Officers' Village. The exclusionary clause in Proclamation No. 461 applies only to areas being used or earmarked for public or quasi-public purposes at the time of the proclamation's issuance in 1965, and the golf course did not yet exist then.
• Validity of Orders of Award: No. Memorandum Order No. 172 is inapplicable because it prohibits only the issuance of deeds of sale, not orders of award. Moreover, this proceeding — an accion reinvindicatoria — is not the proper forum to assail the DENR's orders of award; objections should be filed before the proper government administrative offices under the Public Land Act.
• State Immunity: No. The Philippine Navy cannot validly invoke the doctrine of state immunity from suit, as the doctrine cannot serve as an instrument for perpetrating an injustice against citizens whose property rights were violated.
• Liability for Rental Fees: Yes. The Philippine Navy and the Golf Club are liable to turn over the lots and pay rental fees of ₱5,000.00 per month, computed from the dates the lots were awarded by the DENR — December 1996 for Abaya and Follosco, and November 1998 for Maglonzo and Sta. Clara — until complete vacation, with 6% interest per annum from the date of the RTC decision on June 24, 2015 until full payment.

• Classification of Public Land: Commonwealth Act No. 141 (the Public Land Act) is the country's primary law on the classification and disposition of lands of the public domain. It provides that the President may designate by proclamation any tract of land as a reservation, and that reserved lands are non-alienable until again declared alienable. Proclamation No. 461 reclassified portions of the military reservation into alienable and disposable lands of the AFP Officers' Village. However, the proclamation's exclusionary clause — excluding areas "being used or earmarked for public or quasi-public purposes" — could not comprehend the golf course, which was inexistent when the proclamation was issued in 1965. The golf course was developed only in 1976 upon the unilateral proposal of Admiral Ogbinar. No subsequent law or proclamation earmarked the land for the golf course. The Philippine Navy and its officers are not vested with the power to classify or re-classify lands of the public domain. The unilateral development of the golf course was not ratified by any presidential proclamation. In Navy Officer's Village Association Inc. vs. Republic of the Philippines, the Court upheld the nullification of a title where a subsequent proclamation (Proclamation No. 478) had reclassified the land back to non-alienable; here, in contrast, no such reclassification occurred. The exclusionary clause cannot shield the golf course land against the actual purpose for which it was allotted — housing for AFP officers and veterans.

• Validity of Orders of Award: This case originated from an accion reinvindicatoria, which is not the proper forum to assail the DENR's orders of award. The Public Land Act (Sections 101, 102, and 106) explicitly provides that actions for reversion of public lands shall be instituted by the Solicitor General in the proper courts, and that objections to applications or concessions shall be filed before the proper government administrative offices, in observance of the doctrine of exhaustion of administrative remedies. At any rate, the RTC and the CA were unanimous in finding that the orders of award were validly issued — there was an approving authority, the appraised value was set at ₱15.00 per square meter, a public auction was held, and Abaya, et al. were the highest bidders. The appreciation of evidence is beyond the Court's jurisdiction in a Rule 45 petition. Memorandum Order No. 172 is inapplicable because it prohibits only the issuance of deeds of sale, not orders of award; the two are distinct concepts. An order of award is issued after a successful bidding and submission of proofs of publication, while a deed of sale is released only after all requirements are complied with. Moreover, Memorandum Order No. 126, issued in 2000, subsequently lifted the ban on deeds of sale in recognition of Proclamation No. 461's purpose to provide housing for AFP members.

• State Immunity: The doctrine of state immunity from suit stems from the principle that there can be no legal right against the authority which makes the law on which the right depends. However, the doctrine is not absolute — the State may waive immunity expressly or by implication, and the doctrine may be shelved when its stubborn observance will subvert the ends of justice. In Amigable vs. Cuenca and Ministerio vs. CFI of Cebu, the Court held that the doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating an injustice on a citizen. Although those cases involved just compensation for expropriated property, the principles apply here. The Philippine Navy has no valid reason to deprive Abaya, et al. of the enjoyment of the lands awarded to them, and it fully utilized the lands for approximately 20 years to generate income in violation of the awardees' property rights.

• Liability for Rental Fees: The Constitution provides that no person shall be deprived of life, liberty, or property without due process of law. The RTC and CA correctly ordered the turnover of the lots and payment of rental fees in the reasonable amount of ₱5,000.00 per month. These rental fees accrue not from the filing of the complaint but from the time Abaya, et al. acquired ownership of the lots — December 1996 for Abaya and Follosco, and November 1998 for Maglonzo and Sta. Clara. The rental fees shall earn interest at 6% per annum from the date of the RTC decision on June 24, 2015 until full payment, pursuant to Nacar vs. Gallery Frames.

• Doctrine of State Immunity from Suit — The State may not be sued without its consent, as there can be no legal right against the authority which makes the law on which the right depends. However, the doctrine is not absolute: the State may waive immunity expressly or by implication, and the doctrine may be shelved when its stubborn observance will lead to the subversion of the ends of justice. Applied here, the Philippine Navy could not invoke state immunity because it had no valid reason to deprive the awardees of their lots and had utilized the lands for approximately 20 years to generate income in violation of property rights.

• Classification and Disposition of Public Lands — Under Commonwealth Act No. 141 (the Public Land Act), the President may designate by proclamation any tract of public land as a reservation, and such reserved lands are non-alienable until again declared alienable. A presidential proclamation reclassifying reserved land as alienable and disposable, with an exclusionary clause for areas "being used or earmarked for public or quasi-public purposes," applies only to uses existing or earmarked at the time of issuance. A subsequent unilateral development by a government agency, not ratified by any presidential proclamation, cannot change the land's classification or shield it from disposition.

• Doctrine of Exhaustion of Administrative Remedies — Objections to applications or concessions under the Public Land Act must be filed before the proper government administrative offices (e.g., the Director of Lands), and actions for reversion of public lands must be instituted by the Solicitor General in the proper courts. An accion reinvindicatoria is not the proper forum to assail the validity of DENR orders of award.

• Distinction Between Order of Award and Deed of Sale — An order of award is issued to an applicant after a successful bidding and submission of proofs of publication and notice of sale. A deed of sale is released only as the last part of the application process, after all requirements are complied with. Memorandum Order No. 172, which prohibited only the issuance of deeds of sale, did not prohibit the issuance of orders of award.

• "The exclusionary clause cannot comprehend the golf course which is inexistent at the time the proclamation was issued. There is no basis to identify whether the empty land is being used for public or quasi-public purposes." — This passage articulates the ratio decidendi on the classification issue: the exclusionary clause in Proclamation No. 461 could not apply to a golf course that did not exist when the proclamation was issued in 1965.

• "the doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating an injustice on a citizen." — This is the canonical formulation from Ministerio vs. CFI of Cebu, quoted and applied here to hold that the Philippine Navy could not invoke state immunity to shield itself from an accion reinvindicatoria when it had violated the awardees' property rights for approximately 20 years.

• "The Philippine Navy and any of its officers are not vested with the power to classify and re-classify lands of public domain. At most, the subsequent development of the golf course was a unilateral decision on the part of the Philippine Navy, which is not ratified by any proclamation from the President." — This passage establishes that a government agency's unilateral use of public land cannot alter its legal classification without presidential proclamation, a principle central to the disposition of this case.

• Navy Officer's Village Association Inc. vs. Republic of the Philippines, 765 Phil. 429 (2015) — Distinguished. In that case, the Court upheld the nullification of a title because a subsequent proclamation (No. 478) had reclassified the land back to non-alienable for the Veterans Rehabilitation and Medical Training Center. Here, no such reclassification occurred, so the land remained alienable and disposable.
• Amigable vs. Cuenca, 150 Phil. 422 (1972) — Followed. The Court applied the principle that the doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating an injustice on a citizen, extending it from the context of just compensation to the present case of property deprivation.
• Ministerio vs. CFI of Cebu, 148-B Phil. 474 (1971) — Followed. Cited as the landmark case establishing that governmental immunity cannot perpetrate injustice on a citizen.
• Republic vs. Southside Homeowners Association, Inc., 534 Phil. 8 (2006) — Cited for the proposition that the President, upon recommendation of the DENR Secretary, may designate public lands as reservations by proclamation, and that reserved lands are non-alienable until again declared alienable.
• Nacar vs. Gallery Frames, 716 Phil. 267 (2013) — Followed. Applied to fix the applicable interest rate at 6% per annum on the rental fees from the date of the RTC decision until full payment.
• Guzman vs. Court of Appeals, 258 Phil. 410 (1989) — Followed. Applied to establish that rental fees accrue from the time ownership is acquired, not from the filing of the complaint.

• Section 88, Commonwealth Act No. 141 (Public Land Act) — Provides that tracts of land reserved under the Act shall be non-alienable and not subject to occupation, entry, sale, lease, or other disposition until again declared alienable. Applied to establish that the military reservation lands were initially inalienable until Proclamation No. 461 reclassified portions as alienable and disposable.
• Sections 101, 102, and 106, Commonwealth Act No. 141 (Public Land Act) — Provide that actions for reversion of public lands shall be instituted by the Solicitor General in the proper courts, and that objections to applications or concessions shall be filed before the Director of Lands or the Secretary of Agriculture and Commerce. Applied to hold that an accion reinvindicatoria is not the proper forum to assail DENR orders of award.
• Proclamation No. 461 (1965) — Declared portions of Fort Andres Bonifacio as AFP Officers' Village, disposable under RA Nos. 274 and 730 in relation to the Public Land Act, with an exclusionary clause for areas used or earmarked for public or quasi-public purposes. Central to the classification issue; the Court held the exclusionary clause inapplicable to the golf course.
• Memorandum Order No. 172 (1993) — Prohibited the Director of the Land Management Bureau from executing or issuing deeds of sale on certain areas of the Fort Bonifacio Military Reservation. Held inapplicable because it prohibited only deeds of sale, not orders of award.
• Memorandum Order No. 126 (2000) — Lifted the ban on issuance of deeds of sale under Memorandum Order No. 172 for AFP Officers' Village lands, recognizing the purpose of Proclamation No. 461 to provide housing for AFP/PNP members.
• Article XVI, Section 3, 1987 Constitution — Provides that the State may not be sued without its consent. Cited as the constitutional basis for the doctrine of state immunity, which the Court held could not be invoked by the Philippine Navy in this case.

Peralta, C.J. (Chairperson), Caguioa, J. Reyes, Jr., and Lazaro-Javier, JJ., concurred.