Property administered by municipal corporations

Article 424 of the Civil Code of the Philippines talks of property administered by municipal corporations.

[1] Property for public use, in the provinces, cities, and municipalities, consist of the provincial roads, city streets, municipal streets, the squares, fountains, public waters, promenades, and public works for public service paid for by said provinces, cities, or municipalities.

[2] Patrimonial property of municipal corporations:

[2a] Provinces, cities, and municipalities, as a juridical entities, also possess private property to answer for its economic necessities.
[2b] Classification of properties of provinces, cities, and municipalities:

(i) Properties acquired with their own funds in their private or corporate capacity over which the political subdivision has ownership and control; and
(ii) Properties of public dominion held in trust for the State’s inhabitants are subject to the control and supervision of the State. (Salas v. Jarencio)

[2c] A municipal corporation must prove that they acquired the land with their own corporate funds.
[2d] The presumption is that land comes from the State upon the creation of the municipality. All lands in the possession of the municipality, except for those acquired with its private funds, are deemed to be property of public dominion, held in trust for the State for the benefit of its inhabitants.
[2e] Congress has paramount power to dispose of lands of public dominion in a municipality, the latter being a subdivision only for purposes of local administration. [Salas v. Jarencio, (1972)]

G.R. No. 97764; August 10, 1992: LEVY D. MACASIANO, petitioner, vs. HONORABLE ROBERTO C. DIOKNO, et al., respondents.
A local government unit may, through its head acting pursuant to a resolution of its sanggunian and in accordance with existing law, close any barangay, municipal, city or provincial road, street, alley, park or square. No such way or place or any part of thereof shall be closed without indemnifying any person prejudiced thereby. A property thus withdrawn from public use may be used or conveyed for any purpose for which other real property belonging to the local unit concerned might be lawfully used or conveyed.However, the aforestated legal provision which gives authority to local government units to close roads and other similar public places should be read and interpreted in accordance with basic principles already established by law. These basic principles have the effect of limiting such authority of the province, city or municipality to close a public street or thoroughfare. Article 424 of the Civil Code lays down the basic principle that properties of public dominion devoted to public use and made available to the public in general are outside the commerce of man and cannot be disposed of or leased by the local government unit to private persons. Aside from the requirement of due process which should be complied with before closing a road, street or park, the closure should be for the sole purpose of withdrawing the road or other public property from public use when circumstances show that such property is no longer intended or necessary for public use or public service.

When it is already withdrawn from public use, the property then becomes patrimonial property of the local government unit concerned (Article 422, Civil Code; Cebu Oxygen, etc. et al. v. Bercilles, et al., G.R. No. L-40474, August 29, 1975, 66 SCRA 481). It is only then that the municipality can "use or convey them for any purpose for which other real property belonging to the local unit concerned might be lawfully used or conveyed" in accordance with the last sentence of Section 10, Chapter II of Blg. 337, known as Local Government Code.

In one case, the City Council of Cebu, through a resolution, declared the terminal road of M. Borces Street, Mabolo, Cebu City as an abandoned road, the same not being included in the City Development Plan. Thereafter, the City Council passes another resolution authorizing the sale of the said abandoned road through public bidding. The Supreme Court held that the City of Cebu is empowered to close a city street and to vacate or withdraw the same from public use. Such withdrawn portion becomes patrimonial property which can be the object of an ordinary contract (Cebu Oxygen and Acetylene Co., Inc. v. Bercilles, et al., G.R. No. L-40474, August 29, 1975, 66 SCRA 481). 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.