Republic v. Quasha

Facts:

William R. Quasha, an American citizen, had acquired by purchase on 26 November 1954 a parcel of land with the permanent improvements thereon, situated at 22 Molave Place, in Forbes Park, Municipality of Makati, Province of Rizal. Quasha averred the acquisition of the real estate aforesaid; that the Republic of the Philippines, through its officials, claimed that upon expiration of the Parity Amendment on 3 July 1974, rights acquired by citizens of the United States of America shall cease and be of no further force and effect; that such claims necessarily affect the rights and interest of the plaintiff, and that continued uncertainty as to the status of plaintiff's property after 3 July 1974 reduces the value thereof, and precludes further improvements being introduced thereon, for which reason plaintiff Quasha sought a declaration of his rights under the Parity Amendment, said plaintiff contending that the ownership of properties during the effectivity of the Parity Amendment continues notwithstanding the termination and effectivity of the Amendment.

Then Solicitor General Antonio P. Barredo (and later on his successors in office, Felix V. Makasiar and Felix Q. Antonio) contended that the land acquired by plaintiff constituted private agricultural land and that the acquisition violated section 5, Article XIII, of the Constitution of the Philippines, which prohibits the transfer of private agricultural land to non-Filipinos, except by hereditary succession; and assuming, without conceding, that Quasha's acquisition was valid, any and all rights by him so acquired "will expire ipso facto and ipso jure at the end of the day on 3 July 1974, if he continued to hold the property until then, and will be subject to escheat or reversion proceedings" by the Republic.

CFI of Rizal declared that acquisition by the plaintiff on 26 November 1954 of, the private agricultural land.

Issue:

Whether or not under or by virtue of the so-called Parity Amendment to the Philippine Constitution respondent Quasha could validly acquire ownership of the private residential land in Forbes Park, Makati, Rizal, which is concededly classified private agricultural land.

Held:

As originally drafted by the framers of the Constitution, the privilege to acquire and exploit agricultural lands of the public domain, and other natural resources of the Philippines, and to operate public utilities, were reserved to Filipinos and entities owned or controlled by them: but the "Parity Amendment" expressly extended the privilege to citizens of the United States of America and/or to business enterprises owned or controlled by them.
No other provision of our Constitution was referred to by the "Parity Amendment"; not Section 2 of Article XIII limiting the maximum area of public agricultural lands that could be held by individuals or corporations or associations; nor Section 5 restricting the transfer or assignment of private agricultural lands to those qualified to acquire or hold lands of the public domain (which under the original Section 1 of Article XIII meant Filipinos exclusively), save in cases of hereditary succession.

As ruled in Commissioner of Internal Revenue vs. Guerrero, et al., L-20942, 22 September 1967, 21 SCRA 181, per Justice Enrique M. Fernando:

"'While good faith, no less than adherence to the categorical wording of the Ordinance, requires that all the rights and privileges thus granted to Americans and business enterprises owned and controlled by them be respected, anything further would not be warranted. Nothing less would suffice but anything more is not justified.'"

The basis for the strict interpretation was given by former President of the University of the Philippines, Hon. Vicente G. Sinco (Congressional Record, House of Representatives, Volume 1, No. 26, page 561):

"'It should be emphatically stated that the provisions of our Constitution which limit to Filipinos the rights to develop the natural resources and to operate the public utilities of the Philippines is one of the bulwarks of our national integrity. The Filipino people decided to include it in our Constitution in order that it may have the stability and permanency that its importance requires. It is written in our Constitution so that it may neither be the subject of barter nor be impaired in the give and take of politics. With our natural resources, our sources of power and energy, our public lands, and our public utilities, the material basis of the nation's existence, in the hands of aliens over whom the Philippine Government does not have complete control, the Filipinos may soon find themselves deprived of their patrimony and living as it were, in a house that no longer belongs to them.'"

The true extent of the Parity Amendment, as understood by its proponents in the Philippine Congress, was clearly expressed by one of its advocates, Senator Lorenzo Sumulong:

'It is a misconception to believe that under this amendment Americans will be able to acquire all kinds of natural resources of this country, and even after the expiration of 28 years their acquired rights cannot be divested from them. If we read carefully the language of thisamendment which is taken verbatim from the provisions of the Bell Act, and, which in turn, is taken also verbatim from certain sections of theConstitution, you will find out that the equality of rights granted under this amendment refers only to two subjects. Firstly, it refers to exploitation of natural resources, and secondly, it refers to the operation of public utilities. Now, when it comes to exploitation of natural resources, it must be pointed out here that under our Constitution and under this amendment, only public agricultural land may be acquired, may be bought, so that on the supposition that we give way to this amendment and on the further supposition that it is approved by our people, let not the mistaken belief be entertained that all kinds of natural resources may be acquired by Americans because under our Constitution forest lands cannot be bought, mineral lands cannot be bought, because by explicit provision of the Constitution they belong to the State, they belong to our Government, they belong to our people. That is why we call them rightly the patrimony of our race. Even if the Americans should so desire, they can have no further privilege than to ask for a lease of concession of forest lands and mineral lands because it is so commanded in the Constitution. And under the Constitution, such a concession is given only for a limited period. It can be extended only for 25 years, renewable for another 25. So that with respect to mineral or forest lands, all they can do is to lease it for 25 years, and after the expiration of the original 25years they will have to extend it, and I believe it can be extended provided that it does not exceed 28 years because this agreement is to be effected only as an ordinance and for the express period of 28 years. So that it is my humble belief that there is nothing to worry about insofar as our forest and mineral lands are concerned.

Now, coming to the operation of public utilities, as every member of the Congress knows, it is also for a limited period, under our Constitution, for a period not exceeding 50 years. And since this amendment is intended to endure only for 28 years, it is my humble opinion that when Americans try to operate public utilities they cannot take advantage of the maximum provided in the Constitution but only the 28 years which is expressly provided to be the life of this amendment.

There remains for us to consider the case of our public agricultural lands. To be sure, they may be bought, and if we pass this amendment, Americans may buy our public agricultural lands, but the very same Constitution applying even to Filipinos, provides that the sale of public agricultural lands to a corporation can never exceed one thousand and twenty-four hectares. That is to say, if an American corporation, and American enterprise, should decide to invest its money in public agricultural lands, it will be limited to the amount of 1,024 hectares, no more than 1,024 hectares' (Italics supplied)."

Thus, whether from the Philippine or the American side, the intention was to secure parity for United States citizens only in two matters: (1) exploitation, development and utilization of public lands, and other natural resources of the Philippines; and (2) the operation of public utilities. That and nothing else.

Under the "Parity Amendment" to our Constitution, citizens of the United States and corporations and business enterprises owned or controlled by them can not acquire and own, save in cases of hereditary succession, private agricultural lands in the Philippines and that all other rights acquired by them under said Amendment will expire on 3 July 1974.