G.R. No. L-8782 - Florentino vs. Philippine National Bank

Hospicio de San Jose de Barili was created in 1925 by Act No. 3239 as a charitable institution to care for indigent invalids and other helpless persons.
The instituting statute endowed the Hospicio with personal and real properties donated by its founders and other benefactors to fund its operations.
Section 4 of Act No. 3239 expressly prohibits the sale of the donated properties “under any consideration” to ensure that the asset base remains intact for its charitable functions.

In 1987, the Department of Agrarian Reform Regional Office (DARRO) issued an order placing two parcels of land owned by the Hospicio under Operation Land Transfer for the benefit of 22 tenant farmers.
The order was based on Presidential Decree (P.D.) No. 27, a land reform law, and later reinforced by Republic Act No. 6657 (the Comprehensive Agrarian Reform Law or CARL).
The land transfers were executed as a forced expropriation measure under agrarian reform, not through a consensual contract.

Hospicio filed a motion for reconsideration and subsequently a petition challenging the land transfer, arguing that Section 4 of Act No. 3239, a special law, should protect its property.
It maintained that the prohibition of sale was limited to conventional, consensual sales and did not extend to forced sales arising from agrarian reform expropriation.
Hospicio further contended that applying forced transfer amounted to an impairment of contractual obligations under the Constitution’s non-impairment clause.

The Department of Agrarian Reform and the Office of the Solicitor General (OSG) argued that the agrarian reform laws (P.D. No. 27 and CARL) have general repealing clauses, which override the specific prohibition in Act No. 3239.
They maintained that the agrarian reform laws do not exempt lands held by charitable institutions and that forced transfers do not qualify as conventional sales.
The Hospicio, on the other hand, asserted that its property is protected by the special law provision and that the forced transfer lacks the element of consent intrinsic to a sale.

Does Section 4’s prohibition on selling the donated properties extend to forced sales or merely to conventional sales arising from voluntary contracts?
Can the absence of consent in a forced transfer be reconciled with the contractual nature of a “sale” as envisaged by the statute?

Whether the general repealing clauses contained in P.D. No. 27 and the CARL are sufficient to repeal or modify the provisions of Act No. 3239 concerning the sale of charitable properties.
Whether those clauses effectively remove the protection otherwise afforded to the Hospicio’s property under the special law.

Does the forced expropriation of the Hospicio’s lands under agrarian reform laws violate the constitutional prohibition on impairing the obligation of contracts?
Is the legislative act of expropriation, which lacks the consensual element of a contract, subject to the same limitations as private contractual agreements?