G.R. No. 235619 - Philippine Navy Golf Club, Inc. vs. Abaya

Background and Establishment of Military Reservation and AFP Officers’ Village

In 1957, President Carlos Garcia issued Proclamation No. 423 establishing Fort William McKinley (later renamed Fort Andres Bonifacio) as a military reservation, consisting of public lands reserved for military purposes.
In 1965, President Diosdado Macapagal issued Proclamation No. 461, which excluded portions of the military reservation and declared them as the AFP Officers’ Village, to be disposed of under Republic Acts Nos. 274 and 730, in relation to Commonwealth Act No. 141 (Public Land Act). This effectively reclassified portions of the military reservation as alienable and disposable lands for disposition to AFP officers and veterans.
Proclamation No. 461 contained an exclusionary clause that areas within the AFP Officers’ Village being used or earmarked for public or quasi-public purposes were excluded from disposition.

In 1976, the Philippine Navy developed part of the AFP Officers’ Village land into a golf course, managed and controlled by the Philippine Navy Golf Club, Inc.
The Department of Environment and Natural Resources (DENR) later awarded lots in the AFP Officers’ Village to former military officers – Merardo Abaya and Ruben Follosco in December 1996, and Angelito Maglonzo and Elias Sta. Clara in November 1998.
Abaya, et al. were unable to improve or occupy the lots due to the Philippine Navy and the Golf Club already occupying the land (the golf course).

Abaya, et al. filed an accion reinvindicatoria (an action to recover possession) against the Philippine Navy and the Golf Club before the Regional Trial Court (RTC) to reclaim possession of the lots and to receive rental fees for illegal occupation.
The Philippine Navy and the Golf Club claimed:

The golf course land was excluded from disposition under the exclusionary clause in Proclamation No. 461 as it was being used for public/quasi-public purposes.
The case could not proceed against the Philippine Navy without its consent (state immunity).
The transfer to Abaya, et al. violated Memorandum Order No. 172 prohibiting sale of certain military reservation lands.

On June 24, 2015, the RTC ruled in favor of Abaya, et al., ordering the Philippine Navy and the Golf Club to turn over the lots and pay monthly rental fees of P5,000 for each parcel from the filing date until vacation, with 12% interest from finality of judgment until full payment. Claims for moral damages and attorney’s fees were denied. The defendants’ counterclaims were likewise denied.
The Philippine Navy and the Golf Club appealed to the Court of Appeals (CA). They reiterated their arguments and raised that Memorandum Order No. 172 prohibited issuance of deeds of sale in the area.
On July 10, 2017, the CA affirmed the RTC’s decision, holding that:

The lands where the golf course stands remained alienable and disposable under Proclamation No. 461, with no valid reservation for the golf course.
The exclusionary clause did not apply because the golf course was established after the proclamation and was not earmarked then.
Memorandum Order No. 172 did not apply as it only prohibited issuance of deeds of sale, not orders of award (which were validly issued).
The doctrine of non-suability (state immunity) could not be used to perpetuate injustice against the private parties.
The legal interest on monetary awards was reduced from 12% to 6% per annum from finality of judgment until full satisfaction.

The Philippine Navy and the Golf Club’s motion for reconsideration was denied, prompting this petition for review before the Supreme Court.

Whether the land occupied by the Philippine Navy Golf Club is alienable and disposable public land or reserved for public/quasi-public purposes under Proclamation No. 461 and other relevant laws.
Whether the orders of award issued by DENR in favor of Abaya, et al. were valid and binding.
Whether the Philippine Navy and Golf Club can invoke state immunity to avoid turning over possession and paying rental fees.
Whether Memorandum Order No. 172 prohibits the awarding and sale of the disputed lands to Abaya, et al.
The proper amount and reckoning of rental fees to be paid to Abaya, et al. for the use and occupation of the lots.