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[G.R. No. 16887. November 17, 1920. ]

MIGUEL R. CORNEJO, Petitioner, v. ANDRES GABRIEL, provincial governor of Rizal, and
the PROVINCIAL BOARD OF RIZAL, composed of ANDRES GABRIEL, PEDRO MAGSALIN
and CATALINO S. CRUZ, Respondents.
1. CONSTITUTIONAL LAW; DUE PROCESS OF LAW; PUBLIC CORPORATIONS; SUSPENSION
OF MUNICIPAL OFFICERS; SECTIONS 2188-2191, ADMINISTRATIVE CODE; CONSTRUED.
Numerous complaints having been received by the provincial governor of Rizal against the
conduct of the municipal president of Pasay, these complaints were investigated by the provincial
governor who, without a hearing, temporarily suspended the municipal president and laid the
charges before the provincial board for investigation. Held: (1) That the provincial governor has
only followed the provisions of the law and (2) that the provisions of the law, sections 2188-2191 of
the Administrative Code, do not offend the due process of law clause of the Philippine Bill of
Rights.
2. ID.; ID.; ID.; ID.; ID. In ordinary cases, to condemn without a hearing violates the due process
of law clause of the American Constitution and of the Philippine Bill of Rights.
3. ID.; ID.; ID.; ID.; ID. Ordinarily, a public official should not be removed from office without
notice, charges, a trial, and an opportunity for explanation.
4. ID.; ID.; ID.; ID.; ID. Due process of law is not necessarily judicial process; much of the
process by means of which the Government is carried on, and the order of society maintained, is
purely executive or administrative, which is as much due process of law, as is judicial process.
While a day in court is a matter of right in judicial proceedings, in administrative proceedings it is
otherwise since they rest upon different principles.
6. ID.; ID.; ID.; ID.; ID. In certain proceedings of an administrative character the right to a notice
and hearing are not essential to due process of law.
6. ID.; ID.; ID.; ID.; ID. It is well settled in the United States, that a public office is not property
within the sense of the constitutional guaranties of due process of law but is a public trust or
agency.
7. ID.; ID.; ID.; ID.; ID. Power to suspend temporarily may be exercised without notice to the
person suspended.
8. ID.; ID.; ID.; ID.; ID. Notice and hearing are not prerequisites to the suspension of a public
officer under a statute which does not provide for such notice and hearing.
9. GOVERNMENT OF THE PHILIPPINE ISLANDS; NATURE. The basic idea of government in
the Philippine Islands, as in the United States, is that of a popular representative government, the
officers being mere agents and not rulers of the people, one where no man or set of men has a
proprietary or contractual right to an office, but where every officer accepts office pursuant to the
provisions of the law and holds the office as a trust for the people whom he represents.
DECISION
MALCOLM, J. :
The petitioner in this case, the suspended municipal president of Pasay, Rizal, seeks by these
proceedings in mandamus to have the provincial governor and the provincial board of the Province
of Rizal temporarily restrained from going ahead with investigation of the charges filed against him
pending resolution of the case, and to have an order issue directed to the provincial governor
commanding him to return the petitioner to his position as municipal president of Pasay. The
members of the provincial board have interposed a demurrer based on the ground that this court
has no right to keep them from complying with the provisions of the law. The provincial governor
has filed an answer to the petition, in which he alleges as a special defense that numerous
complaints have been received by him against the conduct of Miguel R. Cornejo, municipal
president of Pasay; that these complaints were investigated by him; that he came to the conclusion
that agreeable to the powers conferred upon provincial governors, the municipal president should
be temporarily suspended, and that an investigation is now being conducted by the provincial
board.
Counsel for petitioner has argued, with much eloquence that his client has been deprived of an
office, to which he was elected by popular vote, without having an opportunity to be heard in his
own defense. The respondents reply that all that the provincial governor and the provincial board
have done in this case is to comply with the requirement of the law which they are sworn to
enforce. Obviously, therefore, we should first have before us the applicable provisions of the
Philippine law bearing on the subject of suspension of public officers.
Under the title of "Provincial supervision over municipal officers," Article IV of Chapter 57 of the
Administrative Code, provides:

further reprimand, it shall direct the provincial governor to deliver such reprimand in pursuance of
its judgment; and in either case the official, if previously suspended, shall be reinstated.
"If in the opinion of the board the case is one requiring more severe discipline, it shall without
unnecessary delay forward to the Chief. of the Executive Bureau certified copies of the record in
the case, including the charges, the evidence and the findings of the board, to which shall be
added the recommendation of the board as to whether the official ought to be suspended, further
suspended, or finally dismissed from office; and in such case the board may exercise its discretion
to reinstate the official, if already suspended, or to suspend him or continue his suspension
pending final action.
"The trial of a suspended municipal official and the proceedings incident thereto shall be given
preference over the current and routine business of the board.
"Action by Chief of Executive Bureau. Upon receiving the papers in any such proceeding the
Chief of the Executive delay and shall make such order for the reinstatement dismissal,
suspension, or further suspension of the Official as the facts shall warrant. Disciplinary suspension
made upon order of the Chief of the Executive Bureau shall be without pay and in duration shall
not exceed two months. No final dismissal hereinunder shall take effect until recommended by the
Department Head and approved by the Governor-General."
With the foregoing legal provisions in mind, certain aspects of the case can be disposed of without
difficulty. Thus it cannot be seriously contended that the courts should interfere with an orderly
investigation which is about to be conducted by the provincial board. Nor can there be any doubt
as to the meaning of the law. A very minute and extensive procedure is provided by the Legislature
for central and provincial supervision of municipal officers. The provincial governor, in receiving
and investigating complaints against such officers, may take three courses. For a minor
delinquency he may reprimand the offender; but if the maladministration in office is more serious
he may temporarily suspend the officer, and thereafter may file written charges against the officer
with the provincial board. The procedure followed before the provincial board and later on appeal
to the Chief of the Executive Bureau, while interesting, does not concern us. The important fact is
that the law, in permitting a provincial governor temporarily to suspend a municipal officer, makes
no mention of a formal hearing of the charges.
In the exercise of this disciplinary power by the provincial governor, all that he can do before the
presentation of formal charges is either to reprimand the officer or to suspend him temporarily from
office. In the latter case the provincial governors action is not a finality. The law is especially
careful to guard the rights of officers charged with maladministration in office. But the point is made
that, notwithstanding the provisions of the law and notwithstanding long official practice, the
temporary suspension of a municipal officer, without an opportunity to be heard in his own defense,
is in contravention of the provisions of the Philippine Bill of Rights concerning due process of law.
So much has been written on the subject of due process of law that it would be futile to enter into
its intricate mazes. It is self-evident, however, that, in ordinary cases, to condemn without a
hearing violates the due process of law clause of the American Constitution and of the Philippine
Bill of Rights. It is for this reason that we can well understand the logic of those who cling to this
thought and to whom a contemplated violation of the Constitution is most repugnant. It is but fair, in
ordinary cases, that a public official should not be removed or suspended without notice, charges,
a trial, and an opportunity for explanation. But not permitting our judgment to be unduly swayed by
sympathy for the petitioners brave fight, and recalling again that the courts have ordinarily to give
effect to legislative purposes, it is further only fair to mention certain exceptions to the due process
of law rule, which would seem to include the instant case.
The fact should not be lost sight of that we are dealing with an administrative proceeding and not
with a judicial proceeding. As Judge Cooley, the leading American writer on Constitutional Law, has
well said, due process of law is not necessarily judicial process; much of the process by means of
which the Government is carried on, and the order of society maintained, is purely executive or
administrative, which is as much due process of law, as is judicial process. While a day in court is
a matter of right in judicial proceedings, in administrative proceedings it is otherwise since they rest
upon different principles. (Weimer v. Bunbury [1874], 30 Mich., 201; Den. v. Hoboken Land and
Improvement Co. [1856], 18 How., 272, followed in Forbes v. Chuoco Tiaco [1910], 16 Phil., 534;
Tan Te v. Bell [1914], 27 Phil., 354; U. S. v. Gomez Jesus [1915], 31 Phil., 218 and other Philippine
cases.) In certain proceedings, therefore, of an administrative character, it may be stated, without
fear of contradictions that the right to a notice and hearing are not essential to due process of law.
Examples of Specifically or summary proceedings affecting the life, liberty or property of the
individual without any hearing can easily be recalled. Among these are the arrest of an offender
pending the filing of charges; the restraint of property in tax cases; the granting of preliminary
injunctions ex parte; and the suspension of officers or employees by the Governor General or a
Chief of a Bureau pending an investigation. (See Weimer v. Bunbury, supra; 12 C. J., 1224;
Administrative Code, sec. 694.)

"The provincial governor shall receive and investigate complaints against municipal officers for
neglect of duty, oppression, corruption, or other form of maladministration in office. For minor
delinquency he may reprimand the offender; and if a more severe punishment seems to be
desirable, he shall submit written charges touching the matter to the provincial board, and he may
in such case suspend the officer (not being the municipal treasurer) pending action by the board, if
in his opinion the charge be one affecting the official integrity of the officer in question. Where
suspension is thus effected, the written charges against the officer shall be filed with the board
within ten days."

Again, for this petition to come under the due process of law prohibition, it would be necessary to
consider an office as "property." It is, however, well settled in the United States, that a public office
is not property within the sense of the constitutional guaranties of due process of law, but is a
public trust or agency. In the case of Taylor v. Beckham ([1899], 178 U. S., 548), Mr. Chief Justice
Fuller said that: "Decisions are numerous to the effect that public offices are mere agencies or
trusts, and not property as such." The basic idea of government in the Philippine Islands, as in the
United States, is that of a popular representative government, the officers being mere agents and
not rulers of the people, one where no one man or set of men has a proprietary or contractual right
to an office, but where every officer accepts office pursuant to the provisions of the law and holds
the office as a trust for the people whom he represents.

"Trial of municipal officer by provincial board. When written charges are preferred by a
provincial governor against a municipal officer, the provincial board shall, at its next meeting,
regular or special, furnish a copy of said charges to the accused official, with a notification of the
time and place of hearing thereon; and at the time and place appointed, the board shall proceed to
hear and investigate the truth or falsity of said charges, giving the accused official full opportunity
to be heard. The hearing shall occur as soon as may be practicable, and in case suspension has
been effected, not later than fifteen days from the date the accused is furnished a copy of the
charges, unless the suspended official shall, on sufficient grounds, request an extension of time to
prepare his defense.

Coming now to the more specific consideration of the issue in this case, we turn to the article by
Prof. Frank J. Goodnow, generally considered the leading authority in the United States on the
subject of Administration Law, in Vol. 29, Cyclopedia of Law and Procedure, and find the rule as to
suspension of public officers laid down very concisely as follows: "Power to suspend may be
exercised without notice to the person suspended." (P. 1405.) The citation by Professor Goodnow
to support his conclusion is State of Florida, ex rel. Attorney-General v. Johnson ([1892], 30 Fla.,
433; 18 L. R. A., 410). It was here held by the Supreme Court of Florida that the governor could,
under section 15 of the executive article of the Constitutions suspend an officer for neglect of duty
in office without giving previous notice to the officer of the charge made against him.

"Action by provincial board. If, upon due consideration, the provincial board shall adjudge that
the charges are not sustained, the proceedings shall be dismissed; if it shall adjudge that the
accused has been guilty of misconduct which would be sufficiently punished by reprimand, or

A later compilation of the pertinent authorities is to be found in 22 Ruling Case Law, pp. 564, 565.
On the subject of suspension of public officers it is here said:
"The suspension of an officer pending his trial for mis conduct, so as to tie his hands for the time

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being, seems to be universally accepted as fair, and often necessary. . . . Notice and hearing are
not prerequisites to suspension unless required by statute and therefore suspension without such
notice does not deprive the officer of property without due process of law. Nor is a suspension
wanting in due process of law or a denial of the equal protection of the laws because the evidence
against the officer is not produced and he is not given an opportunity to confront his accusers and
cross-examine the witnesses."
The case to support the first sentence in the above enunciation of the rule is State v. Megaarden
(85 Minn., 41), which in turn is predicated on State v. Peterson ([1892], 50 Minn., 239). In a
discussion of the subject more general than specific, it was said
"The safety of the state, which is the highest law, imperatively requires the suspension, pending his
trial, of a public officer, especially a custodian of public funds, charged with malfeasance or
nonfeasance in office. Suspension does not remove the officer, but merely prevents him, for the
time being, from performing the functions of his office; and from the very necessities of the case
must precede a trial or hearing. Such temporary suspension without previous hearing is fully in
accordance with the analogies of the law. It is a constitutional principle that no person shall be
deprived of his liberty or property except by due process of law, which includes notice and a
hearing, yet it was never claimed that in criminal procedure a person could not be arrested and
deprived of his liberty until a trial could reasonably be had, or that in civil actions ex parte and
temporary injunctions might not be issued and retained in proper cases, until a trial could be had,
and the rights of the parties determined. We have no doubt, therefore, of the authority of the
legislature to vest the governor with power to temporarily suspend a county treasurer pending the
investigation of the charges against him, of official misconduct."
The case cited by the editors of Ruling Case Law as authority for their second sentence is that of
Griner v. Thomas ([1907], 101 Texas, 36; 16 Ann. Cas., 944). The holding of the court here was
that it is within the power of the legislature to authorize the temporary suspension of a public officer
during the pendency of valid proceedings to remove such officer and as an incident to such
proceedings, notwithstanding the fact that the constitution has given power to remove such officer
only for cause and after a hearing. Notice and hearing are not prerequisites to the suspension of a
public officer under a statute which does not provide for such notice and hearing.
The third case cited by Ruling Case Law comes from the United States Supreme Court. (Wilson v.
North Carolina [1897], 169 U. S., 586.) An examination of the decision, however, shows that while
it tends to substantiate the rule, the facts are not exactly on all fours with those before us. Without,
therefore, stopping to set forth the facts, only the following from the body of the decision need be
noted, viz.
"In speaking of the statute and the purpose of this particular provision the Supreme Court of the
State said: The duty of suspension was imposed upon the Governor from the highest motives of
public policy to prevent the danger to the public interests which might arise from leaving such great
powers and responsibilities in the hands of men legally disqualified. To leave them in full charge of
their office until the next biennial session of the legislature, or pending litigation which might be
continued for years, would destroy the very object of the law. As the Governor was, therefore, by
the very letter and spirit of the law, required to act and act promptly, necessarily upon his own
findings of fact, we are compelled to hold that such official action was, under the circumstances,
due process of law. Even if it were proper, the Governor would have no power to direct an issue
like a chancellor.
"The highest court of the State has held that this statute was not a violation of the constitution of
the State; that the hearing before the Governor was sufficient; that the office was substantially an
administrative one, although the commission was designated by a statute subsequent to that
which created it, a court of record; that the officer taking once under the statute was bound to take
it on the terms provided for therein; that he was lawfully suspended from office; and that he was
not entitled to a trial by jury upon the hearing of this case in the trial court. As a result the court
held that the defendant had not been deprived of his property without due process of law, nor had
he been denied the equal protection of the law.
x
x
x
"We are of opinion the plaintiff in error was not deprived of any right guaranteed to him by the
Federal Constitution, by reason of the proceedings before the Governor under the statute above
mentioned, and resulting in his suspension from office.
"The procedure was in accordance with the constitution and laws of the State. It was taken under a
valid statute creating a state office in a constitutional manner, as the state court has held. What
kind and how much of a hearing the officer should have before suspension by the Governor was a
matter for the state legislature to determine, having regard to the constitution of the State." (There
can also be cited as supporting authority State ex rel Wendling v. Board of Police and Fire
Commissioners [1915], 159 Wis., 295; Sumpter v. State [1906], 81 Ark., 60; Gray v. McLendon
[1910], 134 Ga., 224; State v. Police Commissioners, 16 Mo. App., 947; Preston v. City of Chicago
[1910], 246 III., 26; and People vs: Draper [1910], 124 N. Y. S., 758, where it was held that the
legislature has the right to authorize an officer to remove a appointive or elective officer without
notice or hearing.)
Certain intimations have been made that under the procedure prescribed by the law an injustice
might be done municipal officers. Such suppositions are not unusual even as to cases before the
courts, but in this as in all other instances, the presumption always is that the law will be followed
and that the investigation and the hearing will be impartial. In the language of Justice Trent in
Severino v. Governor-General ([1910], 16 Phil., 366, 402), "the presumption is just as conclusive in
favor of executive action, as to its correctness and justness, as it is in favor of judicial action." We
entertain no doubt that the provincial governor, fully conscious of the trust reposed in him by the
law, will act only in cases where strong reasons exist for exercising the power of suspension and
upon a high consideration of his duty.
The suggestion that an unfriendly governor might unduly delay the hearing is also without much
force. The same might be said of any administrative officer, or in fact of any judicial officer. The
presumption, again, is that every officer will do his duty promptly, and if he does not, certainly a
remedy can be found to make him do so. Not only this, but the law before us expedites the
proceedings by fixing a short period of ten days within which the provincial governor must lay the
charges before the provincial board, which must be heard by- the latter body within fifteen days. Of
more compelling force is the suggestion from the other side that the public interest might suffer
detriment by postponing the temporary suspension until after the hearing.
Our holding, after most thoughtful consideration, is that the provisions of section 2188 of the
Administrative Code are clear and that they do not offend the due process of law clause of the
Philippine Bill of Rights. Accordingly, it is our duty to apply the law without fear or favor.

Petition denied with costs. So ordered.

Separate Opinions
JOHNSON, J., dissenting:
This is an original action for the writ of mandamus to require the respondents to reinstate the
petitioner to his office as president of the municipality of Pasay, Province of Rizal.
The facts upon which the petition is based are not in dispute. They are not only admitted by the
demurrer of the respondent Andres Gabriel but were expressly admitted by him in open court.
They are:chanrob1es virtual 1aw library
(1) That the petitioner was duly elected by the people of the municipality of Pasay as president for
the period of three years from the 16th day of October, 1919;
(2) That the petitioner was suspended from said office on the 13th day of September, 1920, by the
respondent Andres Gabriel, without notice, without a hearing, and without an opportunity to
present any proof whatsoever in his defense.
The facts having been admitted, we have only a question of law to decide, to wit: Is the governor of
a province authorized under the law to suspend a municipal president from his office, to which he
has been legally elected for a period fixed by the law, without notice, without a hearing, and without
an opportunity to present proof in his defense?
Section 3 (first paragraph) of the Jones Law provides that no law shall be enacted in said Islands
which shall deprive any person of life, liberty or property without due process of law, or deny to any
person therein the equal protection of the law."cralaw virtua1aw library
Section 2188 of Act No. 2711 provides:chanrob1es virtual 1aw library
SEC. 2188. Supervisory authority of provincial governor over municipal officers. The provincial
governor shall receive and investigate complaints against municipal officers for neglect of duty
oppression, corruption, or other form of maladministration in office. For minor delinquency he may
reprimand the offender; and if a more severe punishment seems to be desirable, he shall submit
written charges touching the matter to the provincial board and he may in such case suspend the
officer (not being the municipal treasurer) pending action by the board, if in his opinion the charge
be one affecting the official integrity of the officer in question. Where suspension is thus effected,
the written charges against the officer shall be filed with the board within ten days."
It will be noted that while section 2188 provides for a suspension, it makes no provision for the
procedure in such cases. In the absence of a procedure prescribed by the statute, we are of the
opinion that the procedure marked by the Constitution (Jones Law) must be followed, to wit: That
no person shall be deprived of his life, liberty, or property without due process of law. "Due process
of law" has been defined many, many times, and simply means that before a man can be deprived
of his life, liberty or property, he must be given an opportunity to defend himself.
The right to hold, occupy and exercise an office is as much a species of property within the
protection of the law, as any other thing capable of possession; and, to wrongfully deprive one of it
or unjustly withhold it, is an injury which the law can redress in as ample a manner as any other
wrong. And that right is regarded as a right within the protection of the Fourteenth Amendment to
the Constitution of the United States, which says: "No State shall make or enforce any law which
shall abridge the privileges or immunities of citizens of the United States; nor shall any State
deprive any person of life, liberty or property without due process of law."
The power to remove an officer who has been duly elected for a specified period can be exercised
only, and for just cause, after the officer has had an opportunity for defense.
In the absence of express power, given in express words, the presumption must be, in view of the
provisions of the Jones Law above quoted, that the legislature intended that every officer duly
elected for a fixed period should be entitled to hold his office until the expiration of such period,
unless removed therefrom for cause, after a fair and impartial investigation in which he has been
given an opportunity to defend himself.
It seems to me that if the hero of the Filipino people, Jose Rizal, could read the decision of the
majority of this court and thereby learn that one of the citizens of the Philippine Islands has been
deprived of his property and rights, without a hearing, he would turn over in his grave and, with a
wailing cry, exclaim: "A social cancer of a new type is again in my beloved land!"
The question presented is not a new one. It has been discussed since long before the English
people, in mass, met upon the fields of Runnymede and demanded and obtained from an unwilling
king the Magna Charta, which has constituted the chief stone in the political edifice of all the
civilized nations since that time (year 1215). In creating the constitution for the Filipino people, the
United States Government expressly provided that no person, no Filipino, no citizen of the
Philippine Islands, shall be deprived of his life or property without "due process of law."cralaw
virtua1aw library
The question has been presented to the courts many, many times, and without exception the said
provision of the constitution has been sustained, except where the same constitution contains
other provisions authorizing the suspension of officers without a hearing. In the Philippine Islands
there is no authority in the constitution (the Jones Law) authorizing or justifying the statute in
question. Not only is such a statute not authorized but it is absolutely prohibited by the provisions
of the Jones Law quoted above. The Jopes Law provides that no law shall be enacted, etc.
In a discussion of the subject before us we must bear in mind the distinction between an
appointive and an elected officer. There are a few cases which hold that in case of an appointive
officer, where the appointment is at the pleasure of the appointing power, his suspension or
removal is exercisable at the mere discretion of the appointing power.
Where a person is appointed to an office and is a mere employee, whose position does not have
the dignity of an office, and, by virtue of his appointment, may be removed or suspended at the will
of the appointing power, then, of course, the rule is different. Such persons are not officers but
mere employees.

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On the other hand the authorities are practically unanimous, where the appointment or election is
made for a definite term, and the removal is to be for cause, that the power of removal or
suspension cannot be exercised without due notice and hearing.
The constitution and laws of the Philippine Islands having created the office of president of the
different municipalities and having fixed definitely the tenure of said office, the legislature, by virtue
of the provisions of the Jones Law, is prohibited from enacting any law which would justify any
individual in the state in removing him from office without first presenting charges against him and
giving him an opportunity to be heard.
In the case of State v. Hewitt (16 L. R. A., 413) the attorney-general of the State of South Dakota
admitted in open court "that it is true, as contended by the relator, that the preponderance of
authorities is against the removal of the officer for cause, whose term of once is fixed, by law,
without formal charges and a hearing thereon on timely notice."
Mr. Justice Bailey of the English Court, in the case of Williams v. Bagot (3 Barn and C., 785), said:
"It is contrary to common sense of justice that any party could be deprived of his rights and be
concluded unheard."cralaw virtua1aw library
Every officer in the Philippine Government who has been legally elected for a fixed period has a
right to be heard under the provisions of the Jones Law before he can be deprived of his rights. He
has a right to be heard and to explain.
In the absence of express constitutional authority, the Philippine Legislature is prohibited from
enacting a law by which any officer elected by the people for a definite period may be suspended
or removed from his office without first having been given an opportunity to be heard and to
present whatever defense he may have. (Jones Law, sec., 3; Dullan v. Wilson, 51 Mich., 128;
Hallgreen v. Campbell, 82 Mich., 255; Jacques v. Little, 51 Kansas, 300.)
In the case of Dullan v. Wilson (53 Mich., 392) the Supreme Court of the State of Michigan, with
whom Mr. Justice Cooley agreed, said: "We have examined carefully the authorities cited upon the
brief of the learned counsel for relator in support of the position that no notice is required to be
given, and that the action of the Executive is final and conclusive. It is sufficient to say, without
commenting specially upon them, that the reasoning of those cases does not commend itself to
our judgment. They appear to us to be opposed, not only to the decided weight of authority, but
also to the fundamental principles of justice.
In the case of Hallgren v. Campbell (82 Mich., 255), the Supreme Court of the State of Michigan
said: "We have not found any case where an officer who is appointed for a fixed term has been
held to be removable except for cause, and, wherever cause must be assigned for the removal of
the officer, he is entitled to notice and a chance to defend himself."cralaw virtua1aw library
In the case of Han v. Boston (142 Mass., 90) it was held that no power to remove or suspend an
officer could be exercised until after notice and an opportunity by the official in question to be
heard in his own defense.
In the case of State v. St. Louis (90 Mo., 19) the Supreme Court said: "When the removal is not
discretionary, but must be for a cause, . . . and nothing is said as to the procedure, a specification
of the charges, notice, and an opportunity to be heard are essential."
Mr. Dillon, in his valuable work on Municipal Corporations (sec. 250) says: "Where the right of
removal or suspension is confined to specific causes, such power cannot be exercised until there
have been formulated charges against the officer, notice thereof, and an opportunity for defense.
In the case of State v. Hastings (16 L. R. A., 791, 797) the Supreme Court of Nebraska, after citing
and commenting not only upon the cases cited above but also upon other cases, said: "It seems
plain to us that the doctrine of these cases is in accord with the weight of authority and is
supported by the soundest reasons."
It is true that a few cases can be found which hold that an officer may be suspended under a
statute, without notice and without a hearing. But it is believed that an examination of each of such
cases will show that such statutes are authorized by the constitution of the particular state.
All that has been said above relates only to the petition for mandamus against the respondent the
provincial governor of Rizal. I am fully convinced that a great preponderance of the jurisprudence
upon the question which I have here discussed shows clearly that the petitioner herein was
suspended in a manner not authorized by law, and that the writ of mandamus prayed for should be
issued, directing the reinstatement of the petitioner.
With reference to the respondent provincial board, the record shows that it was not a party to the
acts complained of in the petition in the present case. The petition, therefore, as against the
provincial board should be denied.
ARAULLO, J., dissenting:
Section 2188 of the Administrative Code which empowers the provincial governor to investigate
complaints against municipal officers for neglect of duty, corruption or other form of
maladministration in office does not, as may be seen from the text itself of said section, empower
the provincial governor to suspend the officer against whom the complaint may be presented
pending the investigation. There is even no word whatever in said section from which such power
may be inferred.
The suspension of the officer against whom the complaint may have been presented (when he is
not a municipal treasurer), may, according to said section, be ordered by the latter to the provincial
board after the investigation has been made, if he thinks it desirable to impose a more severe
made, if he thinks it desirable to impose a more severe punishment, or if, in his opinion, the charge
is one affecting the official integrity of the officer in question; and, in this case, that is, when the
suspension is effected after the investigation is held, such written charges against said official must
be presented by governor to the provincial board within the period of ten days. Therefore, it is clear
and evident, according to the text of said section, that during the investigation that the provincial
governor may hold, in view of a charge presented against a municipal officer, the latter cannot be
suspended from his office for the simple reason that such investigation may end in a reprimand of
the officer, which is the only punishment that the provincial governor may impose in such case
upon the municipal officer, and the law does not empower the governor to order said suspension at
that time, except only when a complaint is presented against the municipal officer to the provincial
board.

If, as has been said, the investigation which the provincial governor may hold against a municipal
officer may end either in the imposition of a punishment, such as a reprimand of the officer or in a
complaint against the municipal officer which the provincial governor may submit to the provincial
board, in the latter case suspending said municipal officer from that time, that time, that is, from
the time the complaint is made and submit to the provincial board, in the latter case suspending
said municipal officer from that time, that is, from the time the complaint is made and submitted to
the board within the period of ten days, a period determined and fixed, which the law grants for
said purpose, it is evident that the municipal officer should be notified of the complaint and
therefore should be heard in said investigation; otherwise, in holding the investigation without the
presence of the officer against whom the complaint may have been presented, and, in holding, at
most, a summary trial against him without first hearing him or giving him an opportunity to defend
himself, the reprimand imposed upon him, as the result of the investigation in the first case the
which said article 2188 refers, would be a penalty imposed upon the officer without due process of
law.
If this is true, it is also true that the officer subjected to investigation should be notified of the
complaint and should be heard in said investigation for, if such investigation should end in a
charge which the provincial governor may consider proper to present against him to the provincial
board, such investigation would be the basis of the charge against the officer and the provincial
board should take cognizance of such investigation in the corresponding proceeding. If the most
vulgar criminal is notified of the complaint presented against him before a justice of the peace and
is heard in the preliminary investigation which this judicial officer must hold before the
corresponding information is filed by the fiscal in a court of first instance, and if in that investigation
he is given the opportunity to plead guilty or not guilty as well as to defend himself in order that the
justice of peace holding the investigation may consider the merits of the complaint and the result
thereof, so that he may determine whether or not reasonable motives exist for him to believe that
the accused is guilty and also to determine, as a consequence, whether sufficient motives exist to
present against the accused the corresponding information in the Court of First Instance these
being facts which the fiscal in turn should consider before filing the corresponding information it
is unreasonable, unjust and illegal that, in a preliminary investigation such as that held by the
provincial governor in the second case referred to in section 2188 by virtue of the complaint
presented to him against a municipal officer, such municipal officer should not be notified of the
complaint or heard or given the opportunity to defend himself in order that the provincial governor
may duly determine whether it is proper to much upon said officer a more severe punishment or
whether the abuse or neglect of duty imputed to him is among the that affect the official integrity of
said officer.
"When a complaint charging the commission of a delito (felony) is laid before a magistrate, the
accused is entitled as of right to a preliminary investigation as to probable cause before being
committed to stand trial for the crime charged therein." (U. S. v. MGovern, 6 Phil., 621.)
"When a preliminary examination, under the provisions of General Orders, No. 58, is conducted by
a judge or by a justice of the peace in this jurisdiction, either within or without the city of Manila, the
accused has a right to be present and to be heard by himself and by counsel and to present
witnesses in his behalf.." . .
"The object of a preliminary investigation, or a previous inquiry of some kind, before an accused
person is placed upon trial, is to secure the innocent against hasty, malicious and oppressive
prosecutions, and to protect him from an open and public accusation of crime, from the trouble,
expenses and anxiety of a public trial, and also to protect the State from useless and expensive
prosecutions."
The doctrine established by this court in the cases above mentioned, and in many others that need
not be cited, is applicable also to the case where an investigation is held, according to said section
2188 of the Administrative Code, by the provincial governor by virtue of a complaint presented
against a municipal officer, because without an investigation held in legal form, that is, by hearing
the person accused of a crime in a judicial complaint or the municipal officer accused in a
complaint presented to the provincial governor, and giving him the opportunity to defend himself,
the information against the accused in the first case, cannot be filed in the Court of First Instance
and, in the second case, the complaint against the municipal officer, which may result in his
discharge, can not be presented to the provincial board; and as the right to be present at the
investigation, and be heard by himself or through an attorney and present witnesses in his favor,
which are what constitute due process of law, is an essential right of the accused in either case,
then, if in the investigation by the provincial governor of Rizal, of the complaint received by him
against Miguel Cornejo, municipal president of Pasay, and referred to in his answer, said governor,
without previously notifying the accused municipal president of said charges, held a preliminary
investigation in his absence, without hearing him and without giving him an opportunity to defend
himself, the complaint against said municipal officer filed by said provincial governor of Rizal with
the provincial board is without foundation and is illegal for want of due process of law in said
investigation. Therefore, the administrative proceeding instituted against said municipal officer by
virtue of that complaint is for that reason affected with a radical vice and it is evident that the
provincial governor has not acted in accordance with the clear and conclusive provisions of the
section of the Administrative Code already cited and that he has acted in excess of his powers, not
only in ordering the suspension of the municipal president, petitioner herein, but also in presenting
to the provincial board, as a result of said investigation, the complaint against him. Hence the
proceeding instituted before said provincial board by virtue of said complaint, is illegal and void.
For the reasons above stated, in dissenting from the respectable opinion of the majority, I am of
the opinion that the petition presented by Miguel Cornejo, municipal president of Pasay, against
Andres Gabriel, provincial governor of Rizal as well as against the provincial board of Rizal,
composed of Andres Gabriel, Pedro Magsalin, and Catalino S. Cruz, is well taken, and the
respondents should be, as they now are, ordered to pay the costs.
G.R. Nos. L-10817-18
February 28, 1958
ENRIQUE LOPEZ, petitioner, vs. VICENTE OROSA, JR., and PLAZA THEATRE,
INC., respondents.
FELIX, J.:
Enrique Lopez is a resident of Balayan, Batangas, doing business under the trade name of LopezCastelo Sawmill. Sometime in May, 1946, Vicente Orosa, Jr., also a resident of the same province,
dropped at Lopez' house and invited him to make an investment in the theatre business. It was
intimated that Orosa, his family and close friends were organizing a corporation to be known as
Plaza Theatre, Inc., that would engage in such venture. Although Lopez expressed his

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unwillingness to invest of the same, he agreed to supply the lumber necessary for the construction
of the proposed theatre, and at Orosa's behest and assurance that the latter would be personally
liable for any account that the said construction might incur, Lopez further agreed that payment
therefor would be on demand and not cash on delivery basis. Pursuant to said verbal agreement,
Lopez delivered the lumber which was used for the construction of the Plaza Theatre on May 17,
1946, up to December 4 of the same year. But of the total cost of the materials amounting to
P62,255.85, Lopez was paid only P20,848.50, thus leaving a balance of P41,771.35.
We may state at this juncture that the Plaza Theatre was erected on a piece of land with an area of
679.17 square meters formerly owned by Vicente Orosa, Jr., and was acquired by the corporation
on September 25, 1946, for P6,000. As Lopez was pressing Orosa for payment of the remaining
unpaid obligation, the latter and Belarmino Rustia, the president of the corporation, promised to
obtain a bank loan by mortgaging the properties of the Plaza Theatre., out of which said amount of
P41,771.35 would be satisfied, to which assurance Lopez had to accede. Unknown to him,
however, as early as November, 1946, the corporation already got a loan for P30,000 from the
Philippine National Bank with the Luzon Surety Company as surety, and the corporation in turn
executed a mortgage on the land and building in favor of said company as counter-security. As the
land at that time was not yet brought under the operation of the Torrens System, the mortgage on
the same was registered on November 16, 1946, under Act No. 3344. Subsequently, when the
corporation applied for the registration of the land under Act 496, such mortgage was not revealed
and thus Original Certificate of Title No. O-391 was correspondingly issued on October 25, 1947,
without any encumbrance appearing thereon.
Persistent demand from Lopez for the payment of the amount due him caused Vicente Orosa, Jr.
to execute on March 17, 1947, an alleged "deed of assignment" of his 420 shares of stock of the
Plaza Theater, Inc., at P100 per share or with a total value of P42,000 in favor of the creditor, and
as the obligation still remained unsettled, Lopez filed on November 12, 1947, a complaint with the
Court of First Instance of Batangas (Civil Case No. 4501 which later became R-57) against Vicente
Orosa, Jr. and Plaza Theater, Inc., praying that defendants be sentenced to pay him jointly and
severally the sum of P41,771.35, with legal interest from the firing of the action; that in case
defendants fail to pay the same, that the building and the land covered by OCT No. O-391 owned
by the corporation be sold at public auction and the proceeds thereof be applied to said
indebtedness; or that the 420 shares of the capital stock of the Plaza Theatre, Inc., assigned by
Vicente Orosa, Jr., to said plaintiff be sold at public auction for the same purpose; and for such
other remedies as may be warranted by the circumstances. Plaintiff also caused the annotation of
a notice of lis pendens on said properties with the Register of Deeds.
Defendants Vicente Orosa, Jr. and Plaza Theatre, Inc., filed separate answers, the first denying
that the materials were delivered to him as a promoter and later treasurer of the corporation,
because he had purchased and received the same on his personal account; that the land on which
the movie house was constructed was not charged with a lien to secure the payment of the
aforementioned unpaid obligation; and that the 420 shares of stock of the Plaza Theatre, Inc., was
not assigned to plaintiff as collaterals but as direct security for the payment of his indebtedness. As
special defense, this defendant contended that as the 420 shares of stock assigned and conveyed
by the assignor and accepted by Lopez as direct security for the payment of the amount of
P41,771.35 were personal properties, plaintiff was barred from recovering any deficiency if the
proceeds of the sale thereof at public auction would not be sufficient to cover and satisfy the
obligation. It was thus prayed that he be declared exempted from the payment of any deficiency in
case the proceeds from the sale of said personal properties would not be enough to cover the
amount sought to be collected.
Defendant Plaza Theatre, Inc., on the other hand, practically set up the same line of defense by
alleging that the building materials delivered to Orosa were on the latter's personal account; and
that there was no understanding that said materials would be paid jointly and severally by Orosa
and the corporation, nor was a lien charged on the properties of the latter to secure payment of the
same obligation. As special defense, defendant corporation averred that while it was true that the
materials purchased by Orosa were sold by the latter to the corporation, such transactions were in
good faith and for valuable consideration thus when plaintiff failed to claim said materials within 30
days from the time of removal thereof from Orosa, lumber became a different and distinct specie
and plaintiff lost whatever rights he might have in the same and consequently had no recourse
against the Plaza Theatre, Inc., that the claim could not have been refectionary credit, for such
kind of obligation referred to an indebtedness incurred in the repair or reconstruction of something
already existing and this concept did not include an entirely new work; and that the Plaza Theatre,
Inc., having been incorporated on October 14, 1946, it could not have contracted any obligation
prior to said date. It was, therefore, prayed that the complaint be dismissed; that said defendant be
awarded the sum P 5,000 for damages, and such other relief as may be just and proper in the
premises.
The surety company, in the meantime, upon discovery that the land was already registered under
the Torrens System and that there was a notice of lis pendens thereon, filed on August 17, 1948, or
within the 1-year period after the issuance of the certificate of title, a petition for review of the
decree of the land registration court dated October 18, 1947, which was made the basis of OCT
No. O-319, in order to annotate the rights and interests of the surety company over said properties
(Land Registration Case No. 17 GLRO Rec. No. 296). Opposition thereto was offered by Enrique
Lopez, asserting that the amount demanded by him constituted a preferred lien over the properties
of the obligors; that the surety company was guilty of negligence when it failed to present an
opposition to the application for registration of the property; and that if any violation of the rights
and interest of said surety would ever be made, same must be subject to the lien in his favor.
The two cases were heard jointly and in a decision dated October 30, 1952, the lower Court, after
making an exhaustive and detailed analysis of the respective stands of the parties and the
evidence adduced at the trial, held that defendants Vicente Orosa, Jr., and the Plaza Theatre, Inc.,

were jointly liable for the unpaid balance of the cost of lumber used in the construction of
the building and the plaintiff thus acquired the materialman's lien over the same. In making the
pronouncement that the lien was merely confined to the building and did not extend to the land on
which the construction was made, the trial judge took into consideration the fact that when plaintiff
started the delivery of lumber in May, 1946, the land was not yet owned by the corporation; that the
mortgage in favor of Luzon Surety Company was previously registered under Act No. 3344; that
the codal provision (Art. 1923 of the old Spanish Civil Code) specifying that refection credits are
preferred could refer only to buildings which are also classified as real properties, upon which said
refection was made. It was, however, declared that plaintiff's lien on the building was superior to
the right of the surety company. And finding that the Plaza Theatre, Inc., had no objection to the
review of the decree issued in its favor by the land registration court and the inclusion in the title of
the encumbrance in favor of the surety company, the court a quo granted the petition filed by the
latter company. Defendants Orosa and the Plaza Theatre, Inc., were thus required to
pay jointly the amount of P41,771.35 with legal interest and costs within 90 days from notice of
said decision; that in case of default, the 420 shares of stock assigned by Orosa to plaintiff be sold
at public auction and the proceeds thereof be applied to the payment of the amount due the
plaintiff, plus interest and costs; and that the encumbrance in favor of the surety company be
endorsed at the back of OCT No. O-391, with notation I that with respect to the building, said
mortgage was subject to the materialman's lien in favor of Enrique Lopez.
Plaintiff tried to secure a modification of the decision in so far as it declared that the obligation of
therein defendants was joint instead of solidary, and that the lien did not extend to the land, but
same was denied by order the court of December 23, 1952. The matter was thus appealed to the
Court of appeals, which affirmed the lower court's ruling, and then to this Tribunal. In this instance,
plaintiff-appellant raises 2 issues: (1) whether a materialman's lien for the value of the materials
used in the construction of a building attaches to said structure alone and does not extend to the
land on which the building is adhered to; and (2) whether the lower court and the Court of Appeals
erred in not providing that the material mans liens is superior to the mortgage executed in favor
surety company not only on the building but also on the land.
It is to be noted in this appeal that Enrique Lopez has not raised any question against the part of
the decision sentencing defendants Orosa and Plaza Theatre, Inc., to pay jointly the sum of
P41,771.35, so We will not take up or consider anything on that point. Appellant, however,
contends that the lien created in favor of the furnisher of the materials used for the construction,
repair or refection of a building, is also extended to the land which the construction was made, and
in support thereof he relies on Article 1923 of the Spanish Civil Code, pertinent law on the matter,
which reads as follows:
ART. 1923. With respect to determinate real property and real rights of the debtor, the following are
preferred:
5. Credits for refection, not entered or recorded, with respect to the estate upon which the
refection was made, and only with respect to other credits different from those mentioned in four
preceding paragraphs.
It is argued that in view of the employment of the phrase real estate, or immovable property, and
inasmuch as said provision does not contain any specification delimiting the lien to the building,
said article must be construed as to embrace both the land and the building or structure adhering
thereto. We cannot subscribe to this view, for while it is true that generally, real estate connotes the
land and the building constructed thereon, it is obvious that the inclusion of the building, separate
and distinct from the land, in the enumeration of what may constitute real properties1 could mean
only one thing that a building is by itself an immovable property, a doctrine already pronounced
by this Court in the case of Leung Yee vs. Strong Machinery Co., 37 Phil., 644. Moreover, and in
view of the absence of any specific provision of law to the contrary, a building is an immovable
property, irrespective of whether or not said structure and the land on which it is adhered to belong
to the same owner.
A close examination of the provision of the Civil Code invoked by appellant reveals that the law
gives preference to unregistered refectionary credits only with respect to the real estate upon
which the refection or work was made. This being so, the inevitable conclusion must be that the
lien so created attaches merely to the immovable property for the construction or repair of which
the obligation was incurred. Evidently, therefore, the lien in favor of appellant for the unpaid value
of the lumber used in the construction of the building attaches only to said structure and to no
other property of the obligors.
Considering the conclusion thus arrived at, i.e., that the materialman's lien could be charged only
to the building for which the credit was made or which received the benefit of refection, the lower
court was right in, holding at the interest of the mortgagee over the land is superior and cannot be
made subject to the said materialman's lien.
Wherefore, and on the strength of the foregoing considerations, the decision appealed from is
hereby affirmed, with costs against appellant. It is so ordered.
G.R. No. L-64261 December 26, 1984
JOSE BURGOS, SR., JOSE BURGOS, JR., BAYANI SORIANO and J. BURGOS MEDIA
SERVICES, INC.,petitioners,
vs.
THE CHIEF OF STAFF, ARMED FORCES OF THE PHILIPPINES, THE CHIEF, PHILIPPINE
CONSTABULARY, THE CHIEF LEGAL OFFICER, PRESIDENTIAL SECURITY COMMAND, THE
JUDGE ADVOCATE GENERAL, ET AL., respondents.
ESCOLIN, J.:

Page |5
Assailed in this petition for certiorari prohibition and mandamus with preliminary mandatory and
prohibitory injunction is the validity of two [2] search warrants issued on December 7, 1982 by
respondent Judge Ernani Cruz-Pano, Executive Judge of the then Court of First Instance of Rizal
[Quezon City], under which the premises known as No. 19, Road 3, Project 6, Quezon City, and
784 Units C & D, RMS Building, Quezon Avenue, Quezon City, business addresses of the
"Metropolitan Mail" and "We Forum" newspapers, respectively, were searched, and office and
printing machines, equipment, paraphernalia, motor vehicles and other articles used in the printing,
publication and distribution of the said newspapers, as well as numerous papers, documents,
books and other written literature alleged to be in the possession and control of petitioner Jose
Burgos, Jr. publisher-editor of the "We Forum" newspaper, were seized.
Petitioners further pray that a writ of preliminary mandatory and prohibitory injunction be issued for
the return of the seized articles, and that respondents, "particularly the Chief Legal Officer,
Presidential Security Command, the Judge Advocate General, AFP, the City Fiscal of Quezon City,
their representatives, assistants, subalterns, subordinates, substitute or successors" be enjoined
from using the articles thus seized as evidence against petitioner Jose Burgos, Jr. and the other
accused in Criminal Case No. Q- 022782 of the Regional Trial Court of Quezon City,
entitled People v. Jose Burgos, Jr. et al. 1
In our Resolution dated June 21, 1983, respondents were required to answer the petition. The plea
for preliminary mandatory and prohibitory injunction was set for hearing on June 28, 1983, later
reset to July 7, 1983, on motion of the Solicitor General in behalf of respondents.
At the hearing on July 7, 1983, the Solicitor General, while opposing petitioners' prayer for a writ of
preliminary mandatory injunction, manifested that respondents "will not use the aforementioned
articles as evidence in the aforementioned case until final resolution of the legality of the seizure of
the aforementioned articles. ..." 2 With this manifestation, the prayer for preliminary prohibitory
injunction was rendered moot and academic.
Respondents would have this Court dismiss the petition on the ground that petitioners had come to
this Court without having previously sought the quashal of the search warrants before respondent
judge. Indeed, petitioners, before impugning the validity of the warrants before this Court, should
have filed a motion to quash said warrants in the court that issued them. 3 But this procedural flaw
notwithstanding, we take cognizance of this petition in view of the seriousness and urgency of the
constitutional issues raised not to mention the public interest generated by the search of the "We
Forum" offices, which was televised in Channel 7 and widely publicized in all metropolitan dailies.
The existence of this special circumstance justifies this Court to exercise its inherent power to
suspend its rules. In the words of the revered Mr. Justice Abad Santos in the case of C. Vda. de
Ordoveza v. Raymundo, 4 "it is always in the power of the court [Supreme Court] to suspend its
rules or to except a particular case from its operation, whenever the purposes of justice require
it...".
Respondents likewise urge dismissal of the petition on ground of laches. Considerable stress is
laid on the fact that while said search warrants were issued on December 7, 1982, the instant
petition impugning the same was filed only on June 16, 1983 or after the lapse of a period of more
than six [6] months.

Respondents also submit the theory that since petitioner Jose Burgos, Jr. had used and marked as
evidence some of the seized documents in Criminal Case No. Q- 022872, he is now estopped
from challenging the validity of the search warrants. We do not follow the logic of respondents.
These documents lawfully belong to petitioner Jose Burgos, Jr. and he can do whatever he
pleases with them, within legal bounds. The fact that he has used them as evidence does not and
cannot in any way affect the validity or invalidity of the search warrants assailed in this petition.
Several and diverse reasons have been advanced by petitioners to nullify the search warrants in
question.
1. Petitioners fault respondent judge for his alleged failure to conduct an examination under oath or
affirmation of the applicant and his witnesses, as mandated by the above-quoted constitutional
provision as wen as Sec. 4, Rule 126 of the Rules of Court . 6 This objection, however, may
properly be considered moot and academic, as petitioners themselves conceded during the
hearing on August 9, 1983, that an examination had indeed been conducted by respondent judge
of Col. Abadilla and his witnesses.
2. Search Warrants No. 20-82[a] and No. 20- 82[b] were used to search two distinct places: No.
19, Road 3, Project 6, Quezon City and 784 Units C & D, RMS Building, Quezon Avenue, Quezon
City, respectively. Objection is interposed to the execution of Search Warrant No. 20-82[b] at the
latter address on the ground that the two search warrants pinpointed only one place where
petitioner Jose Burgos, Jr. was allegedly keeping and concealing the articles listed therein, i.e., No.
19, Road 3, Project 6, Quezon City. This assertion is based on that portion of Search Warrant No.
20- 82[b] which states:
Which have been used, and are being used as instruments and means of committing the crime of
subversion penalized under P.D. 885 as amended and he is keeping and concealing the same at
19 Road 3, Project 6, Quezon City.
The defect pointed out is obviously a typographical error. Precisely, two search warrants were
applied for and issued because the purpose and intent were to search two distinct premises. It
would be quite absurd and illogical for respondent judge to have issued two warrants intended for
one and the same place. Besides, the addresses of the places sought to be searched were
specifically set forth in the application, and since it was Col. Abadilla himself who headed the team
which executed the search warrants, the ambiguity that might have arisen by reason of the
typographical error is more apparent than real. The fact is that the place for which Search Warrant
No. 20- 82[b] was applied for was 728 Units C & D, RMS Building, Quezon Avenue, Quezon City,
which address appeared in the opening paragraph of the said warrant. 7 Obviously this is the same
place that respondent judge had in mind when he issued Warrant No. 20-82 [b].
In the determination of whether a search warrant describes the premises to be searched with
sufficient particularity, it has been held "that the executing officer's prior knowledge as to the place
intended in the warrant is relevant. This would seem to be especially true where the executing
officer is the affiant on whose affidavit the warrant had issued, and when he knows that the judge
who issued the warrant intended the building described in the affidavit, And it has also been said
that the executing officer may look to the affidavit in the official court file to resolve an ambiguity in
the warrant as to the place to be searched." 8

Laches is failure or negligence for an unreasonable and unexplained length of time to do that
which, by exercising due diligence, could or should have been done earlier. It is negligence or
omission to assert a right within a reasonable time, warranting a presumption that the party entitled
to assert it either has abandoned it or declined to assert it. 5

3. Another ground relied upon to annul the search warrants is the fact that although the warrants
were directed against Jose Burgos, Jr. alone, articles b belonging to his co-petitioners Jose
Burgos, Sr., Bayani Soriano and the J. Burgos Media Services, Inc. were seized.

Petitioners, in their Consolidated Reply, explained the reason for the delay in the filing of the
petition thus:

Section 2, Rule 126 of the Rules of Court, enumerates the personal properties that may be seized
under a search warrant, to wit:

Respondents should not find fault, as they now do [p. 1, Answer, p. 3, Manifestation] with the fact
that the Petition was filed on June 16, 1983, more than half a year after the petitioners' premises
had been raided.

Sec. 2. Personal Property to be seized. A search warrant may be issued for the search and
seizure of the following personal property:

The climate of the times has given petitioners no other choice. If they had waited this long to bring
their case to court, it was because they tried at first to exhaust other remedies. The events of the
past eleven fill years had taught them that everything in this country, from release of public funds
to release of detained persons from custody, has become a matter of executive benevolence or
largesse
Hence, as soon as they could, petitioners, upon suggestion of persons close to the President, like
Fiscal Flaminiano, sent a letter to President Marcos, through counsel Antonio Coronet asking the
return at least of the printing equipment and vehicles. And after such a letter had been sent,
through Col. Balbino V. Diego, Chief Intelligence and Legal Officer of the Presidential Security
Command, they were further encouraged to hope that the latter would yield the desired results.
After waiting in vain for five [5] months, petitioners finally decided to come to Court. [pp. 123-124,
Rollo]
Although the reason given by petitioners may not be flattering to our judicial system, We find no
ground to punish or chastise them for an error in judgment. On the contrary, the extrajudicial efforts
exerted by petitioners quite evidently negate the presumption that they had abandoned their right
to the possession of the seized property, thereby refuting the charge of laches against them.

[a] Property subject of the offense;

[b] Property stolen or embezzled and other proceeds or fruits of the offense; and
[c] Property used or intended to be used as the means of committing an offense.
The above rule does not require that the property to be seized should be owned by the person
against whom the search warrant is directed. It may or may not be owned by him. In fact, under
subsection [b] of the above-quoted Section 2, one of the properties that may be seized is stolen
property. Necessarily, stolen property must be owned by one other than the person in whose
possession it may be at the time of the search and seizure. Ownership, therefore, is of no
consequence, and it is sufficient that the person against whom the warrant is directed has control
or possession of the property sought to be seized, as petitioner Jose Burgos, Jr. was alleged to
have in relation to the articles and property seized under the warrants.
4. Neither is there merit in petitioners' assertion that real properties were seized under the disputed
warrants. Under Article 415[5] of the Civil Code of the Philippines, "machinery, receptables,
instruments or implements intended by the owner of the tenement for an industry or works which
may be carried on in a building or on a piece of land and which tend directly to meet the needs of
the said industry or works" are considered immovable property. In Davao Sawmill Co. v.
Castillo 9 where this legal provision was invoked, this Court ruled that machinery which is movable
by nature becomes immobilized when placed by the owner of the tenement, property or plant, but
not so when placed by a tenant, usufructuary, or any other person having only a temporary right,
unless such person acted as the agent of the owner.

Page |6
In the case at bar, petitioners do not claim to be the owners of the land and/or building on which
the machineries were placed. This being the case, the machineries in question, while in fact bolted
to the ground remain movable property susceptible to seizure under a search warrant.
5. The questioned search warrants were issued by respondent judge upon application of Col.
Rolando N. Abadilla Intelligence Officer of the P.C. Metrocom. 10 The application was accompanied
by the Joint Affidavit of Alejandro M. Gutierrez and Pedro U. Tango, 11 members of the Metrocom
Intelligence and Security Group under Col. Abadilla which conducted a surveillance of the
premises prior to the filing of the application for the search warrants on December 7, 1982.
It is contended by petitioners, however, that the abovementioned documents could not have
provided sufficient basis for the finding of a probable cause upon which a warrant may validly issue
in accordance with Section 3, Article IV of the 1973 Constitution which provides:
SEC. 3. ... and no search warrant or warrant of arrest shall issue except upon probable cause to
be determined by the judge, or such other responsible officer as may be authorized by law, after
examination under oath or affirmation of the complainant and the witnesses he may produce, and
particularly describing the place to be searched and the persons or things to be seized.
We find petitioners' thesis impressed with merit. Probable cause for a search is defined as such
facts and circumstances which would lead a reasonably discreet and prudent man to believe that
an offense has been committed and that the objects sought in connection with the offense are in
the place sought to be searched. And when the search warrant applied for is directed against a
newspaper publisher or editor in connection with the publication of subversive materials, as in the
case at bar, the application and/or its supporting affidavits must contain a specification, stating with
particularity the alleged subversive material he has published or is intending to publish. Mere
generalization will not suffice. Thus, the broad statement in Col. Abadilla's application that
petitioner "is in possession or has in his control printing equipment and other paraphernalia, news
publications and other documents which were used and are all continuously being used as a
means of committing the offense of subversion punishable under Presidential Decree 885, as
amended ..." 12 is a mere conclusion of law and does not satisfy the requirements of probable
cause. Bereft of such particulars as would justify a finding of the existence of probable cause, said
allegation cannot serve as basis for the issuance of a search warrant and it was a grave error for
respondent judge to have done so.
Equally insufficient as basis for the determination of probable cause is the statement contained in
the joint affidavit of Alejandro M. Gutierrez and Pedro U. Tango, "that the evidence gathered and
collated by our unit clearly shows that the premises above- mentioned and the articles and things
above-described were used and are continuously being used for subversive activities in conspiracy
with, and to promote the objective of, illegal organizations such as the Light-a-Fire Movement,
Movement for Free Philippines, and April 6 Movement." 13

held to be a general warrant, and therefore invalid. 17 The description of the articles sought to be
seized under the search warrants in question cannot be characterized differently.
In the Stanford case, the U.S. Supreme Courts calls to mind a notable chapter in English history:
the era of disaccord between the Tudor Government and the English Press, when "Officers of the
Crown were given roving commissions to search where they pleased in order to suppress and
destroy the literature of dissent both Catholic and Puritan Reference herein to such historical
episode would not be relevant for it is not the policy of our government to suppress any newspaper
or publication that speaks with "the voice of non-conformity" but poses no clear and imminent
danger to state security.
As heretofore stated, the premises searched were the business and printing offices of the
"Metropolitan Mail" and the "We Forum newspapers. As a consequence of the search and seizure,
these premises were padlocked and sealed, with the further result that the printing and publication
of said newspapers were discontinued.
Such closure is in the nature of previous restraint or censorship abhorrent to the freedom of the
press guaranteed under the fundamental law, 18 and constitutes a virtual denial of petitioners'
freedom to express themselves in print. This state of being is patently anathematic to a democratic
framework where a free, alert and even militant press is essential for the political enlightenment
and growth of the citizenry.
Respondents would justify the continued sealing of the printing machines on the ground that they
have been sequestered under Section 8 of Presidential Decree No. 885, as amended, which
authorizes "the sequestration of the property of any person, natural or artificial, engaged in
subversive activities against the government and its duly constituted authorities ... in accordance
with implementing rules and regulations as may be issued by the Secretary of National Defense." It
is doubtful however, if sequestration could validly be effected in view of the absence of any
implementing rules and regulations promulgated by the Minister of National Defense.
Besides, in the December 10, 1982 issue of the Daily Express, it was reported that no less than
President Marcos himself denied the request of the military authorities to sequester the property
seized from petitioners on December 7, 1982. Thus:
The President denied a request flied by government prosecutors for sequestration of the WE
FORUM newspaper and its printing presses, according to Information Minister Gregorio S.
Cendana.
On the basis of court orders, government agents went to the We Forum offices in Quezon City and
took a detailed inventory of the equipment and all materials in the premises.

In mandating that "no warrant shall issue except upon probable cause to be determined by the
judge, ... after examination under oath or affirmation of the complainant and the witnesses he may
produce; 14 the Constitution requires no less than personal knowledge by the complainant or his
witnesses of the facts upon which the issuance of a search warrant may be justified. In Alvarez v.
Court of First Instance, 15 this Court ruled that "the oath required must refer to the truth of the facts
within the personal knowledge of the petitioner or his witnesses, because the purpose thereof is to
convince the committing magistrate, not the individual making the affidavit and seeking the
issuance of the warrant, of the existence of probable cause." As couched, the quoted averment in
said joint affidavit filed before respondent judge hardly meets the test of sufficiency established by
this Court in Alvarez case.

Cendaa said that because of the denial the newspaper and its equipment remain at the disposal
of the owners, subject to the discretion of the court. 19

Another factor which makes the search warrants under consideration constitutionally objectionable
is that they are in the nature of general warrants. The search warrants describe the articles sought
to be seized in this wise:

IN VIEW OF THE FOREGOING, Search Warrants Nos. 20-82[a] and 20-82[b] issued by
respondent judge on December 7, 1982 are hereby declared null and void and are accordingly set
aside. The prayer for a writ of mandatory injunction for the return of the seized articles is hereby
granted and all articles seized thereunder are hereby ordered released to petitioners. No costs.

That the property seized on December 7, 1982 had not been sequestered is further confirmed by
the reply of then Foreign Minister Carlos P. Romulo to the letter dated February 10, 1983 of U.S.
Congressman Tony P. Hall addressed to President Marcos, expressing alarm over the "WE
FORUM " case. 20 In this reply dated February 11, 1983, Minister Romulo stated:
2. Contrary to reports, President Marcos turned down the recommendation of our authorities to
close the paper's printing facilities and confiscate the equipment and materials it uses. 21

1] All printing equipment, paraphernalia, paper, ink, photo (equipment, typewriters, cabinets,
tables, communications/recording equipment, tape recorders, dictaphone and the like used and/or
connected in the printing of the "WE FORUM" newspaper and any and all documents
communication, letters and facsimile of prints related to the "WE FORUM" newspaper.

SO ORDERED.

2] Subversive documents, pamphlets, leaflets, books, and other publication to promote the
objectives and piurposes of the subversive organization known as Movement for Free Philippines,
Light-a-Fire Movement and April 6 Movement; and,

ABAD SANTOS, J., concurring

3] Motor vehicles used in the distribution/circulation of the "WE FORUM" and other subversive
materials and propaganda, more particularly,
1] Toyota-Corolla, colored yellow with Plate No. NKA 892;
2] DATSUN pick-up colored white with Plate No. NKV 969
3] A delivery truck with Plate No. NBS 524;
4] TOYOTA-TAMARAW, colored white with Plate No. PBP 665; and,
5] TOYOTA Hi-Lux, pick-up truck with Plate No. NGV 427 with marking "Bagong Silang."
In Stanford v. State of Texas 16 the search warrant which authorized the search for "books,
records, pamphlets, cards, receipts, lists, memoranda, pictures, recordings and other written
instruments concerning the Communist Party in Texas," was declared void by the U.S. Supreme
Court for being too general. In like manner, directions to "seize any evidence in connectionwith the
violation of SDC 13-3703 or otherwise" have been held too general, and that portion of a search
warrant which authorized the seizure of any "paraphernalia which could be used to violate Sec. 54197 of the Connecticut General Statutes [the statute dealing with the crime of conspiracy]" was

Separate Opinions

I am glad to give my concurrence to the ponencia of Mr. Justice Escolin At the same time I wish to
state my own reasons for holding that the search warrants which are the subject of the petition are
utterly void.
The action against "WE FORUM" was a naked suppression of press freedom for the search
warrants were issued in gross violation of the Constitution.
The Constitutional requirement which is expressed in Section 3, Article IV, stresses two points,
namely: "(1) that no warrant shall issue but upon probable cause, to be determined by the judge in
the manner set forth in said provision; and (2) that the warrant shall particularly describe the things
to be seized." (Stonehill vs. Diokno, 126 Phil. 738, 747: 20 SCRA 383 [1967].)
Any search warrant is conducted in disregard of the points mentioned above will result in wiping
"out completely one of the most fundamental rights guaranteed in our Constitution, for it would

Page |7
place the sanctity of the domicile and the privacy of communication and correspondence at the
mercy of the whims caprice or passion of peace officers." (Ibid, p. 748.)
The two search warrants were issued without probable cause. To satisfy the requirement of
probable cause a specific offense must be alleged in the application; abstract averments will not
suffice. In the case at bar nothing specifically subversive has been alleged; stated only is the claim
that certain objects were being used as instruments and means of committing the offense of
subversion punishable under P.D. No. 885, as amended. There is no mention of any specific
provision of the decree. I n the words of Chief Justice C Concepcion, " It would be legal heresy of
the highest order, to convict anybody" of violating the decree without reference to any determinate
provision thereof.
The search warrants are also void for lack of particularity. Both search warrants authorize Col.
Rolando Abadilla to seize and take possession, among other things, of the following:
Subversive documents, pamphlets, leaflets, books and other publication
to promote the objectives and purposes of the subversive organizations
known as Movement for Free Philippines, Light-a-Fire Movement and
April 6 Movement.
The obvious question is: Why were the documents, pamphlets, leaflets, books, etc. subversive?
What did they contain to make them subversive? There is nothing in the applications nor in the
warrants which answers the questions. I must, therefore, conclude that the warrants are general
warrants which are obnoxious to the Constitution.
In point of fact, there was nothing subversive published in the WE FORUM just as there is nothing
subversive which has been published in MALAYA which has replaced the former and has the same
content but against which no action has been taken.
Conformably with existing jurisprudence everything seized pursuant to the warrants should be
returned to the owners and all of the items are subject to the exclusionary rule of evidence.

In their Reply, petitioners asserted that the properties sought to be seized [were] immovable as
defined in Article 415 of the Civil Code, the parties agreement to the contrary
notwithstanding. They argued that to give effect to the agreement would be prejudicial to innocent
third parties. They further stated that PCI Leasing [was] estopped from treating these machineries
as personal because the contracts in which the alleged agreement [were] embodied [were] totally
sham and farcical.
On April 6, 1998, the sheriff again sought to enforce the writ of seizure and take possession of the
remaining properties. He was able to take two more, but was prevented by the workers from taking
the rest.
On April 7, 1998, they went to [the CA] via an original action for certiorari.
Ruling of the Court of Appeals
Citing the Agreement of the parties, the appellate court held that the subject
machines were personal property, and that they had only been leased, not owned,
by petitioners. It also ruled that the words of the contract are clear and leave no
doubt upon the true intention of the contracting parties. Observing that Petitioner
Goquiolay was an experienced businessman who was not unfamiliar with the ways
of the trade, it ruled that he should have realized the import of the document he
signed. The CA further held:
Furthermore, to accord merit to this petition would be to preempt the trial court in ruling upon the
case below, since the merits of the whole matter are laid down before us via a petition whose sole
purpose is to inquire upon the existence of a grave abuse of discretion on the part of the [RTC] in
issuing the assailed Order and Resolution. The issues raised herein are proper subjects of a fullblown trial, necessitating presentation of evidence by both parties. The contract is being enforced
by one, and [its] validity is attacked by the other a matter x x x which respondent court is in the
best position to determine.
Hence, this Petition.[11]
The Issues
In their Memorandum, petitioners submit the following issues for our
consideration:

Teehankee, J., concur.

[G.R. No. 137705. August 22, 2000]
SERGS PRODUCTS, INC., and SERGIO T. GOQUIOLAY, petitioners, vs. PCI LEASING AND
FINANCE, INC., respondent.
PANGANIBAN, J.:
After agreeing to a contract stipulating that a real or immovable property be
considered as personal or movable, a party is estopped from subsequently claiming
otherwise. Hence, such property is a proper subject of a writ of replevin obtained by
the other contracting party.

A. Whether or not the machineries purchased and imported by SERGS became real property by
virtue of immobilization.
B. Whether or not the contract between the parties is a loan or a lease.[12]
In the main, the Court will resolve whether the said machines are personal,
not immovable, property which may be a proper subject of a writ of replevin. As a
preliminary matter, the Court will also address briefly the procedural points raised by
respondent.
The Courts Ruling
The Petition is not meritorious.

The Case
Before us is a Petition for Review on Certiorari assailing the January 6, 1999
Decision[1] of the Court of Appeals (CA) [2] in CA-GR SP No. 47332 and its February
26, 1999 Resolution[3] denying reconsideration. The decretal portion of the CA
Decision reads as follows:
WHEREFORE, premises considered, the assailed Order dated February 18, 1998 and Resolution
dated March 31, 1998 in Civil Case No. Q-98-33500 are hereby AFFIRMED. The writ of
preliminary injunction issued on June 15, 1998 is herebyLIFTED.[4]

Preliminary Matter:Procedural Questions

Respondent contends that the Petition failed to indicate expressly whether it
was being filed under Rule 45 or Rule 65 of the Rules of Court. It further alleges
that the Petition erroneously impleaded Judge Hilario Laqui as respondent.
There is no question that the present recourse is under Rule 45. This
conclusion finds support in the very title of the Petition, which is Petition for Review
on Certiorari.[13]
While Judge Laqui should not have been impleaded as a respondent,
substantial justice requires that such lapse by itself should not warrant the
dismissal of the present Petition. In this light, the Court deems it proper to
remove, motu proprio, the name of Judge Laqui from the caption of the present
case.
[14]

In its February 18, 1998 Order, the Regional Trial Court (RTC) of Quezon
City (Branch 218)[6] issued a Writ of Seizure.[7] The March 18, 1998
Resolution[8] denied petitioners Motion for Special Protective Order, praying that the
deputy sheriff be enjoined from seizing immobilized or other real properties in
(petitioners) factory in Cainta, Rizal and to return to their original place whatever
immobilized machineries or equipments he may have removed.[9]
[5]

The Facts
The undisputed facts are summarized by the Court of Appeals as follows: [10]
On February 13, 1998, respondent PCI Leasing and Finance, Inc. (PCI Leasing for short) filed with
the RTC-QC a complaint for [a] sum of money (Annex E), with an application for a writ of replevin
docketed as Civil Case No. Q-98-33500.
On March 6, 1998, upon an ex-parte application of PCI Leasing, respondent judge issued a writ of
replevin (Annex B) directing its sheriff to seize and deliver the machineries and equipment to PCI
Leasing after 5 days and upon the payment of the necessary expenses.
On March 24, 1998, in implementation of said writ, the sheriff proceeded to petitioners factory,
seized one machinery with [the] word that he [would] return for the other machineries.

Main Issue: Nature of the Subject Machinery

Petitioners contend that the subject machines used in their factory were not
proper subjects of the Writ issued by the RTC, because they were in fact real
property. Serious policy considerations, they argue, militate against a contrary
characterization.
Rule 60 of the Rules of Court provides that writs of replevin are issued for
the recovery of personal property only.[15] Section 3 thereof reads:
SEC. 3. Order. -- Upon the filing of such affidavit and approval of the bond, the court shall issue an
order and the corresponding writ of replevin describing the personal property alleged to be
wrongfully detained and requiring the sheriff forthwith to take such property into his custody.
On the other hand, Article 415 of the Civil Code enumerates immovable or
real property as follows:
ART. 415. The following are immovable property:

On March 25, 1998, petitioners filed a motion for special protective order (Annex C), invoking the
power of the court to control the conduct of its officers and amend and control its processes,
praying for a directive for the sheriff to defer enforcement of the writ of replevin.
This motion was opposed by PCI Leasing (Annex F), on the ground that the properties [were] still
personal and therefore still subject to seizure and a writ of replevin.

x x x....................................x x x....................................x x x
(5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for
an industry or works which may be carried on in a building or on a piece of land, and which tend
directly to meet the needs of the said industry or works;

Page |8
x x x....................................x x x....................................x x x

Reliance on the Lease Agreement

In the present case, the machines that were the subjects of the Writ of
Seizure were placed by petitioners in the factory built on their own
land. Indisputably, they were essential and principal elements of their chocolatemaking industry.Hence, although each of them was movable or personal property
on its own, all of them have become immobilized by destination because they are
essential and principal elements in the industry.[16] In that sense, petitioners are
correct in arguing that the said machines are real, not personal, property pursuant
to Article 415 (5) of the Civil Code.[17]

It should be pointed out that the Court in this case may rely on the Lease
Agreement, for nothing on record shows that it has been nullified or annulled. In
fact, petitioners assailed it first only in the RTC proceedings, which had ironically
been instituted by respondent. Accordingly, it must be presumed valid and binding
as the law between the parties.

Be that as it may, we disagree with the submission of the petitioners that the
said machines are not proper subjects of the Writ of Seizure.
The Court has held that contracting parties may validly stipulate that a real
property be considered as personal.[18] After agreeing to such stipulation, they are
consequently estopped from claiming otherwise. Under the principle of estoppel, a
party to a contract is ordinarily precluded from denying the truth of any material fact
found therein.
Hence, in Tumalad v. Vicencio,[19] the Court upheld the intention of the
parties to treat a house as a personal property because it had been made the
subject of a chattel mortgage. The Court ruled:
x x x. Although there is no specific statement referring to the subject house as personal property,
yet by ceding, selling or transferring a property by way of chattel mortgage defendants-appellants
could only have meant to convey the house as chattel, or at least, intended to treat the same as
such, so that they should not now be allowed to make an inconsistent stand by claiming otherwise.
Applying Tumalad, the Court in Makati Leasing and Finance Corp. v.
Wearever Textile Mills[20] also held that the machinery used in a factory and
essential to the industry, as in the present case, was a proper subject of a writ of
replevin because it was treated as personal property in a contract. Pertinent
portions of the Courts ruling are reproduced hereunder:
x x x. If a house of strong materials, like what was involved in the above Tumalad case, may be
considered as personal property for purposes of executing a chattel mortgage thereon as long as
the parties to the contract so agree and no innocent third party will be prejudiced thereby, there is
absolutely no reason why a machinery, which is movable in its nature and becomes immobilized
only by destination or purpose, may not be likewise treated as such. This is really because one
who has so agreed is estopped from denying the existence of the chattel mortgage.
In the present case, the Lease Agreement clearly provides that the
machines in question are to be considered as personal property. Specifically,
Section 12.1 of the Agreement reads as follows:[21]

Makati Leasing and Finance Corporation[30] is also instructive on this

point. In that case, the Deed of Chattel Mortgage, which characterized the subject
machinery as personal property, was also assailed because respondent had
allegedly been required to sign a printed form of chattel mortgage which was in a
blank form at the time of signing. The Court rejected the argument and relied on the
Deed, ruling as follows:
x x x. Moreover, even granting that the charge is true, such fact alone does not render a contract
void ab initio, but can only be a ground for rendering said contract voidable, or annullable pursuant
to Article 1390 of the new Civil Code, by a proper action in court. There is nothing on record to
show that the mortgage has been annulled. Neither is it disclosed that steps were taken to nullify
the same. x x x
Alleged Injustice Committed on the Part of Petitioners
Petitioners contend that if the Court allows these machineries to be seized,
then its workers would be out of work and thrown into the streets. [31] They also
allege that the seizure would nullify all efforts to rehabilitate the corporation.
Petitioners arguments do not preclude the implementation of the Writ. As
earlier discussed, law and jurisprudence support its propriety. Verily, the abovementioned consequences, if they come true, should not be blamed on this Court,
but on the petitioners for failing to avail themselves of the remedy under Section 5
of Rule 60, which allows the filing of a counter-bond. The provision states:
SEC. 5. Return of property. -- If the adverse party objects to the sufficiency of the applicants bond,
or of the surety or sureties thereon, he cannot immediately require the return of the property, but if
he does not so object, he may, at any time before the delivery of the property to the applicant,
require the return thereof, by filing with the court where the action is pending a bond executed to
the applicant, in double the value of the property as stated in the applicants affidavit for the delivery
thereof to the applicant, if such delivery be adjudged, and for the payment of such sum to him as
may be recovered against the adverse party, and by serving a copy bond on the applicant.
WHEREFORE, the Petition is DENIED and the assailed Decision of the
Court of Appeals AFFIRMED. Costs against petitioners.
SO ORDERED.

12.1 The PROPERTY is, and shall at all times be and remain, personal property notwithstanding
that the PROPERTY or any part thereof may now be, or hereafter become, in any manner affixed
or attached to or embedded in, or permanently resting upon, real property or any building thereon,
or attached in any manner to what is permanent.
Clearly then, petitioners are estopped from denying the characterization of
the subject machines as personal property. Under the circumstances, they are
proper subjects of the Writ of Seizure.
It should be stressed, however, that our holding -- that the machines should
be deemed personal property pursuant to the Lease Agreement is good only insofar
as the contracting parties are concerned.[22] Hence, while the parties are bound by
the Agreement, third persons acting in good faith are not affected by its stipulation
characterizing the subject machinery as personal.[23] In any event, there is no
showing that any specific third party would be adversely affected.

G.R. No. L-16218

November 29, 1962
ANTONIA BICERRA, DOMINGO BICERRA, BERNARDO BICERRA, CAYETANO BICERRA,
LINDA BICERRA, PIO BICERRA and EUFRICINA BICERRA, plaintiffs-appellants,
vs.
TOMASA TENEZA and BENJAMIN BARBOSA, defendants-appellees.
MAKALINTAL, J.:

Validity of the Lease Agreement

In their Memorandum, petitioners contend that the Agreement is a loan and
not a lease.[24] Submitting documents supposedly showing that they own the subject
machines, petitioners also argue in their Petition that the Agreement suffers from
intrinsic ambiguity which places in serious doubt the intention of the parties and the
validity of the lease agreement itself.[25] In their Reply to respondents Comment,
they further allege that the Agreement is invalid.[26]
These arguments are unconvincing. The validity and the nature of the
contract are the lis mota of the civil action pending before the RTC. A resolution of
these questions, therefore, is effectively a resolution of the merits of the
case.Hence, they should be threshed out in the trial, not in the proceedings
involving the issuance of the Writ of Seizure.
Indeed, in La Tondea Distillers v. CA,[27] the Court explained that the policy
under Rule 60 was that questions involving title to the subject property questions
which petitioners are now raising -- should be determined in the trial. In that case,
the Court noted that the remedy of defendants under Rule 60 was either to post a
counter-bond or to question the sufficiency of the plaintiffs bond. They were not
allowed, however, to invoke the title to the subject property. The Court ruled:
In other words, the law does not allow the defendant to file a motion to dissolve or discharge the
writ of seizure (or delivery) on ground of insufficiency of the complaint or of the grounds relied upon
therefor, as in proceedings on preliminary attachment or injunction, and thereby put at issue the
matter of the title or right of possession over the specific chattel being replevied, the policy
apparently being that said matter should be ventilated and determined only at the trial on the
merits.[28]
Besides, these questions require a determination of facts and a presentation
of evidence, both of which have no place in a petition for certiorari in the CA under
Rule 65 or in a petition for review in this Court under Rule 45.[29]

This case is before us on appeal from the order of the Court of First Instance of Abra dismissing
the complaint filed by appellants, upon motion of defendants-appellate on the ground that the
action was within the exclude (original) jurisdiction of the Justice of the Peace Court of
Lagangilang, of the same province.
The complaint alleges in substance that appellants were the owners of the house, worth P200.00,
built on and owned by them and situated in the said municipality Lagangilang; that sometime in
January 1957 appealed forcibly demolished the house, claiming to be the owners thereof; that the
materials of the house, after it was dismantled, were placed in the custody of the barrio lieutenant
of the place; and that as a result of appellate's refusal to restore the house or to deliver the
material appellants the latter have suffered actual damages the amount of P200.00, plus moral and
consequential damages in the amount of P600.00. The relief prayed for is that "the plaintiffs be
declared the owners of the house in question and/or the materials that resulted in (sic) its
dismantling; (and) that the defendants be orders pay the sum of P200.00, plus P600.00 as
damages, the costs."
The issue posed by the parties in this appeal is whether the action involves title to real property, as
appellants contend, and therefore is cognizable by the Court of First Instance (Sec. 44, par. [b],
R.A. 296, as amended), whether it pertains to the jurisdiction of the Justice of the Peace Court, as
stated in the order appealed from, since there is no real property litigated, the house having
ceased to exist, and the amount of the demand does exceed P2,000.00 (Sec. 88, id.)1
The dismissal of the complaint was proper. A house is classified as immovable property by reason
of its adherence to the soil on which it is built (Art. 415, par. 1, Civil Code). This classification holds
true regardless of the fact that the house may be situated on land belonging to a different owner.
But once the house is demolished, as in this case, it ceases to exist as such and hence its

Page |9
character as an immovable likewise ceases. It should be noted that the complaint here is for
recovery of damages. This is the only positive relief prayed for by appellants. To be sure, they also
asked that they be declared owners of the dismantled house and/or of the materials. However,
such declaration in no wise constitutes the relief itself which if granted by final judgment could be
enforceable by execution, but is only incidental to the real cause of action to recover damages.
The order appealed from is affirmed. The appeal having been admitted in forma pauperis, no costs
are adjudged.
G.R. No. 190106
January 15, 2014
MAGDALENA T. VILLASI, Petitioner,
vs.
FILOMENO GARCIA, substituted by his heirs, namely, ERMELINDA H. GARCIA, LIZA
GARCIA-GONZALEZ, THERESA GARCIA-TIANGSON, MARIVIC H. GARCIA, MARLENE
GARCIA-MOMIN, GERARDO H. GARCIA, GIDEON H. GARCIA and GENEROSO H. GARCIA,
and ERMELINDA H. GARCIA, Respondents.
PEREZ, J.:
This is a Petition for Review on Certiorari filed pursuant to Rule 45 of the Revised Rules of Court,
assailing the 19 May 2009 Decision2 rendered by the Sixth Division of the Court of Appeals in CAG.R. SP No. 92587. The appellate court affirmed the Order 3 of the Regional Trial Court R TC) of
Quezon City, Branch 77, directing the Deputy Sheriff to suspend the conduct of the execution sale
of the buildings levied upon by him.
1

The Facts
Sometime in 1990, petitioner Magdalena T Villasi (Villasi) engaged the services of respondent FilGarcia Construction, Inc. (FGCI) to construct a seven-storey condominium building located at
Aurora Boulevard corner N. Domingo Street, Cubao, Quezon City. For failure of Villasi to fully pay
the contract price despite several demands, FGCI initiated a suit for collection of sum of money
before the RTC of Quezon City, Branch 77. In its action docketed as Civil Case No. Q-91-8187,
FGCI prayed, among others, for the payment of the amount of P2,865,000.00, representing the
unpaid accomplishment billings. Served with summons, Villasi filed an answer specifically denying
the material allegations of the complaint. Contending that FGCI has no cause of action against her,
Villasi averred that she delivered the total amount of P7,490,325.10 to FGCI but the latter
accomplished only 28% of the project. After the pre-trial conference was terminated without the
parties having reached an amicable settlement, trial on the merits ensued.
Finding that FGCI was able to preponderantly establish by evidence its right to the unpaid
accomplishment billings, the RTC rendered a Decision4 dated 26 June 1996 in FGCIs favor. While
the trial court brushed aside the allegation of Villasi that an excess payment was made, it upheld
the claim of FGCI to the unpaid amount of the contract price and, thus, disposed:
WHEREFORE, judgment is hereby rendered:
1. Ordering [Villasi] to pay [FGCI] the sum of P2,865,000.00 as actual damages and
unpaid accomplishment billings;
2. Ordering [Villasi] to pay [FGCI] the amount of P500,000.00 representing the value
of unused building materials;
3. Ordering [Villasi] to pay [FGCI] the amount of P100,000.00, as moral damages
and P100,000.00 as attorneys fees.5
Elevated on appeal and docketed as CA-GR CV No. 54750, the Court of Appeals reversed the
disquisition of the RTC in its Decision6 dated 20 November 2000. The appellate court ruled that an
overpayment was made by Villasi and thereby directed FGCI to return the amount that was paid in
excess, viz:
WHEREFORE, premises considered, the present appeal is hereby GRANTED and the appealed
decision in Civil Case No. Q-91-8187 is hereby REVERSED and SET ASIDE and judgment is
hereby rendered ordering the [FGCI] to return to [Villasi] the sum of P1,244,543.33 as
overpayment under their contract, and the further sum ofP425,004.00 representing unpaid
construction materials obtained by it from [Villasi]. [FGCI] is likewise hereby declared liable for the
payment of liquidated damages in the sum equivalent to 1/10 of 1% of the contract price for each
day of delay computed from March 6, 1991.
No pronouncement as to costs.7
Unrelenting, FGCI filed a Petition for Review on Certiorari before this Court, docketed as G.R. No.
147960, asseverating that the appellate court erred in rendering the 20 November 2000 Decision.
This Court, however, in a Resolution dated 1 October 2001, denied the appeal for being filed out of
time. The said resolution became final and executory on 27 November 2001, as evidenced by the
Entry of Judgment8 made herein.
To enforce her right as prevailing party, Villasi filed a Motion for Execution of the 20 November
2000 Court of Appeals Decision, which was favorably acted upon by the RTC. 9 A Writ of Execution
was issued on 28 April 2004, commanding the Sheriff to execute and make effective the 20
November 2000 Decision of the Court of Appeals.

To satisfy the judgment, the sheriff levied on a building located at No. 140 Kalayaan Avenue,
Quezon City, covered by Tax Declaration No. D-021-01458, and built in the lots registered under
Transfer Certificates of Title (TCT) Nos. 379193 and 379194. While the building was declared for
taxation purposes in the name of FGCI, the lots in which it was erected were registered in the
names of the Spouses Filomeno Garcia and Ermelinda Halili-Garcia (Spouses Garcia). After the
mandatory posting and publication of notice of sale on execution of real property were complied
with, a public auction was scheduled on 25 January 2006.
To forestall the sale on execution, the Spouses Garcia filed an Affidavit of Third Party Claim 10 and a
Motion to Set Aside Notice of Sale on Execution,11 claiming that they are the lawful owners of the
property which was erroneously levied upon by the sheriff. To persuade the court a quo to grant
their motion, the Spouses Garcia argued that the building covered by the levy was mistakenly
assessed by the City Assessor in the name of FGCI. The motion was opposed by Villasi who
insisted that its ownership belongs to FGCI and not to the Spouses Garcia as shown by the tax
declaration.
After weighing the arguments of the opposing parties, the RTC issued on 24 February 2005 an
Order12 directing the Sheriff to hold in abeyance the conduct of the sale on execution, to wit:
WHEREFORE, premises considered, the Court hereby orders Deputy Sheriff Angel Doroni to
suspend or hold in abeyance the conduct of the sale on execution of the buildings levied upon by
him, until further orders from the Court.13
The motion for reconsideration of Villasi was denied by the trial court in its 11 October 2005
Order.14
Arguing that the RTC gravely abused its discretion in ordering the suspension of the sale on
execution, Villasi timely filed a Petition for Certiorari before the Court of Appeals. In a
Decision15 dated 19 May 2009, the appellate court dismissed the petition. In a Resolution16 dated
28 October 2009, the Court of Appeals refused to reconsider its decision.
Villasi is now before this Court via this instant Petition for Review on Certiorariassailing the
adverse Court of Appeals Decision and Resolution and raising the following issues:
The Issues
I.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED IN
UPHOLDING THE DECISION OF THE TRIAL COURT TO SUSPEND AND HOLD IN ABEYANCE
THE SALE ON EXECUTION OF THE BUILDINGS LEVIED UPON ON THE BASIS OF
RESPONDENTS AFFIDAVIT OF THIRD-PARTY CLAIM;
II.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED WHEN IT
HELD THAT THERE IS NO REASON TO PIERCE THE VEIL OF [FGCIS] CORPORATE FICTION
IN THE CASE AT BAR; [AND]
III.
WHETHER OR NOT THE BRANCH SHERIFF OF THE REGIONAL TRIAL COURT OF QUEZON
CITY, BRANCH 77 SHOULD BE DIRECTED TO FILE THE APPROPRIATE NOTICE OF LEVY
WITH THE REGISTER OF DEEDS OF QUEZON CITY.17
The Courts Ruling
It is a basic principle of law that money judgments are enforceable only against the property
incontrovertibly belonging to the judgment debtor, and if the property belonging to any third person
is mistakenly levied upon to answer for another mans indebtedness, such person has all the right
to challenge the levy through any of the remedies provided for under the Rules of Court. Section
16,18 Rule 39 specifically provides that a third person may avail himself of the remedies of either
terceria, to determine whether the sheriff has rightly or wrongly taken hold of the property not
belonging to the judgment debtor or obligor, or an independent "separate action" to vindicate his
claim of ownership and/or possession over the foreclosed property. However, the person other
than the judgment debtor who claims ownership or right over levied properties is not precluded
from taking other legal remedies to prosecute his claim.19
Indeed, the power of the court in executing judgments extends only to properties unquestionably
belonging to the judgment debtor alone. An execution can be issued only against a party and not
against one who did not have his day in court. The duty of the sheriff is to levy the property of the
judgment debtor not that of a third person. For, as the saying goes, one man's goods shall not be
sold for another man's debts.20
Claiming that the sheriff mistakenly levied the building that lawfully belongs to them, the Spouses
Garcia availed themselves of the remedy of terceria under Section 16, Rule 39 of the Revised
Rules of Court. To fortify their position, the Spouses Garcia asserted that as the owners of the
land, they would be deemed under the law as owners of the building standing thereon. The
Spouses Garcia also asserted that the construction of the building was financed thru a loan
obtained from Metrobank in their personal capacities, and they merely contracted FGCI to
construct the building. Finally, the Spouses Garcia argued that the tax declaration, based on an
erroneous assessment by the City Assessor, cannot be made as basis of ownership.
For her part, Villasi insists that the levy effected by the sheriff was proper since the subject
property belongs to the judgment debtor and not to third persons. To dispute the ownership of the
Spouses Garcia, Villasi pointed out that the levied property was declared for tax purposes in the
name of FGCI. A Certification issued by the Office of the City Engineering of Quezon City likewise
showed that the building permit of the subject property was likewise issued in the name of FGCI.
We grant the petition.

P a g e | 10
The right of a third-party claimant to file a terceria is founded on his title or right of
possession.1avvphi1 Corollary thereto, before the court can exercise its supervisory power to
direct the release of the property mistakenly levied and the restoration thereof to its rightful owner,
the claimant must first unmistakably establish his ownership or right of possession thereon. In
Spouses Sy v. Hon. Discaya,21 we declared that for a third-party claim or a terceria to prosper, the
claimant must first sufficiently establish his right on the property:

proof of possession of the building since 1977, petitioners evidence pales in comparison and
leaves us totally unconvinced.34

[A] third person whose property was seized by a sheriff to answer for the obligation of the judgment
debtor may invoke the supervisory power of the court which authorized such execution. Upon due
application by the third person and after summary hearing, the court may command that the
property be released from the mistaken levy and restored to the rightful owner or possessor. What
said court can do in these instances, however, is limited to a determination of whether the sheriff
has acted rightly or wrongly in the performance of his duties in the execution of judgment, more
specifically, if he has indeed taken hold of property not belonging to the judgment debtor. The court
does not and cannot pass upon the question of title to the property, with any character of finality. It
can treat of the matter only insofar as may be necessary to decide if the sheriff has acted correctly
or not. It can require the sheriff to restore the property to the claimant's possession if warranted by
the evidence. However, if the claimant's proofs do not persuade the court of the validity of his title
or right of possession thereto, the claim will be denied.22 (Emphasis and underscoring supplied).

x x x. In other words, when the lot was donated to Felisa by her parents, as owners of the land on
which the building was constructed, the lot became her paraphernal property. The donation
transmitted to her the rights of a landowner over a building constructed on it. Therefore, at the time
of the levy and sale of the sheriff, Lot No. 107 did not belong to the conjugal partnership, but it was
paraphernal property of Felisa. As such, it was not answerable for the obligations of her husband
which resulted in the judgment against him in favor of Caltex.36

Our perusal of the record shows that, as the party asserting their title, the Spouses Garcia failed to
prove that they have a bona fide title to the building in question. Aside from their postulation that as
title holders of the land, the law presumes them to be owners of the improvements built thereon,
the Spouses Garcia were unable to adduce credible evidence to prove their ownership of the
property. In contrast, Villasi was able to satisfactorily establish the ownership of FGCI thru the
pieces of evidence she appended to her opposition. Worthy to note is the fact that the building in
litigation was declared for taxation purposes in the name of FGCI and not in the Spouses Garcias.
While it is true that tax receipts and tax declarations are not incontrovertible evidence of
ownership, they constitute credible proof of claim of title over the property. 23 In Buduhan v.
Pakurao,24 we underscored the significance of a tax declaration as proof that a holder has claim of
title, and, we gave weight to the demonstrable interest of the claimant holding a tax receipt:
Although tax declarations or realty tax payment of property are not conclusive evidence of
ownership, nevertheless, they are good indicia of possession in the concept of owner for no one in
his right mind would be paying taxes for a property that is not in his actual or at least constructive
possession. They constitute at least proof that the holder has a claim of title over the property. The
voluntary declaration of a piece of property for taxation purposes manifests not only ones sincere
and honest desire to obtain title to the property and announces his adverse claim against the State
and all other interested parties, but also the intention to contribute needed revenues to the
Government. Such an act strengthens ones bona fide claim of acquisition of ownership. 25
It likewise failed to escape our attention that FGCI is in actual possession of the building and as
the payment of taxes coupled with actual possession of the land covered by tax declaration
strongly supports a claim of ownership.26 Quite significantly, all the court processes in an earlier
collection suit between FGCI and Villasi were served, thru the formers representative Filomeno
Garcia, at No. 140 Kalayaan Avenue, Quezon City, where the subject property is located. This
circumstance is consistent with the tax declaration in the name of FGCI.
The explanation proffered by the Spouses Garcia, that the City Assessor merely committed an
error when it declared the property for taxation purposes in the name of FGCI, appears to be
suspect in the absence of any prompt and serious effort on their part to have it rectified before the
onset of the instant controversy. The correction of entry belatedly sought by the Spouses Garcia is
indicative of its intention to put the property beyond the reach of the judgment creditor. Every
prevailing party to a suit enjoys the corollary right to the fruits of the judgment and, thus, court rules
provide a procedure to ensure that every favorable judgment is fully satisfied.27 It is almost trite to
say that execution is the fruit and end of the suit. Hailing it as the "life of the law,"
ratio legis est anima,28 this Court has zealously guarded against any attempt to thwart the rigid rule
and deny the prevailing litigant his right to savour the fruit of his victory.29 A judgment, if left
unexecuted, would be nothing but an empty triumph for the prevailing party.30
While it is a hornbook doctrine that the accessory follows the principal, 31 that is, the ownership of
the property gives the right by accession to everything which is produced thereby, or which is
incorporated or attached thereto, either naturally or artificially,32 such rule is not without exception.
In cases where there is a clear and convincing evidence to prove that the principal and the
accessory are not owned by one and the same person or entity, the presumption shall not be
applied and the actual ownership shall be upheld. In a number of cases, we recognized the
separate ownership of the land from the building and brushed aside the rule that accessory follows
the principal.
In Carbonilla v. Abiera,33 we denied the claim of petitioner that, as the owner of the land, he is
likewise the owner of the building erected thereon, for his failure to present evidence to buttress
his position:
To set the record straight, while petitioner may have proven his ownership of the land, as there can
be no other piece of evidence more worthy of credence than a Torrens certificate of title, he failed
to present any evidence to substantiate his claim of ownership or right to the possession of the
building. Like the CA, we cannot accept the Deed of Extrajudicial Settlement of Estate (Residential
Building) with Waiver and Quitclaim of Ownership executed by the Garcianos as proof that
petitioner acquired ownership of the building. There is no showing that the Garcianos were the
owners of the building or that they had any proprietary right over it. Ranged against respondents

In Caltex (Phil.) Inc. v. Felias,35 we ruled that while the building is a conjugal property and therefore
liable for the debts of the conjugal partnership, the lot on which the building was constructed is a
paraphernal property and could not be the subject of levy and sale:

The rule on accession is not an iron-clad dictum. On instances where this Court was confronted
with cases requiring judicial determination of the ownership of the building separate from the lot, it
never hesitated to disregard such rule. The case at bar is of similar import. When there are factual
and evidentiary evidence to prove that the building and the lot on which it stands are owned by
different persons, they shall be treated separately. As such, the building or the lot, as the case may
be, can be made liable to answer for the obligation of its respective owner.
Finally, the issue regarding the piercing of the veil of corporate fiction is irrelevant in this case. The
Spouses Garcia are trying to protect FGCI from liability by asserting that they, not FGCI, own the
levied property. The Spouses Garcia are asserting their separation from FGCI. FGCI, the judgment
debtor, is the proven owner of the building. Piercing FGCIs corporate veil will not protect FGCI
from its judgment debt. Piercing will result in the identification of the Spouses Garcia as FGCI itself
and will make them liable for FGCIs judgment debt.
WHEREFORE, premises considered, the petition is GRANTED. The assailed Decision and
Resolution of the Court of Appeals in CA-G.R. SP No. 92587 are hereby REVERSED and SET
ASIDE. The Deputy Sheriff is hereby directed to proceed with the conduct of the sale on execution
of the levied building.
SO ORDERED.
G.R. No. L-40411
August 7, 1935
DAVAO SAW MILL CO., INC., plaintiff-appellant, vs. APRONIANO G. CASTILLO and DAVAO
LIGHT & POWER CO., INC., defendants-appellees.
MALCOLM, J.:
The issue in this case, as announced in the opening sentence of the decision in the trial court and
as set forth by counsel for the parties on appeal, involves the determination of the nature of the
properties described in the complaint. The trial judge found that those properties were personal in
nature, and as a consequence absolved the defendants from the complaint, with costs against the
plaintiff.
The Davao Saw Mill Co., Inc., is the holder of a lumber concession from the Government of the
Philippine Islands. It has operated a sawmill in the sitio of Maa, barrio of Tigatu, municipality of
Davao, Province of Davao. However, the land upon which the business was conducted belonged
to another person. On the land the sawmill company erected a building which housed the
machinery used by it. Some of the implements thus used were clearly personal property, the
conflict concerning machines which were placed and mounted on foundations of cement. In the
contract of lease between the sawmill company and the owner of the land there appeared the
following provision:
That on the expiration of the period agreed upon, all the improvements and buildings
introduced and erected by the party of the second part shall pass to the exclusive
ownership of the party of the first part without any obligation on its part to pay any
amount for said improvements and buildings; also, in the event the party of the second
part should leave or abandon the land leased before the time herein stipulated, the
improvements and buildings shall likewise pass to the ownership of the party of the
first part as though the time agreed upon had expired: Provided, however, That the
machineries and accessories are not included in the improvements which will pass to
the party of the first part on the expiration or abandonment of the land leased.
In another action, wherein the Davao Light & Power Co., Inc., was the plaintiff and the Davao,
Saw, Mill Co., Inc., was the defendant, a judgment was rendered in favor of the plaintiff in that
action against the defendant in that action; a writ of execution issued thereon, and the properties
now in question were levied upon as personalty by the sheriff. No third party claim was filed for
such properties at the time of the sales thereof as is borne out by the record made by the plaintiff
herein. Indeed the bidder, which was the plaintiff in that action, and the defendant herein having
consummated the sale, proceeded to take possession of the machinery and other properties
described in the corresponding certificates of sale executed in its favor by the sheriff of Davao.
As connecting up with the facts, it should further be explained that the Davao Saw Mill Co., Inc.,
has on a number of occasions treated the machinery as personal property by executing chattel
mortgages in favor of third persons. One of such persons is the appellee by assignment from the
original mortgages.

P a g e | 11
Article 334, paragraphs 1 and 5, of the Civil Code, is in point. According to the Code, real property
consists of
1. Land, buildings, roads and constructions of all kinds adhering to the soil;
xxx

xxx

xxx

5. Machinery, liquid containers, instruments or implements intended by the owner of

any building or land for use in connection with any industry or trade being carried on
therein and which are expressly adapted to meet the requirements of such trade of
industry.
Appellant emphasizes the first paragraph, and appellees the last mentioned paragraph. We
entertain no doubt that the trial judge and appellees are right in their appreciation of the legal
doctrines flowing from the facts.
In the first place, it must again be pointed out that the appellant should have registered its protest
before or at the time of the sale of this property. It must further be pointed out that while not
conclusive, the characterization of the property as chattels by the appellant is indicative of intention
and impresses upon the property the character determined by the parties. In this connection the
decision of this court in the case of Standard Oil Co. of New Yorkvs. Jaramillo ( [1923], 44 Phil.,
630), whether obiter dicta or not, furnishes the key to such a situation.
It is, however not necessary to spend overly must time in the resolution of this appeal on side
issues. It is machinery which is involved; moreover, machinery not intended by the owner of any
building or land for use in connection therewith, but intended by a lessee for use in a building
erected on the land by the latter to be returned to the lessee on the expiration or abandonment of
the lease.
A similar question arose in Puerto Rico, and on appeal being taken to the United States Supreme
Court, it was held that machinery which is movable in its nature only becomes immobilized when
placed in a plant by the owner of the property or plant, but not when so placed by a tenant, a
usufructuary, or any person having only a temporary right, unless such person acted as the agent
of the owner. In the opinion written by Chief Justice White, whose knowledge of the Civil Law is
well known, it was in part said:
To determine this question involves fixing the nature and character of the property
from the point of view of the rights of Valdes and its nature and character from the
point of view of Nevers & Callaghan as a judgment creditor of the Altagracia Company
and the rights derived by them from the execution levied on the machinery placed by
the corporation in the plant. Following the Code Napoleon, the Porto Rican Code
treats as immovable (real) property, not only land and buildings, but also attributes
immovability in some cases to property of a movable nature, that is, personal property,
because of the destination to which it is applied. "Things," says section 334 of the
Porto Rican Code, "may be immovable either by their own nature or by their
destination or the object to which they are applicable." Numerous illustrations are
given in the fifth subdivision of section 335, which is as follows: "Machinery, vessels,
instruments or implements intended by the owner of the tenements for the industrial or
works that they may carry on in any building or upon any land and which tend directly
to meet the needs of the said industry or works." (See also Code Nap., articles 516,
518 et seq. to and inclusive of article 534, recapitulating the things which, though in
themselves movable, may be immobilized.) So far as the subject-matter with which we
are dealing machinery placed in the plant it is plain, both under the provisions of
the Porto Rican Law and of the Code Napoleon, that machinery which is movable in
its nature only becomes immobilized when placed in a plant by the owner of the
property or plant. Such result would not be accomplished, therefore, by the placing of
machinery in a plant by a tenant or a usufructuary or any person having only a
temporary right. (Demolombe, Tit. 9, No. 203; Aubry et Rau, Tit. 2, p. 12, Section 164;
Laurent, Tit. 5, No. 447; and decisions quoted in Fuzier-Herman ed. Code Napoleon
under articles 522 et seq.) The distinction rests, as pointed out by Demolombe, upon
the fact that one only having a temporary right to the possession or enjoyment of
property is not presumed by the law to have applied movable property belonging to
him so as to deprive him of it by causing it by an act of immobilization to become the
property of another. It follows that abstractly speaking the machinery put by the
Altagracia Company in the plant belonging to Sanchez did not lose its character of
movable property and become immovable by destination. But in the concrete
immobilization took place because of the express provisions of the lease under which
the Altagracia held, since the lease in substance required the putting in of improved
machinery, deprived the tenant of any right to charge against the lessor the cost such
machinery, and it was expressly stipulated that the machinery so put in should
become a part of the plant belonging to the owner without compensation to the lessee.
Under such conditions the tenant in putting in the machinery was acting but as the
agent of the owner in compliance with the obligations resting upon him, and the
immobilization of the machinery which resulted arose in legal effect from the act of the
owner in giving by contract a permanent destination to the machinery.
xxx

xxx

xxx

The machinery levied upon by Nevers & Callaghan, that is, that which was placed in
the plant by the Altagracia Company, being, as regards Nevers & Callaghan, movable

property, it follows that they had the right to levy on it under the execution upon the
judgment in their favor, and the exercise of that right did not in a legal sense conflict
with the claim of Valdes, since as to him the property was a part of the realty which, as
the result of his obligations under the lease, he could not, for the purpose of collecting
his debt, proceed separately against. (Valdes vs. Central Altagracia [192], 225 U.S.,
58.)
Finding no reversible error in the record, the judgment appealed from will be affirmed, the costs of
this instance to be paid by the appellant.
G.R. No. L-58469 May 16, 1983
MAKATI LEASING and FINANCE CORPORATION, petitioner, vs. WEAREVER TEXTILE
MILLS, INC., and HONORABLE COURT OF APPEALS, respondents.
DE CASTRO, J.:
Petition for review on certiorari of the decision of the Court of Appeals (now Intermediate Appellate
Court) promulgated on August 27, 1981 in CA-G.R. No. SP-12731, setting aside certain Orders
later specified herein, of Judge Ricardo J. Francisco, as Presiding Judge of the Court of First
instance of Rizal Branch VI, issued in Civil Case No. 36040, as wen as the resolution dated
September 22, 1981 of the said appellate court, denying petitioner's motion for reconsideration.
It appears that in order to obtain financial accommodations from herein petitioner Makati Leasing
and Finance Corporation, the private respondent Wearever Textile Mills, Inc., discounted and
assigned several receivables with the former under a Receivable Purchase Agreement. To secure
the collection of the receivables assigned, private respondent executed a Chattel Mortgage over
certain raw materials inventory as well as a machinery described as an Artos Aero Dryer Stentering
Range.
Upon private respondent's default, petitioner filed a petition for extrajudicial foreclosure of the
properties mortgage to it. However, the Deputy Sheriff assigned to implement the foreclosure failed
to gain entry into private respondent's premises and was not able to effect the seizure of the
aforedescribed machinery. Petitioner thereafter filed a complaint for judicial foreclosure with the
Court of First Instance of Rizal, Branch VI, docketed as Civil Case No. 36040, the case before the
lower court.
Acting on petitioner's application for replevin, the lower court issued a writ of seizure, the
enforcement of which was however subsequently restrained upon private respondent's filing of a
motion for reconsideration. After several incidents, the lower court finally issued on February 11,
1981, an order lifting the restraining order for the enforcement of the writ of seizure and an order to
break open the premises of private respondent to enforce said writ. The lower court reaffirmed its
stand upon private respondent's filing of a further motion for reconsideration.
On July 13, 1981, the sheriff enforcing the seizure order, repaired to the premises of private
respondent and removed the main drive motor of the subject machinery.
The Court of Appeals, in certiorari and prohibition proceedings subsequently filed by herein private
respondent, set aside the Orders of the lower court and ordered the return of the drive motor
seized by the sheriff pursuant to said Orders, after ruling that the machinery in suit cannot be the
subject of replevin, much less of a chattel mortgage, because it is a real property pursuant to
Article 415 of the new Civil Code, the same being attached to the ground by means of bolts and
the only way to remove it from respondent's plant would be to drill out or destroy the concrete floor,
the reason why all that the sheriff could do to enfore the writ was to take the main drive motor of
said machinery. The appellate court rejected petitioner's argument that private respondent is
estopped from claiming that the machine is real property by constituting a chattel mortgage
thereon.
A motion for reconsideration of this decision of the Court of Appeals having been denied, petitioner
has brought the case to this Court for review by writ of certiorari. It is contended by private
respondent, however, that the instant petition was rendered moot and academic by petitioner's act
of returning the subject motor drive of respondent's machinery after the Court of Appeals' decision
was promulgated.
The contention of private respondent is without merit. When petitioner returned the subject motor
drive, it made itself unequivocably clear that said action was without prejudice to a motion for
reconsideration of the Court of Appeals decision, as shown by the receipt duly signed by
respondent's representative. 1 Considering that petitioner has reserved its right to question the
propriety of the Court of Appeals' decision, the contention of private respondent that this petition
has been mooted by such return may not be sustained.
The next and the more crucial question to be resolved in this Petition is whether the machinery in
suit is real or personal property from the point of view of the parties, with petitioner arguing that it is
a personality, while the respondent claiming the contrary, and was sustained by the appellate
court, which accordingly held that the chattel mortgage constituted thereon is null and void, as
contended by said respondent.
A similar, if not Identical issue was raised in Tumalad v. Vicencio, 41 SCRA 143 where this Court,
speaking through Justice J.B.L. Reyes, ruled:
Although there is no specific statement referring to the subject house as personal property, yet
by ceding, selling or transferring a property by way of chattel mortgage defendants-appellants

P a g e | 12
could only have meant to convey the house as chattel, or at least, intended to treat the same as
such, so that they should not now be allowed to make an inconsistent stand by claiming
otherwise. Moreover, the subject house stood on a rented lot to which defendants-appellants
merely had a temporary right as lessee, and although this can not in itself alone determine the
status of the property, it does so when combined with other factors to sustain the interpretation
that the parties, particularly the mortgagors, intended to treat the house as personality. Finally,
unlike in the Iya cases, Lopez vs. Orosa, Jr. & Plaza Theatre, Inc. & Leung Yee vs. F.L. Strong
Machinery & Williamson, wherein third persons assailed the validity of the chattel mortgage, it
is the defendants-appellants themselves, as debtors-mortgagors, who are attacking the validity
of the chattel mortgage in this case. The doctrine of estoppel therefore applies to the herein
defendants-appellants, having treated the subject house as personality.
Examining the records of the instant case, We find no logical justification to exclude the rule out, as
the appellate court did, the present case from the application of the abovequoted pronouncement.
If a house of strong materials, like what was involved in the above Tumalad case, may be
considered as personal property for purposes of executing a chattel mortgage thereon as long as
the parties to the contract so agree and no innocent third party will be prejudiced thereby, there is
absolutely no reason why a machinery, which is movable in its nature and becomes immobilized
only by destination or purpose, may not be likewise treated as such. This is really because one
who has so agreed is estopped from denying the existence of the chattel mortgage.
In rejecting petitioner's assertion on the applicability of the Tumalad doctrine, the Court of Appeals
lays stress on the fact that the house involved therein was built on a land that did not belong to the
owner of such house. But the law makes no distinction with respect to the ownership of the land on
which the house is built and We should not lay down distinctions not contemplated by law.
It must be pointed out that the characterization of the subject machinery as chattel by the private
respondent is indicative of intention and impresses upon the property the character determined by
the parties. As stated inStandard Oil Co. of New York v. Jaramillo, 44 Phil. 630, it is undeniable that
the parties to a contract may by agreement treat as personal property that which by nature would
be real property, as long as no interest of third parties would be prejudiced thereby.
Private respondent contends that estoppel cannot apply against it because it had never
represented nor agreed that the machinery in suit be considered as personal property but was
merely required and dictated on by herein petitioner to sign a printed form of chattel mortgage
which was in a blank form at the time of signing. This contention lacks persuasiveness. As aptly
pointed out by petitioner and not denied by the respondent, the status of the subject machinery as
movable or immovable was never placed in issue before the lower court and the Court of Appeals
except in a supplemental memorandum in support of the petition filed in the appellate court.
Moreover, even granting that the charge is true, such fact alone does not render a contract void ab
initio, but can only be a ground for rendering said contract voidable, or annullable pursuant to
Article 1390 of the new Civil Code, by a proper action in court. There is nothing on record to show
that the mortgage has been annulled. Neither is it disclosed that steps were taken to nullify the
same. On the other hand, as pointed out by petitioner and again not refuted by respondent, the
latter has indubitably benefited from said contract. Equity dictates that one should not benefit at the
expense of another. Private respondent could not now therefore, be allowed to impugn the efficacy
of the chattel mortgage after it has benefited therefrom,
From what has been said above, the error of the appellate court in ruling that the questioned
machinery is real, not personal property, becomes very apparent. Moreover, the case of Machinery
and Engineering Supplies, Inc. v. CA, 96 Phil. 70, heavily relied upon by said court is not
applicable to the case at bar, the nature of the machinery and equipment involved therein as real
properties never having been disputed nor in issue, and they were not the subject of a Chattel
Mortgage. Undoubtedly, the Tumalad case bears more nearly perfect parity with the instant case to
be the more controlling jurisprudential authority.
WHEREFORE, the questioned decision and resolution of the Court of Appeals are hereby
reversed and set aside, and the Orders of the lower court are hereby reinstated, with costs against
the private respondent.
SO ORDERED.
G.R. No. L-30173 September 30, 1971
GAVINO A. TUMALAD and GENEROSA R. TUMALAD, plaintiffs-appellees, vs. ALBERTA
VICENCIO and EMILIANO SIMEON, defendants-appellants.
REYES, J.B.L., J.:

It appears on the records that on 1 September 1955 defendants-appellants executed a chattel

mortgage in favor of plaintiffs-appellees over their house of strong materials located at No. 550 Int.
3, Quezon Boulevard, Quiapo, Manila, over Lot Nos. 6-B and 7-B, Block No. 2554, which were
being rented from Madrigal & Company, Inc. The mortgage was registered in the Registry of
Deeds of Manila on 2 September 1955. The herein mortgage was executed to guarantee a loan of
P4,800.00 received from plaintiffs-appellees, payable within one year at 12% per annum. The
mode of payment was P150.00 monthly, starting September, 1955, up to July 1956, and the lump
sum of P3,150 was payable on or before August, 1956. It was also agreed that default in the
payment of any of the amortizations, would cause the remaining unpaid balance to
becomeimmediately due and Payable and
the Chattel Mortgage will be enforceable in accordance with the provisions of Special Act No.
3135, and for this purpose, the Sheriff of the City of Manila or any of his deputies is hereby
empowered and authorized to sell all the Mortgagor's property after the necessary publication in
order to settle the financial debts of P4,800.00, plus 12% yearly interest, and attorney's fees... 2
When defendants-appellants defaulted in paying, the mortgage was extrajudicially foreclosed, and
on 27 March 1956, the house was sold at public auction pursuant to the said contract. As highest
bidder, plaintiffs-appellees were issued the corresponding certificate of sale. 3 Thereafter, on 18
April 1956, plaintiffs-appellant commenced Civil Case No. 43073 in the municipal court of Manila,
praying, among other things, that the house be vacated and its possession surrendered to them,
and for defendants-appellants to pay rent of P200.00 monthly from 27 March 1956 up to the time
the possession is surrendered. 4 On 21 September 1956, the municipal court rendered its decision
... ordering the defendants to vacate the premises described in the complaint; ordering further
to pay monthly the amount of P200.00 from March 27, 1956, until such (time that) the premises
is (sic) completely vacated; plus attorney's fees of P100.00 and the costs of the suit. 5
Defendants-appellants, in their answers in both the municipal court and court a quo impugned the
legality of the chattel mortgage, claiming that they are still the owners of the house; but they
waived the right to introduce evidence, oral or documentary. Instead, they relied on their
memoranda in support of their motion to dismiss, predicated mainly on the grounds that: (a) the
municipal court did not have jurisdiction to try and decide the case because (1) the issue involved,
is ownership, and (2) there was no allegation of prior possession; and (b) failure to prove prior
demand pursuant to Section 2, Rule 72, of the Rules of Court. 6
During the pendency of the appeal to the Court of First Instance, defendants-appellants failed to
deposit the rent for November, 1956 within the first 10 days of December, 1956 as ordered in the
decision of the municipal court. As a result, the court granted plaintiffs-appellees' motion for
execution, and it was actually issued on 24 January 1957. However, the judgment regarding the
surrender of possession to plaintiffs-appellees could not be executed because the subject house
had been already demolished on 14 January 1957 pursuant to the order of the court in a separate
civil case (No. 25816) for ejectment against the present defendants for non-payment of rentals on
the land on which the house was constructed.
The motion of plaintiffs for dismissal of the appeal, execution of the supersedeas bond and
withdrawal of deposited rentals was denied for the reason that the liability therefor was disclaimed
and was still being litigated, and under Section 8, Rule 72, rentals deposited had to be held until
final disposition of the appeal. 7
On 7 October 1957, the appellate court of First Instance rendered its decision, the dispositive
portion of which is quoted earlier. The said decision was appealed by defendants to the Court of
Appeals which, in turn, certified the appeal to this Court. Plaintiffs-appellees failed to file a brief and
this appeal was submitted for decision without it.
Defendants-appellants submitted numerous assignments of error which can be condensed into
two questions, namely: .
(a) Whether the municipal court from which the case originated had jurisdiction to adjudicate the
same;
(b) Whether the defendants are, under the law, legally bound to pay rentals to the plaintiffs
during the period of one (1) year provided by law for the redemption of the extrajudicially
foreclosed house.
We will consider these questions seriatim.

Case certified to this Court by the Court of Appeals (CA-G.R. No. 27824-R) for the reason that only
questions of law are involved.
This case was originally commenced by defendants-appellants in the municipal court of Manila in
Civil Case No. 43073, for ejectment. Having lost therein, defendants-appellants appealed to the
court a quo (Civil Case No. 30993) which also rendered a decision against them, the dispositive
portion of which follows:
WHEREFORE, the court hereby renders judgment in favor of the plaintiffs and against the
defendants, ordering the latter to pay jointly and severally the former a monthly rent of P200.00
on the house, subject-matter of this action, from March 27, 1956, to January 14, 1967, with
interest at the legal rate from April 18, 1956, the filing of the complaint, until fully paid, plus
attorney's fees in the sum of P300.00 and to pay the costs.

(a) Defendants-appellants mortgagors question the jurisdiction of the municipal court from which
the case originated, and consequently, the appellate jurisdiction of the Court of First Instance a
quo, on the theory that the chattel mortgage is void ab initio; whence it would follow that the
extrajudicial foreclosure, and necessarily the consequent auction sale, are also void. Thus, the
ownership of the house still remained with defendants-appellants who are entitled to possession
and not plaintiffs-appellees. Therefore, it is argued by defendants-appellants, the issue of
ownership will have to be adjudicated first in order to determine possession. lt is contended further
that ownership being in issue, it is the Court of First Instance which has jurisdiction and not the
municipal court.
Defendants-appellants predicate their theory of nullity of the chattel mortgage on two grounds,
which are: (a) that, their signatures on the chattel mortgage were obtained through fraud, deceit, or

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trickery; and (b) that the subject matter of the mortgage is a house of strong materials, and, being
an immovable, it can only be the subject of a real estate mortgage and not a chattel mortgage.
On the charge of fraud, deceit or trickery, the Court of First Instance found defendants-appellants'
contentions as not supported by evidence and accordingly dismissed the charge, 8 confirming the
earlier finding of the municipal court that "the defense of ownership as well as the allegations of
fraud and deceit ... are mere allegations." 9
It has been held in Supia and Batiaco vs. Quintero and Ayala 10 that "the answer is a mere
statement of the facts which the party filing it expects to prove, but it is not evidence; 11 and further,
that when the question to be determined is one of title, the Court is given the authority to proceed
with the hearing of the cause until this fact is clearly established. In the case of Sy vs.
Dalman, 12 wherein the defendant was also a successful bidder in an auction sale, it was likewise
held by this Court that in detainer cases the aim of ownership "is a matter of defense and raises an
issue of fact which should be determined from the evidence at the trial." What determines
jurisdiction are the allegations or averments in the complaint and the relief asked for. 13
Moreover, even granting that the charge is true, fraud or deceit does not render a contract void ab
initio, and can only be a ground for rendering the contract voidable or annullable pursuant to Article
1390 of the New Civil Code, by a proper action in court. 14 There is nothing on record to show that
the mortgage has been annulled. Neither is it disclosed that steps were taken to nullify the same.
Hence, defendants-appellants' claim of ownership on the basis of a voidable contract which has
not been voided fails.
It is claimed in the alternative by defendants-appellants that even if there was no fraud, deceit or
trickery, the chattel mortgage was still null and void ab initio because only personal properties can
be subject of a chattel mortgage. The rule about the status of buildings as immovable property is
stated in Lopez vs. Orosa, Jr. and Plaza Theatre Inc., 15cited in Associated Insurance Surety Co.,
Inc. vs. Iya, et al. 16 to the effect that
... it is obvious that the inclusion of the building, separate and distinct from the land, in the
enumeration of what may constitute real properties (art. 415, New Civil Code) could only mean
one thing that a building is by itself an immovable property irrespective of whether or not said
structure and the land on which it is adhered to belong to the same owner.
Certain deviations, however, have been allowed for various reasons. In the case of Manarang and
Manarang vs. Ofilada, 17 this Court stated that "it is undeniable that the parties to a contract may by
agreement treat as personal property that which by nature would be real property", citing Standard
Oil Company of New York vs. Jaramillo. 18 In the latter case, the mortgagor conveyed and
transferred to the mortgagee by way of mortgage "the following described personal
property."19 The "personal property" consisted of leasehold rights and a building. Again, in the case
of Luna vs. Encarnacion, 20 the subject of the contract designated as Chattel Mortgage was a
house of mixed materials, and this Court hold therein that it was a valid Chattel mortgage because
it was so expressly designated and specifically that the property given as security "is a house of
mixed materials, which by its very nature is considered personal property." In the later case
of Navarro vs. Pineda,21 this Court stated that
The view that parties to a deed of chattel mortgage may agree to consider a house as personal
property for the purposes of said contract, "is good only insofar as the contracting parties are
concerned. It is based, partly, upon the principle of estoppel" (Evangelista vs. Alto Surety, No. L11139, 23 April 1958). In a case, a mortgaged house built on a rented land was held to be a
personal property, not only because the deed of mortgage considered it as such, but also
because it did not form part of the land (Evangelists vs. Abad, [CA]; 36 O.G. 2913), for it is now
settled that an object placed on land by one who had only a temporary right to the same, such
as the lessee or usufructuary, does not become immobilized by attachment (Valdez vs. Central
Altagracia, 222 U.S. 58, cited in Davao Sawmill Co., Inc. vs. Castillo, et al., 61 Phil. 709).
Hence, if a house belonging to a person stands on a rented land belonging to another person, it
may be mortgaged as a personal property as so stipulated in the document of mortgage.
(Evangelista vs. Abad, Supra.) It should be noted, however that the principle is predicated on
statements by the owner declaring his house to be a chattel, a conduct that may conceivably
estop him from subsequently claiming otherwise. (Ladera vs. C.N. Hodges, [CA] 48 O.G.
5374): 22
In the contract now before Us, the house on rented land is not only expressly designated as
Chattel Mortgage; it specifically provides that "the mortgagor ... voluntarily CEDES, SELLS and
TRANSFERS by way of Chattel Mortgage 23 the property together with its leasehold rights over the
lot on which it is constructed and participation ..." 24Although there is no specific statement referring
to the subject house as personal property, yet by ceding, selling or transferring a property by way
of chattel mortgage defendants-appellants could only have meant to convey the house as chattel,
or at least, intended to treat the same as such, so that they should not now be allowed to make an
inconsistent stand by claiming otherwise. Moreover, the subject house stood on a rented lot to
which defendats-appellants merely had a temporary right as lessee, and although this can not in
itself alone determine the status of the property, it does so when combined with other factors to
sustain the interpretation that the parties, particularly the mortgagors, intended to treat the house
as personalty. Finally unlike in the Iya cases, Lopez vs. Orosa, Jr. and Plaza Theatre,
Inc. 25 and Leung Yee vs. F. L. Strong Machinery and Williamson, 26 wherein third persons assailed
the validity of the chattel mortgage, 27 it is the defendants-appellants themselves, as debtorsmortgagors, who are attacking the validity of the chattel mortgage in this case. The doctrine of
estoppel therefore applies to the herein defendants-appellants, having treated the subject house
as personalty.

(b) Turning to the question of possession and rentals of the premises in question. The Court of
First Instance noted in its decision that nearly a year after the foreclosure sale the mortgaged
house had been demolished on 14 and 15 January 1957 by virtue of a decision obtained by the
lessor of the land on which the house stood. For this reason, the said court limited itself to
sentencing the erstwhile mortgagors to pay plaintiffs a monthly rent of P200.00 from 27 March
1956 (when the chattel mortgage was foreclosed and the house sold) until 14 January 1957 (when
it was torn down by the Sheriff), plus P300.00 attorney's fees.
Appellants mortgagors question this award, claiming that they were entitled to remain in
possession without any obligation to pay rent during the one year redemption period after the
foreclosure sale, i.e., until 27 March 1957. On this issue, We must rule for the appellants.
Chattel mortgages are covered and regulated by the Chattel Mortgage Law, Act No.
1508. 28 Section 14 of this Act allows the mortgagee to have the property mortgaged sold at public
auction through a public officer in almost the same manner as that allowed by Act No. 3135, as
amended by Act No. 4118, provided that the requirements of the law relative to notice and
registration are complied with. 29 In the instant case, the parties specifically stipulated that "the
chattel mortgage will be enforceable in accordance with the provisions of Special Act No.
3135 ... ." 30 (Emphasis supplied).
Section 6 of the Act referred to 31 provides that the debtor-mortgagor (defendants-appellants
herein) may, at any time within one year from and after the date of the auction sale, redeem the
property sold at the extra judicial foreclosure sale. Section 7 of the same Act 32 allows the
purchaser of the property to obtain from the court the possession during the period of redemption:
but the same provision expressly requires the filing of a petition with the proper Court of First
Instance and the furnishing of a bond. It is only upon filing of the proper motion and the approval of
the corresponding bond that the order for a writ of possession issues as a matter of course. No
discretion is left to the court. 33 In the absence of such a compliance, as in the instant case, the
purchaser can not claim possession during the period of redemption as a matter of right. In such a
case, the governing provision is Section 34, Rule 39, of the Revised Rules of Court 34 which also
applies to properties purchased in extrajudicial foreclosure proceedings. 35 Construing the said
section, this Court stated in the aforestated case of Reyes vs. Hamada.
In other words, before the expiration of the 1-year period within which the judgment-debtor or
mortgagor may redeem the property, the purchaser thereof is not entitled, as a matter of right,
to possession of the same. Thus, while it is true that the Rules of Court allow the purchaser to
receive the rentals if the purchased property is occupied by tenants, he is, nevertheless,
accountable to the judgment-debtor or mortgagor as the case may be, for the amount so
received and the same will be duly credited against the redemption price when the said debtor
or mortgagor effects the redemption.Differently stated, the rentals receivable from tenants,
although they may be collected by the purchaser during the redemption period, do not belong
to the latter but still pertain to the debtor of mortgagor. The rationale for the Rule, it seems, is to
secure for the benefit of the debtor or mortgagor, the payment of the redemption amount and
the consequent return to him of his properties sold at public auction. (Emphasis supplied)
The Hamada case reiterates the previous ruling in Chan vs. Espe. 36
Since the defendants-appellants were occupying the house at the time of the auction sale, they are
entitled to remain in possession during the period of redemption or within one year from and after
27 March 1956, the date of the auction sale, and to collect the rents or profits during the said
period.
It will be noted further that in the case at bar the period of redemption had not yet expired when
action was instituted in the court of origin, and that plaintiffs-appellees did not choose to take
possession under Section 7, Act No. 3135, as amended, which is the law selected by the parties to
govern the extrajudicial foreclosure of the chattel mortgage. Neither was there an allegation to that
effect. Since plaintiffs-appellees' right to possess was not yet born at the filing of the complaint,
there could be no violation or breach thereof. Wherefore, the original complaint stated no cause of
action and was prematurely filed. For this reason, the same should be ordered dismissed, even if
there was no assignment of error to that effect. The Supreme Court is clothed with ample authority
to review palpable errors not assigned as such if it finds that their consideration is necessary in
arriving at a just decision of the cases. 37
It follows that the court below erred in requiring the mortgagors to pay rents for the year following
the foreclosure sale, as well as attorney's fees.
FOR THE FOREGOING REASONS, the decision appealed from is reversed and another one
entered, dismissing the complaint. With costs against plaintiffs-appellees.
G.R. No. L-17500
May 16, 1967
PEOPLE'S BANK AND TRUST CO. and ATLANTIC GULF AND PACIFIC CO. OF
MANILA, plaintiffs-appellants, vs. DAHICAN LUMBER COMPANY, DAHICAN AMERICAN
LUMBER CORPORATION and CONNELL BROS. CO. (PHIL.), defendants-appellants.
DIZON, J.:
On September 8, 1948, Atlantic Gulf & Pacific Company of Manila, a West Virginia corporation
licensed to do business in the Philippines hereinafter referred to as ATLANTIC sold and
assigned all its rights in the Dahican Lumber concession to Dahican Lumber Company
hereinafter referred to as DALCO for the total sum of $500,000.00, of which only the amount of
$50,000.00 was paid. Thereafter, to develop the concession, DALCO obtained various loans from

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the People's Bank & Trust Company hereinafter referred to as the BANK amounting, as of
July 13, 1950, to P200,000.00. In addition, DALCO obtained, through the BANK, a loan of
$250,000.00 from the Export-Import Bank of Washington D.C., evidenced by five promissory notes
of $50,000.00 each, maturing on different dates, executed by both DALCO and the Dahican
America Lumber Corporation, a foreign corporation and a stockholder of DALCO, hereinafter
referred to as DAMCO, all payable to the BANK or its order.

consideration of P175,000.00 which was deposited in court pending final determination of the
action. By a similar agreement one-half (P87,500.00) of this amount was considered as
representing the proceeds obtained from the sale of the "undebated properties" (those not claimed
by DAMCO and CONNELL), and the other half as representing those obtained from the sale of the
"after acquired properties".
After due trial, the Court, on July 15, 1960, rendered judgment as follows:

As security for the payment of the abovementioned loans, on July 13, 1950 DALCO executed in
favor of the BANK the latter acting for itself and as trustee for the Export-Import Bank of
Washington D.C. a deed of mortgage covering five parcels of land situated in the province of
Camarines Norte together with all the buildings and other improvements existing thereon and all
the personal properties of the mortgagor located in its place of business in the municipalities of
Mambulao and Capalonga, Camarines Norte (Exhibit D). On the same date, DALCO executed a
second mortgage on the same properties in favor of ATLANTIC to secure payment of the unpaid
balance of the sale price of the lumber concession amounting to the sum of $450,000.00 (Exhibit
G). Both deeds contained the following provision extending the mortgage lien to properties to be
subsequently acquired referred to hereafter as "after acquired properties" by the mortgagor:
All property of every nature and description taken in exchange or replacement, and all
buildings, machinery, fixtures, tools equipment and other property which the Mortgagor
may hereafter acquire, construct, install, attach, or use in, to, upon, or in connection
with the premises, shall immediately be and become subject to the lien of this
mortgage in the same manner and to the same extent as if now included therein, and
the Mortgagor shall from time to time during the existence of this mortgage furnish the
Mortgagee with an accurate inventory of such substituted and subsequently acquired
property.
Both mortgages were registered in the Office of the Register of Deeds of Camarines Norte. In
addition thereto DALCO and DAMCO pledged to the BANK 7,296 shares of stock of DALCO and
9,286 shares of DAMCO to secure the same obligations.
Upon DALCO's and DAMCO's failure to pay the fifth promissory note upon its maturity, the BANK
paid the same to the Export-Import Bank of Washington D.C., and the latter assigned to the former
its credit and the first mortgage securing it. Subsequently, the BANK gave DALCO and DAMCO up
to April 1, 1953 to pay the overdue promissory note.
After July 13, 1950 the date of execution of the mortgages mentioned above DALCO
purchased various machineries, equipment, spare parts and supplies in addition to, or in
replacement of some of those already owned and used by it on the date aforesaid. Pursuant to the
provision of the mortgage deeds quoted theretofore regarding "after acquired properties," the
BANK requested DALCO to submit complete lists of said properties but the latter failed to do so. In
connection with these purchases, there appeared in the books of DALCO as due to Connell Bros.
Company (Philippines) a domestic corporation who was acting as the general purchasing agent
of DALCO thereinafter called CONNELL the sum of P452,860.55 and to DAMCO, the sum of
P2,151,678.34.
On December 16, 1952, the Board of Directors of DALCO, in a special meeting called for the
purpose, passed a resolution agreeing to rescind the alleged sales of equipment, spare parts and
supplies by CONNELL and DAMCO to it. Thereafter, the corresponding agreements of rescission
of sale were executed between DALCO and DAMCO, on the one hand and between DALCO and
CONNELL, on the other.
On January 13, 1953, the BANK, in its own behalf and that of ATLANTIC, demanded that said
agreements be cancelled but CONNELL and DAMCO refused to do so. As a result, on February
12, 1953; ATLANTIC and the BANK, commenced foreclosure proceedings in the Court of First
Instance of Camarines Norte against DALCO and DAMCO. On the same date they filed an exparte application for the appointment of a Receiver and/or for the issuance of a writ of preliminary
injunction to restrain DALCO from removing its properties. The court granted both remedies and
appointed George H. Evans as Receiver. Upon defendants' motion, however, the court, in its order
of February 21, 1953, discharged the Receiver.
On March 2, 1953, defendants filed their answer denying the material allegations of the complaint
and alleging several affirmative defenses and a counterclaim.
On March 4 of the same year, CONNELL, filed a motion for intervention alleging that it was the
owner and possessor of some of the equipments, spare parts and supplies which DALCO had
acquired subsequent to the execution of the mortgages sought to be foreclosed and which
plaintiffs claimed were covered by the lien. In its order of March 18,1953 the Court granted the
motion, as well as plaintiffs' motion to set aside the order discharging the Receiver. Consequently,
Evans was reinstated.
On April 1, 1953, CONNELL filed its answer denying the material averment of the complaint, and
asserting affirmative defenses and a counterclaim.
Upon motion of the parties the Court, on September 30, 1953, issued an order transferring the
venue of the action to the Court of First Instance of Manila where it was docketed as Civil Case
No. 20987.
On August 30, 1958, upon motion of all the parties, the Court ordered the sale of all the
machineries, equipment and supplies of DALCO, and the same were subsequently sold for a total

IN VIEW WHEREFORE, the Court:

1. Condemns Dahican Lumber Co. to pay unto People's Bank the sum of P200,000,00
with 7% interest per annum from July 13, 1950, Plus another sum of P100,000.00 with
5% interest per annum from July 13, 1950; plus 10% on both principal sums as
attorney's fees;
2. Condemns Dahican Lumber Co. to pay unto Atlantic Gulf the sum of P900,000.00
with 4% interest per annum from July 3, 1950, plus 10% on both principal as
attorney's fees;
3. Condemns Dahican Lumber Co. to pay unto Connell Bros, the sum of P425,860.55,
and to pay unto Dahican American Lumber Co. the sum of P2,151,678.24 both with
legal interest from the date of the filing of the respective answers of those parties, 10%
of the principals as attorney's fees;
4. Orders that of the sum realized from the sale of the properties of P175,000.00, after
deducting the recognized expenses, one-half thereof be adjudicated unto plaintiffs, the
court no longer specifying the share of each because of that announced intention
under the stipulation of facts to "pool their resources"; as to the other one-half, the
same should be adjudicated unto both plaintiffs, and defendant Dahican American and
Connell Bros. in the proportion already set forth on page 9, lines 21, 22 and 23 of the
body of this decision; but with the understanding that whatever plaintiffs and Dahican
American and Connell Bros. should receive from the P175,000.00 deposited in the
Court shall be applied to the judgments particularly rendered in favor of each;
5. No other pronouncement as to costs; but the costs of the receivership as to the
debated properties shall be borne by People's Bank, Atlantic Gulf, Connell Bros., and
Dahican American Lumber Co., pro-rata.
On the following day, the Court issued the following supplementary decision:
IN VIEW WHEREOF, the dispositive part of the decision is hereby amended in order
to add the following paragraph 6:
6. If the sums mentioned in paragraphs 1 and 2 are not paid within ninety (90) days,
the Court orders the sale at public auction of the lands object of the mortgages to
satisfy the said mortgages and costs of foreclosure.
From the above-quoted decision, all the parties appealed.
Main contentions of plaintiffs as appellants are the following: that the "after acquired properties"
were subject to the deeds of mortgage mentioned heretofore; that said properties were acquired
from suppliers other than DAMCO and CONNELL; that even granting that DAMCO and CONNELL
were the real suppliers, the rescission of the sales to DALCO could not prejudice the mortgage lien
in favor of plaintiffs; that considering the foregoing, the proceeds obtained from the sale of the
"after acquired properties" as well as those obtained from the sale of the "undebated properties" in
the total sum of P175,000.00 should have been awarded exclusively to plaintiffs by reason of the
mortgage lien they had thereon; that damages should have been awarded to plaintiffs against
defendants, all of them being guilty of an attempt to defraud the former when they sought to
rescind the sales already mentioned for the purpose of defeating their mortgage lien, and finally,
that defendants should have been made to bear all the expenses of the receivership, costs and
attorney's fees.
On the other hand, defendants-appellants contend that the trial court erred: firstly, in not holding
that plaintiffs had no cause of action against them because the promissory note sued upon was not
yet due when the action to foreclose the mortgages was commenced; secondly, in not holding that
the mortgages aforesaid were null and void as regards the "after acquired properties" of DALCO
because they were not registered in accordance with the Chattel Mortgage Law, the court erring,
as a consequence, in holding that said properties were subject to the mortgage lien in favor of
plaintiffs; thirdly, in not holding that the provision of the fourth paragraph of each of said mortgages
did not automatically make subject to such mortgages the "after acquired properties", the only
meaning thereof being that the mortgagor was willing to constitute a lien over such properties;
fourthly, in not ruling that said stipulation was void as against DAMCO and CONNELL and in not
awarding the proceeds obtained from the sale of the "after acquired properties" to the latter
exclusively; fifthly, in appointing a Receiver and in holding that the damages suffered by DAMCO
and CONNELL by reason of the depreciation or loss in value of the "after acquired properties"
placed under receivership was damnum absque injuria and, consequently, in not awarding, to said
parties the corresponding damages claimed in their counterclaim; lastly, in sentencing DALCO and
DAMCO to pay attorney's fees and in requiring DAMCO and CONNELL to pay the costs of the
Receivership, instead of sentencing plaintiffs to pay attorney's fees.

P a g e | 15
Plaintiffs' brief as appellants submit six assignments of error, while that of defendants also as
appellants submit a total of seventeen. However, the multifarious issues thus before Us may be
resolved, directly or indirectly, by deciding the following issues:
Firstly, are the so-called "after acquired properties" covered by and subject to the deeds of
mortgage subject of foreclosure?; secondly, assuming that they are subject thereto, are the
mortgages valid and binding on the properties aforesaid inspite of the fact that they were not
registered in accordance with the provisions of the Chattel Mortgage Law?; thirdly, assuming again
that the mortgages are valid and binding upon the "after acquired properties", what is the effect
thereon, if any, of the rescission of sales entered into, on the one hand, between DAMCO and
DALCO, and between DALCO and CONNELL, on the other?; and lastly, was the action to
foreclose the mortgages premature?
A. Under the fourth paragraph of both deeds of mortgage, it is crystal clear that all property of
every nature and description taken in exchange or replacement, as well as all buildings,
machineries, fixtures, tools, equipments, and other property that the mortgagor may acquire,
construct, install, attach; or use in, to upon, or in connection with the premises that is, its lumber
concession "shall immediately be and become subject to the lien" of both mortgages in the
same manner and to the same extent as if already included therein at the time of their execution.
As the language thus used leaves no room for doubt as to the intention of the parties, We see no
useful purpose in discussing the matter extensively. Suffice it to say that the stipulation referred to
is common, and We might say logical, in all cases where the properties given as collateral are
perishable or subject to inevitable wear and tear or were intended to be sold, or to be used thus
becoming subject to the inevitable wear and tear but with the understanding express or
implied that they shall be replaced with others to be thereafter acquired by the mortgagor. Such
stipulation is neither unlawful nor immoral, its obvious purpose being to maintain, to the extent
allowed by circumstances, the original value of the properties given as security. Indeed, if such
properties were of the nature already referred to, it would be poor judgment on the part of the
creditor who does not see to it that a similar provision is included in the contract.
B. But defendants contend that, granting without admitting, that the deeds of mortgage in question
cover the "after acquired properties" of DALCO, the same are void and ineffectual because they
were not registered in accordance with the Chattel Mortgage Law. In support of this and of the
proposition that, even if said mortgages were valid, they should not prejudice them, the defendants
argue (1) that the deeds do not describe the mortgaged chattels specifically, nor were they
registered in accordance with the Chattel Mortgage Law; (2) that the stipulation contained in the
fourth paragraph thereof constitutes "mere executory agreements to give a lien" over the "after
acquired properties" upon their acquisition; and (3) that any mortgage stipulation concerning "after
acquired properties" should not prejudice creditors and other third persons such as DAMCO and
CONNELL.
The stipulation under consideration strongly belies defendants contention. As adverted to
hereinbefore, it states that all property of every nature, building, machinery etc. taken in exchange
or replacement by the mortgagor "shall immediately be and become subject to the lien of this
mortgage in the same manner and to the same extent as if now included therein". No clearer
language could have been chosen.
Conceding, on the other hand, that it is the law in this jurisdiction that, to affect third persons, a
chattel mortgage must be registered and must describe the mortgaged chattels or personal
properties sufficiently to enable the parties and any other person to identify them, We say that such
law does not apply to this case.
As the mortgages in question were executed on July 13, 1950 with the old Civil Code still in force,
there can be no doubt that the provisions of said code must govern their interpretation and the
question of their validity. It happens however, that Articles 334 and 1877 of the old Civil Code are
substantially reproduced in Articles 415 and 2127, respectively, of the new Civil Code. It is,
therefore, immaterial in this case whether we take the former or the latter as guide in deciding the
point under consideration.
Article 415 does not define real property but enumerates what are considered as such, among
them being machinery, receptacles, instruments or replacements intended by owner of the
tenement for an industry or works which may be carried on in a building or on a piece of land, and
shall tend directly to meet the needs of the said industry or works.
On the strength of the above-quoted legal provisions, the lower court held that inasmuch as "the
chattels were placed in the real properties mortgaged to plaintiffs, they came within the operation
of Art. 415, paragraph 5 and Art. 2127 of the New Civil Code".
We find the above ruling in agreement with our decisions on the subject:
(1) In Berkenkotter vs. Cu Unjieng, 61 Phil. 663, We held that Article 334, paragraph 5 of the Civil
Code (old) gives the character of real property to machinery, liquid containers, instruments or
replacements intended by the owner of any building or land for use in connection with any industry
or trade being carried on therein and which are expressly adapted to meet the requirements of
such trade or industry.
(2) In Cu Unjieng e Hijos vs. Mabalacat Sugar Co., 58 Phil. 439, We held that a mortgage
constituted on a sugar central includes not only the land on which it is built but also the buildings,
machinery and accessories installed at the time the mortgage was constituted as well as the

buildings, machinery and accessories belonging to the mortgagor, installed after the constitution
thereof .
It is not disputed in the case at bar that the "after acquired properties" were purchased by DALCO
in connection with, and for use in the development of its lumber concession and that they were
purchased in addition to, or in replacement of those already existing in the premises on July 13,
1950. In Law, therefore, they must be deemed to have been immobilized, with the result that the
real estate mortgages involved herein which were registered as such did not have to be
registered a second time as chattel mortgages in order to bind the "after acquired properties" and
affect third parties.
But defendants, invoking the case of Davao Sawmill Company vs. Castillo, 61 Phil. 709, claim that
the "after acquired properties" did not become immobilized because DALCO did not own the whole
area of its lumber concession all over which said properties were scattered.
The facts in the Davao Sawmill case, however, are not on all fours with the ones obtaining in the
present. In the former, the Davao Sawmill Company, Inc., had repeatedly treated the machinery
therein involved as personal property by executing chattel mortgages thereon in favor of third
parties, while in the present case the parties had treated the "after acquired properties" as real
properties by expressly and unequivocally agreeing that they shall automatically become subject to
the lien of the real estate mortgages executed by them. In the Davao Sawmill decision it was, in
fact, stated that "the characterization of the property as chattels by the appellant is indicative of
intention and impresses upon the property the character determined by the parties" (61 Phil. 112,
emphasis supplied). In the present case, the characterization of the "after acquired properties" as
real property was made not only by one but by both interested parties. There is, therefore, more
reason to hold that such consensus impresses upon the properties the character determined by
the parties who must now be held in estoppel to question it.
Moreover, quoted in the Davao Sawmill case was that of Valdez vs. Central Altagracia, Inc. (225
U.S. 58) where it was held that while under the general law of Puerto Rico, machinery placed on
property by a tenant does not become immobilized, yet, when the tenant places it there pursuant
to contract that it shall belong to the owner, it then becomes immobilized as to that tenant and
even as against his assignees and creditors who had sufficient notice of such stipulation. In the
case at bar it is not disputed that DALCO purchased the "after acquired properties" to be placed
on, and be used in the development of its lumber concession, and agreed further that the same
shall become immediately subject to the lien constituted by the questioned mortgages. There is
also abundant evidence in the record that DAMCO and CONNELL had full notice of such
stipulation and had never thought of disputed validity until the present case was filed.
Consequently all of them must be deemed barred from denying that the properties in question had
become immobilized.
What We have said heretofore sufficiently disposes all the arguments adduced by defendants in
support their contention that the mortgages under foreclosure are void, and, that, even if valid, are
ineffectual as against DAMCO and CONNELL.
Now to the question of whether or not DAMCO CONNELL have rights over the "after acquired
properties" superior to the mortgage lien constituted thereon in favor of plaintiffs. It is defendants'
contention that in relation to said properties they are "unpaid sellers"; that as such they had not
only a superior lien on the "after acquired properties" but also the right to rescind the sales thereof
to DALCO.
This contention it is obvious would have validity only if it were true that DAMCO and
CONNELL were the suppliers or vendors of the "after acquired properties". According to the
record, plaintiffs did not know their exact identity and description prior to the filing of the case bar
because DALCO, in violation of its obligation under the mortgages, had failed and refused
theretofore to submit a complete list thereof. In the course of the proceedings, however, when
defendants moved to dissolve the order of receivership and the writ of preliminary injunction issued
by the lower court, they attached to their motion the lists marked as Exhibits 1, 2 and 3 describing
the properties aforesaid. Later on, the parties agreed to consider said lists as identifying and
describing the "after acquire properties," and engaged the services of auditors to examine the
books of DALCO so as to bring out the details thereof. The report of the auditors and its annexes
(Exhibits V, V-1 V4) show that neither DAMCO nor CONNELL had supplied any of the goods of
which they respective claimed to be the unpaid seller; that all items were supplied by different
parties, neither of whom appeared to be DAMCO or CONNELL that, in fact, CONNELL collected a
5% service charge on the net value of all items it claims to have sold to DALCO and which, in
truth, it had purchased for DALCO as the latter's general agent; that CONNELL had to issue its
own invoices in addition to those o f the real suppliers in order to collect and justify such service
charge.
Taking into account the above circumstances together with the fact that DAMCO was a stockholder
and CONNELL was not only a stockholder but the general agent of DALCO, their claim to be the
suppliers of the "after acquired required properties" would seem to be preposterous. The most that
can be claimed on the basis of the evidence is that DAMCO and CONNELL probably financed
some of the purchases. But if DALCO still owes them any amount in this connection, it is clear
that, as financiers, they can not claim any right over the "after acquired properties" superior to the
lien constituted thereon by virtue of the deeds of mortgage under foreclosure. Indeed, the
execution of the rescission of sales mentioned heretofore appears to be but a desperate attempt to
better or improve DAMCO and CONNELL's position by enabling them to assume the role of
"unpaid suppliers" and thus claim a vendor's lien over the "after acquired properties". The attempt,
of course, is utterly ineffectual, not only because they are not the "unpaid sellers" they claim to be
but also because there is abundant evidence in the record showing that both DAMCO and

P a g e | 16
CONNELL had known and admitted from the beginning that the "after acquired properties" of
DALCO were meant to be included in the first and second mortgages under foreclosure.

borne by the defendants, jointly and severally, in the same manner that all of them should pay to
the plaintiffs, jointly a severally, attorney's fees awarded in the appealed judgment.

The claim that Belden, of ATLANTIC, had given his consent to the rescission, expressly or
otherwise, is of no consequence and does not make the rescission valid and legally effective. It
must be stated clearly, however, in justice to Belden, that, as a member of the Board of Directors of
DALCO, he opposed the resolution of December 15, 1952 passed by said Board and the
subsequent rescission of the sales.

In consonance with the portion of this decision concerning the damages that the plaintiffs are
entitled to recover from the defendants, the record of this case shall be remanded below for the
corresponding proceedings.

Finally, defendants claim that the action to foreclose the mortgages filed on February 12, 1953 was
premature because the promissory note sued upon did not fall due until April 1 of the same year,
concluding from this that, when the action was commenced, the plaintiffs had no cause of action.
Upon this question the lower court says the following in the appealed judgment;

G.R. No. 6295 September 1, 1911

THE UNITED STATES, plaintiff-appellee, vs. IGNACIO CARLOS, defendant-appellant.

The other is the defense of prematurity of the causes of action in that plaintiffs, as a
matter of grace, conceded an extension of time to pay up to 1 April, 1953 while the
action was filed on 12 February, 1953, but, as to this, the Court taking it that there is
absolutely no debate that Dahican Lumber Co., was insolvent as of the date of the
filing of the complaint, it should follow that the debtor thereby lost the benefit to the
period.
x x x unless he gives a guaranty or security for the debt . . . (Art. 1198, New Civil
Code);
and as the guaranty was plainly inadequate since the claim of plaintiffs reached in the
aggregate, P1,200,000 excluding interest while the aggregate price of the "afteracquired" chattels claimed by Connell under the rescission contracts was
P1,614,675.94, Exh. 1, Exh. V, report of auditors, and as a matter of fact, almost all
the properties were sold afterwards for only P175,000.00, page 47, Vol. IV, and the
Court understanding that when the law permits the debtor to enjoy the benefits of the
period notwithstanding that he is insolvent by his giving a guaranty for the debt, that
must mean a new and efficient guaranty, must concede that the causes of action for
collection of the notes were not premature.
Very little need be added to the above. Defendants, however, contend that the lower court had no
basis for finding that, when the action was commenced, DALCO was insolvent for purposes
related to Article 1198, paragraph 1 of the Civil Code. We find, however, that the finding of the trial
court is sufficiently supported by the evidence particularly the resolution marked as Exhibit K,
which shows that on December 16, 1952 in the words of the Chairman of the Board DALCO
was "without funds, neither does it expect to have any funds in the foreseeable future." (p. 64,
record on appeal).
The remaining issues, namely, whether or not the proceeds obtained from the sale of the "after
acquired properties" should have been awarded exclusively to the plaintiffs or to DAMCO and
CONNELL, and if in law they should be distributed among said parties, whether or not the
distribution should be pro-rata or otherwise; whether or not plaintiffs are entitled to damages; and,
lastly, whether or not the expenses incidental to the Receivership should be borne by all the parties
on a pro-rata basis or exclusively by one or some of them are of a secondary nature as they are
already impliedly resolved by what has been said heretofore.
As regard the proceeds obtained from the sale of the of after acquired properties" and the
"undebated properties", it is clear, in view of our opinion sustaining the validity of the mortgages in
relation thereto, that said proceeds should be awarded exclusively to the plaintiffs in payment of
the money obligations secured by the mortgages under foreclosure.
On the question of plaintiffs' right to recover damages from the defendants, the law (Articles 1313
and 1314 of the New Civil Code) provides that creditors are protected in cases of contracts
intended to defraud them; and that any third person who induces another to violate his contract
shall be liable for damages to the other contracting party. Similar liability is demandable under Arts.
20 and 21 which may be given retroactive effect (Arts. 225253) or under Arts. 1902 and 2176
of the Old Civil Code.
The facts of this case, as stated heretofore, clearly show that DALCO and DAMCO, after failing to
pay the fifth promissory note upon its maturity, conspired jointly with CONNELL to violate the
provisions of the fourth paragraph of the mortgages under foreclosure by attempting to defeat
plaintiffs' mortgage lien on the "after acquired properties". As a result, the plaintiffs had to go to
court to protect their rights thus jeopardized. Defendants' liability for damages is therefore clear.
However, the measure of the damages suffered by the plaintiffs is not what the latter claim,
namely, the difference between the alleged total obligation secured by the mortgages amounting to
around P1,200,000.00, plus the stipulated interest and attorney's fees, on the one hand, and the
proceeds obtained from the sale of "after acquired properties", and of those that were not claimed
neither by DAMCO nor CONNELL, on the other. Considering that the sale of the real properties
subject to the mortgages under foreclosure has not been effected, and considering further the lack
of evidence showing that the true value of all the properties already sold was not realized because
their sale was under stress, We feel that We do not have before Us the true elements or factors
that should determine the amount of damages that plaintiffs are entitled recover from defendants. It
is, however, our considered opinion that, upon the facts established, all the expenses of the
Receivership, which was deemed necessary to safeguard the rights of the plaintiffs, should be

Modified as above indicated, the appealed judgment is affirmed in all other respects. With costs.

PER CURIAM:
The information filed in this case is as follows:
The undersigned accuses Ignacio Carlos of the crime of theft, committed as follows:
That on, during, and between the 13th day of February, 1909, and the 3d day of
March, 1910, in the city of Manila, Philippine Islands, the said Ignacio Carlos, with
intent of gain and without violence or intimidation against the person or force against
the thing, did then and there, willfully, unlawfully, and feloniously, take, steal , and carry
away two thousand two hundred and seventy-three (2,273) kilowatts of electric
current, of the value of nine hundred and nine (909) pesos and twenty (20) cents
Philippine currency, the property of the Manila Electric Railroad and Light Company, a
corporation doing business in the Philippine Islands, without the consent of the owner
thereof; to the damage and prejudice of the said Manila Electric Railroad and Light
Company in the said sum of nine hundred and nine (909) pesos and twenty (20) cents
Philippine currency, equal to and equivalent of 4,546 pesetas Philippine currency. All
contrary to law.
(Sgd.) L. M. SOUTWORTH,
Prosecuting Attorney.
Subscribed and sworn to before me this 4th day of March, 1910, in the city of Manila,
Philippine Islands, by L. M. Southworth, prosecuting attorney for the city of Manila.
(Sgd.) CHARLES S. LOBINGIER,
Judge, First Instance.
A preliminary investigation has heretofore been conducted in this case, under my
direction, having examined the witness under oath, in accordance with the provisions
of section 39 of Act No. 183 of the Philippine Commission, as amended by section 2 of
Act No. 612 of the Philippine Commission.
(Sgd) L. M. SOUTHWORTH,
Prosecuting Attorney.
Subscribed and sworn to before me this 4th day of March, 1910, in the city of Manila,
Philippine Islands, by L. M. Southworth, prosecuting attorney for the city of Manila.
(Sgd.) CHARLES LOBINGIER,
Judge, First Instance.
A warrant for the arrest of the defendant was issued by the Honorable J. C. Jenkins on the 4th of
March and placed in the hands of the sheriff. The sheriff's return shows that the defendant gave
bond for his appearance. On the 14th of the same month counsel for the defendant demurrer to
the complaint on the following grounds:
1 That the court has no jurisdiction over the person of the accused nor of the offense
charged because the accused has not been accorded a preliminary investigation or
examination as required by law and no court, magistrate, or other competent authority
has determined from a sworn complaint or evidence adduced that there is probable
cause to believe that a crime has been committed, or that this defendant has
committed any crime.
2 That the facts charged do not constitute a public offense.
The demurrer was overruled on the same day and the defendant having refused to plead, a plea of
not guilty was entered by direction of the court for him and the trial proceeded.
After due consideration of all the proofs presented and the arguments of counsel the trial court
found the defendant guilty of the crime charged and sentenced him to one year eight months and
twenty-one days' presidio correccional, to indemnify the offended party, The Manila Electric
Railroad and Light Company, in the sum of P865.26, to the corresponding subsidiary imprisonment
in case of insolvency and to the payment of the costs. From this judgment the defendant appealed
and makes the following assignments of error:
I.
The court erred in overruling the objection of the accused to the jurisdiction of the court, because
he was not given a preliminary investigation as required by law, and in overruling his demurrer for
the same reason.
II.
The court erred in declaring the accused to be guilty, in view of the evidence submitted.

P a g e | 17
III.
The court erred in declaring that electrical energy may be stolen.
IV.
The court erred in not declaring that the plaintiff consented to the taking of the current.
V.
The court erred in finding the accused guilty of more than one offense.
VI.
The court erred in condemning the accused to pay P865.26 to the electric company as damages.
Exactly the same question as that raised in the first assignment of error, was after a through
examination and due consideration, decided adversely to appellant's contention in the case of U.
S. vs. Grant and Kennedy (18 Phil. Rep., 122). No sufficient reason is presented why we should
not follow the doctrine enunciated in that case.
The question raised in the second assignment of error is purely one fact. Upon this point the trial
court said:
For considerably more than a year previous to the filing of this complaint the accused
had been a consumer of electricity furnished by the Manila Electric Railroad and Light
Company for a building containing the residence of the accused and three other
residences, and which was equipped, according to the defendant's testimony, with
thirty electric lights. On March 15, 1909, the representatives of the company, believing
that more light was being used than their meter showed, installed an additional meter
(Exhibit A) on a pole outside of defendant's house, and both it and the meter (Exhibit
B) which had been previously installed in the house were read on said date. Exhibit A
read 218 kilowatt hours; Exhibit B, 745 kilowatt hours. On March 3, 1910 each was
read again, Exhibit A showing 2,718 kilowatt hours and Exhibit B, 968. It is undisputed
that the current which supplied the house passed through both meters and the city
electrician testifies that each meter was tested on the date of the last reading and was
"in good condition." The result of this registration therefore is that while the outsider
meter (Exhibit A) showed a consumption in defendant's building of 2,500 kilowatt
hours of electricity, this inside meter (Exhibit B) showed but 223 kilowatt hours. In
other words the actual consumption, according to the outside meter, was more than
ten times as great as that registered by the one inside. Obviously this difference could
not be due to normal causes, for while the electrician called by the defense (Lanusa)
testifies to the possibility of a difference between two such meters, he places the
extreme limit of such difference between them 5 per cent. Here, as we have seen, the
difference is more than 900 per cent. Besides, according to the defendant's electrician,
the outside meter should normally run faster, while according to the test made in this
case the inside meter (Exhibit B) ran the faster. The city electrician also testifies that
the electric current could have been deflected from the inside meter by placing
thereon a device known as a "jumper" connecting the two outside wires, and there is
other testimony that there were marks on the insulation of the meter Exhibit B which
showed the use of such a device. There is a further evidence that the consumption of
223 kilowatt hours, registered by the inside meter would not be a reasonable amount
for the number of lights installed in defendant's building during the period in question,
and the accused fails to explain why he should have had thirty lights installed if he
needed but four or five.
On the strength of this showing a search warrant was issued for the examination of
defendant's premises and was duly served by a police officer (Hartpence). He was
accompanied at the time by three employees of the Manila Electric Railroad and Light
Company, and he found there the accused, his wife and son, and perhaps one or two
others. There is a sharp conflict between the several spectators on some points but on
one there is no dispute. All agree that the "jumper" (Exhibit C) was found in a drawer
of a small cabinet in the room of defendant's house where the meter was installed and
not more than 20 feet therefrom. In the absence of a satisfactory explanation this
constituted possession on defendant's part, and such possession, under the Code of
Civil Procedure, section 334 (10), raises the presumption that the accused was the
owner of a device whose only use was to deflect the current from the meter.
Is there any other "satisfactory explanation" of the "jumper's" presence? The only one
sought to be offered is the statement by the son of the accused, a boy of twelve years,
that he saw the "jumper" placed there by the witness Porter, an employee of the Light
Company. The boy is the only witness who so testifies and Porter himself squarely
denies it. We can not agree with counsel for the defense that the boy's interest in the
outcome of this case is less than that of the witness for the prosecution. It seems to us
that his natural desire to shield his father would far outweight any interest such an
employee like Porter would have and which, at most, would be merely pecuniary.
There is, however, one witness whom so far as appears, has no interest in the matter
whatsoever. This is officer Hartpence, who executed the search warrant. He testifies
that after inspecting other articles and places in the building as he and the other
spectators, including the accused, approached the cabinet in which the "jumper" was
found, the officer's attention was called to the defendant's appearance and the former
noticed that the latter was becoming nervous. Where the only two witnesses who are
supposed to know anything of the matter thus contradict each other this item of
testimony by the officer is of more than ordinary significance; for if, as the accused
claims, the "jumper" was placed in the cabinet for the first time by Porter there would
be no occasion for any change of demeanor on the part of the accused. We do not
think that the officer's declination to wait until defendant should secure a notary public
shows bias. The presence of such an official was neither required nor authorized by
law and the very efficacy of a search depends upon its swiftness.
We must also agree with the prosecuting attorney that the attending circumstances do
not strengthen the story told by the boy; that the latter would have been likely to call
out at the time he saw the "jumper" being placed in the drawer, or at least directed his
father's attention to it immediately instead of waiting, as he says, until the latter was
called by the officer. Finally, to accept the boy's story we must believe that this
company or its representatives deliberately conspired not merely to lure the defendant
into the commission of a crime but to fasten upon him a crime which he did not commit
and thus convict an innocent man by perjured evidence. This is a much more serious

charge than that contained in the complaint and should be supported by very strong
corroborating circumstances which we do not find here. We are, accordingly, unable to
consider as satisfactory defendant's explanation of the "jumper's" presence.
The only alternative is the conclusion that the "jumper" was placed there by the
accused or by some one acting for him and that it was the instrument by which the
current was deflected from the matter Exhibit B and the Light Company deprived of its
lawful compensation.
After a careful examination of the entire record we are satisfied beyond peradventure of a doubt
that the proofs presented fully support the facts as set forth in the foregoing finding.
Counsel for the appellant insists that the only corporeal property can be the subject of the crime of
larceny, and in the support of this proposition cites several authorities for the purpose of showing
that the only subjects of larceny are tangible, movable, chattels, something which could be taken in
possession and carried away, and which had some, although trifling, intrinsic value, and also to
show that electricity is an unknown force and can not be a subject of larceny.
In the U. S. vs. Genato (15 Phi. Rep., 170) the defendant, the owner of the store situated at No.
154 Escolta, Manila, was using a contrivance known as a "jumper" on the electric meter installed
by the Manila Electric Railroad and the Light Company. As a result of the use of this "jumper" the
meter, instead of making one revolution in every four seconds, registered one in seventy-seven
seconds, thereby reducing the current approximately 95 per cent. Genato was charged in the
municipal court with a violation of a certain ordinance of the city of Manila, and was sentenced to
pay a fine of P200. He appealed to the Court of First Instance, was again tried and sentenced to
pay the same fine. An appeal was taken from the judgment of the Court of First Instance to the
Supreme Court on the ground that the ordinance in question was null and void. It is true that the
only question directly presented was of the validity of the city ordinance. The court, after holding
that said ordinance was valid, said:
Even without them (ordinances), the right of ownership of electric current is secured
by articles 517 and 518 of the Penal Code; the application of these articles in case of
subtraction of gas, a fluid used for lighting, and in some respects resembling
electricity, is confirmed by the rule laid down in the decisions of the supreme court of
Spain January 20, 1887, and April 1, 1897, construing and enforcing the provisions of
articles 530 and 531 of the penal code of that country, articles identical with articles
517 and 518 of the code in force in these Islands.
Article 517 of the Penal Code above referred to reads as follows:
The following are guilty of larceny:
(1) Those who with intent of gain and without violence or intimidation against the
person, or force against things, shall take another's personal property without the
owner's consent.
And article 518 fixes the penalty for larceny in proportion to the value of the personal property
stolen.
It is true that electricity is no longer, as formerly, regarded by electricians as a fluid, but its
manifestation and effects, like those of gas, may be seen and felt. The true test of what is a proper
subject of larceny seems to be not whether the subject is corporeal, but whether it is capable of
appropriation by another than the owner.
It is well-settled that illuminating gas may be the subject of larceny, even in the absence of a
statute so providing. (Decisions of supreme court of Spain, January 20, 1887, and April 1,
1897, supra; also (England) Queen vs. Firth, L. R. 1 C. C., 172, 11 Cox C. C., 234;
Queen vs. White, 3 C. & K., 363, 6 Cox C. C., 213; Woods vs. People, 222 III., 293, 7 L. R. A.,
520; Commonwealth vs. Shaw, 4 Allen (Mass), 308; State vs. Wellman, 34 Minn., 221, N. W. Rep.,
385, and 25 Cyc., p. 12, note 10.)
In the case of Commonwealth vs. Shaw, supra, the court, speaking through Chief Justice Bigelow,
said:
There is nothing in the nature of gas used for illuminating purposes which renders it
incapable of being feloniously taken and carried away. It is a valuable article of
merchandise, bought and sold like other personal property, susceptible of being
severed from a mass or larger quantity, and of being transported from place to place.
In the present case it appears that it was the property of the Boston Gas Light
Company; that it was in their possession by being confined in conduits and tubes
which belonged to them, and that the defendant severed a portion of that which was in
the pipes of the company by taking it into her house and there consuming it. All this
being proved to have been done by her secretly and with intent to deprive the
company of their property and to appropriate it to her own use, clearly constitutes the
crime of larceny.
Electricity, the same as gas, is a valuable article of merchandise, bought and sold like other
personal property and is capable of appropriation by another. So no error was committed by the
trial court in holding that electricity is a subject of larceny.
It is urged in support of the fourth assignment of error that if it be true that the appellant did
appropriate to his own use the electricity as charged he can not be held guilty of larceny for any
part of the electricity thus appropriated, after the first month, for the reason that the complaining
party, the Manila Electric Road and Light Company, knew of this misappropriation and consented
thereto.

P a g e | 18
The outside meter was installed on March 15, 1909, and read 218 kilowatt hours. On the same day
the inside meter was read and showed 745 kilowatt hours. Both meters were again read on March
3, 1910, and the outside one showed 2,718 kilowatt hours while the one on the inside only showed
968, the difference in consumption during this time being 2,277 kilowatt hours. The taking of this
current continued over a period of one year, less twelve days. Assuming that the company read
both meters at the end of each month; that it knew the defendant was misappropriating the current
to that extent; and that t continued to furnish the current, thereby giving the defendant an
opportunity to continue the misppropriation, still, we think, that the defendant is criminally
responsible for the taking of the whole amount, 2,277 kilowatt hours. The company had a contract
with the defendant to furnish him with current for lighting purposes. It could not stop the
misappropriation without cutting off the current entirely. It could not reduce the current so as to just
furnish sufficient for the lighting of two, three, or five lights, as claimed by the defendant that he
used during the most of this time, but the current must always be sufficiently strong to furnish
current for the thirty lights, at any time the defendant desired to use them.
There is no pretense that the accused was solicited by the company or any one else to commit the
acts charged. At most there was a mere passive submission on the part of the company that the
current should be taken and no indication that it wished it to be taken, and no knowledge by the
defendant that the company wished him to take the current, and no mutual understanding between
the company and the defendant, and no measures of inducement of any kind were employed by
the company for the purpose of leading the defendant into temptation, and no preconcert whatever
between him and company. The original design to misappropriate this current was formed by the
defendant absolutely independent of any acts on the part of the company or its agents. It is true,
no doubt, as a general proposition, that larceny is not committed when the property is taken with
the consent of its owner. It may be difficult in some instances to determine whether certain acts
constitute, in law, such "consent." But under the facts in the case at bar it is not difficult to reach a
conclusion that the acts performed by the plaintiff company did not constitute a consent on its part
the defendant take its property. We have been unable to find a well considered case holding
contrary opinion under similar facts, but, there are numerous cases holding that such acts do not
constitute such consent as would relieve the taker of criminal responsibility. The fourth assignment
of error is, therefore, not well founded.
It is also contended that since the "jumper" was not used continuously, the defendant committed
not a single offense but a series of offenses. It is, no doubt, true that the defendant did not allow
the "jumper" to remain in place continuously for any number of days as the company inspected
monthly the inside meter. So the "jumper" was put on and taken off at least monthly, if not daily, in
order to avoid detection, and while the "jumper" was off the defendant was not misappropriating
the current. The complaint alleged that the defendant did on, during, and between the 13th day of
February, 1909, and the 3d of March, 1910. willfully, unlawfully, and feloniously take, steal, and
carry away 2,277 kilowatts of electric current of the value of P909. No demurrer was presented
against this complaint on the ground that more than one crime was charged. The Government had
no opportunity to amend or correct this error, if error at all. In the case of U. S. vs. Macaspac (12
Phil. Rep., 26), the defendant received from one Joquina Punu the sum of P31.50, with the request
to deliver it to Marcelina Dy-Oco. The defendant called upon Marcelina, but instead of delivering
the said amount she asked Marcelina for P30 in the name of Joaquina who had in no way
authorized her to do so. Marcelina gave her P30, believing that Joaquina had sent for it. Counsel
for the defendant insisted that the complaint charged his client with two different crimes of estafa in
violation of section 11 of General Orders, No. 58. In disposing of this question this court said:
The said defect constitutes one of the dilatory pleas indicated by section 21, and the
accused ought to have raised the point before the trial began. Had this been done, the
complaint might have been amended in time, because it is merely a defect of form
easily remedied. . . . Inasmuch as in the first instance the accused did not make the
corresponding dilatory plea to the irregularity of the complaint, it must be understood
that has waived such objection, and is not now entitled to raise for the first time any
question in reference thereto when submitting to this court her assignment of errors.
Apart from the fact that the defense does not pretend that any of the essential rights of
the accused have been injured, the allegation of the defect above alluded to, which in
any case would only affect form of the complaint, can not justify a reversal of the
judgment appealed from, according to the provisions of section 10 of General Orders,
No. 58.
In the case at bar it is not pointed out wherein any of the essential rights of the defendant have
been prejudiced by reason of the fact that the complaint covered the entire period. If twelve distinct
and separate complaints had been filed against the defendant, one for each month, the sum total
of the penalties imposed might have been very much greater than that imposed by the court in this
case. The covering of the entire period by one charge has been beneficial, if anything, and not
prejudicial to the rights of the defendant. The prosecuting attorney elected to cover the entire
period with one charge and the accused having been convicted for this offense, he can not again
be prosecuted for the stealing of the current at any time within that period. Then, again, we are of
the opinion that the charge was properly laid. The electricity was stolen from the same person, in
the same manner, and in the same place. It was substantially one continuous act, although the
"jumper" might have been removed and replaced daily or monthly. The defendant was moved by
one impulse to appropriate to his own use the current, and the means adopted by him for the
taking of the current were in the execution of a general fraudulent plan.
A person stole gas for the use of a manufactory by means of pipe, which drew off the
gas from the main without allowing it to pass through the meter. The gas from this pipe
was burnt every day, and turned off at night. The pipe was never closed at this junction
with the main, and consequently always remained full of gas. It was held, that if the
pipe always remained full, there was, in fact, a continuous taking of the gas and not a
series of separate talkings. It was held also that even if the pipe had not been kept full,
the taking would have been continuous, as it was substantially all one transaction.
(Regina vs. Firth, L. R., 1 C. C., 172; 11 Cox C. C., 234. Cited on p. 758 of Wharton's
Criminal Law, vol. 1, 10th ed.)
The value of the electricity taken by the defendant was found by the trial court to be P865.26. This
finding is fully in accordance with the evidence presented. So no error was committed in
sentencing the defendant to indemnify the company in this amount, or to suffer the corresponding
subsidiary imprisonment in case of insolvency.

The judgment being strictly in accordance with the law and the merits of the case, same is hereby
affirmed, with costs against the appellant.
Arellano, C.J., Torres, Mapa and Carson, JJ.

Separate Opinions
MORELAND, J., dissenting:
I feel myself compelled to dissent because, in my judgment, there is no evidence before this court,
and there was none before the court below, establishing the most essential element of the crime of
larceny, namely, the takingwithout the consent of the owner. As I read the record, there is no
evidence showing that the electricity alleged to have been stolen was taken without the consent of
the complaining company. The fact is that there was not a witness who testified for the prosecution
who was authorized in law, or who claimed to be authorized in fact, to testify as to whether or not
the alleged taking of the electricity was without the consent of the company or, even that said
company had not been paid for all electricity taken. Not one of them was, as a matter of law,
competent to either of those facts. Not one of them was an officer of the company. The leading
witness for the people, Kay, was only an inspector of electric lights. Another, McGeachim was an
electrical engineer in the employ of the company. Another, Garcia, was an electrician of the
company. These witness all confined their testimony to technical descriptions of meters, their
nature and function, of electric light wires, the writing of defendant's house, the placing of a meter
therein, the placing of the meter outside of the house in order to detect, by comparing the readings
of the two, whether the accused was actually using more electricity than the house meter
registered, the discovery that more electricity was being used than said meter registered, and of
the finding of a "jumper" in defendant's possession. One of these witnesses testified also that he
had suspected for a long time that the accused was "stealing" electricity and that later he was
"positive of it."
In order to sustain a charge of larceny under section 517 of Penal Code, it is necessary to prove
that there was a taking without the consent of the owner. This is unquestioned. The question is:
Has the prosecution proved that fact? Has it proved that the electricity alleged to have been stolen
was used without the consent of the company? Has it proved that the accused did not have a right
to use electricity whether it went through the meter or not? Has it proved, even, that the accused
did not have a right to use a "jumper?" Has it been proved that the company has not been fully
paid for all the electricity which defendant used, however obtained? Not one of these facts has
been proved. The only way to determine those questions was to ascertain the relations which
existed between the accused and the company at the time the electricity alleged to have been
stolen was used by the accused. There was certainly some relation, some contract, either express
or implied, between the company and the accused or the company would not have been supplying
him the electric current. What was that relation, that contract? No one can possibly tell by reading
the record. There is not a single word in all the evidence even referring to it. Not one of the
people's witnesses mentioned it. Not one of them, very likely, knew what it really was. The relation
which a corporation bears to private persons for whom they are rendering service is determined by
the corporation itself through the acts of its officials, and not by its employees. While an employee
might, as the act of a servant, have caused the contract between the company and the accused to
be signed by the accused, it was nevertheless a contract determined and prepared by the
company through its officers and not one made by the employee; and unless the employee
actually knew the terms of the contract signed by the accused, either by having read it, if in writing,
or by having heard it agreed upon, if verbal, he would not be competent to testify to its terms
except rendered so by admission of the party to be charged by it. It nowhere appears that any of
the witnesses for the prosecution had any knowledge whatever of the terms of the contract
between the company and the accused. It does not appear that any of them had ever seen it or
heard it talked about by either party thereto. The company has offered no testimony whatever on
the matter. The record is absolutely silent on that point.
This being true, how can we say that the accused committed a crime? How can we say that a
given act is criminal unless we know the relation of the parties to whom the act refers? Are we
to presume an act wrong when it may be right? Are we to say that the accused committed a
wrong when we do not know whether he did or not? If we do not know the arrangements under
which the company undertook to furnish electricity to the defendant, how do we know that the
accused has not lived up to them? If we do not know their contract, how do we know that the
accused violated it?
It may be urged that the very fact that a meter was put in by the company is evidence that it was
for the company's protection. This may be true. But is it not just as proper to presume that it was
put in for defendant's protection also? Besides, it does not appear that the company really put in
the matter, nor does not appear that the company really put in the meter, nor does it even appear
to whom it belonged. No more does it appear on whose application it was put in. The witness who
installed the meter in defendant's house did not say to whom it belonged and was unable to
identify the one presented by the prosecution on the trial as the one he installed. But however
these things may be, courts are not justified in "assuming" men into state prison. The only
inferences that courts are justified in drawing are those springing from facts which are not
only proved but which are of themselves sufficient to warrant the inference. The mere fact, it is a
fact, that the company placed a meter in defendant's house is not sufficient to sustain the
conclusion in a criminal case that the defendant did not have the right to use electricity which did
not have the right to use electricity which did not pass through the meter. Much less would it
warrant the inference that, in so using electricity, the defendant feloniously and criminally took,
sole, and carried it away without the consent of the company. An accused is presumed innocent
until contrary is proved. His guilt must be established beyond a reasonable doubt. It is incumbent
on the state to prove every fact which is essential to the guilt of the accused, and to prove every
such fact as though the whole issue rested on it. The evidence of the prosecution must exclude
every reasonable hypothesis of innocence as with his guilt, he can not be convicted.
But what was the necessity of all this uncertainty? What was the force which prevented the
company from proving clearly and explicitly the contract between itself and the accused? What
prevented it from proving clearly, explicitly, and beyond all cavil that the electricity was taken (used)
without its consent? Why did not some competent official testify? Why did the company stand by

P a g e | 19
wholly silent? Why did it leave its case to be proved by servants who were competent to testify,
and who did actually testify, so far as legal evidence goes, only in relation to technical matters
relating to meters and electric currents? Why did the prosecution place upon this court the
necessity of deducing and inferring and concluding relative to the lack of consent of the company
when a single word from the company itself would have avoided that necessity? We have only one
answer to all these questions: We do not know.
In the case of Bubster vs. Nebraska (33 Neb., 663), the accused was charged with the larceny of
buggy of the value of $75. He was found guilty. On appeal the judgment of conviction was
reversed, the court saying:
There are two serious objections to this verdict. First, the owner of the buggy, although
apparently within reach of the process of the court, was not called as a witness. Her
son-in-law, who resided with her, testifies that he did not give his consent, and very
freely testifies that his mother-in-law did not. She was within reach of the process of
the court and should have been called as a witness to prove her nonconsent.
The rule is very clearly stated in note 183, volume 1, Philips on Evidence (4th Am.
ed.). A conviction of larceny ought not to be permitted or sustained unless it appears
that the property was taken without the consent of the owner, and the owner himself
should be called, particularly in a case like that under consideration, when the acts
complained of may be consistent with the utmost goodfaith. There is a failure of proof
therefore on this point.
In the case of State vs. Moon (41 Wis., 684), the accused was charged with the larceny of a mare.
He was convicted. On appeal the court reversed the judgment of conviction, saying:
In State vs. Morey (2 Wis., 494) it was held that in prosecutions of lacerny, if the owner
of the property alleged to have been stolen is known, and his attendance as a witness
can be procured, his testimony that the property was taken from him without his
consent is indispensable to a conviction. This is upon the principle that his testimony is
the primary and the best evidence that the property was taken without his consent,
and hence, that secondary evidence of the fact cannot be resorted to, until the
prosecution shows it inability, after due diligence, to procure the attendance of the
owner.
In volume 1, Phillips on Evidence (5th Am., ed., note 183 sec. 635), the author says:
In all cases, and especially in this, the lacerny itself must be proved by the evidence
the nature of the case admits. . . . This should be by the testimony of the owner
himself if the property was taken from his immediate possession, or if from the actual
possession of another, though a mere servant or child of the owner, that the
immediate possession was violated, and this, too, without the consent of the person
holding it. Where nonconsent is an essential ingredient in the offense, as it is here,
direct proof alone, from the person whose nonconsent is necessary, can satisfy the
rule. You are to prove a negative, and the very person who can swear directly to the
necessary negative must, if possible, always be produced. (Citing English authorities.)
Other and inferior proof cannot be resorted to till it be impossible to procure this best
evidence. If one person be dead who can swear directly to the negative, and another
be alive who can yet swear to the same thing, he must be produced. In such cases,
mere presumption, prima facie or circumstantial evidence is secondary in degree, and
cannot be used until all the sources of direct evidence are exhausted.
I quote these authorities not because I agree with the doctrine as therein set forth. I quote them
because there is a principle inherent in the doctrine laid down which is recognized by all courts as
having value and effect. It is this: Failure to call an available witness possessing peculiar
knowledge concerning facts essential to a party's case, direct or rebutting, or to examine such
witness as to facts covered by his special knowledge, especially if the witness be naturally
favorable to the party's contention, relying instead upon the evidence of witnesses less familiar
with the matter, gives rise to an inference, sometimes denominated a strong presumption of law,
that the testimony of such uninterrogated witness would not sustain the contention of the party.
Where the party himself is the one who fails to appear or testify, the inference is still stronger. The
nonappearance of a litigant or his failure to testify as to facts material to his case and as to which
he has especially full knowledge creates an inference that he refrains from appearing or testifying
because the truth, if made to appear, would not aid his contention; and, in connection with an
equivocal statement on the other side, which if untrue could be disapproved by his testimony, often
furnishes strong evidence of the facts asserted. As to this proposition the authorities are
substantially uniform. They differ only in the cases to which the principles are applied. A
substantially full list of the authorities is given in 16 Cyclopedia of Law and Procedure (pp. 1062 to
1064, inclusive) from which the rules as stated above are taken.
This court has recognized the value of this principle and has permitted it strongly to influence its
view of the evidence in certain cases. In the case of United States vs. Magsipoc (20 Phil. Rep.,
604) one of the vital facts which the prosecution was required to establish in order to convict the
accused was that a certain letter which the accused alleged he mailed to his daughter, who was
attending a boarding school in Iloilo, and which the daughter testified she had received, had not
really been sent by the accused and received by the daughter but, instead, had been purloined by
him from the post-office after he had duly placed it therein and after it had been taken into custody
and control of the postal authorities. It was conceded that the directress of the boarding school
which the daughter was at the time attending knew positively whether the daughter was at the time
attending knew positively whether the daughter had received the letter in question or not. This
court held that, in weighing the evidence, it would take into consideration the failure of the
prosecution to produce the directress of the school as a witness in the case, she being the only
person, apart from the daughter herself, who really knew the fact.
Another those cases was that of U. S. vs. Casipong (20 Phil. Rep., 178) charged with maintaining
a concubine outside his home with public scandal. To prove the scandalous conduct charged and
its publicity, the prosecution introduced testimony, not of witnesses in the vicinity where the
accused resided and where the scandal was alleged to have occurred, but those from another
barrio. No Witness living in the locality where the public scandal was alleged to have occurred was
produced. This court, in the decision of that case on appeal, allowed itself, in weighing the

evidence of the prosecution, to be strongly influenced by the failure to produce as witnesses

persons who, if there had really been public scandal, would have been the first, if not the only
ones, to know it. The court said:
In this case it would have been easy to have submitted abundant evidence that Juan
Casipong forsook his lawful wife and lived in concubinage in the village of Bolocboc
with his paramour Gregoria Hongoy, for there would have been an excess of
witnesses to testify regarding the actions performed by the defendants, actions not of
isolated occurrence but carried on for many days in slight of numerous residents
scandalized by their bad example. But it is impossible to conclude from the result of
the trial that the concubinage with scandal charged against the defendants has been
proved, and therefore conviction of the alleged concubine Gregoria Hongoy is not
according to law.
In the case at bar the question of the consent of the company to the us of the electricity was the
essence of the charge. The defendant denied that he had taken the electricity without the consent
of the company. The prosecution did not present any officer of the corporation to offset this denial
and the company itself, although represented on the trial by its own private counsel, did not
produce a single witness upon that subject.
In the case of Standard Oil Co. vs. State (117 Tenn., 618), the court (p.672) said:
But the best evidence of what his instructions to Holt were and the information he had
of the transaction at the time was made were the letters which he wrote to Holt
directing him to go to Gallatin, and the daily and semi-weekly reports made to him by
Holt and Rutherford of what was done there, which were not produced, although
admitted to be then in his possession. He was aware of the value of such evidence, as
he produced a copy of his letter to Holt, condemning the transaction, as evidence in
behalf of the plaintiffs in error. The presumption always is that competent and pertinent
evidence within the knowledge or control of a party which he withholds is against his
interest and insistence. (Dunlap vs. Haynes, 4 Heisk., 476; Kirby vs. Tallmadge, 160
U. S., 379, 16 Sup. Ct., 349, 40 L. ed., 463; Pacific Constr. Co. vs. B. W. Co., 94 Fed,,
180, 36 C. C. A., 153)
In the case of Succession of Drysdale (127 La., 890), the court held:
When a will presented for probate is attacked on the ground that it is a forgery, and
there are pertinent facts relating to the will in the possession of the proponent, and he
repeatedly fails to testify when his testimony could clear up many clouded and
doubtful things, his failure to testify casts suspicion upon the will, especially when the
one asking for the probate of the will is a principal legatee.
In the case of Belknap vs. Sleeth (77 Kan., 164), the court (p. 172) said:
What effect should such conduct have in the consideration of a case, where the
successful party thus living beyond the jurisdiction of the court has refused to testify in
a material matter in behalf of the opposing party? It must be conceded that the benefit
of all reasonable presumptions arising from his refusal should be given to the other
party. The conduct of a party in omitting to produce evidence peculiarly within his
knowledge frequently affords occasion for presumptions against him.
(Kirby vs. Tallmadge, 160 U. S., 379, 16 Sup. Ct., 349, 14 L. Ed., 463.) This rule has
been often applied where a party withholds evidence within his exclusive possession
and the circumstances are such as to impel an honest man to produce the testimony.
In this case the witness not only failed but refused to testify concerning material
matters that must have been within his knowledge.
In the case of Heath vs. Waters (40 Mich., 457), it was held that:
It is to be presumed that when a witness refuses to explain what he can explain, the
explanation would be to his prejudice.
In case of Frick vs. Barbour (64 Pa. St., 120, 121), the court said:
It has been more than once said that testimony in a case often consists in what is not
proved as well as in what is proved. Where withholding testimony raises a violent
presumption that a fact not clearly proved or disproved exists, it is not error to allude to
the fact of withholding, as a circumstance strengthening the proof. That was all that
was done here.
In the case of Funda vs. St. Paul City Railway Co. (71 Minn., 438), the court held:
The defendant having omitted to call its motorman as a witness, although within reach
and available, the court was, under the circumstances, justified in instructing the jury
that, in weighing the effect of the evidence actually introduced, they were at liberty to
presume that the testimony of the motorman, if introduced, would not have been
favorable to the cause of defendant.
In the case of Gulf, C. & S. F. Ry. Co. vs. Ellis (54 Fed. Rep., 481), the circuit court of appeals held
that:
Failure to produce the engineer as a witness to rebut the inferences raised by the
circumstancial evidence would justify the jury in assuming that his evidence, instead of
rebutting such inference, would support them.
In Wigmore on Evidence (vol. 1, sec. 285), it is said:

P a g e | 20
The consciousness indicated by the conduct may be, not an indefinite one affecting
the weakness of the cause at large, but a specific one concerning the defects of a
particular element in the cause. The failure to bring before the tribunal some
circumstances, document, or witness, when either the party himself or his opponent
claims that the facts would thereby be elucidated, serves to indicate, as the most
natural inference, that the party fears to do so, and this fear is some evidence that
circumstances or document or witness, if brought, would have exposed facts
unfavorable to the party. These inferences, to be sure, cannot fairly be made except
upon certain conditions; and they are also open always to explanation by
circumstances which make some other hypothesis a more natural one than the party's
fear of exposure. But the propriety of such an inference in general is not doubted. The
nonproduction of evidence that would naturally have been produced by an honest and
therefore fearless claimant permits the inference that its tenor is unfavorable to the
party's cause. . . .
Continuing this same subject the same author says:
At common law the party-opponent in a civil case was ordinarily privileged from taking
the stand (post, sec. 2217); but he was also disqualified; and hence the question could
rarely arise whether his failure to testify could justify any inference against him. But
since the general abolition of both of the privilege and the disqualification (post, secs.
2218, 577), the party has become both competent and compellable like other
witnesses; and the question plainly arises whether his conduct is to be judged by the
same standards of inference. This question naturally be answered in the affirmative. . .
. (See Aragon Coffee Co., vs. Rogers, 105 Va., 51.)
As I stated at the outset, I have been unable to find in the record of this case any proof of legal
value showing or tending to show that the electricity alleged to have been stolen was taken or
used without the consent of the company. The defendant, therefore, should be acquitted.

In this I do not forget the theory of the "Electron" which is now being quietly investigated and
studied, which seems to tend to the conclusion that there is no difference between energy and
matter, and that all matter is simply a manifestation of energy. This theory is not established, has
not been announced by any scientist as proved, and would probably have no effect on the present
discussion if it were.
Based on this accepted theory I draw the conclusion in the following pages that electricity is not
the subject of larceny under the law of the Philippine Islands.
Partida 3, title 29, law 4, thus defines "cosas muebles:"
The term muebles is applied to all the things that men can move from one place to
another, and all those that can naturally move themselves: those that men can move
from one place to another are such as cloths, books, provisions, wine or oil, and all
other things like them; and those that can naturally move themselves are such as
horses, mules, and the other beast, and cattle, fowls and other similar things.
Partida 5 title 5, law 29, contains the following:
But all the other things which are muebles and are not annexed to the house or do not
appeartain thereto belong to the vendor and he can take them away and do what he
likes with them: such are the wardrobes, casks and the jars not fixed in the ground,
and other similar things.
Article 517 of the Penal Code, in that portion defining larceny, as charged against the accused in
the case at bar, reads:
ART. 517. The following are guilty of theft:

There are other reasons why I cannot agree to the conviction of the accused. Even though the
accused to be found to have committed the acts charged against him, it stands conceded in this
case that there is a special law passed particularly and especially to meet cases of this very kind,
in which the offense is mentioned by name and described in detail and is therein made a
misdemeanor and punished as such. It is undisputed and admitted that heretofore and ever since
said act was passed cases such as the one at bar have uniformly and invariably been cognized
and punished under said act; and that this is the first attempt ever made in these Islands to
disregard utterly the plain provisions of this act, and to punish this class of offenses under the
provisions of Penal Code relating to larceny. The applicability of those provisions is, to say the very
least, extremely doubtful, even admitting that they are still in force. Even though originally
applicable, these provisions must now be held to be repealed by implication, at least so far as the
city of Manila is concerned, by the passage of the subsequent act defining the offense in question
and punishing it altogether differently.
Moreover, I do not believe that electricity, in the for in which it was delivered to the accused, is
susceptible of being stolen under the definition given by the law of these Islands to the crime of
larceny.
Concisely, then, I dissent because (a) this court, by its decision in this case, has, in my judgment,
disregarded the purpose of the Legislature, clearly expressed; because (b) it has applied a general
law, of at least very doubtful application, to a situation completely dealt with, and admittedly so by
a later statute conceived and enacted solely and expressly to cover that very situation; because (c)
the court makes such application in spite of the fact that, under the general law, if it is applicable,
the crime in hand is a felony while under the later statute it is only a misdemeanor; because (d), in
my judgment, the court modifies the definition given by the Legislature to the crime of lacerny,
which has been the same and has received the same interpretation in this country and in Spain for
more than two centuries; because (e) the decision disregards, giving no importance to a positive
statute which is not only the last expression of the legislative will on the particular subject in hand,
but was admittedly passed for the express purpose of covering the very situation to which the court
refuses to apply it. While the statute referred to is an act of the Municipal Board of the city of
Manila, this court has held in a recent case that said board was authorized by the legislature to
pass it. Therefore it is an Act of the Legislature of the Philippine Islands.
In this dissent I shall assert, and, I think, demonstrate three propositions, to wit:
First. That an electric current is not a tangible thing, a chattel, but is a condition, a state in which a
thing or chattel finds itself; and that a condition or state can not be stolen independently of the
thing or chattel of which it is a condition or state. That it is chattels which are subjects of lacerny
and not conditions.
Second. That, even if an electric current is a tangible thing, a chattel, and capable of being stolen,
in the case at barno electric current was taken by the defendant, and therefore none was stolen.
The defendant simply made use of the electric current, returning to the company exactly the
same amount that he received.
Third. That, even if an electric current is a tangible thing, a chattel, and capable of being stolen, the
contract between the company and the defendant was one for use and not for consumption; and
all the defendant is shown to have done, which is all he could possibly have done, was to make
use of a current of electricity and not to take or consume electricity itself .
I shall therefore maintain that there is no lacerny even though the defendant committed all the acts
charged against him.
In discussing the question whether, under the law of the Philippine Islands, an electric current is
the subject of larceny, I shall proceed upon the theory, universally accepted to-day, that electricity
is nothing more or less thanenergy. As Mr. Meadowcroft says in his A B C of Electricity, indorsed by
Mr. Edison, "electricity is a form of energy, or force, and is obtained by transforming some other
form of energy into electrical energy."

1. Those who, with intent of gain and without violence or intimidation against the
person or force against things, shall take another's personal property (cosas muebles)
without the owner's consent.
This article of the Penal Code, as is seen, employs precisely the words defined in the Partidas.
The definition of the word is clear in the law as written. It is also clear in the law as interpreted. I
have not been able to find a writer on Spanish or Roman criminal law who does not say clearly and
positively that the only property subject to lacerny istangible movable chattels, those which occupy
space, have three dimensions, have a separate and independent existence of their own apart from
everything else, and can be manually seized and carried from one place to another. This was the
unquestioned theory of the Roman criminal law and it is the undoubted and unquestioned theory of
the Spanish criminal law. Nor do I find a writer or commentator on the Spanish or Roman Civil Law
who does not define a cosa mueble in the same way.
One of the leading commentators of Spain on criminal law writes thus concerning the property
subject to robbery and lacerny:
Personal property belonging to another. If robbery consists in the taking of a thing
for the purpose and by the means indicated in the article in question, it follows from
the very nature of this class of crimes, that only personal or movable property can be
the subject thereof, because none but such property can be the subject of the
correctatio of the Romans; "Furtum since contrectatione non fiat," says Ulpian. The
abstraction, the rapine, the taking, and all the analogous terms and expressions used
in the codes, imply the necessity that the things abstracted or taken can be carried
from one place to another. Hence the legal maxim: Real property "non contractantur,
sed invaduntur." (6 Groizard, p. 47)
The act of taking is what constitutes the contrectatio and the invito domino which all
the great ancient and modern jurists consider as the common ingredient (in addition to
the fraudulent intention of gain), of the crimes of robbery and theft. From what has
been said it follows that the taking, the act of taking without violence or intimidation to
the persons, or force upon the things, for the purpose of gain and against the will of
the owner, is what determines the nature of the crime of theft as defined in paragraph
1 of this section. (6 Groizard, pp. 261, 262.)
The material act of taking is, therefore, an element of the crime which cannot be
replaced by any other equivalent element. From this principle important consequences
follow which we need not now stop to consider for the reason that in speaking of the
crime of robbery we have already discussed the subject at great length. Immovable
and incorporeal things cannot be the subject of the theft for the reason that in neither
the one or the other is it possible to effect the contrectatio, that is to say, the material
act of laying hands on them for the purpose of removing the same, taxing the same or
abstracting the same. Hence the legal maxims: "Furtum non committitur in rebus
immobilibus and Res incorporales nec tradi possideri possunt, ita contectavit nec
aufferri." (6 Groizard, p. 266.)
Criticising an opinion of the supreme court of Spain which held that illuminating gas was a subject
of lacerny, the same writer says:
The owner of a certain store who had entered into a contract with a gas company
whereby he substantially agreed to pay for the consumption of the amount of gas
which passed through a meter, surreptitiously placed a pipe which he connected with
the branch from the main pipe before it reached the meter and used the same for
burning more lights than those for which he actually paid. The supreme court of
Madrid convicted the defendant of the crime of estafa but the supreme court of Spain
reversed the judgment, holding that he should be convicted of theft. The only reason
which the supreme court had for so deciding was that the owner of the store
had taken personal property belonging to another without the latter's consent, thereby
committing the crime not of estafa but of consummated theft. But in our judgment,

P a g e | 21
considering the sense and import of the section under consideration, it cannot be
properly said that the owner of the store took the gas because in order to do this it
would have been necessary that the said fluid were capable of being taken or
transported, in other words, that the contrectatio, the meaning of which we have
already sufficiently explained, should have taken place.
Gas is not only intangible and therefore impossible of being the subject of contrectatio,
of being seized, removed, or transported from one place to another by the exercise of
the means purely natural which man employs in taking possession of property
belonging to another, but, by reason of its nature, it is necessary that it be kept in tank,
or that it be transmitted through tubes or pipes which by reason of their construction,
or by reason of the building to which the same may be attached, partake of the nature
of immovable property. There is no means, therefore, of abstracting gas from a tank,
from a tunnel or from a pipe which conveys the fluid to a building, for the purpose of
being consumed therein, unless the receptacle containing the same is broken, or the
tank or pipe bored, and other tubes or pipes are connected therewith at the point of
the opening or fracture by means of which the gas can conveyed to a place different
from that for which it was originally intended.
This exposition, interpretation, if you choose to call it such, has a further foundation in
our old laws which have not been changed but rather preserved in the definition of
movable an immovable property given by the Civil Code. According to Law, I Title XVII,
Partida II, personal property means those things which live and move naturally by
themselves, and those which are neither living nor can naturally move, but which may
be removed; and Law IV, Title XXIX, Partida III, defines personal property as that
which man can move or take from one place to another, and those things which
naturally by themselves can move. Finally, corporeal things, according to Law I, Title
III, Partida III, are those which may be the subject of possession with the assistance
of the body, and incorporeal those which cannot be physically seized, and cannot be
properly possessed. From these definitions it follows that unless we do violence to the
plain language of these definitions, it would be impossible to admit that gas is
a corporeal thing, and much less that it is movable property. (6 Groizard, pp. 268,
269.)
If the holding that gas, which is unquestionably a physical entity having a separate and
independent existence and occupying space, has approached the verge of unstealable property so
closely that the ablest of Spain commentators believes that there is grave danger of the complete
destruction of the ancient legislative definition of stealable property by judicial interpretation, what
would be said in regard to a decision holding that an electric current is a subject of lacerny?
It may be well to add just here, although it may be somewhat out of its regular order, what the
author above quoted regards was the crime actually committed in the case he was discussing. He
says:
For us, for the reasons hereinbefore set out, it would be more in harmony with the
principles and legal texts which determine the nature of the crimes of theft and estafa,
to assign the latter designation to the fraudulent act which he have heretofore
examined and which substantially consists in the alteration, by means of a fraudulent
method, of the system established by an agreement to supply a store with illuminating
gas and to determine the amount consumed for lighting and heating and pay its just
value. We respect, however, the reasons to the contrary advanced in the hope that the
supreme court in subsequent judgments will definitely fix the jurisprudence on the
subject.
Nor can the abusive use of a thing determine the existence of the crime under
consideration. A bailee or pledgee who disposes of the thing, bail or pledge entrusted
to his custody for his own benefit is not guilty of lacerny for the reason that both
contracts necessarily imply the voluntary delivery of the thing by the owner thereof and
a lawful possession of the same prior to the abusive use of it.
Not even a denial of the existence of the bailment or contract of pledge with of gain
constitutes the crime of lacerny for the reason that the material act of taking
possession of the property without the consent of the owner is lacking. (6 Groizard, p.
269.)
That under the Roman and Spanish law property to be the subject of lacerny must be a tangible
chattel which has a separate independent existence of its own apart from everything else, which
has three dimensions an occupies space so that it may of itself be bodily seized and carried away,
is not an open question. That that was also the doctrine of the common law is equally beyond
question.
In the consideration of this case the great difficulty lies in confusing the appearance with the thing,
in confounding the analogy with the things analogous. It is said that the analogy between electricity
and real liquids or gas is absolutely complete; that liquids and gases pass through pipes from the
place of manufacture to the place of use; and the electric current, in apparently the same manner,
passes through a wire from the plant to the lamp; that it is measured by a meter like liquids and
gas; that it can be diverted or drawn from the wire in which the manufacturer has placed it, to the
light in the possession of another; that a designing and unscrupulous person may, by means of a
wire surreptiously and criminally transfer from a wire owned by another all the electricity which it
contains precisely as he might draw molasses from a barrel for his personal use. And the question
is triumphantly put, "how can you escape the inevitable results of this analogy?" The answer is that
it is an analogy and nothing more. It is anappearance. The wire from which the electricity was
drawn has lost nothing. It is exactly the same entity. It weighs the same, has just as many atoms,
arranged in exactly the same way, is just as hard and just as durable. It exactly the same thing as it
was before it received the electricity, at the time it had it, and after it was withdrawn from it. The
difference between a wire before and after the removal of the electricity is simply a difference
of condition. Being charged with electricity it had a quality or condition which was capable of being
transferred to some other body and, in the course of that transfer, of doing work or performing
service. A body in an elevated position is in a conditiondifferent from a body at sea level or at the
center of the earth. It has the quality of being able to do something, to perform some service by the
mere change of location. It has potential energy, measured by the amount of work required to

elevated it. The weight or monkey of a pile driver is the same weight when elevated 50 feet in air
as it is when it lies on top of the pile 50 feet below, but it has altogether a different quality. When
elevated it is capable of working for man by driving a pile. When lying on top of the pile, or at sea
level, it has no such quality. The question is, "can you steal that quality?"
Two pile drivers, owned by different persons, are located near each other. The one owner has, by
means of his engine and machinery, raised his weight to its highest elevation, ready to deliver a
blow. While this owner is absent over night the owner of the other pile driver, surreptiously and with
evil design and intent, unlocks the weight and, by means of some mechanical contrivance, takes
advantage of its fall in such a way that the energy thus produced raised the weight of his own pile
driver to an elevation of forty feet, where it remains ready, when released, to perform service for
him. What has happened? Exactly the same thing, essentially, as happened when the electric
charge of one battery is transferred to another. The condition which was inherent in the elevated
weight was transferred to the weight which was not elevated; that is, the potential energy which
was a condition or quality of the elevated weight was by a wrongful act transferred to another. But
was that condition or quality stolen in the sense that it was a subject of lacerny as that crime is
defined the world over? Would the one who stole the battery after it had been elevated to the
ceiling, or the weight of the pile driver after it had been elevated 50 feet in the air, be guilty of a
different offense than if he stole those chattels before such elevation? Not at all. The weight
elevated had more value, in a sense, than one not elevated; and the quality of elevation is
considered only in fixing value. It has nothing whatever to do with the nature of the crime
committed. It is impossible to steal a quality or condition apart from thething or chattel of which it is
a quality or condition of a thing affects the value of the thing. It is impossible to stealvalue.
The thing, the chattel is that which is stolen. Its quality or condition is that which, with other
circumstances, goes to make the value.
A mill owner has collected a large amount of water in a dam at such an elevation as to be capable
of running his mill for a given time. A neighboring mill owner secretly introduces a pipe in the dam
and conveys the water to his own mill, using it for his own benefit. He may have stolen the water,
but did he steal the head, the elevation of the water above the wheel? The fact that the water had
a head made it more valuable and that fact would be taken into consideration in fixing the penalty
which ought to be imposed for the offense; but it has nothing whatever to do with determining
the nature of the offense of which the man would be charged.
Larceny cannot be committed against qualities or conditions. It is committed solely against
chattels, tangible things. A given chattel is a compromise result of all its properties, qualities, or
conditions. None of the qualities which go make up the complete thing is the subject of larceny.
One cannot steal from a roof the quality of shedding rain, although he may bore it full of holes and
thus spoil that quality; and this, no matter how much he might be benefit thereby himself. If, in a
country where black horses were very dear and white horses very cheap, one, by a subtle
process, took from a black horse the quality of being black and transferred that quality to his own
horse, which formerly was white, thereby greatly increasing its value and correspondingly
decreasing the value of the other horse which by the process was made white, would he be guilty
of larceny? Would he be guilty of larceny who, with intent to gain, secretly and furtively and with
the purpose of depriving the true owner of his property, took from a bar of steal belonging to
another the quality of being hard, stiff and unyielding and transferred that quality to a willow wand
belonging to himself? Is he guilty of larceny who, with intent to defraud and to benefit himself
correspondingly, takes from a copper wire belonging to another the quality of being electrified and
transfers that quality to an electric light? An electric current is either a tangible thing, a chattel of
and by itself, with a perfect, separate and independent existence, or else it is a mere quality,
property or condition of some tangible thing or chattel which does have such an existence. The
accepted theory to-day is, and it is that which must control, that electricity is not a tangible thing or
chattel, that it has no qualities of its own, that it has no dimensions, that it is imponderable,
impalpable, intangible, invisible, unweighable, weightless, colorless, tasteless, odorless, has no
form, no mass, cannot be measured, does not occupy space, and has no separate existence. It is,
must be, therefore, simply a quality, a condition, a propertyof some tangible thing or chattel which
has all or most of those qualities which electricity has not. Being merely thequality of a thing and
not the thing itself , it cannot be the subject of larceny.
To repeat" As we know it, electricity is nothing more or less than a condition of matter. It has no
existence apart from the thing of which it is condition. In other words, it has no separate,
independent existence. It is immaterial, imponderable, impalpable, intangible, invisible, weightless
and immeasurable, is tasteless, odorless, and colorless. It has no dimensions and occupies no
space. It is the energy latent in a live herself is the power potential in the arm of a laborer. It is the
force stored in the wound-up spring. It is an agency, not a "cosa mueble." It is a movement and not
a chattel. It is energy and not a body. It is what the laborer expends and not what he produces. It is
strength striped by an unknown process from arms of men and atoms of coal, collected and
marshalled at a given place under the mysterious leash of metal, ready to spring like a living
servant to the work of its master. It is not a chattel, it is life. It is as incapable of being stolen, by
itself, as the energy latent in a live horse. It is as impossible to steal an electric current as it is to
steal the energy hidden in a wound-up watch spring. One may steal the horse and with it the
energy which is a quality of the horse. One may steal a watch and with it the energy which is
a property of the wound-up. But can we say that one can steal the energy in the watch spring
separate from the spring itself, or electricity apart from the wire of which it is a quality or condition?
A laborer was stored up in his muscles the capacity to do a day's work. He has potential energy
packed away in little cells or batteries all through his body. With the proper mechanism he can
enter a room which it is desired to light with electricity and, by using the stored-up energy of his
body on the mechanism, light the room by transforming the energy of his muscles into the
electricity which illuminates the room. We have, then, a laborer who, by moving his hands and
arms in connection with the appropriate machinery, is able to light the room in which he is at the
time. What causes the light? The energy in the laborer's muscles is transformed into light by
means of the intermediate phenomenon known as electricity. As a concrete result, we have the
energy in the laborer's muscles transmuted into light. Now, is the energy passing through the wire,
more capable of being stolen than the energy in the muscles of the laborer? Or is the light or heat
any more or less a subject of larceny than the electric current of which they are a manifestation?
Could the energy which performed the day's work be stolen? Could the electric current which
lighted the room be stolen apart from the wire of which it was a quality? One might kidnap the
laborer and with him the energy which constitutes his life; but can we say that the energy, of itself,
is the subject of separate larceny? But, it the laborer's energy cannot be stolen while it resides in
and is a quality of his arm, can the same energy any more be stolen when it resides in and is a
quality of a wire in the form of electricity? If so, just where is the dividing line, where is the point at
which this kinetic energy ceases to be incapable of being separately stolen and becomes a subject

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to theft? Is it at the crank by which the laborer turns the machine? Is it at the armature, the
conductor, the fields coils, the field magnet, the commutator, the brushes, the driving pulley, or the
belt tightener? Is it where the current enters what is called the electric-light wire, or is it where it
enters the bulb or arc and produces the light? In other words, at what point does the untealable
laborer's energy become stealable electric energy?
An electric-light wire placed in a house for the purpose of furnishing light for the same has its
precise counterpart in a laborer placed therein for the same purpose. Like the laborer, it is filled
with energy which will, when released, perform the service intended. The wire is simply a means of
transmitting the energy of the laborer's muscles, and that stored in tons of coal which he handles,
from the electric plant or factory to the house where the light is produced. The wire simply avoids
the necessity of the laborer being in the very house where he produces the light. Instead of being
there, he, by means of the so-called electric-light wire, is located at a distance, but produces the
light in exactly the same way, transmitting his energy for that purpose. The wire stands in exactly
the same relation to the person in whose house it is put as would a laborer who had been sent to
that house to render services. The energy may be diverted from the purpose for which it was
intended, or a wrong account given of the amount of work performed by that energy; but it is
impossible to steal, take and carry the energy away. One cannot steal days' works; and that is all
an electric current is. One may use those days' works in hoeing corn when it has been agreed that
they shall be used in picking cotton; but that is not larceny of the days' works, as larceny has been
defined by the jurisprudence of every country, Or, one may report to the owner of those days'
works that he had used three of them when in reality he used thirty and pay him accordingly, but
that is not larceny of the twenty-seven.
But, it is argued, the illustration is not a fair one; energy in a laborer's arm or in the muscles of a
horse or in a wound-up spring is, so far as its capability of being stolen is concerned, quite different
from energy which has been separated from the arms of the laborer or the muscles of the horse
and driven through a wire; from such wire electricity may be drawn like water from a barrel; and
while it is impossible to steal the energy of a man or a horse because it would destroy the life of
the animal, an entirely different question is presented when the energy has actually been
separated from those animals and confined in a wire.
This argument has several fundamental defects. In the first place, it assumes the whole question
at issue. By asserting that electricity is separable from the object of which it is a quality or state is
to assume that electricity is a material thing, which the real question to be resolved. In the second
place, if electricity is in the real sense of that term, separable from the object to which it belongs,
then it must be admitted that it is capable of separate and independent existence apart from any
other object. This is not so. It is not only admitted but contended by every scientist who has
touched this subject that electricity is incapable of an independent existence apart from some
given material object. In the third place, this argument overlooks the fact, even if we assume that it
can be separated, that the thing when separated is not the same thing that it was before
separation; in other words, when the so-called separation occurs there is not only a transference of
energy from the horse to the battery but there is also a transformation. In the horse it is muscular
energy. In the wire it is electrical energy. In the horse it is potential. In the wire kinetic. It is not the
same thing in the wire that it was in the horse. In the fourth place, the argument makes the
stealability of a thing depend not on its nature but on where it is located. This is an assumption
wholly unwarranted and impossible under the law. To say that whether or not a thing is stealable
depends not on its nature but on where it is located is absurd. A diamond ring in a burglar-proof
safe is as much a subject of larceny, under the definition of the law, as if it lay in an open
showcase. If energy is stealable at all, and it must be remembered that I am proceeding, as we
must necessarily proceed upon the accepted theory that electricity is nothing more or less than
energy, it is so by reason of its nature and by reason of its residing in a battery rather than in a
horse; and if it is stealable by virtue of its nature it can be stolen from the horse as well as from the
battery or wire. A thing is subject to larceny because, and only because, it is a cosa mueble, not
because it is inside a horse, a wire or a safe. If it is a cosa mueble it is the subject of larceny
although it be located on the moon; and if it is not a cosa mueble it is not subject to lacerny
although it be placed in a den of thieves. The difficulty or ease of getting at a thing has nothing
whatever to do with its stealability. In the fifth place, this argument overlooks the very important
fact, to be dealt with more at length later, that the electric current used by the accused was
returned to the company, after use, absolutely undiminished in quantity.
What, then, is the difference between corn, for example, and an electric current? It is this. One is
a cosa mueblewhile the other is not; one is produced by a wholly different process from the other
and from wholly different materials, if we may call materials those changes which result in
the immaterial thing called an electric current; in the case of corn we deal not with
the quality or energy of corn, but with corn as a composite and concrete result of all its qualities
and uses; we deal with a tangible thing, a chattel, and not with a condition or quality of a tangible
thing; we deal with things instead of ideas, with things which
exist separate and independent and which do not depend, as does electricity, wholly upon some
body not only for the capability of manifesting its existence, but also for very existence itself ;
because we deal with something which changes its form but never its nature as a physical entity. It
is always a chattel, a tangible thing, a cosa mueble.
On the other hand, in the case of the electric current we deal not with a thing, a chattel a cosa
mueble, but with acondition or quality, a property of a cosa mueble; with an idea which always,
before it has any significance of meaning whatever, associates itself with an entity, a body or
chattel, as a characteristic or quality of such body or chattel; with lines of force which are merely
and solely a quality, a property, a characteristic of the magnet, instead of which grains of corn
which are absolute entities, independent of and apart from everything else, and not
merecharacteristic or qualities of some entity of body which does not exist as an absolute physical
entity in itself; with the horse and the violet and not their perfume; with the lily and not its beauty;
with the clouds and not their color; with entities and not accidents; with realities and not the
imponderable, impalpable ideas and qualities which make upthe reality.
As he already been said, the difficulty in the elucidation of the question comes from the confusion
of qualities withthings, of appearances with realities. Apparently an electric current does things. It
produces phenomena. It, therefore, appears to be something. But it must not be forgotten that
many times appearances are deceitful. They do not always insure realities. It is not judicial to say
that, because a thing looks so, it is so. It is not judicial to say that, simply because it looks as if one
committed larceny, therefore he is guilty of larceny. Before we may legally convict one of larceny,
we must know exactly what he did. Justice is not founded on guess work nor on appearances.
Men's right are preserved by definitions, and definitions are founded on facts, not fancies, on
realities, not appearances. Because, when one taps an electrically charged wire belonging to

another and, by means of a contrivance, transfers the charge to his own uses, it looks as if he
was stealing something, is not sufficient to convict him of larceny. We must first know what larceny
is, as well as what an electric current is, and what is meant by its use in producing light. To know
what larceny is we must know what legislators and judges during the development of jurisprudence
have always said and agreed it is. In other words, we must know its definition. It approaches
tyranny to convict one of murder when is actually guilty of homicide only. Yet the only thing which
separates the two crimes is a definition. It is wrong to convict one of robbery who is guilty only of
larceny. Yet these two crimes are distinguished only by adefinition. If, as in the case at bar, whether
or not one is declared a felon and is sent to prison for one year eight months and twenty-one days,
is forever disqualified from holding public office and of exercising the right of suffrage, or whether,
instead, he is declared guilty of a misdemeanor simply and punished lightly with no accompanying
disqualifications, depends upon whether he has committed larceny as defined by the Penal Code
or whether he has merely violated a city ordinance, the question whether he actually committed
larceny or not begins to assume importance. It assumes importance not only to him but to society
as well. If a court to-day palpably modifies a definition in order to convict an offender of larceny,
how can society be assured that tomorrow the same court will not modify some other definition to
convict a citizen of treason? When definitions are destroyed no man is secure in his person or his
property. When men act on appearances instead of realities justice will be shortlived. A whale looks
like a fish, acts like a fish, swims like a fish and lives all its life in the water like a fish. But it is not a
fish. It is an animal. It is air-breathing, warm-blooded, and viviparous, and suckles its young. Now,
if whether or not a whale is a fish or an animal is the potent factor determining whether a man goes
to state prison as a felon with all the deplorable consequences resulting, or whether he is lightly
sentenced as a mere misdemeanant, is it not of the supremest importance to determine whether a
whale is a fish or an animal? I am informed that it used to be a common sight in The New York
Zoological Gardens to see Mr. Crowley, the large and extremely intelligent chimpanzee, dressed in
faultless attire, sit at the table and take his food and wine like a gentleman. Children believed him
to be a man; and many intelligent grown people honestly believed that he was as much man as
chimpanzee. But if the officials of the city of New York had been indicted for kidnapping, based
upon the seizure and forcible detention of Mr. Crowley, would it not have been of the most solemn
importance to them to throw away appearances and determine accurately what Mr. Crowley really
was? And in case of doubt as to what he was, could they not justly have demanded the benefit of
that doubt?
So, where one who diverted an electric current has been accused by reason thereof of the crime of
larceny, which crime, it being admitted, can be committed only against tangible things, chattels, is it
not of the very greatest importance to determine what an electric current is, that is, whether it is
a tangible thing, a chattel, or not and what is the nature and meaning of the process by which it
transforms itself into electric light? And in case of doubt as what it is, cannot the accused justly
demand the benefit of that doubt? To convict one of larceny it is not sufficient to show merely that a
wrongful act has been done; but it must appear that a wrongful act of a particular kind has been
committed. To constitute larceny it must be proved that the wrongful act was committed against
chattels, againsttangible things, which were seized upon and asported by the one accused. In the
case at bar it has not been shown that the accused laid unlawful hands upon and asported a
tangible thing, a chattel, una cosa mueble. The very least that the prosecution must necessarily
admit is that no one knows what electricity really is. That being so, it seems to me to be a
contradiction of terms to say that larceny, which must admittedly be committed against a known
thing, can be committed against a thing absolutely unknown. At least it would seem that there is a
grave doubt about the definition of larceny covering wrongful acts relative to an electric current;
and by reason of that doubt the conviction ought not to be sustained. And if it is true, as I have
herein attempted to show, that, under the prevailing and generally accepted theory, electricity is
nothing more or less than a condition, a quality, a property of some tangible thing, some chattel or
body, then, certainly, the charge of larceny must fall, as that crime can be committed only against
the thing and not against a quality of the thing.
Although the only question in this case is whether electricity is such a tangible thing, as can, under
the definition of lacerny contained in the Penal Code, be the subject of lacerny, nevertheless the
court dismissed that question substantially without discussion, the only reference thereto being the
following:
I is true that electricity is no longer, as formerly, regarded by electricians as a fluid, but
its manifestations and effects, like those of gas, may be seen and felt. The true test of
what is a proper subject of lacerny seems to be not whether the subject is incorporeal,
but whether it is capable of appropriation by another than the owner.
xxx

xxx

xxx

Electricity, the same as gas, is a valuable article of merchandise, bought and sold like
other personal property and is capable of appropriation by another. So no error was
committed by the trial court in holding that electricity is a subject of lacerny.
The statement fail to touch the essential question involved and is wholly beside the point for the
following reasons, lying aside for the moment the nature of the act which the accused actually
committed, assuming that he committed the act described by the witnesses for the prosecution:
In the first place, as I understand the law , the statement is not quite correct that, in the Philippine
Islands, "the true test of what is a proper subject of lacerny seems to be not whether the subject is
corporeal or incorporeal, but whether it is capable of appropriation," unless the word
"appropriation" has the same meaning as the word "taking"used in the article of the Penal Code
defining larceny. If the court intended to use the word "appropriation" in the sense of "taking," then
its use was unnecessary and may be misleading. If it did not so intend, then the rule of law laid
down by the court is not as I understand the law to be. An appropriation in addition to or different
from the takingis not an essential of lacerny anywhere. Wharton says that "lacerny id is the
fraudulent taking and carrying away of a thing without claim of right, with the intention of converting
it to a use other than that of the owner and without his consent." Article 517 of the Penal Code
provides that they shall be guilty of lacerny "who . . . take (toman) (not appropriate)
another's cosas muebles (movable chattels) without the owner's consent." Unless, therefore, the
word "appropriation" is used in the same sense as "taking," the paragraph in the court's decision
above quoted does not contain a correct statement of the law. If it means the same thing then the
use of the word in no way enlightens the situation; for it is just as difficult to determine whether
a cosa mueble can be appropriated as it is to determine whether it can be taken. The question
before us is whether or not electricity is such a cosa mueble that it can betaken under the law of
lacerny. To substitute in that problem the word "appropriation" for the word "taking" does not laid in

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its solution in the slightest degree when it is admitted that the word substituted means exactly the
same thing as the word in the place of which it was substituted.
An illustration will serve further to show the fallacy inherent in the statement quoted: Let us
suppose that the Penal Code defined larceny thus: "Any person who, with intent to gain, takes
from another his cake without his consent shall be guilty of lacerny." Let us suppose that some one
should then defined the subject of lacerny as anything, corporeal or incorporeal, which can be
"appropriated." It would be obvious that such definition would be erroneous, for the reason that,
while pie is as capable of being "appropriated" as cake, still, under the terms of the law, lacerny
cannot be committed against pie. So that where the statute prescribes that the only thing subject to
larceny is a cosa mueble and the definition of the subject of larceny is claimed to be anything that
can be "appropriated," the answer at once is that such definition is inaccurate under the law as
it may be too broad. There may be some things which can be "appropriated" that are not cosas
muebles.
In the second place, the quoted paragraph from the court's decision contains another error in the
statement of the law. I am of the opinion that, under the common law, and I am sure under the
Spanish law, the statement that "the true test of what is a proper subject of larceny seems to be
not whether the subject is corporeal or incorporeal . . ." is not accurate. Professor Beale, of
Harvard, says in his article on larceny that
At common law the only subjects of larceny were tangible, movable chattels;
something which could be taken in possession and carried away, and which had
some, although trifling, intrinsic value. Any substance which has length, breadth, and
thickness may be the subject of larceny. . . . A chose in action being in its essence
intangible could not be the subject of larceny at common law and the paper evidence
of the chose in action was considered merged with it.
Wharton says:
Choses in action, including bonds and notes of all classes according to the common
law are not the subject of larceny, being mere rights of action, having no corporeal
existence; . . . .
I have already quoted at length from writers on the Spanish and Roman law to show that
only tangible, corporealchattels can be the subject of larceny.
In the third place, by entirely begging the question, it leaves the whole proposition of whether
electricity is a subject of larceny not only unsolved but wholly untouched. As we have already
seen, the word "appropriation" nowhere appears in subdivision 1 of the Penal Code in connection
with larceny. But if it were there used in connection with such crime, it would necessarily refer
entirely to a cosa mueble as that is the only thing under that article which is the subject of larceny
and, therefore of "appropriation." So that, before we can possibly know whether a thing is capable
of appropriation or not under the Penal Code, we must know whether that thing is or is not a cosa
mueble, as that, as we have said, is the only thing that can be taken or appropriated in committing
the crime of larceny. But, as is readily seen, that brings us right back to the question we started
with, What is a cosa mueble? It is more than apparent, therefore, that the quoted paragraph adds
nothing whatever to the discussion.
In the fourth place, the word "appropriation" in the paragraph quoted is there used with a complete
misapprehension of its meaning as found in the article of the Civil Code from which it is taken.
Articles 334 and 335 of the Civil Code seek to divide all property capable of appropriation into
classes. They read:
ART. 334. Son bienes immuebles:
1. Las tierras, edificios, caminos y construcciones de todo genero adheridas al suelo.
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This article has ten subdivision dealing with all kinds of real property. It is not necessary to quote it
all at this time.
The English of the part quoted is as follows:
ART. 334. Real property consists of
1. Lands, buildings, roads, and constructions of all kinds adherent to the soil.
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ART. 335. Se reputan bienes muebles los susceptibles de apropiacion no

comprendidos en el capitulo anterior, y en general todos los que se pueden
transportar de un punto a otro sin menoscabo de la cosa immueble a que estuvieron
unidos.
This article in English is as follows:
ART. 335. Personal property is considered anything susceptible of appropriation and
not included in the foregoing chapter, and, in general, all that which can be carried
from one place to another without damage to the real estate to which it may be
attached.
As is seen from the terms of the articles, two expressions are used in defining "bienes muebles,"
one of elimination and other of description. The clause of elimination provides that all property

subject to appropriation shall be personal property except that property described in article 334.
But this description was found to be too broad. It included too much; and it was, therefore,
necessary to make use of a limiting or restricting clause in connection with the exclusion clause. To
that the article further provided that appropriable property shall be, "in general, all property
which can be carried from one place to another." Under this restricting clause, then, property to
be personal property must be not only property not included in article 334 but also property which
can be transported from one place to another. It must fulfill two requirements instead of one.
Besides, under the Spanish law, real property is as much subject to appropriation as personal
property. The word in Spanish seems to be broader than its legal use in English.
From the foregoing it is plain that property to be personal property must not only be susceptible of
appropriation, which the court in the quoted paragraph claims is the only requirement, but it must
also be capable of being of itself manually seized and transported from one place to another.
This presents the fourth reason why I say that the proposition laid down by the court in the quoted
paragraph is laid down under a complete misapprehension of the definition of una cosa mueble.
And finally, the word "appropriate" which the court has used is found in subdivision 2 of article 517
of the Penal Code. It provides that those are guilty of larceny, "who, finding a thing (una cosa
mueble) lost and knowing its owner, appropriate it with intent to gain." The signification which the
word here has is quite different from that of the word "take" (toman) used in the first subdivision,
being considerably limited in its reach. As used here it is very like "convert." There is no removal
from the possession of the owner, as in the first paragraph. In the Penal Code the word "taking"
means something more than "appropriation." It means a removal from the possession of the owner
a transportation or asportation of the thing from one place to another from the possession of
the owner to the possession of the theft; while "appropriation" means, rather, the making use of the
converting of the property after the taking is complete, or without any "taking" at all. Under the
Spanish law, while real estate is not, of course, subject to asportation, to "taking," and, therefore,
not the subject of larceny, it is subject to "appropriation." In the same way while electricity is, under
the Spanish and Roman laws, wholly incapable of seizure and asportation, of the manual "taking"
the trespass essential to larceny, it may possibly, in one or another sense of the word, be subject
to appropriation." If at one extreme of the scale of things, namely, real estate, the thing
is too tangible to be stolen, is it not logical to expect that at the opposite extreme the thing,
electricity, for example, may be found toointangible to be stolen?
We have seen that, in all the history of Roman and Spanish jurisprudence, the crime of larceny has
been confined totangible things, to chattels, which have an independent existence of their own;
which have three dimensions; which occupy space; which are capable of having a trespass
committed against themselves; which can be, of themselves and alone, taken physically into
possession and carried away (asported).
We have that the fact that electricity is not such a thing is admitted by all.
And we have asked the question, "How, then, can the charge of larceny be sustained?"
But let as assume, for the sake of argument, that electricity is a tangible thing, like water, for
instance. Still the crime committed, if any, is not lacerny. Let us modify the illustration already given
of the surreptitious removal by A of water stored in a dam by B for milling purposes. Let us
suppose that B has built a reservoir on an elevated portion of his farm for the storage of water for
irrigating purposes. He has built ditches or conduits from the reservoir to every part of his farm to
carry the water to the places needed. During the dry season while B is engaged in irrigating his
lands A surreptitiously and with intent to gain, constructs a small mill upon one of the conduits and
utilizes the rapid fall and swift flow of the water to operate his mill. For many months A thus takes
advantages of B's conduit and water and enriches himself by reason thereof. Did A commit the
crime larceny? The water, every drop of it, after being used by A, went to its work of irrigating the
lands of B, pausing only long enough to turn the water wheel of A's mill. Certainly then, no water
was stolen. A simply made use of the "head," the fall of the water. If anything was stolen it was the
"head," the elevation of the water, the energy developed by its passage from high to low ground.
This is precisely what happens when an electric current passes through an electric bulb or arc and
produces light. Whether the current operates one light of one hundred, the volume, the amperage,
of the current, that is, thequantity of it, if we may use the term (and it must be remembered that I
am assuming electricity to be a tangible thing and will speak accordingly) remains exactly the
same. The volume or quantity of the electricity is just the same when it comes out of the hundredth
light as it was when it entered the first. While there is a difference between the current as it comes
from the last light and as it entered the first, it is simply one of condition, or state. All of
theelectricity is still there. Like the water; it has simply lost its "head," its energy. It has been
deprived of its pressure, of its electro-motive force; but it is the same old electricity, in the same old
quantity. So that, when the accused in the case at bar, by means of a "jumper," burned thirty lights,
instead of the three for which he paid the company, he was not stealing electricity. Exactly as much
electricity went back into the company's wire after serving the twenty-seven lights for which he did
not pay as came out of that wire in the first place. The defendant took nothing; he usedsomething.
In larceny there must be a taking. Here there is only a use. Electricity is a utility, not a thing. The
company, in the cease at bar, lost no more than did the owner of the irrigation system in the
example heretofore given. As no water was taken, so no electricity was taken. The same amount
of water remained to the owner after its use by A. The same amount of electricity remained to the
company after its use by the defendant.
The well-known Italian author, Avv. Umberto Pipia, in his very able work entitled "L' Electricita nel
Diritto" puts the question thus (translation of Mr. Percy R. Angell, Manila, 1911):
From the point of view of the jurist can electricity be stolen? A person connects a
deflecting wire to the main conduit of electricity; he thus makes a secondary circuit in
which he introduces a resistance and profits by the electro-motive power which is
developed, to supply his lamps or put his motor in movement. In such case can we
apply article 402 of the Penal Code, which provides that whoever takes possession of
movable property of another in order to derive profit thereby, taking it from the place
where he finds it without the consent of the owner, is punished with reclusion up to
three years?
The author then refers to the decisions of certain course of Europe which hold that electricity is
stealable, and continues:

P a g e | 24
The Roman court of cassation has lost sight of that fundamental principle of
interpretation of law (a principle which it ought to have had well in mind before
applying to a new manifestations of force legislative provisions enacted in view of
totally different cases) by which penal laws do not extend beyond the cases and the
times in them expressed. Nulla poena sine lege, is the rule in terms of penal law,
unless we wish to bring about a deplorable confusion of powers, and the judiciary
desires to usurp the authority of the legislator. If in the written laws gaps or breaks are
encountered, it is the duty of the court to point them out to the legislator, to the end
that he take the necessary measures; but it is not lawful for him by analogous
interpretation to apply a penal provision where such has not been explicitly enacted.
In the unanimous opinion of jurist, two elements are necessary to constitute the crime
of theft, legally speaking; the first is the taking possession of the personal (movable)
property of another, contrectatio, and the taking away of the thing from the place
where it is found without the consent of the person to whom it belongs, ablatio.
Now we have conclusively shown that electric current is not a thing, but a state, a
vibration following certain converging waves. It can not therefore be taken possession
of as the personal property of another. A person who unlawfully uses electric current
for his personal enjoyment places himself in a state of unlawful enjoyment of a utility,
but he does not take possession of personal property. It was a grave error, that of the
court of cassation, in holding electric current to be a thing imprisoned in wires, and
composed of particles that can be subtracted. In connecting a second circuit one does
not subtract electric current; not a particle of electric energy enters into the possession
of the so-called thief ; the same amount in amperes that was found and derived on
connecting the second circuit, is found at the end of this circuit. The current has only
suffered a diminution of potential; while continuing to be of the same volume, it
becomes less adapted for the use intended, because having overcome a resistance, it
has lost in potential, its electro-motive power.
. . . It leaves the circuit in the same amount in which it entered. Only its power for work
has diminished. Not a single particle or molecule of electric current is taken by such
abusive use, only the state of undulation. The movement that first follows the principal,
and then the second circuit, and by these undulations the so-called thief illegally
derives benefit. But the extraordinary provisions of crime are not applicable to all
illegal actions.
Another powerful argument in favor of my position is this: That in no case of
usurpation, the using of things protected by law (diritto) that are not material things ,
do we speak of theft. To repress abuses the legislator has been obliged to establish
special provisions of law, but has explicitly recognized those relating to theft to be
inapplicable. A trade-mark, trade-name, modello de fabrica, a scientific or artistic work,
undoubtedly constitute objects of law similar to things; form the contents of various
juridical relations; have more or less economic value; pertain to the patrimony of the
person who has produced them or brought them into being. If a third person makes
use of the trade-mark or trade-name, the scientific work or artistic production of
another, nobody denies that he takes possession of a utility that does not belong to
him; that by the very illegal act he derives profit, and at the same time diminishes the
patrimony of the person having legitimate rights herein. But with all that, it has never
occurred to anyone to bring an action for theft against the usurper of the firm name,
the counterfeit of the trade-mark or the plagiarist. The legislator, desiring to protect this
new species of property, has provided special repressive measures; but in their
absence, the courts can not apply the actio furti, because it is not applicable to cases
and conditions other than those provided for.
If this be so, why different conceptions on the score of electricity? Here likewise, there
is no subtraction of personal property, but the illegal use of an advantage, of the right
pertaining to another, which remain however unchanged. Hence the legal solution
should be the same.
The second and not less essential condition of theft is that of the ablatio, the necessity
of taking the thing from the place where it is found. But here we have nothing of that;
the current is deviated from its course, true, but it returns to the place where it was
undiminished. The statement in the foregoing decision that there are particles
transportable from place to place is exact; the undulation is in itself, it has its own
efficiency, but it is neither taken away nor subtracted. It has been justly said that all
that is done is to erect a bridge over which the undulations of the particles are
transported in the wire attached, but nothing corporeal passes from one wire to
another, since not one of the vibrating particles moves with the current which flows
through the connected wire.
Consequently, in whatever aspect the question is considered the presumption of theft
grows less. In fine, although there be a usurpation of a utility to the prejudice of
another, it should not be held to constitute theft, because that is the vulgar, not the
legal conception. That in civil and commercial law we may resort to analogous
interpretation, and that, in the absence of special provisions we should apply the rules
which govern similar matters and analogous cases, there is no doubt. The courts can
not refuse to say what the law is (dire ie diritto) nor dismiss the litigants on the pretext
that the law had made no provision for their case; and it is from this concept that
electricity, as a rule, in the various relations where it constitutes the object, is
considered to be a thing, with all the attributes of such. But the penal law is restrictive;
under certain aspects it is exceptional. Here we have to do with limitations and
restrictions on the most sacred rights of persons, the right to liberty, the right to honor.
And these rights can not be abridged without definite and explicit provisions of the law.
Where these are lacking we can pray, as I do, that they be supplied, but a decision in
such case is an arbitrary act (arbitro), not justice: nulla poena sine lege.
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So on the wrongful use of electric current; profit is derived from its high potential which
is produced by the work and expenditure of money on the part of the furnishing

company; the current is returned exactly as it was delivered except it has lost a certain
amount of electromotive power that was illegally (antigiuridicamente) employed to
overcome the resistance introduced by the third party.
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. . . Penal law must be strictly construed (e di interpretazione restrittiva). It punishes

the contractatio of a movable thing which is taken from the place where it is found
without the consent of the owner. In the proposition under discussion, we have not to
do with movable things, there is no true transporting to another place; therefore
the figura giuridica of theft is wanting.
It can not be doubted that by movable things is meant even liquids and fluids, because
these are material, concrete, and corporeal things, but their physical external
manifestations can not affect the juridical relation . But in our case there is not a thing,
fluid or liquid; there is a state of undulation, of movement, which one uses illegally,
assuming however the obligation to indemnify for all the damages resulting from his
illicit action, but there is no theft, any more than there would be where a person
applied a pulley to the shaft of an engine in order to put his own machinery in motion,
so far as there would be no appropriation. The current which injuriously traverse the
lamp or electric motor is not appropriated or destroyed by the person who uses it; it
flows out from the lights and continues its course in the circuit undiminished in
intensity; it has only lost part of its power, because, having encountered a resistance,
it has developed certain energy to overcome it, energy which has produced light,
traction, or mechanical work.
Nor may it be said that electricity would then be deprived of any legal protection. Do
we not have articles 1511 et seq. of the Civil Code that provide for fraud? Is there not
the civil crime and quasi crime? To protect electric energy is it necessary to imprison
one who uses it antigiuridicamente, while the letter of the law does not consent? In
any case it is known that adducere inconveniens non est solvere argumentum. As in
the laws of our country provision is made for the illegal use of a firm name, trade-mark
and works of genius (l' ingegno); in England, where provision has been made for the
matter we are discussing they have enacted a law imposing severe penalties upon
persons who illegally use electric energy, and I am of the first to applaud them. But let
there be laws, not merely judicial opinion (arbitria di interpretati).
Nor does it avail to urge that when we have to do with benefits that are useful to man,
which serve his ends, that he can appropriate, these benefits are considered as things
in the eyes of the law. But it is necessary to make a distinction. From the standpoint of
the civil law, they are, because a wide and analogous construction is permissible and
permitted; but from that of the penal law, they are not, because such construction is
expressly forbidden by article 4 of the preliminary provisions of the Civil Code.
If a trade-mark is not a benefit to man, in what does it serve him? Is not a literary or
artistic production such? Does not the counterfeiter illegally appropriate such benefits?
But if it is required to inflict criminal penalties upon him, a special law must be
enacted; the provisions relative to theft can be applied in his case.
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Nor is it a conclusive argument to say that the manufacturer spends large sums of
money and erects costly machinery to generate the electricity, and when others steal it
from him, such action, according to juridical conscience and social morals, constitutes
theft.
Let us suppose an individual acquires a ticket of admission, and enters a hall where
there is being produced a play of some sort. He, on the strength of the legal
negotiation with the impresario and the acquisition of the ticket has a right to the most
ample enjoyment that his optical and acoustic senses are able to realize. But he
arranges a phonograph and a cinematograph, and surreptitiously fixes and
appropriates part of the acoustic and visual enjoyment that does not belong to him,
takes it outside of the theater and later avails himself thereof to his benefit by
reproducing the harmony of the sounds and the optical illusion of the scene. Is he
liable for theft?
From the standpoint of the doctrine I am combating, he is. The impresario has
sacrificed money or work to produce the spectacle. Our friend has the right to enjoy it
to the limit of the capacity of his organs of vision and hearing, but beyond that. By
means of suitable instruments he has caught up the sounds, movements, and colors
for the purpose of gain, and he commits a theft because there enter
the correctatio and the ablatio.
From the point of view of the law he is not. He would be held to reimburse the
impresario for all damages, but he can not be called a thieft, nor be punished as such.
The sounds and forms of light are states, not things; therefore they can not form
subjects of theft.
And if this is so, the same conclusion must be reached with respect to electricity.
The supreme court of the German Empire, sitting at Leipsic, October 20, 1896, in a decision
holding that electricity was not a subject of larceny, said:
The court below found that the act did not constitute theft or unlawful appropriation,
because electricity is not to be considered a thing within the meaning of paragraph
242 of the Penal Code, and because by things the law means portions of material
nature; that corporeal existence is an essential ingredient of the thing. Even the Penal
Code starts from this principle. Incorporeal things, as for example rights, intellectual

P a g e | 25
products and machine power are not subjects of theft. The same must be said of
electricity. Experts say that the science is not yet determined. We well know what must
be done to produce electric energy, but we do not comprehend these vital operations,
any more than we understand what is that makes the muscles of the human arm
capable of exerting force. In the conclusions of the Court of First Instance there is no
error of law. That court starts from the principle that the corporal existence of the thing
must be the essential element to come within the meaning of article 242. This
assumption is not based upon the precepts of the Civil Code, but, rather, upon the
idea which is at the bottom of the Penal Code, namely, the movable and independent
thing, which presupposes the corporeality of the object. If then, under articles 242 and
245, the condition precedent to the commission of larceny is that the object of theft or
unlawful appropriation be a piece or portion of material substance in either a solid or
liquid state, or in form of gas, the Court of First Instance committed no error in finding
there was neither theft nor illegal appropriation. Whether or not the notation of a thing,
in the sense of the penal laws, requires something corporeal, is a question of law; but
the question whether electricity is a substance, a corporeal thing, or a force, a
movement of a minute particles, is a question of fact that can not be decided by the
rules of law, but by physical research alone. The consideration of the great importance
of electricity in commercial life and the place awaiting it among the vital conveniences
and the fact of its having commercial value, is not an argument to prove that electricity
is a corporeal thing, because the quality of being a vital convenience and having
commercial value does not constitute a necessary standard of corporelity, since force,
operations, intellectual products are vital conveniences (beni) and have commercial
value. When, in the jurisprudence of the day the need for penal laws for punishment of
unjust appropriation of electric current becomes apparent, the legislator should
provide them. The courts can not be called upon to supply the lack of legal provisions
by analogous applications of rules not made to fit the circumstance. In penal law the
principle nulla poena sine is supreme.
These authorities fully support my contention that electricity is not stealable under the provisions of
the Spanish Penal Code. They also support the proposition that even if electricity is a tangible
thing, like water, and therefore stealable, the crime, if any, committed by the defendant in this case
is not larceny, because the company had just as much electricity after the illegal act as it had
before. In other words, it has lost no electricity. Having lost no electricity it can not charge anyone
with stealing it. If a thousand lights were burned, no more electricity would be consumed than if
one light were burned, just as, no more water is consumed in running a thousand water wheels
placed one below another than in running one. Just as much water flows over the thousandth
wheel as flowed over the first. In the same manner there is just as much electricity flowing out of
the thousandth light as flowed into the first. Just as in using the water, nothing is consumed but
the head, the quantity of water remaining the same, so, in using electricity, nothing is consumed
but the head (the pressure, the potential, the electro-motive force), the electricity itself remaining
undiminished. No electricity was taken. It was used and then returned to its owner.

therefore, the legislature is presumed to have had in mind in framing its definition of "cosas
muebles" only such chattels, or those of the same nature, as were known to the legislature at the
time it acted. At the time the Penal Code became operative substantially nothing was known by
those who created if of the phenomenon, electricity. It is more than clear that at the time of the
enactment of the laws relating to larceny, of which article 517 of the Penal Code is a reproduction,
nothing whatever was known of that phenomenon. We have, therefore, no means of knowing what
would have been the legislative action in relation thereto. The legislative authorities of those times
might have treated it as substantially every other legislative body has treated it that has touched
the question; namely, as a thing separate and distinct from chattels, and unlawful acts affecting it
and its use as crimes distinct from the crimes against tangible property, such as robbery and
larceny. In this jurisdiction the legislature is the only authority for the definition of the crime. Where
a new situation arises by virtue of discoveries which reveal agencies never known before, and
whose real nature is unknown even to the discoverers the legislature is the body to take the
initiative in determining the position of such agencies among the affairs of men, unless
they clearly fall within a class already established and defined; and it appears that some legislative
bodies have done that very thing and have passed special laws touching the place which should
be given electricity in the civil and criminal law. This was done here by the passage of the
ordinance of the city of Manila. The fact that legislatures in many jurisdictions have enacted special
laws relative to electricity is the very clearest proof that there was the gravest doubt among
learned men of the applicability of existing laws to acts committed against the rights of producers
of electricity. The legislature of the Islands having acted through the council of the city of Manila
and by such action made illegal acts against the producers of electricity a special crime wholly
distinct from larceny, such act should be conclusive on this court as to the legislative intent.
Section 649 of the Revised Ordinance of the city of Manila provides in part:
No person shall, for any purpose whatsoever, use or enjoy the benefits of any device
by means of which he may fraudulently obtain any current of electricity or any
telephone or telegraph service; and the existence in any building or premises of any
such device shall, in the absence of satisfactory explanation, be deemed sufficient
evidence of such use by the person benefiting thereby.
This section was enacted under the authority of the Legislature of the Philippine Islands, as was
section 930 of said ordinances, by the terms of which one was violates the provisions of section
649 "shall be punished by a fine of not more than two hundred pesos or by imprisonment for not
more than six months, or both such fine and imprisonment, in the discretion of the court, for each
offense."
Articles 517 and 518 of the Penal Code read in part as follows:
ART. 517. The following are guilty of theft:

For a clear understanding of this problem, and a logical and philosophical, as well as legal,
solution thereof, we must never, for a moment, forget the fact that the real contract between the
company and the defendant was one to furnish labor and services; a lease, if you please, of an
agency, a contract of precisely the same nature as one by which the company lets to the
defendant the use of one of the company's workmen to turn by hand, in the defendant's own
house, an electrical machine and thereby produce light for defendant's use. This is the crux of the
whole question. While no contract was proved we know of necessity, from the principles which
underlie and govern electric lighting, that the contract must have been as above stated. If the
defendant should require the laborer thus placed in his house to work overtime and should not pay
the company therefor, thus taking advantage of the situation, there would be no larceny. To be
sure, the defendant would return the workman to the company fatigued and reduced in strength by
reason of the overtime he had required him to put in, but it would be the same workman which he
had received. It is this which shows the absurdity of the claim that the defendant in this case is
guilty of larceny. The company never intended to sell the workman to the defendant and the
defendant never expected to buy him. It was the use that was the basis of the contract. In exactly
the same manner the company never intended to sell electricity to the defendant and the
defendant never intended to buy electricity. The basis of the contract was the use of electricity. Just
as the laborer was returned by defendant to the company fatigued and reduced in strength by
reason of the overtime which the defendant had wrongfully and illegally required him to put in, so
the current of electricity was returned by the defendant to the company fatigued and reduced in
strength by reason of the lights which the defendant had wrongfully and illegally caused it to
supply; and just as, notwithstanding the reduction in strength, it was the same identical workman
returned that was sent out, so the electric current returned to the company after the illegal use by
defendant was the same identical current which the company had furnished him. Where then, is
the foundation for the charge of larceny?
Let us now see what are the results of the holding of the court that electricity is subject to larceny.
The Spanish Law of the Philippine Islands has not been changed by any legislative enactment.
A cosa mueble is the same now as it was in the days of the Partidas. No legislature has changed
the law of larceny as it came from the jurisprudence of Rome and Spain. Nor has any legislature
touched the law of the personal chattel to give it a new definition or one which changes its ancient
signification. Its present definition is the same as that given by Sanchez Roman, Pacheco,
Scaevola, Manresa, and Groizard as drawn form the decrees of kings and acts of legislatures.
That definition having been framed by the lawmaking power of Spain, from the Partidas down to
the Penal Code, it ought not to be changed by any agency short of the lawmaking power of the
United States. The substance and nature of crime ought not to be changed by courts in a country
where crimes are purely statutory. It has the appearance of a usurpation of the functions of the
lawmaking body, an unwarrantable assumption of the legislative attributes.
The holding of the court in this case is, in effect, an amendment to the Penal Code. It has changed
materially the definition of a cosa mueble and, therefore, of the crime of larceny, as made by the
lawmaking bodies of Spain and the United States. I do not assert that the courts have not the right
to determine whether a given set of facts do or do not fulfill the definition of a given crime. What I
do say is that the very greatest care should be exercised in cases which may involved as a
consequence of their decision the changing of the scope of the substantive law of crime. The fact,
admitted by all, that whether the phenomenon which we call electricity really is a "cosa mueble,"
under the accepted definition of that word, is open to doubt, should give us pause. Before holding
that electricity is a cosa mueble, the fact whether it is or not ought to be substantially free from
doubt, This is particularly true in a country where crimes are purely statutory, and in which,

1. Those who, with intent of gain and without violence or intimidation against the
person or force against the things, shall take another's personal property (cosa
mueble) without the owner's consent.
xxx

xxx

xxx

ART. 518. Those guilty of theft shall be punished:

1. With the penalty of presidio correccional in its medium and maximum degrees if the
value of the stolen property should exceed 6,250 pesetas.
2. With the penalty of presidio correccional in its minimum and medium degrees
should it not exceed 6,250,pesetas and be more than 1,250 pesetas.
3. With arresto mayor in its medium degree to presidio correccional in its minimum
degree should it not exceed 1,250 pesetas and be more than 250 pesetas.
4. With arresto mayor to its fullest extent should it be more than 25 but not exceed
250 pesetas.
5. With arresto mayor in its minimum and medium degrees if it should not exceed
25 pesetas; if exceeding 25 and not more than 65 pesetas, a theft of nutritious grains,
fruits, or wood shall be punished with a fine of room 325 to 500 pesetas.
Under subdivision 2 of the article last quoted, which is the paragraph under which the accused is
punished in the case at bar, the penalty prescribed is from six months and one day to four years
and two months. The accused in this case was actually sentenced to one year eight months and
twenty-one days of presidio correccional, to indemnify the company in the sum of P865.26, to the
corresponding subsidiary imprisonment in case of failure to pay said sum, and to the accessory
penalties provided by law.
Having before us these two laws, we may now see to what untoward and unfortunate results the
majority opinion leads us in holding that a person who commits a crime against an electric current
can be punished under either, or both, of two different statutes. As we have seen already there is,
relatively speaking, an enormous difference in the penalties prescribed by said law. That imposed
by the ordinance of the city of Manila can not in any event exceed six months' imprisonment and a
fine of P200; while that provided in the Penal Code may be as severe as four years and two
months imprisonment, with indemnity equal to the value of the property stolen, with corresponding
subsidiary imprisonment in case of nonpayment. To this must be added all those accessory
penalties prescribed by the code, such as suspension from any public office, profession or trade,
and from the right the suffrage. To me it is wholly unbelievable that, under the circumstances of this
case and the nature of the offense itself, it was the intention of the legislative authority to permit the
concurrent existence of two laws, both in force, punishing the same crime with penalties which
bear no relation to each other and which are widely different in severity. Note what results from
such a holding. Prosecution under the ordinance must be in the municipal court. Prosecution under
the Penal Code may be in the municipal court or it may be and generally must be, as in this case,

P a g e | 26
in the Court of First Instance. But it is certain that, under the ordinance, every case may be
prosecuted in the municipal court, whatever the value of the electricity taken; or, if the value is
sufficient, the prosecution may be brought in the Court of First Instance. The selection of the court
is left to the complaint. This means that the complaint is able to say within certain limits what
punishment shall be inflicted; for, if he desires that the accused shall be lightly punished he will
bring the action in the municipal court, which he always can do if he wish, and if he desires to
punish him very severely he will bring it in the Court of First Instance, which he can generally do if
he cares to. It is incoceivable that the legislature intended that such a condition should exist. It is in
violation of every sense of fairness, is against every rule of statutory construction, and is clearly
inimical to public policy. To assert that the complaining in which he shall prosecute the accused but
also, in effect, the crime of which he shall be charged, as the decision in this case holds in effect, is
to assert a proposition, the bare statement of which is its own completest refutation.

(2) Absolving the defendants from all liability under the complaint; and
(3) Condemning the plaintiff and his sureties Cenon de la Cruz, Juan Sangalang and
Marcos Sibal to jointly and severally pay to the defendant Emiliano J. Valdez the sum
of P9,439.08 as follows:
(a) P6,757.40, the value of the sugar cane;
(b) 1,435.68, the value of the sugar-cane shoots;
(c) 646.00, the value of palay harvested by plaintiff;

For these reasons the judgment of conviction should be reversed.

G.R. No. L-26278

August 4, 1927

LEON SIBAL , plaintiff-appellant,

vs.
EMILIANO J. VALDEZ ET AL., defendants.
EMILIANO J. VALDEZ, appellee.
J. E. Blanco for appellant.
Felix B. Bautista and Santos and Benitez for appellee.
JOHNSON, J.:
The action was commenced in the Court of First Instance of the Province of Tarlac on the 14th day
of December 1924. The facts are about as conflicting as it is possible for facts to be, in the trial
causes.
As a first cause of action the plaintiff alleged that the defendant Vitaliano Mamawal, deputy sheriff
of the Province of Tarlac, by virtue of a writ of execution issued by the Court of First Instance of
Pampanga, attached and sold to the defendant Emiliano J. Valdez the sugar cane planted by the
plaintiff and his tenants on seven parcels of land described in the complaint in the third paragraph
of the first cause of action; that within one year from the date of the attachment and sale the
plaintiff offered to redeem said sugar cane and tendered to the defendant Valdez the amount
sufficient to cover the price paid by the latter, the interest thereon and any assessments or taxes
which he may have paid thereon after the purchase, and the interest corresponding thereto and
that Valdez refused to accept the money and to return the sugar cane to the plaintiff.
As a second cause of action, the plaintiff alleged that the defendant Emiliano J. Valdez was
attempting to harvest the palay planted in four of the seven parcels mentioned in the first cause of
action; that he had harvested and taken possession of the palay in one of said seven parcels and
in another parcel described in the second cause of action, amounting to 300 cavans; and that all of
said palay belonged to the plaintiff.
Plaintiff prayed that a writ of preliminary injunction be issued against the defendant Emiliano J.
Valdez his attorneys and agents, restraining them (1) from distributing him in the possession of the
parcels of land described in the complaint; (2) from taking possession of, or harvesting the sugar
cane in question; and (3) from taking possession, or harvesting the palay in said parcels of land.
Plaintiff also prayed that a judgment be rendered in his favor and against the defendants ordering
them to consent to the redemption of the sugar cane in question, and that the defendant Valdez be
condemned to pay to the plaintiff the sum of P1,056 the value of palay harvested by him in the two
parcels above-mentioned ,with interest and costs.
On December 27, 1924, the court, after hearing both parties and upon approval of the bond for
P6,000 filed by the plaintiff, issued the writ of preliminary injunction prayed for in the complaint.

(d) 600.00, the value of 150 cavans of palay which the defendant was not
able to raise by reason of the injunction, at P4 cavan. 9,439.08 From that
judgment the plaintiff appealed and in his assignments of error contends
that the lower court erred: (1) In holding that the sugar cane in question
was personal property and, therefore, not subject to redemption;
(2) In holding that parcels 1 and 2 of the complaint belonged to Valdez, as well as
parcels 7 and 8, and that the palay therein was planted by Valdez;
(3) In holding that Valdez, by reason of the preliminary injunction failed to realized
P6,757.40 from the sugar cane and P1,435.68 from sugar-cane shoots (puntas de
cana dulce);
(4) In holding that, for failure of plaintiff to gather the sugar cane on time, the
defendant was unable to raise palay on the land, which would have netted him the
sum of P600; and.
(5) In condemning the plaintiff and his sureties to pay to the defendant the sum of
P9,439.08.
It appears from the record:
(1) That on May 11, 1923, the deputy sheriff of the Province of Tarlac, by virtue of writ
of execution in civil case No. 20203 of the Court of First Instance of Manila
(Macondray & Co., Inc. vs. Leon Sibal),levied an attachment on eight parcels of land
belonging to said Leon Sibal, situated in the Province of Tarlac, designated in the
second of attachment as parcels 1, 2, 3, 4, 5, 6, 7 and 8 (Exhibit B, Exhibit 2-A).
(2) That on July 30, 1923, Macondray & Co., Inc., bought said eight parcels of land, at
the auction held by the sheriff of the Province of Tarlac, for the sum to P4,273.93,
having paid for the said parcels separately as follows (Exhibit C, and 2-A):

Parcel
1 .....................................................................
2 .....................................................................
3 .....................................................................
4 .....................................................................
5 .....................................................................
6 .....................................................................
7 with the house thereon ..........................

The defendant Emiliano J. Valdez, in his amended answer, denied generally and specifically each
and every allegation of the complaint and step up the following defenses:

8 .....................................................................

(a) That the sugar cane in question had the nature of personal property and was not,
therefore, subject to redemption;
(b) That he was the owner of parcels 1, 2 and 7 described in the first cause of action
of the complaint;
(c) That he was the owner of the palay in parcels 1, 2 and 7; and
(d) That he never attempted to harvest the palay in parcels 4 and 5.
The defendant Emiliano J. Valdez by way of counterclaim, alleged that by reason of the preliminary
injunction he was unable to gather the sugar cane, sugar-cane shoots (puntas de cana dulce)
palay in said parcels of land, representing a loss to him of P8,375.20 and that, in addition thereto,
he suffered damages amounting to P3,458.56. He prayed, for a judgment (1) absolving him from
all liability under the complaint; (2) declaring him to be the absolute owner of the sugar cane in
question and of the palay in parcels 1, 2 and 7; and (3) ordering the plaintiff to pay to him the sum
of P11,833.76, representing the value of the sugar cane and palay in question, including damages.
Upon the issues thus presented by the pleadings the cause was brought on for trial. After hearing
the evidence, and on April 28, 1926, the Honorable Cayetano Lukban, judge, rendered a judgment
against the plaintiff and in favor of the defendants
(1) Holding that the sugar cane in question was personal property and, as such, was
not subject to redemption;

(3) That within one year from the sale of said parcel of land, and on the 24th day of
September, 1923, the judgment debtor, Leon Sibal, paid P2,000 to Macondray & Co.,
Inc., for the account of the redemption price of said parcels of land, without specifying
the particular parcels to which said amount was to applied. The redemption price said
eight parcels was reduced, by virtue of said transaction, to P2,579.97 including
interest (Exhibit C and 2).
The record further shows:
(1) That on April 29, 1924, the defendant Vitaliano Mamawal, deputy sheriff of the
Province of Tarlac, by virtue of a writ of execution in civil case No. 1301 of the
Province of Pampanga (Emiliano J. Valdez vs. Leon Sibal 1. the same parties in
the present case), attached the personal property of said Leon Sibal located in Tarlac,
among which was included the sugar cane now in question in the seven parcels of
land described in the complaint (Exhibit A).
(2) That on May 9 and 10, 1924, said deputy sheriff sold at public auction said
personal properties of Leon Sibal, including the sugar cane in question to Emilio J.
Valdez, who paid therefor the sum of P1,550, of which P600 was for the sugar cane
(Exhibit A).

P a g e | 27
(3) That on April 29,1924, said deputy sheriff, by virtue of said writ of execution, also
attached the real property of said Leon Sibal in Tarlac, including all of his rights,
interest and participation therein, which real property consisted of eleven parcels of
land and a house and camarin situated in one of said parcels (Exhibit A).
(4) That on June 25, 1924, eight of said eleven parcels, including the house and the
camarin, were bought by Emilio J. Valdez at the auction held by the sheriff for the sum
of P12,200. Said eight parcels were designated in the certificate of sale as parcels 1,
3, 4, 5, 6, 7, 10 and 11. The house and camarin were situated on parcel 7 (Exhibit A).
(5) That the remaining three parcels, indicated in the certificate of the sheriff as
parcels 2, 12, and 13, were released from the attachment by virtue of claims
presented by Agustin Cuyugan and Domiciano Tizon (Exhibit A).
(6) That on the same date, June 25, 1924, Macondray & Co. sold and conveyed to
Emilio J. Valdez for P2,579.97 all of its rights and interest in the eight parcels of land
acquired by it at public auction held by the deputy sheriff of Tarlac in connection with
civil case No. 20203 of the Court of First Instance of Manila, as stated above. Said
amount represented the unpaid balance of the redemption price of said eight parcels,
after payment by Leon Sibal of P2,000 on September 24, 1923, fro the account of the
redemption price, as stated above. (Exhibit C and 2).
The foregoing statement of facts shows:
(1) The Emilio J. Valdez bought the sugar cane in question, located in the seven
parcels of land described in the first cause of action of the complaint at public auction
on May 9 and 10, 1924, for P600.
(2) That on July 30, 1923, Macondray & Co. became the owner of eight parcels of land
situated in the Province of Tarlac belonging to Leon Sibal and that on September 24,
1923, Leon Sibal paid to Macondray & Co. P2,000 for the account of the redemption
price of said parcels.
(3) That on June 25, 1924, Emilio J. Valdez acquired from Macondray & Co. all of its
rights and interest in the said eight parcels of land.
(4) That on June 25, 1924, Emilio J. Valdez also acquired all of the rights and interest
which Leon Sibal had or might have had on said eight parcels by virtue of the P2,000
paid by the latter to Macondray.
(5) That Emilio J. Valdez became the absolute owner of said eight parcels of land.
The first question raised by the appeal is, whether the sugar cane in question is personal or real
property. It is contended that sugar cane comes under the classification of real property as
"ungathered products" in paragraph 2 of article 334 of the Civil Code. Said paragraph 2 of article
334 enumerates as real property the following: Trees, plants, and ungathered products, while they
are annexed to the land or form an integral part of any immovable property." That article, however,
has received in recent years an interpretation by the Tribunal Supremo de Espaa, which holds
that, under certain conditions, growing crops may be considered as personal property. (Decision of
March 18, 1904, vol. 97, Civil Jurisprudence of Spain.)
Manresa, the eminent commentator of the Spanish Civil Code, in discussing section 334 of the
Civil Code, in view of the recent decisions of the supreme Court of Spain, admits that growing
crops are sometimes considered and treated as personal property. He says:
No creemos, sin embargo, que esto excluya la excepcionque muchos autores hacen
tocante a la venta de toda cosecha o de parte de ella cuando aun no esta cogida
(cosa frecuente con la uvay y la naranja), y a la de lenas, considerando ambas
como muebles. El Tribunal Supremo, en sentencia de 18 de marzo de 1904, al
entender sobre un contrato de arrendamiento de un predio rustico, resuelve que su
terminacion por desahucio no extingue los derechos del arrendario, para recolectar o
percibir los frutos correspondientes al ao agricola, dentro del que nacieron aquellos
derechos, cuando el arrendor ha percibido a su vez el importe de la renta integra
correspondiente, aun cuando lo haya sido por precepto legal durante el curso del
juicio, fundandose para ello, no solo en que de otra suerte se daria al desahucio un
alcance que no tiene, sino en que, y esto es lo interesante a nuestro proposito, la
consideracion de inmuebles que el articulo 334 del Codigo Civil atribuge a los frutos
pendientes, no les priva del caracter de productos pertenecientes, como tales, a
quienes a ellos tenga derecho, Ilegado el momento de su recoleccion.
xxx

xxx

xxx

Mas actualmente y por virtud de la nueva edicion de la Ley Hipotecaria, publicada en

16 de diciembre de 1909, con las reformas introducidas por la de 21 de abril anterior,
la hipoteca, salvo pacto expreso que disponga lo contrario, y cualquiera que sea la
naturaleza y forma de la obligacion que garantice, no comprende los frutos cualquiera
que sea la situacion en que se encuentre. (3 Manresa, 5. edicion, pags. 22, 23.)
From the foregoing it appears (1) that, under Spanish authorities, pending fruits and ungathered
products may be sold and transferred as personal property; (2) that the Supreme Court of Spain, in
a case of ejectment of a lessee of an agricultural land, held that the lessee was entitled to gather
the products corresponding to the agricultural year, because said fruits did not go with the land but
belonged separately to the lessee; and (3) that under the Spanish Mortgage Law of 1909, as
amended, the mortgage of a piece of land does not include the fruits and products existing
thereon, unless the contract expressly provides otherwise.

An examination of the decisions of the Supreme Court of Louisiana may give us some light on the
question which we are discussing. Article 465 of the Civil Code of Louisiana, which corresponds to
paragraph 2 of article 334 of our Civil Code, provides: "Standing crops and the fruits of trees not
gathered, and trees before they are cut down, are likewise immovable, and are considered as part
of the land to which they are attached."
The Supreme Court of Louisiana having occasion to interpret that provision, held that in some
cases "standing crops" may be considered and dealt with as personal property. In the case
of Lumber Co. vs. Sheriff and Tax Collector (106 La., 418) the Supreme Court said: "True, by
article 465 of the Civil Code it is provided that 'standing crops and the fruits of trees not gathered
and trees before they are cut down . . . are considered as part of the land to which they are
attached, but the immovability provided for is only one in abstracto and without reference to rights
on or to the crop acquired by others than the owners of the property to which the crop is attached. .
. . The existence of a right on the growing crop is a mobilization by anticipation, a gathering as it
were in advance, rendering the crop movable quoad the right acquired therein. Our jurisprudence
recognizes the possible mobilization of the growing crop." (Citizens' Bank vs. Wiltz, 31 La. Ann.,
244; Porche vs. Bodin, 28 La., Ann., 761; Sandel vs. Douglass, 27 La. Ann., 629; Lewis vs. Klotz,
39 La. Ann., 267.)
"It is true," as the Supreme Court of Louisiana said in the case of Porche vs. Bodin (28 La. An.,
761) that "article 465 of the Revised Code says that standing crops are considered as immovable
and as part of the land to which they are attached, and article 466 declares that the fruits of an
immovable gathered or produced while it is under seizure are considered as making part thereof,
and incurred to the benefit of the person making the seizure. But the evident meaning of these
articles, is where the crops belong to the owner of the plantation they form part of the immovable,
and where it is seized, the fruits gathered or produced inure to the benefit of the seizing creditor.
A crop raised on leased premises in no sense forms part of the immovable. It belongs
to the lessee, and may be sold by him, whether it be gathered or not, and it may be
sold by his judgment creditors. If it necessarily forms part of the leased premises the
result would be that it could not be sold under execution separate and apart from the
land. If a lessee obtain supplies to make his crop, the factor's lien would not attach to
the crop as a separate thing belonging to his debtor, but the land belonging to the
lessor would be affected with the recorded privilege. The law cannot be construed so
as to result in such absurd consequences.
In the case of Citizen's Bank vs. Wiltz (31 La. Ann., 244)the court said:
If the crop quoad the pledge thereof under the act of 1874 was an immovable, it would
be destructive of the very objects of the act, it would render the pledge of the crop
objects of the act, it would render the pledge of the crop impossible, for if the crop was
an inseparable part of the realty possession of the latter would be necessary to that of
the former; but such is not the case. True, by article 465 C. C. it is provided that
"standing crops and the fruits of trees not gathered and trees before they are cut down
are likewise immovable and are considered as part of the land to which they are
attached;" but the immovability provided for is only one in abstracto and without
reference to rights on or to the crop acquired by other than the owners of the property
to which the crop was attached. The immovability of a growing crop is in the order of
things temporary, for the crop passes from the state of a growing to that of a gathered
one, from an immovable to a movable. The existence of a right on the growing crop is
a mobilization by anticipation, a gathering as it were in advance, rendering the crop
movable quoad the right acquired thereon. The provision of our Code is identical with
the Napoleon Code 520, and we may therefore obtain light by an examination of the
jurisprudence of France.
The rule above announced, not only by the Tribunal Supremo de Espaa but by the Supreme
Court of Louisiana, is followed in practically every state of the Union.
From an examination of the reports and codes of the State of California and other states we find
that the settle doctrine followed in said states in connection with the attachment of property and
execution of judgment is, that growing crops raised by yearly labor and cultivation are considered
personal property. (6 Corpuz Juris, p. 197; 17 Corpus Juris, p. 379; 23 Corpus Juris, p. 329:
Raventas vs. Green, 57 Cal., 254; Norris vs. Watson, 55 Am. Dec., 161; Whipple vs. Foot, 3 Am.
Dec., 442; 1 Benjamin on Sales, sec. 126; McKenzie vs. Lampley, 31 Ala., 526; Crinevs. Tifts and
Co., 65 Ga., 644; Gillitt vs. Truax, 27 Minn., 528; Preston vs. Ryan, 45 Mich., 174; Freeman on
Execution, vol. 1, p. 438; Drake on Attachment, sec. 249; Mechem on Sales, sec. 200 and 763.)
Mr. Mechem says that a valid sale may be made of a thing, which though not yet actually in
existence, is reasonably certain to come into existence as the natural increment or usual incident
of something already in existence, and then belonging to the vendor, and then title will vest in the
buyer the moment the thing comes into existence. (Emersonvs. European Railway Co., 67 Me.,
387; Cutting vs. Packers Exchange, 21 Am. St. Rep., 63.) Things of this nature are said to have a
potential existence. A man may sell property of which he is potentially and not actually possessed.
He may make a valid sale of the wine that a vineyard is expected to produce; or the gain a field
may grow in a given time; or the milk a cow may yield during the coming year; or the wool that
shall thereafter grow upon sheep; or what may be taken at the next cast of a fisherman's net; or
fruits to grow; or young animals not yet in existence; or the good will of a trade and the like. The
thing sold, however, must be specific and identified. They must be also owned at the time by the
vendor. (Hull vs. Hull, 48 Conn., 250 [40 Am. Rep., 165].)
It is contended on the part of the appellee that paragraph 2 of article 334 of the Civil Code has
been modified by section 450 of the Code of Civil Procedure as well as by Act No. 1508, the
Chattel Mortgage Law. Said section 450 enumerates the property of a judgment debtor which may
be subjected to execution. The pertinent portion of said section reads as follows: "All goods,
chattels, moneys, and other property, both real and personal, * * * shall be liable to execution. Said
section 450 and most of the other sections of the Code of Civil Procedure relating to the execution
of judgment were taken from the Code of Civil Procedure of California. The Supreme Court of
California, under section 688 of the Code of Civil Procedure of that state (Pomeroy, p. 424) has
held, without variation, that growing crops were personal property and subject to execution.

P a g e | 28
Act No. 1508, the Chattel Mortgage Law, fully recognized that growing crops are personal property.
Section 2 of said Act provides: "All personal property shall be subject to mortgage, agreeably to the
provisions of this Act, and a mortgage executed in pursuance thereof shall be termed a chattel
mortgage." Section 7 in part provides: "If growing crops be mortgaged the mortgage may contain
an agreement stipulating that the mortgagor binds himself properly to tend, care for and protect the
crop while growing.
It is clear from the foregoing provisions that Act No. 1508 was enacted on the assumption that
"growing crops" are personal property. This consideration tends to support the conclusion
hereinbefore stated, that paragraph 2 of article 334 of the Civil Code has been modified by section
450 of Act No. 190 and by Act No. 1508 in the sense that "ungathered products" as mentioned in
said article of the Civil Code have the nature of personal property. In other words, the phrase
"personal property" should be understood to include "ungathered products."
At common law, and generally in the United States, all annual crops which are raised
by yearly manurance and labor, and essentially owe their annual existence to
cultivation by man, . may be levied on as personal property." (23 C. J., p. 329.) On this
question Freeman, in his treatise on the Law of Executions, says: "Crops, whether
growing or standing in the field ready to be harvested, are, when produced by annual
cultivation, no part of the realty. They are, therefore, liable to voluntary transfer as
chattels. It is equally well settled that they may be seized and sold under execution.
(Freeman on Executions, vol. p. 438.)
We may, therefore, conclude that paragraph 2 of article 334 of the Civil Code has been modified by
section 450 of the Code of Civil Procedure and by Act No. 1508, in the sense that, for the purpose
of attachment and execution, and for the purposes of the Chattel Mortgage Law, "ungathered
products" have the nature of personal property. The lower court, therefore, committed no error in
holding that the sugar cane in question was personal property and, as such, was not subject to
redemption.
All the other assignments of error made by the appellant, as above stated, relate to questions of
fact only. Before entering upon a discussion of said assignments of error, we deem it opportune to
take special notice of the failure of the plaintiff to appear at the trial during the presentation of
evidence by the defendant. His absence from the trial and his failure to cross-examine the
defendant have lent considerable weight to the evidence then presented for the defense.
Coming not to the ownership of parcels 1 and 2 described in the first cause of action of the
complaint, the plaintiff made a futile attempt to show that said two parcels belonged to Agustin
Cuyugan and were the identical parcel 2 which was excluded from the attachment and sale of real
property of Sibal to Valdez on June 25, 1924, as stated above. A comparison of the description of
parcel 2 in the certificate of sale by the sheriff (Exhibit A) and the description of parcels 1 and 2 of
the complaint will readily show that they are not the same.
The description of the parcels in the complaint is as follows:
1. La caa dulce sembrada por los inquilinos del ejecutado Leon Sibal 1. en una
parcela de terreno de la pertenencia del citado ejecutado, situada en Libutad,
Culubasa, Bamban, Tarlac, de unas dos hectareas poco mas o menos de superficie.
2. La caa dulce sembrada por el inquilino del ejecutado Leon Sibal 1., Ilamado
Alejandro Policarpio, en una parcela de terreno de la pertenencia del ejecutado,
situada en Dalayap, Culubasa, Bamban, Tarlac de unas dos hectareas de superficie
poco mas o menos." The description of parcel 2 given in the certificate of sale (Exhibit
A) is as follows:
2a. Terreno palayero situado en Culubasa, Bamban, Tarlac, de 177,090 metros
cuadrados de superficie, linda al N. con Canuto Sibal, Esteban Lazatin and Alejandro
Dayrit; al E. con Francisco Dizon, Felipe Mau and others; al S. con Alejandro Dayrit,
Isidro Santos and Melecio Mau; y al O. con Alejandro Dayrit and Paulino Vergara.
Tax No. 2854, vador amillarado P4,200 pesos.

As to the ownership of parcel 7 of the complaint, the evidence shows that said parcel corresponds
to parcel 1 of the deed of sale of Macondray & Co, to Valdez (Exhibit B and 2), and to parcel 4 in
the certificate of sale to Valdez of real property belonging to Sibal, executed by the sheriff as above
stated (Exhibit A). Valdez is therefore the absolute owner of said parcel, having acquired the
interest of both Macondray and Sibal in said parcel.
With reference to the parcel of land in Pacalcal, Tarlac, described in paragraph 3 of the second
cause of action, it appears from the testimony of the plaintiff himself that said parcel corresponds
to parcel 8 of the deed of sale of Macondray to Valdez (Exhibit B and 2) and to parcel 10 in the
deed of sale executed by the sheriff in favor of Valdez (Exhibit A). Valdez is therefore the absolute
owner of said parcel, having acquired the interest of both Macondray and Sibal therein.
In this connection the following facts are worthy of mention:
Execution in favor of Macondray & Co., May 11, 1923. Eight parcels of land were attached under
said execution. Said parcels of land were sold to Macondray & Co. on the 30th day of July, 1923.
Rice paid P4,273.93. On September 24, 1923, Leon Sibal paid to Macondray & Co. P2,000 on the
redemption of said parcels of land. (See Exhibits B and C ).
Attachment, April 29, 1924, in favor of Valdez. Personal property of Sibal was attached, including
the sugar cane in question. (Exhibit A) The said personal property so attached, sold at public
auction May 9 and 10, 1924. April 29, 1924, the real property was attached under the execution in
favor of Valdez (Exhibit A). June 25, 1924, said real property was sold and purchased by Valdez
(Exhibit A).
June 25, 1924, Macondray & Co. sold all of the land which they had purchased at public auction
on the 30th day of July, 1923, to Valdez.
As to the loss of the defendant in sugar cane by reason of the injunction, the evidence shows that
the sugar cane in question covered an area of 22 hectares and 60 ares (Exhibits 8, 8-b and 8-c);
that said area would have yielded an average crop of 1039 picos and 60 cates; that one-half of the
quantity, or 519 picos and 80 cates would have corresponded to the defendant, as owner; that
during the season the sugar was selling at P13 a pico (Exhibit 5 and 5-A). Therefore, the
defendant, as owner, would have netted P 6,757.40 from the sugar cane in question. The evidence
also shows that the defendant could have taken from the sugar cane 1,017,000 sugar-cane shoots
(puntas de cana) and not 1,170,000 as computed by the lower court. During the season the shoots
were selling at P1.20 a thousand (Exhibits 6 and 7). The defendant therefore would have netted
P1,220.40 from sugar-cane shoots and not P1,435.68 as allowed by the lower court.
As to the palay harvested by the plaintiff in parcels 1 and 2 of the complaint, amounting to 190
cavans, one-half of said quantity should belong to the plaintiff, as stated above, and the other half
to the defendant. The court erred in awarding the whole crop to the defendant. The plaintiff should
therefore pay the defendant for 95 cavans only, at P3.40 a cavan, or P323 instead of P646 as
allowed by the lower court.
The evidence also shows that the defendant was prevented by the acts of the plaintiff from
cultivating about 10 hectares of the land involved in the litigation. He expected to have raised
about 600 cavans of palay, 300 cavans of which would have corresponded to him as owner. The
lower court has wisely reduced his share to 150 cavans only. At P4 a cavan, the palay would have
netted him P600.
In view of the foregoing, the judgment appealed from is hereby modified. The plaintiff and his
sureties Cenon de la Cruz, Juan Sangalang and Marcos Sibal are hereby ordered to pay to the
defendant jointly and severally the sum of P8,900.80, instead of P9,439.08 allowed by the lower
court, as follows:
P6,757.40 for the sugar cane;
1,220.40 for the sugar cane shoots;
323.00 for the palay harvested by plaintiff in parcels 1 and 2;

On the other hand the evidence for the defendant purported to show that parcels 1 and 2 of the
complaint were included among the parcels bought by Valdez from Macondray on June 25, 1924,
and corresponded to parcel 4 in the deed of sale (Exhibit B and 2), and were also included among
the parcels bought by Valdez at the auction of the real property of Leon Sibal on June 25, 1924,
and corresponded to parcel 3 in the certificate of sale made by the sheriff (Exhibit A). The
description of parcel 4 (Exhibit 2) and parcel 3 (Exhibit A) is as follows:
Parcels No. 4. Terreno palayero, ubicado en el barrio de Culubasa,Bamban, Tarlac,
I. F. de 145,000 metros cuadrados de superficie, lindante al Norte con Road of the
barrio of Culubasa that goes to Concepcion; al Este con Juan Dizon; al Sur con Lucio
Mao y Canuto Sibal y al Oeste con Esteban Lazatin, su valor amillarado asciende a
la suma de P2,990. Tax No. 2856.
As will be noticed, there is hardly any relation between parcels 1 and 2 of the complaint and parcel
4 (Exhibit 2 and B) and parcel 3 (Exhibit A). But, inasmuch as the plaintiff did not care to appear at
the trial when the defendant offered his evidence, we are inclined to give more weight to the
evidence adduced by him that to the evidence adduced by the plaintiff, with respect to the
ownership of parcels 1 and 2 of the compliant. We, therefore, conclude that parcels 1 and 2 of the
complaint belong to the defendant, having acquired the same from Macondray & Co. on June 25,
1924, and from the plaintiff Leon Sibal on the same date.
It appears, however, that the plaintiff planted the palay in said parcels and harvested therefrom 190
cavans. There being no evidence of bad faith on his part, he is therefore entitled to one-half of the
crop, or 95 cavans. He should therefore be condemned to pay to the defendant for 95 cavans only,
at P3.40 a cavan, or the sum of P323, and not for the total of 190 cavans as held by the lower
court.

600.00 for the palay which defendant could have raised.

8,900.80
============
In all other respects, the judgment appealed from is hereby affirmed, with costs. So ordered.
Street, Malcolm, Villamor, Romualdez and Villa-Real., JJ., concur.
G.R. No. 97764 August 10, 1992
LEVY D. MACASIANO, Brigadier General/PNP Superintendent, Metropolitan Traffic
Command, petitioner,
vs.
HONORABLE ROBERTO C. DIOKNO, Presiding Judge, Branch 62, Regional Trial Court of
Makati, Metro Manila, MUNICIPALITY OF PARAAQUE, METRO MANILA, PALANYAG
KILUSANG BAYAN FOR SERVICE,respondents.
Ceferino, Padua Law Office for Palanyag Kilusang Bayan for service.
Manuel de Guia for Municipality of Paraaque.

P a g e | 29
MEDIALDEA, J.:
This is a petition for certiorari under Rule 65 of the Rules of Court seeking the annulment of the
decision of the Regional Trial Court of Makati, Branch 62, which granted the writ of preliminary
injunction applied for by respondents Municipality of Paraaque and Palanyag Kilusang Bayan for
Service (Palanyag for brevity) against petitioner herein.
The antecedent facts are as follows:
On June 13, 1990, the respondent municipality passed Ordinance No. 86, Series of 1990 which
authorized the closure of J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena
Streets located at Baclaran, Paraaque, Metro Manila and the establishment of a flea market
thereon. The said ordinance was approved by the municipal council pursuant to MMC Ordinance
No. 2, Series of 1979, authorizing and regulating the use of certain city and/or municipal streets,
roads and open spaces within Metropolitan Manila as sites for flea market and/or vending areas,
under certain terms and conditions.
On July 20, 1990, the Metropolitan Manila Authority approved Ordinance No. 86, s. 1990 of the
municipal council of respondent municipality subject to the following conditions:
1. That the aforenamed streets are not used for vehicular traffic, and that
the majority of the residents do not oppose the establishment of the flea
market/vending areas thereon;
2. That the 2-meter middle road to be used as flea market/vending area
shall be marked distinctly, and that the 2 meters on both sides of the road
shall be used by pedestrians;
3. That the time during which the vending area is to be used shall be
clearly designated;
4. That the use of the vending areas shall be temporary and shall be
closed once the reclaimed areas are developed and donated by the
Public Estate Authority.
On June 20, 1990, the municipal council of Paraaque issued a resolution authorizing Paraaque
Mayor Walfrido N. Ferrer to enter into contract with any service cooperative for the establishment,
operation, maintenance and management of flea markets and/or vending areas.
On August 8, 1990, respondent municipality and respondent Palanyag, a service cooperative,
entered into an agreement whereby the latter shall operate, maintain and manage the flea market
in the aforementioned streets with the obligation to remit dues to the treasury of the municipal
government of Paraaque. Consequently, market stalls were put up by respondent Palanyag on
the said streets.
On September 13, 1990, petitioner Brig. Gen. Macasiano, PNP Superintendent of the Metropolitan
Traffic Command, ordered the destruction and confiscation of stalls along G.G. Cruz and J. Gabriel
St. in Baclaran. These stalls were later returned to respondent Palanyag.
On October 16, 1990, petitioner Brig. General Macasiano wrote a letter to respondent Palanyag
giving the latter ten (10) days to discontinue the flea market; otherwise, the market stalls shall be
dismantled.
Hence, on October 23, 1990, respondents municipality and Palanyag filed with the trial court a joint
petition for prohibition and mandamus with damages and prayer for preliminary injunction, to which
the petitioner filed his memorandum/opposition to the issuance of the writ of preliminary injunction.
On October 24, 1990, the trial court issued a temporary restraining order to enjoin petitioner from
enforcing his letter-order of October 16, 1990 pending the hearing on the motion for writ of
preliminary injunction.
On December 17, 1990, the trial court issued an order upholding the validity of Ordinance No. 86
s. 1990 of the Municipality' of Paraaque and enjoining petitioner Brig. Gen. Macasiano from
enforcing his letter-order against respondent Palanyag.
Hence, this petition was filed by the petitioner thru the Office of the Solicitor General alleging grave
abuse of discretion tantamount to lack or excess of jurisdiction on the part of the trial judge in
issuing the assailed order.
The sole issue to be resolved in this case is whether or not an ordinance or resolution issued by
the municipal council of Paraaque authorizing the lease and use of public streets or
thoroughfares as sites for flea markets is valid.
The Solicitor General, in behalf of petitioner, contends that municipal roads are used for public
service and are therefore public properties; that as such, they cannot be subject to private
appropriation or private contract by any person, even by the respondent Municipality of
Paraaque. Petitioner submits that a property already dedicated to public use cannot be used for
another public purpose and that absent a clear showing that the Municipality of Paraaque has

been granted by the legislature specific authority to convert a property already in public use to
another public use, respondent municipality is, therefore, bereft of any authority to close municipal
roads for the establishment of a flea market. Petitioner also submits that assuming that the
respondent municipality is authorized to close streets, it failed to comply with the conditions set
forth by the Metropolitan Manila Authority for the approval of the ordinance providing for the
establishment of flea markets on public streets. Lastly, petitioner contends that by allowing the
municipal streets to be used by market vendors the municipal council of respondent municipality
violated its duty under the Local Government Code to promote the general welfare of the residents
of the municipality.
In upholding the legality of the disputed ordinance, the trial court ruled:
. . . that Chanter II Section 10 of the Local Government Code is a
statutory grant of power given to local government units, the Municipality
of Paraaque as such, is empowered under that law to close its roads,
streets or alley subject to limitations stated therein (i.e., that it is in
accordance with existing laws and the provisions of this code).
xxx xxx xxx
The actuation of the respondent Brig. Gen. Levi Macasiano, though
apparently within its power is in fact an encroachment of power legally
vested to the municipality, precisely because when the municipality
enacted the ordinance in question the authority of the respondent as
Police Superintendent ceases to be operative on the ground that the
streets covered by the ordinance ceases to be a public thoroughfare. (pp.
33-34, Rollo)
We find the petition meritorious. In resolving the question of whether the disputed municipal
ordinance authorizing the flea market on the public streets is valid, it is necessary to examine the
laws in force during the time the said ordinance was enacted, namely, Batas Pambansa Blg. 337,
otherwise known as Local Government Code, in connection with established principles embodied
in the Civil Code an property and settled jurisprudence on the matter.
The property of provinces, cities and municipalities is divided into property for public use and
patrimonial property (Art. 423, Civil Code). As to what consists of property for public use, Article
424 of Civil Code states:
Art. 424. Property for public use, in the provinces, cities and
municipalities, consists of the provincial roads, city streets, the squares,
fountains, public waters, promenades, and public works for public service
paid for by said provinces, cities or municipalities.
All other property possessed by any of them is patrimonial and shall be
governed by this Code, without prejudice to the provisions of special laws.
Based on the foregoing, J. Gabriel G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena streets
are local roads used for public service and are therefore considered public properties of
respondent municipality. Properties of the local government which are devoted to public service
are deemed public and are under the absolute control of Congress (Province of Zamboanga del
Norte v. City of Zamboanga, L-24440, March 28, 1968, 22 SCRA 1334). Hence, local governments
have no authority whatsoever to control or regulate the use of public properties unless specific
authority is vested upon them by Congress. One such example of this authority given by Congress
to the local governments is the power to close roads as provided in Section 10, Chapter II of the
Local Government Code, which states:
Sec. 10. Closure of roads. A local government unit may likewise,
through its head acting pursuant to a resolution of its sangguniang and in
accordance with existing law and the provisions of this Code, 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 close 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. (Emphasis ours).
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 respondent municipality can "use or convey them for any purpose for which other real

P a g e | 30
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. We held therein 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. This limitation on the authority of the local
government over public properties has been discussed and settled by this Court en banc in
"Francisco V. Dacanay, petitioner v. Mayor Macaria Asistio, Jr., et al., respondents, G.R. No.
93654, May 6, 1992." This Court ruled:

Further, it is of public notice that the streets along Baclaran area are congested with people,
houses and traffic brought about by the proliferation of vendors occupying the streets. To license
and allow the establishment of a flea market along J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia
Extension and Opena streets in Baclaran would not help in solving the problem of congestion. We
take note of the other observations of the Solicitor General when he said:
. . . There have been many instances of emergencies and fires where
ambulances and fire engines, instead of using the roads for a more direct
access to the fire area, have to maneuver and look for other streets which
are not occupied by stalls and vendors thereby losing valuable time which
could, otherwise, have been spent in saving properties and lives.
Along G.G. Cruz Street is a hospital, the St. Rita Hospital. However, its
ambulances and the people rushing their patients to the hospital cannot
pass through G.G. Cruz because of the stalls and the vendors. One can
only imagine the tragedy of losing a life just because of a few seconds
delay brought about by the inaccessibility of the streets leading to the
hospital.

There is no doubt that the disputed areas from which the private
respondents' market stalls are sought to be evicted are public streets, as
found by the trial court in Civil Case No. C-12921. A public street is
property for public use hence outside the commerce of man (Arts. 420,
424, Civil Code). Being outside the commerce of man, it may not be the
subject of lease or others contract (Villanueva, et al. v. Castaeda and
Macalino, 15 SCRA 142 citing the Municipality of Cavite v. Rojas, 30
SCRA 602; Espiritu v. Municipal Council of Pozorrubio, 102 Phil. 869; And
Muyot v. De la Fuente, 48 O.G. 4860).
As the stallholders pay fees to the City Government for the right to occupy
portions of the public street, the City Government, contrary to law, has
been leasing portions of the streets to them. Such leases or licenses are
null and void for being contrary to law. The right of the public to use the
city streets may not be bargained away through contract. The interests of
a few should not prevail over the good of the greater number in the
community whose health, peace, safety, good order and general welfare,
the respondent city officials are under legal obligation to protect.
The Executive Order issued by acting Mayor Robles authorizing the use
of Heroes del '96 Street as a vending area for stallholders who were
granted licenses by the city government contravenes the general law that
reserves city streets and roads for public use. Mayor Robles' Executive
Order may not infringe upon the vested right of the public to use city
streets for the purpose they were intended to serve: i.e., as arteries of
travel for vehicles and pedestrians.
Even assuming, in gratia argumenti, that respondent municipality has the authority to pass the
disputed ordinance, the same cannot be validly implemented because it cannot be considered
approved by the Metropolitan Manila Authority due to non-compliance by respondent municipality
of the conditions imposed by the former for the approval of the ordinance, to wit:
1. That the aforenamed streets are not used for vehicular traffic, and that
the majority of the residents do(es) not oppose the establishment of the
flea market/vending areas thereon;
2. That the 2-meter middle road to be used as flea market/vending area
shall be marked distinctly, and that the 2 meters on both sides of the road
shall be used by pedestrians;
3. That the time during which the vending area is to be used shall be
clearly designated;
4. That the use of the vending areas shall be temporary and shall be
closed once the reclaimed areas are developed and donated by the
Public Estate Authority. (p. 38, Rollo)
Respondent municipality has not shown any iota of proof that it has complied with the foregoing
conditions precedent to the approval of the ordinance. The allegations of respondent municipality
that the closed streets were not used for vehicular traffic and that the majority of the residents do
not oppose the establishment of a flea market on said streets are unsupported by any evidence
that will show that this first condition has been met. Likewise, the designation by respondents of a
time schedule during which the flea market shall operate is absent.

The children, too, suffer. In view of the occupancy of the roads by stalls
and vendors, normal transportation flow is disrupted and school children
have to get off at a distance still far from their schools and walk, rain or
shine.
Indeed one can only imagine the garbage and litter left by vendors on the
streets at the end of the day. Needless to say, these cause further
pollution, sickness and deterioration of health of the residents therein. (pp.
21-22, Rollo)
Respondents do not refute the truth of the foregoing findings and observations of petitioners.
Instead, respondents want this Court to focus its attention solely on the argument that the use of
public spaces for the establishment of a flea market is well within the powers granted by law to a
local government which should not be interfered with by the courts.
Verily, the powers of a local government unit are not absolute. They are subject to limitations laid
down by toe Constitution and the laws such as our Civil Code. Moreover, the exercise of such
powers should be subservient to paramount considerations of health and well-being of the
members of the community. Every local government unit has the sworn obligation to enact
measures that will enhance the public health, safety and convenience, maintain peace and order,
and promote the general prosperity of the inhabitants of the local units. Based on this objective,
the local government should refrain from acting towards that which might prejudice or adversely
affect the general welfare.
As what we have said in the Dacanay case, the general public have a legal right to demand the
demolition of the illegally constructed stalls in public roads and streets and the officials of
respondent municipality have the corresponding duty arising from public office to clear the city
streets and restore them to their specific public purpose.
The instant case as well as the Dacanay case, involves an ordinance which is void and illegal for
lack of basis and authority in laws applicable during its time. However, at this point, We find it
worthy to note that Batas Pambansa Blg. 337, known as Local Government Lode, has already
been repealed by Republic Act No. 7160 known as Local Government Code of 1991 which took
effect on January 1, 1992. Section 5(d) of the new Code provides that rights and obligations
existing on the date of effectivity of the new Code and arising out of contracts or any other source
of prestation involving a local government unit shall be governed by the original terms and
conditions of the said contracts or the law in force at the time such rights were vested.
ACCORDINGLY, the petition is GRANTED and the decision of the respondent Regional Trial Court
dated December 17, 1990 which granted the writ of preliminary injunction enjoining petitioner as
PNP Superintendent, Metropolitan Traffic Command from enforcing the demolition of market stalls
along J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena streets is hereby
RESERVED and SET ASIDE.
SO ORDERED.
Narvasa, C.J., Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Regalado, Davide, Jr.,
Romero, Nocon and Bellosillo, JJ., concur.