PRUDENTIAL BANK V. PANIS G.R. No.

L-50008 August 31, 1987

153 SCRA 390 FACTS: Spouses Magcale secured a loan from Prudential Bank. To secure payment, they executed a real estate mortgage over a residential building. The mortgage included also the right to occupy the lot and the information about the sales patent applied for by the spouses for the lot to which the building stood. After securing the first loan, the spouses secured another from the same bank. To secure payment, another real estate mortgage was executed over the same properties. The Secretary of Agriculture then issued a Miscellaneous Sales Patent over the land which was later on mortgaged to the bank. The spouses then failed to pay for the loan and the REM was extrajudicially foreclosed and sold in public auction despite opposition from the spouses. The respondent court held that the REM was null and void. ISSUE: Whether or not a valid RE mortgage can be constituted on the building erected on the belonging to another. HELD: A real estate mortgage can be constituted on the building erected on the land belonging to another. The inclusion of building distinct and separate from the land in the Civil Code can only mean that the building itself is an immovable property. While it is true that a mortgage of land necessarily includes in the absence of stipulation of the improvements thereon, buildings, still a building in itself may be mortgaged by itself apart from the land on which it is built. Such a mortgage would still be considered as a REM for the building would still be considered as immovable property even if dealt with separately and apart from the land. The original mortgage on the building and right to occupancy of the land was executed before the issuance of the sales patent and before the government was divested of title to the land. Under the foregoing, it is evident that the mortgage executed by private respondent on his own building was a valid mortgage. As to the second mortgage, it was done after the sales patent was issued and thus prohibits pertinent provisions of the Public Land Act.

MAKATI LEASING AND FINANCE CORPORATION V. WEAREVER TEXTILE MILLS

122 SCRA 296 FACTS: To be able to secure financial accommodations from the petitioner, the private respondent discounted and assigned several receivables under a Receivable Purchase Agreement. To secure the collection of the receivables, a chattel mortgage was executed over machinery found in the factory of the private respondent. As the private respondent failed to pay, the mortgage was extrajudicially foreclosed. Nonetheless, the sheriff was unable to seize the machinery. This prompted petitioner to file an action for replevin. The CA reversed the decision of the trial court and ordered the return of the drive motor, after ruling that the machinery may not be the subject of a chattel mortgage, given that it was an immovable under the provisions of Article 415. The same was attached to the ground by means of bolts and the only way to remove it from the plant would be to drill the ground. HELD: There is no logical justification to exclude the rule out that the machinery may be considered as personal property, and subject to a chattel mortgage. If a house may be considered as personal property for purposes of executing a chattel mortgage, what more a machinery, which is movable by nature and becomes immobilized only by destination or purpose, may not be likewise treated as such.

TUMALAD V. VICENCIO
FACTS: Vicencio and Simeon executed a chattel mortgage in favor of plaintiffs Tumalad over their house, which was being rented by Madrigal and company. This was executed to guarantee a loan, payable in one year with a 12% per annum interest.

The mortgage was extrajudicially foreclosed upon failure to pay the loan. The house was sold at a public auction and the plaintiffs were the highest bidder. A corresponding certificate of sale was issued. Thereafter, the plaintiffs filed an action for ejectment against the defendants, praying that the latter vacate the house as they were the proper owners.

HELD: Certain deviations have been allowed from the general doctrine that buildings are immovable property such as when through stipulation, parties may agree to treat as personal property those by their nature would be real property. This is partly based on the principle of estoppel wherein the principle is predicated on statements by the owner declaring his house as chattel, a conduct that may conceivably stop him from subsequently claiming otherwise.

highestbidder, the Tumalads were issued thecorresponding certificate of sale.On 18 April 1956, the Tumalads commencedcase in the municipal court of Manila, prayingthat the house be vacated and its possessionsurrendered to them, and for Vicencio andSimeon to pay rent of P200.00 monthly up tothe time the possession is surrendered. Themunicipal court rendered its decision in favor of the Tumalads.Defendant-appellants impugned the legality of the chattel mortgage claiming that they are stillthe owner of the house but waived their rightsto introduce evidence.Nearly a year after the foreclosure sale themortgaged house had been demolished on 14and 15 January 1957 by virtue of a decisionobtained by the lessor of the land on which thehouse stood for non-payment of rentals. Issues: 1.WON the subject matter of the mortgagewhich is a house of strong material canbe subject of real estate mortgage or achattel mortgage. 2. Whether or not the defendants arelegally bound to pay rentals to theplaintiffs during the period of 1 yearprovided by law for the redemption of the extrajudicially foreclosed house. Held: The inclusion of the building separate anddistinct from the land in the enumeration of what may constitute real property, that thebuilding is by itself an immovable property.However deviations have been allowed forvarious reasons specially if it is stipulated in thesubject of contract. In the case at bar, althoughthere is no specific statement referring to thesubject house as a personal property, yet byceding, selling or transferring a property by wayof chattel mortgage, defendants-appellantscould only have meant to convey the house asa chattel.Hence if a house belonging to a person standson a rented land belonging to another person, itmay be mortgaged as a personal property as sostipulated in the document of mortgage. Itshould be noted that the principle is predicatedon statements by the owner declaring his houseto be chattel. Party in a chattel mortgagecannot question the validity of the chattelmortgage entered into. The doctrine of estoppels therefore applies to the defendant-appellants.Since the defendant-appellants were occupyingthe house at the time the auction of sale, theyare entitled to remain in possession during theperiod of redemption or within one year fromthe date of auction sale and to collect the rentsor profits during the said period.And since the plaintiff-appellees right to posseswas not yet born at the filing of the complaint,there could be no violation or breach thereof. The Supreme Court

In the case at bar, though there be no specific statement referring to the subject house as personal property, yet by ceding, selling or transferring a property through chattel mortgage could only have meant that defendant conveys 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.

Tumalad vs Vicencio41 SCRA 143

Facts: On 1 September 1955 Vicencio and Simeon,defendants-appellants, executed a chattelmortgage in favor of the Tumalads, plaintiff-appellees over their house of strong materialsover a lot in Quiapo, which were being rentedfrom Madrigal & Company, Inc. The mortgagewas executed to guarantee a loan of P4,800.00received from the Tumalads, payable within oneyear at 12% per annum. The mode of paymentwas P150.00 monthly, It was also agreed thatdefault in the payment of any of theamortizations would cause the remainingunpaid balance to become immediately due andpayable, the Chattel Mortgage enforceable, andthe Sheriff of Manila authorized to sell theMortgagors property after necessarypublicatio n. When Vicencio and Simeondefaulted in paying, the mortgage wasextrajudicially foreclosed, and on 27 March1956, the house was sold at public auctionpursuant to the said contract. As

reversed the decisionappealed from and entered another dismissingthe complaint, with costs against plaintiffs-appellees.

Article 415 (5) of the Civil Code provides that 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 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.They were essential and principal elements of their chocolate-making 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. However, contracting parties may validly stipulate that a real property be considered as personal. 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. Section 12.1 of the Agreement between the parties provides 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. The machines are personal property and they are proper subjects of the Writ of Replevin

Sergs Products, Inc. vs. PCI Leasing G.R. No. 137705. August 22, 2000
FACTS: PCI Leasing and Finance filed a complaint for sum of money, with an application for a writ of replevin. Judge issued a writ of replevin 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. The sheriff proceeded to petitioner's factory, seized one machinery, with word that he would return for other machineries. Petitioner (Sergs Products) filed a motion for special protective order to defer enforcement of the writ of replevin. PCI Leasing opposed the motion on the ground that the properties were still personal and therefore can still be subjected to seizure and writ of replevin. Petitioner asserted that properties sought to be seized were immovable as defined in Article 415 of the Civil Code. Sheriff was still able to take possession of two more machineries In its decision on the original action for certiorari filed by the Petitioner, the appellate court, Citing the Agreement of the parties, held that the subject machines were personal property, and that they had only been leased, not owned, by petitioners; and ruled that the "words of the contract are clear and leave no doubt upon the true intention of the contracting parties." ISSUE: Whether or not the machineries became real property by virtue of immobilization. Ruling: 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. Writ of Replevin: Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only.

Yap vs. Taada

Doctrine: Article 415, par. 3 of the Civil Code considers and immovable property as everything attached to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without breaking the material or deteriorating the object. The pump does not fit this description. It could be, and was, in fact,separated from Yaps premises without being broken of suffering deterioration. Obviously, the separation or removal of the pump involved nothing more complicated that the loosening of bolts or dismantling of other fasteners. Facts: The case began in the City Court of Cebu with the filing of Goulds Pumps International (Phil), Inc. of a complaint against Yap and his wife seeking recovery of P1,459.30, representing the balance of the price and installation cost of a water pump

in the latters premises. The Court rendered judgment in favor of herein respondent after they presented evidence ex-parte due to failure of petitioner Yap to appear before the Court. Petitioner then appealed to the CFI, particularly to the sale of Judge Tanada. For again failure to appear for pre-trial, Yap was declared in default. He filed for a motion for reconsideration which was denied by Judge Tanada. On October 15, 1969, Tanada granted Goulds Motion for Issuance of Writ of Execution. Yap f orthwith filed an Urgent Motion for Reconsideration of the said Order. In the meantime, the Sheriff levied on the water pump in question and by notice scheduled the execution sale thereof. But in view of the pendency of Yaps motion, suspension of sale was directed by Judge Tanada. It appears, however, that this was not made known to the Sheriff whocontinued with the auction sale and sold the property to the highest bidder, Goulds. Because of such, petitioner filed a Motion to Set Aside Execution Sale and to Quash Alias Writ of Execution. One of his arguments was that the sale was made without the notice required by Sec. 18, Rule 29 of the New Rules of Court, i.e. notice by publication in case of execution of sale of real property, the pump and its accessories being immovable because attached to the ground with the character of permanency. Such motion was denied by the CFI. Issue: Whether or not the pump and its accessories are immovable property

from the province of Laguna to the saidCity. These electric transmission wires whichcarry high voltage current, are fastened toinsulators attached on steel towers constructedby respondent at intervals, from its hydro-electric plant in the province of Laguna to theCity of Manila. The respondent Meralco hasconstructed 40 of these steel towers withinQuezon City, on land belonging to it. The City Assessor of Quezon City declared theaforesaid steel towers for real property taxunder Tax.Respondent paid the amount under protest, andfiled a petition for review in the Court of TaxAppeals Issue:Whether or not the Meralco poles constitutereal properties so as they can be subjected to areal property tax. Held: The SC ruled that Meralco's steel towers wereconsidered poles within the meaning of paragraph 9 of its franchise which exempts itspoles from taxation. The steel towers wereconsidered personalty because they wereremovable and merely attached to squaremetal frames by means of bolts and could bemoved from place to place when unscrewedand dismantled. Furthermore, they are notattached to an immovable in a fixed manner,and they can be separated without breaking thematerial or causing deterioration upon theobject to which they are attached. Note: Poles - was used to denote the steel towers of an electric company engaged in thegeneration of hydro-electric powergenerated from its plant.

Held: No. The water pump and its accessories are NOT immovable properties. The argument of Yap that the water pump had become immovable property by its being installed in his residence is untenable. Article 415, par. 3 of the Civil Code considers and immovable property as everything attached to an immovable in a f ixed manner, in such a way that it cannot be separated therefrom without breaking the material or deteriorating the object. The pump does not fit this description. It could be, and was, in fact,separated from Yaps premises without being broken of sufferi ng deterioration. Obviously, the separation or removal of the pump involved nothing more complicated that the loosening of bolts or dismantling of other fasteners.

Davao Saw Mill61 Phil 709

Facts: The Davao Saw Mill Co., Inc., is the holder of alumber concession from the Government of thePhilippine Islands. It has operated a sawmill inthesitioof Maa, barrio of Tigatu, municipality of Davao, Province of Davao. However, the landupon which the business was conductedbelonged to another person. On the land thesawmill company erected a building whichhoused the machinery used by it.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 thataction; a writ of execution issued thereon, andthe properties now in question were levied uponas personalty by the sheriff. No third partyclaim was filed for such properties at the timeof the sales thereof as is borne out by therecord made by the plaintiff herein. Issue:Whether or not the machinery mounted onfoundations of cement and installed by thelessee on a lease land be regarded as realproperty.

Board of Assessment vs Meralco

Facts: The Philippine Commission enacted Act No. 484which authorized the Municipal Board of Manilato grant a franchise to construct, maintain andoperate an electric street railway and electriclight, heat and power system in the City of Manila.Meralco's electric power is generated by itshydro-electric plant located at Botocan Falls,Laguna and is transmitted to the City of Manilaby means of electric transmission wires,running

Held: The machinery which is movable in its natureonly becomes immobilized when placed in aplant by the owner of the property or plant butnot when so placed by a tenant, a usufructuary,or any person having only a temporary right,unless such person acted as agent of theowner.Immobilization by destination or purposecannot generally be made by a person whosepossession of property is only TEPORARY,otherwise we will be forced to presume that heintended to give the property permanentlyaway in favor of the owner of the premises

cannot be the subject of lease or any contractual undertaking. The petitioners had no right in the first place to occupy the disputed premises. 2. The proliferation of the stalls caused several repercussions to the area such as > the makeshift and flammable materials has made the area susceptible of fire endangering public safety > said stalls have obstructed the way going to the real public market

VILLANUEVA V. CASTAEDA, JR.

FACTS Petitioners are owners of stalls in a talipapa located in a land owned by the municipal government. They were ed to lease the said land through a municipal council resolution in 1961.

> the filthy conditions of the stalls has aggravated health and sanitation problems > the area has contributed to the obstruction of the flow of traffic 3. Assuming that there was a valid contract (and that the land is not for public use), the petitioners must yield to the police power exercised by the municipal government. It is a well settled rule that any valid contract may be cancelled if it causes danger to the public.

The municipal government demolished the the stalls and subsequently issued a new resolution revoking the right previously granted to the vendor. Said resolution indicated that the said area will be a parking space for the town plaza. Petitioners brought an action against the municipal government alleging that they have the right to use the said lang because the resolution allowing them to use the area constitutes a contract between them (vendors) and the municipal government. CFI dismissed the petition and ordered the petitioners to be evicted from the area. But such eviction was not enforced and the number of stall owners even grew. After a few years, the municipal again resolved to demolish the stalls ISSUE: 1. Whether or not the resolution in 1961 conferred contractual rights to the stall owners making them lawful lessees of the land 2. Whether or not the said area are dedicated for public use HELD: 1. There was no dispute that the land occupied by the petitioners was previously used as a town plaza and being such it is considered as beyond the commerce of man and

Villanueva vs Castaneda
Facts:On November 7, 1961, the municipal council of San Fernando adoptedResolution No. 218 authorizing some 24 members of the Fernandino UnitedMerchants and Traders Association to construct permanent stags and sell in the saidplace. A protest was filed and the CFI decided that the land occupied by thepetitioners, being public in nature, was beyond the commerce of man and thereforecould not be the subject of private occupancy. This decision was not enforced forthe petitioners were not evicted. In fact, the petitioners paid daily fees to themunicipal government.On January 12, 1982, the Association of Concerned Citizens and Consumersof San Fernando filed a petition for the immediate implementation of Resolution No.29, to restore the subject property "to its original and customary use as a publicplaza. Vicente Macalino (officer in charge in the office of the mayor) required themunicipal treasurer and engineer to demolish the stalls. Petitioners filed aprohibition with the CFI claiming that the disputed area was leased to them by themunicipal government. The CFI denied the petition/ Issue:WON the petitioners have a right to the said land Held:NoRatio:There is no question that the place occupied by the petitioners and fromwhich they are sought to be evicted is a public plaza pursuant to the previous case.It does not appear that the decision in this case was appealed or has been reversed.A public plaza is beyond the commerce of man and so cannot be the subjectof lease or any other contractual undertaking. This is elementary. Indeed, this pointwas

settled as early as in Municipality of Cavite vs. Rojas, where the Court declaredas null and void the lease of a public plaza of the said municipality in favor of aprivate person. In Muyot vs. de la Fuente, it was held that the City of Manila couldnot lease a portion of a public sidewalk on Plaza Sta. Cruz, being likewise beyondthe commerce of man. We rule that the petitioners had no right in the first place tooccupy the disputed premises and cannot insist in remaining there now on thestrength of their alleged lease contracts. They should have realized and acceptedthis earlier, considering that even before case was decided, the municipal councilalready adopted Resolution No. 29, declaring the area as the parking place andpublic plaza of the municipality.It is the decision in Civil Case No. 2040 and the said resolution of themunicipal council of San Fernando that respondent Macalino was seeking to enforcewhen he ordered the demolition of the stags constructed in the disputed area. Asofficer-in-charge of the office of the mayor, he had the duty to clear the area andrestore it to its intended use as a parking place and public plaza of the municipalityof San Fernando, conformably to the orders from the court and the council. It is, therefore, not correct to say that he had acted without authority or taken the lawinto his hands in issuing his order.Neither can it be said that he acted whimsically in exercising his authority forit has been established that he directed the demolition of the stalls only after, uponhis instructions, the municipal attorney had conducted an investigation, to look intothe complaint filed by the Association of Concerned Citizens and Consumers of SanFernando. There is evidence that the petitioners were notified of this hearing, whichthey chose to disregard. Photographs of the disputed area, which does lookcongested and ugly, show that the complaint was valid and that the area reallyneeded to be cleared, as recommended by the municipal attorney.Since the occupation of the place in question, it has deteriorated increasinglyto the great prejudice of the community in general. The proliferation of stagstherein, most of them makeshift and of flammable materials, has converted it into averitable fire trap, which, added to the fact that it obstructs access to and from thepublic market itself, has seriously endangered public safety. The filthy condition of the talipapa, where fish and other wet items are sold, has aggravated health andsanitation problems, besides pervading the place with a foul odor that has spreadinto the surrounding areas. The entire place is unsightly, to the dismay andembarrassment of the inhabitants, who want it converted into a showcase of thetown of which they can all be proud. The vendors in the talipapa have also spilledinto the street and obstruct the flow of traffic, thereby impairing the convenience of motorists and pedestrians alike. The regular stallholders in the public market, whopay substantial rentals to the municipality, are deprived of a sizable volume of business from prospective customers who are intercepted by the talipapa vendorsbefore they can reach the market proper. On top of all these, the people are deniedthe proper use of the place as a public plaza, where they may spend their leisure ina relaxed and even beautiful environment and civic and

other communal activitiesof the town can be held. The problems caused by the usurpation of the place by the petitioners arecovered by the police power as delegated to the municipality under the generalwelfare clause. This authorizes the municipal council "to enact such ordinances andmake such regulations, not repugnant to law, as may be necessary to carry intoeffect and discharge the powers and duties conferred upon it by law and such asshall seem necessary and proper to provide for the health and safety, promote theprosperity, improve the morals, peace, good order, comfort, and convenience of themunicipality and the inhabitants thereof, and for the protection of property therein." This authority was validly exercised in this case through the adoption of ResolutionNo. 29, by the municipal council of San Fernando.Even assuming a valid lease of the property in dispute, the resolution couldhave effectively terminated the agreement for it is settled that the police powercannot be surrendered or bargained away through the medium of a contract. Infact, every contract affecting the public interest suffers a congenital infirmity in thatit contains an implied reservation of the police power as a postulate of the existinglegal order. This power can be activated at any time to change the provisions of thecontract, or even abrogate it entirely, for the promotion or protection of the generalwelfare. Such an act will not militate against the impairment clause, which is subjectto and limited by the paramount police power.

Maneclang v. IAC
[G.R. No. L-66575. September 30, 1986.]Second Division, Fernan (J): 4 concur Facts: Adriano Maneclang, et.al., petitioners, filed before the then CFI Pangasinan (Branch XI) a complaint for quieting of title over acertain fishpond located within 4 parcels of land belonging to them situated in Barrio Salomague, Bugallon, Pangasinan, and theannulment of Resolutions 38 and 95 of the Municipal Council of Bugallon, Pangasinan.On 15 August 1975, the trial court dismissed the complaint upon a finding that the body of water traversing the titled propertiesis a creek constituting a tributary of the Agno River (therefore public in nature and not subject to private appropriation); and held thatResolution 38, ordering an ocular inspection of the Cayangan Creek situated between Barrios Salomague Sur and Salomague Norte,and Resolution 95 authorizing public bidding for the lease of all municipal ferries and fisheries were passed by the members of theMunicipal Council of Bugallon, Pangasinan in the exercise of their legislative powers. Maneclang appealed said decision to the IAC,which affirmed the same on 29 April 1983. Hence, the petition for review on certiorari.Before the respondents were able to comment on the petition, the petitioners manifested that for

lack of interest on the part of respondent Alfredo Maza, the awardee in the public bidding of the fishpond, as the parties desire to amicably settle the case bysubmitting to the Court a Compromise Agreement praying that judgment be rendered recognizing the ownership of the petitionersover the land the body of water found within their titled properties.The Supreme Court dismissed the petition for lack of merit, and set aside the Compromise Agreement and declare the same null andvoid for being contrary to law and public policy. ISSUE:Whether or not the creek formed part of the public domain HELD:The stipulations contained in the Compromise Agreement partake of the nature of an adjudication of ownership in favor of herein petitioners of the fishpond in dispute, which, as clearly found by the lower and appellate courts, was originally a creek forming a txibutary of the Agno River. Considering that as held in the case of Mercado vs. Municipal President of Macabebe, 59 Phil. 592 [1934], a creek, defined as a recess or arm extending from a river and participating in the ebb and flow of the sea, is a property belonging to the public domain which is not susceptible to private appropriation and acquisitive prescription, and as a public water, it cannot be registered under the Torrens System in the name of any individual [Diego v. Court of Appeals, 102 Phil. 494; Mangaldan v. Manaoag, 38 Phil. 455]; and considering further that neither the mere construction of irrigation dikes by the National Irrigation Administration which prevented the water from flowing in and out of the subject fishpond, nor its conversion into a fishpond, alter or change the nature of the creek as a property of the public domain, the Court finds the Compromise Agreement null and void and of no legal effect, the same being contrary to law and public policy. The finding that the subject body of water is a creek belonging to the public domain is a factual determination binding upon this Court. The Municipality of Bugallon, acting thru its duly-constituted municipal council is clothed with authority to pass, as it did the two resolutions dealing with its municipal waters, and it cannot be said that petitioners were deprived of their right to due process as mere publication of the notice of the public bidding suffices as a constructive notice to the whole world.

cannot beregistered under the Torrens System in the name of any individual (Diego v. CA; Mangaldan v. Manaoag) and considering further thatneither the mere construction of irrigation dikes by the National Irrigation Administration which prevented the water from flowing inand out of the subject fishpond, nor its conversion into a fishpond, alter or change the nature of the creek as a property of the publicdomain. The Compromise Agreement, thus, is null and void and of no legal effect, the same being contrary to law and public policy. 2.Municipal council authorized to pass laws dealing with its municipal waters The Municipality of Bugallon, acting thru its duly-constituted municipal council is clothed with authority to pass, as it did the tworesolutions dealing with its municipal waters. 3. Publication a constructive notice to the whole world; due process followed Petitioners were not deprived of their right to due process as mere publication of the notice of the public bidding suffices as aconstructive notice to the whole world

Nimfa Usero vs CA
FACTS:Petitioners Lutgarda R. Samela and Nimfa Usero are the owners respectively of lots 1 and 2, Block 5, Golden Acres Subdivision, Barrio Almanza, Las Pias City. Private respondent spouses Polinar are the registered owners of a parcel of land at no. 18 Anahaw St., Pilar Village, Las Pias City, behind the lots of petitioners Samela and Usero. Situated between the lots of the parties is a low-level strip of land, with a stagnant body of water filled with floating water lilies; abutting and perpendicular to the lot of petitioner Samela, the lot of the Polinars and the low-level strip of land is the perimeter wall of Pilar Village Subdivision. Apparently, every time a storm or heavy rains occur, the water in said strip of land rises and the strong current passing through it causes considerable damage to the house of respondent Polinars. Frustrated by their predicament, private respondent spouses, on July 30, 1998, erected a concrete wall on the bank of the low-level strip of land about three meters from their house and rip-rapped the soil on that portion of the strip of land. Claiming ownership of the subject strip of land, petitioners Samela and Usero demanded that the spouses Apolinar stop their construction but the spouses paid no heed, believing the strip to be part of a creek. Nevertheless, for the sake

1. Stipulations null and void for being contrary to law and public policy The stipulations contained in the Compromise Agreement partake of the nature of an adjudication of ownership of the fishpond indispute, which was originally a creek forming a tributary of the Agno River. A creek, defined as a recess or arm extending from a river and participating in the ebb and flow of the sea, is a property belonging to the public domain which is not susceptible to privateappropriation and acquisitive prescription (Mercado vs. Municipal President of Macabebe), and as a public water, it

of peace, the Polinars offered to pay for the land being claimed by petitioners Samela and Usero. However, the parties failed to settle their differences. ISSUE: Whether or not there is an existence of a creek on the lots and such is public domain, and hence the plaintiff cannot therefore lay claim of lawful ownership of that portion..

Accordingly, the Polinar spouses may utilize the rip-rapped portion of the creek to prevent the erosion of their property.

LRTA v CENTRAL BOARD (2000)

FACTS: LRTA is a GOCC engaged in public transportation. By virtue of its charter, it acquiredreal properties. It entered into a contract of management with Metro wherein Metroundertook to manage, operate, and maintain the LRT system owned by LRTA.The City Assessor assessed LRTA for realty tax. LRTA paid the realty tax, except theassessment made on its carriageways and passenger terminal stations including theland on which they were constructed on the ground that the same were not real properties under the Real Property Tax Code, and that even if the same were realproperty, it is still exempt from paying the realty tax because said properties are for public use. ISSUE: WON a profit-oriented GOCC is exempt from paying realty tax under the RealProperty Tax Code. HELD:No. A profit-oriented GOCC is not exempt from paying realty tax under the RealProperty Tax Code.Though the creation of the LRTA was impelled by public service -- to provide masstransportation to alleviate the traffic and transportation situation in Metro Manila -- itsoperation undeniably partakes of ordinary business. Petitioner is clothed withcorporate status and corporate powers in the furtherance of its proprietary objectives.Indeed, it operates much like any private corporation engaged in the mass transportindustry. Given that it is engaged in a service-oriented commercial endeavor, itscarriageways and terminal stations are patrimonial property subject to tax,notwithstanding its claim of being a government-owned or controlled corporation.True, petitioner's carriageways and terminal stations are anchored, at certain points,on public roads. However, it must be emphasized that these structures do not form part of such roads, since the former have been constructed over the latter in such away that the flow of vehicular traffic would not be impeded. These carriageways andterminal stations serve a function different from that of the public roads. The former are part and parcel of the light rail transit (LRT) system which, unlike the latter, are notopen to use by the general public. The carriageways are accessible only to the LRTtrains, while the terminal stations have been built for the convenience of LRTA itself and its customers who pay the required fare.Unlike public roads which are open for use by everyone, the LRT is accessible only tothose who pay the required

HELD: A careful scrutiny of the records reveals that the assailed decisions are founded on sufficient evidence. That the subject strip of land is a creek is evidenced by: (1) a barangay certification that a creek exists in the disputed strip of land; (2) a certification from the Second Manila Engineering District, NCR-DPWH, that the western portion of Pilar Village where the subject strip of land is located is bounded by a tributary of Talon Creek and (3) photographs showing the abundance of water lilies in the subject strip of land. The Court of Appeals was correct: the fact that water lilies thrive in that strip of land can only mean that there is a permanent stream of water or creek there. In contrast, petitioners failed to present proof sufficient to support their claim. Petitioners presented the TCTs of their respective lots to prove that there is no creek between their properties and that of the Polinars. However, an examination of said TCTs reveals that the descriptions thereon are incomplete. In petitioner Samela's TCT No. T-30088, there is no boundary description relative to the northwest portion of the property pertaining to the site of the creek. Likewise in TCT No. T-22329-A of the spouses Polinar, the southeast portion which pertains to the site of the creek has no described boundary. Moreover the tax declaration presented by petitioner is devoid of any entry on the "west boundary" vis-a-vis the location of the creek. All the pieces of evidence taken together, we can only conclude that the adjoining portion of these boundaries is in fact a creek and belongs to no one but the state. Property is either of public dominion or of private ownership. Concomitantly, Article 420 of the Civil Code provides: ART. 420. The following things are property of public dominion: (1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character; The phrase "others of similar character" includes a creek which is a recess or an arm of a river. It is property belonging to the public domain which is not susceptible to private ownership. Being public water, a creek cannot be registered under the Torrens System in the name of any individual.

fare. It is thus apparent that petitioner does not exist solelyfor public service, and that the LRT carriageways and terminal stations are notexclusively for public use. Although petitioner is a public utility, it is nonetheless profit-earning. It actually uses those carriageways and terminal stations in its public utilitybusiness and earns money therefrom. Other grounds: 1. The charter of LRTA does not provide for any real estate tax exemption.Executive Order No. 603, the charter of petitioner, does not provide for any real estatetax exemption in its favor. Its exemption is limited to direct and indirect taxes, duties or fees in connection with the importation of equipment not locally available, as thefollowing provision shows:2. The beneficial use of the properties have been transferred to a taxable entity.Even granting that the national government indeed owns the carriageways andterminal stations, the exemption would not apply because their beneficial use hasbeen granted to petitioner, a taxable entity.