Manila Electric Co., v.

Central Board of Assessment Appeals

114 SCRA 273

DOCTRINE: Oil storage tanks were held to be taxable realty. For purposes of taxation, the term "real property"
may include things which should generally be regarded as personal property.

FACTS:
The case is about the imposition of the realty tax on two oil storage tanks installed in 1969 by Manila Electric
Company in Batangas which it leased in 1968 from Caltex (Phil.), Inc. The tanks are within the Caltex refinery
compound, and are used for storing fuel oil for Meralco's power plants.

According to Meralco, the storage tanks are made of steel plates welded and assembled on the spot. Their bottoms
rest on a foundation consisting of compacted earth as the outermost layer, a sand pad as the intermediate layer and
a two-inch thick bituminous asphalt stratum as the top layer. The bottom of each tank is in contact with the
asphalt layer. Hence, it is not attached to its foundation.

On the other hand, according to the hearing commissioners of the Central Board of Assessment Appeals (CBAA)
states that while the tanks rest or sit on their foundation, the foundation itself and the walls, dikes and steps, which
are integral parts of the tanks, are affixed to the land while the pipelines are attached to the tanks.

The CBAA ruled that the tanks together with the foundation, walls, dikes, steps, pipelines and other
appurtenances constitute taxable improvements.

Meralco filed a motion for reconsideration which the Board denied. They elevated the case to the SC.

ISSUE:
WON the storage tanks are considered improvements on real property such that it is subject to real property tax.
-- YES

HELD:
Meralco contends that the said oil storage tanks do not fall within any of the kinds of real property enumerated in
article 415 of the Civil Code and, therefore, they cannot be categorized as realty by nature, by incorporation, by
destination nor by analogy. Stress is laid on the fact that the tanks are not attached to the land and that they were
placed on leased land, not on the land owned by Meralco.

The issue raised by Meralco has to be resolved in the light of the provisions of the Assessment Law,
Commonwealth Act No. 470, and the Real Property Tax Code, Presidential Decree No. 464 which took effect on
June 1, 1974.

Section 2 of the Assessment Law provides that the realty tax is due "on real property, including land, buildings,
machinery, and other improvements" not specifically exempted in section 3 thereof. This provision is reproduced
with some modification in the Real Property Tax Code which provides:
Sec. 38. Incidence of Real Property Tax. They shall be levied, assessed and collected in all provinces,
cities and municipalities an annual ad valorem tax on real property, such as land, buildings, machinery
and other improvements affixed or attached to real property not hereinafter specifically exempted.

The Code contains the following definition in its section 3:

k) Improvements is a valuable addition made to property or an amelioration in its condition,
amounting to more than mere repairs or replacement of waste, costing labor or capital and intended to
enhance its value, beauty or utility or to adapt it for new or further purposes.

The SC holds that while the two storage tanks are not embedded in the land, they may, nevertheless, be
considered as improvements on the land, enhancing its utility and rendering it useful to the oil industry. It is
undeniable that the two tanks have been installed with some degree of permanence as receptacles for the
considerable quantities of oil needed by Meralco for its operations.
Oil storage tanks were held to be taxable realty in Standard Oil Co. of New Jersey vs. Atlantic City, 15 Atl. 2nd
271.

For purposes of taxation, the term "real property" may include things which should generally be regarded as
personal property. It is a familiar phenomenon to see things classed as real property for purposes of taxation
which on general principle might be considered personal property (Standard Oil Co. of New York vs. Jaramillo,
44 Phil. 630, 633).

Lopez v. Orosa [G.R. Nos. L-10817-18. February 28, 1958.]

En Banc, Felix (J): 10 concur.

Facts: Enrique Lopez is a resident of Balayan, Batangas, doing business as Lopez-Castelo Sawmill. Sometime in
May 1946, Vicente Orosa, Jr. invited Lopez to make an investment in the theatre business (Plaza Theatre, Inc.).
Although Lopez expressed his unwillingness to invest in the business, he agreed to supply the lumber necessary
for the construction of the proposed theatre and at Orosas 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 for the theater on 17 May 1946, up to 4 December of the same year. The Plaza

Theatre was erected on a piece of land with an area of 679.17 m2 formerly owned by Vicente Orosa, Jr., and was
acquired by the corporation on 25 September 1946. The total cost of the materials amounted to P62,255.85, of
which Lopez was paid only P20,848.50, thus leaving a balance of P41,771.35. Orosa and Belarmino Rustia,
corporation president, promised Lopez to obtain a bank loan to satisfy the balance, 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 PNB 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 16 November 1946, under Act
3344. Subsequently, when the corporation applied for the registration of the land under Act 496, such mortgage
was not revealed and thus OCT O-391 was correspondingly issued on October 25, 1947, without any
encumbrance appearing thereon.

Vicente Orosa, Jr. executed, on 17 March 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 12 November 1947, a complaint with the CFI Batangas (Civil
Case 4501, later R-57) against Vicente Orosa Jr. and Plaza Theatre, Inc., praying that defendants be sentenced to
pay him jointly and severally the sum of P41,771.35 with legal interest from the filing of the action; that in case
defendants fail to pay the same, that the building and the land covered by OCT 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.

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 17 August 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
18 October 1947, in order to annotate the lights and interests of the surety company over said properties.
Opposition thereto was offered by 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 annotation 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 30 October 1952, the lower Court held that Orosa 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 materialmans lien over the same; the lien being merely confined
to the building and did not extend to the land on which the construction was made.

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.

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
of the court of 23 December 1952. The matter was thus appealed to the Court of Appeals, which affirmed the
lower courts ruling, and then to the Supreme Court.

Issue: 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?

Held: Yes. 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.

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.

Benguet Corporation Vs. CBAA

Facts: This petition for certiorari now seeks to reverse the ruling of the CBAA.

The principal contention of the petitioner is that the tailings dam is not subject to realty tax because it is not an
"improvement" upon the land within the meaning of the Real Property Tax Code. More particularly, it is claimed

(1) as regards the tailings dam as an "improvement":

(a) that the tailings dam has no value separate from and independent of the mine; hence, by itself it cannot be
considered an improvement separately assessable;

(b) that it is an integral part of the mine;

(c) that at the end of the mining operation of the petitioner corporation in the area, the tailings dam will
benefit the local community by serving as an irrigation facility;

(d) that the building of the dam has stripped the property of any commercial value as the property is
submerged under water wastes from the mine;
(e) that the tailings dam is an environmental pollution control device for which petitioner must be
commended rather than penalized with a realty tax assessment;

(f) that the installation and utilization of the tailings dam as a pollution control device is a requirement
imposed by law;

(2) as regards the valuation of the tailings dam and the submerged lands:

(a) that the subject properties have no market value as they cannot be sold independently of the mine;

(b) that the valuation of the tailings dam should be based on its incidental use by petitioner as a water
reservoir and not on the alleged cost of construction of the dam and the annual build-up expense;

(c) that the "residual value formula" used by the Provincial Assessor and adopted by respondent CBAA is
arbitrary and erroneous; and

(3) as regards the petitioner's liability for penalties for

non-declaration of the tailings dam and the submerged lands for realty tax purposes:

(a) that where a tax is not paid in an honest belief that it is not due, no penalty shall be collected in addition to
the basic tax;

(b) that no other mining companies in the Philippines operating a tailings dam have been made to declare the
dam for realty tax purposes.

The Provincial Assessor of Zambales assessed the said properties as taxable improvements. The assessment was
appealed to the Board of Assessment Appeals of the Province of Zambales. On August 24, 1988, the appeal
was dismissed mainly on the ground of the petitioner's "failure to pay the realty taxes that fell due during the
pendency of the appeal."

ISSUE: W/N the tailings dam be considered as immovable property?

HELD: YES. Art. 415. The following are immovable property.

(1) Lands, buildings and constructions of all kinds adhered to the soil;

xxx xxx xxx

(3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated
therefrom without breaking the material or deterioration of the object.

Section 2 of C.A. No. 470, otherwise known as the Assessment Law, provides that the realty tax is due "on the
real property, including land, buildings, machinery and other improvements" not specifically exempted in Section
3 thereof. A reading of that section shows that the tailings dam of the petitioner does not fall under any of the
classes of exempt real properties therein enumerated.

Is the tailings dam an improvement on the mine? Section 3(k) of the Real Property Tax Code defines
improvement as follows:

(k) Improvements is a valuable addition made to property or an amelioration in its condition, amounting to
more than mere repairs or replacement of waste, costing labor or capital and intended to enhance its value, beauty
or utility or to adopt it for new or further purposes.

From the definitions and the cases cited above, it would appear that whether a structure constitutes an
improvement so as to partake of the status of realty would depend upon the degree of permanence intended in its
construction and use. The expression "permanent" as applied to an improvement does not imply that the
improvement must be used perpetually but only until the purpose to which the principal realty is devoted has been
accomplished. It is sufficient that the improvement is intended to remain as long as the land to which it is annexed
is still used for the said purpose.

The Court is convinced that the subject dam falls within the definition of an "improvement" because it is
permanent in character and it enhances both the value and utility of petitioner's mine. Moreover, the immovable
nature of the dam defines its character as real property under Article 415 of the Civil Code and thus makes it
taxable under Section 38 of the Real Property Tax Code.

Tumalad v. Vicencio
41 SCRA 143

DOCTRINE: 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.

FACTS:
On 1 September 1955 Vicencio and Simeon, defendants-appellants, executed a chattel mortgage in favor of the
Tumalads, plaintiff-appellees over their house of strong materials located at 550 Int. 3, Quezon Boulevard,
Quiapo, Manila, over Lot 6-B and 7-B, Block 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

mortgage was executed to guarantee a loan of P4,800.00 received from the Tumalads, 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 become immediately due and payable, the
Chattel Mortgage enforceable, and the Sheriff of Manila authorized the Mortgagors property after necessary
publication. When Vicencio and Simeon 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, the
Tumalads were issued the corresponding certificate of sale.

On 18 April 1956, the Tumalads commenced Civil Case 43073 in the municipal court of Manila, praying, among
other things, that the house be vacated and its possession surrendered to them, and for Vicencio and Simeon to
pay rent of P200.00 monthly from 27 March 1956 up to the time the possession is surrendered. On 21 September
1956, the municipal court rendered its decision in favor of the Tumalads. Having lost therein, appealed to the
court a quo (Civil Case 30993) which also rendered a decision against them.

On appeal, the case was certified to the Supreme Court by the Court of Appeals (CA-G.R. No. 27824-R) for the
reason that only questions of law are involved. Plaintiffs-appellees failed to file a brief and this appeal was
submitted for decision without it.

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.

ISSUE:
W/N the house may be a subject of a Chattel Mortgage. YES, it may be the subject of a chattel mortgage.

HELD:
Defendants predicate their theory of nullity of the chattel mortgage on the ground 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.
The rule about the status of buildings as immovable property is 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 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.

It is undeniable that the parties to a contract may by agreement treat as personal property that which by nature
would be real property. 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.

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 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. 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. 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.

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 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 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, because it is the defendants themselves, as debtors-mortgagors, who are attacking the validity
of the chattel mortgage in this case, the doctrine of estoppel therefore applies to the defendants, having treated the
subject house as personalty.

The Supreme Court reversed the decision appealed from and entered another dismissing the complaint, with costs
against plaintiffs-appellees.

Leung Yee v. Strong Machinery [G.R. No. L-11658. February 15, 1918.]

First Division, Carson (J): 5 concur, 3 took no part.

Facts: The Compaia Agricola Filipina bought rice- cleaning machinery from the machinery company, and
executed a chattel mortgage thereon to secure payment of the purchase price. It included in the mortgage deed the
building of strong materials in which the machinery was installed, without any reference to the land on which it
stood. The indebtedness secured by this instrument not having been paid when it fell due, the mortgaged property
was sold by the sheriff, in pursuance of the terms of the mortgage instrument, and was bought in by the machinery
company. The mortgage was registered in the chattel mortgage registry, and the sale of the property to the
machinery company in satisfaction of the mortgage was annotated in the same registry on 29 December 1913. On
14 January 1914, the Compaia Agricola Filipina executed a deed of sale of the land upon which the building
stood to the machinery company, but this deed of sale, although executed in a public document, was not registered
and made no reference to the building erected on the land and would appear to have been executed for the purpose
of curing any defects which might be found to exist in the machinery companys title to the building under the
sheriffs certificate of sale. The machinery company went into possession of the building at or about the time
when this sale took place, that is to say, the month of December 1913, and it has continued in possession ever
since.

At or about the time when the chattel mortgage was executed in favor of the machinery company, the Compaia
Agricola Filipina executed another mortgage to Leung Yee upon the building, separate and apart from the land
on which it stood, to secure payment of the balance of its indebtedness to Leung Yee under a contract for the
construction of the building. Upon the failure of the mortgagor to pay the amount of the indebtedness secured by
the mortgage, Leung Yee secured judgment for that amount, levied execution upon the building, bought it in at
the sheriffs sale on or about the 18 December 1914, and had the sheriffs certificate of sale duly registered in the
land registry of the Province of Cavite. At the time when the execution was levied upon the building, the
machinery company, which was in possession, filed with the sheriff a sworn statement setting up its claim of title
and demanding the release of the property from the levy. Thereafter, upon demand of the sheriff, Leung Yee
executed an indemnity bond in favor of the sheriff in the sum of P12,000, in reliance upon which the sheriff sold
the property at public auction to the plaintiff, who was the highest bidder at the sheriffs sale.

The current action was instituted to recover possession of the building from the machinery company. The Court
gave judgment in favor of the machinery company, relying upon Article 1473 and the fact that the company had
its title to the building registered prior to the date of the registry of plaintiffs certificate. Hence the appeal.

ISSUE: Whether or not the nature of property is changed by its registration in the Chattel Mortgage Registry.
NO

HELD: The registry under Article 1473 of the Civil Code refers to registry of real property and the annotation or
inscription of a deed of sale of real property in a chattel mortgage registry cannot be given the legal effect of an
inscription in the registry of real property.

The Chattel Mortgage Law contemplates mortgages of personal property. The sole purpose and object of the
chattel mortgage registry is the registration of personal property mortgages executed in the manner and form
prescribed in the statute.

This rule is always to be understood on the basis of the good faith mentioned in the first paragraph; therefore, it
having been found that the second purchasers who record their purchase had knowledge of the previous sale, the
question is to be decided in accordance with the following paragraph. (Note 2, art. 1473, Civ. Code, Medina and
Maranon [1911] edition.)

Although article 1473, in its second paragraph, provides that the title of conveyance of ownership of the real
property that is first recorded in the registry shall have preference, this provision must always be understood on
the basis of the good faith mentioned in the first paragraph; the legislator could not have wished to strike it out
and to sanction bad faith, just to comply with a mere formality which, in given cases, does not obtain even in real
disputes between third persons. (Note 2, art. 1473, Civ. Code, issued by the publishers of the La Revista de los
Tribunales, 13th edition.)

In this case, the building where the rice-cleaning machinery was installed was real property. The mere fact that the
parties dealt with it as separate and apart from the land on which it stood does not change its character as real
property. Neither the original registry of the building in the chattel mortgage nor the annotation of sale of the
mortgaged property in the registry had any effect on the buildings nature as immovable property.

STANDARD OIL CO. OF NEW YORK VS JARAMILLO

Facts: On 27 November 1922, Gervasia de la Rosa Vda. de Vera was the lessee of a parcel of land situated in the
City of Manila and owner of the house of strong materials built thereon, upon which date she executed a
document in the form of a chattel mortgage, purporting to convey to Standard Oil Company of New York by way
of mortgage both the leasehold interest in said lot and the building which stands thereon. After said document had
been duly acknowledged and delivered, Standard Oil caused the same to be presented to Joaquin Jaramillo, as
register of deeds of the City of Manila, for the purpose of having the same recorded in the book of record of
chattel mortgages. Upon examination of the instrument, Jaramillo opined that it was not chattel mortgage, for the
reason that the interest therein mortgaged did not appear to be personal property, within the meaning of the
Chattel Mortgage Law, and registration was refused on this ground only.

The point submitted to us in this case was determined on September 8, 1914, in an administrative ruling
promulgated by the Honorable James A. Ostrand, now a Justice of this Court, but acting at that time in the
capacity of Judge of the fourth branch of the Court of First Instance of the Ninth Judicial District, in the City of
Manila; and little of value can be here added to the observations contained in said ruling. We accordingly quote
therefrom as follows:
It is unnecessary here to determine whether or not the property described in the document in question is real or
personal; the discussion may be confined to the point as to whether a register of deeds has authority to deny the
registration of a document purporting to be a chattel mortgage and executed in the manner and form prescribed by
the Chattel Mortgage Law.

The cause was brought to the Supreme Court upon demurrer interposed by Joaquin Jaramillo, register of deeds of
the City of Manila, to an original petition of the Standard Oil Company of New York, seeking a peremptory
mandamus to compel the respondent to record in the proper register a document purporting to be a chattel
mortgage executed in the City of Manila by Gervasia de la Rosa, Vda. de Vera, in favor of the Standard Oil
Company of New York.

ISSUE: W/N the ROD can refuse the registration of a chattel mortgage? NO.

HELD: It is his duty to accept the proper fee and place the instrument on record. The duties of a register of deeds
in respect to the registration of chattel mortgage are of a purely ministerial character; and no provision of law can
be cited which confers upon him any judicial or quasi-judicial power to determine the nature of any document of
which registration is sought as a chattel mortgage.

The original provisions touching this matter are contained in section 15 of the Chattel Mortgage Law (Act No.
1508), as amended by Act No. 2496; but these have been transferred to section 198 of the Administrative Code.
There is nothing in any of these provisions conferring upon the register of deeds any authority whatever in respect
to the "qualification, of chattel mortgage. His duties in respect to such instruments are ministerial only. The
efficacy of the act of recording a chattel mortgage consists in the fact that it operates as constructive notice of the
existence of the contract, and the legal effects of the contract must be discovered in the instrument itself in
relation with the fact of notice. Registration adds nothing to the instrument, considered as a source of title, and
affects nobody's rights except as a specifies of notice.

Articles 334 and 335 of the Civil Code supply no absolute criterion for discriminating between real property and
personal property for purpose of the application of the Chattel Mortgage Law. Those articles state rules which,
considered as a general doctrine, are law in this jurisdiction; but it must not be forgotten that under given
conditions property may have character different from that imputed to it in said articles. It is undeniable that the
parties to a contract may by agreement treat as personal property that which by nature would be real property; and
it is a familiar phenomenon to see things classed as real property for purposes of taxation which on general
principle might be considered personal property.

Mindanao Bus Co. v. City Assessor and Treasurer

G.R. No. L-17870

DOCTRINE: Movable equipment, to be immobilized in contemplation of Article 415 of the Civil Code, must be
the essential and principal elements of an industry or works which are carried on in a building or on a piece of
land. Thus, where the business is one of transportation, which is carried on without a repair or service shop, and
its rolling equipment is repaired or serviced in a shop belonging to another, the tools and equipment in its repair
shop which appear movable are merely incidentals and may not be considered immovables, and, hence, not
subject to assessment as real estate for purposes of the real estate tax.

FACTS:
Petitioner is a public utility solely engaged in transporting passengers and cargoes by motor trucks, over its
authorized lines in the Island of Mindanao, collecting rates approved by the Public Service Commission.

The petitioner is the owner of the land where it maintains and operates a garage for its TPU motor trucks; a repair
shop; blacksmith and carpentry shops, and with these machineries which are placed therein, its TPU trucks are
made; body constructed; and same are repaired in a condition to be serviceable in the TPU land transportation
business it operates.

These machineries have never been or were never used as industrial equipments to produce finished products for
sale, nor to repair machineries, parts and the like offered to the general public indiscriminately for business or
commercial purposes for which petitioner has never engaged in,

The City Assessor of CDO then assessed a P4,400 realty tax on said machineries and repair equipment. This was
then appealed to the Court of Tax Appeals (CTA) who sustained the respondent city assessor's ruling.

ISSUE:
Whether or not the machineries and the equipments are considered immobilized and thus subject to a realty tax. --
NO

HELD:
The Supreme Court held a decision for the petition for review to be set aside and the equipments in question
declared not subject to assessment as real estate for the purposes of the real estate tax.

The law that governs the determination of the question at issue is as follows:

Art. 415. The following are immovable property:

xxx xxx xxx

(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; (Civil Code of the Phil.)

Aside from the element of essentiality the above-quoted provision also requires that the industry or works be
carried on in a building or on a piece of land. Thus in the case of Berkenkotter vs. Cu Unjieng, supra, the
"machinery, liquid containers, and instruments or implements" are found in a building constructed on the land. A
sawmill would also be installed in a building on land more or less permanently, and the sawing is conducted in the
land or building.

But in the case at bar the equipments in question are destined only to repair or service the transportation business,
which is not carried on in a building or permanently on a piece of land, as demanded by the law. Said equipments
may not, therefore, be deemed real property.

Resuming what we have set forth above, we hold that the equipments in question are not absolutely essential to
the petitioner's transportation business, and petitioner's business is not carried on in a building, tenement or on a
specified land, so said equipment may not be considered real estate within the meaning of Article 415 (c) of the
Civil Code.

Said equipments are not considered immobilized as they are merely incidental, not essential and principal to the
business of the petitioner. The transportation business could be carried on without repair or service shops of its
rolling equipment as they can be repaired or services in another shop belonging to another.

CLATEX VS CBAA

FACTS: This case is about the realty tax on machinery and equipment installed by Caltex (Philippines) Inc. in its
gas stations located on leased land.

The machines and equipment consists of underground tanks, elevated tank, elevated water tanks, water tanks,
gasoline pumps, computing pumps, water pumps, car washer, car hoists, truck hoists, air compressors and
tireflators. The city assessor described the said equipment and machinery in this manner:

A gasoline service station is a piece of lot where a building or shed is erected, a water tank if there is any is placed
in one corner of the lot, car hoists are placed in an adjacent shed, an air compressor is attached in the wall of the
shed or at the concrete wall fence.
The controversial underground tank, depository of gasoline or crude oil, is dug deep about six feet more or less, a
few meters away from the shed. This is done to prevent conflagration because gasoline and other combustible oil
are very inflammable.

This underground tank is connected with a steel pipe to the gasoline pump and the gasoline pump is commonly
placed or constructed under the shed.

As to whether the subject properties are attached and affixed to the tenement, it is clear they are, for the tenement
we consider in this particular case are (is) the pavement covering the entire lot which was constructed by the
owner of the gasoline station and the improvement which holds all the properties under question, they are
attached and affixed to the pavement and to the improvement.

The city assessor of Pasay City characterized the said items of gas station equipment and machinery as taxable
realty.

The decision was reiterated by the Board (Minister Vicente Abad Santos took Macaraig's place) in its resolution
of January 12, 1978, denying Caltex's motion for reconsideration, a copy of which was received by its lawyer on
April 2, 1979.

On May 2, 1979 Caltex filed this certiorari petition wherein it prayed for the setting aside of the Board's decision.

CBAA hold that the said equipment and machinery, as appurtenances to the gas station building or shed owned by
Caltex (as to which it is subject to realty tax) and which fixtures are necessary to the operation of the gas station,
for without them the gas station would be useless, and which have been attached or affixed permanently to the gas
station site or embedded therein, are taxable improvements and machinery within the meaning of the Assessment
Law and the Real Property Tax Code.

ISSUE: WON the pieces of gas station equipment and machinery permanently affixed by Caltex to its gas station
form part of immovable or real property?

HELD: That ruling is an interpretation of paragraph 5 of article 415 of the Civil Code regarding machinery that
becomes real property by destination. In the Davao Saw Mills case the question was whether the machinery
mounted on foundations of cement and installed by the lessee on leased land should be regarded as real property
for purposes of execution of a judgment against the lessee. The sheriff treated the machinery as personal property.
This Court sustained the sheriff's action. (Compare with Machinery & Engineering Supplies, Inc. vs. Court of
Appeals, 96 Phil. 70, where in a replevin case machinery was treated as realty).

This case is also easily distinguishable from Board of Assessment Appeals vs. Manila Electric Co., 119 Phil. 328,
where Meralco's steel towers were considered poles within the meaning of paragraph 9 of its franchise which
exempts its poles from taxation. The steel towers were considered personalty because they were attached to
square metal frames by means of bolts and could be moved from place to place when unscrewed and dismantled.

Nor are Caltex's gas station equipment and machinery the same as tools and equipment in the repair shop of a bus
company which were held to be personal property not subject to realty tax (Mindanao Bus Co. vs. City Assessor,
116 Phil. 501).

The Central Board of Assessment Appeals did not commit a grave abuse of discretion in upholding the city
assessor's is imposition of the realty tax on Caltex's gas station and equipment.

SERGS PRODUCTS VS PCI LEASING

FACTS: In its February 18, 1998 Order,[5] 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]
PCI Leasing and Finance, Inc. filed a complaint with the RTC for a sum of money with an application for a writ
of replevin. Upon an ex-parte application of PCI Leasing, respondent 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.

Sergs filed a motion for special protective order. This motion was opposed by PCI Leasing on the ground that
the properties [were] still personal and therefore still subject to seizure and a writ of replevin.

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.

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.

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- The Petition is not meritorious. HENCE, THE PETITION

ISSUE: W/N the Court will resolve whether the said machines are personal, not immovable, property which may
be a proper subject of a writ of repleviN?

HELD: ART. 415. The following are immovable property:

(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;

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 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.[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.

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.

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

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.

The Petition is DENIED and the assailed Decision of the Court of Appeals AFFIRMED.
Ago v. CA [G.R. No. L-17898. October 31, 1962.]

En Banc, Labrador (J): 9 concurring, 1 took no part

Facts: In 1957, Pastor D. Ago bought sawmill machineries and equipments from Grace Park Engineering, Inc.,
executing a chattel mortgage over said machineries and equipments to secure the payment of a balance of the
price remaining unpaid of P32,000.00, which Ago agreed to pay on installment basis. Ago defaulted in his
payments and so, in 1958, Grace Park Engineering, Inc. instituted extrajudicial foreclosure proceedings of the
mortgage. To enjoin said foreclosure, Ago instituted Special Civil Case 53 in the CFI Agusan. The parties to the
case arrived at a compromise agreement and submitted the same in court in writing, signed by Ago and the Grace
Park Engineering. Judge Ortiz of the CFI Agusan dictated a decision in open court on 28 January 1959. Still, Ago
continued to default in his payments as provided in the judgment by compromise, so Grace Park Engineering filed
with the lower court a motion for execution, which was granted by the court on 15 August 1959. A writ of
execution, dated 23 September 1959, later followed.

The Provincial Sheriff of Surigao, acting upon the writ of execution, levied upon and ordered the sale of the
sawmill machineries and equipments in question. These machineries and equipments had been taken to and
installed in a sawmill building located in Lianga, Surigao del Sur, and owned by the Golden Pacific Sawmill to
whom he had sold them or assigned them in payment of his subscription to the shares of stock of said corporation
on 16 February 1959 (a date after the decision of the lower court but before levy by the Sheriff). Thereafter the
sawmill machineries and equipments were installed in a building and permanently attached to the ground. Having
been advised by the sheriff that the public auction sale was set for 4 December 1959, Ago, on 1 December 1959,
filed the petition for certiorari and prohibition with preliminary injunction with the CA.

The Court of Appeals on 8 December 1959, issued a writ of preliminary injunction against the sheriff but it turned
out that the latter had already sold at public auction the machineries in question as scheduled. Grace Park
Engineering was the only bidder for P15,000.00, although the certificate of sale was not yet executed. The CA
instructed the sheriff to suspend the issuance of a certificate of sale of the said sawmill machineries and
equipment until the final decision of the case. On 9 November 1960, the CA dismissed the petition for certiorari
and dissolved the writ of preliminary injunction, with costs against the petitioner.

ISSUE: W/N the nature of the machineries in question is movables or immovables?

HELD: Immovables. The record shows that after petitioner herein Pastor D. Ago had purchased the sawmill
machineries and equipments he assigned the same to the Golden Pacific Sawmill, Inc. in payment of his
subscription to the shares of stock of said corporation. Thereafter the sawmill machinery and equipments were
installed in a building and permanently attached to the ground. By reason of such installment in a building, the
said sawmill machineries and equipment became real estate properties in accordance with the provision of Art.
415 (5) of the Civil Code, thus:

ART. 415. The following are immovable property:

xxx xxx xxx

(5) Machinery, receptacles, instruments or implements tended 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;

This Court in interpreting a similar question raised before it in the case of Berkenkotter vs. Cu Unjieng e Hijos, 61
Phil. 683, held that the installation of the machine and equipment in the central of the Mabalacat Sugar Co., Inc.
for use in connection with the industry carried by the company, converted the said machinery and equipment into
real estate by reason of their purpose. And therefore, the machiniries in question are immovable.

The decision of the Court of Appeals sought to be reviewed is hereby set aside and We declare that the issuance
of the writ of execution in this case against the sawmill machineries and equipments purchased by petitioner
Pastor D. Ago from the Grace Park Engineering, Inc., as well as the sale of the same by the Sheriff of Surigao, are
null and void.
Berkenkotter v. Cu Unjieng [G.R. No. 41643. July 31, 1935.]

En Banc, Villa-real (J): 4 concur

Facts: On 26 April 1926, the Mabalacat Sugar Company obtained from Cu Unjieng e Hijos, a loan secured by a
first mortgage constituted on 2 parcels of land with all its buildings, improvements, sugar-cane mill, steel

railway, telephone line, apparatus, utensils and whatever forms part or is a necessary complement of said sugar-
cane mill, steel railway, telephone line, now existing or that may in the future exist in said lots.

On 5 October 1926, the Mabalacat Sugar Company decided to increase the capacity of its sugar central by buying
additional machinery and equipment, so that instead of milling 150 tons daily, it could produce 250. The
estimated cost of said additional machinery and equipment was P100,000. In order to carry out this plan, B. A.
Green, president of said corporation, proposed to the B. H. Berkenkotter, to advance the necessary amount for the
purchase of said machinery and equipment, promising to reimburse him as soon as he could obtain an additional
loan from the mortgagees, Cu Unjieng e Hijos, and that in case B. A. Green should fail to obtain an additional
loan from Cu Unjieng e Hijos, said machinery and equipment would become security therefor, said B. A. Green
binding himself not to mortgage nor encumber them to anybody until Berkenkotter be fully reimbursed for the
corporations indebtedness to him.. Having agreed to said proposition made in a letter dated 5 October 1926, B.
H. Berkenkotter, on 9 October 1926, delivered the sum of P1,710 to B. A. Green, the total amount supplied by
him to B. A. Green having been P25,750. Furthermore, B. H. Berkenkotter had a credit of P22,000 against said
corporation for unpaid salary. With the loan of P25,750 and said credit of P22,000, the Mabalacat Sugar Co., Inc.,
purchased the additional machinery and equipment.

On 10 June 1927, B. A. Green applied to Cu Unjieng e Hijos for an additional loan of P75,000 offering as security
the additional machinery and equipment acquired by said B. A. Green and installed in the sugar central after the
execution of the original mortgage deed, on 27 April 1927, together with whatever additional equipment acquired
with said loan. B. A. Green failed to obtain said loan.

The appellant contends that the installation of the machinery and equipment claimed by him in the sugar central
of the Mabalacat Sugar Company, Inc., was not permanent in character

<The case facts do not provide for the instance when the case was filed with the lower court, and details of such
controversy>

The CFI Manila dismissed Berkenkotters complaint, with costs. Hence, the appeal.

ISSUE: whether or not the lower court erred in declaring that the additional machinery and equipment, as
improvement incorporated with the central are subject to the mortgage deed executed in favor of the defendants
Cu Unjieng e Hijos?

HELD: NO. Article 1877 of the Civil Code provides as follows.

ART. 1877. A mortgage includes all natural accessions, improvements, growing fruits, and rents not collected
when the obligation falls due, and the amount of any indemnities paid or due the owner by the insurers of the
mortgaged property or by virtue of the exercise of the power of eminent domain, with the declarations,
amplifications, and limitations established by law, whether the estate continues in the possession of the person
who mortgaged it or whether it passes into the hands of a third person.

If the installation of the machinery and equipment in question in the central of the Mabalacat Sugar Co., Inc., in
lieu of the other of less capacity existing therein, for its sugar industry, converted them into real property by
reason of their purpose, it cannot be said that their incorporation therewith was not permanent in character
because, as essential and principal elements of a sugar central, without them the sugar central would be unable to
function or carry on the industrial purpose for which it was established. Inasmuch as the central is permanent in
character, the necessary machinery and equipment installed for carrying on the sugar industry for which it has
been established must necessarily be permanent.
For the foregoing considerations, we are of the opinion and so hold: (1) That the installation of a machinery and
equipment in a mortgaged sugar central, in lieu of another of less capacity, for the purpose of carrying out the
industrial functions of the latter and increasing production, constitutes a permanent improvement on said sugar
central and subjects said machinery and equipment to the mortgage constituted thereon (article 1877, Civil Code);
(2) that the fact that the purchaser of the new machinery and equipment has bound himself to the person supplying
him the purchase money to hold them as security for the payment of the latter's credit, and to refrain from
mortgaging or otherwise encumbering them does not alter the permanent character of the incorporation of said
machinery and equipment with the central; and (3) that the sale of the machinery and equipment in question by
the purchaser who was supplied the purchase money, as a loan, to the person who supplied the money, after the
incorporation thereof with the mortgaged sugar central, does not vest the creditor with ownership of said
machinery and equipment but simply with the right of redemption.

Wherefore, finding no error in the appealed judgment, it is affirmed in all its parts, with costs to the appellant.
______________________________________________________________________________

JAIME SANCHEZ, JR., Petitioner, vs. ZENAIDA F. MARIN, JESUS NICASIO F. MARIN, JOSE DAVID F. MARIN,
MARIABERNADETTE F. MARIN, PAUL PETER F. MARIN and PHILIP LUIS F. MARIN, Respondents.

FACTS: David Felix owned a fishpond. Jaime Sanchez was instituted as a tenant on the said fishpond, with a
50/50 sharing agreement. After a few years, Felix sold and transferred ownership of the subject fishpond to the
Marins. As new owners of the fishpond, they entered into a civil law agreement with their mother, Zenaida, which
was renewable yearly. Zenaida then made an arrangement with Sanchez wherein Sanchez would receive a regular
salary and a 20%share in the net profit of the fishpond. When her lease agreement with her children expired,
Zenaida ordered Sanchez to vacate the premises. Sanchez refused, asserting that he was a tenant of the fishpond
and not a mere contractual worker; hence, he had the right to its peaceful possession and security of tenure. On 21
July 1986, the petitioner filed a Complaint before the Regional Trial Court (RTC) of Lucena City, in which he
asked the court to declare him as a tenant of the subject fishpond. On 20 July 1987, the RTC of Lucena City
rendered a Decision in favor of the petitioner, As Sanchez was already declared as an agricultural tenant of the
fishpond, he filed a petition to the Provincial Agrarian Reform Adjudicator (PARAD) for the fixing of leasehold
rentals for his use of the fishpond. However, Zenaida countered this application by filing a case with the PARAD
to eject Sanchez for failure to pay the rent and for failure to render an accounting. The PARAD consolidated the 2
cases and ruled in favor of Sanchez. Zenaida appealed to the DARAB, which affirmed the PARAD decision. The
CA reversed the ruling, stating that the DARAB lacked jurisdiction over the case. It stated that Sec. 2 of RA 7881,
which amended Sec. 10 of RA 6657, excluded private lands actually, directly, and exclusively used for prawn
farms and fishponds from the coverage of the CARL, so that the operation of a fishpond is no longer considered
an agricultural activity. Since the cases are not agrarian disputes, then the DARAB could not have validly
acquired jurisdiction over the case
Issues:

1. Whether or not a fishpond is an agricultural land.

2. Whether or not a tenurial arrangement exists between sanchez and zenaida marin.
3. W/N the DARAB has jurisdiction over the case.

Held.

1. No. by virtue of sec 2, ra 7881, the operation of fishponds is no longer considered an agricultural activity, and
a parcel of land devoted to fishpond is no longer an agricultural land.

2. Yes. Although the fishpond is not covered by the CARL, it bears empahasis that Sanches status as a tenant in
the subject fishpond and his right to security of tenure were already previously settled. Having been declared
as a tenant with the right to security of tenure as provided in Section 35 [22] of Republic Act No. 3844 in
relation to Section 7 of Republic Act No. 1199, the law enforced at the time of the filing of the Complaint
before the RTC of Lucena City, the petitioner has acquired a vested right over the subject fishpond, which
right or interest has become fixed and established and is no longer open to doubt or controversy. [23]Therefore,
even if fishponds, like the subject matter of this case, were later excluded/exempted from the coverage of the
CARL as expressly provided in Section 10 of Republic Act No. 6657, as amended by Republic Act No. 7881,
 and despite the fact that no CLOA has been issued to the petitioner, the same cannot defeat the aforesaid
vested right already granted and acquired by the petitioner long before the passage of Republic Act No.
7881. And being in the nature of a substantive law, the amendments introduced by Republic Act No. 7881 to
Republic Act No. 6657 in the year 1995 cannot be given a retroactive application as to deprive the petitioner
of his rights under the previous agrarian legislation

3. YES. The present case was instituted as early as 1991 when the law applicable was still RA 6657, and
fishponds and prawn farms were not yet exempted/excluded from the CARL coverage. At that time, there was
an agrarian dispute between the parties. Prior to the enactment of RA 7881 in 1995, the case was already
pending appeal before the DARAB. And being in the nature of a substantive law, the amendments introduced
by Republic Act No. 7881 to Republic Act No.6657 in the year 1995 cannot be given a retroactive application
as to deprive the petitioner of his rights under the previous agrarian legislation. Hence, the aforesaid
amendments cannot be made to apply to divest the DARAB of its jurisdiction of the case. Once jurisdiction is
acquired by the court, it remains with it until the full termination of the case.

___________________________________________________________________________

DIGEST: Heirs of Proceso Bautista vs Sps. Barza

G.R. No. 79167 / May 7, 1992

FACTS:

On October 25, 1946, Proceso Bautista applied for a fishpond permit over a 30 hectare parcel of public
land located in Sitio Central, Lupon, Davao. On November 9, 1948, the Division of Fisheries rejected Bautistas
application because the area applied for was needed for firewood production as certified by the Bureau of
Forestry. Between the date of his application and the date of its rejection, Bautista occupied an area which
extended beyond the boundary of the one he had applied for and introduced improvements thereon.

On September 23, 1948, Ester Barza filed a fishpond application covering an area of 14.85 hectares at
Sitio Bundas, Lupon, Davao. The area applied for by Barza overlapped the area originally applied for by Bautista.

On February 8, 1949, Bautista filed another fishpond application.

The records of the Bureau of Fisheries further show that the 14.85 hectares applied for by Barza was
released by the Bureau of Forestry as available for fishpond purposes while the 49 hectares applied for by
Bautista was not released by the said bureau.

An administrative case arose between Bautista and Barza before the Director of Fisheries and the latter
ruled in favor of Barza subject however to reimbursement of the value of the improvements made by Bautista.
Bautista appealed to the Secretary of Agriculture and Natural Resources and the latter affirmed the ruling of the
Director of Fisheries. Meanwhile, the Director of Fisheries required Barza to remit the amount representing the
value of the improvements made by Bautista. However, the parties could not agree on the amount of
reimbursement. Bautista moved for the rejection of the fishpond application of Barza in view of her non-
compliance with the order of the Director of Fisheries. Barza consigned the sum of P1,789.18 with the then
Justice of the Peace of Lupon, Davao. Bautista, however, refused to accept the same. The final reappraisal of the
value of the improvements amounted to P9,514.33.

Barza filed an action in the Court of First Instance (CFI) against Bautista for the recovery of possession
over the area she applied for. Bautista died while the case was pending for resolution. He was substituted by his
heirs as defendants. The CFI ruled that the Barzas had not acquired a vested right to possess the areas concerned
as they had not complied with the "condition precedent" to such possession - the reimbursement of the value of
the improvements made by Bautista. Barza appealed to the Court of Appeals (CA). The CA reversed the decision
of the CFI, it gave great weight to the decision of the Secretary of Agriculture on Barzas right over the area.
Hence, this appeal.

ISSUE:
 Whether Bautista has better right over the area considering that his application was made ahead the
application of Barza.

RULING: NO, Barza has a better right over the area than Bautista.

It should be remembered that until timber or forest lands are released as disposable or alienable, neither
the Bureau of Lands nor the Bureau of Fisheries has authority to lease, grant, sell, or otherwise dispose of these
lands for homesteads, sales patents, leases for grazing purposes, fishpond leases and other modes of utilization.

On October 25, 1946 when Bautista applied for a Fishpond permit, the area applied for could not yet be
granted to him as it was yet to be released for public utilization. The situation, however, changed when Barza
filed Fishpond Application, for the area had, by then, been opened for fishpond purposes.

Thus, even if Bautista were ahead of Barza by two years in terms of occupation, possession and
introduction of substantial improvements, he was not placed in a better position than Barza. The priority rule
under Fisheries Administrative Order No. 14 applies only to public lands already released by the Bureau of
Fisheries. Until such lands had been properly declared available for fishpond purposes, any application is
ineffective because there is no disposable land to speak of. Accordingly, Bautista's application was premature and
the ruling of the Director of Fisheries on this matter was, therefore, correct.

It should be stressed that the function of administering and disposing of lands of the public domain in the
manner prescribed by law is not entrusted to the courts but to executive officials. Matters involved in the grant,
cancellation, reinstatement and revision of fishpond licenses and permits are vested under the executive
supervision of the appropriate department head, in this case is the Secretary of Agriculture and Natural Resources.

___________________________________________________________________________

JG Summit Holdings Inc. vs. CA G.R. No. 124293, November 20, 2000
JG Summit Holdings Inc. vs. CA
G.R. No. 124293, November 20, 2000

FACTS:
The National Investment and Development Corporation (NIDC), a government corporation, entered into a Joint
Venture Agreement (JVA) with Kawasaki Heavy Industries, Ltd. for the construction, operation and management
of the Subic National Shipyard, Inc., later became the Philippine Shipyard and Engineering Corporation
(PHILSECO). Under the JVA, NIDC and Kawasaki would maintain a shareholding proportion of 60%-40% and
that the parties have the right of first refusal in case of a sale.

Through a series of transfers, NIDCs rights, title and interest in PHILSECO eventually went to the National
Government. In the interest of national economy, it was decided that PHILSECO should be privatized by selling
87.67% of its total outstanding capital stock to private entities. After negotiations, it was agreed that Kawasakis
right of first refusal under the JVA be exchanged for the right to top by five percent the highest bid for said
shares. Kawasaki that Philyards Holdings, Inc. (PHI), in which it was a stockholder, would exercise this right in
its stead.

During bidding, Kawasaki/PHI Consortium is the losing bidder. Even so, because of the right to top by 5%
percent the highest bid, it was able to top JG Summits bid. JG Summit protested, contending that PHILSECO, as
a shipyard is a public utility and, hence, must observe the 60%-40% Filipino-foreign capitalization. By buying
87.67% of PHILSECOs capital stock at bidding, Kawasaki/PHI in effect now owns more than 40% of the stock.

ISSUE:
* Whether or not PHILSECO is a public utility
* Whether or not Kawasaki/PHI can purchase beyond 40% of PHILSECOs stocks

HELD:
In arguing that PHILSECO, as a shipyard, was a public utility, JG Summit relied on sec. 13, CA No. 146. On the
other hand, Kawasaki/PHI argued that PD No. 666 explicitly stated that a shipyard was not a public utility.
But the SC stated that sec. 1 of PD No. 666 was expressly repealed by sec. 20, BP Blg. 391 and when BP Blg. 391
was subsequently repealed by EO 226, the latter law did not revive sec. 1 of PD No. 666. Therefore, the law that
states that a shipyard is a public utility still stands.

A shipyard such as PHILSECO being a public utility as provided by law is therefore required to comply with the
60%-40% capitalization under the Constitution. Likewise, the JVA between NIDC and Kawasaki manifests an
intention of the parties to abide by this constitutional mandate. Thus, under the JVA, should the NIDC opt to sell
its shares of stock to a third party, Kawasaki could only exercise its right of first refusal to the extent that its total
shares of stock would not exceed 40% of the entire shares of stock. The NIDC, on the other hand, may purchase
even beyond 60% of the total shares. As a government corporation and necessarily a 100% Filipino-owned
corporation, there is nothing to prevent its purchase of stocks even beyond 60% of the capitalization as the
Constitution clearly limits only foreign capitalization.

Kawasaki was bound by its contractual obligation under the JVA that limits its right of first refusal to 40% of the
total capitalization of PHILSECO. Thus, Kawasaki cannot purchase beyond 40% of the capitalization of the joint
venture on account of both constitutional and contractual proscriptions.

Rubiso vs. Rivera [GR L-11407, 30 October 1917]

En Banc, Torres [J]: 5 concur, 1 took no part

Facts: Bonifacio Gelito sold his share in the pilot boat Valentina, consisting of 2/3 interest therein, to the
Chinaman Sy Qui, the co-owner of the other 1/3 interest in said vessel; wherefore this vendor is no longer entitled
to exercise any action whatever in respect to the boat in question. Gelito was one of the partnership owners of the
Valentina, as in fact his name appears in the certificate of protection issued by the Bureau of Customs, and the
rights he held are evidenced by the articles of partnership; but, the whole ownership in the vessel having been
consolidated in behalf of the Chinaman Sy Qui, this latter, in the use of his right as the sole owner of the
Valentina, sold this boat to Florentino E. Rivera for P2,500, on 4 January 1915, which facts are set forth in a deed
ratified on the same date before a notary. This document was registered in the Bureau of Customs on 17 March
1915.

After the sale of the boat to the defendant Rivera, suit having been brought in the justice of the peace court against
the Chinaman Sy Qui to enforce payment of a certain sum of money, the latters creditor Fausto Rubiso. Rubiso
later acquired said vessel at a public auction sale and for the sum of P55.45. The certificate of sale and
adjudication of the boat in question was issued by the sheriff on behalf of Fausto Rubiso, in the office of the
Collector of Customs, on 27 January 1915 and was also entered in the commercial registry on 14 March 1915.

On 10 April 1915, the plaintiffs brought suit in the CFI and alleged in the complaint that his clients were the
owners of the pilot boat named Valentina, which had been in bad condition since 1914 and was stranded in
Tingloy, Bauan, Batangas; and that Florentino E. Rivera took charge or possession of said vessel without the
knowledge or consent of the plaintiffs and refused to deliver it to them, under claim that he was the owner
thereof. After the hearing of the case and the introduction of documentary evidence, the judgment of 6 September
1915, was rendered, , in which the defendant and appellant was ordered to place at the disposal of the Fausto
Rubiso the pilot boat in litigation. No special finding was made for costs. The defendant appealed and moved for
a new trial. This motion was denied and appellant excepted.

ISSUE: WON it is Rubiso or Rivera who has a better right to the boat? -- Rubiso has a better right

HELD: Article 573 of the Code of Commerce provides in its first paragraph that merchant vessels constitute
property which may be acquired an transferred by any of the means recognized by law. The acquisition of a
vessel must be included in a written instrument, which shall not produce any effect with regard to third persons if
not recorded in the commercial registry. With the enactment of Act 1900 on 18 May 1909, said article was
amended and appears as Section 2 of that Act; amending solely in charging the Insular Collector of Customs with
the fulfillment of the duties of the commercial register concerning the registering of vessels. In both laws,
Inscription in the commercial registry is necessary and indispensable in order that the purchasers rights may be
maintained against a claim filed by a third person. The legal rule set down in the Mercantile Code subsists,
inasmuch as the amendment solely refers to the official who shall make the entry; but, with respect to the rights of
two purchases, whichever of them first registered his acquisition of the vessel in the one entitled to enjoy the
protection of the law.

Florentino E. Riveras rights cannot prevail over those acquired by Fausto Rubiso in the ownership of the pilot
boat Valentina, inasmuch as, though the latters acquisition of the vessel at public auction, on 23 January 1915,
was subsequent to its purchase by Rivera, nevertheless the sale at public auction was antecedently record in the
office of the Collector of Customs, on January 27, and entered in the commercial registry (an unnecessary
proceeding) on March 4; while the private and voluntary purchase made by Rivera on a prior date was not
recorded in the office of the Collector of Customs until 17 March 1915. Rubiso, who was careful to record his
acquisition, opportunely and on prior date, has, according to the law, a better right than the defendant Rivera who
subsequently recorded his purchase. The latter is a third person, who was directly affected by the registration
which the plaintiff made of the acquisition.

Ships or vessels are of the nature and condition of real property; Article 573 of Code of Commerce vis--vis
Article 1473 of the Civil Code

Ships or vessels, whether moved by steam or by sail, partake, to a certain extent, of the nature and conditions of
real property, on account of their value and importance in the world commerce; and for this reason the provisions
of article 573 of the Code of Commerce are nearly identical with article 1473 of the Civil Code.

_____________________________________________________________________________

THE DIOCESE OF BACOLOD, REPRESENTED BY THE MOST REV. BISHOP VICENTE M.

NAVARRA and THE BISHOP HIMSELF IN HIS PERSONAL CAPACITY, Petitioners,
vs.
COMMISSION ON ELECTIONS AND THE ELECTION OFFICER OF BACOLOD CITY, ATTY.
MAVIL V. MAJARUCON, Respondents.

FACTS: Petitioners posted two (2) tarpaulins within a private compound housing the San Sebastian Cathedral of
Bacolod. Each tarpaulin was approximately six feet (6') by ten feet (10') in size. They were posted on the front
walls of the cathedral within public view. The first tarpaulin contains the message "IBASURA RH Law" referring
to the Reproductive Health Law of 2012 or Republic Act No. 10354. The second tarpaulin is the subject of the
present case. This tarpaulin contains the heading "Conscience Vote" and lists candidates as either "(Anti-RH)
Team Buhay" with a check mark, or "(Pro-RH) Team Patay" with an "X" mark. The electoral candidates were
classified according to their vote on the adoption of Republic Act No. 10354, otherwise known as the RH Law.
Those who voted for the passing of the law were classified by petitioners as comprising "Team Patay," while
those who voted against it form "Team Buhay".

Respondent Atty. Mavil V. Majarucon, in her capacity as Election Officer of Bacolod City, issued a Notice to
Remove Campaign Materials addressed to petitioner Most Rev. Bishop Vicente M. Navarra. The election officer
ordered the tarpaulins removal within three (3) days from receipt for being oversized. Respondents argue that it
is the right of the state to prevent the circumvention of regulations relating to election propaganda by applying
such regulations to private individuals.

ISSUE: Whether or not there was a violation of petitioners right to property.

RULING: YES. The Court held that even though the tarpaulin is readily seen by the public, the tarpaulin remains
the private property of petitioners. Their right to use their property is likewise protected by the Constitution.

Any regulation, therefore, which operates as an effective confiscation of private property or constitutes
an arbitrary or unreasonable infringement of property rights is void, because it is repugnant to the constitutional
guaranties of due process and equal protection of the laws.
 The Court in Adiong case held that a restriction that regulates where decals and stickers should be
posted is so broad that it encompasses even the citizens private property. Consequently, it violates Article III,
Section 1 of the Constitution which provides that no person shall be deprived of his property without due process
of law. Property is more than the mere thing which a person owns, it includes the right to acquire, use, and
dispose of it. It is more than the mere thing which a person owns. It is elementary that it includes the right to
acquire, use, and dispose of it.

MARCELO R. SORIANO V. SPOUSES RICARDO and ROSALINA GALIT

G.R. No. 156295. September 23, 2003

FACTS: Respondent Ricardo Galit contracted a loan from petitioner Marcelo Soriano, in the total sum of
P480,000.00, evidenced by four promissory notes in the amount of P120,000.00 each dated August 2, 1996;[3]
August 15, 1996;[4] September 4, 1996[5] and September 14, 1996.[6] This loan was secured by a real estate
mortgage over a parcel of land covered by Original Certificate of Title No. 569.[7] After he failed to pay his
obligation, Soriano filed a complaint for sum of money against him with the Regional Trial Court of Balanga
City, Branch 1, which was docketed as Civil Case No. 6643.[8]

Respondents, the Spouses Ricardo and Rosalina Galit, failed to file their answer. Hence, upon motion of Marcelo
Soriano, the trial court declared the spouses in default and proceeded to receive evidence for petitioner Soriano ex
parte.
The RTC rendered judgment in favor of petitioner Soriano, against the defendant ordering the latter to pay. It
became final and executory. Accordingly, the trial court issued a writ of execution in due course, by virtue of
which, Deputy Sheriff Renato E. Robles levied on the following real properties of the Galit spouses:

1. A parcel of land

2. STORE/HOUSE CONSTRUCTED made of strong materials

3. BODEGA made of strong materials

At the sale of the above-enumerated properties at public auction, petitioner was the highest and only
bidder. Accordingly, Deputy Sheriff Robles issued a Certificate of Sale of Execution of Real Property

Respondents filed a petition for certiorari with the Court of Appeals, assailing the inclusion of the parcel of land
covered among the list of real properties in the writ of possession. Respondents argued that said property was not
among those sold on execution by Deputy Sheriff Renato E. Robles as reflected in the Certificate of Sale on
Execution of Real Property.

Court of Appeals granted the instant petition.

ISSUE: Whether or not the Certificate of Sale on execution of real property is null and void and subsequently the
writ of possession.

RULING: Yes. Petitioner dwells on the general proposition that since the certificate of sale is a public document,
it enjoys the presumption of regularity and all entries therein are presumed to be done in the performance of
regular functions.

There are actually two copies of the Certificate of Sale on Execution of Real Properties issued namely: (a) copy
which is on file with the deputy sheriff; and (b) copy registered with the Registry of Deeds. The object of
scrutiny, however, is not the copy of the Certificate of Sale on Execution of Real Properties issued by the deputy
sheriff but the copy thereof subsequently registered by petitioner with the Registry of Deeds which included an
entry on the dorsal portion of the first page thereof describing a parcel of land not found in the Certificate of Sale
of Real Properties on file with the sheriff.

Thus, it has been held that while a public document like a notarized deed of sale is vested with the presumption of
regularity, this is not a guarantee of the validity of its contents. It must be pointed out in this regard that the
issuance of a Certificate of Sale is an end result of judicial foreclosure where statutory requirements are strictly
adhered to; where even the slightest deviations therefrom will invalidate the proceeding and the sale. Among
these requirements is an explicit enumeration and correct description of what properties are to be sold stated in the
notice.

The argument that the land on which the buildings levied upon in execution is necessarily included is, likewise,
tenuous.

The foregoing provision of the Civil Code enumerates land and buildings separately. This can only mean that a
building is, by itself, considered immovable. Thus, it has been held that

. . . while it is true that a mortgage of land necessarily includes, in the absence of stipulation of the improvements
thereon, buildings, still a building by itself may be mortgaged apart from the land on which it has been
built. Such mortgage would be still a real estate mortgage for the building would still be considered immovable
property even if dealt with separately and apart from the land.

In this case, considering that what was sold by virtue of the writ of execution issued by the trial court was merely
the storehouse and bodega constructed on the parcel of land, which by themselves are real properties of
respondents spouses, the same should be regarded as separate and distinct from the conveyance of the lot on
which they stand.

Sibal v. Valdez [G.R. No. 26278. August 4, 1927.]

Second Division, Johnson (J): 5 concur

Facts: On 11 May 1923, the deputy-sheriff of the Province of Tarlac, by virtue of a writ of execution in civil case
20203 of the CFI Manila (Macondray & Co., Inc. vs. Leon Sibal), levied an attachment on Leon Sibals 8 parcels
of land for the sum of P4,273.93. 2 months later, or on 30 July 1923, Macondray & Co., Inc., bought said parcels
of land, at the auction held by the sheriff of the Province of Tarlac. Within 1 year from the sale of said parcels of
land, or on 24 September 1923, Sibal paid P2,000 to Macondray for the account of the redemption price of said
parcels of land, without specifying which said amount was to be applied. The redemption price of the parcels was
reduced to P2,579.97 including interest.

On 29 April 1924, the deputy sheriff of the Province of Tarlac, by virtue of a writ of execution in civil case 1301
of the Province of Pampanga (Emiliano J. Valdez vs. Leon Sibal 1.), attached the personal property of Sibal
located in Tarlac, among which was included the sugar cane in question in the 7 parcels of land described in the
complaint. He also attached Sibals real property in Tarlac, including rights, interest and participation therein,
which consists of 11 parcels of land and a house and camarin situated in one of said parcels. On 9-10 May 1924,
the deputy sheriff sold at public auction said personal properties to Emiliano J. Valdez, who paid therefor the sum
of P1,550, of which P600 was for the sugar cane. On 25 June 1924, 8 of the 11 parcels, including the camarin and
the house were bought by Valdez at the auction held by the sheriff for the sum of P12,200. The 3 remaining
parcels were released from attachment by virtue of claims presented by Cayugan and Tizon. On the same date,
Macondray sold and conveyed to Valdez for P2,579.97 all of its rights and interest in the 8 parcels of land
acquired by it in connection with civil case 20203 of the CFI Manila.

On 14 December 1924, action was commenced in the CFI of the Province of Tarlac. The plaintiff alleged that the
deputy sheriff of Tarlac Province attached and sold to Valdez the sugar cane planted by the plaintiff and his
tenants on 7 parcels of land, and that within 1 year from the date of the attachment and sale the plaintiff ordered to
redeem said sugar cane and tendered to Valdez the amount sufficient to cover the price paid by the latter, with
taxes and interests, and that Valdez refused to accept the money and return the sugar cane to the plaintiff. After
hearing and on 28 April 1926, the judge (Lukban) rendered judgment in favor of the defendant holding that the
sugar cane in question was personal property and, as such, was not subject to redemption; among others. Hence,
the appeal.

ISSUE: Whether or NOT the sugar cane in question is personal or real property?

HELD: Sugar cane may come under the classification of real property as ungathered products in paragraph 2 of
article 334 of the Civil Code, which enumerates as real property as 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.) Thus, under Spanish authorities, pending fruits and ungathered products may be sold and
transferred as personal property. Also, 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 further, 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.

_______________________________________________________________________

Laurel v. AbrogaS
G.R. No. 155076

DOCTRINE: Telecommunication services and the business of providing said services are not personal properties
and cannot be subject to Article 308 of the Revised Penal Code

Services in business, although properties, are not proper subjects of theft under the Revised Penal Code because
the same cannot be "taken" or "occupied".

FACTS:
PLDT claims that Luis Marcos P. Laurel, board member and corporate secretary of Baynet Co., Ltd., stole and
used the international long distance calls belonging to PLDT by conducting International Simple Resale (ISR) a
method of routing and completing international long distance calls using lines, cables, antennae, and/or air wave
frequency which connect directly to the local or domestic exchange facilities of the country where the call is
destined. PLDT alleged that such business was effectively stolen while using their facilities leading to great
damage and prejudice amounting to P20,370,651.92.

Laurel however alleged that the allegations do not constitue the felony of theft under Article 308 of the RPC or
any special law. He claimed that, telephone calls with the use of PLDT telephone lines, whether domestic or
international, belong to the persons making the call, not to PLDT. He argued that the caller merely uses the
facilities of PLDT, and what the latter owns are the telecommunication infrastructures or facilities through which
the call is made. He also asserted that PLDT is compensated for the callers use of its facilities by way of rental;
for an outgoing overseas call, PLDT charges the caller per minute, based on the duration of the call. Thus, no
personal property was stolen from PLDT.

The prosecution asserted that the use of PLDTs intangible telephone services/facilities allows electronic voice
signals to pass through the same, and ultimately to the called partys number. It averred that such service/facility
is akin to electricity which, although an intangible property, may, nevertheless, be appropriated and be the subject
of theft. The prosecution further alleged that "international business calls and revenues constitute personal
property envisaged in Article 308 of the Revised Penal Code." Moreover, the intangible telephone
services/facilities belong to PLDT and not to the movant and the other accused, because they have no telephone
services and facilities of their own duly authorized by the NTC; thus, the taking by the movant and his co-accused
of PLDT services was with intent to gain and without the latters consent.

RTC held that the Amended Information does not contain material allegations charging petitioner with theft of
personal property since international long distance calls and the business of providing telecommunication or
telephone services are not personal properties under Article 308 of the Revised Penal Code. CA affirmed RTCs
decision.

The Office of the Solicitor General (OSG) agrees with respondent PLDT that international phone calls and the
business or service of providing international phone calls are subsumed in the enumeration and definition of
personal property under the Civil Code hence, may be proper subjects of theft.

ISSUE: W/N telephone calls placed by Bay Super Orient Card holders through the telecommunication services
provided by PLDT are considered as personal property, and thus, proper subjects of theft under Article 308 of the
Revised Penal Code. -- NO
HELD:The court finds that the international telephone calls placed by Bay Super Orient Card holders, the
telecommunication services provided by PLDT and its business of providing said services are not personal
properties under Article 308 of the Revised Penal Code. The rule is that, penal laws are to be construed strictly.
Penal statutes may not be enlarged by implication or intent beyond the fair meaning of the language used; and
may not be held to include offenses other than those which are clearly described.

One is apt to conclude that "personal property" standing alone, covers both tangible and intangible properties and
are subject of theft under the Revised Penal Code. But the words "Personal property" under the Revised Penal
Code must be considered in tandem with the word "take" in the law. The statutory definition of "taking" and
movable property indicates that, clearly, not all personal properties may be the proper subjects of theft. The
general rule is that, only movable properties which have physical or material existence and susceptible of
occupation by another are proper objects of theft.

According to Cuello Callon, in the context of the Penal Code, only those movable properties which can be taken
and carried from the place they are found are proper subjects of theft. Intangible properties such as rights and
ideas are not subject of theft because the same cannot be "taken" from the place it is found and is occupied or
appropriated.

Gas and electrical energy should not be equated with business or services provided by business entrepreneurs to
the public. Business does not have an exact definition. Business is referred as that which occupies the time,
attention and labor of men for the purpose of livelihood or profit. It embraces everything that which a person can
be employed. Business may also mean employment, occupation or profession. Business is also defined as a
commercial activity for gain benefit or advantage. Business, like services in business, although are properties, are
not proper subjects of theft under the Revised Penal Code because the same cannot be "taken" or "occupied."

PLDT does not acquire possession, much less, ownership of the voices of the telephone callers or of the electronic
voice signals or current emanating from said calls. The human voice and the electronic voice signals or current
caused thereby are intangible and not susceptible of possession, occupation or appropriation by PLDT or even the
petitioner, for that matter. PLDT merely transmits the electronic voice signals through its facilities and equipment.
Baynet Card Ltd., through its operator, merely intercepts, reroutes the calls and passes them to its toll center.

The petition is GRANTED. The assailed Orders of the Regional Trial Court and the Decision of the Court of
Appeals are REVERSED and SET ASIDE.
_______________________________________________________________________________

U.S. v. Carlos
21 Phil. 553

DOCTRINE: The true test of what constitutes the proper subject of [theft] is not whether the subject is corporeal
or incorporeal, but whether it is capable of appropriation by another other than the owner.

FACTS: Ignacio Carlos has been a consumer of electricity furnished by MERALCO for a building containing the
residence of the accused and 3 other residences. Representatives of the company believing that more light is
consumed than what is shown in the meter installed an additional meter on the pole outside Carlos house to
compare the actual consumption and found out that a jumper was used to manipulate the readings of the first
meter. Further, a jumper was found in a drawer of a small cabinet in the room of the defendants house where the
meter was installed. In the absence of any explanation for Carlos possession of said device, the presumption
raised was that Carlos was the owner of the device whose only use was to deflect the current from the meter.
Thus, he was charged with the crime of theft amounting to 2,273KW of electric power worth 909.20 pesos.

Carlos claimed that what he did failed to constitute an offense because the crime of theft applies only to tangibles,
chattels and objects that can be taken into possession.

Deliberation quickly followed at the court which subsequently sentenced him to over a year in jail. Carlos
contested saying that electrical energy cant be stolen because of its nature of being incorporeal. He filed an
appeal on such grounds which the CFI affirmed.
ISSUE: Whether or not theft can be committed against an intangible such as electricity. -- YES

HELD: Theft of incorporeal objects is possible. The right of ownership of electrical current was secured by Art
517 and 518 of the Penal Code which applies to gas.

Analogically, electricity can be considered as gas which can be stolen. However, the true test of what constitutes
the proper subject of larceny is not whether the subject is corporeal or incorporeal, but whether it is capable of
appropriation by another other than the owner. It is a valuable article of merchandise, a force of nature brought
under the control of science (under Art. 416 of the New Civil Code).

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.

Carlos secretly and with intent to deprive the company of its rightful property, used jumper cables to appropriate
the same for his own use. Such acts constitute theft.

The judgment being strictly in accordance with the law and the merits of the case, same is hereby affirmed, with
costs against the appellant.

Board of Assessment Appeals v. MERALCO

10 SCRA 68

DOCTRINE: The steel towers or poles of MERALCO are not real properties because 1) they are not adhered to
the soil, 2) they are not attached to an immovable property and can be dismantled without breaking or
deteriorating the material and 3) they are not machineries nor instruments or implements intended for the industry
or works on the land

FACTS: On October 20, 1902, the Philippine Commission enacted Act No. 484 which authorized the Municipal
Board of Manila to grant a franchise to construct, maintain and operate an electric street railway and electric light,
heat and power system in the City of Manila and its suburbs to the person or persons making the most favorable
bid. Charles M. Swift was awarded the said franchise on March 1903, the terms and conditions of which were
embodied in Ordinance No. 44 approved on March 24, 1903. Respondent Manila Electric Co. (Meralco for short),
became the transferee and owner of the franchise.
Meralco's electric power is generated by its hydro-electric plant located at Botocan Falls, Laguna and is
transmitted to the City of Manila by means of electric transmission wires, running from the province of Laguna to
the said City. These electric transmission wires which carry high voltage current, are fastened to insulators
attached on steel towers constructed by respondent at intervals, from its hydro-electric plant in the province of
Laguna to the City of Manila. The respondent Meralco has constructed 40 of these steel towers within Quezon
City, on land belonging to it. A photograph of one of these steel towers is attached to the petition for review,
marked Annex A.Three steel towers were the subject of this dispute. When inspected, the findings disclose that
there was no concrete foundation but there was adobe stone underneath. Further, it could not be ascertained
whether said adobe stone was purposely or not.

From this, the City Assessor of Quezon City declared the steel towers subject to real propert y tax. MERALCO,
however, protested the assessment saying that the steel towers are considered poles and according to their
franchise, it is exempt from taxation.

CTA held that: (1) the steel towers come within the term "poles" which are declared exempt from taxes under part
II paragraph 9 of respondent's franchise; (2) the steel towers are personal properties and are not subject to real
property tax; and (3) the City Treasurer of Quezon City is held responsible for the refund of the amount paid.
These are assigned as errors by the petitioner in the brief.

ISSUE: Whether or not the steel towers or poles of the MERALCO are considered real properties, hence subject
to real property tax?

HELD: The Supreme Court held in the negative. The Court said that the steel towers are personal properties. The
Court based their ruling on the enumeration of immovable properties in Art. 415 of the Civil Code.

The word "pole" means "a long, comparatively slender usually cylindrical piece of wood or timber, as typically
the stem of a small tree stripped of its branches; also by extension, a similar typically cylindrical piece or object of
metal or the like".

First, the steel towers do not come within the objects mentioned in par. 1, because they do not constitute buildings
or constructions adhered to the soil. Moreover, they are not construction analogous to buildings nor adhering to
the soil because as per description, they are removable and merely attached to a square metal frame by means of
bolts, which when unscrewed could easily be dismantled and moved from place to place.

Second, they can not be included under paragraph 3 since they are not attached to an immovable in a fixed
manner; they can be separated without breaking the material or causing deterioration upon the object to which
they are attached. In fact, each of these steel towers or supports consists of steel bars joined together by means of
bolts, which can be disassembled by unscrewing the bolts and reassembled by screwing the same.

Lastly, they do not fall under paragraph 5, as they are not machineries, receptacles, instruments or implements.
SC said that even if they were machineries, receptacles, instruments or implements, they are not intended for
industry or works on the land. MERALCO is not engaged in an industry or works in the land in which the steel
supports or towers are constructed.

_________________________________________________________________________

NAVARRO VS PINEDA

DOCTRINE: Estoppel, in that "the parties have so expressly agreed" in the mortgage to consider the house as
chattel "for its smallness and mixed materials of sawali and wood".

FACTS:
December 14, 1959, Rufino G. Pineda and his mother Juana Gonzales (married to Gregorio Pineda), borrowed
from plaintiff Conrado P. Navarro, the sum of P2,500.00, payable 6 months after said date or on June 14, 1959.
To secure the indebtedness, Rufino executed a document captioned "DEED OF REAL ESTATE and CHATTEL
MORTGAGES", whereby Juana Gonzales, by way of Real Estate Mortgage hypothecated a parcel of land,
belonging to her, registered with the Register of Deeds of Tarlac, under Transfer Certificate of Title No. 25776,
and Rufino G. Pineda, by way of Chattel Mortgage, mortgaged his two-story residential house, having a floor area
of 912 square meters, erected on a lot belonging to Atty. Vicente Castro, located at Bo. San Roque, Tarlac, Tarlac;
and one motor truck, registered in his name, under Motor Vehicle Registration Certificate No. A-171806. Both
mortgages were contained in one instrument, which was registered in both the Office of the Register of Deeds and
the Motor Vehicles Office of Tarlac.

After failing to settle amount due, respondent was then granted an extension on June 30,1960 and consequently
July 30th of the same year for still being unable to comply. Rufino Pineda then issued a document entitled
"Promise," stating that defendant would no longer ask for further extension and there would be no need for any
formal demand, and plaintiff could proceed to take whatever action he might desire to enforce his rights, under the
said mortgage contract.

On August 10, 1960, plaintiff filed a complaint for foreclosure of the mortgage and for damages, which consisted
of liquidated damages in the sum of P500.00 and 12% per annum interest on the principal, effective on the date of
maturity, until fully paid. Defendants admit that the loan is overdue but deny that portion of paragraph 4 of the
First Cause of Action which states that the defendants unreasonably failed and refuse to pay their obligation to the
plaintiff the truth being the defendants are hard up these days and pleaded to the plaintiff to grant them more time
within which to pay their obligation and the plaintiff refused;

WHEREFORE, in view of the foregoing it is most respectfully prayed that this Honorable Court render judgment
granting the defendants until January 31, 1961, within which to pay their obligation to the plaintiff.

November 11, 1960, however, the parties submitted a Stipulation of Facts, wherein the defendants admitted the
indebtedness, the authenticity and due execution of the Real Estate and Chattel Mortgages; that the indebtedness
has been due and unpaid since June 14, 1960; that a liability of 12% per annum as interest was agreed, upon
failure to pay the principal when due and P500.00 as liquidated damages; that the instrument had been registered
in the Registry of Property and Motor Vehicles Office, both of the province of Tarlac.

ISSUE:
W/N the residential house, subject of the mortgage therein, can be considered a Chattel and the propriety of the
attorney's fees.

HELD: THE S.C AFFIRMED THE DECISION APPEALED FROM.

Article 415 of the New Civil Code, in classifying a house as immovable property, makes no distinctions whether
the owner of the land is or is not the owner of the building; the fact that the land belongs to another is immaterial,
it is enough that the house adheres to the land; that in case of immovables by incorporation, such as houses, trees,
plants, etc; the Code does not require that the attachment or incorporation be made by the owner of the land, the
only criterion being the union or incorporation with the soil. 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 (Lopez vs. Orosa,
Leung Yee vs. Strong Machinery Co.).

The cases cited by appellants are not applicable to the present case. The Iya cases refer to a building or a house of
strong materials, permanently adhered to the land, belonging to the owner of the house himself. In the case of
Lopez vs. Orosa, the subject building was a theater, built of materials worth more than P62,000.00 attached
permanently to the soil. In these two cases and in the Leung Yee Case, third persons assailed the validity of the
deed of chattel mortgages; in the present case, it was one of the parties to the contract of mortgages who assailed
its validity.

The trial court did not predicate its decision declaring the deed of chattel mortgage valid solely on the
ground that the house mortgaged was erected on the land which belonged to a third person, but also and
principally on the doctrine of estoppel, in that the parties have so expressly agreed in the mortgage to consider
the house as a chattel for its smallness and mixed materials of sawali and wood. In the present case, Rufino
Pineda grouped the house with the truck which is inherently a movable property. The house which was not even
declared for taxation purposes was small and made of light construction materials: G.I. sheets roofing, sawali and
wooden walls and wooden posts; built on land belonging to another. Clearly, the house in question was treated as
personal or movable property, by the parties to the contract themselves.

Ruby Tsai vs CA, Ever Textile Mills, and Mamerto Villaluz

(G.R. No. 120098; October 2, 2001)

Facts: On November 26, 1975, respondent Ever Textile Mills, Inc. (EVERTEX) obtained a Php 3,000,000.00
loan from PBCom. As security for the loan, EVERTEX executed in favor of PBCom, a deed of Real and Chattel
Mortgage over the lot where its factory stands, and the chattels located therein as enumerated in a schedule
attached to the mortgage contract. Subsequently, a second loan of P3,356,000.00 was granted to EVERTEX. The
loan was secured by a Chattel Mortgage over personal properties enumerated in a list attached thereto. After the
date of the execution of the second mortgage mentioned above, EVERTEX purchased various machines and
equipments.

On November 19, 1982, due to business reverses, EVERTEX filed insolvency proceedings. The CFI issued an
order on November 24, 1982 declaring the corporation insolvent. All its assets were taken into the custody of the
Insolvency Court, including the collateral, real and personal, securing the two mortgages with PBCom.

In the meantime, upon EVERTEX's failure to meet its obligation to PBCom, the latter commenced extrajudicial
foreclosure proceedings against EVERTEX. Public auctions were held where petitioner PBCom emerged as the
highest bidder and a Certificate of Sale was issued in its favor.

Eventually, PBCom consolidated its ownership over the lot and all the properties in it by leasing the entire factory
premises to petitioner Ruby L. Tsai for Php 50,000.00 a month. Eventually, PBCom sold the factory, lock, stock
and barrel to Tsai for Php 9,000,000.00, including the contested machineries.

EVERTEX filed a complaint for annulment of sale, reconveyance, and damages with the Regional Trial Court
against PBCom, alleging inter alia that the extrajudicial foreclosure of subject mortgage was in violation of the
Insolvency Law. EVERTEX claimed that no rights having been transmitted to PBCom over the assets of insolvent
EVERTEX, therefore Tsai acquired no rights over such assets sold to her, and should reconvey the assets. Further,
it EVERTEX averred that PBCom appropriated the contested properties, which were not included in any of the
the Real and Chattel Mortgages.

The RTC found that the lease and sale of said personal properties were irregular and illegal because they were not
duly foreclosed nor sold at the December 15, 1982 auction sale since these were not included in the schedules
attached to the mortgage contracts. The CA affirmed the judgment.

Issue: WON the CA erred in holding that the disputed Machineries are not real properties deemed part of
the mortgage.

Held: NO. Petitioners contend that the nature of the disputed machineries, i.e., that they were heavy, bolted or
cemented on the real property mortgaged by EVERTEX to PBCom, make them ipso facto immovable under
Article 415 (3) and (5) of the New Civil Code. This assertion, however, does not settle the issue. Mere nuts and
bolts do not foreclose the controversy. We have to look at the parties intent. While it is true that the controverted
properties appear to be immobile, a perusal of the contract of Real and Chattel Mortgage executed by the parties
herein gives us a contrary indication. In the case at bar, both the trial and the appellate courts reached the same
finding that the true intention of PBCom and the owner, EVERTEX, is to treat machinery and equipment as
chattels.

Too, assuming arguendo that the properties in question are immovable by nature, nothing detracts the parties from
treating it as chattels to secure an obligation under the principle of estoppel. As far back as Navarro v. Pineda, 9
SCRA 631 (1963), an immovable may be considered a personal property if there is a stipulation as when it is used
as security in the payment of an obligation where a chattel mortgage is executed over it, as in the case at bar.

In the instant case, the parties herein: (1) executed a contract styled as Real Estate Mortgage and Chattel
Mortgage, instead of just Real Estate Mortgage if indeed their intention is to treat all properties included
therein as immovable, and (2) attached to the said contract a separate LIST OF MACHINERIES &
EQUIPMENT. These facts, taken together, evince the conclusion that the parties intention is to treat these units
of machinery as chattels. A fortiori, the contested after-acquired properties, which are of the same description as
the units enumerated under the title LIST OF MACHINERIES & EQUIPMENT, must also be treated as
chattels.

FE FLORO VALINOBvs.ROSARIO D. ADRIANO,

FACTS: Atty. Adriano Adriano (Atty. Adriano), a partner in the Pelaez Adriano and Gregorio Law Office,
married respondent Rosario Adriano (Rosario) on November 15, 1955. The couple had two (2) sons, Florante and
Ruben Adriano; three (3) daughters, Rosario, Victoria and Maria Teresa; and one (1) adopted daughter, Leah
Antonette.

The marriage of Atty. Adriano and Rosario, however, turned sour and they were eventually separated-in-fact.
Years later, Atty. Adriano courted Valino, one of his clients, until they decided to live together as husband and
wife. Despite such arrangement, he continued to provide financial support to Rosario and their children
(respondents).

In 1992, Atty. Adriano died of acute emphysema. At that time, Rosario was in the United States spending
Christmas with her children. As none of the family members was around, Valino took it upon herself to shoulder
the funeral and burial expenses for Atty. Adriano. When Rosario learned about the death of her husband, she
immediately called Valino and requested that she delay the interment for a few days but her request was not
heeded. The remains of Atty. Adriano were then interred at the mausoleum of the family of Valino at the Manila
Memorial Park. Respondents were not able to attend the interment.

Claiming that they were deprived of the chance to view the remains of Atty. Adriano before he was buried and
that his burial at the Manila Memorial Park was contrary to his wishes, respondents commenced suit against
Valino praying that they be indemnified for actual, moral and exemplary damages and attorneys fees and that the
remains of Atty. Adriano be exhumed and transferred to the family plot at the Holy Cross Memorial Cemetery in
Novaliches, Quezon City.

The Regional Trial Court, Branch 77, Quezon City (RTC) which ruled that petitioner Fe Floro Valino (Valino)
was entitled to the remains of the decedent.

On appeal, the CA reversed and set aside the RTC decision and directed Valino to have the remains of Atty.
Adriano exhumed at the expense of respondents. It likewise directed respondents, at their expense, to transfer,
transport and inter the remains of the decedent in the family plot at the Holy Cross Memorial Park in Novaliches,
Quezon City.

In reaching said determination, the CA explained that Rosario, being the legal wife, was entitled to the custody of
the remains of her deceased husband. Citing Article 305 of the New Civil Code in relation to Article 199 of the
Family Code, it was the considered view of the appellate court that the law gave the surviving spouse not only the
duty but also the right to make arrangements for the funeral of her husband. For the CA, Rosario was still entitled
to such right on the ground of her subsisting marriage with Atty. Adriano at the time of the latters death,
notwithstanding their 30-year separation in fact.

ISSUE: who between Rosario and Valino is entitled to the remains of Atty. Adriano?

HELD: Article 305 of the Civil Code, in relation to what is now Article 1996 of the Family Code, specifies the
persons who have the right and duty to make funeral arrangements for the deceased. Thus:

Art. 305. The duty and the right to make arrangements for the funeral of a relative shall be in accordance with the
order established for support, under Article 294. In case of descendants of the same degree, or of brothers and
sisters, the oldest shall be preferred. In case of ascendants, the paternal shall have a better right. [Emphases
supplied]
Art. 199. Whenever two or more persons are obliged to give support, the liability shall devolve upon the
following persons in the order herein provided:

(1) The spouse;

(2) The descendants in the nearest degree;

(3) The ascendants in the nearest degree; and

(4) The brothers and sisters. (294a)

While it is true that our laws do not just brush aside the fact that such relationships are present in our society, and
that they produce a community of properties and interests which is governed by law, authority exists in case law
to the effect that such form of co-ownership requires that the man and woman living together must not in any way
be incapacitated to contract marriage. In any case, herein petitioner has a subsisting marriage with another
woman, a legal impediment which disqualified him from even legally marrying Vitaliana. In Santero vs. CFI of
Cavite, the Court, thru Mr. Justice Paras, interpreting Art. 188 of the Civil Code (Support of Surviving Spouse
and Children During Liquidation of Inventoried Property) stated: "Be it noted, however, that with respect to
'spouse,' the same must be the legitimate 'spouse' (not common-law spouses)."

Atty. Adriano truly wished to be buried in the Valino family plot at the Manila Memorial Park, the result remains
the same. Article 307 of the Civil Code provides:

Art. 307. The funeral shall be in accordance with the expressed wishes of the deceased. In the absence of such
expression, his religious beliefs or affiliation shall determine the funeral rites. In case of doubt, the form of the
funeral shall be decided upon by the person obliged to make arrangements for the same, after consulting the other
members of the family.

From its terms, it is apparent that Article 307 simply seeks to prescribe the "form of the funeral rites" that should
govern in the burial of the deceased. As thoroughly explained earlier, the right and duty to make funeral
arrangements reside in the persons specified in Article 305 in relation to Article 199 of the Family Code. Even if
Article 307 were to be interpreted to include the place of burial among those on which the wishes of the deceased
shall be followed, Dr. Arturo M. Tolentino (Dr. Tolentino), an eminent authority on civil law, commented that it
is generally recognized that any inferences as to the wishes of the deceased should be established by some form of
testamentary disposition.10 As Article 307 itself provides, the wishes of the deceased must be expressly provided.
It cannot be inferred lightly, such as from the circumstance that Atty. Adriano spent his last remaining days with
Valino. It bears stressing once more that other than Valinos claim that Atty. Adriano wished to be buried at the
Valino family plot, no other evidence was presented to corroborate it.

At any rate, it should be remembered that the wishes of the decedent with respect to his funeral are not absolute.
___________________________________________________________________________________________

PEOPLE OF THE PHILIPPINES vs. EDGAR JUMAWAN

G.R. No. 187495 April 21, 2014

TOPIC: Marital rape

FACTS: Accused-appellant and his wife, KKK, were married and have four children.

On February 19, 1999, KKK executed a Complaint-Affidavit, alleging that her husband, the accused-
appellant, raped her at 3 :00 a.m. of December 3, 1998 at their residence in Cagayan de Oro City, and that on
December 12, 1998, the accused-appellant boxed her shoulder for refusing to have sex with him.

As to the charge of rape according to KKK, conjugal intimacy did not really cause marital problems
between her and the accused-appellant. It was, in fact, both frequent and fulfilling. He treated her well and she, of
course, responded with equal degree of enthusiasm. However, in 1997, he started to be brutal in bed. He would
immediately remove her panties and, sans any foreplay, insert her penis in her vagina. His abridged method of
lovemaking was physically painful for her so she would resist his sexual ambush but he would threaten her into
submission.

One night, in the spouses bedroom, KKK changed into a daster and fixed the matrimonial bed but she
did not lie thereon with the accused-appellant and instead, rested separately in a cot near the bed. Her reclusive
behavior prompted him to ask angrily: Why are you lying on the cot?, and to instantaneously order: You
transfer here to our bed.

KKK insisted to stay on the cot and explained that she had headache andabdominal pain due to her
forthcoming menstruation. Her reasons did not appease him and he got angrier. He rose from the bed, lifted the
cot and threw it against the wallcausing KKK to fall on the floor. Terrified, KKK stood up from where she fell,
took her pillow and transferred to the bed.

The accused-appellant then lay beside KKK and not before long, expressed his desire to copulate with
her by tapping his fingers on her lap. She politely declined by warding off his hand and reiterating that she was
not feeling well.

The accused-appellant again asserted his sexual yearning and when KKK tried to resist by holding on to
her panties, he pulled them down so forcefully they tore on the sides. KKK stayed defiant by refusing to bend her
legs.

The accused-appellant then raised KKKs daster,41 stretched her legs apart and rested his own legs on
them. She tried to wrestle him away but he held her hands and succeeded in penetrating her. As he was carrying
out his carnal desires, KKK continued to protest by desperately shouting: Don t do that to me because Im not
feeling well.

Accused raised the defense of denial and alleged that KKK merely fabricated the rape charges as her
revenge because he took over the control and management of their businesses, and to cover up her extra-marital
affairs.

ISSUE: Whether or not there can be a marital rape.

HELD: YES. The Supreme Court held that husbands do not have property rights over their wives bodies.
Sexual intercourse, albeit within the realm of marriage, if notconsensual, is rape.

Violation of equal protection clause

The Court ruled that to treat marital rape cases differently from non-marital rape cases in terms of the
elements that constitute the crime and in the rules for their proof, infringes on the equal protection clause.

The Court found that there is no rational basis for distinguishing between marital rape and non-marital
rape. The various rationales which have been asserted in defense of the exemption are either based
upon archaic notions about the consent and property rights incident to marriage or are simply unable to withstand
even the slightest scrutiny.

The Court declared the marital exemption for rape in the New York statute to be unconstitutional.

Said exemption states that a husband was endowed with absolute immunityfrom prosecution for the
rape of his wife. The privilege was personal and pertained to him alone. He had the marital right to rape his wife
but he will be liable when he aids or abets another person in raping her.

Moreover, Section 1 of RA 8353 penalizes the crime without regard to the rapists legal relationship
with his victim.
Implied consent theory untenable

The Court also ruled against the application of implied consent theory which was raised by the accused.
The accused argued that consent to copulation is presumed between cohabiting husband and wife unless the
contrary is proved.

According to the Court, it is now acknowledged that rape, as a form of sexual violence, exists within
marriage. A man who penetrates her wife without her consent or against her will commits sexual violence upon
her, and the Philippines, as a State Party to the CEDAW and its accompanying Declaration, defines and penalizes
the act as rape under R.A. No. 8353.

INVOLUNTARY INSOLVENCY OF PAUL STROCHECKER, appellee,

vs.
ILDEFONSO RAMIREZ, creditor and appellant.
WILLIAM EDMONDS, assignee.

Lim & Lim for appellant.

Ross & Lawrence and Antonio T. Carrascoso, jr., for the Fidelity & Surety Co.

The question at issue in this appeal is, which of the two mortgages here in question must be given preference? Is it
the one in favor of the Fidelity & Surety Co., or that in favor of Ildefonso Ramirez. The first was declared by the
trial court to be entitled to preference.

In the lower court there were three mortgagees each of whom claimed preference. They were the two above
mentioned and Concepcion Ayala. The latter's claim was rejected by the trial court, and from that ruling she did
not appeal.

There is no question as to the priority in time of the mortgage in favor of the Fidelity & Surety Co. which was
executed on March 10, 1919, and registered in due time in the registry of property, that in favor of the appellant
being dated September 22, 1919, and registered also in the registry.

The appellant claims preference on these grounds: (a) That the first mortgage above-mentioned is not valid
because the property which is the subject-matter thereof is not capable of being mortgaged, and the description of
said property is not sufficient; and (b) that the amount due the appellant is a purchase price, citing article 1922 of
the Civil Code in support thereof, and that his mortgage is but a modification of the security given by the debtor
on February 15, 1919, that is, prior to the mortgage executed in favor of the Fidelity & Surety Co.

As to the first ground, the thing that was mortgaged to this corporation is described in the document as follows:

. . . his half interest in the drug business known as Antigua Botica Ramirez (owned by Srta. Dolores del Rosario
and the mortgagor herein referred to as the partnership), located at Calle Real Nos. 123 and 125, District of
Intramuros, Manila, Philippine Islands.

With regard to the nature of the property thus mortgaged, which is one-half interest in the business above
described, such interest is a personal property capable of appropriation and not included in the enumeration of real
properties in article 335 of the Civil Code, and may be the subject of mortgage. All personal property may be
mortgaged. (Sec. 2, Act No. 1508.)

The description contained in the document is sufficient. The law (sec. 7, Act No. 1508) requires only a description
of the following nature:

The description of the mortgaged property shall be such as to enable the parties to the mortgage, or any other
person, after reasonable inquiry and investigation, to identify the same.
Turning to the second error assigned, numbers 1, 2, and 3 of article 1922 of the Civil Code invoked by the
appellant are not applicable. Neither he, as debtor, nor the debtor himself, is in possession of the property
mortgaged, which is, and since the registration of the mortgage has been, legally in possession of the Fidelity &
Surety Co. (Sec. 4, Act No. 1508; Meyers vs. Thein, 15 Phil., 303.)

In no way can the mortgage executed in favor of the appellant on September 22, 1919, be given effect as of
February 15, 1919, the date of the sale of the drug store in question. On the 15th of February of that year, there
was a stipulation about a persons security, but not a mortgage upon any property, and much less upon the property
in question.

Moreover, the appellant cannot deny the preferential character of the mortgage in favor of the Fidelity & Surety
Co. because in the very document executed in his favor it was stated that his mortgage was a second mortgage,
subordinate to the one made in favor of the Fidelity & Surety Co.

The judgment appealed from is affirmed with costs against the appellant. So ordered

TUFEXIS VS OLAGUERA AND MUNICIPAL COUNCIL OF GUINOBATAN

FACTS: on September 30, 1911, plaintiff acquired at a public sale held in execution of a judgment rendered
against Ricardo Pardo y Pujol, a piece of property situated in the municipality of Guinobatan, consisting of a
frame building of strong materials with a galvanized-iron roof, erected on a parcel of land belonging to that
municipality and intended for a public market; that plaintiff also acquired at the sale all the right, interest, title,
and participation in the said property that appertained or might appertain to Pardo y Pujol; that the said building
was constructed by virtue of a concession granted by the former Spanish government to Ricardo Pardo y Cabaas,
father of the judgment debtor, who, by a public instrument of July 31, 1912, renounced his right to redeem the
said property and conveyed it to plaintiff, together with all his rights therein, the instrument of grant, Exhibit A,
being attached to the complaint as a part thereof; that on January 2, 1912, the said building was totally destroyed
by an accidental fire; that subsequent to the date just mentioned and for several months thereafter the municipal
council of Guinobatan carried on negotiations with plaintiff for the purchase of his rights in the said concession;
that these negotiations could not be brought to a conclusion because the municipal council had acted therein
deceitfully, fraudulently, and in bad faith and for the sole purpose of beguiling, deceiving, and prejudicing
plaintiff in order to prevent him from exercising his right to reconstruct the burned market building and utilize it
in accordance with the terms of the said concession; that the defendant municipal council, without plaintiff's
consent and in connivance with the other defendant, Francisco Olaguera, had authorized the latter unlawfully to
take possession of all the land from March 1, 1912, in violation of plaintiff's rights; that the said Olaguera
occupied the same with booths or stores for the sale of groceries and other merchandise, for billiard tables, and
other analogous uses and derived unlawful gain from the revenues and rents produced by the said buildings; that
plaintiff was entitled to the possession of the said land in accordance with the concession, which was in full force
and effect and belonged to plaintiff; that plaintiff proposed to construct another public market building on the
same land, but that the defendants had prevented him from using the land and reconstructing thereon the said
public market building, and refused to recognize plaintiff's right and to vacate the land that had been occupied by
the burned edifice.

Counsel for plaintiff, in his written petition of May 13, 1913, prayed the Court of First Instance of Albay to
declare that his client was entitled to the possession and use of the land referred to in the complaint in conformity
with the terms of the Government concession (Exhibit A), of which he claimed to be the sole and lawful owner;
that the defendants be ordered to remove from the said land.

After the complaint had been answered by counsel for the defendant Francisco Olaguera, who prayed that his
client be absolved therefrom, with the costs against the plaintiff, the provincial fiscal, in the name and
representation of the municipality of Guinobatan, demurred on the ground that plaintiff lacked the personality to
institute the action and further alleged that the complaint did not set forth sufficient facts to constitute a cause of
action.
The court, overruling the motion made by the defendant Olaguera, dismissed the complaint filed by the plaintiff,
Vergo D. Tufexis, against the municipal council of Guinobatan on the ground that plaintiff had not amended his
complaint.

The provincial fiscal alleged as a ground for the demurrer that in no part of the instrument of concession did it
appear that the privilege granted to Ricardo Pardo y Cabaas had likewise been granted to his successors or
assignees, and that therefore such rights and actions as might have appertained to the assignee, Pardo y Cabaas,
could not be conveyed to nor could they be acquired by any other person.

ISSUE: whether a building of strong materials, erected by the said debtor's father, Ricardo Pardo y Cabaas, on
land belonging to the municipality of Guinobatan and intended for a public market, by virtue of a concession
granted on August 4, 1884, under the conditions therein imposed upon the grantee, could be attached and sold for
the payment of a certain debt owed by Ricardo Pardo y Pujol to a third person who had obtained a final judgment.

HELD: The land on which the building was erected and which is referred to in the foregoing articles, contained in
the franchise granted by the Government of the former sovereignty, belongs to the municipality of Guinobatan.
Although the building was constructed at the expense and with the money of the grantee, Ricardo Pardo y
Cabaas, it is, nevertheless, the property of the state or of the said municipality, and was temporarily transferred
to the grantee, Pardo y Cabaas, in order that he might enjoy the usufruct of its floor space for forty years, but on
the termination of this period the said right of usufruct was to cease and the building was to belong finally and
absolutely to the state or the municipality in representation thereof.

For these reasons, then, there is no question that the building and the land on which it was erected, since they did
not belong to the grantee, Pardo y Cabaas, nor do they belong to his son and heir, Ricardo Pardo y Pujol, could
not be attached or sold for the payment of a debt contracted by the latter.

This decision is based on the provisions of the aforecited law and the premise that the usufruct of the floor space
of the public market of Guinobatan, granted to Ricardo Pardo y Pujol's father was not subject to attachment on
account of its being of a public character, but still the latter's creditor could have applied for a writ of execution
and laid an attachment on the proceeds obtained from the operation of the market, which proceeds or income
could have been collected by a receiver and intervenor.

This, however, was not done, but on the creditor's petition the public market building, which was not his debtor's
property, together with all the right, interest, title and participation which the latter had or might have had therein,
was attached and sold; and as plaintiff was unable to acquire any right or title in such property illegally sold and
illegally acquired by him at public auction or in the usufruct of the floor space of the building, it is unquestionable
that he lacks the personality to claim possession of the land that belongs to the municipality or the enjoyment and
exercise of the right conferred by the aforesaid administrative concession, which was and is inalienable on
account of its being a personal right. For the same reason, plaintiff has no right to reconstruct the burned building
on the land where it formerly stood.

The only right to which the creditor was entitled was to petition for the attachment of the income and proceeds
obtained from the use of the floor space of the market; but he did not avail himself of this right, nor were the
receipts therefrom attached, nor were they adjudicated either to the creditor or to the plaintiff Tufexis. Therefore,
the order of dismissal appealed is in accordance with law and the merits of the case, and likewise the errors
assigned thereto have been duly refuted by the reasons set forth herein.

For the foregoing considerations, we hereby affirm the said order of dismissal, with the costs against the
appellant. So ordered.

ZENAIDA RAMOS-BALALIO VS. ROLANDO RAMOS, EUSEBIO I. RAMOS

FACTS: As culled from the records, petitioner Zenaida and her brother Alexander (now deceased) are the
children of spouses Susana Bueno and Abundio Ramos. The spouses started occupying Lot No. 204 in 1938.
Abundio died in 1944. Susana met her second husband, respondent Eusebio Ramos in 1946, with whom she had
five children, one of whom is respondent Rolando.
In the interim, prior to 1958, Susana discovered that Felimon Domingo applied for a sales patent over the subject
parcel of land which she opposed. The Bureau of Lands resolved the dispute, thus:

In the light of the foregoing facts, it is clear that Felimon B. Domingo has not entered, possessed or cultivated the
land in question and therefore he has not acquired any preference right thereto. Upon the other hand contestant
Susana Bueno Vda. de Ramos and her children have sufficiently established their right of preference over the land
except the one hectare Cemetery site, on the basis of their continuous occupation and cultivation and their
valuable improvements introduced thereon.

It was alleged that as Susana accompanied her husband Eusebio, a soldier, wherever he was assigned, Susanas
father, George Bueno, and daughter, petitioner Zenaida continued the cultivation and possession of the subject
land. Sometime later, Susana sold the land to petitioner who, in turn, partitioned it among herself, her brother,
Alexander, and respondent Rolando and his siblings. The partition was not registered but Deeds of Sale were
executed in favor of Rolando and Alexander.

Petitioner thereafter mortgaged her share; however, it came to her knowledge that respondents Rolando and
Eusebio had usurped her share and deprived the mortgagees of possession over the land.

The trial court rendered its decision holding that petitioner was deprived of her right to cultivation and possession
of her share of Lot

On appeal, the Court of Appeals found that neither Zenaida nor Alexander complied with the homestead
application requirements in order to acquire superior vested right. As a consequence, it reversed the decision of
the trial court.

ISSUE: whether Zenaida, as an applicant for public land, may be considered as having any right to the land
occupied, which may entitle her to sue in courts for the return of the possession thereof.

HELD: We find that Zenaida has proven prior possession of the portion of land she claims as her share, which
possession antedates the filing of the homestead application. She produced evidence showing that she has filed a
verified application for the registration of the land with the Bureau of Lands on August 10, 1971,[17] which is
still pending. The documents remain uncontested and the application has not been assailed by any of the parties to
the case. She alleged that during the lifetime of her mother, she and her maternal grandfather cultivated and
occupied the land.
Moreover, Zenaida presented tax declarations both in her name and that of her predecessor-in-interest (mother
Susana Bueno) covering the property. Time and again, we have held that although tax declarations or realty tax
payments 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.[18] 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.[19]
______________________________________________________________________

TEOFILO C. VILLARICO, petitioner, vs. VIVENCIO SARMIENTO

FACTS: Teofilo C. Villarico, petitioner, is the owner of a lot in La Huerta, Paraaque City, Metro Manila with an
area of sixty-six (66) square meters and covered by Transfer Certificate of Title (T.C.T.) No. 95453 issued by the
Registry of Deeds, same city.

Petitioners lot is separated from the Ninoy Aquino Avenue (highway) by a strip of land belonging to the
government. the Department of Public Works and Highways (DPWH) constructed stairways at several portions of
this strip of public land to enable the people to have access to the highway.

Sometime in 1991, Vivencio Sarmiento, his daughter Bessie Sarmiento and her husband Beth Del Mundo,
respondents herein, had a building constructed on a portion of said government land. In November that same year,
a part thereof was occupied by Andoks Litson Corporation and Marites Carinderia, also impleaded as
respondents.

In 1993, by means of a Deed of Exchange of Real Property, petitioner acquired a 74.30 square meter portion of
the same area owned by the government. The property was registered in his name as T.C.T. No. 74430 in the
Registry of Deeds of Paraaque City.

In 1995, petitioner filed with the RTC, Branch 259, Paraaque City, a complaint for accion publiciana against
respondents, docketed as Civil Case No. 95-044. He alleged inter alia that respondents structures on the
government land closed his right of way to the Ninoy Aquino Avenue; and encroached on a portion of his lot
covered by T.C.T. No. 74430.

Respondents, in their answer, specifically denied petitioners allegations, claiming that they have been issued
licenses and permits by Paraaque City to construct their buildings on the area; and that petitioner has no right over
the subject property as it belongs to the government.

The trial court found that petitioner has never been in possession of any portion of the public land in question. On
the contrary, the defendants are the ones who have been in actual possession of the area. According to the trial
court, petitioner was not deprived of his right of way as he could use the Kapitan Tinoy Street as passageway to
the highway.

On appeal by petitioner, the Court of Appeals issued its Decision affirming the trial courts Decision.

ISSUE: Whether or not VIllarico has a right of way to the NAA.

RULING: No. It is not disputed in this case that the alleged right of way to the lot belongs to the state or property
of public dominion.

It is intended for public use meaning that it is not confined to privileged individuals but is open to the
indefinite public. Records show that the lot on which the stairways were built is for the use of the people as
passageway hence, it is a property for public dominion.

Public dominion property is outside the commerce of man and hence, it cannot be:

Alienated or leased or otherwise be the subject matter of contracts

Acquired by prescription against the state

Cannot be the subject of attachment and execution

Be burdened by any voluntary easement

Public use is use that is not confined to privileged individuals, but is open to the indefinite public.[6] Records
show that the lot on which the stairways were built is for the use of the people as passageway to the highway.
Consequently, it is a property of public dominion.

Property of public dominion is outside the commerce of man and hence it: (1) cannot be alienated or leased or
otherwise be the subject matter of contracts; (2) cannot be acquired by prescription against the State; (3) is not
subject to attachment and execution; and (4) cannot be burdened by any voluntary easement.[7]

Considering that the lot on which the stairways were constructed is a property of public dominion, it can not be
burdened by a voluntary easement of right of way in favor of herein petitioner. In fact, its use by the public is by
mere tolerance of the government through the DPWH. Petitioner cannot appropriate it for himself. Verily, he can
not claim any right of possession over it. This is clear from Article 530 of the Civil Code.

S.C affirmed the decision of CA

____________________________________________________________________________

G.R. No. 158687

Petitioner: FRISCO F. DOMALSIN

Respondent: SPOUSES JUANITO VALENCIANO and AMALIA VALENCIANO

Facts: Petitioner Frisco F. Domalsin is a lawyer-businessman formerly engaged in trucking business, hauling
sand and gravel, and operated under the name Salamander Enterprises. While he was passing Kennon Road, he
discovered that a portion of the Bued River, Camp 3, Tuba Benguet, can be a potential source of supplies for his
business. Though the area was steep and deep, he scouted a place where he can construct a road from Kennon
Road to the Bued River. In the course of cleaning the area, his workers noticed that the place had been tilled. A
certain Castillo Binay-an appeared informing him that he was the occupant of the site of the proposed private
road. After agreeing on the consideration, the former executed a Deed of Waiver and Quitclaim over the land in
his favor.

Thereafter, the Office of the Highway District Engineer of Baguio, Ministry of Public Highways (now
Department of Public Works and Highways [DPWH]) issued a permit in favor of petitioner to extract construction
materials at Camp 3, Tuba, Benguet. Frisco Domalsin also constructed two houses, the first house was located
along the road right- of- way of Kennon Road and the second house was located below the 40- 60 meters below
the Kenon Road. The first house was used for sleeping quarters and resting center for labores while Dolmasin
used the second house as his quarter.

Sometime in 1983, a man named William Banuca applied for, and was accepted, as foreman. Due to the
nature of his job, Banuca was permitted to stay in the second house beside the private road. Banuca now lives
permanently in said house after Dolmasin gave it to him. Dolmasin revealed that the houses of his former laborers
constructed were awarded to them as a kind gesture.

In 1990, an earthquake occurred which destroyed the first house and the private road constructed by
Domalsin became impassable. However, Dolmasin still continue in paying taxes despite what happened to his
property as shown in his Tax Declaration.

Gloria Banuca a wife of Willaim Banuca noticed and that Domalsin stopped in operating his sand and
gravel business and she never saw Dolmasin introduced any improvements to the said land after earthquake. By
doing so, she hired equipment used to clear the road. She even leveled the area and make improvements on it.
Thereafter, she invited Spouses Valenciano to build their home thereat.

Dolmasin, knowing that there is an going construction thereat filed before the MCTC a complaint for
Forcible Entry with the Prayer for Preliminary Mandadoty Injuction with Application for Issuance of Temporary
Restraining Order plus damages.

MCTC came out with its decision which favored Dolmasin and ordered spouses Valenciano to vacate the
land and removed the structure based on material prior possession of the land and that destruction of the house by
earthquake and leaving the private road impassable is not tantamount to abandonment.

Respondents appealed the decision to the RTC. RTC came out with its decision affirming the decision of
MCTC saying that Dolmasins act of paying the taxes was a clear manifestation of his intention not to abandon
the property and since Gloria Banuca acted in bad faith in inviting spouses Valenciano to built their home thereat
they shall lose what was built.

Respondents appealed to the Court of Appeals. CA reversed and set aside RTCs decision saying that the
property is a portion of the road- right- of- way of Kennon road which forms part of the public dominion not
susceptible to private acquisition of either party regardless of the prolonged occupation, tax payments and
improvements introduced thereon.

Issue:Who is entitled to the physical or material possession of the land?

Ruling: SC finds that the MCTC and the RTC, as well as the Court of Appeals, to be in error when they
respectively declared that petitioner and respondents to be entitled to the possession of the land in dispute. The
parties should not be permitted to take possession of the land, much more, claim ownership thereof as said lot is
part of the public dominion.
WHEREFORE, the foregoing considered, the instant petition is hereby PARTIALLY GRANTED.
Nonetheless, there being a finding that the subject property is a part of the public dominion, of which neither party
is entitled to own nor possess, the decisions of the Court of Appeals, the Regional Trial Court and the Municipal
Circuit Trial Court are SET ASIDE. Respondents Juanito and Amalia Valenciano are ordered to remove their
structure on the subject land within sixty (60) days from receipt of this decision, and to vacate and deliver the
physical possession thereof to the Office of the District Engineer, Benguet Engineering District, Department of
Public Works and Highways.
_____________________________________________________________________________

[G.R. No. 123586. August 12, 2004]

SPOUSES BEDER MORANDARTE and MARINA FEBRERA, petitioners,vs. COURT OF APPEALS,

REPUBLIC OF THE PHILIPPINES, and SPOUSES VIRGINIO B. LACAYA and NENITA
LACAYA, respondents

FACTS:Morandarte filed an application for free patent, dated December 5, 1972, before the Bureau of Lands,
Dipolog City District Land Office, covering a parcel of land located at Sta. Filomena, Dipolog City with an area
of 4.5499 hectares and described as a portion of Lot 1038.

On July 27, 1976, the District Land Officer of the BOL approved the free patent application of Morandarte and
directed the issuance of a free patent in his favor. On September 20, 1976, the Register of Deeds of Zamboanga
del Norte issued the corresponding Original Certificate of Title.

Subsequently, Morandarte caused a subdivision survey of the lot, dividing the same into Lot No. 6781-A, with an
area of 13,939 square meters, and Lot No. 6781-B, with an area of 32,819 square meters. As a result of the
subdivision survey, TCT Nos. T-1835 and T-1836 covering Lots 6781-A and 6781-B, respectively, were issued in
favor of Morandarte on May 12, 1980 by the Registry of Deeds of Dipolog City.

More than ten years after the issuance of the OCT in Morandartes name, or on March 19, 1987, respondent
Republic of the Philippines, represented by the Director of Lands, filed before the RTC a Complaint for
Annulment of Title and Reversion against the Morandarte spouses, the Register of Deeds of Zamboanga del
Norte, the Register of Deeds of Dipolog City, and DBP.

The Republic alleged that the BOL found that the subject land includes a portion of the Miputak River which
cannot be validly awarded as it is outside the commerce of man and beyond the authority of the BOL to dispose
of. It claimed that the Morandarte spouses deliberately and intentionally concealed such fact in the application to
ensure approval thereof. Considering that the Morandarte spouses are guilty of fraud and misrepresentation in the
procurement of their title, the Republic stressed that their title is void.

The Morandarte spouses denied the allegations of the complaint and claimed that they were able to secure the title
in accordance and in compliance with the requirements of the law. They alleged that the land is a portion of
inherited property from Antonio L. Morandarte whose ownership thereof is covered by Tax Declaration No. 2296.

As regards the Miputak River, they argued that the river changed its course brought about by the fact that a
portion of the Miputak River was leased by the Bureau of Fisheries to a certain Aguido Realiza whose rights were
subsequently transferred to Virginio Lacaya. They alleged that they indicated in their survey plan the actual
location of the Miputak River in relation to the property but the BOL returned the survey with the directive that
the existence of the river should not be indicated as the original survey did not show its existence, to which they
complied with by submitting a new survey plan which did not indicate the existence of the river. And that
inclusion of the Miputak River should not render the title void; only the portion of the property covered by the
Miputak River should be nullified, but their title to the remaining portion should be maintained.

RTC:Following trial on the merits, on November 5, 1992, the RTC rendered a Decision in favor of the Republic
and the Lacaya spouses. The RTC declared that while fraud in the procurement of the title was not established by
the State, Morandartes title is, nonetheless, void because it includes a portion of the Miputak River which is
outside the commerce of man and beyond the authority of the BOL to dispose of. In addition, the RTC sustained
the fishpond rights of the Lacaya spouses over a portion included in Morandartes title based on a Deed of Transfer
of Fishpond Rights from Felipe B. Lacaya and a Fishpond Lease Agreement with the BOF.

Court of Appeals: In a Decision dated August 23, 1995, the CA affirmed the decision of the RTC, ratiocinating, as
follows:

The present controversial Miputak River used to occupy the area adjacent to the northern and western boundaries
of Lot No. 6781 Cad-85. As time passed, it changed its course. The original technical description did not show the
Miputak River. But it is inescapable though, that while originally, Lot 6781 is not occupied by the river, at the
time that the Sales Application was filed by Beder Morandarte, the Miputak River was actually occupying said
Lot 6781 or Lot 7 covered by his Sales Application and the titles sought to be annulled in this case.

Rivers and their natural beds are undoubtedly properties of public dominion. Whether navigable or not, rivers
belong to the public and cannot be acquired by prescription. Correspondingly, Art. 462 of the same Civil Code
provides:

Art. 462. Whenever a river, changing its course by natural causes, opens a new bed through a private estate, this
bed shall become of public dominion.

The rule is the same that even if the new bed is on private property. The bed becomes property of public
dominion. Just as the old bed had been of public dominion before the abandonment, the new riverbed shall
likewise be of public dominion.

ISSUE: Whether or Not Free Patent No. (IX-8) 785 and Original Certificate of Title No. P-21972, in the name of
petitioner Beder Morandarte and all its derivative titles, are null and void ab initio.

RULING/HELD:Supreme Court:The present controversy involves a portion of the public domain that was merely
erroneously included in the free patent. A different rule would apply where fraud is convincingly shown. The
absence of clear evidence of fraud will not invalidate the entire title of the Morandarte spouses.

Accordingly, the 12,162-square meter portion traversed by the Miputak River and the 13,339-square meter
portion covered by the fishpond lease agreement of the Lacaya spouses which were erroneously included in Free
Patent No. (IX-8) 785 and Original Certificate of Title No. P-21972 should be reconveyed back to the State.

The Morandarte spouses cannot seek refuge in their claim that Antonio A. Morandarte, their predecessor-in-
interest, was already the owner of that portion of Lot 1038 when the fishpond application of Aguido S. Realiza
was approved in 1948 because Lot 1038 was still part of the public domain then. It was only in 1972, through
Forestry Administrative Order No. 4-1257, which was approved August 14, 1972, when Lot 1038 was declared
alienable or disposable property of the State.

It is a settled rule that unless a public land is shown to have been reclassified as alienable or actually alienated by
the State to a private person, that piece of land remains part of the public domain. Hence, Antonio A. Morandartes
occupation thereof, however long, cannot ripen into private ownership.

The Morandarte spouses also unsuccessfully harp on the inapplicability of Article 462 of the Civil Code by
claiming that the change of course of the Miputak River was due to a man-made cause and not by natural means.
They offered no iota of evidence to substantiate this claim, other than the bare testimony of Beder Morandarte.
Neither is there proof that the movement of the river was caused by accident or calamity, such as a typhoon, and
not by the natural movements thereof. General statements, which are mere conclusions of law and not proofs, are
unavailing and cannot suffice.

Besides, at the time of the filing of the application for free patent in 1972, a portion of the Miputak River was
already in its present course, traversing Lot 1038, particularly Lot 7 of the amended plan submitted by
Morandarte.

In this case, the State failed to prove that fraud and misrepresentation attended the application for free patent. The
RTC, in fact, recognized that no fraud attended the application for free patent declared reversion based on the
judicial admission of the Morandarte spouses that reversion is warranted due to the inalienability of the Miputak
River.
The petition is partly GRANTED. The assailed Decision of the Court of Appeals is REVERSED insofar only as it
affirmed the nullity of Free Patent No. (IX-8) 785 and Original Certificate of Title No. P-21972, in the name of
petitioner Beder Morandarte. In its stead, petitioners Spouses Beder Morandarte and Marina Febrera are directed
to reconvey to the respondent Republic of the Philippines within thirty (30) days from the finality of this Decision
the 12,162-square meter portion traversed by the Miputak River and the 13,339-square meter portion covered by
the fishpond lease agreement of the Lacaya spouses. No pronouncement as to costs.

________________________________________________________________________

EN BANC

MANILA INTERNATIONAL G.R. No. 155650

AIRPORT AUTHORITY,
Petitioner, Present:

PANGANIBAN, C.J.,
PUNO,
QUISUMBING,
YNARES-SANTIAGO,
SANDOVAL-GUTIERREZ,
- versus - CA
Respondents. July 20, 2006

The Antecedents

Petitioner Manila International Airport Authority (MIAA) operates the Ninoy Aquino International Airport
(NAIA) Complex in Paraaque City under Executive Order No. 903, otherwise known as the Revised Charter of
the Manila International Airport Authority (MIAA Charter). Executive Order No. 903 was issued on 21 July 1983
by then President Ferdinand E. Marcos. Subsequently, Executive Order Nos. 909[1] and 298[2] amended the
MIAA Charter.

As operator of the international airport, MIAA administers the land, improvements and equipment within the
NAIA Complex. The MIAA Charter transferred to MIAA approximately 600 hectares of land,[3] including the
runways and buildings (Airport Lands and Buildings) then under the Bureau of Air Transportation.[4] The MIAA
Charter further provides that no portion of the land transferred to MIAA shall be disposed of through sale or any
other mode unless specifically approved by the President of the Philippines.[5]

On 21 March 1997, the Office of the Government Corporate Counsel (OGCC) issued Opinion No. 061. The
OGCC opined that the Local Government Code of 1991 withdrew the exemption from real estate tax granted to
MIAA under Section 21 of the MIAA Charter. Thus, MIAA negotiated with respondent City of Paraaque to pay
the real estate tax imposed by the City. MIAA then paid some of the real estate tax already due.
On 17 July 2001, the City of Paraaque, through its City Treasurer, issued notices of levy and warrants of levy on
the Airport Lands and Buildings. The Mayor of the City of Paraaque threatened to sell at public auction the
Airport Lands and Buildings should MIAA fail to pay the real estate tax delinquency. MIAA thus sought a
clarification of OGCC Opinion No. 061.
On 9 August 2001, the OGCC issued Opinion No. 147 clarifying OGCC Opinion No. 061. The OGCC pointed
out that Section 206 of the Local Government Code requires persons exempt from real estate tax to show proof of
exemption. The OGCC opined that Section 21 of the MIAA Charter is the proof that MIAA is exempt from real
estate tax.

On 1 October 2001, MIAA filed with the Court of Appeals an original petition for prohibition and injunction,
with prayer for preliminary injunction or temporary restraining order. The petition sought to restrain the City of
Paraaque from imposing real estate tax on, levying against, and auctioning for public sale the Airport Lands and
Buildings. The petition was docketed as CA-G.R. SP No. 66878.
On 5 October 2001, the Court of Appeals dismissed the petition because MIAA filed it beyond the 60-day
reglementary period. The Court of Appeals also denied on 27 September 2002 MIAAs motion for reconsideration
and supplemental motion for reconsideration. Hence, MIAA filed on 5 December 2002 the present petition for
review.[7]

Meanwhile, in January 2003, the City of Paraaque posted notices of auction sale at the Barangay Halls of
Barangays Vitalez, Sto. Nio, and Tambo, Paraaque City; in the public market of Barangay La Huerta; and in the
main lobby of the Paraaque City Hall. The City of Paraaque published the notices in the 3 and 10 January 2003
issues of the Philippine Daily Inquirer, a newspaper of general circulation in the Philippines. The notices
announced the public auction sale of the Airport Lands and Buildings to the highest bidder on 7 February 2003,
10:00 a.m., at the Legislative Session Hall Building of Paraaque City.

A day before the public auction, or on 6 February 2003, at 5:10 p.m., MIAA filed before this Court an Urgent Ex-
Parte and Reiteratory Motion for the Issuance of a Temporary Restraining Order. The motion sought to restrain
respondents the City of Paraaque, City Mayor of Paraaque, Sangguniang Panglungsod ng Paraaque, City
Treasurer of Paraaque, and the City Assessor of Paraaque (respondents) from auctioning the Airport Lands and
Buildings.

On 7 February 2003, this Court issued a temporary restraining order (TRO) effective immediately. The Court
ordered respondents to cease and desist from selling at public auction the Airport Lands and Buildings.
Respondents received the TRO on the same day that the Court issued it. However, respondents received the TRO
only at 1:25 p.m. or three hours after the conclusion of the public auction.
On 10 February 2003, this Court issued a Resolution confirming nunc pro tunc the TRO.

Issue: Whether or not the Airport Lands and Buildings are of Public Dominion.

Ruling:
Yes, The Airport Lands and Buildings of MIAA are property of public dominion and therefore owned
by the State or the Republic of the Philippines. The Civil Code provides:
ARTICLE 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;

(2) Those which belong to the State, without being for public use, and are intended for some
public service or for the development of the national wealth.
No one can dispute that properties of public dominion mentioned in Article 420 of the Civil Code, like roads,
canals, rivers, torrents, ports and bridges constructed by the State, are owned by the State. The term ports includes
seaports and airports. The MIAA Airport Lands and Buildings constitute a port constructed by the State. Under
Article 420 of the Civil Code, the MIAA Airport Lands and Buildings are properties of public dominion and thus
owned by the State or the Republic of the Philippines.

The Airport Lands and Buildings are devoted to public use because they are used by the public for international
and domestic travel and transportation. The fact that the MIAA collects terminal fees and other charges from the
public does not remove the character of the Airport Lands and Buildings as properties for public use. The
operation by the government of a tollway does not change the character of the road as one for public use.
Someone must pay for the maintenance of the road, either the public indirectly through the taxes they pay the
government, or only those among the public who actually use the road through the toll fees they pay upon using
the road. The tollway system is even a more efficient and equitable manner of taxing the public for the
maintenance of public roads.

The charging of fees to the public does not determine the character of the property whether it is of public
dominion or not. Article 420 of the Civil Code defines property of public dominion as one intended for public use.
Even if the government collects toll fees, the road is still intended for public use if anyone can use the road under
the same terms and conditions as the rest of the public. The charging of fees, the limitation on the kind of vehicles
that can use the road, the speed restrictions and other conditions for the use of the road do not affect the public
character of the road.

The terminal fees MIAA charges to passengers, as well as the landing fees MIAA charges to airlines, constitute
the bulk of the income that maintains the operations of MIAA.The collection of such fees does not change the
character of MIAA as an airport for public use. Such fees are often termed users tax. This means taxing those
among the public who actually use a public facility instead of taxing all the public including those who never use
the particular public facility. A users tax is more equitable a principle of taxation mandated in the 1987
Constitution.[21]
The Airport Lands and Buildings of MIAA, which its Charter calls the principal airport of the Philippines for both
international and domestic air traffic,[22] are properties of public dominion because they are intended for public
use. As properties of public dominion, they indisputably belong to the State or the Republic of the Philippines.
Thus, unless the President issues a proclamation withdrawing the Airport Lands and Buildings from public use,
these properties remain properties of public dominion and are inalienable. Since the Airport Lands and Buildings
are inalienable in their present status as properties of public dominion, they are not subject to levy on execution or
foreclosure sale. As long as the Airport Lands and Buildings are reserved for public use, their ownership remains
with the State or the Republic of the Philippines.

b. Airport Lands and Buildings are Outside the Commerce of Man

The Airport Lands and Buildings of MIAA are devoted to public use and thus are properties of public dominion.
As properties of public dominion, the Airport Landsand Buildings are outside the commerce of man. The Court
has ruled repeatedly that properties of public dominion are outside the commerce of man. As early as 1915, this
Court already ruled in Municipality of Cavite v. Rojas that properties devoted to public use are outside the
commerce of man, thus:

According to article 344 of the Civil Code: Property for public use in provinces and in towns comprises the
provincial and town roads, the squares, streets, fountains, and public waters, the promenades, and public works of
general service supported by said towns or provinces.

The said Plaza Soledad being a promenade for public use, the municipal council of Cavite could not in 1907
withdraw or exclude from public use a portion thereof in order to lease it for the sole benefit of the defendant
Hilaria Rojas. In leasing a portion of said plaza or public place to the defendant for private use the plaintiff
municipality exceeded its authority in the exercise of its powers by executing a contract over a thing of which it
could not dispose, nor is it empowered so to do.

The Civil Code, article 1271, prescribes that everything which is not outside the commerce of man may be the
object of a contract, and plazas and streets are outside of this commerce, as was decided by the supreme court of
Spain in its decision of February 12, 1895, which says: Communal things that cannot be sold because they are by
their very nature outside of commerce are those for public use, such as the plazas, streets, common lands, rivers,
fountains, etc. (Emphasis supplied) [23]

Again in Espiritu v. Municipal Council, the Court declared that properties of public dominion are outside the
commerce of man:

xxx Town plazas are properties of public dominion, to be devoted to public use and to be made available to the
public in general. They are outside the commerce of man and cannot be disposed of or even leased by the
municipality to private parties. While in case of war or during an emergency, town plazas may be occupied
temporarily by private individuals, as was done and as was tolerated by the Municipality of Pozorrubio, when the
emergency has ceased, said temporary occupation or use must also cease, and the town officials should see to it
that the town plazas should ever be kept open to the public and free from encumbrances or illegal private
constructions.[24] (Emphasis supplied)
The Court has also ruled that property of public dominion, being outside the commerce of man, cannot be the
subject of an auction sale.[25]

Properties of public dominion, being for public use, are not subject to levy, encumbrance or disposition through
public or private sale. Any encumbrance, levy on execution or auction sale of any property of public dominion is
void for being contrary to public policy. Essential public services will stop if properties of public dominion are
subject to encumbrances, foreclosures and auction sale. This will happen if the City of Paraaque can foreclose and
compel the auction sale of the 600-hectare runway of the MIAA for non-payment of real estate tax.
____________________________________________________________________________

Mactan Intl Airport vs. Lapu-lapu City, G.R. No. 181756, Case Digest
Petitioner, Mactan-Cebu International Airport Authority (MCIAA) was created by Congress under Republic Act
No. 6958. Upon its creation, petitioner enjoyed exemption from realty taxes imposed by the National
Government or any of its political subdivision. However, upon the effectivity of the LGC the Supreme Court
rendered a decision that the petitioner is no longer exempt from realty estate taxes.

Respondent City issued to petitioner a Statement of Real Estate Tax assessing the lots comprising
the Mactan International Airport which included the airfield, runway, taxi way and the lots on which these are
built. Petitioner contends that these lots, and the lots to which they are built, are utilized solely and exclusively
for public purposes and are exempt from real property tax. Petitioner based its claim for exemption on DOJ
Opinion No. 50.

Respondent issued notices of levy on 18 sets of real properties of petitioners. Petitioner filed a petition for
Prohibition, TRO, and a writ of preliminary injunction with RTC Lapulapu which sought to enjoin respondent
City from issuing the warrant of levy against petitioners properties from selling them at public auction for
delinquency in realty tax obligations.

Petitioner claimed before the RTC that it had discovered that respondent City did not pass any ordinance
authorizing the collection of real property tax, a tax for the special education fund (SEF), and a penalty interest for
its nonpayment. Petitioner argued that without the corresponding tax ordinances, respondent City could not
impose and collect real property tax, an additional tax for the SEF, and penalty interest from petitioner.

RTC granted the writ of preliminary which was later on lifted upon motion by the respondents.
(fait accompli)

RULING OF THE CA: Court of Appeals held that petitioners airport terminal building, airfield, runway,
taxiway, and the lots on which they are situated are not exempt from real estate tax reasoning as follows: Under
the Local Government Code (LGC for brevity), enacted pursuant to the constitutional mandate of local autonomy,
all natural and juridical persons, including government-owned or controlled corporations (GOCCs),
instrumentalities and agencies, are no longer exempt from local taxes even if previously granted an exemption.
The only exemptions from local taxes are those specifically provided under the Code itself, or those enacted
through subsequent legislation.

WHEREFORE, in view of the foregoing, judgment is hereby rendered by us as follows:

a. We DECLARE the airport terminal building, the airfield, runway, taxiway and the lots on which they are
situatedNOT EXEMPT from the real estate tax imposed by the respondent City of Lapu-Lapu;

b. We DECLARE the imposition and collection of the real estate tax, the additional levy for the Special
Education Fund and the penalty interest as VALID and LEGAL. However, pursuant to Section 255 of
the Local Government Code, respondent city can only collect an interest of 2% per month on the unpaid
tax which total interest shall, in no case, exceed thirty-six (36) months;

We DECLARE the sale in public auction of the aforesaid properties and the eventual forfeiture and purchase of
the subject property by the respondent City of Lapu-Lapu asNULL and VOID. However, petitioner MCIAAs
property is encumbered only by a limited lien possessed by the respondent City of Lapu-Lapu in accord with
Section 257 of the Local Government Code.

RULING OF THE SUPREME COURT:

MIAA is not a government-owned or controlled corporation under Section 2(13) of the Introductory Provisions of
the Administrative Code because it is not organized as a stock or non-stock corporation.Neither is MIAA a
government-owned or controlled corporation under Section 16, Article XII of the 1987 Constitution because
MIAA is not required to meet the test of economic viability. MIAA is a government instrumentality vested with
corporate powers and performing essential public services pursuant to Section 2(10) of the Introductory
Provisions of the Administrative Code. As a government instrumentality, MIAA is not subject to any kind of tax
by local governments under Section 133(o) of the Local Government Code. The exception to the exemption in
Section 234(a) does not apply to MIAA because MIAA is not a taxable entity under the Local Government Code.
Such exception applies only if the beneficial use of real property owned by the Republic is given to a taxable
entity.
Finally, the Airport Lands and Buildings of MIAA are properties devoted to public use and thus are properties of
public dominion. Properties of public dominion are owned by the State or the Republic.
As properties of public dominion owned by the Republic, there is no doubt whatsoever that the Airport Lands and
Buildings are expressly exempt from real estate tax under Section 234(a) of the Local Government Code. This
Court has also repeatedly ruled that properties of public dominion are not subject to execution or
foreclosure sale.

1. Petitioners properties that are actually, solely and exclusively used for public purpose, consisting of the
airport terminal building, airfield, runway, taxiway and the lots on which they are
situated, EXEMPT from real property tax imposed by the City of Lapu-Lapu.

2. VOID all the real property tax assessments, including the additional tax for the special education fund
and the penalty interest, as well as the final notices of real property tax delinquencies, issued by the City
of Lapu-Lapu on petitioners properties, except the assessment covering the portions that petitioner has
leased to private parties.

3. NULL and VOID the sale in public auction of 27 of petitioners properties and the eventual forfeiture
and purchase of the said properties by respondent City of Lapu-Lapu. We likewise declare VOID the
corresponding Certificates of Sale of Delinquent Property issued to respondent City of Lapu-Lapu.

________________________________________________________________________

LAUREL VS GARCIA

DOCTRINE: An abandonment of the intention to use the property for public service and to make it patrimonial
property under Article 422 of the Civil Code must be definite Abandonment and it cannot be inferred from the
non-use alone specially if the non-use was attributable not to the government's own deliberate and indubitable will
but to a lack of financial support to repair and improve the property Abandonment must be a certain and positive
act based on correct legal premises.

FACTS:
These are two petitions for prohibition seeking to enjoin respondents, their representatives and agents from
proceeding with the bidding for the sale of the 3,179 square meters of land at Tokyo, Japan scheduled on February
21, 1990.

The subject property in this case is 1 of the 4 properties in Japan acquired by the Philippine government under the
Reparations Agreement entered into with Japan on May 9, 1956. The properties and the capital goods and services
procured from the Japanese government for national development projects are part of the indemnification to the
Filipino people for their losses in life and property and their suffering during World War II.

A proposal was presented to President Corazon C. Aquino by former Philippine Ambassador to Japan, Carlos J.
Valdez, to make the property the subject of a lease agreement with a Japanese firm. No change of ownership or
title shall occur. The Philippine government retains the title all throughout the lease period and thereafter.
However, the government has not acted favorably.

On July 25, 1987, the President issued Executive Order No. 296 entitling non-Filipino citizens or entities to avail
of separations' capital goods and services in the event of sale, lease or disposition.

The subject property in this case is one of the four (4) properties in Japan acquired by the Philippine government
under the Reparations Agreement entered into with Japan on May 9, 1956, the other lots being:

(1) The Nampeidai Property at 11-24 Nampeidai-machi, Shibuya-ku, Tokyo which has an area of
approximately 2,489.96 square meters, and is at present the site of the Philippine Embassy Chancery;

(2) The Kobe Commercial Property at 63 Naniwa-cho, Kobe, with an area of around 764.72 square meters
and categorized as a commercial lot now being used as a warehouse and parking lot for the consulate staff; and

(3) The Kobe Residential Property at 1-980-2 Obanoyama-cho, Shinohara, Nada-ku, Kobe, a residential lot
which is now vacant.

4. The Roppongi property was acquired from the Japanese government under the Second Year Schedule and
listed under the heading "Government Sector", through Reparations Contract No. 300 dated June 27, 1958. The
Roppongi property consists of the land and building "for the Chancery of the Philippine Embassy" (Annex M-D
to Memorandum for Petitioner, p. 503). As intended, it became the site of the Philippine Embassy until the latter
was transferred to Nampeidai on July 22, 1976 when the Roppongi building needed major repairs. Due to the
failure of our government to provide necessary funds, the Roppongi property has remained undeveloped since that
time.

Amidst opposition by various sectors, the Executive branch of the government has been pushing its decision to
sell the reparations properties starting with the Roppongi lot. The property has twice been set for bidding at a
minimum floor price of $225 million.

The Court could not act on these cases immediately because the respondents filed a motion for an extension of
thirty (30) days to file comment in G.R. No. 92047, followed by a second motion for an extension of another
thirty (30) days which we granted on May 8, 1990, a third motion for extension of time granted on May 24, 1990
and a fourth motion for extension of time which we granted on June 5, 1990 but calling the attention of the
respondents to the length of time the petitions have been pending. After the comment was filed, the petitioner in
G.R. No. 92047 asked for thirty (30) days to file a reply.

ISSUE: W/N the Roppongi property and others of its kind be alienated by the Philippine Government. -- NO

HELD: NO, the subject property cannot be alienated by the government, even if the property has not been in use
for a long time.

Vice President Laurel asserts that the lands were acquired as part of the reparations for diplomatic and consular
use by the Philippine government. Laurel states that the Roppongi property is classified as one of public
dominion, and not of private ownership under Article 420 of the Civil Code.

The petitioner submits that the Roppongi property comes under "property intended for public service" in
paragraph 2 of the above provision. He states that being one of public dominion, no ownership by anyone can
attach to it, not even by the State. The Roppongi and related properties were acquired for "sites for chancery,
diplomatic, and consular quarters, buildings and other improvements. The petitioner states that they continue to be
intended for a necessary service. They are held by the State in anticipation of an opportune use. (Citing 3 Manresa
65-66). Hence, it cannot be appropriated, is outside the commerce of man, or to put it in more simple terms, it
cannot be alienated nor be the subject matter of contracts (Citing Municipality of Cavite v. Rojas, 30 Phil. 20
[1915]). Noting the non-use of the Roppongi property at the moment, the petitioner avers that the same remains
property of public dominion so long as the government has not used it for other purposes nor adopted any
measure constituting a removal of its original purpose or use.
As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot be alienated. Its
ownership is a special collective ownership for general use and enjoyment, an application to the satisfaction of
collective needs, and resides in the social group. The purpose is not to serve the State as a juridical person, but the
citizens; it is intended for the common and public welfare and cannot be the object of appropration

The applicable provisions of the Civil Code are:

ART. 419. Property is either of public dominion or of private ownership.
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;
(2) Those which belong to the State, without being for public use, and are intended for some
public service or for the development of the national wealth.
ART. 421. All other property of the State, which is not of the character stated in the preceding
article, is patrimonial property.

The Roppongi property is correctly classified under paragraph 2 of Article 420 of the Civil Code as property
belonging to the State and intended for some public service.

The fact that the Roppongi site has not been used for a long time for actual Embassy service does not
automatically convert it to patrimonial property. Any such conversion happens only if the property is withdrawn
from public use. A property continues to be part of the public domain, not available for private appropriation or
ownership until there is a formal declaration on the part of the government to withdraw it from being such.

An abandonment of the intention to use the Roppongi property for public service and to make it patrimonial
property under Article 422 of the Civil Code must be definite Abandonment cannot be inferred from the non-use
alone specially if the non-use was attributable not to the government's own deliberate and indubitable will but to a
lack of financial support to repair and improve the property Abandonment must be a certain and positive act based
on correct legal premises.

A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not relinquishment of the Roppongi property's
original purpose.

Moreover, President Aquinos approval of the recommendation by the investigating committee to sell the
Roppongi property was premature or, at the very least, conditioned on a valid change in the public character of the
Roppongi property. It does not have the force and effect of law since the President already lost her legislative
powers. The Congress had already convened for more than a year. Assuming that the Roppongi property is no
longer of public dominion, there is another obstacle to its sale by the respondents. There is no law authorizing its
conveyance, and thus, the Court sees no compelling reason to tackle the constitutional issue raised by petitioner
Ojeda.
_____________________________________________________________________

G.R. No. 177168, August 03, 2015

NAVY OFFICERS' VILLAGE ASSOCIATION, INC. (NOVAI), Petitioner, v. REPUBLIC OF THE

PHILIPPINES, Respondent.

BRION, J.:

FACTS:

TCT No. T-15387, issued in NOVAI's name, covers a 475,009 square-meter parcel of land situated inside the
former Fort Andres Bonifacio Military Reservation (FBMR) in Taguig, Metro Manila. The property previously
formed part of a larger 15,812,684 square-meter parcel of land situated at the former Fort William McKinley,
Rizal, which was covered by TCT No. 61524 issued in the name of the Republic of the Philippines.
On July 12, 1957, then President Carlos P. Garcia issued Proclamation No. 423 "reserving for military purposes
certain parcels of the public domain situated in the municipalities of Pasig, Taguig, Paraaque, province of Rizal,
and Pasay City," which included the 15,812,684 square-meter parcel of land covered by TCT No. 61524.

On September 29, 1965, then Pres. Diosdado Macapagal issued Proclamation No. 461 which excluded from Fort
McKinley "a certain portion of land embraced therein, situated in the municipalities of Taguig and Paraaque,
Province of Rizal, and Pasay City," with an area of 2,455,310 square meters, and declared the excluded area as
"AFP Officers' Village" to be disposed of under the provisions of Republic Act Nos. 274 and 730. A month after,
Pres. Macapagal issued Proclamation No. 478"reserving for the veterans rehabilitation, medicare and training
center site purposes" an area of 537,520 square meters of the land previously declared as AFP Officers' Village
under Proclamation No. 461, and placed the reserved area under the administration of the Veterans Federation of
the Philippines (VFP).

On November 15, 1991, the property was the subject of a Deed of Sale between the Republic of the Philippines,
through former Land Management Bureau (LMB) Director Abelardo G. Palad, Jr., (Dir. Palad) and petitioner
NOVAI. The deed of sale was subsequently registered and from which TCT No. T-15387 was issued in NOVAI's
name. The Republic sought to cancel NOVAFs title based on the following grounds: (a) the land covered by
NOVAFs title is part of a military reservation; (b) the deed of sale conveying the property to NOVAI, which
became the basis for the issuance of TCT No. 15387, is fictitious; (c) the LMB has no records of any application
made by NOVAI for the purchase of the property, and of the NOVAFs alleged payment of P14,250,270.00 for the
property; and (d) the presidential proclamation, i.e., Proclamation No. 2487, claimed to have been issued by then
President Corazon C. Aquino in 1991 that authorized the transfer and titling of the property to NOVAI, is
fictitious. NOVAIs answer to the Republic is that the property was no longer part of the public dominion, as the
land had long been segregated from the military reservation pursuant to Proclamation No. 461, and that it had
actually filed a letter-application for a sales patent over the property with the LMB which prepared, verified and
approved the property's plan and technical description; and that the LMB delivered to it a copy of the deed of sale,
signed and executed by Dir. Palad, after it had paid a portion of the P14,250,270.00 purchase price, corresponding
taxes, and other charges, with the balance to be paid in installments.

Also, NOVAI contended that, since any alleged irregularities that may have attended the sale pertained only to
formalities, the proper remedy for the Republic was to file an action for reformation of instrument, not for
cancellation of title. In any event, it added that the Republic's cause of action had prescribed because its title to the
property had already become indefeasible.

The Petition

NOVAI alleges that the CA erred in declaring that: (a) the property is inalienable land of the public domain, (b)
the deed of sale and Proclamation No. 2487 were void and nonexistent, respectively, (c) the Republic's action for
cancellation of title was not barred by prescription, and (d) the ruling in Southside was applicable to the present
case. In support of its petition, NOVAI raises the following arguments:

(a) The property is no longer part of the public domain because, by virtue of Proclamation No. 461, s. of
1965, the property was excluded from the FBMR and made available for disposition to qualified persons, subject
to the provisions of R.A. Nos. 274 and 720 in relation to the Public Land Act;

(b) The deed of sale was, in all respects, valid and enforceable, as it was shown to have been officially
executed by an authorized public officer under the provisions of the Public Land Act, and celebrated with all the
formalities of a notarial certification;

(c) Proclamation No. 2487 is to be presumed valid until proven otherwise; that the Republic carried the
burden of proving that Proclamation No. 2487 was a forgery, and that it failed to discharge this burden;

(d) The CA should not have considered as evidence the testimony of Senator Franklin Drilon on the
nonexistence of Proclamation No. 2487 because such testimony was given by Senator Drilon in another
case17 and was not formally offered in evidence by the Republic during the trial of the present case before the
RTC;
(e) The action for cancellation of title filed by the Republic is already barred by prescription because it was
filed only on December 23, 1993, or close to two (2) years from the issuance of NOVAI's title on January 9, 1992;
and

(f) The case of Southside is not a cognate or companion case to the present case because the two cases
involve completely dissimilar factual and doctrinal bases; thus, the Court's observations and ruling
in Southside should not be applied to the present case.

The Republic's Comment to the Petition

Procedurally, the Republic assails the propriety of the issues raised by NOVAI, such as "whether Proclamation
No. 2487 and the signature of LMB Director Palad on the assailed deed of sale are forged or fictitious," and
"whether the Republic had presented adequate evidence to establish the spuriousness of the subject proclamation,"
which are factual in nature and not allowed in a Rule 45 petition. On the petition's substance, the Republic
counters that:

(a) The property is inalienable public land incapable of private appropriation because, while the property
formed part of the area segregated from the FBMR under Proclamation No. 461, it was subsequently reserved for
a specific public use or purpose under Proclamation No. 478;

(b) Proclamation No. 2487, which purportedly revoked Proclamation No. 478, does not legally exist and thus
cannot be presumed valid and constitutional unless proven otherwise; the presumption of validity and
constitutionality of a law applies only where there is no dispute as to the authenticity and due execution of the law
in issue;

(c) The deed of sale executed by NOVAI and by Dir. Palad was undeniably forged, as Dir. Palad
categorically denied having signed the deed of sale, and a handwriting expert from the National Bureau of
Investigation (NBI) confirmed that Dir. Palad's signature was indeed a forgery;18

(d) NOVAI, a private corporation, is disqualified from purchasing the property because R.A. Nos. 274 and
730, and the Public Land Act only allow the sale of alienable and disposable public lands to natural persons, not
juridical persons; and

(e) The Court's decision in Southside applies to the present case because of the strong factual and evidentiary
relationship between the two cases.

BCDA's Comment-in-Intervention

On December 28, 2007, and while the case was pending before this Court, the Bases Conversion Development
Authority (BCDA) filed a motion for leave to file comment-in-intervention and to admit the attached comment-in-
intervention. The BCDA contends that NOVAI is disqualified from acquiring the property given the constitutional
and statutory provisions that prohibit the acquisition of lands of the public domain by a corporation or association;
that any sale of land in violation of the Constitution or of the provisions of R.A. Nos. 274 and 730, and the Public
Land Act are null and void; and that any title which may have been issued by mistake or error on the part of a
public official can be cancelled at any time by the State. The BCDA further contends that NOVAI miserably
failed to comply with the legal requirements for the release of the property from the military reservation. More
specifically, (1) the Director of Lands did not cause the property's subdivision, including the determination of the
number of prospective applicants and the area of each subdivision lot which should not exceed one thousand
(1,000) square meters for residential purposes; (2) the purchase price for the property was not fixed by the
Director of Lands as approved by the DENR Secretary; (3) NOVAI did not pay the purchase price or a portion of
it to the LMB; and (4) the Deed of Sale was not signed by the President of the Republic of the Philippines or by
the Executive Secretary, but was signed only by the LMB Director.

ISSUES:

A. The property is non-disposable land of the public domain reserved for public or quasi-public use or purpose

We agree with the CA that the property remains a part of the public domain that could not have been validly
disposed of in NOVAI's favor. While the parties disagree on the character and nature of the property at the time of
the questioned sale, they agree, however, that the property formed part of the FBMR - a military reservation
belonging to the public domain.

Under Section 6 of C.A. No. 141(Public Land Act), the President, upon recommendation of the Secretary of
Agriculture and Natural Resources, may, from time to time,classify lands of the public domain into alienable or
disposable, timber and mineral lands, and transfer these lands from one class to another for purposes of their
administration and disposition. Section 8 excludes (by implication) from disposition or concession, public lands
which have been reserved for public or quasi-public uses; appropriated by the Government; or in any manner have
become private property, or those on which a private right authorized and recognized by the Act or any other valid
law may be claimed. Further, Section 8 authorizes the President to suspend the concession or disposition of lands
previously declared open to disposition, until again declared open to disposition by his proclamation or by act of
Congress. Lands of the public domain classified as alienable and disposable are further classified, under Section 9
of C.A. No. 141, according to their use or purpose into: (1) agricultural; (2) residential, commercial, industrial, or
for similar productive purposes; (3) educational, charitable, or other similar purposes; and (4) reservations for
townsites and for public and quasi-public uses.

Section 83 of C.A. No. 141 defines public domain lands classified as reservations for public and quasi-public
uses as "any tract or tracts of land of the public domain reserved tract or tracts of lands shall be non-alienable and
shall not be subject to occupation, entry, sale, lease or other disposition until again declared alienable under the
provisions of [CA No. 141] or by proclamation of the President. Once these parcels of lands are actually acquired
by private persons, either by sale, grant, or other modes of disposition, they are removed from the mass of land of
the public domain and become, by operation of law, their private property.

Complementing and reinforcing this interpretation - that lands designated as reservations for public and quasi-
public uses are non-alienable and non-disposable and retain their character as land of the public domain is the
Civil Code with its provisions on Property that deal with lands in general. We find these provisions significant to
our discussion and interpretation as lands are property, whether they are public lands or private lands.In this
regard, Article 419 of the Civil Code classifies property as either of public dominion or of private ownership.
Article 420de fines property of the public dominion as those which are intended for public use or, while not
intended for public use, belong to the State and are intended for some public service. Article 421, on the other
hand, defines patrimonial property as all other property of the State which is not of the character stated in Article
420. While Article 422 states that public dominion property which is no longer intended for public use or service
shall form part of the State's patrimonial property. Thus, from the perspective of the general Civil Code provisions
on Property, lands which are intended for public use or public service such as reservations for public or quasi-
public uses are property of the public dominion and remain to be so as long as they remain reserved.

To be subject to sale, occupation or other disposition, lands of the public domain designated as reservations must
first be withdrawn, by act of Congress or by proclamation of the President, from the public or quasi-public use for
which it has been reserved or otherwise positively declared to have been converted to patrimonial property,
pursuant to Sections 8 and 88 of C.A. No. 141 and Article 422 of the Civil Code.40 Without such express
declaration or positive governmental act, the reserved public domain lands remain to be public dominion property
of the State.41cralawrednad

As Proclamation No. 2487 does not legally exist and therefore could not have validly revoked Proclamation No.
478, we find, as the CA also correctly did, that Proclamation No. 478 stands as the most recent manifestation of
the State's intention to reserve the property anew for some public or quasi-public use or purpose. Thus, consistent
with Sections 88, in relation with Section 8, of C.A. No. 141 and Article 420 of the Civil Code, as discussed
above, the property which was classified again as reservation for public or quasi-public use or purpose is non-
alienable and not subject to disposition; it also remains property of the public dominion; hence, non-alienable and
non-disposable land of the public domain. As a consequence, when R.A. No. 7227 took effect in 1992, the
property subject of this case, which does not fall among the areas specifically designated as exempt from the law's
operation67 was, by legal fiat, transferred to the BCDA's authority.

B. As the property remains a reserved public domain land, its sale and the title issued pursuant to the sale are void
As the property remains a reserved public domain land, it is outside the commerce of man. Property which are
intended for public or quasi- public use or for some public purpose are public dominion property of the
State68 and are outside the commerce of man. NOVAI, therefore, could not have validly purchased the property
in 1991.

Since the sale of the property, in this case, is void, the title issued to NOVAI is similarly void ab initio. It is a
well-settled doctrine that registration under the Torrens System does not, by itself, vest title as it is not a mode of
acquiring ownership;71 that registration under the Torrens System merely confirms the registrant's already
existing title. Accordingly, the indefeasibility of a Torrens title does not apply in this case and does not attach to
NOVAI's title. The principle of indefeasibility does not apply when the sale of the property and the title based
thereon are null and void. Hence, the Republic's action to declare the nullity of NOVAI's void title has not
prescribed.

NOVAI insists that the deed of sale carries the presumption of regularity in the performance of official duties as it
bears all the earmarks of a valid deed of sale and is duly notarized. In this case, the evidence on record shows not
only that the property was reserved for public use or purpose, and thus, non-disposable - a fact that on its own
defeats all the evidence which the petitioner may have had to support the validity of the sale - but also shows that
the sale and the circumstances leading to it are void in form and in substance, the disputable presumption of
regularity in the performance of official duties certainly cannot apply.

C. Even assuming that Proclamation No. 2487 legally exists, the sale of the property to NOVAI is illegal.

1. Dir. Palad did not have the authority to sell and convey the property. The subject deed of sale points to
Proclamation No. 2487, purportedly amending Proclamation No. 478, in relation with Act No. 3038,75 as legal
basis for authorizing the sale. Section 1 of Act No. 3038 authorizes the sale or lease only: (i) of land of the private
domain, not land of the public domain; and (ii) by the Secretary of Agriculture and Natural Resources, not by the
LMB Director. Section 277 of the said Act, in fact, specifically exempts from its coverage "land necessary for the
public service." As the sale was executed by the LMB Director covering the property that was reserved for the use
of the VRMTC, it, therefore, clearly violated the provisions of Act No. 3038.

3. The evidence on record and the highly suspect circumstances surrounding the sale fully supports the conclusion
that the property's sale to NOVAI is fictitious, thus, void. We note the following irregularities that attended the
sale of the property to NOVAI:

The absence, on file with the LMB, of any request for approval of any survey plan or of an approved survey plan
in NOVAI's name covering the property.79 The approved survey plan relating to Lot 3, SWO-13-000183 subject
of NOVAI's TCT No. 15387 pertains to the AFPOVAI under Proclamation No. 461;80cralawrednad

The technical description, which the DENR prepared for the property as covered by TCT No. T-15387, was
issued upon NOVAI's request only for purposes of reference, not for registration of title, and was based on the
approved survey plan of the AFPOVAI;81cralawrednad

There is no record of any public land application filed by NOVAI with the LMB or with the DENR Office for the
purchase of the property or of any parcel of land in Metro Manila;82cralawrednad

LMB Dir. Palad categorically denied signing and executing the deed of sale;83cralawrednad

The findings of the NBI handwriting; expert, detailed in the Questioned Documents Report No. 815-1093 dated
October 29, 1993,84 revealed that the, signature of LMB Director Palad as it appeared on the Deed of Sale and his
standard/sample signature as they appeared on the submitted comparison documents "were not written by one and
the same person,"85 and concluded that "[t]he questioned signature of 'ABELARDG G. PALAD, JR.' xxx is a
TRACED FORGERY by carbon process;"86 and

Lastly, the LMB Cashier's Office did not receive the amount of P14,250,270.00 allegedly paid by NOVAI as
consideration for the property. The receipts87 - O.R. No. 8282851 dated November 28, 1991, for P160,000.00
and O.R. No. 317024 dated December 23, 1992, for P200,000.00 - which NOVAI presented as evidence of its
alleged payment bore official receipt numbers which were not among the series of official receipts issued by the
National Printing Office to the LMB, and in fact, were not among the series used by the LMB on the pertinent
dates.88

In sum, we find - based on the facts, the law, and jurisprudence - that the property, at the time of the sale, was a
reserved public domain land. Its sale, therefore, and the corresponding title issued in favor of petitioner NOVAI,
is void.

WHEREFORE, we hereby DENY the present petition for review on certiorari. No reversible error attended the
decision dated December 28, 2006, and the resolution dated March 28, 2007, of the Court of Appeals in CA-G.R.
CV No. 85179.

_____________________________________________________________________________

CITY OF LAPU-LAPU, Petitioner, v. PHILIPPINE ECONOMIC ZONE AUTHORITY,

FACTS: These are consolidated1 petitions for review on certiorari the City of Lapu-Lapu and the Province of
Bataan separately filed against the Philippine Economic Zone Authority (PEZA).

In G.R. No. 184203, the City of Lapu-Lapu (the City) assails the Court of Appeals decision2 dated January 11,
2008 and resolution3 dated August 6, 2008, dismissing the Citys appeal for being the wrong mode of appeal. The
City appealed the Regional Trial Court, Branch 111, Pasay Citys decision finding the PEZA exempt from
payment of real property taxes.

In G.R. No. 187583, the Province of Bataan (the Province) assails the Court of Appeals decision 4dated August
27, 2008 and resolution5 dated April 16, 2009, granting the PEZAs petition for certiorari. The Court of Appeals
ruled that the Regional Trial Court, Branch 115, Pasay City gravely abused its discretion in finding the PEZA
liable for real property taxes to the Province of Bataan.

Facts common to the consolidated petitions

In the exercise of his legislative powers,6 President Ferdinand E. Marcos issued Presidential Decree No. 66 in
1972, declaring as government policy the establishment of export processing zones in strategic locations in the
Philippines. Presidential Decree No. 66 aimed to encourage and promote foreign commerce as a means of
making the Philippines a center of international trade, of strengthening our export trade and foreign exchange
position, of hastening industrialization, of reducing domestic unemployment, and of accelerating the development
of the country.7chanRoblesvirtualLawlibrary

To carry out this policy, the Export Processing Zone Authority (EPZA) was created to operate, administer, and
manage the export processing zones established in the Port of Mariveles, Bataan8and such other export processing
zones that may be created by virtue of the decree.9chanRoblesvirtualLawlibrary

In 1995, the PEZA was created by virtue of Republic Act No. 7916 or the Special Economic Zone Act of
199513 to operate, administer, manage, and develop economic zones in the country.14 The PEZA was granted the
power to register, regulate, and supervise the enterprises located in the economic zones. 15 By virtue of the law,
the export processing zone in Mariveles, Bataan became the Bataan Economic Zone16 and the Mactan Export
Processing Zone the Mactan Economic Zone.17chanRoblesvirtualLawlibrary

As for the EPZA, the law required it to evolve into the PEZA in accordance with the guidelines and regulations
set forth in an executive order issued for [the] purpose.18chanRoblesvirtualLawlibrary

On October 30, 1995, President Fidel V. Ramos issued Executive Order No. 282, directing the PEZA to assume
and exercise all of the EPZAs powers, functions, and responsibilities as provided in Presidential Decree No. 66,
as amended, insofar as they are not inconsistent with the powers, functions, and responsibilities of the PEZA, as
mandated under [the Special Economic Zone Act of 1995].19 All of EPZAs properties, equipment, and assets,
among others, were ordered transferred to the PEZA.20chanRoblesvirtualLawlibrary
Facts of G.R. No. 184203

In the letter21 dated March 25, 1998, the City of Lapu-Lapu, through the Office of the Treasurer, demanded from
the PEZA ?32,912,350.08 in real property taxes for the period from 1992 to 1998 on the PEZAs properties
located in the Mactan Economic Zone.

T
The City OF LAPU-LAPU made subsequent demands23 on the PEZA. In its last reminder24 dated May 13, 2002,
the City assessed the PEZA ?86,843,503.48 as real property taxes for the period from 1992 to 2002.

On September 11, 2002, the PEZA filed a petition for declaratory relief 25 with the Regional Trial Court of Pasay
City, praying that the trial court declare it exempt from payment of real property taxes. The case was raffled to
Branch 111.

The City answered26 the petition, maintaining that the PEZA is liable for real property taxes. The Office of the
Solicitor General filed a comment31 on the PEZAs petition for declaratory relief. It agreed that the PEZA is
exempt from payment of real property taxes, citing Sections 24 and 51 of the Special Economic Zone Act of
1995.

The trial court agreed with the Solicitor General. Section 24 of the Special Economic Zone Act of 1995.

The City filed a motion for reconsideration,33 which the trial court denied in its resolution34 dated September 26,
2006.

The City then appealed35 to the Court of Appeals.

The Court of Appeals noted the following issues the City raised in its appellants brief ON whether the PEZA is a
government agency performing governmental functions. taxes.

According to the Court of Appeals, are pure questions of law which should have been raised in a petition for
review on certiorari directly filed before this court. Since the City availed itself of the wrong mode of appeal, the
Court of Appeals dismissed the Citys appeal in the decision36 dated January 11, 2008.

Facts of G.R. No. 187583

After the City of Lapu-Lapu had demanded payment of real property taxes from the PEZA, the Province of
Bataan followed suit. In its letter55 dated May 29, 2003, the Province, through the Office of the Provincial
Treasurer, informed the PEZA that it would be sending a real property tax billing to the PEZA. Arguing that the
PEZA is a developer of economic zones, the Province claimed that the PEZA is liable for real property taxes
under Section 24 of the Special Economic Zone Act of 1995.

In its reply letter56 dated June 18, 2003, the PEZA requested the Province to suspend the service of the real
property tax billing. It cited its petition for declaratory relief against the City of Lapu-Lapu pending before the
Regional Trial Court, Branch 111, Pasay City as basis.

In its order71 dated June 18, 2004, the trial court issued a temporary restraining order against the Province. In the
order75 dated January 31, 2007, the trial court denied the PEZAs petition for injunction. The trial court ruled that
the PEZA is not exempt from payment of real property taxes. According to the trial court, Sections 193 and 234
of the Local Government Code had withdrawn the real property tax exemptions previously granted to all persons,
whether natural or juridical. The PEZA filed before the Court of Appeals a petition for certiorari 78 with prayer for
issuance of a temporary restraining order.

The Court of Appeals issued a temporary restraining order, enjoining the Province and its Provincial Treasurer
from selling PEZA's properties at public auction scheduled on October 17, 2007.79 It also ordered the Province to
comment on the PEZAs petition.
ISSUE:W/N The PEZA is an instrumentality of the national government

An instrumentality is any agency of the National Government, not integrated within the department framework,
vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering
special funds, and enjoying operational autonomy, usually through a charter. 245chanRoblesvirtualLawlibrary

Examples of instrumentalities of the national government are the Manila International Airport Authority,246 the
Philippine Fisheries Development Authority,247 the Government Service Insurance System,248 and the Philippine
Reclamation Authority.249 These entities are not integrated within the department framework but are nevertheless
vested with special functions to carry out a declared policy of the national government.

Similarly, the PEZA is an instrumentality of the national government. It is not integrated within the department
framework but is an agency attached to the Department of Trade and Industry.

SEC. 38. Definition of Administrative Relationship. Unless otherwise expressly stated in the Code or in other
laws defining the special relationships of particular agencies, administrative relationships shall be categorized and
defined as follows:

. . . .

(3) Attachment.(a) This refers to the lateral relationship between the department or its equivalent and the
attached agency or corporation for purposes of policy and program coordination. The coordination may be
accomplished by having the department represented in the governing board of the attached agency or corporation,
either as chairman or as a member, with or without voting rights, if this is permitted by the charter; having the
attached corporation or agency comply with a system of periodic reporting which shall reflect the progress of the
programs and projects; and having the department or its equivalent provide general policies through its
representative in the board, which shall serve as the framework for the internal policies of the attached corporation
or agency[.]

Attachment, which enjoys a larger measure of independence251 compared with other administrative
relationships such as supervision and control, is further explained in Beja, Sr. v. Court of Appeals:

Being an instrumentality of the national government, the PEZA cannot be taxed by local government units.

Although a body corporate vested with some corporate powers,262 the PEZA is not a government-owned or
controlled corporation taxable for real property taxes.
Under its charter, the PEZA was created a body corporate endowed with some corporate powers. However, it was
not organized as a stock270 or non-stock271 corporation. Nothing in the PEZAs charter provides that the PEZAs
capital is divided into shares.272 The PEZA also has no members who shall share in the PEZAs profits.

The PEZA does not compete with other economic zone authorities in the country. The government may even
subsidize the PEZAs operations. Under Section 47 of the Special Economic Zone Act of 1995, any sum
necessary to augment [the PEZAs] capital outlay shall be included in the General Appropriations Act to be
treated as an equity of the national government.273chanRoblesvirtualLawlibrary

The PEZA, therefore, need not be economically viable. It is not a government-owned or controlled corporation
liable for real property taxes.

HEIRS OF MALABANAN VS REPUBLIC

FACTS: On 20 February 1998, Mario Malabanan filed an application for land registration before the RTC of
Cavite-Tagaytay, covering a parcel of land situated in Silang Cavite, consisting of 71,324 square meters.
Malabanan claimed that he had purchased the property from Eduardo Velazco, and that he and his predecessors-
in-interest had been in open, notorious, and continuous adverse and peaceful possession of the land for more than
thirty (30) years. Velazco testified that the property was originally belonged to a twenty-two hectare property
owned by his great-grandfather, Lino Velazco. Lino had four sons Benedicto, Gregorio, Eduardo and Esteban
the fourth being Aristedess grandfather. Upon Linos death, his four sons inherited the property and divided it
among themselves. But by 1966, Estebans wife, Magdalena, had become the administrator of all the properties
inherited by the Velazco sons from their father, Lino. After the death of Esteban and Magdalena, their son
Virgilio succeeded them in administering the properties, including Lot 9864-A, which originally belonged to his
uncle, Eduardo Velazco. It was this property that was sold by Eduardo Velazco to Malabanan.

Among the evidence presented by Malabanan during trial was a Certification dated 11 June 2001, issued by the
Community Environment & Natural Resources Office, Department of Environment and Natural Resources
(CENRO-DENR), which stated that the subject property was verified to be within the Alienable or Disposable
land per Land Classification Map No. 3013 established under Project No. 20-A and approved as such under FAO
4-1656 on March 15, 1982. On 3 December 2002, the RTC approved the application for registration.

The Republic interposed an appeal to the Court of Appeals, arguing that Malabanan had failed to prove that the
property belonged to the alienable and disposable land of the public domain, and that the RTC had erred in
finding that he had been in possession of the property in the manner and for the length of time required by law for
confirmation of imperfect title. On 23 February 2007, the Court of Appeals reversed the RTC ruling and
dismissed the appliocation of Malabanan.

ISSUES: W/N petitioners entitled to the registration of the subject land in their names under Section 14(1) or
Section 14(2) of the Property Registration Decree or both?

HELD:

The Pertition is denied. The Decision of the Court of Appeals dated 23 February 2007 and Resolution dated 2
October 2007 are AFFIRMED

(1) In connection with Section 14(1) of the Property Registration Decree, Section 48(b) of the Public Land Act
recognizes and confirms that those who by themselves or through their predecessors in interest have been in
open, continuous, exclusive, and notorious possession and occupation of alienable and disposable lands of the
public domain, under a bona fide claim of acquisition of ownership, since June 12, 1945 have acquired
ownership of, and registrable title to, such lands based on the length and quality of their possession.

(a) Since Section 48(b) merely requires possession since 12 June 1945 and does not require that the lands should
have been alienable and disposable during the entire period of possession, the possessor is entitled to secure
judicial confirmation of his title thereto as soon as it is declared alienable and disposable, subject to the timeframe
imposed by Section 47 of the Public Land Act.

(b) The right to register granted under Section 48(b) of the Public Land Act is further confirmed by Section 14(1)
of the Property Registration Decree.

(2) In complying with Section 14(2) of the Property Registration Decree, consider that under the Civil Code,
prescription is recognized as a mode of acquiring ownership of patrimonial property. However, public domain
lands become only patrimonial property not only with a declaration that these are alienable or disposable. There
must also be an express government manifestation that the property is already patrimonial or no longer retained
for public service or the development of national wealth, under Article 422 of the Civil Code. And only when the
property has become patrimonial can the prescriptive period for the acquisition of property of the public dominion
begin to run.

(a) Patrimonial property is private property of the government. The person acquires ownership of patrimonial
property by prescription under the Civil Code is entitled to secure registration thereof under Section 14(2) of the
Property Registration Decree.

(b) There are two kinds of prescription by which patrimonial property may be acquired, one ordinary and other
extraordinary. Under ordinary acquisitive prescription, a person acquires ownership of a patrimonial property
through possession for at least ten (10) years, in good faith and with just title. Under extraordinary acquisitive
prescription, a persons uninterrupted adverse possession of patrimonial property for at least thirty (30) years,
regardless of good faith or just title, ripens into ownership.

It is clear that the evidence of petitioners is insufficient to establish that Malabanan has acquired ownership over
the subject property under Section 48(b) of the Public Land Act. There is no substantive evidence to establish that
Malabanan or petitioners as his predecessors-in-interest have been in possession of the property since 12 June
1945 or earlier. The earliest that petitioners can date back their possession, according to their own evidencethe
Tax Declarations they presented in particularis to the year 1948. Thus, they cannot avail themselves of
registration under Section 14(1) of the Property Registration Decree.

Neither can petitioners properly invoke Section 14(2) as basis for registration. While the subject property was
declared as alienable or disposable in 1982, there is no competent evidence that is no longer intended for public
use service or for the development of the national evidence, conformably with Article 422 of the Civil Code. The
classification of the subject property as alienable and disposable land of the public domain does not change its
status as property of the public dominion under Article 420(2) of the Civil Code. Thus, it is insusceptible to
acquisition by prescription.

REMMAN ENTERPRISES, INC. VS REPUBLIC

FACTS: The case resolves the petition for review on certiorari 1 filed by Remman Enterprises, Inc. (petitioner) to
assail the Decision of the Court of Appeals dated May 23, 2008 and Resolution dated June 22, 2009 The CA
reversed the Decision dated November 27, 2001 of the Regional Trial Court (RTC) of Pasig City which granted
the petitioner's application for land registration of three (3) parcels of land situated in Taguig, Metro Manila
(subject properties

Ronnie P. Inocencio ,petitioners representative filed with the RTC on June 4, 1998 an application for registration
of the subject properties situated in Barangay Napindan, Taguig, Metro Manila, with an area of 27,477 square
meters, 23,179 sq m and 45,636 sq m.. The State, through the Office of the Solicitor General, interposed its
opposition to the application.1avvphiThe petitioner was allowed to present its evidence before the Branch Clerk
of Court of the RTC. Inocencio, the petitioners sales manager, testified that the subject properties were purchased
on August 28, 1989 by the petitioner from sellers Magdalena Samonte, Jaime Aldana and Virgilio Navarro. The
properties were declared for taxation purposes on August 9; 1989.After the sale, the petitioner occupied the
properties and planted thereon crops like rice, corn and vegetables

On November 27, 2001, the RTC rendered its Decision granting the petitioners application

Dissatisfied, the State appealed to the CA by alleging substantive and procedural defects in the petitioners
application. It argued that the identity of the subject properties was not sufficiently established. The State further
claimed that the character and length of possession required by law in land registration cases were not satisfied by
the petitioner. Finding merit in the appeal, the CA reversed the RTC decision.

ISSUE: W/N the CA erred in reversing the RTCs decision in granting the petitioner's application for land
registration of three (3) parcels of land situated in Taguig, Metro Manila.

HELD: NO. On the matter of proof of the subject propertys identity, jurisprudence provides that the presentation
of the original tracing cloth plan may be dispensed with, subject however to certain conditions. Contrary to the
petitioners claim, the original clothing plans that cover the subject properties do not form part of the case records.
As ruled in Republic v. Guinto-Aldana, the identity of the land, its boundaries and location can be established by
other competent evidence apart from the original tracing cloth such as a duly executed blueprint of the survey plan
and technical description.

Notwithstanding the foregoing, the CAs dismissal of the petitioners application for original registration was
proper considering the latters failure to sufficiently establish that the subject properties were already declared
alienable and disposable by the government. Its reliance on a Report, issued by the CENRO, DENR National
Capital Region, West Sector, was misplaced.
The burden of proof in overcoming the presumption of State ownership of the lands of the public domain is on the
person applying for registration, who must prove that the properties subject of the application are alienable and
disposable Even the notations on the survey plans submitted by the petitioner cannot be admitted as evidence of
the subject properties alienability and disposability. Such notations do not constitute incontrovertible evidence to
overcome the presumption that the subject properties remain part of the inalienable public domain.

Without sufficient proof that the subject properties had been declared alienable and disposable, the Court finds no
reason to look further into the petitioner's claim that the CA erred in' finding that it failed to satisfy the nature and
length of possession that could qualify for land registration. WHEREFORE, the petition is DENIED. The
Decision dated May 23, 2008 and Resolution dated Jun~ 22, 2009 of the Court of Appeals are AFFIRMED.

REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
ANTONIO, FELIZA, NEMESIO, ALBERTO, FELICIDAD, RICARDO, MILAGROS AND CIPRIANO,
ALL SURNAMED BACAS; EMILIANA CHABON, SATURNINO ABDON, ESTELA, CHABON,
LACSASA DEMON, PDERITA CHABON, FORTUNATA EMBALSADO, MINDA J. CASTILLO,
PABLO CASTILLO, ARTURO P. LEGASPI, and JESSIE I. LEGASPI, Respondents.

The Antecedents: In 1938, Commonwealth President Manuel Luis Quezon (Pres. Quezon) issued Presidential
Proclamation No. 265, which took effect on March 31, 1938, reserving for the use of the Philippine Army three
(3) parcels of the public domain situated in the barrios of Bulua and Carmen, then Municipality of Cagayan,
Misamis Oriental. The parcels of land were withdrawn from sale or settlement and reserved for military purposes,
"subject to private rights, if any there be."

Land Registration Case No. N-275

[Antonio, Feliza, Nemesio, Roberto, and Felicidad, all surnamed Bacas, and the Heirs of Jesus Bacas, Applicants
(The Bacases)]

The Bacases filed their Application for Registration3 on November 12, 1964 covering a parcel of land, together
with all the improvements found thereon, located in Patag, Cagayan de Oro City, more particularly described and
bounded as follows:

They alleged ownership in fee simple of the property and indicated in their application the names and addresses of
the adjoining owners, as well as a statement that the Philippine Army (Fourth Military Area) recently occupied a
portion of the land by their mere tolerance.5

On April 10, 1968, based on the evidence presented by the Bacases, the Land Registration Court (LRC) rendered
a decision8 holding that the applicants had conclusively established their ownership in fee simple over the subject
land and that their possession, including that of their predecessor-in-interest, had been open, adverse, peaceful,
uninterrupted, and in concept of owners for more than forty (40) years.

No appeal was interposed by the Republic from the decision of the LRC. Thus, the decision became final and
executory, resulting in the issuance of a decree and the corresponding certificate of title over the subject property.

Land Registration Case No. N-521 [Emiliana Chabon, Estela Chabon and Pedrita Chabon, Applicants (The
Chabons)]

The Chabons filed their Application for Registration9 on May 8, 1974 covering a parcel of land located in
Carmen-District, Cagayan de Oro City, known as Lot 4357, Cagayan Cadastre, bounded and described as:

They alleged ownership in fee simple over the property and indicated therein the names and addresses of the
adjoining owners, but no mention was made with respect to the occupation, if any, by the Philippine Army. The
Chabons likewise alleged that, to the best of their knowledge, no mortgage or encumbrance of any kind affecting
said land with the exception of 18,957 square meters sold to Minda J. Castillo and 1,000 square meters sold and
conveyed to Atty. Arturo R. Legaspi.11
On February 18, 1976, there being no opposition made, even from the government, hearing on the application
ensued. The LRC then rendered a decision12 holding that Chabons evidence established their ownership in fee
simple over the subject property and that their possession, including that of their predecessor-in-interest, had been
actual, open, public, peaceful, adverse, continuous, and in concept of owners for more than thirty (30) years.

The present cases

As a consequence of the LRC decisions in both applications for registration, the Republic filed a complaint for
annulment of titles against the Bacases and the Chabons before the RTC.

The Republic claimed in its petition for annulment before the RTC14 that the certificate of title issued in favor of
the Bacases was null and void because they fraudulently omitted to name the military camp as the actual occupant
in their application for registration.. Further, the Bacases failed to likewise state that Lot No. 4354 was part of
Camp Evangelista. These omissions constituted fraud which vitiated the decree and certificate of title issued.

Also, the Republic averred that the subject land had long been reserved in 1938 for military purposes at the time it
was applied for and, so, it was no longer disposable and subject to registration.16

Decision of the Regional Trial Court

As the facts and issues in both cases were substantially the same and identical, and the pieces of evidence adduced
were applicable to both, the cases were consolidated and jointly tried. Thereafter, a joint decision dismissing the
two complaints of the Republic was rendered.

In dismissing the complaints, the RTC explained that the stated fact of occupancy by Camp Evangelista over
certain portions of the subject lands in the applications for registration by the respondents was a substantial
compliance with the requirements of the law.24 It would have been absurd to state Camp Evangelista as an
adjoining owner when it was alleged that it was an occupant of the land.25 Thus, the RTC ruled that the
respondents did not commit fraud in filing their applications for registration.

Action of the Court of Appeals and the Court regarding the Republics Appeal

Ruling of the Court of Appeals

The appeal allowed, the CA docketed the case as CA G.R. CV No. 64142.

On November 12, 2007, the CA affirmed the ruling of the RTC. It explained that once a decree of registration was
issued under the Torrens system and the reglementary period had passed within which the decree may be
questioned, the title was perfected and could not be collaterally questioned later on.

Citing the rule that "[t]he fraud is extrinsic if it is employed to deprive parties of their day in court and, thus,
prevent them from asserting their right to the property registered in the name of the applicant,"39 the CA found
that there was none. The CA agreed with the RTC that there was substantial compliance with the requirement of
the law. The allegation of the respondent that Camp Evangelista occupied portions of their property negated the
complaint that they committed misrepresentation or concealment amounting to fraud.40

Issue: whether or not the applications for registration of the subject parcels of land should be allowed?

HELD: S.C reversed the decision of CA affirming RTC. When a property is officially declared a military
reservation, it becomes inalienable and outside the commerce of man.66 It may not be the subject of a contract or
of a compromise agreement.67 A property continues to be part of the public domain, not available for private
appropriation or ownership, until there is a formal declaration on the part of the government to withdraw it from
being such.68 In the case of Republic v. Court of Appeals and De Jesus,69 it was even stated that
Lands covered by reservation are not subject to entry, and no lawful settlement on them can be acquired. The
claims 0f persons who have settled on, occupied, and improved a parcel of public land which is later included in a
reservation are considered worthy of protection and are usually respected, but where the President, as authorized
by law, issues a proclamation reserving certain lands and warning all persons to depart therefrom, this terminates
any rights previously acquired in such lands by a person who was settled thereon in order to obtain a preferential
right of purchase. And patents for lands which have been previously granted, reserved from sale, or appropriate,
are void.

In this case, however, the respondents miserably failed to prove that, before the proclamation, the subject lands
were already private lands. They merely relied on such "recognition" of possible private rights. In their
application, they alleged that at the time of their application,71 they had been in open, continuous, exclusive, and
notorious possession of the subject parcels of land for at least thirty (30) years and became its owners by
prescription. There was, however, no allegation or showing that the government had earlier declared it open for
sale or settlement, or that it was already pronounced as inalienable and disposable.

It is well-settled that land of the public domain is not ipso facto converted into a patrimonial or private property
by the mere possession and occupation by an individual over a long period of time. In the case of Diaz v.
Republic.

G.R. No. 83383 May 6, 1991

SOLID STATE MULTI-PRODUCTS CORPORATION, petitioner,

vs.
THE COURT OF APPEALS (Former Sixth Division) and THE INTESTATE ESTATE OF ANTENOR S.
VIRATA and the DEVELOPMENT BANK OF THE PHILIPPINES, respondents.

FACTS: On September 28, 1982, petitioner, a domestic corporation, filed an action for quieting of title against the
respondent estate of Virata alleging that it is the registered owner of a parcel of land located at Imus, Cavite, with
an area of 48,182 sq. meters, covered by Certificate of Title No. T-80889 of the Register of Deeds of Cavite,
which was issued on February 24, 1976; that Virata, during his lifetime thru the use of fraud, caused the issuance
of Certificate of Title No. T-11520 RT 1660 on September 1, 1959 thru an administrative reconstitution of a
nonexistent original title covering the same parcel of land; that by reason of the said reconstitution and subsequent
issuance of TCT No. T-11520 RT 1660, there now exists a cloud on the title of petitioner.

Pursuant to the provisions of Act No. 32, as amended, Julian Pearanda submitted with the Bureau of Lands, thru
its District Land Office at Rosario, Cavite an application dated November 22, 1968, in a verified Indorsement
dated November 25, 1968, to purchase a friar land which was subscribed and sworn to before Manuel Cupino,
Acting District Land Officer (Exh. "D"). The application covers Lot No. 7449 of the Imus Friar Lands Estate,
situated at Barrio Molino, Bacoor, Cavite, containing an area of 4 hectares, 81 ares and 82 centares. Said
application was accompanied by a "SALAYSAY" (Exhibit "A") signed and sworn to by one Mabini Legaspi
before said District Land Officer Cupino, purporting to transfer to, and to waive in favor of, Julian Pearanda, all
the rights of executor to Lot No. 7449.

Following the routine in cases of this nature, District Land Officer Cupino referred to Land Investigator Alberto
Buhain for investigation and in a verified Indorsement dated November 25, 1968, said investigator made a Report
(Exh. "B") on the result of his investigation, to District Land Officer Cupino, District Land Office No. III-8
Bureau of Lands, Rosario, Cavite, certifying that applicant Julian Pearanda is the actual occupant of Lot No.
7449, has introduced improvements consisting of upland rice and other seasonal crops; that Pearanda's
occupation of the land is derived through a voluntary assignment of right of the former occupant, Mabini Legaspi,
and that the same is free from claims and conflicts and that the said applicant has established his rights over the
subject land, in view of which, said investigator recommended that said lot be awarded to applicant Julian
Pearanda according to law.

By second Indorsement dated December 16, 1968, Higinio P. Sunico, Chief, Land Management Division, acting
for and in behalf of the Director of Lands, forwarded to the Secretary of Agriculture and Natural Resources, the
application of Julian Pearanda, recommending that Lot No. 7449 be sold to said applicant without public
auction.

On the basis of said Deed of Conveyance No. 10431, the Register of Deeds of Cavite issued on November 14,
1969 in favor of Julian Pearanda TCT No. T-39631 (Exh. "Z-6") which on its face shows it to have come from a
direct transfer from OCT no. 1002, and on February 17, 1976, the plaintiff, by way of a Deed of Absolute Sale
(Exh. "Z") bought said Lot No. 7449 as a consequence of which, TCT No. T-39631 was cancelled and new TCT
No. T-80889 was issued on February 24, 1976 to the plaintiff, Solid State Multi Products Corporation.

Plaintiff Solid State Multi-Products Corporation enrolled Lot No. 7449 with the issuance of Tax Declaration No.
20893 which was superseded by Tax Declaration No. 10973 and continued to religiously pay the realty taxes as
covered by receipts of tax payments (Exh. for 1977 and Exh. "7-19" for 1984) and the subject property is in its
actual possession since its acquisition from Pearanda up to the present. (pp. 109-112, Rollo (Emphasis Ours)

On the other hand, respondent Virata denied the allegations in the complaint and presented evidence to prove his
claim over the land.

On June 15, 1985, the trial court rendered its decision, the dispositive portion of which reads:

b. Recognizing that defendant Virata is the true and lawful owner of the land covered by Transfer
Certificate of Title No. (T-11520) RT 1660 of the Register of Deeds of the Province of Cavite and
holding that the same is valid;

c. Declaring that Transfer Certificate of Title No. T-80889 in the name of plaintiff, the Solid State Multi
Products Corporation is null and void and of no force and effect and is, therefore, ordered cancelled;

Not satisfied with the decision of the trial court, the petitioner appealed to the Court of Appeals. On July 13, 1987,
the respondent appellate court rendered its decision affirming the decision of the trial court.

ISSUE: W/N C.A. ERRED IN UPHOLDING THE DECISION OF RTC THAT RESPONDENT IS THE REAL
OWNER OF THE SUBJECT LAND.

HELD: YES. It is clear from the foregoing provisions that the friar lands were purchased by the government for
sale to actual settlers and occupants at the time said lands are acquired by the government. The Bureau of Lands
shall first issue a certificate stating therein that the government has agreed to sell the land to such settler or
occupant. The latter then shall accept the certificate and agree to pay the purchase price so fixed and in the
installments and at the interest specified in the certificate.

The conveyance executed in favor of a buyer or purchaser, or the so called certificate of sale, is a conveyance of
the ownership of the property, subject only to the resolutory condition that the sale may be cancelled if the price
agreed upon is not paid for in full. The purchaser becomes the owner upon the issuance of the certificate of sale
in his favor subject only to the cancellation thereof in case the price agreed upon is not paid (Pugeda vs. Trias,
No. L-16925, March 31, 1962, 4 SCRA 849.)

Clearly, the purchase of the friar land made by Pearanda was in compliance with law. The execution of the sales
contract vested the right of ownership in Pearanda over the land. There is no doubt whatsoever that the said sale
was valid as it was approved by the Secretary of Agriculture and Natural Resources. Hence, the sale made by
Pearanda in favor of the petitioner transferred the ownership of the land in favor of the latter resulting in the
proper issuance of TCT No. T-80889 in its name.

Apparently, the sale of the lot to Mabini Legaspi occurred much earlier than the date of acquisition of same lot by
petitioner's predecessor, and the evidence presented by respondent Virata indicates that the latter's predecessor
paid the purchase price of Lot No. 7449 on installments.
Nowhere in the evidence for the respondent or in the records of this case however, would show that a certificate
of sale was ever issued by the Bureau of Lands, which would vest ownership and title over the land in favor of
Mabini Legaspi. The existence of the official receipts showing payment of the price of the land by Legaspi does
not prove that the land was legally conveyed to her without any contract of sale having been executed by the
government in her favor. Viewed from all angles, the acquisition of the lot by Legaspi was highly irregular and
void, and not in compliance with the procedure mandated by law for the sale of friar lands. For one thing, Mabini
Legaspi allegedly purchased the land in a sale at public auction, which procedure is nowhere provided in Act No.
1120 or in C.A. 32, as amended by C.A. 316. The laws expressly state that an actual occupant of the land shall
purchase the lot occupied by him at a private sale and not in a sale at public auction (Sec. 2, C.A. 32 as amended).
Further, neither was there any deed of conveyance issued to Legaspi by the government after the full payment of
the installments on the disputed lot.

Highly significant at this point is the fact that there was neither allegation nor proof that the sale was with the
approval of the Secretary of Agriculture and Commerce. The absence of such approval made the supposed sale
null and void ab initio. Without the certificate of sale to prove the transfer of the ownership of the land from the
government Mabini Legaspi and without the required approval of the sale by the Secretary of Agriculture and
Commerce, We find that Mabini Legaspi did not in any manner acquire ownership over the land in 1943. The
ownership or title over the friar land, specifically Lot No. 7449 remained in the government until Pearanda,
petitioners predecessor, lawfully acquired ownership over the same lot on February 28, 1969 by virtue of a sales
contract executed in his favor.

Even assuming that respondent Virata was a purchaser in good faith and for value, the law is, as between two
persons both of whom are in good faith and both innocent of any negligence, the law must protect and prefer the
lawful holder of registered title over the transferee of a vendor bereft of any transmissible rights (Baltazar vs.
Court of Appeals, G.R. 78728, December 8, 1988, 168 SCRA 354, emphasis ours). Further if a person happened
to obtain property by mistake or to the prejudice of another with or without bad faith, the certificate of title which
may have been issued to him under the circumstances may and should be cancelled or corrected.

SPS. ARMANDO SILVERIO, SR. AND REMEDIOS SILVERIO, Petitioners, v.SPS. RICARDO AND
EVELYN MARCELO, Respondents.

FACTS: On July 12, 2004, respondents spouses Ricardo and Evelyn Marcelo filed a Complaint11 for unlawful
detainer against petitioners spouses Armando Silverio, Sr., and his mother, Remedios Silverio

Respondents represented themselves as the lawful owners and possessors of Lot 3976, a residential land with an
area of 5,004 square meters located in Marcelo Compound, Philip St. Ext., Multinational Village, Paraaque City.
They claimed ownership over said lot by virtue of a Decision12 dated December 12, 1996 of the Department of
Environment and Natural Resources (DENR) .

Respondents alleged that sometime in May 1987, petitioners sought permission to construct a house within Lot
3976. Respondents agreed on the condition that petitioners will vacate the moment they need the land.
Subsequently, respondents made an oral demand on petitioners to leave the house and return possession of the lot
within 15 days from notice.

As respondents' demands remained unheeded, they filed a complaint for unlawful detainer against petitioners
before Barangay Moonwalk in Paraaque City.

On September 6, 2005, the MeTC of Paraaque City, Branch 78, rendered judgment in favor of respondents
Marcelo. The MeTC held that petitioners failed to refute the character of their possession as merely tolerated by
respondents and they became deforciants upon the latter's demand for them to vacate the subject premises.

On appeal, the Paraaque RTC, Branch 258, affirmed the ruling of the MeTC. In a Decision dated November 7,
2006, the RTC sustained respondents' right to bring action to evict petitioners from the contested property. It
found petitioners' claim of ownership unsubstantiated and their defense of forum shopping without merit since the
properties involved in Civil Case Nos. 2004-269 and 2004-271 are different from each other.
Petitioners moved for reconsideration but their motion was denied in an Order18 dated February 5, 2007.
Thereafter, petitioners filed a Petition for Review19 under Rule 42 of the Rules with the CA.

In the assailed Decision dated March 18, 2008, the appellate court affirmed in toto the RTC judgment. It found no
basis to dismiss respondents' complaint based on either forum shopping or splitting a cause of action. The CA
disregarded petitioners' argument that the subject property is public land in view of their admission in their
Answer20 that respondents are the owners and possessors thereof.

ISSUE: W/N RESPONDENTS CAN CLAIM THE SUBJECT LAND AND HAVE A CAUSE OF ACTION TO
PETITIONER?

HELD: NO. Unlawful detainer is an action to recover possession of real property from one who illegally
withholds possession after the expiration or termination of his right to hold possession under any contract, express
or implied. The possession of the defendant in unlawful detainer is originally legal but became illegal due to the
expiration or termination of the right to possess.36 In an unlawful detainer case, the sole issue for resolution is
physical or material possession of the property involved, independent of any claim of ownership by any of the
parties. Where the issue of ownership is raised by any of the parties, the courts may pass upon the same in order
to determine who has the right to possess the property. The adjudication is, however, merely provisional and
would not bar or prejudice an action between the same parties involving title to the property.

For their part, the Silverios seek the dismissal of both complaints on the grounds of forum shopping and splitting
a single cause of action.
Factual considerations relating to lands of the public domain properly rest within the administrative competence
of the Director of Lands and the DENR. Findings of administrative agencies, which have acquired expertise
because of their jurisdiction, are confined to specific matters and are accorded respect, if not finality, by the
courts. Even if they are not binding to civil courts exercising jurisdiction over ejectment cases, such factual
findings deserve great consideration and are accorded much weight.54chanroblesvirtualawlibrary

Meanwhile, the spouses Marcelo insist on their better right to possess the contested parcels as holders of Tax
Declaration No. E-008-19942 in the name of Ricardo Marcelo. Said tax declaration, which covers Lot 3976, was
issued for the year 2005 and canceled Tax Declaration No. E-008-18821, also under the name of Ricardo
Marcelo. Other than said tax declaration, however, we found nothing in the records of these cases to show that the
spouses Marcelo have been consistently paying taxes on Lot 3976. We note that Tax Declaration No. E-008-
19942 was issued fairly recently, and by itself, is inadequate to convince the Court that the spouses Marcelo have
been in open, continuous and exclusive possession of the subject portions of Lot 3976, by themselves or through a
successor-in-interest, since January 3, 1968. More importantly, it is ingrained in our jurisprudence that the mere
declaration of a land for taxation purposes does not constitute possession thereof nor is it proof of ownership in
the absence of the claimant's actual possession.61chanroblesvirtualawlibrary

Considering that the Silverios are in actual possession of the subject portions of Lot 3976, they are entitled to
remain on the property until a person who has a title or a better right lawfully ejects them. The ruling in this case,
however, does not preclude the Silverios and the spouses Marcelo from introducing evidence and presenting
arguments before the proper administrative agency to establish any right to which they may be entitled under the
law.

FRANCISCO M. ALONSO, substituted by his heirs, petitioners, vs. CEBU COUNTRY CLUB, INC.,
respondent.
DECISION
The Facts
(1) Petitioner Francisco M. Alonso, who died pendente lite and substituted by his legal heirs, a lawyer by
profession, the only son and sole heir of the late Tomas N. Alonso and Asuncion Medalle, who died on June 16,
1962 and August 18, 1963, respectively (Exhibits P and P-1). Cebu Country Club, Inc. is a non-stock, non-profit
corporation duly organized and existing under Philippine Laws the purpose of which is to cater to the recreation
and leisure of its members.
(2) Sometime in 1992, petitioner discovered documents and records Friar Lands Sale Certificate
Register/Installment Record Certificate No. 734, Sales Certificate No. 734 and Assignment of Sales Certificate
(Exhs. A, J and K) showing that his father acquired Lot No. 727 of the Banilad Friar Lands Estate from the
Government of the Philippine Islands in or about the year 1911 in accordance with the Friar Lands Act (Act No.
1120). It appears, however, that the deed was not registered with the Register of Deeds because of lack of
technical requirements, among them the approval of the deed of sale by the Secretary of Agriculture and Natural
Resources, as required by law.

(3) Upon investigation of the status of the land, petitioner found out from the office of the Registrar of Deeds of
Cebu City that title to Lot No. 727 of the Banilad Friar Lands Estate had been administratively reconstituted from
the owners duplicate on July 26, 1948 under Transfer Certificate of Title (TCT) No. RT-1310 (T-11351) in the
name of United Service Country Club, Inc., predecessor of Cebu Country Club, Inc.

(5) In the firm belief that petitioners father is still the rightful owner of Lot No. 727 of the Banilad Friar Lands
Estate since there are no records showing that he ever sold or conveyed the disputed property to anyone, on July
7, 1992, petitioner made a formal demand upon Cebu Country Club, Inc. to restore to him the ownership and
possession of said lot within fifteen (15) days from receipt thereof
(6) Left with no other recourse, on September 25, 1992, petitioner filed with the Regional Trial Court, Cebu
City,[6] a complaint for declaration of nullity and non existence of deed/title, cancellation of certificates of title
and recovery of property against defendant Cebu Country Club, Inc.[7] He alleged that the Cebu Country Club,
Inc. fraudulently and illegally managed to secure in its name the administrative reconstitution of the subject land.

(7) On November 5, 1992, Cebu Country Club, Inc. filed with the trial court its answer with counterclaim. It
alleged that petitioner had no cause of action against Cebu Country Club, Inc. since the same had prescribed and
was barred by laches, Cebu Country Club, Inc. having been in possession of the land since 1935 until the present
in the concept of an owner, openly, publicly, peacefully, exclusively, adversely, continuously, paying regularly
the real estate taxes thereon; that Cebu Country Club, Inc. acquired the lot in good faith and for value.

(8) In the course of the trial, Cebu Country Club, Inc. to disprove petitioners allegation that its title, TCT No. RT-
1310 (T-11351), was obtained illegally and fraudulently, submitted the deposition of an expert witness, Atty.
Benjamin Bustos, Chief of the Reconstitution Division, Land Registration Authority, Central Office, Metro
Manila (Exh. 8).

On May 7, 1993, the trial court rendered a decision, the dispositive portion of which reads:

THE FOREGOING CONSIDERED, judgment is hereby rendered in favor of the defendant and against the
plaintiff.

(In due time, both parties appealed to the Court of Appeals.

, the appeals interposed by both parties are hereby DENIED, and the lower courts Decision dated May 7, 1993 is
AFFIRMED

On April 30, 1997, petitioner filed a motion for reconsideration; however, on October 2, 1997, the Court of
Appeals denied the motion.[15]

Hence, this appeal.[16]

On October 24, 2000, we required the Solicitor General to file comment on the issue of the validity of the re-
constituted title in dispute.[17]

On November 8, 2000, the Solicitor General submitted a comment stating that on the basis of information
received from the Land Registration Authority (LRA) and the Land Management Bureau (LMB), the Cebu
Country Club, Inc. had been occupying the disputed property even before the Second World War and developed it
into a golf course and must have acquired the property in a proper and valid manner.[18] Nonetheless, the
Solicitor General emphasized that the Cebu Country Clubs certificate of title is a reconstituted title. A
reconstituted title does not confirm or adjudicate ownership of land covered by lost or destroyed title.[19] And the
 Governments right to file reversion proceedings cannot be barred by prescription that does not run against the
State.[20]

Issue: Whether Francisco Alonso is owner of the land

The second issue is whether the Court of Appeals erred in ruling that the Cebu Country Club, Inc. is owner of Lot
No. 727.

HELD: Admittedly, neither petitioners nor their predecessor had any title to the land in question. The most that
petitioners could claim was that the Director of Lands issued a sales patent in the name of Tomas N. Alonso. The
sales patent, however, and even the corresponding deed of sale were not registered with the Register of Deeds and
no title was ever issued in the name of the latter. This is because there were basic requirements not complied with,
the most important of which was that the deed of sale executed by the Director of Lands was not approved by the
Secretary of Agriculture and Natural Resources. Hence, the deed of sale was void.[28] Approval by the Secretary
of Agriculture and Commerce is indispensable for the validity of the sale.[29] Moreover, Cebu Country Club, Inc.
was in possession of the land since 1931, and had been paying the real estate taxes thereon based on tax
declarations in its name with the title number indicated thereon. Tax receipts and declarations of ownership for
taxation purposes are strong evidence of ownership.[30] This Court has ruled that although tax declarations or
realty tax payments 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 will be paying taxes for a property that is not in his actual or
constructive possession.[31]

Consequently, we rule that neither Tomas N. Alonso nor his son Francisco M. Alonso or the latters heirs are the
lawful owners of Lot No. 727 in dispute. Neither has the respondent Cebu Country Club, Inc. been able to
establish a clear title over the contested estate. The reconstitution of a title is simply the re-issuance of a lost
duplicate certificate of title in its original form and condition. It does not determine or resolve the ownership of
the land covered by the lost or destroyed title. A reconstituted title, like the original certificate of title, by itself
does not vest ownership of the land or estate covered thereby.[38]

MANOTOK vs. BARQUE[1] (G.R. Nos. 162335 & 162605; August 24, 2010; VILLARAMA, JR., J.)

FACTS:

Piedad Estate originally owned by Philippine Sugar Estates Development Company, Ltd., La Sociedad
Agricola de Ultramar, the British-Manila Estate Company, Ltd., and the Recoleto Order of the Philippine Islands.
(It is a Friar Land.)
o The subject parcel Lot No. 823 is part of the Piedad Estate and is located in QC.
On 23 December 1903, Piedad Estate was acquired by the Philippine Government pursuant to the Friar Lands
Act. The certificate of title in the name of the government was OCT No. 614. The Estate was placed under the
administration of the Director of Lands.
Controversy arising from conflicting claims over Lot 823 began after a fire gutted portions of the Quezon City
Hall on June 11, 1988 which destroyed records stored in the Office of the Register of Deeds.
In 1990, Manotoks filed a petition with the LRA for administrative reconstitution of TCT No. 372302
covering Lot No. 823 with an area of 342,945 square meters GRANTED TCT No. RT-22481 (372302) was
issued in 1991.
In 1996, 8 years after the fire the Barques filed a petition with the LRA for administrative reconstitution of
TCT No. 210177 in the name of Homer Barque also covering Lot 823. In support of their petition, the Barques
submitted copies of the alleged owners duplicate of the TCT, real estate tax receipts, tax declarations and a Plan
Fls 3168-D covering the property.
o MANOTOKs opposed alleging that TCT No. 210177 was spurious.
Although both titles of the Manotoks and the Barques refer to land belonging to Lot No. 823, TCT No. 210177
actually involves 2 parcels with an aggregate area of 342,945 square meters, while TCT No. RT-22481 (372302)
pertains only to a 1 parcel of land, with a similar area of 342,945 square meters.
1997 Barques petition was DENIED. Lot. No. 823 already registered in the name of the Manotoks. -
-> Barques MR was denied They appealed to the LRA LRA Reversed.
o LRA found that the reconstitution of the Manotok title was fraudulent. Hence, it ordered the Barque title to be
reconstituted. BUT cancellation must 1st be sought in a court of competent jurisdiction of the 1991 Manotok TCT.
The LRA denied the Manotoks MR and the Barques prayer for immediate reconstitution. Both the
Manotoks and the Barques appealed the LRA decision to the CA.
In the CA, Felicitas Manahan filed a motion to intervene and sought the dismissal of the cases claiming ownership
of the subject property.
2002 and 2003 2 separate divisions of the CA both directed the RD of QC to cancel the Reconstituted
Manotok Title and to reconstitute the Barques valid, genuine and existing TCT No. 210177.
o Hence, the Manotoks filed the present separate petitions which were ordered consolidated on August 2, 2004.
December 12, 2005, SC First Division affirmed both decisions of the CA. Manotoks filed MR Denied
in April 2006 Resolution.
o Thereafter, the Manotoks filed a Motion for Leave to File a Second MR with their MR attached. Denied in June
2006 Resolution. Eventually entry of judgment was made in the Book of Entries of Judgment on May 2, 2006. In
the meantime, the Barques filed multiple motions with the First Division for execution of the judgment, while the
Manotoks filed an Urgent Motion to Refer Motion for Possession to the SC En Banc (with prayer to set motion
for oral arguments). Case was referred to the En Banc in July 2006.
On September 7, 2006, Felicitas Manahan and Rosendo Manahan filed a motion to intervene, to which was
attached their petition in intervention. They alleged that their predecessor-in-interest, Valentin Manahan, was
issued Sale Certificate No. 511 covering Lot No. 823 and attached the findings of the NBI that the documents of
the Manotoks were not as old as they were purported to be. Consequently, the Director of the Legal Division of
the LMB recommended to the Director of the LMB the reconstituted Manotok Title should be reverted to the
state.
o Oral arguments were held on July 24, 2007.
2008 - En Banc set aside the December 2005 1st division decision and entry of judgment recalled and the CAs
Amended Decisions in CA-G.R. SP Nos. 66642 and 66700 were reversed and set aside. The En Banc remanded
the case to the CA.
o The CA was directed to receive evidence of and focus on the issue of WON the Manotoks can trace their claim of
title to a valid alienation by the Government of Lot No. 823 of the Piedad Estate, which was a Friar Land.
PURPOSE: to decide WON the title of the Maotoks should be annulled.
CAs findings None of the parties were able to prove a valid alienation of Lot 823 from the government in
accordance with the provisions of Act No. 1120 otherwise known as the Friar Lands Act. Notably lacking in
the deed of conveyance of the Manotoks is the approval of the Secretary of Agriculture and Commerce as
required by Section 18 of the said law. Upon close scrutiny, the factual allegations and voluminous documentary
exhibits relating to the purchase of Lot 823 by the predecessors-in-interest of the claimants revealed badges of
fraud and irregularity.

BASIS FOR THEIR CLAIMS FOR OWNERSHIP:

Manotoks Their grandfather bought Lot 823 from the Government in 1919. They have since occupied the land,
built their houses and buildings on it. The subject land is now known as Manotok Compound.
Barques Teresita claims her father (Homer) bought land from Emiliano Setosta who had a TCT in his name.
Manahans The lot originally belonged to his parents but was subsequently bought by his wife. They had a
caretaker on the property but she was ousted by armed men in 1950s so they just declared the property for
taxation to protect their rights.

ISSUE: Who has the better right over Lot No. 823? NO ONE! It belongs to the National Government.

RATIO:
From the proceedings in the CA, it was established that while records of the DENR-LMB indicate the original
claimant/applicant of Lot 823 as a certain Valentin Manahan, only the Manotoks were able to produce a sale
certificate in the name of their predecessors-in-interest, certified by the LMB Records Management Division. In
addition, the Manotoks submitted photocopies of original documents entitled Assignment of Sale Certificate dated
1919, 1920 and 1923.
Sale Certificate No. 1054 was not signed by the Director of Lands nor approved by the Secretary of the
Interior. The Certificates of Assignment of Sale contained only the signature of the Director of Lands. The
Manotoks belatedly secured from the National Archives a certified copy of Deed of Conveyance No. 29204 dated
 December 7, 1932, which likewise lacks the approval of the Secretary of Agriculture and Natural Resources as it
was signed only by the Director of Lands.

Act No. 1120 SECTION 18. No lease or sale made by Chief of the Bureau of Public Lands under the provisions
of this Act shall be valid until approved by the Secretary of the Interior.

It is clear from the foregoing provision and from jurisprudence that the sale of friar lands shall be valid only if
approved by the Secretary of the Interior (later the Secretary of Agriculture and Commerce).

In their Memorandum, the Manotoks pointed out that their photocopy of the original Deed of Conveyance No.
29204, sourced from the National Archives, shows on the second page a poorly imprinted typewritten name over
the words Secretary of Agriculture and Natural Resources, which name is illegible, and above it an even more
poorly imprinted impression of what may be a stamp of the Secretarys approval.
The Manotoks are invoking the presumption of regularity in the performance of the RDs task in issuing the
TCT in the Manotok name. The Manotoks contend that we can assume that the Manotok deed of conveyance
was in fact approved by the Department Secretary because the register of deeds did issue TCT No. 22813 in the
name of the buyer Severino Manotok. FURTHER, the Manotoks assert that even if we were to ignore the
presumption of validity in the performance of official duty, Department Memorandum Order No. 16-05 issued on
October 27, 2005 by then DENR Secretary Michael T. Defensor, supplies the omission of approval by the
Secretary of Agriculture and Natural Resources in deeds of conveyances over friar lands.
o NO! These arguments fail.
Citing Alonso v. Cebu Country Club which applied the rule in the Solid State and Liao Cases the absence of
approval by the Secretary of Agriculture and Commerce in the sale certificate and assignment of sale certificate
made the sale null and void ab initio. Necessarily, there can be no valid titles issued on the basis of such sale or
assignment.
o SC in the MR of the Alonso case underscored that the approval is a MADATORY requirement. Approval of the
Secretary of the Interior cannot simply be presumed or inferred from certain acts since the law is explicit in its
mandate. Petitioners have not offered any cogent reason that would justify a deviation from this rule.

DENR Memorandum Order No. 16, invoked by both the Manotoks and the Manahans, states that some Deeds
of Conveyance on record in the field offices of the LMB do not bear the Secretarys signature despite full
payment for the Friar Land. They are deemed signed or otherwise ratified by this Memo provided that the
applicant really paid the purchase price and complied with all the requirements under the Friar Lands Act.
o The CA opined that the Manotoks cannot benefit from the above department issuance because it makes reference
only to those deeds of conveyance on file with the records of the DENR field offices. The Manotoks copy of the
alleged Deed of Conveyance No. 29204 issued in 1932, was sourced from the National Archives.
Manotoks also point out that the Friar Lands Act itself states that the Government ceases reservation of its title
once the buyer had fully paid the price. (They were claiming that they fully paid!) Their basis is SECTION
15[2] of the Friar Lands Act.
Court found that the old rule would support the Manotoks contention however, the new rule Pugeda v.
Trias, the conveyance executed in favor of a buyer or purchaser, or the so-called certificate of sale, is a
conveyance of the ownership of the property, subject only to the resolutory condition that the sale may be
cancelled if the price agreed upon is not paid for in full.
Clearly, it is the execution of the contract to sell and delivery of the certificate of sale that vests title and
ownership to the purchaser of friar land. Such certificate of sale must, of course, be signed by the Secretary of
Agriculture and Natural Resources, as evident from Sections 11[3], 12[4] and the 2nd paragraph of Section 15[5],
in relation to Section 18.

CONCLUSIONS
Manotoks could not have acquired ownership of the subject lot as they had no valid certificate of sale issued to
them by the Government because their Certificate lacks the signature of the Director of Lands and the Secretary of
Agriculture and Natural Resources
The decades-long occupation by the Manotoks of Lot 823, their payment of real property taxes and
construction of buildings, are of no moment. It must be noted that the Manotoks miserably failed to prove the
existence of the title allegedly issued in the name of Severino Mantotok after the latter had paid in full the
purchase price. The Manotoks did not offer any explanation as to why the only copy of TCT No. 22813 was torn
 in half and no record of documents leading to its issuance can be found in the registry of deeds. As to the
certification issued by the Register of Deeds of Caloocan, it simply described the copy presented as
DILAPIDATED without stating if the original copy of TCT No. 22813 actually existed in their records, nor any
information on the year of issuance and name of registered owner.
o As we stressed in Alonso: Prescription can never lie against the Government.

RE: MANAHANS No copy of the alleged Sale Certificate No. 511 can be found in the records of either the
DENR-NCR, LMB or National Archives. Although the OSG submitted a certified copy of Assignment of Sale
Certificate No. 511 allegedly executed by Valentin Manahan in favor of Hilaria de Guzman, there is no competent
evidence to show that the claimant Valentin Manahan or his successors-in-interest actually occupied Lot 823,
declared the land for tax purposes, or paid the taxes due thereon.
Even assuming arguendo the existence and validity of the alleged Sale Certificate No. 511 and Assignment of
Sale Certificate No. 511 presented by the Manahans, the CA correctly observed that the claim had become stale
after the lapse of 86 years from the date of its alleged issuance. Citing Liao v. CA the certificates of sale x x x
became stale after 10 years from its issuance and hence cannot be the source documents for issuance of title
more than 70 years later.

Dispositive:
Manotok Appeal denied
Manahan Petition for intervention denied
Petition for reconstitution of the Barque title denied
All the TCTs in the name of Manotoks, Manahans and Barque, are NULL and VOID. The Register of Deeds of
Caloocan City and/or Quezon City are hereby ordered to CANCEL the said titles.
Lot No. 823 is property of the National Government of the Philippines w/o prejudice to Reversion proceedings

HEIRS OF SPOUSES TEOFILO M. RETER AND ELIZA RETER VS SPS CORENZO MORES

FACTS: On May 2, 2000, the petitioners commenced an action for quieting of title and reconveyance in
the RTC in Trece Martires City (Civil Case No. TM-983),1[2] averring that they were the true and real owners of
the parcel of land (the land) situated in Trez Cruzes, Tanza, Cavite, containing an area of 47,708 square meters,
having inherited the land from their father who had died on July 11, 1983; that their late father had been the
grantee of the land by virtue of his occupation and cultivation; that their late father and his predecessors in interest
had been in open, exclusive, notorious, and continuous possession of the land for more than 30 years; that they
had discovered in 1999 an affidavit dated March 1, 1966 that their father had purportedly executed whereby he
had waived his rights, interests, and participation in the land; that by virtue of the affidavit, Sales Certificate No.
V-769 had been issued in favor of respondent Lorenzo Mores by the then Department of Agriculture and Natural
Resources; and that Transfer Certificate of Title No. T-64071 had later issued to the respondents.

On August 1, 2000, the respondents, as defendants, filed a motion to dismiss, insisting that the RTC had
no jurisdiction to take cognizance of Civil Case No. TM-983 due to the land being friar land, and that the
petitioners had no legal personality to commence Civil Case No. TM-983.

On October 29, 2001, the RTC granted the motion to dismiss.

The petitioners then timely filed a motion for reconsideration, but the RTC denied their motion for
reconsideration on February 21, 2002.2[4]

2[4] Id., p. 93.

On May 15, 2002, therefore, the petitioners assailed the dismissal via petition for certiorari, but the CA dismissed
the petition on April 25, 2003 .

ISSUE: is whether or not the CA erred in dismissing the petition for certiorari.

HELD: The petitioners cause of action for reconveyance has support in jurisprudence bearing upon the manner by
which to establish a right in a piece of friar land. According to Arayata v. Joya,3[17] in order that a transfer of the
rights of a holder of a certificate of sale of friar lands may be legally effective, it is necessary that a formal
certificate of transfer be drawn up and submitted to the Chief of the Bureau of Public Lands for his approval and
registration. The law authorizes no other way of transferring the rights of a holder of a certificate of sale of friar
lands. In other words, where a person considered as a grantee of a piece of friar land transfers his rights thereon,
such transfer must conform to certain requirements of the law. Under Director of Lands v. Rizal,4[18] the
purchaser in the sale of friar lands under Act No. 1120 is already treated by law as the actual owner of the lot
purchased even before the payment of the full payment price and before the execution of the final deed of
conveyance, subject to the obligation to pay in full the purchase price, the role or position of the Government
becoming that of a mere lien holder or MORTGAGE.

Thus, pursuant to Section 16 of Act No. 1120,5[20] had grantee Teofilo Reterta perfected his title, the
petitioners as his heirs would have succeeded him and taken title from him upon his death. By law, therefore,
should the execution of the deed in favor of the respondents be held invalid, the interests of Teofilo Reterta should
descend to the petitioners and the deed should issue in their favor. Adding significance to the petitioners claim
was their allegation in the complaint that they were in possession of the land. Moreover, as alleged in the
petitioners opposition to the motion to dismiss of the respondents, Teofilo Reterta had partially paid the price of
the land.6[21]

Given the foregoing, the petitioners complaint made out a good case for reconveyance or reversion, and its
allegations, if duly established, might well warrant the reconveyance of the land from the respondents to the
petitioners

WHEREFORE, the Court grants the petition for certiorari; sets aside the decision the Court of Appeals
promulgated on April 25, 2003; and directs Branch 23 of the Regional Trial Court in Trece Martires City to
resume the proceedings in Civil Case No. TM-983 with dispatch.

Canete vs. Genuino Ice Company, Inc., 542 SCRA 206 Case Digest

FACTS:

On January 11, 1999, GIC, respondent therein filed a complaint for cancellation of title to property and alleged
that said titles are spurious, fictitious and were issued "under mysterious circumstances," considering that the

3[17] No. 28067, 51 Phil. 654 (1928).

4[18] No. L-292587, 87 Phil. 806 (1950).

5[20] The provision pertinently states: xxx [i]n the event of death of a holder of a certificate the
issuance of which is provided for in section twelve hereof, prior to the execution of a deed by the
Government to any purchaser, the interest of the holder of the certificate shall descend and deed shall
issue to the persons who under the laws of the Philippine Islands would have taken had the title been
perfected before the death of the holder of the certificate.

6[21] Rollo, p. 124.

holders thereof including their predecessors-in-interest were never in actual, adverse and physical possession
of the property, rendering them ineligible to acquire title to the said property under the Friar Lands Act. GIC also
sought to nullify Original Certificate of Title (OCT) No. 614 from which the foregoing titles sought to be
cancelled originated or were derived.

That plaintiffs (petitioners) and their predecessors-in-interest are among those who have been in actual, adverse,
peaceful and continuous possession in concept of owners of unregistered parcels of land situated at Sitio Mabilog,
Barangay Culiat, Quezon City, Metro Manila, which parcels of land are more particularly described as follows:

(1) "A parcel of unregistered land known as Lot 668, situated at Barangay Culiat, Quezon City x x x."

(2) "A parcel of unregistered land known as Lot 669, situated at Barangay Culiat, Quezon City x x x."

The above-described real property is a portion of a friar land known as "Piedad Estate," which property is
intended for distribution among the bona fide occupants thereof pursuant to the Friar Lands Act.

Respondent Genuino Ice Co., Inc. herein filed a motion to dismiss9 on the ground that the complaint states no
cause of action because petitioners Canete,et. al are not real parties-in-interest; that no relief may be granted as a
matter of law; and that petitioners failed to exhaust administrative remedies, but it was denied by the trial court.
Respondent moved for reconsideration but the same was denies hence respondent filed a petition for certiorari
with the Court of Appeals.

The appellate court granted respondents petition for certiorari and dismissed petitioners Second Amended
Complaint for failure to state a cause of action.

ISSUE:

Whether or not the petitioners can claim that they are bona fide occupants of the subject property within the
contemplation of the Friar Lands Act, having allegedly been in actual, adverse, peaceful and continuous
possession of the property.

HELD/RULING:

One who acquires land under the Friar Lands Act, as well as his successors-in-interest, may not claim
successional rights to purchase by reason of occupation from time immemorial, as this contravenes the historical
fact that friar lands were bought by the Government of the Philippine Islands, pursuant to an Act of Congress of
the United States, approved on July 1, 1902, not from individual persons but from certain companies, a society
and a religious order. Under the Friar Lands Act, only "actual settlers and occupants at the time said lands are
acquired by the Government" were given preference to lease, purchase, or acquire their holdings, in disregard of
the settlement and occupation of persons before the government acquired the lands.

According to Art. 420 of the Civil Code, 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;

(2) Those which belong to the State, without being for public use, and are intended for some public service or for
the development of the national wealth.

They do not pray to be declared owners of the subject property despite their alleged adverse possession but
only to be adjudged as the "bona fide occupants" thereof. In other words, petitioners concede the States
ownership of the property. That private respondents are not the proper parties to initiate the present suit. The
complaint, praying as it did for the cancellation of the transfer certificates of title of petitioners on the ground that
they were derived from a "spurious" OCT No. 4216, assailed in effect the validity of said title. While private
respondents did not pray for the reversion of the land to the government, we agree with the petitioners that the
prayer in the complaint will have the same result of reverting the land to the government under the Regalian
doctrine.
In the case at bar, the plaintiffs own averments negate the existence of such right, for it would appear therefrom
that whatever right might have been violated by the defendant belonged to the government, not to the plaintiff.
Plaintiff-appellant argues that although his complaint is captioned as one for cancellation of title, he has
nevertheless stated therein several causes of action based on his alleged rights of possession and ownership over
the improvements, on defendant-appellees alleged fraudulent acquisition of the land, and on the damages
allegedly incurred by him (plaintiff-appellant) in relation to the improvements. These matters are merely ancillary
to the central issue of whether or not defendant-appellees title should be canceled or amended, and they may not
be leaned upon in an effort to make out a cause of action in relation to the said focal issue. Indeed, the principal
relief prayed for in the amended complaint is the cancellation or amendment of defendant-appellees title.

There is no merit in petitioners contention therefore, denied.

G.R. No. 100709 November 14, 1997

REPUBLIC OF THE PHILIPPINES, represented by the DIRECTOR OF LANDS, petitioner, vs. COURT
OF APPEALS, JOSEFINA L. MORATO, SPOUSES NENITA CO and ANTONIO QUILATAN AND THE
REGISTER OF DEEDS OF QUEZON PROVINCE, respondents.
Facts:

Morato filed a Free Patent Application on a parcel of land and the patent was approved and the Register of
Deeds with OCT. Both the free patent and the title specifically mandate that the land shall not
be alienated nor encumbered within five years from the date of the issuance of the patent. District Land Officer in
Lucena City conducted an investigation and it was established that the subject land is a portion of the Calauag
Bay and not suitable to vegetation. Morato mortgaged the property to respondents Quilatan and Advincula.
Petitioner filed an amended complaint against respondents and the Register of Deeds of Quezon for the
cancellation of title and reversion of a parcel of land to the public domain, subject of a free patent in favor of
respondent Morato, on the grounds that the land is a foreshore land and was mortgaged and leased within the five-
year prohibitory period. After trial, the lower court rendered a decision dismissing petitioner's complaint. In
finding for private respondents, the lower court ruled that there was no violation of the 5-year period ban against
alienating or encumbering the land, because the land was merely leased and not alienated. It also found that the
mortgage to Quilatan covered only the improvement and not the land itself. the Court of Appeals affirmed the
decision of the trial court.
Issues:

WON the lease and/or mortgage of a portion of a realty acquired through free patent constitute sufficient
ground for the nullification of such land grant.

WON property revert to the State once it is invaded by the sea and thus becomes foreshore land.

Held:

Respondent Morato cannot fully use or enjoy the land during the duration of the lease contract. This
restriction on the enjoyment of her property sufficiently meets the definition of an encumbrance under Section
118 of the Public Land Act, because such contract "impairs the use of the property" by the grantee. In a contract
of lease which is consensual, bilateral, onerous and commutative, the owner temporarily grants the use of his or
her property to another who undertakes to pay rent therefor. During the term of the lease, the grantee of the patent
cannot enjoy the beneficial use of the land leased. As already observed, the Public Land Act does not permit a
grantee of a free patent from encumbering any portion of such land. Such encumbrance is a ground for the
nullification of the award. Even if only part of the property has been sold or alienated within the prohibited period
of five years from the issuance of the patent, such alienation is a sufficient cause for the reversion of the whole
estate to the State. As a condition for the grant of a free patent to an applicant, the law requires that the land
should not be encumbered, sold or alienated within five years from the issuance of the patent. The sale or the
alienation of part of the homestead violates that condition.
 The application for a free patent was made in 1972. From the undisputed factual findings of the Court of
Appeals, however, the land has since become foreshore. Accordingly, it can no longer be subject of a free patent
under the Public Land Act. When the sea moved towards the estate and the tide invaded it, the invaded property
became foreshore land and passed to the realm of the public domain. The subject land in this case, being foreshore
land, should therefore be returned to the public domain.

Republic of the Philippines vs. Amanda lat vda. De castillo, et. al.

FACTS: The late modesto castillo applied for the registration of two parcels of land, lots 1 and 2, located in
banadero, tanauan, batangas, described in plan psu-119166,. In a decision dated august 31, 1951, the said modesto
castillo, married to amanda lat, was declared the true and absolute owner of the land with the improvements
thereon, for which original certificate of title was issued to him by the register of deeds at batangas, batangas, on
february 7, 1952. After the death of modesto castillo, or on august 31, 1960, amanda lat vda. De castillo, et al.,
executed a deed of partition and assumption of mortgage in favor of florencio l. Castillo, et al., and in lieu thereof,
new transfer cerfificates of title were issued to florencio Castillo.

The republic of the philippines filed civil case no. 2044 with the lower court for the annulment of the certificates
of title issued to defendants amanda lat vda. De castillo, et al., as heirs/successors of modesto castillo, and for the
reversion of the lands covered thereby (lots 1 and 2) to the state. It was alleged that said lands had always formed
part of the taal lake, washed and inundated by the waters thereof, and being of public ownership, it could not be
the subject of registration as private property. Appellants herein, defendants below, alleged in their answer that
the government's action was already barred by the decision of the registration court; that the action has prescribed;
and that the government was estopped from questioning the ownership and possession of appellants.

After trial, the then court of first instance of batangas, branch vi, presided over by honorable benjamin relova, in a
decision dated february 6, 1976, ruled in favor of herein petitioner republic of the philippines.

The court of appeals, on appeal, in a decision promulgated on april 26,1984, reversed and set aside the appealed
decision, and dismissed the complaint (Herein petitioner filed a motion for), but the same was denied.

ISSUE: W/N the subject land is a property of public dominion and therefore cannot be subjected to mortgage?

HELD:YES. the subject property is a property of public dominion and cannot be subjected to mortgage.

In the case of Republic v. Ayala y cia, 14 scra, 259 [1965], the court ruled that shores are properties of the public
domain intended for public use (article 420, civil code) and, therefore, not registrable. Thus, it has long been
settled that portions of the foreshore or of the territorial waters and beaches cannot be registered. Their inclusion
in a certificate of title does not convert the same into properties of private ownership or confer title upon the
registrant.

A careful study of the merits of their varied contentions readily shows that the evidence for the government has
far outweighed the evidence for the private respondents. Otherwise stated, it has been satisfactorily established as
found by the trial court, that the properties in question were the shorelands of taal lake during the cadastral survey
of 1923.

The defense of long possession is likewise not available in this case because, as already ruled by this court, mere
possession of land does not by itself automatically divest the land of its public character (cuevas v. Pineda, 143
scra 674 [1968]).

Premises considered, the decision of the then intermediate appellate court is hereby set aside and reversed and the
decision of the then court of first instance of batangas is hereby affirmed and reinstated.

PILAPIL VS. CA
 G.R. No. 55134

December 4, 1995

FACTS: In the instant petition for review on certiorari, questioning the decision of the CA affirming the
decision of the trial court.

Felix Otadora was the registered owner of a parcel of land (273,796-sqm) in Ormoc city covered by OCT
No. 26026. He died and was survived by his wife Leona and 3 children (vitaliana, Maxima and Agaton).
Subsequently, Leona and the three children sold portions of said lot, leaving a portion with an area of 51, 019
sqm (Lot 8734-B-5) . Then Leona died.

On March, 1962, the Otadora siblings, together with their nephew Antonio, executed a deed of
extrajudicial partition and confirmation of sales, giving each of them one-fourth undivided share in the remaining
property. That very same day, Vitallana and Agaton sold to petitioners Pilapil and Penaranda an undivided portion
of the, measuring 18,626 sqm of lot Lot 8734-B-5. The deed of sale, which was executed in the presence of
Antonio and another witness, specified that the possession and ownership of the property sold shall be transferred
to the buyers from the date of the instrument. The deed of extrajudicial partition was annotated on OCT No.
26026. Because of such partition, OCT No. 26026 was cancelled and replaced by TCT No. 4026 which, in turn,
was superseded by TCT No. 4029, indicating as owners Agaton, Vitaliana, Maxima, and Antonio. The sale to
petitioners was inscribed at the back of TCT No. 4029 as Entry No. 10903 on March 29, 1962.

Later, Antonio sold his one-fourth share to his cousin Bensig, who ceded one-half thereof to the spouses
Visitacion Otadora and S. Aldrin, by a deed of quitclaim. Because of such, TCT No. 4029 was cancelled and
supplanted by TCT No. 4484, which showed Agaton, Vitaliana, Maxima, Bensig, and the spouses Visitacion and
S. Aldrin as owners of Lot 8734-B-5. Petitioners names did not appear among the owners, although in the
memorandum of encumbrances at the back of TCT No. 4484 regarding the sale to them by Vitaliana was retained.

Despite the sale of 18, 626 sqm of their undivided share in said lot earlier made in favor of petitioners,
Agaton AGAIN sold his one-fourth share in the lot to his daughter Carmen covered by TCT No. 9130. Vitaliana
on the other hand, RE-SOLD her one-fourth share to Maxima. 4 days later, Maxima sold her now one-half share
to her sons Dionisio and Macario who were able to register the said properties in their names. On Sept, 1971, TCT
was issued to spouses Visitacion and S. Aldrin, and another TCT for Carmen and her husband.

Upon discovery of the new titles, petitioners filed a protest with the register of deeds or Ormoc city, who
in a letter informed Carmen, S. ALdrin, Macario and Dionisio of the existence of the deed of sale in favor of
petitioner and required them to present their original titles for proper annotation. Such request was, however,
ignored.

On July 1972, Carmen and her husband Masias sold the one-fourth share sold by Carmens father to
her to respondent Serafica and Sons Corp. which was not able to register the same because of the annotation in
TCT No. 9130 earlier made showing the sale in favor of petitioners. Because of this, the corporation charged the
vendors with estafa before the City Fiscals Office, but the complaint did not prosper.

Petitioners therefore filed, on December 1973, a complaint for quieting of title, annulment of deeds,
cancellation of titles, partition, and recovery of ownership with damages, against herein private respondents. The
complaint alleged, among other things, that petitioners succeeded in possessing only 12,000 square meters of the
lot and needed 6,626 square meters more to complete the total area purchased from Vitaliana and Agaton in 1962.

The trial court rendered a decision in favor of the defendants (Serafica & Sons Corporation) and against
the plaintiffs (Pilapil) hereby dismissing plaintiffs complaint, and ordering the plaintiffs to pay the defendants for
attorneys fee, to vacate the lot in question and deliver the same to defendant. In its decision dated June 1994, the
court a quo concluded that the annotation on TCT No. 4484 of the sale by Vitaliana and Agaton in favor of
petitioners was null and void because the latter failed to surrender the owners duplicate copy of the title, in
violation of Section 55 of the Land Registration Act (Act No. 496).

The CA said that OCT No. 26026 thereby became inexistent, it having been already cancelled by TCT(s)
Nos. 4026 and 4029. It would have been against the law to have the deed of sale registered in TCT No. 4029
without an order from the proper court authorizing such registration, specifically because OCT No. 26026 had
already undergone two cancellations, first by TCT No. 4026 and then by TCT No. 4029 .It held that Appellants
should have filed the necessary petition with the proper court asking that the Register of Deeds be authorized to
annotate the deed of sale executed by Agaton Otadora and Vitaliana Otadora in their favor. The said title was,
therefore, null and void, and the same did not acquire the effect of a constructive notice to the whole world of the
interest over the land in question of the plaintiffs-appellants. At most, the deed of sale is merely a contract
between the plaintiffs-appellants and the vendors appearing therein but without any binding effect upon their
persons and upon whom bad faith cannot be imputed. Also, The deed of sale did not specify what part of the 1/4
share of each of the registered owners who executed the sale was sold to the appellants. The CA also agreed with
the lower court that H. Serafica & Sons Corporation was an innocent purchaser for value as it was not required by
law to go beyond TCT No. 9130 which, on its face, appeared to be unencumbered.

ISSUE: petitioners argue that the CA erred in holding that:

(1) The annotation of the sale in their favor on TCT No. 4029 is ineffectual;

(2) The deeds of sale respectively executed by Agaton and Vitaliana in favor of Carmen and Maxima are
valid and superior to that executed earlier by Agaton and Vitaliana in their favor;

Petitioners contend that the liability of the Otadoras who sold the same property twice should have been
determined to avoid multiplicity of suits

HELD: WHEREFORE, the appealed decision is hereby REVERSED and SET ASIDE. Petitioners are
declared the lawful owners of 18,626 square meters of said lot and the unclaimed lot of petitioners be taken in
equal portions from the shares thereof of Agaton and Vitaliana or their successors-in-interest.

(1) The court below correctly ruled that the annotation of Entry No. 10903 in the certificates of title was
not made in accordance with law. To affect the land sold, the presentation of the deed of sale and its entry in the
day book must be done with the surrender of the owners duplicate of the certificate of title.Production of the
owners duplicate of the certificate of title is required by Section 55 of Act No. 496 (now Section 53 of PD No.
1529), and only after compliance with this and other requirements shall actual registration retroact to the date of
entry in the day book. However, nonproduction of the owners duplicate of the certificate of title
may not invalidate petitioners claim of ownership over the lot involved considering the factual circumstances of
this case.

(2) It is undisputed that after the sale of the lot to petitioners, the same vendors sold the same property to
persons who cannot be considered in law to be unaware of the prior sale to the petitioners.

Considering these relationships and contrary to the findings of the courts below, the vendees, Carmen and
Maxima, cannot be considered as third parties who are not bound by the prior sale between Agaton and Vitaliana
as vendors and petitioners as vendees, because there is privity of interest between them and their
predecessors. The reason for this is that the validity of a title to a piece of property depends on the buyers
knowledge, actual or constructive, of a prior sale. While there is no direct proof that Carmen and Maxima actually
knew of the sale to petitioners, they are deemed to have constructive knowledge thereof by virtue of their
relationship to both Agaton and Vitaliana. Hence, it has become immaterial if the sale to petitioners was properly
annotated on the correct certificate of title or not.

It is not disputed that of the 25,510 square meters which pertain to Vitaliana and Agaton as their
combined undivided share in Lot No. 8734-B-5, an area of 18,626 square meters had been sold to petitioners who,
in turn, were able to possess only 12,000 square meters thereof. Thus, at most, Vitaliana and Agaton had a
remainder of 6,884 square meters of undivided share which they could have legally disposed of. As it turned out,
however, they sold their entire individual one-fourth shares to Carmen and Maxima who, as earlier concluded,
were privy to the prior sale to petitioners.

Thus, when Carmen sold the property to H. Serafica and Sons Corporation, she no longer had any rights
of dominion to transmit, since her own father who sold to her the property had himself earlier relinquished his
ownership rights in favor of the petitioners. Accordingly, Carmen transmitted no right to the corporation.
 Under these circumstances, the corporation, having failed to obtain relief through the criminal complaint
filed against the spouses Carmen Otadora and Luis Masias, and having relied on the unencumbered transfer
certificate of title shown to it by the Masias spouses, is entitled to damages.

As regards the sale made by Vitaliana to her sister Maxima, the former can no longer transmit any
property rights over the subject lot when she sold it to her own sister as she had previously sold the same property
to petitioners. Moreover, as Vitalianas sister, Maxima was actually a co-owner of Lot No. 8734-B-5 which, at the
time of the sale to petitioners, was not yet partitioned and segregated. Maxima was, therefore, privy to the
contract

On the matter of whether the rights of co-owners had been transgressed by the sale to the petitioners, the
trial court erroneously ruled that there should be proof of compliance with Article 1623 of the Civil Code
requiring the vendor of the property to give a written notice of sale to the other co-owners.

In view of the foregoing, the sale to the petitioners must be respected by the successors-in-interest of
Agaton and Vitaliana. Inasmuch as petitioners had managed to possess only 12,000 square meters of the 18,625
square meters they bought from Agaton and Vitaliana, the whole area purchased by them should be taken from
the shares of Agaton and Vitaliana upon partition of the property.

Macasiano v. Diokno
G.R. No. 97764

DOCTRINE: "Verily, the powers of a local government unit are not absolute. They are subject to limitations laid
down by the 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."

FACTS:
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,
Paranaque, Metro Manila and the establishment of a flea market thereon. 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.

June 20, 1990, 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 Paranaque. 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. 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. 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 Paranaque and enjoining petitioner Brig. Gen. Macasiano from enforcing his letter-
order against respondent Palanyag.
ISSUE:
W/N an ordinance or resolution issued by the municipal council of Paranaque authorizing the lease and use of
public streets or thoroughfares as sites for flea markets is valid. -- NO

HELD:
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. The Solicitor General furthers the matter with his observation, "Verily, the powers of a local
government unit are not absolute. They are subject to limitations laid down by the 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." Moreover,
the municipality did not even comply with the guidelines set forth by the Metropolitan Manila Authority. Even if
we were to argue for purposes of debate, the city of Paranaque's claim would still be bereft and lacking in reason.

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.

Province of Zamboanga del Norte v. City of Zamboanga

G.R. No. L-24440

DOCTRINE: Under the law of Municipal Corporations, properties which are devoted to public service are
deemed public and the rest remain patrimonial. Under this norm, to be considered public, it is enough that the
property be held and, devoted for governmental purposes like local administration, public education, public
health, etc.

FACTS:
On October 12, 1936, Commonwealth Act 39 was approved converting the Municipality of Zamboanga into
Zamboanga City. It further provided that buildings and properties which the province shall abandon upon the
transfer of the capital to another place will be acquired and paid for by the City of Zamboanga at a price to be
fixed by the Auditor General.

The properties and buildings referred to consisted of 50 lots and some buildings constructed thereon, located in
the City of Zamboanga and covered individually by Torrens certificates of title in the name of Zamboanga
Province. Pursuant to CA 39, the Auditor General fixed the value of the properties and buildings in question left
by Zamboanga Province in Zamboanga City at P1,294,244.00.

When RA 711 was approved dividing the province of Zamboanga into Zamboanga del Norte and Zamboanga del
Sur, assets and obligations of the previous Zamboanga province were divided as follows: 54.39% for Zamboanga
del Norte and 45.61% for Zamboanga del Sur. Zamboanga del Norte therefore became entitled to 54.39% of
P1,294,244.00, the total value of the lots and buildings in question, or P704,220.05 payable by Zamboanga City.

The Executive Secretary issued a ruling holding that Zamboanga del Norte had a vested right as owner of the
properties mentioned in Sec. 50 of CA 39, and is entitled to the price thereof, payable by Zamboanga City. This
ruling revoked the previous Cabinet Resolution conveying all the said 50 lots and buildings thereon to
Zamboanga City when the provincial capital of the then Zamboanga Province was transferred to Dipolog.

The Secretary of Finance then authorized the Commissioner of Internal Revenue to deduct an amount equal to
25% of the regular internal revenue allotment for the City of Zamboanga. The deductions, all aggregating
P57,373.46, was credited to the province of Zamboanga del Norte, in partial payment of the P704,220.05 due it.

On June 17, 1961, RA 3039 was approved amending Sec. 50 of CA 39 by providing that buildings, properties and
assets belonging to the former province of Zamboanga and located within the City of Zamboanga are transferred,
free of charge, in favor of the said City of Zamboanga.

Consequently, the Secretary of Finance ordered the CIR to stop from effecting further payments to Zamboanga
del Norte and to return to Zamboanga City the sum taken from it out of the internal revenue allotment of
Zamboanga del Norte.

Zamboanga del Norte filed a complaint for relief with Preliminary Mandatory Injunction against Zamboanga City,
the Secretary of Finance and the Commissioner of Internal Revenue. They prayed that 1) RA 3039 be declared
unconstitutional, 2) plaintiff's rights and obligations under said law be declared, 3) they be reimbursed the sum
paid to defendant City, and 4) the latter be ordered to continue paying the balance of its internal revenue
allotments.

The lower court ruled in favor of the plaintiff.

ISSUE:
WON RA 3039 is valid PARTLY VALID

HELD:
Applying the norm obtaining under the principles constituting the law of Municipal Corporations, all those of the
50 properties in question which are devoted to public service are deemed public; the rest remain patrimonial.
Under this norm, to be considered public, it is enough that the property be held and, devoted for governmental
purposes like local administration, public education, public health, etc.

Following this classification, RA 3039 is valid insofar as it affects the lots used as capitol site, school sites and its
grounds, hospital and leprosarium sites and the high school playground sites a total of 24 lots since these
were held by the former Zamboanga province in its governmental capacity and therefore are subject to the
absolute control of Congress.

Regarding the several buildings existing on the lots above-mentioned, the records do not disclose whether they
were constructed at the expense of the former Province of Zamboanga. Considering however the fact that said
buildings must have been erected even before 1936 when CA 39 was enacted and the further fact that provinces
then had no power to authorize construction of buildings at their own expense, it can be assumed that said
buildings were erected by the National Government, using national funds. Even assuming that provincial funds
were used, still the buildings constitute mere accessories to the lands, which are public in nature, and so, they
follow the nature of said lands, i.e., public.

But RA 3039 cannot be applied to deprive Zamboanga del Norte of its share in the value of the rest of the 26
remaining lots which are patrimonial properties since they are not being utilized for distinctly, governmental
purposes. Moreover, the fact that these 26 lots are registered strengthens the proposition that they are truly private
in nature. However, the fact that the 24 lots used for governmental purposes are also registered is of no
significance since registration cannot convert public property to private.

It results then that Zamboanga del Norte is still entitled to collect from the City of Zamboanga the former's
54.39% share in the 26 properties which are patrimonial in nature.

ROMAN CATHOLIC BISHOP OF KALIBO, AKLAN, represented by BISHOP JUAN N. NILMAR,

Petitioner, vs. MUNICIPALITY OF BURUANGA, AKLAN, represented by the HON. PROTACIO S.
OBRIQUE, Respondent.

G.R. No. 149145 March 31, 2006

FACTS: Petitioner Roman Catholic Bishop of Kalibo was allegedly the lawful owner and possessor of a parcel of
residential and commercial land, designated as Lot 138. The Roman Catholic Church was built in 1984 in the
middle portion of the said lot and has been in existence since then up to the present. That sometime in 1978, the
Municipality of Buruanga constructed its municipal building on the northeastern portion of the Lot 138 after it
obtained the permission of the then parish priest of Buruanga on the condition that the municipality remove all the
improvements it constructed thereon if and when the petitioner needed the said lot.

When the municipal building was razed by fire in 1989, petitioner, through its counsel requested the
officials of the municipality to refrain from constructing its new building on the same site because it is the
property of the church and it needed the lot for its social projects. However, the construction of the new municipal
building on the same site proceeded. Consequently, petitioner filed a complaint and prayed that it be declared the
lawful owner and possessor of Lot 138. Petitioner contends that it does not allegedly lose its possession or
ownership over the property if the possession or use by another of the same is by mere tolerance.

In its answer, the municipality alleged that said lot was surveyed as property of the municipality and that
the said municipality alone had possessed the said land under the claim of title exclusively for over fifty (50)
years, exclusive of all other rights and adverse to all other claimants.

After due trial, the trial court declared petitioner as the lawful owner and possessor of Lot 138-B and the
Municipality of Buruanga as the lawful owner and possessor of Lots 138-A and 138-C, the said lots being public
plaza for public use. On appeal, the CA affirmed the ownership of petitioner over Lot 138-B but declared Lots
138-A and 138-C as property of public dominion.

ISSUE: Whether or not petitioners open, continuous, exclusive and notorious possession and occupation of Lot
138 since 1894 and for many decades thereafter vests ipso jure or by operation of law upon it a government grant,
a vested title, to the subject property.

HELD: No. There was no question that petitioner has been in open, continuous, exclusive and notorious
possession and occupation of Lot 138-B since 1894 as evidenced by the church structure built thereon but there
was no evidence to show that such possession and occupation extended to Lots 138-A and 138-C beginning the
same period. No single instance of the exercise by the petitioner of proprietary acts or acts of dominion over these
lots was established. Its unsubstantiated claim that the construction of the municipal building as well as the
subsequent improvements thereon was by its tolerance does not constitute proof of possession and occupation on
the petitioners part. Absent the important requisite of open, continuous, exclusive and notorious possession and
occupation thereon since 1894, no government grant or title to Lots 138-A and 138-C had vested upon the
petitioner ipso jure or by operation of law.

Possession is open when it is patent, visible, apparent, notorious and not clandestine. It is continuous
when uninterrupted, unbroken and not intermittent or occasional; exclusive when the adverse possessor can show
exclusive dominion over the land and an appropriation of it to his own use and benefit; and notorious when it is so
conspicuous that it is generally known and talked of by the public or the people in the neighbourhood. Use of land
is adverse when it is open and notorious.

The municipality of tacloban, applicant-appellee, v. The director of lands, opponent-appellant.

Attorney-general villamor, for appellant.

No appearance, for appellee.

FACTS: On april 6, 1908, the municipal president of tacloban, province of leyte, filed an application in the court
of land registration, in representation of the said municipality, soliciting the inscription in the registry, in
conformity with the law, of a parcel of land which it was alleged belonged to the municipality mentioned, as
absolute owner of the same, situated within the town proper of tacloban, not comprised within the reservation,
bounded on the north by the land owned by the chinaman la layco, on the south by calle san roque, on the east by
the lands belonging to hilarion asuncion and the municipality referred to, and on the west by calle rizal. The
application further recited that the land concerned contained an area of 4,054.85 square meters, the description
and boundaries of which were given in detail in the accompanying plan; that the said land was appraised at the
last assessment, for the purpose of the payment of the land tax, at $3,041, united states currency; that there was no
incumbrance on the property, nor did any person have any right or interest therein, except the applicant; that it
was acquired by being filed in by the municipality in 1893 and 1894; and that it was then occupied by the houses
of vicente bagay, victor cipres, cirila almera, sinforoso labajo, manuel catalan, hilaria opio, dalmacio agaton,
gervasio brillantes, manuel padilla, rosa juson, and teresa escorial. The applicant furthermore stated that, in case
of the remote possibility of his application not being admissible under the land registration act, he would, as
municipal president, claim the benefits offered by chapter vi of act no. 926, inasmuch as the municipality had
been in possession of the land since 1893, had used it for building purposes for the past fifteen years, and the
property was inclosed on two of its sides by buildings.

On june 8, by reason of the summons and publications made in connection with the action taken on the
aforementioned application, the attorney-general appeared in representation of the director of lands and opposed
the applicants petition, on the ground that the land in question belonged to the government of the united states
and was under the control of the government of these islands, and asked that the registration applied for be
denied.

The court, in view of the oral evidence adduced by the applicant, rendered judgment by decreeing, after entry of
the general default, the adjudication and registration of the property described in the application and plan
aforementioned, in favor of the applicant, in conformity with the provisions of act no. 926.

ISSUE: W/N THE SUBJECT LAND IS PART OF THE PROPERTY OF THE MUNICIPALITY?

HELD: NO. The land sought to be inscribed in the property registry by the municipality of tacloban, was, prior to
1891-1892, a mangrove swamp which was inundated by the water of a nearby estero, although situated within the
town proper, and was gradually filled in by order of the said municipality, between the years 1892 and 1894,
when it was successively occupied by the houses of several of the residents of tacloban, as the portions of the land
were successively raised the level and freed from the water.

Since then, the municipality has exercised control over the said land and found it to its interest to collect rents
from those who, without impediment of any kind, occupied it with their dwellings. However, It was not shown
that any building belonging to the municipality of tacloban and intended for the public service was erected on the
said land, nor that the property had been conveyed to the aforementioned municipality to form a part of the
municipal assets or estate; therefore it can not be considered as one of the patrimonial properties of the
municipality, nor entered in the name of the same in the property registry.

The mere fact that the municipality of tacloban continued to charge and collect rents from the persons who build
houses upon the occupied portions of the said lands, is not proof that the municipality was the proprietor, for, as it
had erected thereon no building intended for the service of the pueblo - a circumstance which, had it existed,
would have led to the presumption that, in obtaining permission to erect the building, it also obtained a grant, if
only an implied one, of the land, from the government in the name of the state in order that the said
municipality may be deemed to be the owner of the land in question, it must prove that an express grant of the
said land, as one of the properties that form a part of its patrimony, was made to it by the government.

It is true that the land herein concerned is neither mineral nor forest land, but is comprised within the term of
agricultural land; yet the mere occupation of the said property by the municipality during more than ten years
immediately preceding the passage of act no. 926, which went into effect on july 26, 1904, can not serve as a little
whereby to acquire the ownership thereof pursuant to the provisions of paragraph 6 of section 54 of act no. 926,
inasmuch as, to do so, is necessary that the municipality shall have an implied or express grant from the
government, without the fulfillment of which requisite it can not be presumed that a municipality owns and holds
in good faith realty admittedly belonging to the state, enabling it to convert the same into terreno propio so as to
form a part of its estate or municipal assets.

Salalima v. Guingona

GR No. 117589-92, May 22 1996

FACTS:
 This Supreme Court case involves four administrative complaints filed against Albay Governor Salalima
and the members of the Sangguniang Panlalawigan of Albay. The complaints seek to hold the petitioners liable
for a) wanton disregard of law amounting to abuse of authority in OP case 5470; b) grave abuse of authority under
Section 60 (e) of the Local Government Code in OP cae 5649; c) oppression and abuse of authority under Section
60 (c) and (e) of the Local Government Code in OP case 5471 and d) abuse of authority and negligence in OP
case 5450. Relevant to our discussion on whether or not LGUs can hire private lawyers in cases filed against it is
OP case 5469.

The Province of Albay imposed real property tax against the National Power Corporation. The latter,
claiming that it is tax exempt, refused to pay the said tax liability. Due to its refusal to pay, the Province of Albay
took over the properties of NPC and sold them in an auction sale. The Province was the sole bidder. Upon the
failure of NPC to redeem the property, the Province sought the issuance of a writ of possession from the Regional
Trial Court. The NPC challenged this in a petition filed with the Supreme Court. The Province, through its legal
office Atty. Ricaforte, filed its comment on the said petition on May 17, 1989.

On June 2, 1989, the Sangguniang Panlalawigan issued Resolution No. 129-89, authorizing Salalima to
engage the services of a Manila-based law firm to handle the case. As such, on August 25, 1989, Atty. Jesus
Carnago entered his appearance with the SC as a collaborating counsel. On November 14, 1989, Atty. Antonio
Jose Cortes of Cortes and Reyna Law Firm sent a letter to Salalima, informing him that Atty. Carnago had filed a
memorandum in the SC. He then proposed that his law firm and that of Atty. Carnago enter into a retainer
agreement with the Province in connection with the case. He charged 50, 000 as acceptance fee and a contingency
fee of 18%. In response to this, the Sangguniang Panlalawigan passed Resolution No. 01-90 authorizing Salalima
to sign a retainer contract with Cortes and Reyna Law Firm.

On June 4, 1990, the Supreme Court ruled in favor of the Province. The latter then paid the lawyers
amounting to around 7 million. However, on May 31, 1993, the Provincial Auditor informed the Province that
COA had disallowed the payments for lack of prior written conformity of the Solicitor General and a written
concurrence of COA. An administrative complaint was later on filed against the petitioners with the Office of the
President.

The OP found that the petitioners incurred administrative liability in hiring private lawyers to defend it in
the NPC case.

OPs RATIO

1. Section 481 of the LGC states that the legal officer of the province has the duty to represent the LGU in
all civil actions and special proceedings wherein the LGU or any official thereof, in his official capacity,
is a party.

2. In the case Municipality of Bocaue v. Manotok, the Supreme Court ruled that the LGU cannot be
represented by private lawyers and it is solely the Provincial legal officer or provincial fiscal who can
represent it. A private lawyer has no standing in such a case.

3. Sec. 481 and Municipality of Bocaue v. Manotok are applicable in this case. In hiring the private lawyers,
the petitioners violated the LGC and the doctrine laid down by the Supreme court.

4. Moreover, the transaction was also full of irregularities.

a. The disbursement of 7M as payment was disallowed by COA for failure to comply with the
prerequisite conformity from the SolGen and the COA.

b. Resolution 01-90 authorized Salalima to contract with Cortes and Reyna Law Firm and NOT with
Atty. Carnago. Salalima exceeded the authority given to him in doing so.

c. Only Atty. Carnago appeared as counsel in the NPC case. It appears that Cortes and Reyna did not
render any form of legal service in relation thereto.

d. The provincial legal officer had already filed a comment in the SC. What Carnago filed was merely a
memorandum. The total attorneys fees of 38 Million is clearly unconscionable.
 Because of these findings, the OP imposed the penalty of suspension for 6 months against Gov.
Salalima and Vice governor Azana, while the members of the SP were suspended for 4 months. The
petitioners appealed the case to the SC. In the meantime, the 1992 elections took place wherein the
petitioners were reelected.

ISSUE: WON the petitioners incurred administrative liabilities in hiring private lawyers to represent the Province

HELD: Whether or not they incurred liabilities, they can no longer be held to answer for these in view of the fact
that they have already been reelected. Their reelection operates as condonation of any misconduct committed in
their prior term.

RATIO

In Pascual v. Pascual, the SC ruled that offenses committed or acts done in a previous term are generally
held not to furnish a cause for removal in the current term of office. This is because each term is separate from
other terms and that the reelection operates as a condonation of the officers previous misconduct to the extent of
cutting off the right to remove him therefore. Such a rule is founded on the theory that an officials reelection
expresses the sovereign will of the electorate to forgive or condone any act or omission constituting a ground for
administrative discipline which was committed during the previous term. Also, sound policy dictates such a rule.
A contrary rule would open the floodgates to exacerbating endless partisan contests between reelected officials
and their political enemies who may not stop to hound the former during his new term with administrative cases
for acts alleged to have been committed during his previous term.

RULING: OP Decision imposing penalties is reversed and set aside.