UP LAW A2019
Table of Doctrines - Property Midterms
Case Title
Movable or Personal Property
Davao Sawmill v. Castillo
Berkenkoter v. Cu Unjieng
Associated Insurance v. Iya
Facts
Davao Saw Mill leased the land of another upon which
their business was conducted. Within this land, they
erected a building which housed the machinery used by it.
In the contract of lease, Davao Sawmill agreed to turn over
free of charge all improvements and buildings erected by it
on the premises with the exception of machineries, which
shall remain with the Davao Sawmill. In an action brought
by the Davao Light and Power Co., judgment was rendered
against Davao Sawmill. A writ of execution was issued and
the machineries placed on the sawmill were levied upon
as personalty by the sheriff. Davao Light and Power Co.,
proceeded to purchase the machinery and other properties
auctioned by the sheriff. Furthermore, it was found that
Davao Saw Mill treated the machinery as personal property
by executing chattel mortgages.
Mabalacat Sugar Co. obtained from Cu Unjieng e Hijos a
loan secured by a mortgage constituted on two parcels of
land "with all its buildings, improvements, sugar-cane mill...
and whatever forms part or is a necessary compliment of
said sugar cane mill now existing or that may in the future
exist in said lots." Shortly thereafter, Berkenkotter, upon
the request of Mabalacat, advanced the necessary amount
for the purchase of additional machinery and equipment to
increase the capacity of the sugar central. Mabalacat
bound itself not to mortgage or encumber the additional
machinery and equipment to anybody until Berkenkotter be
fully reimbursed. Berkenkotter filed this complaint to
exclude from the mortgage executed by Mabalacat in favor
of Cu Unjieng e Hijos the additional machinery and
equipment. He contends that the installation of the
machinery and equipment claimed by him in the sugar
central was not permanent in character.
In order to purchase rice on credit from NARIC, Adriano and
Lucia Valino executed in 1951 an alleged chattel mortgage
on their house in Caloocan in favor of Associated Insurance
and Surety Co. A year later, the Valinos executed a real
estate mortgage over the same house in favor of Isabel Iya.
In its complaint filed before the Manila CFI, Associated
Insurance prayed for the recognition of its right over the
property.
Holding/Doctrine Notes/Relevant Laws
Issue Art. 415 par. 5 CC
W/N the machines placed and mounted on foundations of
cement placed by the lessee are real or personal property? -
PERSONAL.
Although machinery is naturally movable, it may be immoblized
by destination or purpose. Applying Art. 334 [415] par. 5 CC, the
rule is that machinery which is movable in its nature only
becomes immobilized when placed in a plant by the owner of
the property or plant, but not when so placed by a tenant, a
usufructuary, or any person having only a temporary right,
unless such person acted as the agent of the owner; or he
intended to permanently give away the property in favor of the
owner.
Since, in this case, Davao Sawmill, as tenant, placed the
machinery, such are deemed personal.
The installation of a machinery and equipment in a mortgaged In a mortgage of real estate, the improvements
sugar central for the purpose of carrying out the industrial on the same are included; therefore, all
functions of the latter and increasing production constitutes a objects permanently attached to a mortgaged
permanent improvement on said sugar central and subjects building or land, although they may have been
said machinery and equipment to the mortgage constituted placed there after the mortgage was
thereon. The fact that Mabalacat bound itself to hold the constituted are also included (Bischoff v
additional machinery and equipment as security for payment of Pomar and Compania General de Tabacos)
its credit to the person who supplied the purchase money to
buy them does not alter the permanent character of the Art 334 par 5 of the Old Civil Codegives the
installation. character of real property to "machinery, liquid
containers, instruments, or implements
intended by the owner of any building or land
for use in connection with any industry or trade
being carried on therein and which are
expressly adapted to meet the requirements of
such trade or industry".
WON the chattel mortgage executed by Adriano and Lucia Art. 415(1), CC
Valino should take preference over the real estate mortgage -
NO
In Lopez v. Orosa , the Court concluded that a building is an
immovable property irrespective of whether or not the building
and the property on which it stands belong to the same owner.
Thus, to divest a building of its character as realty creates a
situation where a permanent fixture changes its nature as its
ownership changes hands. Since only personal properties can
be the subject of a chattel mortgage, the execution of the
chattel mortgage over the Valinos' house is a nullity
1

Makati Leasing v. Wearever
Bd. of Assessment Appeals v.
Meralco
Under a Receivable Purchase Agreement with Makati
Leasing and Finance Corp., Wearever Textile Mills, Inc.
executed a chattel mortgage over certain raw materials
inventory and a machine described as an Artos Aero Dryer
Stentering Range. When Wearever defaulted, Makati
Leasing filed a complaint for foreclosure, and a sheriff
seized the machine's main drive motor. The CA set aside
the Rizal CFI's seizure order, holding that the machine was
real property
On November 15, 1955, the QC City Assessor declared the
MERALCO's steel towers subject to real property tax. After
the denial of MERALCO's petition to cancel these
declarations, an appeal was taken to the QC Board of
Assessment Appeals, which required respondent to pay
P11,651.86 as real property tax on the said steel towers for
the years 1952 to 1956.
MERALCO paid the amount under protest, and filed a
petition for review in the Court of Tax Appeals (CTA) which
rendered a decision ordering the cancellation of the said
tax declarations and the refunding to MERALCO by the QC
City Treasurer of P11,651.86.
UP LAW A2019
WON the machine, or the Artos Aero Dryer Stentering Range, is
real property - NO
Standard Oil Co. of New York v. Jaramillo:
"The parties to a contract may by agreement treat as personal
property that which by nature would be real property, as long as
no interest of third parties would be prejudiced thereby."
1. As in the case of Tumalad v. Vicencio, the characterization of
the subject machine as chattel is indicative of the intention of
Wearever and impresses such character upon it
2. Wearever's claim that estoppel cannot apply against it fails
as the status of the machine was never placed in issue before
the lower court and the CA
Are the steel towers or poles of the MERALCO considered real Art. 415 (1) (3) (5) -NCC
or personal properties for purposes of taxtion? - PERSONAL
Pole – long, comparatively slender, usually cylindrical piece of
wood, timber, object of metal or the like; an upright standard to
the top of which something is affixed or by which something is
supported.
MERALCO's steel supports consists of a framework of 4 steel
bars/strips which are bound by steel cross-arms atop of which
are cross-arms supporting 5 high-voltage transmission wires,
and their sole function is to support/carry such wires. The
exemption granted to poles as quoted from Part II, Par.9 of
respondent's franchise is determined by the use to which such
poles are dedicated.
It is evident that the word “poles”, as used in Act No. 484 and
incorporated in the petitioner's franchise, should not be given a
restrictive and narrow interpretation, as to defeat the very
object for which the franchise was granted. The poles should
be taken and understood as part of MERALCO's electric power
system for the conveyance of electric current to its consumers.
Following these classifications, MERALCO's steel towers should
be considered personal property. It should be noted that the
steel towers:
(a) are neither buildings or constructions adhered to the soil;
(b) are not attached to an immovable in a fixed manner – they
can be separated without breaking the material or
deterioration of the object;
© are not machineries, receptacles or instruments, and even if
they are, they are not intended for an industry to be carried on
in the premises.
2

Meralco Securities v. Bd. of
Assessment Appeals
Meralco Securities installed from Batangas to Manila a
pipeline system consisting of cylindrical steel pipes joined
together and buried not less than one meter below the
surface along the shoulder of the public highway. The pipes
are embedded in the soil and are firmly and solidly welded
together so as to preclude breakage or damage thereto
and prevent leakage or seepage of the oil. The valves are
welded to the pipes so as to make the pipeline system one
single piece of property from end to end.
The pipeline system in question is indubitably a construction
adhering to the soil (Exh. B, p. 39, Rollo). It is attached to the
land in such a way that it cannot be separated therefrom
without dismantling the steel pipes which were welded to form
the pipeline.
UP LAW A2019
Article 415[l] and [3] provides that real property
may consist of constructions of all kinds
adhered to the soil and 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.

In order to repair, replace, remove or transfer segments of

the pipeline, the pipes have to be cold-cut by means of a
rotary hard-metal pipe-cutter after digging or excavating
them out of the ground where they are buried. In points
where the pipeline traversed rivers or creeks, the pipes
were laid beneath the bed thereof. Hence, the pipes are
permanently attached to the land.

However, Meralco Securities notes that segments of the

Meralco v. Central Board of
Assessments
pipeline can be moved from one place to another as
shown in the permit issued by the Secretary of Public
Works and Communications which permit provides that the
government reserves the right to require the removal or
transfer of the pipes by and at the concessionaire's
expense should they be affected by any road repair or
improvement.
The Provincial Assessor of Laguna subjected
Meralco’s oil pipeline system to realty tax.
The pipes are embedded in the soil and are firmly
welded together so as to preclude breakage or
damage thereto and prevent leakage or seepage
of oil.
The Court held that under the provisions of the Assessment
Law, the Real Property Tax
Code and the Civil Code, the oil pipeline is subject to realty tax.
The Assessment Law provides that realty tax is due “on real
property, including land, buildings, machinery, and other
improvements” not specifically mentioned in Section 3 therof.
The Real Property Tax Code provides that “There shall be
levied, assessed and collected xxx an annual ad valorem tax
on real property, sucj as land, buildings, machinery and other
improvements affixed or attached to real property not
hereinafter specifically exempted

3

Caltex v. Bd. of Assessment
Appeals
Benguest Corp. v. Central Bd. of
Assessments Appeals
Tumalad v. Vicencio
Public Dominion; Property of State
Certain machinery and equipment (tanks, pumps, etc.) are
installed by Caltex in its gas stations located on leased
lands. The said machinery and equipment are loaned by
Caltex to gas station operators. They were made subject to
real property tax by the assesment board.
In 1985, the Provincial Assessor of Zambales assessed the
petitioner's tailings dam as taxable improvements.
Petitioner contends that dam cannot be subjected to realty
tax as a separate and independent property because it
does not constitute an "assessable improvement" on the
mine because it is an integral part thereof. The OSG,
however, argues that the dam is an assessable
improvement because it enhances the value and utility of
the mine.
Alberta Vicencio and Emiliano Simeon executed a chattel
mortgage in favor of Gavino and Generosa Tumalad over
their house of strong materials located at Quiapo, Manila
over lots being rented from Madrigal & Company, Inc. This
was executed to guarantee a P4,800 loan, payable in one
year with a 12% per annum interest. When Vicencio &
Simeon defaulted, the mortgage was extrajudicially
foreclosed, and the house was sold to the Tumalads at
public auction. Vicencio and Simeon claim nullity of the
chattel mortgage over real property. TC ruled against
defendants. CFI affirmed. CA certified this case to the SC,
which held the chattel mortgage to be valid.
These items are realty and, therefore, subject to real property Incidence of Real Property Tax. — There shall
tax. The property in question are permanently affixed to the gas be levied, assessed and collected in all
station and necessary to its operation.
The Court held that the tailings dam in question falls under the
definition of an "improvement" under the law because it is
permanent in character, and enhances the value and utility of
the petitioner's mine.The immovable nature of the dam
defines its character as real immovable property under Art.
415, CC. Hence, it is taxable under Sec. 38, Real Property Tax
Code.
The parties to a contract may by agreement treat as personal
property that which by nature is real property, but are estopped
from subsequently claiming otherwise. By categorically ceding,
selling, or transferring a property by way of chattel mortgage,
Vicencio & Simeon could only mean to convey the house as
chattel, or at least, intend to treat it as such, so they should not
be allowed to be inconsistent by attacking the mortgage.
Moreover, the house stood on a rented lot to which they merely
had a temporary right as lessee. This sustains the
interpretation that the parties intended to treat the house as
personal property.
4
UP LAW A2019
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. (Real
Property Tax Code, Sec. 38)
Improvements — Is a valuable addition made
to property or an amelioration in its condition,
amounting to more than more 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.
[Real Property Tax Code, Sec. 3(k)]
Machinery — shall embrace machines,
mechanical contrivances, instruments,
appliances and apparatus attached to the real
estate. It includes the physical facilities
available for production, as well as the
installations and appurtenant service facilities,
together with all other equipment designed for
or essential to its manufacturing, industrial or
agricultural purposes. [Real Property Tax Code,
Sec. 3(m)]
Art. 415, as to our lesson. Sec. 38 of Realty Tax
Code, as per the case.
Standard Oil Company of New York vs.
Jaramillo (leasehold rights and a building were
treated as personal property); Luna vs.
Encarnacion (house of mixed materials);
Navarro v. Pineda (estoppel principle)

Bugal-B'laan Tribal Assn. v. President Ramos signed RA 7942 into law to govern the
Ramos development, utilization, and processing of mineral
resources. The law prescribes the qualifications of
contractors and grants them certain rights, including
timber, water and easement rights, and the right to
possess explosives. Before the effectivity of the law, the
President entered into a Financial Technical Assistance
Agreement with WMCP covering 99,287 ha of land in
different provinces. DENR Secretary Victor Ramos issued
the IRR of the law. Petitioners filed an action to stop the
implementation of RA 7942. Petitioners contend that 64
out of the 100 FTAA applications that have been filed are
from foreign-owned corporations. WMCP for its part argues
that it sold its shares to Sagittarius Mines, whose equity is
60% owned by Filipinos. Petitioners assail the
constitutionality of the FTAAs.
Chavez v. PEA Phil Gov't signed a contract with CDCP (private company) for
the reclamation of certain foreshore and offshore areas of
Manila Bay and the construction of Manila Cavite Coastal
Road. Former President Marcos issued PDs 1084 and
1085, which created PEA (Public Estates Authority). PEA
took over the contract with CDCP. Former President Aquino
then transferred ownership of reclaimed parcels of land
under the project to PEA, including 3 reclaimed islands
known as the Freedom Islands. PEA entered into a joint
venture agreement with AMARI to develop these islands. A
Senate investigation found that these islands were part of
the public domain and not alienable public land, and that
PEA sought to transfer these islands to AMARI through the
JVA. The JVA as later amended to include an area of
submerged land that was not yet reclaimed.
(Jan 2004 decision) The FTAAs with WMCP are
unconstitutional. A comparison between the 1987 and 1973
Constitutions show that service contracts (which the FTAAs are)
were in fact deleted in the newer constitution. WMCP’s
contention that they are allowed to enter into FTAAs that
include management and operation of mineral resources
contravenes The Constitution (Art XII Sec 2). The FTAAs provide
beneficial ownership of State-owned resources to corporations,
which effectively leaves the State with nothing but a bare title.
Such properties that form part of public domain cannot be
alienated.
(Dec 2004 decision) These were declared not unconstitutional.
The Constitution allows the continued use of service contracts
with foreign corporations subject to full control and supervision
of the state. The court also concluded that in the RA, IRR, and
FTAA, provide that more than sufficient control and supervision
over mining operations is vested on the state. Therefore, there
is no surrender of control under the FTAA BUT 2
of its provisions are defective – sections giving the government
a 60% in the net mining revenues of WMCP from the
commencement of commercial production
Amended JVA is unconstitutional for violating Sections 2 and 3,
Art XII of the Constitution. The JVA provision seeking the
transfer of the Freedom Islands from PEA to AMARI is illegal for
violating the constitutional prohibition against private
corporations owning alienable lands of public domain. The
provision seeking transfer of the submered land is illegal for the
same reason, and for violating the constitutional prohibition
against alienation of natural resources other than agricultural
land. Due to being submerged land, it is not yet classified as
alienable land of public domain.
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Art. XII, Sec. 2, 1987 Const. “The exploration,
development, and utilization of natural
resources shall be under the full control and
supervision of the State.”
[Art. XII. Sec. 2 & 3, Const.] Sec. 2. " All lands of
the public domain, x x x are owned by the
State. With the exception of agricultural lands,
all other natural resources shall not be
alienated. The exploration, development, and
utilization of natural resources shall be under
the full control and supervision of the State.
The State may directly undertake such
activities, or it may enter into co-production,
joint venture, or production-sharing
agreements with Filipino citizens, or
corporations or associations at least sixty per
centum of whose capital is owned by such
citizens. x x x"; Sec. 3. "x x x Alienable lands of
the public domain shall be limited to
agricultural lands. Private corporations or
associations may not hold such alienable
lands of the public domain except by lease, for
a period not exceeding twenty-five years,
renewable for not more than twenty-five years,
and not to exceed one thousand hectares in
area. x x x"

On Reconsideration:Ruling in Chavez v. PEA that
submerged areas of Manila Bay are inalienable natural
resources of public domain until classified as alienable
land is being assailed. PEA argues that cost of reclaiming
deeply submerged land is enormous, therefore
participation of private corporations (such as AMARI) is
needed.
Usero v. CA
Petitioners Usero and Samela are owners of adjacent lots
while respondents own a lot behind those of petitioners’.
Between the lots is a low-level strip of land filled with
stagnant water and floating water lilies. Respondents suffer Village where the subject strip of land is
flooding everything the water rises, which prompted them located is bounded by a tributary of Talon
to build a wall on the strip of land. Petitioners claimed
ownership, and requested respondents to stop their
construction. Both petitioners presented their respective
TCTs that showed the boundary of the lots. Efforts to settle that strip of land can only mean that there is
disputes failed, and petitioners filed separate complaints
against respondents. When the case reached the RTC, the
court said that the strip of land formed part of a creek,
which is included in the public dominion. As such, no one
may claim ownership. Hence, the consolidated appeals.
Private Property
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On Reconsideration:Motion DENIED. Reclaimed lands are
public domain, and are therefore inalienable by private
corporations. Ruling does not bar private corporations from
participating in reclamation projects and being paid for it
thereafter. What it prohibits is for private corporations to
acquire reclaimed lands of public domain (as was being
provided for in the JVA).Dissent, Bellosillo:Reclaimed lands
should not be forever withheld as unmoving assets. They are
lands sui generis , and cannot be lumped as lands of public
domain without due regard for vested rights and joint executive
and legislative rights to the contrary. Dissent, Ynares-Santiago.
There was never an intention to classify the reclaimed lands as
inalienable lands of the public domain. Evidence shows that
there was legislative intent to classify them as alienable public
lands - they were expressly made private property of the
Government subject to disposition by whoever undertook the
reclamation work. Dissent, Sandoval-Gutierrez:Decision was
based on earlier general laws (Public Lands Acts). Reclaimed
lands are subject to the more recent PDs 10849 and 10851. If
several laws cannot be harmonized, earlier statutes must yield
to later enactments.
The Supreme Court held that the strip was Art 420(1), CC
public domain. It cited the findings of the
lower courts. That there were a barangay
certification that a creek exists in the
disputed strip of land; certification from the
Second Manila Engineering District, NCRDPWH,
that the western portion of Pilar
Creek; and photographs showing the
abundance of water lilies in the subject strip
of land. The fact that water lilies thrive in
a permanent stream of water or creek
there. The Court cited Art. 420 (1) of the
New Civil Code, stating that creeks fell into
the classification in the article in “others of
similar character.”
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Manotok v. Heirs of Barque
Laurel v. Garcia
Tantoco v. Municipal Council
Lot 823 in QC is part of the Piedad estate, which was later
acquired by the PH Gov pursuant to the Friar Lands Act,
thereby placing the estate under the Director of Lands'
administration. Controversy around the lot began after a
fire gutted portions of the QC Hall, destroying the records
stored in the Office of the Register of Deeds; the Manotoks
would file a petition with the LRA to reconstitute the TCT
but 8 years after, the Barques would also file a petition to
reconstitute a TCT over the subject lot. Manotoks opposed
alleging that the TCT of the Barques was spurious. LRA
would rule in favor of the Barques. Later, the Manahans
would move to intervene claiming that they own the
subject lot. Each parties' claims are as follows: Manotoks
claim that their grandfather bought the lot from the Gov
since 1919 and that it's now known as the Manotok
compound; Barques claim that their father bought the land
from an Emiliano Setosta who had a TCT in his name; and
the Manahans claim that the lot was bought by his wife.
Petitioners seek to stop the Philippine Government from
selling the Roppongi Property, which is located in Japan. It
is one of the properties given by the Japanese Government
as reparations for damage done by the latter to the former
during the war. Petitioner argues that under Philippine Law,
the subject property is property of public dominion. As
such, it is outside the commerce of men. Therefore, it
cannot be alienated. Respondents aver that according to
the lex situs rule, Japanese Law, and not Philippine Law,
shall apply to the case because the property is located in
Japan.
Widow of Tantoco had sued the Municipal Council of Iloilo
for Php 42, 966 being the purchase price for 2 strips of land
which the municipality had appropriated for widening of
Calle J.M. Basa and Calle Aldiguer. Tantoco secured a writ
of execution on the municpality's properties because the
latter lacked funds. The sheriff attached 2 autotrucks for
street sprinkling, 1 police mobile, the police stations in 3
streets, and the concrete structures used as markets.
Provincial fiscal filed a motion to annul the attachment for
being illegal which the court granted. Plaintiff appealed.
UP LAW A2019
The Manotoks could not have acquired ownership of the lot as
they had no valid certificate of sale issued to them by the Gov
because their Certificate lacks the signature of the Director of
Lands and the Secretary of Agriculture and Natural Resources.
Their decades-long occupation, their payment of real property
taxes and construction of buildings are of no moment as they
miserably failed to prove the existence of the title allegedly
issued in the name of Severino Manotok after the latter had
paid in full the purchase price; they did not offer any
explanation as to why the only copy they had was torn in half
and had no record of documents leading to its issuance. As the
Court has stressed in Alonso v. Cebu Country Club: Prescription
can never lie against the Government, and 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. Necessarily, there can be no valid titles issued on
the basis of such sale or assignment.
The issues are not concerned with validity of ownership or title. CC 419-421
There is no question that the property belongs to the
Philippines. The issue is the authority of the respondent
officials to validly dispose of property belonging to the State,
and the validity of the procedures adopted to effect its sale.
This is governed by Philippine Law. The rule of lex situs does
not apply.
Articles 343 - 344 now CC 423-424 of the NCC divides the CC 423, 424
property of provinces and
municipalities into property for public use
and patrimonial property. Property for
public use is not within the commerce of
man if used by the public, thus not subject
to execution. The rule also applies to funds
in the hands of a public officer. Taxes due
to a municipality cannot also be seized
under execution But a property used by
municipality for quasi-private purposes
(such as stocks) maybe subject to
execution. Therefore, properties levied
upon cannot be the subject of execution
because they are public properties or
properties held by the municipality in
trust for the benefit of their inhabitants
and used for public purpose.
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Zamboanga Del Norte v. City of
Zamboanga
Salas v. Jarencio
Cebu v. Bercilles
In this case, Commonwealth Act 39 converted the
Municipality of Zamboanga (hereinafter MZ) into
Zamboanga City (hereinafter ZC) and stated that ZC shall
acquire and pay for the properties and buildings to be
abandoned by MZ. These properties consisted of 50 lots
and buildings (Capitol site, School site, Hospital site,
Leprosarium, Curuan School, Trade School, Burliegh
School, HS Playground, Burleighs, Hydro-electric site, San
Roque, Vacant). The Auditor general pegged the price of
these properties at 1,294,244.00. Subsequently, MZ was
divided into Zamboanga Del Sur and Zamboanga Del Norte
(hereinafter ZDN). After an allocation, ZDN became entitled
to 54.39% of the assets of MZ, hence, it was entitled to
recieve 54.39% of the 1,294,244.00 liability of ZC to MZ or
704,220.05. As partial payment, ZC already paid 57,373.46.
However, RA 3039 was subsequently enacted saying that
all buildings and properties of MZ will be transferred to ZC
free of charge (meaning ZDN will no longer be entitled to its
1,294,244.00). Hence, ZDN is assailing the constitutionality
of RA 3039 for depriving it of its property without
compensation.
The City of Manila was declared the owner in fee simple of
a parcel of land known from the Cadastral Survey of the City
of Manila. It sold portions of the land and a new certificate
of title was issued in favour of the City for the remaining
areas.
The City failed to use the land for any recognized public
purpose and allowed it to remain idle and unoccupied for a
long time until it was overrun by
squatters. Subsequently, a law was passed declaring the
residual area of the original parcel of land as patrimonial
property which would be sold to the occupants thereof. The
Mayor of Manila opposed.
• The land in question was originally a portion of a certain
land which the City Council of Cebu, via a resolution,
declared as an abandoned road. Subsequently, the City
Council of Cebu authorized the acting city mayor to sell the
land through public bidding. Pursuant thereto, the lot was
awarded to Cebu Oxygen, being the highest bidder (10.800
pesos.) and a deed of absolute sale was executed.
• CoFI: dismissed Cebu Oxygen’s petition for application for
registration on the ground that it is a public road intended
for public use, thus cannot be subject to registration by
private individual.
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The Court said that the validity of RA 3039 will depend on the CC 423, 424
nature of the properties and buildings: If a. they are owned by
municipality (municipal corporation) in its public and
governmental capacity, then Congress will have absolute
control over it because the property is public, or b. if the
property is owned in its private or proprietary capacity, then it is
patrimonial and Congress has no control. To answer this, the
Court said that it had to choose between two norms: A. That of
the Civil Code (423,424), or B. That of the Law on Municipal
Corporations. If under A. the CC, only the HS Playground is
public because under the egusdem generis rule, "public works"
under CC424 means FREE AND INDISCRIMINATE USE BY
ANYONE. On the other hand, If under B. Law on municap corp.,
to be considered public, it is enough that property be held and
devoted for governmental purposes like local administration,
public education, public health, etc. (NOTE: NO NEED TO BE
FREE!!). The Court said that the applicable law is B, Law on
Municipal Corp. 1. the controversy is more along domains of
Law on Municipal Corp - State v. Province. 2. Consequences are
dire if we apply CC bec then municipal property devoted to
public service are just like ordinary private property, they can be
levied, acquired thru adverse possession, etc. Disposition: RA
3039 was valid insofar as capitol site, school sites, hospitals,
leposariums, hs playground sites, because they are devoted to
public purpose, not to the other lots which are not devoted to
public purpose.
Said land belongs to the State and was simply granted in
usufruct to the City of Manila for municipal purposes.No As a general rule, regardless of the source
presumption of State grant of ownership in favor of the City of or classification of land in the possession
Manila may be acquiesced in to justify the claim that it is its of a municipality, excepting those acquired
own private or patrimonial property, because the City failed to with its own funds in its private or
utilize the land for its required public purpose. When it corporate capacity, such property is held in
comes to property of the municipality which it did not acquire in trust for the State for the benefit of its
its private or corporate capacity with its own funds, the inhabitants, whether it be for governmental
legislature can transfer its administration and disposition to an or proprietary purposes
agency of the National Government to be disposed of according
to its discretion.
Here it did so in obedience to the constitutional mandate of
promoting social justice to insure the wellbeing and economic
security of the people. The Congress has dealt with the land
involved as one reserved for communal use (terreno comunal) .
The act of classifying State property calls for the exercise of
wide discretionary legislative power and it should not be
interfered with by the courts
CITY CHARTER ENABLES CITY COUNCIL TO DESIGNATE LAND AS ART. 422
ABANDONED. THUS, BECOMES PATRIMONIAL PROPERTY. Yes
the City Charter enables City Council to declare any land as
abandoned. Generally, The Council would be the best authority
to determine if such land was still needed for public use. Since
no longer for public use, it becomes patrimonial property which
can be the object of an ordinary contract. Article 422 of the Civil
Code expressly provides that “Property of public dominion,
when no longer intended for public use or for public service,
shall form part of the patrimonial property of the State.
Doctrine: Once the public use of a land ceases, it shall be
considered the patrimonial property of the City.
8

Municipality of San Miguel v.
Fernandez
Government v. Cabangis
In a previous civil case entitled “Margarita D. Vda. de
Imperio v. Municipal Government of San Miguel”, the deed
of donation made in favour of the municipality was revoked
and it was ordered to pay the plaintiffs in the case the
rentals it has collected during its possession of the
property. A writ of execution for the satisfaction of the
judgment was issued on the municipality’s property and
funds. The Municipality contends that said property and
funds are all public funds exempt from execution.
Disputed lots were formerly a part of a large parcel of land
belonging to the predecessor of the herein appellees
(Cabangis).
1896 - said land began to wear away, due to the action of
the waves of Manila Bay
1901 - said lots became completely submerged in water in
ordinary tides, and remained in such a state
1912 - the Government undertook the dredging of Vitas
Estuary in order to facilitate navigation, depositing all the
sand and silt taken from the bed of the estuary on the low
lands which were completely covered with water, thereby
slowly and gradually forming the disputed lots
Up to the month of February, 1927 nobody had declared lot
39 for the purposes of taxation, and it was only in the year
1926 that Dr. Pedro Gil, in behalf of the claimants and
appellees, declared lot No. 40 for such purpose. Roughly 25
years have passed before appellees claimed said lots.
UP LAW A2019
Issue: W/N the funds of the Municipality of San Miguel, in the
hands of the provincial and municipal treasurers, are public
funds which are exempt from execution for the satisfaction of
the money judgment? NO.
Public funds are not subject to levy and execution. They are
held in trust for the people, intended and used for the
accomplishment of the purposes for which municipal
corporations are created, and that to subject said properties
and public funds to execution would materially impede, even
defeat and in some instances destroy said purpose. Not only
the public property but also the taxes and public revenues of
such corporations cannot be seized under execution against
them, either in the treasury or when in transit to it. Judgments
rendered for taxes, and the proceeds of such judgments in the
hands of officers of the law, are not subject to execution unless
so declared by statute.
There must be a corresponding appropriation in the form of an
ordinance duly passed by the Sangguniang Bayan before any
money of the municipality may be paid out. In the case at bar,
it has not been shown that the Sangguniang Bayan has passed
an ordinance to this effect.
Issue: Who owns the disputed lots? - GOVERNMENT. Art. 420 CC, Art. 5 Law of Waters
The government owns the reclaimed land in the sense that it
has become property of public dominion, because in letting it
remained submerged, previous owners may be said to have
abandoned the same. Having become part of the sea or the
seashore, it became property for public use under Art. 339
[420] CC. When the government took steps to make reclaim
the land, its status as public dominion remained unchanged
under Art. 5 of the Law of Waters; therefore, the Cabangis family
is not entitled to the land.
9

Chavez v. PEA PEA entered into an Amended Joint Venture Agreement
(Amended JVA) with AMARI, a private corporation, for the
development of the Freedom Islands (three reclaimed
islands- 157.84 hectares) and further reclamation of 250
hectares plus an option granted to AMARI to subsequently
reclaim another 350 hectares of foreshore and submerged
areas of Manila Bay. In short the Amended JVA covers a
reclamation area of 750 hectares— only 157.84 hectares
have been reclaimed and the rest of the 592.15 hectares
are still submerged area. Under the Amended JVA, AMARI
and PEA will share in proportion of 70 percent and 30
percent respectively the total net usable area and title to
AMARI’s share totaling 367.5 hectares will be issued in the
name of AMARI.
ISSUE: Whether AMARI, a private corporation, can acquire
and own reclaimed foreshore and submerged areas in
Manila Bay in view of Sec 2, 3 Art XII of the 1987 Const
No.
1. The 157.84 hectares reclaimed lands comprising the
Freedom Islands are alienable lands of the public domain.
However, in view of the constitutional proscription, PEA may
only lease these lands to private corporations but may not sell
of transfer ownership of these lands to private corporations.
The foreshore and submerged areas are part of the "lands of
public domain, waters xxx and other natural resources" (Sec 2
Art XII Const). (Note: natural resources are property of public
dominion under Art. 420 of CC “those which belong to the
State, without being for public use, and are intended xxx for the
development of the national wealth”). As such, they shall not
be alienated unless they are classified as agricultural lands of
the public domain by law or presidential proclamation. Under
Art 422 of CC, a property of public dominion retains such
character until formally declared otherwise (Laurel v Garcia) . PD
No. 1085 authorizing the issuance of special land patents for
land reclaimed by PEA coupled with the actual issuance of a
Special Patent issued by Pres. Cory in the name of PEA for the
157.74 hectares comprising the Freedom Islands is equivalent
to an official proclamation classifying the Freedom Islands as
alienable or disposable lands of the public domain and a
declaration that the Freedom Islands are no longer needed for
public service.
UP LAW A2019
Art. 420, 422 CC
Sec 2, 3 Art XII Const
Section 2. All lands of the public domain,
waters, minerals, coal, petroleum, and other
mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and
fauna, and other natural resources are owned
by the State. With the exception of agricultural
lands, all other natural resources shall not be
alienatedxxx
Section 3. Lands of the public domain are
classified into agricultural, forest or timber,
mineral lands and national parks xxx Alienable
lands of the public domain shall be limited to
agricultural lands. Private corporations or
associations may not hold such alienable lands
of the public domain except by lease, for a
period not exceeding twenty-five years,
renewable for not more than twenty-five years,
and not to exceed one thousand hectares in
area. Citizens of the Philippines may lease not
more than five hundred hectares, or acquire
not more than twelve hectares thereof, by
purchase, homestead, or grant.

2. The 592.15 hectares of submerged areas of Manila Bay

remain inalienable natural resources of the public domain until
classified as alienable or disposable lands open to disposition
and declared no longer needed for public service. The
submerged areas are inalienable and outside the commerce of
man.

3. The Amended JVA violates glaringly Sections 2 and 3 of Art XII

of the 1987 Const. Hence, it is void ab initio (Art 1409 of the CC).

Heirs of Simplicio Santiago v.
Heirs of Mariano Santiago
Actions to Recover Possession / Ownership
The heirs of Simplicio Santiago alleged that after Simplicio
acquired a free patent for the Lot No. 2344 in 1980,
Mariano Santiago built a house on a portion thereof and
refused to leave. Mariano claimed that: a) the heirs only
owned Lot 2344-B, and Lots 2344-A and 2344-B were
fradulently included in the free patent and certificate; and
b) he and his sister bought Lot 2344-A in 1972.
AFFIRMED-- MOTION FOR RECONSIDERATION
WON the free patent and certificate of title issued to Simplicio SC: A free patent issued over a private land is
Santiago are valid - NO null and void (land must be disposable land of
the public domain)
Lot 2344 has long been a private property of the Santiago
family and has been declared for taxation. Having had open,
continuous, exclusive and notorious possession of the land,
Mariano's side of the family has therefore acquired a right to a
government grant by operation of law. Furthermore,
respondents' claim of ownership over Lots 2344-A and 2344-C
is substantiated by evidence. In the first place, the document of
sale of Lot 2344-C to Mariano is duly notarized. Nestor
Santiago also admitted that Mariano's house was already
existing in the lot.

10

Hilario v. Salvador Petitioners Cesar, Ibarra, Nestor, Lina, and Prescilla Hilario
inherited Lot No. 3113 in Romblon from their grandmother,
Concepcion Salvador, via their father, Brigido Hilario Jr. In
1989, respondent Allan Salvador built his house on the
property without the knowledge of the Hilarios or their
predecessors-in-interest. Faced with demands to vacate,
Allan claimed that he had asked Concepcion's consent.
After the RTC ruled in favor of plaintiffs, the same was
reversed by the CA, who held that the MTC had jurisdiction
over the action
Sampayan v. Vasquez
A complaint for forcible entry was filed by siblings Crispulo improvements in the disputed lot and that they were not
Vasquez and Florencia Vasquez-Gilsano against Cesar
Sampayan before the MCTC of Agusan del Sur, for allegedly contention of the respondents that Cristita’s participation in a
having entered andoccupied a parcel of land through
strategy and stealth, and built a house thereon without
theirknowledge, consent or authority.
UP LAW A2019
WON the RTC had jurisdiction over the action of the petitioners
against the private respondent - NO
-SC: The nature of the action and which court has exclusive and
original jurisdiction over the same is determined by the
material allegations of the complaint, the type of relief prayed
for, and the law in effect when the action is filed...
-Accion reinvindicatoria: Suit which has for its object the
recovery of possession over the real property as owner
-Accion publiciana: Action for recovery of possession of right to
possess
-Sec. 33(3), B.P. Blg. 129 (as amended by R.A. No. 7691).
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal
Circuit Trial Courts shall exercise:
(3) Exclusive original jurisdiction in all civil actions which involve
title to, or possession of, real property, or any interest therein
where the assessed value of the property or interest therein
does not exceed Twenty thousand pesos (P20,000.00) x x x.
-Value of assessed property = (Fair market value) x
(assessment level)
1. The action of the Hilarios does not involve a claim of
ownership as they claim to be co-owners with a right to
possess the subject property (accion publiciana)
2. Complaint does not contain an allegation of the assessed
value of Lot No. 3113
3. However, during the trial, the Hilarios produced in evidence
Tax Declaration No. 8590-A, which showed that the value of
the property in 1991 was P5, 950"
Right to possess the property:The Supreme Court held that
Cristita Quita and her children Florencia Vasquez-Galisano and
Crispulo Vasquez failed to establish valid possession in
concept of an owner. It upheld the findings of the MCTC and
the affidavit of Dionesia Noynay that it was Sampayan’s
predecessors-in-interest the Occida spouses who introduced
physically in possession of the disputed property.The
cadastral proceeding vests valid possession as owner over the
lot is also disagreed by the Court.
Right to institute the forcible entry case:The Supreme Court
denied the petitioner’s contention that the MCTC of Sibagat-
Bayugan did not acquire jurisdiction over the forcible entry case
filedagainst him by the respondents-siblings. Their allegation
that he entered the lot without theirconsent, knowledge,
authority through force, stealth or strategy is enough to vest
jurisdiction ofthe said MCTC over the case
11

Santos v. Ayon No, prior physical possession of the property by tolerance
does not preclude an action for unlawful detainer. The SC
reinstated the RTC decision.A complaint for unlawful
detainer is sufficient if it alleges that the withholding of the
possession or the refusal to vacate is unlawful without
necessarily employing the terminology of the law. Here,
there is an allegation in the complaint that respondents'
occupancy on the portion of his property is by virtue of his
tolerance. Possession by tolerance is lawful, but such
possession becomes unlawful when the possessor by
tolerance refuses to vacate upon demand made by the
owner. Thus, a person who occupies the land of another at
the latter's tolerance or permission, without any contract
between them, is necessarily bound by an implied promise
that he will vacate upon demand, failing which, a summary
action for ejectment is the proper remedy against him.
Ganila v. CA Herrera, owner of Lot 1227, tolerated Ganila, et al. to
construct their houses on her lot. When she withdrew her
tolerance and asked them to vacate, the refused
to heed her demand. She filed a complaint for unlawful
detainer. Gamila contended that the proper remedy was
an action to recover possession de jure because
(1) they have been in possession of Lot 1227 in good faith
for more than 30 years, and (2) because there was no
withholding of possession since Herrera was in in
prior possession of the lot. The Court noted that Ganila
confused the remedy of an action for forcible entry with that
of unlawful detainer
Peralta-Labrador v. Bugarin Peralta-Labrador owned a Cadastral Lot in Zambales which
was separated by a highway built by DPWH. The separated
part of the lot was then occupied by respondent Bugarin. 2
years after the lot was occupied, Peralta-Labrador filed a
forcible entry suit against Bugarin, alleging prior physical
possession of the lot.
UP LAW A2019
No, prior physical possession of the property by tolerance does
not preclude an action for unlawful detainer. The SC reinstated
the RTC decision.A complaint for unlawful detainer is sufficient
if it alleges that the withholding of the possession or the refusal
to vacate is unlawful without necessarily employing the
terminology of the law. Here, there is an allegation in the
complaint that respondents' occupancy on the portion of his
property is by virtue of his tolerance. Possession by tolerance is
lawful, but such possession becomes unlawful when the
possessor by tolerance refuses to vacate upon demand made
by the owner. Thus, a person who occupies the land of another
at the latter's tolerance or permission, without any contract
between them, is necessarily bound by an implied promise
that he will vacate upon demand, failing which, a summary
action for ejectment is the proper remedy against him.
Actual, prior physical possession of a property is indispensable
only in forcible entry cases. The issue of prior lawful possession
by the defendants does
not arise at all in a suit of unlawful detainer. A person who
occupies the land of another at the latter’s tolerance or
permission, without any contract between
them, is necessarily bound by an implied promise that he will
vacate upon demand, failing which a summary action for
ejectment is the proper remedy against
him. His status is analogous to that of a lessee or tenant
whose term of lease has expired but whose occupancy
continued by tolerance of the owner. In such a case,
the date of unlawful deprivation or withholding of possession is
to be counted from the date of the demand to vacate.
An action for forcible entry must be brought within one year
from the date of actual entry on the land.
--> Since the occupation was already beyond one year, the
summary proceeding for forcible entry should be dismissed.
What should be instituted is an accion publiciana or
reinvindicatoria.
In an action to recover, the plaintiff must prove his right to
ownership — by relying on the strength of his evidence and not
on the weakness of the defendant’s claim.
--> Peralta-Labrador failed to prove that the separated portion
of the lot was part of her title.
12

Ross Rica Sales Center v. Sps.
Ong
Petitioner filed a complaint for ejectment against Sps. Ong,
alleging that they acquired the land from Mandaue Prime
Estate Realty, who in turn acqured the same from Elizabeth
Ong. Mandaue has previously informed Sps. Ong that they
intended to use the purchased lots, but the latter refused
to vacate the premises. The Sps, Ong, on the other hand,
filed a petition separate from the petitioner's complaint for
ejectment, praying therein for the annullment of the Deed
of Sale and TCT in favor of the petitioner.
UP LAW A2019
Well-settled is the rule that what determines the nature of an
action, as well as which court has jurisdiction over such are the
allegations in the complaint. In Javelosa v. Ca, it was held that
the allegation that there was an unlawful withholding of the
possession of property is sufficient to establish a case for
unlawful detainer. Hence, the phrase "unlawful withholding"
implies possession on the part of the defendant, which was
legal in the beginning, but has expired as a right and is now
being illegally withheld by the same. It has been held in Barba
v. CA that the simple allegation of unlawful withholding is
sufficient.

The Court has also held that the case is not, and cannot be
considered one for accion reivindicatoria, cognizable by the
RTC alone, since the issue involved in the same is the recovery
of ownership of real property, which differs from accion
publiciana, where the issue revolves around the better right of
possession. These are also distinguished from accion
interdictal which revolves around the physical possession of
the property. In this case, the petitioners merely sought to
recover the physical possession over the property, and the
mere fact that they claim ownership over the land does not
divest the MTC of jurisdiction. Ganadin v. Ramos states that if
an action prays for ejectment or recovery of possession, a claim
of ownership from either party is immaterial.

Further, it has been held that a certificate of title shall not be

Requisites for Recovery; Identify the Property
Seriña v. Caballero
Requisites for Recovery; Prove right of ownership - rely on strength of his evidence and not on weakness of defendant
Perez v. Mendoza
Dr. Jesus and Enriqueta Seriña allege that they are the
absolute owners and have been in actual possession for
35 years of a parcel of land in the Cagayan Cadastre of
Misamis Oriental. Sometime in 1982, they discovered that
Victor Caballero was claiming ownership over the land and
offering it for sale or mortgage, so they filed a complaint for
quieting of title, recovery of possession and damages
against Caballero and his tenants Sps. Donela. RTC
dismissed the complaint. CA affirmed RTC and denied MR.
Felisa Montalbo inherited land from her father, which she
exchanged with that of her aunt, Andrea. After the
exchange, Andrea donated half the land to daughter
Margarita. Margarita and husband Nicolas occupied the
land continuously in the concept of owners since 1927.
When Nicolas sought the transfer of property in their
names, he submitted the deed of exchange. Perezes then
accused sps. Nicolas and Andrea of falsifying the deed of
exchange
subject to a collateral attack. The issue of the validity of the
title can only be assailed in an action instituted expressly for
that purpos. (Apostol v. CA)
In order that an action for recovery of possession may prosper,
he who brings the action must fully prove not only his
ownership but also the identity of the property claimed, by
describing the location, area and boundaries thereof. Here, the
complaint varies from the Deed of Sale in location of property
(Mantadiao, Opol, Misamis Oriental in complaint, and
Puntakon, Igpit, Cagayan Or. Misamis in deed), area (2.5
hectares in complaint versus 5 hectares in deed), and
boundaries thereof. There is no evidence that Dr. Seriña's Tax
Declaration No. 4029 cancelled Tax Declaration No. 2442 in
the name of Victor’s grandfather Eustaquio Caballero as it was
Lucia Vda. de Marbella from whom the Seriñas purchased the
land.
Possession is an indicium of ownership of the thing possessed
and to the possessor goes the presumption that he holds the
thing under a claim of ownership. Perezes failed to prove
ownership of land. Meanwhile, the Mendozas are presently in
possession of the land in the concept of owners thereof since
1927. Hence, the requisite of proving ownership in making a
recovery is absent.
Beo vs. Court of Appeals: A person who claims
ownership of real property is duty-bound to
clearly identify the land being claimed, in
accordance with the title on which he anchors
his right of ownership. When the record does
not show that the land subject matter of the
action for recovery of possession has been
exactly determined, such action cannot
prosper, as in the case of petitioners. In sum,
proof of ownership coupled with identity of the
land is the basic rule.
See Civil Code A433 (actual possession raises
a presumption of ownership) and 538 (present
possessor is preferred in cases where the fact
of possession is in question)

13

Dizon v. CA 6 children (Dionisio and 5 girls) are heirs of 2 lots. Lots
were mortgaged. All 6 siblings contributed money to
redeem the lots, but they were redeemed in the name of
Dionisio alone. The heirs of Dionisio and the 5 girls are now
fighting over the lots. The heirs of the 5 sisters allege that
the lots were partitioned among the 6 siblings in an
unnotarized affidavit executed by Dionisio, and that
ownership of the lots and houses thereon has been
passed from generation to generation. The heirs of Dionisio
countered that a cadastral survey was conducted on the
lots from where OCTs were issued in Dionisio's name, that
the cadastral case is a proceeding in rem (i.e., binding
upon the whole world), and that the 5 sisters and their
heirs did not raise any objection to this until only 61 years
later.
Limitations on Real Right of Ownership (from scattered provisions of the CC)
US v. Causby Respondents owned a 2.8-acre property
near an airport. A dwelling house and structures for raising
chicken were built on
the property. The nearby airport is being
leased by the US government for use of
various military planes. The “startling noise”
from the planes caused fright to the
chickens. Glare from the airport lights and
the glide of planes through the property
also caused disturbance to the
respondents. As a result, respondents had
to give up their chicken business and the
property itself depreciated in value.
Respondents contend that the use of the
airspace above their property constitutes
“unlawful taking” of personal property that
must be compensated by the government.
Lunod v. Meneses Petitioners are owners of farm lands who filed this
complaint against Meneses, an owner of a fish pond. For
>20 years before 1901, they allege that there existed, in
favor of the rice fields of the plaintiff, an easement
permitting water from lands of plaintiffs to flow over land of
Meneses, to the Taliptip River. Meneses constructed a
bamboo net and dam which prevented such flow of water
to the river, therefore resulting in the flooding of the lands
of petitioners. Thus, they ask that land of Meneses be
subject of a statutory easement permitting the flow of
water to the reiver and destroy obstructions placed by the
Meneses.
Accretion Discreta (Fruits)
UP LAW A2019
HELD: Heirs of Dionisio have better title. Dionisio's ownership Art. 434 CC
over the lots was judicially confirmed in the cadastral case
(which is a proceeding in rem, thus binding on the whole
world). None of the co-heirs objected to the issuance of the
OCTs. By the time they did, the action has long prescribed.
Unnotarized affidavit presented by the heirs of the 5 sisters as
evidence was not a sufficient basis for alleged partition (it did
not contain any reference to the lots in question). In the
absence of definite proof establishing respondents’
link/relationship to predecessors-in-interest, i.e. the Galang
sisters, they do not have any cause of action DOCTRINE: In
proving one's right of ownership, he must rely on the strength of
his own evidence and not on the weakness of the evidence of
the defendant.
The Court ruled that there was indeed
unlawful taking. The traditional common law doctrine is that
the owner of a property has
full enjoyment as owner even of the
atmosphere above the property (i.e. the
airspace and beyond). This has no place in
the modern world where navigation through
air has transformed airspace into a public
highway. To insist that the airspace above
a property is private property as well would
result in endless litigation over trespass in
one’s private airspace. However, this does
not apply in the case at bar where the use
of the air space has rendered the property
below it uninhabitable and useless to the
owners. They have been prevented from
enjoying the land. In effect, an easement Modern doctrine is that airspace extending
was established for use of the government. outward ad infinitum is NOT part of private
For this, the owners must be compensated. property
EASEMENT ALLOWED .Where a statutory easement exists Arts. 552 & 553 (Old Civil Code); Law of Waters
between adjoining estates, the onwer of the lower lands must of August 3, 1866
not construct any work that may impair or obstruct an
easement which consists in receiving the waters which
naturally, and without the intervention of man, descend from
the more elevated lands; neither shall the owner of the latter
construct any work that may increase the easement. In
addition, every owner may enclose his property via walls, dikes,
fences, or any other device, but his right's limited by the
easement with which his estate's charged . The lands of
Meneses bein the lower are subject to the easement of
receiving and giving passage to the waters proceeding from the
higher lands and the lake of Calalaran; this easement was not
constituted by agreement between the interested parties as it
is of a statutory nature, which the law has imposed for the
common public utility in view of the difference in the altitude of
the lands in the barrio of Bambang.
14

Bachrach v. Seifert
Bachrach v. Talisay Silay
Accession Continua; Over Immovables; Artificial or Industrial; BPS builds, plants, sows on Land of Another, with Materials owned by 3rd Person
Bernardo v. Bataclan
Mary Bachrach (petitioner) petitioned to the lower court to A stock dividend is a civil fruit which consequently belongs to
authorize the administrator of her deceased husband’s the usufructuary.
estate the transfer of the 54,000 shares of stock to which
her husband’s legal heirs opposed. Mary claims such
dividends are part of the usufructuary while the heirs claim
that such are part of the remainder man. SC held that the
dividends form part of the usufructuary.
Talisay-Silay (TS) was indebted to PNB. To secure payment,
it has induced its planters to mortgage their land to bank.
In
exchange, TS undertook to give its planters
a bonus equal to 2% of the debt secured.
Bachrach (creditor of Ledesma) filed a case
against TS for the delivery of the bonus of
Mariano Ledesma (a planter). But PNB filed
a third party claim alleging that it has a
preferential right to receive any amount
which Ledesma might be entitled to TS
because such would be civil fruits of the
land mortgaged to the bank. Even if it
turned out that the land was sold by
Mariano Ledesma to Ceasar Ledesma, the
trial court held that Bachrach had a
preferred right to bonus of Mariano. Bank
appealed.
Plaintiff acquired a parcel of land of about 90 hectares from
vendor Pastor Samante. However, when he entered upon
the premises, he found the defendant Bataclan occupying
the premises. Bernardo filed a suit against Bataclan, where
Bernardo was declared owner, but Bataclan was declared
possessor in good faith and hence entitled to
reimbursement in the total sum of P1,642. Subsequently,
the SC gave plaintiff Bernardo 30 days to exercise his
option of either: a. sell the land to Bataclan, or b. buy the
improvements introduced by Bataclan. Bernardo exercised
option A - he required defendant Bataclan to pay him the
value of the land. SC hence gave bataclan 30 days to pay
2,212 to Bernardo, and if he fails, the land would be
ordered sold at public auction. Bataclan was not able to
pay, hence the land was sold at public auction which
Toribio Teodoro won. Both Bernardo and Bataclan
complains. Plaintiff Benardo - does not want to sell at
public auction, Defendant - He still has right of retention
UP LAW A2019
CC, 471
Article 442 of the NCC considers 3 things as civil fruits: rents of CC, 442
buildings, proceeds
from leases of lands, and income from life
annuities and other similar sources of
revenue. The bonus in question is income
under the article of NCC if it is derived from
the land mortgaged for the benefit of the
central. The bonus here is not civil fruit
because it beras no immediate, but only
a remote and accidental relation to the
land mentioned, having been granted as
compensation to the risk of having
subjected one’s land to a lien in favour
of the bank. The amount of the bonus is
based on the total value of the debt
secured and not on the value of the land.
Thus, such is independent from property.
Defendant - Bataclan argues that he still has a right of retention CC 353, 358, 361
because he has not been paid 2,102 yet. NO said the SC. "The
law, as we have already said, requires NO MORE than that the
owner of the land should CHOOSE between indemnifying the
owner of the improvements or requiring the latter to pay for the
land. When he failed to pay for the land, the defendant herein
lost his right of retention. " (bec bernardo chose to sell)
Plaintiff - "The sale at public auction having been asked by the
plaintiff himself and the purchase price of P8,000 received by
him from Toribio Teodoro, we find no reason to justify a rapture
of the situation thus created between them, the defendant-
appellant not being entitled, after all, to recover from the
plaintiff the sum of P2,212." (As sir said, there is no third option.
Either you sell or you buy the improvements, you can't sell then
keep the property upon failure of the other party).
15

Ignacio v. Hilario The CFI of Pangasinan declared Hilarios were the lawful
owners of a parcel of land, while the Ignacios were held to
be possessors in good faith and the owners of the houses
and granaries they had built on the land.
CFI decided that the Ignacios were entitled to hold the
property until they receive payment for\ the market value of
the buildings; and that alternatively, the Hilarios have the
option to sell the property to the Ignacios, in which case
the latter must pay forproportionate value of the residential
lot--basing its decision on Articles 361 (Article 448 today)
and 453 (Article 543 today) of the Civil Code:
Hilarios filed for a writ of execution of judgment, praying
that petitioners should remove the improvements and
restore them in possession. Petitioners objected, offering
to pay for the lot or as an alternative,
prayed that plaintiffs be compelled to the property to them.
Hilario’s writ was granted so Ignacios to remove the houses
and granaries at their own expense, and to restore
possession of the lot to the Hilarios.
UP LAW A2019
The remedies available to the owner in Art. 546 (NCC) are Under 453, the owner of a building constructed
alternative. They cannot be imposed at the same time against in good faith on land owned by another is
the person whose possession has been defeated by one who entitled to retain possession of the land until
has a better title. the landowner pays him the value of his
building.
CFI decision was improper because it contravenes the Under 361, the landowner may pay for the
purposes of Article 453 and 361. building OR sell the land to the owner of the
building. He CANNOT do both.
the applicable provisions are Art. 361 (Art. 448, NCC) and Art.
453 (Art. 546, NCC), where
there is a possessor in good faith who has introduced
necessary expenses to the
property. The owner of the improvements is entitled to retain
them until he has been paid for the value of the improvements.
On the other hand, the owner of the land has the option to pay
for the building or to sell the lot and compel the builder to
remove the improvements from the land where it was erected.
The Hilarios cannot refuse both to A) pay for the Ignacios'
buildings and B) to sell the land to the latter, and ultimately
compel the latter to remove the buildings from their land. The
Hilarios, as owners, are entitled to the removal only after
pursuing option B and the Ignacios fail or refuse to make
payment.
The writ of execution was set aside. The lower court was
ordered to determine the prices of the buildings and the lot, as
well as the time period within which the Hilarios may decide to
pay for the buildings or sell their land.
16

Depra v. Dumlao Depra is the owner of a parcel of land in Dumangas, Iloilo.
Dumlao is the owner of an adjoining lot. Dumlao had his
house built on the adjoining lot, the kitchen thereof
encroached upon Depra’s lot of 34m2. Municipal Court:
Depra filed for an action for Unlawful Detainer. The
Municipal Court ruled that that Dumlao was a builder in
good faith and ordered a “forced lease” with Depra as
lessor, and Dumlao as lessee.
Court of First Instance: Depra filed for an action for Quieting
of Title, involving the same area. The CoFI ruled that Depra
is entitled to possess the same.
Technogas Phils. v CA Technogas bought a parcel of land with all the buildings
and improvements (including the wall existing thereon)
from Pariz Industries. Upon learning that portions of its
buildings and wall occupied part of Eduardo Uy’s property,
Technogas offered to buy said part but Uy refused. When
Uy’s complaint in connection with the encroachment did
not prosper, he dug a canal along Technogas’ wall causing
the collapse of a portion of which.
UP LAW A2019
(1) The decision of the MC is null and void, hence the action in DOCTRINE: The owner of the land on which a
the CoFI is not builder
barred by res judicata. The MC decision is effective in respect erected a structure in good faith can either
to possession choose to appropriate it after paying its
only. The MC overstepped its boundaries when it imposed a value or to sell it to the builder. He cannot
“forced refuse to do either.
leased” between the parties. Even assuming that the MC
decision is not
null and void, res judicata still does not apply due to differences
in causes
of action, ie. (a) MC (unlawful detainer): deprivation of
possession (b) CoFI
(quieting of title): ownership.
(2) The stipulation of the facts between the parties concedes
that Dumlao is a
builder in good faith. The SC accords legal effect to this
agreement
between the parties. Thus, pursuant to CC448, DEPRA has the
option either
to pay for the encroaching part of DUMLAO's kitchen, or to sell
the
encroached 34 square meters of his lot to DUMLAO. Depra
cannot refuse
to do both. Furthermore, it was an error for the CoFI to have
ruled that DEPRA is "entitled to possession," without more, of
the disputed portion implying thereby that he is entitled to have
the kitchen removed. He is entitled to such removal only when,
after having chosen to sell his encroached land, DUMLAO fails
to pay for the same.
Issue: W/N the provisions of Art. 448 of CC can be invoked by
Technogas who is not the builder of the offending structures
but possesses them as a buyer? YES.
Upon delivery of the property by Pariz Industries, as seller, to
the petitioner, as buyer, the latter acquired ownership of the
property. Consequently and as earlier discussed, petitioner is
deemed to have stepped into the shoes of the seller in regard
to all rights of ownership over the immovable sold, including
the right to compel the private respondent to exercise either of
the two options provided under Article 448 of the Civil Code.
17

Briones v. Macabagdad R - lot 2-R
P - lot 2-S, the adjacent lot
P constructed their house mistakenly on 2-R, thinking it
was lot 2-S as the same had been pointed to them as
theirs by Vergons agents over the 7-yr period they were
paying for the lot. As such, R demanded P to demolish the
house and vacate the property. When P refused to heed
their demand, R filed an action to recover ownership and
possession of the said parcel of land. P insisted it was a
builder in good faith.
Ortiz v. Kayanan Zamora was adjudged owner of half portion of a parcel of
land but was ordered to reimburse jointly with Comintan
(person who has a sales patent over the other half) Ortiz
for the improvements he has introduced to the property in
the amount of P13,632, Ortiz having the right to retain the
property until after he has been fully paid therefor (Ortiz is a
bps in good faith). A portion of the land adjudicated to
Zamora was used as a diversion road. Ortiz collected tolls
in the total amount of about P25, 000. Upon the motion of
Comintan and Zamora, the lower court issued a writ of
execution ordering the accounting of the tolls received by
Ortiz and setting if off against what is due him for the
improvements he made (Comintan and Zamora has not
yet reimbursed Ortiz). Ortiz argued that the tolls collected
by him cannot be set off against the amount due him
because they belong to him. Who owns the tolls?
Geminiano v. CA On a 12 sq. m. portion of Lot No. 3765-B-1, owned by
Paulina vda. de Geminiano, stood the unfinished bungalow
of her children (Federico, Maria, Ernesto, Asuncion, Larry,
and Marilyn). In 1978, the Geminiano siblings sold the
house to private respondents Dominador and Mary
Nicolas, with a promise to sell the portion of the lot where
the house stood. It turned out, however, that Maria Lee
won the lot in a suit in 1972, after which it was bought by
Agustin and Ester Dionisio in 1984. The Geminiano siblings
then sent a demand to vacate in 1993, which was not
heeded by the Nicolases.
UP LAW A2019
Issues: Art. 448, 527, 546, 548 CC
W/N P may be demanded to vacate or pay the prevailing value
of the land? - NO.
Art. 527 CC presumes good faith, and since no proof exists to
show that the mistake was done by petitioners in bad faith, the
latter should be presumed to have built the house in good
faith. Thus follows the application of Art. 448 CC wherein the
builder in good faith may compel the landowner to make a
choice between [1] appropriating the building by paying the
proper indemnity or [2] obliging the builder to pay the price of
the land. The owner may only remove the improvements built
when, after choosing to sell his land, the builder fails to pay for
the same.
What are the rights of a builder in good faith?
- [448 CC] right to compel the landowner to choose between
appropriating the building by paying the proper indemnity or
obliging the builder to pay the price of the land
- [546 & 548 CC] right to be indemnified for the necessary and
useful expenses they may have made on the subject property
Zamora owns the tolls. A possessor in good faith is entitled to Art. 546
the fruits received before the possession is illegally interrupted.
Possession in good faith ceases from the moment the defects
in the title are made known to the possessor. Hence, all the
fruits that the possessor may receive from the time he is
summoned in court must be delievered to the owner. Even if
good faith ceases, possessor in good faith can still retain the
property until he has been fully reimbursed (Art. 546). Its object
is to guarantee the reimbursement.
Ortiz cannot appropriate for his own exclusive benefit the tolls
which he collected from the property retained by him. It was his
duty to apply such amount collected to the payment of the
interest and the principal due him.
WON respondent Wilson Kee was a builder in good faith - YES 1. Definition of good faith: Belief of the builder
that the land he is building on is his, and his
It is true that Lot 8 was covered by TCT No. T-69561 while Lot 9 ignorance of any defect or flaw in his title
was identified in TCT No. T-106367. However, Kee paid for a lot
plan by CTTEI's geodetic engineer, while his wife requested to 2. Art. 448, CC
inspect the property. The alleged violation of paragraphs 22
and 26 of Kee's Contract of Sale can only give rise to an action
for breach of contract.
18

Pleasantville Dev't Corp v. CA
Felices v. Iriola
Edith Robillo, who owned Lot 9 of the Pleasantville
Subdivision in Bacolod, sold the property to respondent
Eldred Jardinico in 1975. Meanwhile, in 1974 respondent
Wilson Kee bought Lot 8 from C.T. Torres Enterprises, Inc.
(CTTEI), whose employee, Zenaida Octaviano, mistakenly
identified Lot 9 as Lot 8. Jardinico later discovered that Kee
had taken possession of Lot 9 and built improvements
thereon, such as the latter's house and an auto repair
shop. The RTC declared Kee to be a builder in bad faith; the
CA reversed the RTC's ruling
In violation of the 5-year prohibition period under the Public for Iriola to execute a deed of reconveyance in his favor. The
Land Law, Felices sold to Iriola his homestead. Felices
tried to recover the land two (2) years after the sale but I
refused unless he was paid the value of the improvements under Article 453, considered both acted in good faith, Iriola,
made after recovery was sought.
UP LAW A2019
1. WON respondent Wilson Kee was a builder in good faith -
YES
2. WON petitioner Pleasantville Development Corp. is liable as
principal of CTTEI - YES
1. Definition of good faith: Belief of the builder that the land he
is building on is his, and his ignorance of any defect or flaw in
his title
2. Art. 448, CC. The owner of the land on which anything has
been built, sown or planted in good faith, shall have the right to
appropriate as his own the works, sowing or planting, after
payment of the indemnity provided for in articles 546 and 548,
or to oblige the one who built or planted to pay the price of the
land, and the one who sowed, the proper rent x x x. (361a)
1.
a. Granted, Lot 8 was covered by TCT No. T-69561 while Lot 9
was identified in TCT No. T-106367
b. However, Kee paid for a lot plan by CTTEI's geodetic
engineer, while his wife requested to inspect the property
c. Alleged violation of paragraphs 22 and 26 of Kee's Contract of
Sale can only give rise to an action for breach of contract
2. CTTEI was acting within the scope of its authority, albeit with
negligence, when it delivered Lot 9 to Kee
3. SC: The CA's order for the Kees to shoulder demolition
expenses will unjustly enrich Jardinico
Issue:Is Iriola entitled to the value of the improvements? Art. 449, NCC
Held: No. Since Felices never lost title over the homestead
there is no need for him to repurchase the same from Iriola or
case is actually for mutual restitution. While both acted in bad
faith because they know the sale to be void and consequently,
however, cannot recover the value of his improvements
because they were made only after Felices had made some
acts to recover land. By so doing, Iriola acted in bad faith and
as penalty therefor, he must forfeit his improvements without
right to indemnity under Article 449.
19

Sps. Nuguid v. CA Pedro P. Pecson owned a commercial lot located at 27
Kamias Road, Quezon City, on which he built a four-door
two-storey apartment building. For failure to pay realty
taxes, the lot was sold at public auction by the City
Treasurer of Quezon City to Mamerto Nepomuceno, who in
turn sold it for P103,000 to the spouses Juan and Erlinda
Nuguid. Pecson challenged the validity of the auction sale
before the RTC of Quezon City. RTC upheld the spouses title
but declared that the four-door two-storey apartment
building was not included in the auction sale, as upheld by
the CA and the SC. Nuguid spouses moved for delivery of
possession of the lot and the apartment building. The trial
court, relying upon Article 546 of the Civil Code, ruled that
the Spouses Nuguid were to reimburse Pecson for his
construction cost of P53,000, following which, the spouses
Nuguid were entitled to immediate issuance of a writ of
possession over the lot and improvements. In the same
order the RTC also directed Pecson to pay the same
amount of monthly rentals to the Nuguids as paid by the
tenants occupying the apartment units or P21,000 per
month from June 23, 1993, and allowed the offset of the
amount of P53,000 due from the Nuguids against the
amount of rents collected by Pecson from June 23, 1993 to
September 23, 1993 from the tenants of the apartment.
Pecson moved to reconsider, but the RTC issued a writ of of
possession. CA affirmed, relying on Art 448, CC. SC set aside
CA decision and remanded the case for determination of
current market value. Pecson then filed a Motion to
Restore Possession and a Motion to Render Accounting,
praying respectively for restoration of his possession over
the subject 256-square meter commercial lot and for the
spouses Nuguid to be directed to render an accounting
under oath, of the income derived from the subject four-
door apartment from November 22, 1993 until possession
of the same was restored to him. the RTC denied the
Motion to Restore Possession to the plaintiff averring that
the current market value of the building should first be
determined. Pending the said determination, the
resolution of the Motion for Accounting was likewise held in
abeyance. With the submission of the parties assessment
and the reports of the subject realty, and the reports of the
Quezon City Assessor, as well as the members of the duly
constituted assessment committee, the trial court directed
defendants are directed to pay plaintiff the balance of
P100,000.00; w/n there are rentals to be paid shall still be
determined. After paying the said P100,000 balance to
Pedro Pecson the spouses Nuguid prayed for the closure
and termination of the case, as well as the cancellation of
the notice of lis pendens on the title of the property on the
ground that Pedro Pecsons claim for rentals was devoid of
factual and legal bases. After conducting a hearing, the
lower court issued an Order dated July 31, 1998, directing
the spouses to pay the sum of P1,344,000 as
reimbursement of the unrealized income of Pecson for the
period beginning November 22, 1993 up to December
1997.
It is not disputed that the construction of the four-door two-
storey apartment, subject of this dispute, was undertaken at
the time when Pecson was still the owner of the lot. When the
Nuguids became the uncontested owner of the lot on June 23,
1993, by virtue of entry of judgment of the Courts decision, the
apartment building was already in existence and occupied by
tenants. In its decision dated May 26, 1995, the Court declared
the rights and obligations of the litigants in accordance with
Articles 448 and 546 of the Civil Code. These provisions of the
Code are directly applicable to the instant case.
Since petitioners opted to appropriate the improvement for
themselves as early as June 1993, when they applied for a writ
of execution despite knowledge that the auction sale did not
include the apartment building, they could not benefit from the
lots improvement, until they reimbursed the improver in full,
based on the current market value of the property.
Despite the Courts recognition of Pecsons right of ownership
over the apartment building, the petitioners still insisted on
dispossessing Pecson by filing for a Writ of Possession to cover
both the lot and the building. Clearly, this resulted in a violation
of respondents right of retention. Worse, petitioners took
advantage of the situation to benefit from the highly valued,
income-yielding, four-unit apartment building by collecting
rentals thereon, before they paid for the cost of the apartment
building. It was only four years later that they finally paid its full
value to the respondent.
The text of the decision in G.R. No. 115814 expressly exempted
Pecson from liability to pay rentals, for we found that the Court
of Appeals erred not only in upholding the trial courts
determination of the indemnity, but also in ordering him to
account for the rentals of the apartment building from June 23,
1993 to September 23, 1993, the period from entry of judgment
until Pecsons dispossession. As pointed out by Pecson, the
dispositive portion of our decision in G.R. No. 115814 need not
specifically include the income derived from the improvement
in order to entitle him, as a builder in good faith, to such
income. The right of retention, which entitles the builder in
good faith to the possession as well as the income derived
therefrom, is already provided for under Article 546 of the Civil
Code.
Given the circumstances of the instant case where the builder
in good faith has been clearly denied his right of retention for
almost half a decade, we find that the increased award of
rentals by the RTC was reasonable and equitable. The
petitioners had reaped all the benefits from the improvement
introduced by the respondent during said period, without
paying any amount to the latter as reimbursement for his
construction costs and expenses. They should account and pay
for such benefits.
20
UP LAW A2019
Under Article 448, the landowner is given the
option, either to appropriate the improvement
as his own upon payment of the proper
amount of indemnity or to sell the land to the
possessor in good faith. Relatedly, Article 546
provides that a builder in good faith is entitled
to full reimbursement for all the necessary and
useful expenses incurred; it also gives him right
of retention until full reimbursement is made.
While the law aims to concentrate in one
person the ownership of the land and the
improvements thereon in view of the
impracticability of creating a state of forced co-
ownership, it guards against unjust enrichment
insofar as the good-faith builders
improvements are concerned. The right of
retention is considered as one of the
measures devised by the law for the protection
of builders in good faith. Its object is to
guarantee full and prompt reimbursement as it
permits the actual possessor to remain in
possession while he has not been reimbursed
(by the person who defeated him in the case
for possession of the property) for those
necessary expenses and useful improvements
made by him on the thing possessed.
Accordingly, a builder in good faith cannot be
compelled to pay rentals during the period of
retention nor be disturbed in his possession by
ordering him to vacate. In addition, as in this
case, the owner of the land is prohibited from
offsetting or compensating the necessary and
useful expenses with the fruits received by the
builder-possessor in good faith. Otherwise, the
security provided by law would be impaired.
This is so because the right to the expenses
and the right to the fruits both pertain to the
possessor, making compensation juridically
impossible; and one cannot be used to reduce
the other.

Coleongco v. Regalado Prior to September of 1944, Pedro F. Regalado was the
owner of lot No. 1205-A situated at barrio Mandalagan,
Municipality of Bacolod, Province of Negros Occidental. In
this lot there was erected a building which in September of
1944, was being occupied by the forces of the Japanese
Army. In that month of September Pedro F. Regalado sold
lot No. 157 to Vicente M. Coleongco who thus became the
owner of the lot. The total area of the lot was 1,000 square
meters, and the land occupied by the house was 245
square meters.
It appears from the records that Vicente M. Coleongco
contended that the house erected on lot 157 was included
in the sale to him of this property, and when the City of
Bacolod was liberated by the American Forces that
succeeded the Japanese and occupied said house for
about two months, Coleongco received from the local office
of the AFWESPAC as rentals for such occupation the sum of
$93.75 or P137.50. It so happened, however, that after the
American Forces vacated the house, Pedro F. Regalado
occupied the same, so Vicente M. Coleongco instituted a
Civil which decided that the improvement of lot No. 157,
consisting of a residential house, was the property of the
defendant therein Pedro F. Regalado. From that decision
Coleongco appealed to the Court of Appeals, but on August
28, 1947, this tribunal declared the appeal abandoned.
Pecson v. CA Pecson was owner of a commercial lot on which he built an
apartment building. For failure to pay realty taxes, lot was
sold at a public auction by City Treasurer to Nepomuceno
who subsequently sold it to the Spouses Nuquid.
Pecson challenged the validity of the auction sale; RTC
upheld the Nuquids’ title, but declared that the apartment
building was not included in the auction sale. The Nuquids
became the uncontested owners of the commercial lot.
The Nuquids, relying on Art. 546, moved for delivery of
possession of the lot and the apartment building; RTC ruled
that spouses should reimburse Pecson for his construction
cost so that they be issued writ of possession over lot and
apartment building. RTC ordered Pecson to also pay rentals
as paid by tenants of the apartment building. Offsetting
was allowed.
Regalado, being the owner of both the lot and the house, sold
only the lot to Coleongco, retaining ownership of the house.
Consequently, Regalado or his successor Leonor Montilla
should remove said house from the lot without any
compensation from Coleongco. Article 361 of the old Civil Code
is not applicable in this case, for Regalado constructed the
house on his own land before he sold said land to Coleongco.
Article 361 applies only in the cases where a person constructs
a building on the land of another in good or in bad faith, as the
case may be. It does not apply to a case where a person
constructs a building on his own land, for then there can be no
question as to good or bad faith on the part of the builder.
Art. 448 refers to a land whose ownership is claimed by two or
more parties, one of whom has built/planted/sown something.
It has no application to a case where the owner of the land is
the builder/planter/sower who then later loses ownership of
the land by sale or donation.
Pecson was a builder in good faith of the apartment building
since he was still the owner of lot at time of construction.
Articles 546 and Article 448 do not apply, but provisions on
indemnity may be applied.
Since the Nuquids have opted to appropriate the apartment
building, Pecson is thus entitled to the possession and
enjoyment of the apartment building, until he is paid the proper
indemnity, as well as of the portion of the lot where the building
has been constructed.
The case is remanded to the lower court for the determination
of the current market value of lot and apartment.
21
UP LAW A2019
"ART. 358. What is built, planted or sown on
another's land and any improvements or repair
made on it, belongs to the owner of the land,
subject to the provisions of the following
articles.
"ART. 361. The owner of land on which
anything has been built, sown or planted, in
good faith, shall be entitled to appropriate the
thing so built, sown, or planted, upon paying
the compensation mentioned in articles 453
and 456, or to compel the person who has
built or planned to pay him the value of the
land, and the person who sowed thereon to
pay the proper rent therefor.
"ART. 453. Necessary expenditures shall be
refunded to every possessor; but only the
possessor in good faith may retain the thing
until they are repaid to him.
Useful expenditures shall be paid to the
possessor in good faith with the same right of
retention, the person who has defeated him in
his possession having the option of refunding
the amount of such expenditures or paying him
the increase in value which the thing has
acquired by reason thereof.
"ART. 454. Expenditures purely for ostentation
or mere pleasure shall not be repaid the
possessor in good faith; but he may remove
the ornaments with which he has established
the principal thing if it does not suffer injury
thereby and if the successor in the possession
does no prefer to refund the amount
expended.
Arts. 448 & 546, CC.

Mercado v. CA The Bulaong Group have been individual lessees of stalls in
the public market of Baliuag since 1956 to 1972. Such
market was destroyed by fire in 1956, prompting said group
to construct new stalls at their own expense, and to pay
rentals to the Municipality of Baliuag.. In 1972, the group
subleased their stalls to the Mercado group. After being in
possession of the stalls for several months, the
municipality cancelled the leases of the Bulaong group and
declared the Mercado group the rightful lessees of the
stalls, invoking Ordinance 14, which prohibited the sub-
leasing of stalls.
The Bulaong group filed complaints for the recovery of the
stalls. The lower court ruled for the Bulaong group, holding
that the municipality did not automatically acquire
ownership of the stalls after the market was razed by fire,
and declared the Bulaong group builders in good faith. It
was also held that the Bulaong and Mercado groups were
aware of the prohibition in Ordinance 14, and pushed
through with the sub-leasing, thus rendering both in pari
delicto, and without a cause of action against each other.
Accretion Continua; Over Immovables; Natural; Accretion Alluvium
UP LAW A2019
The Supreme Court held that “to be deemed a builder in good
faith, it is essential that a person assert title to the land on
which he builds; i.e., that he be a possessor in concept of
owner, and that he be unaware ‘that there exists in his title or
mode of acquisition any flaw which invalidates it.’
The members of the Bulaong group were admittedly lessees of
space in the public market; they therefore could not, and in
truth never did make the claim, that they were owners of any
part of the land occupied by the market so that in respect of
any new structure put up by them thereon, they could be
deemed builders in good faith (in accordance with Article 526
of the Civil Code). To be deemed a builder in good faith, it is
essential that a person assert title to the land on which he
builds; i.e., that he be a possessor in concept of owner, and
that he be unaware “that there exists in his title or mode of
acquisition any flaw which invalidates it. It is such a builder in
good faith who is given the right to retain the thing, even as
against the real owner, until he has been reimbursed in full not
only for the necessary expenses but also for useful expenses.
On the other hand, unlike the builder in good faith, a lessee
who “makes in good faith useful improvements which are
suitable to the use for which the lease is intended, without
altering the form or substance of the property leased,” can only
claim payment of “one-half of the value of the improvements”
or, “should the lessor refuse to reimburse said amount, remove
the improvements, even though the principal thing may suffer
damage thereby.”
22

Republic v. CA Josephina Morato filed a free patent application on a
parcel of land at Calauag, Quezon. Both the free patent and
title issued to her specifically mandate that the land shall
not be alienated nor encumbered within 5 years from the
date of the issuance of the patent pursuant to Sections
118 and 124 of CA No. 141, as amended. The District Land
Officer in Lucena City, acting upon reports that Morato had
encumbered the land and upon finding that the subject
land is submerged in the Calauag Bay 5 to 6 feet under
during high tide and 2 feet deep at low tide, filed a
complaint for cancellation of the title and reversion of the
parcel of land to the public domain. RTC dismissed the
complaint. CA affirmed.
The land has become foreshore as it is was invaded by, and
became subject to the ebb and flow of the tide, and cannot be
subject of a free patent under the Public Land Act. Due to a
strong earthquake in 1937 followed by frequent storms, and
then another earthquake and typhoon in the 1970s, great
erosion occurred and the sea moved towards the estate. In
Government v. Cabangis, the Court annulled the registration of
land subject of cadastral proceedings when the parcel
subsequently became foreshore land. In another case, the
Court voided the registration decree of a trial court and held
that said court had no jurisdiction to award foreshore land to
any private person or entity. The subject land in this case, being
foreshore land should therefor be returned to the public
domain.
UP LAW A2019
Foreshore land, defined.That part of the land
which is between high and low water and left
dry by the flux and reflux of the tides, or the
strip of land that lies between the high and low
water marks and that is alternatively wet and
dry according to the flow of the tide (Republic
vs. CA).
Civil Code, Article 339 (1).Property of public
ownership is
1. That devoted to public use, such as roads,
canals, rivers, torrents, ports and bridges
constructed by the State, riverbanks, shores,
roadsteads, and that of a similar character.

Civil Code, 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.

Law of Waters of August 3, 1866, Art. 1(3).

The following are part of the national domain
open to public use:
3. The Shores. By the shore is understood that
space covered and uncovered by the
movement of the tide. Its interior or terrestrial
limit is the line reached by the highest
equinoctal tides. Where the tides are not
appreciable, the shore begins on the land side
at the line reached by the sea during ordinary
storms or tempests.
Grande v. CA Grande siblings own a parcel of land, with an area of The trial court was wrong in ruling that by accession the land in
3.5032 hectares, located at barrio Ragan, Magsaysay question pertains to the original estate, and since the original
(formerly Tumauini), Isabela. They inherited it from their estate is registered, the accretion consequently is
mother Patricia Angui who in turn inherited it from her automatically registered too (and thus there could not be
parents Isidro Angui and Ana Lopez, in whose name the acquisitive prescription in Calalungs' favor => action to quiet
land is registered. Upon survey for registration in 1930, its title was imprescriptible).
northeastern boundary was the Cagayan River. Since then,
and for many years thereafter, a gradual accretion on the The accretion does not ipso facto become registered like the
northeastern side took place, by action of the said river, so land to which it is attached. Ownership of land is different from
much, so that by 1958, the bank thereof had receded to aregistration. Ownership is governed by the civil code while the
distance of about 105 meters from its original site , and an imprescriptibility of registered land is governed by the Land
alluvial deposite of 19,964 sq. meters more or less had Registration and Cadastral Acts. To obtain the protection of
been added to the registered land. imprescriptibility, the land must be placed under the operation
of the registration laws wherein certain judicial procedures
On January 25, 1958, the Grandes filed suit to quiet title must be observed. The fact remains that the Grandes have not
and alleged that they were in former peaceful possession sought registration of the alluvial property in dispute up to the
of said alluvial deposit when the Calalungs encroached the time they filed an action against respondents. Because of this,
land claiming ownership. said accretion is not protected by imprescriptibility.

23

Careg v. IAC NOTE: Case not in pile. Wrong citation in syllabus. Looked
at all 11 of the 1989 cases available online with IAC as
respondent, but not one of them talks about accretion.
Sorry. :( Since Careg is not available and Meneses has not
been assigned, I made an entry for Meneses instead (see
entry below).
Meneses v. CA Meneses acquired lots from Bautista in consideration of
the latter's "love and affection" for and "some monetary
obligations" in favor of the former. On the other hand, the
Quisimbings claim to have had ownership of the properties
as far back as 1919. In 1978, the title of the Quisimbings
was confirmed as to an additional 2387 sq m of land which
has gradually accrued to their property by the natural
action of the waters of Laguna de Bay. The Quisimbings
filed a civil case for the nullification of the free patents and
titles issued to Pablito Meneses, alleging that then Mayor
Lorenzo Meneses, using his brother Pablito as his "tool
and dummy", illegally occupied their private accretion land.
Petitioners claim that the land is foreshore land that is part
of Laguna de Bay, and therefore the Quisimbings have no
legal right to claim the same as accretion land.
Accretion Continua; Over Immovables; Natural; Avulsion
Heirs of Emiliano v. IAC Sinforo Pascual owned land bounded on
the east by Talisay River, on the West by
Bulacan River and on the North by the
Manila Bay. About 17 hectares of formed
on the northernmost part of his land,
allegedly due to the currents of the two
rivers. Thus, he claims that this land is part
of his property, he being the riparian
owner.
Emiliano Navarro filed a fishpond
application covering a tract of land near the
disputed area. Consequently, he also
ended up occupying part of the 17-ha.
land. Pascual sought to eject him. His
complaint was dismissed because the
land, according to the trial court, was
foreshore land and part of the public
domain.
On appeal, IAC reversed and granted
Pascual’s complaint as well as his
application for land registration. Ratio:
avulsion was caused by the action of two
rivers, not of Manila Bay.
Same; Same; Same; Change of Course of River
HELD: Accretion land belongs to the Quisimbings, who own the
property adjacent to it. Land in question is not foreshore land:
accretion was due to the rains falling on or flowing into Laguna
de Bay, and not due to flux and reflux of tides. The land not
being part of the bed and basin of the lake, and not being
foreshore land, it is capable of registration of private property.
Also, the Meneses acquired title to the land through fraud, so
the principle of indefeasibility of title after the lapse of one year
cannot apply in their favor. DOCTRINE: Accretion of land via
lakes which are contiguous to the land owned by a party
belongs to the owner of contiguous land.
The disputed property is foreshore land,
therefore part of the public domain.
• Spanish Law of Waters of 1866:
“Lands added to the shores by
accretions and alluvial deposits caused
by the action of the sea, form part of
the public domain. When they are no
longer washed by the waters of the sea
and are not necessary for purposes of
public utility, or for the establishment
of special industries, or for the coastguard
service, the Government shall
declare them to be the property of the
owners of the estates adjacent thereto
and as increment thereof.”
• In this case, the land formed on the
northern portion of Pascual’s property
fronting Manila Bay. The land deposits
did not come from the Talisay or
Bulacan rivers.
24
UP LAW A2019
Art. 457 CC
Accretion as a mode of acquiring property
requires the concurrence of these requisites:
1) that deposition of soil or sediment be
gradual and imperceptible; 2) that it be the
result of the action of the waters of the river (or
sea); and 3) that the land where accretion
takes place is adjacent to the banks of rivers
(or the sea coast).
Accretion on a sea bank (Manila Bay) is
property of the public domain.
Accretion as a mode of acquiring property
and requires the concurrence of the
following requisites:
1. That the accumulation of soil or
sediment be gradual and
imperceptible;
2. That it be the result of the action of the
waters of the river; and
3. That the land where the accretion
takes place is adjacent to the bank of
the river.

Baes v. CA
Binalay v. Manalo
Same; Over Movables; Commixtion and Confusion
Siari Valley Estates v. Lucasan
In 1962, the Government dug up a canal on a private
estate in order to streamline the Tripa de Gallina creek (in
other words, there was a mand-made change of river
course). Said private estate was acquired by petitioner
Baes, and was subdivided in to three lots. It was lot 2958-C
which was totally occupied by the canal so the Government
in exchange granted him a lot near but not contiguous to C.
The old river bed was filled up by soil from Lot C. Petitioner
now claims ownership over the old river bed on the basis of
Article 461 which says that abandoned river beds belong to
the riparian owners whose land is occupied by the new
course of water.
Late Judge Taccad owned a parcel of land. Through the
years, the western portion of said land would periodically
go under the waters of Cagayan River. The submerged
portion would re-appear during the dry season. Manalo
acquired a part thereof from daughter of Judge then later
purchased another portion thereof. When a cadastral
survey was conducted of Manalo’s lands, a portion of the
land was left unsurveyed for it was under water hence not
included in Lot 307. The Cagayan River, running from south
to north, forks at a certain point to form 2 branches and
then unites at the other end, further north, to form a narrow
strip of land, Lot 812. Since the strip of land is directly
opposite Manalo’s lot, he claims that said strip should
belong to him by way of accretion to the submerged part of
the property to which it is adjacent. Petitioner Binalay who
are in possession of the strip argues it is theirs. Hence,
Manlo filed a case for forcible entry.
Siari Valley Estate Inc. filed an action to recover about 200
head of cattle that were driven, or wandered, from its
pasture lands into the adjoining ranch of defendant
Filemon Lucasan. Plaintiff asked for the return of its
animals with their offspring, or for payment of those
disposed of by defendant, plus damages. In his answer, the
defendant denied having appropriated or retained any
cattle belonging to the corporation.
UP LAW A2019
The rules on alluvion do not apply to man-made or artificial Article 461, NCC.
accretions nor to accretions to lands that adjoin canals or
esteros or artificial drainage systems. If the riparian owner is
entitled to compensation for the damage to or loss of his
property due to natural causes, there is all the more reason to
compensate him when the change in the course of the river is
effected through artificial means.
The regularly submerged portion or the eastern bed of the river Accretion as a mode of acquiring property
is of public dominion. Pursuant to Article 420, Manalo did not under Article 457 of the Civil Code requires the
acquire private ownership of the bed of eastern branch of river concurrence of three (3) requisites:
even if it was included in the deeds of absolute sale because (1)That the deposition of soil or sediment be
vendors could not have validly sold the land which is a property gradual and imperceptible;
of public dominion. As to issue on accretion, there was no (2)That it be the result of the action of the
evidence that strip of land is an increment of Lot of Manalo. waters of the river (or sea); and
The Court notes that the parcels of land bought by Manalo (3)That the land where accretion takes place is
border on the eastern branch of the Cagayan River. Any adjacent to the banks of rivers (or the sea
accretion formed by this eastern branch which respondent coast).
Manalo may claim must be deposited on or attached to Lot
307. As it is, the claimed accretion (Lot 821) lies on the bank of
the river not adjacent to Lot 307 but directly opposite Lot 307
across the river. Further, Lot 821 has an area of 11.91 ha and
such is sizeable to result from slow accretion to another lot of
almost equal in size.
The Court affirmed the trial court finding that such commixtion
was actuated by bad faith on the part of defendant Lucasan.
The circumstances disclosed in this record show that his
cowboys -and even his sons - rounded up and drove plaintiff’s
cattle into his pasture; he knew he had plaintiff’s cattle, but
refused to return them despite demands by plaintiff; he
rebranded several Siari Valley cattle with his own brand etc.
Pursuant to the principles in the Civil Code, “if the commingling
of two things is made in bad faith, the one responsible for it will
lose his share.
DOCTRINE: Where the goods are so mingled that they cannot
thereafter properly be identified or divided, all the
inconvenience or loss resulting from the confusion is thrown on
the party who occasioned it.
25

Santos v. Bernabe Santos deposited 778 cavans of palay while Tiongson
deposited 1,026 cavans of the same grain in the
waerehouse of Bernabe. Tiongson filed with the CFI a
complaint against Bernabe, to recover the 1,026 cavans
and of palay deposited in the warehouse. A writ of
attachment was granted, and the attachable property of
Bernabe, including 924 cavans of palay found by the sheriff
in his warehouse, were attached, sold at public auction,
and the proceeds thereof delivered to said Tiongson.
Santos, intervened in the attachment of the palay. It does
not appear that the sacks of palay of Santos and those of
Tiongson, deposited in Bernabe's warehouse, bore any
marks or signs, nor were they separated one from the
other.
UP LAW A2019
Santos is entitled to the proceeds of the sale in proportion to Article 381. If, by the will of their owners, two
what he deposited. things of identical or dissimilar nature are
mixed, or if the mixture occurs accidentally, if
There being no means of separating from said 924 cavans of in the latter case the things cannot be
palay belonging to Santos and those belonging to Tiongson, the separated without injury, each owner shall
rule in Article 381 of the Civil Code is applicable. Thus, taking acquire a right in the mixture proportionate to
the proportion of the 924 cavans of palay which were attached the part belonging to him, according to the
and sold, Santos, who deposited 778 cavans, is entitled 398.49 value of the things mixed or commingled.
thereof, and Pablo Tiongson, who deposited 1,026 cavans,
525.51, or the value thereof at the rate of P3 per cavan.
26