I.

DEFINITION OF PROPERTY PROPERTY Is an economic concept, meaning a mass of things useful to human activity and which are necessary to life, for which reason they may be organized and distributed in one way or another, but, always for the good of the main. In order that a thing may be considered as property: o Utility capacity to satisfy human wants o Individuality or Substantivity an autonomous or separate existence; materials composing a thing are not thing in themselves. o Appropriability or susceptibility to appropriation A. 1. Classification under the Civil Code Immovable or Real Property 1. Lands, buildings, road and constructions of all kinds adhered to the soil. 2. Trees, plants, growing fruits while they are attached to the land or form an integral part of an immovable 3. Everything attached to an immovable in a fixed manner, in such a way that it cannot be removed without breaking the material or deterioration of the object 4. Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings or on lands by the owner of the immovable in such a manner that it reveals the intention to attach them permanently to the tenements 5. Machineries, receptacles, instruments and implements intended by the owner of the tenement for industry or works which may be carried on in a building or on a piece of land, and which tends directly to meet the needs of the said industry or works 6. Animal houses, pigeon houses, beehives, fish ponds or breeding places of similar nature, in case their owner has placed them or preserves them with the intention to have them permanently attached to the land, and forming a permanent part of it; the animals in these places are included; 7. Fertilizer actually used on a piece of land 8. Mines, quarries, and slag dumps, while the matter thereof forms part of the bed, and waters either running or stagnant 9. Docks and structures which, though floating are intended by their nature and object to remain at a fixed place on a river, lake or coast 10. Contract for public works and servitudes and other real rights over immovable property a. By Nature those which cannot be moved from place to place

d.

By Analogy

Art 415, Par 10 Contracts for public works, servitudes and other real rights over immovable property Movables or Personal Property Art 416 The following are things deemed to be movable property: (1) Those movables susceptible of appropriation which are not included in the preceding article (2) RP which by any special provision of law is considered as personalty (3) Forces of nature which are brought under the control by science (4) In general, all things which can be transported from place to place without impairment of the real property to which they are fixed (c.f. Art 415 No 3) Art 417 The following are also considered as personal property: (1) Obligations and actions which have for their objects movables or demandable sums (2) Shares of stock of agricultural, commercial and industrial entities, although they may have real estate 2. i. ii. iii. iv. v. vi. Importance and Significance of Classification From point of view of: Criminal Law Form of contracts involving movables or immovables Prescription Venue/Jurisdiction Taxation Double Sales under Art 1544 Art 1544 If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be IMMOVABLE PROPERTY.

(applies to unregistered lands)

For registered lands: Should it be IMMOVABLE PROPERTY, the ownership shall belong to the person

acquiring it who in good faith, first recorded it in the Registry of Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith. vii. Preference of Credits viii. Causes of Action to Recover 3. Differences between Real Rights and Personal Rights REAL RIGHTS Power belonging to a person over a specific thing, without a passive subject individually determined against whom such right may be personally exercised 1) Subject and object connected by a relation of ownership of the former over the latter 2) A general obligation or PERSONAL RIGHTS Power belonging to one person to demand to another, as a definite passive subject, the fulfillment of a prestation to give, to do or not to do 1) Two subjects: active and passive (bound to perform prestation incumbent upon him by reason of a

Art 415, Par 1 Land, buildings, road and constructions of all kinds Art 415, Par 8 Mines, quarries and slag dumps b. By Incorporation

Point of comparison Definition

Art 415, Par 2 Trees, plants and growing fruits Art 415, Par 3 Everything attached to an immovable Art 415, Par 7 Fertilizers c. By Destination Elements

Art 415, Par 4 Statues, reliefs, paintings and other objects for use or ornamentation Art 415, Par 5 Machines, receptacles, implements and instruments Art 415, Par 6 Animal houses, pigeon-houses, beehives, fishponds and breeding places of similar nature Art 415, Par 9 Docks and structures

3)

duty of respect for such relation, there being no particular passive subject Effective actions recognized by law to protect such relation against anyone who may want to disturb it

2)

3)

Also known as Number of persons involved in the juridical relation

Jus in re
Active subject 1 Passive subject the rest of the world without individual determination Generally a corporeal thing Generally affects the thing directly By mode and title Extinguished by the loss or destruction of the thing Real actions against third persons

Jus ad rem

juridical tie which binds him to the active subject), who are determined and specified General obligation on the part of 3rd persons to respect the relation between the active and passive subjects Effective actions in favor of the active subject against the passive subject for the performance of the prestation by the latter or so that the relation between them may produce its natural and juridical effects

State, banks, shores, roadsteads and other 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 national wealth Art 421 All other property of the State, which is not of the character stated in the preceding article, is patrimonial property Art 422 Property of public dominion, when no longer intended for public use or public service, shall form part of the patrimonial property of the State. Art 424 Property for public use, in the provinces, cities, and municipalities, consists of the provincial roads, city streets, municipal streets, the squares, fountains, public waters, promenades and public works for public service paid for by said provinces, cities, or municipalities. All other property possessed by any of them is patrimonial, and shall be governed by this Code, without prejudice to the provisions of special laws. a. i. ii. iii. Property of State Art 420 Art 421 Art 422 see above

For public use For public service For development of national wealth b. Property of Municipal Corporations Art 424, Par 1 see above

i. 3.

For public use including public works for public service Private Property a. b. c. Patrimonial Property of State Art 421 see above Patrimonial Property of Municipal Corporations Art 424, Par 2 see above Private Property of Private Persons Art 425 Property of private ownership, besides the patrimonial property of the State, provinces, cities and municipalities, consists of all property belonging to private persons, either individually or collectively.

Definite active subject Definite passive subject Intangible thing, i.e. the prestation of the debtor Indirectly through the prestation of the debtor By title alone Not extinguished by the loss or destruction of the thing Only personal actions against the definite debtor C. 1. 4.

Object of the juridical relation By the manner in which the will of the active subject affects the thing related to it By the causes of creating the juridical relation By the methods of extinguishment of the juridical relation By the nature of the actions arising from them B.

Effect and Significance of Classification of Property as Property of Public Dominion a. b. c. d. Property is outside the commerce of man Property cannot be the subject of acquisitive prescription Property cannot be attached or levied upon in execution Property cannot be burdened with a voluntary easement

Classification by Ownership 1. 2. Res Nullius does not belong and are not enjoyed by anyone e.g. abandoned property and hidden treasure Public Dominion owned by the state but enjoyed by all its citizens

Other Classifications By their physical existence a. Corporeal those which are manifest to the senses, which we may touch or take, which exist in space and have a body, whether animate or inanimate b. Incorporeal personal prestations or acts or services productive of utility. They are not manifest to the senses but are conceived only by the understanding. They must combine three requisites: i. External manifested act ii. Personal done by the debtor himself iii. Possible when it can be done both in nature and in law

cf. Patrimonial Property of State

Art 419 Property is either of public dominion or private ownership. Art 420 The following are things of public dominion: (1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges, constructed by the

2.

By their autonomy or dependence a. Principal those which other things are considered dependent or subordinated e.g. lands on which a house is built b. Accessory dependent upon or subordinated to the principal e.g. house in the preceding example

J. B. L. Reyes: It is independent right of exclusive

3.

By their subsistence after use Art 418 Movable property is either consumable or nonconsummable. To the first class belong those movables which cannot be used in a manner appropriate to their nature without being consumed. To the second class belong all the others. a. Consumable whose used according to their nature destroys the substance of the thing or causes their loss to the owner e.g. food b. Non-consumable not consumed by use Differentiated from Fungible or Non-fungible Fungible depends upon possibility (because of their nature or the will of the parties) of being substituted by others of the same kind, not having distinct individuality; those which belong to the common genus which includes several species of the same kind, perfectly permitting substitution of one by the others Non-fungible those which have their own individuality (specifically determined) and do not admit of substitution c. Deteriorable or non-deteriorable 4. By reason of their susceptibility to division a. Divisible can be divided physically or juridically without injury to their nature e.g. piece of land, inheritance b. Indivisible those which cannot be divided without destroying their nature or rendering impossible the fulfillment of the juridical relation of which they are the object e.g. horse By reason of designation a. Generic indicates its homogenous nature, but not the individual e.g. horse, house, dress b. Specific indicates the specie or its nature and the individual e.g. white horse of X or house No. 20 at Y Street By their existence in point of time a. Present exist in actuality, either physical or legal e.g. erected building, not that which is planned b. Future do not exist in actuality, but whose existence can reasonably be expected with more or less probability e.g. ungathered fruits By reason of contents and constitution a. Singular i. Simple ii. Compound b. Universal when several things collectively form a single object in law under one name, which may be in fact e.g. warehouse, herd OR in law e.g. inheritance or dowry By reason of susceptibility to appropriation a. Non-appropriable b. Appropriable i. Already appropriated ii. Not yet appropriated By reason of susceptibility to commerce a. Within the commerce of man b. Outside the commerce of man

enjoyment and control of a thing for the purpose of deriving therefrom all the advantages required by the: o Reasonable needs of the owner (or holder of the right) and o Promotion of the general welfare But subject to the restrictions imposed by: o Law o Rights of others Scialoja: It is a relation in private law by virtue of which is a thing (or property right) pertaining to one person is completely subjected to his will in everything not prohibited by public law or the concurrence with the rights of another o Sir actually prefers this definition

B.

Bundle of Rights included in Ownership

Art 429 The owner or lawful possessor of a thing has the right to exclude any person from the enjoyment and disposal thereof. For this purpose, he may use such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property. C.

Jus Utendi right to use and enjoy the property

without destroying its substance Jus Abutendi right to use and enjoy by consuming the thing by its use Jus Fruendi right to receive the fruits Jus Disponendi right to dispose or the power of the owner to alienate, encumber, transform and even destroy the thing owned Jus Vindicandi right to recover a thing

Other Specific Rights found in the Civil Code 1. Right to exclude; self-help; Doctrine of Self-help Art 429 see above

5.

ELEMENTS OF SELF-HELP
2.

6.

Right to enclose or fence Art 430 Every owner may enclose of fence his land or tenements by means of walls, ditches, live or dead hedges, or by any other means without detriment to servitudes consisted thereon. Right to receive just compensation in case of expropriation Art 435 No person shall be deprived of his property except by competent authority and for public use and always upon just compensation. Right to hidden treasure Art 438 Hidden treasure belongs to the owner of the land, buiding or other property on which it is found. Nevertheless, when the discovery is made on the property of another, OR of the State or any of its subdivisions, and by chance thereof shall be allowed to the finder. If the finder is a trespasser, he shall not be entitled to any share of the treasure. If the things found be of interest to science or the arts, the State may acquire them at their just price, which shall be divided in conformity with the rule stated. Art 439 By treasure is understood, for legal purposes, any hidden and unknown deposit of money, jewelry, or other precious objects, the lawful ownership of which does not appear.

3.

7.

4.

8.

9.

5. II. OWNERSHIP A. Definition 6.

Right to space and subsoil Art 437 Right to accession Art 440 The ownership of property gives the right by accession to: o Everything which is produced thereby (accession discreta)

OWNERSHIP

Incorporated or attached thereto, either naturally or artificially (accession continua) 2.

b. c.

7.

Right to recover possession and/or ownership (jus vindicandi) a. Available actions to Recover Possession/Ownership i. For immovable property

Taxation Eminent domain Art 435

1) 2)

Accion reivindicatoria - recovery of dominion of property as

Specific Limitation a. Legal servitudes b. Limitations imposed by party transmitting the property i. By contract or last will or donation ii. Stipulation on inalienability Limitation from scattered provisions of CC Art 431 The owner of a thing cannot make use thereof in such manner as to injure the rights of a third person. Sis utere tuo ut alienum no Art 432 The owner of a thing has no right to prohibit the interference of another with the same, if the interference is necessary to avert an imminent danger and threatened damage, compared to the damage arising to the owner from the interference is much greater. The owner may demand from the person benefited indemnity for the damage to him Act in state of necessity Art 2191 Proprietors shall also be responsible for damages caused: (1) By the explosion of machinery which has not been taken care of with due diligence, and the inflammation of explosive substances which have not been kept in a safe and adequate place (2) By excessive smoke, which may be harmful to persons or property (3) By the falling of trees situated at or near highways or lanes, if not caused by force majeure (4) By emanations from tubes, canals, sewers or deposits of infectious matter, constructed without precautions suitable to the place Art 670 Distances for windows, apertures, balconies or other similar projection which afford direct and oblique views Art 677 Constructions near fortified places or fortresses Art 678 Building of aqueduct, well, sewer, furnace, chimney, stable, depository of corrosive substances, machinery or factory Art 679 Planting of trees near a tenement Art 649 Easement of right of way Art 652 Acquisition of piece of land without right of way Art 637 Receipt of lower estates of waters which naturally descend from higher estates Art 676 Easement of drainage

3)

4)

5) 6)

owner; main issue is ownership not merely possession. Accion publiciana - plenary action to recover possession when owner is dispossessed by any other means than the grounds for instituting a forcible entry and unlawful detainer case. Forcible entry - used by person deprived of possession through Force, Intimidation, Strategy, Threat or Stealth (FISTS) Unlawful detainer - used by lessor/person having legal right over property when lessee/person withholding property refuses to surrender possession of property after expiration of lease/right to hold property (physical possession, 1 year from the last date of demand to vacate the premises) Writ of possession Writ of injunction ii. For movable property Replevin b. Requisites for recovery Art 434 In an action to recover, the property must be identified, and the plaintiff must rely on the strength of his title and not on the weakness of the defendants claim. i. Identify the property Prove his right of ownership rely on the strength of his evidence not on the weakness of defendants

3.

laedas

1)

SERINA v CABALLERO (2004)

ii.

D. Limitations of Real Right of Ownership 1. General Limitation a. Police power salus populi suprema est lex Art 436 When any property is condemned or seized by competent authority in the interest of health, safety or security, the owner thereof shall not be entitled to compensation, UNLESS he can show that such condemnation or seizure is unjustified. Art 644 Limitations on the imposition of easement of aqueduct Art 684-687 Lateral and subjacent support

US v CAUSBY ( ) LUNOD v MENESES ( )

Republic of the Philippines SUPREME COURT ManilaEN BANC G.R. No. L-40411 August 7, 1935

The issue in this case, as announced in the opening sentence of the decision in the trial court and as set forth by counsel for the parties on appeal, involves the determination of the nature of the properties described in the complaint. The trial judge found that those properties were personal in nature, and as a consequence absolved the defendants from the complaint, with costs against the plaintiff. The Davao Saw Mill Co., Inc., is the holder of a lumber concession from the Government of the Philippine Islands. It has operated a sawmill in the sitio of Maa, barrio of Tigatu, municipality of Davao, Province of Davao. However, the land upon which the business was conducted belonged to another person. On the land the sawmill company erected a building which housed the machinery used by it. Some of the implements thus used were clearly personal property, the conflict concerning machines which were placed and mounted on foundations of cement. In the contract of lease between the sawmill company and the owner of the land there appeared the following provision:

DAVAO SAW MILL CO., INC., plaintiff-appellant, vs.APRONIANO G. CASTILLO and DAVAO LIGHT & POWER CO., INC., defendants-appellees.

Arsenio Suazo and Jose L. Palma Gil and Pablo Lorenzo and Delfin Joven for appellant. J.W. Ferrier for appellees.
MALCOLM, J.:

That on the expiration of the period agreed upon, all the improvements and buildings introduced and erected by the party of the second part shall pass to the exclusive ownership of the party of the first part without any obligation on its part to pay any amount for said improvements and buildings; also, in the event the party of the second part should leave or abandon the land leased before the time herein stipulated, the improvements and buildings shall likewise pass to the ownership of the party of the first part as though the time agreed upon had expired: Provided, however, That the machineries and accessories are not included in the improvements which will pass to the party of the first part on the expiration or abandonment of the land leased. In another action, wherein the Davao Light & Power Co., Inc., was the plaintiff and the Davao, Saw, Mill Co., Inc., was the defendant, a judgment was rendered in favor of the plaintiff in that action against the defendant in that action; a writ of execution issued thereon, and the properties now in question were levied upon as personalty by the sheriff. No third party claim was filed for such properties at the time of the sales thereof as is borne out by the record made by the plaintiff herein. Indeed the bidder, which was the plaintiff in that action, and the defendant herein having consummated the sale, proceeded to take possession of the machinery and other properties described in the corresponding certificates of sale executed in its favor by the sheriff of Davao. As connecting up with the facts, it should further be explained that the Davao Saw Mill Co., Inc., has on a number of occasions treated the machinery as personal property by executing chattel mortgages in favor of third persons. One of such persons is the appellee by assignment from the original mortgages. Article 334, paragraphs 1 and 5, of the Civil Code, is in point. According to the Code, real property consists of 1. Land, buildings, roads and constructions of all kinds adhering to the soil; xxx xxx xxx

A similar question arose in Puerto Rico, and on appeal being taken to the United States Supreme Court, it was held that machinery which is movable in its nature only becomes immobilized when placed in a plant by the owner of the property or plant, but not when so placed by a tenant, a usufructuary, or any person having only a temporary right, unless such person acted as the agent of the owner. In the opinion written by Chief Justice White, whose knowledge of the Civil Law is well known, it was in part said: To determine this question involves fixing the nature and character of the property from the point of view of the rights of Valdes and its nature and character from the point of view of Nevers & Callaghan as a judgment creditor of the Altagracia Company and the rights derived by them from the execution levied on the machinery placed by the corporation in the plant. Following the Code Napoleon, the Porto Rican Code treats as immovable (real) property, not only land and buildings, but also attributes immovability in some cases to property of a movable nature, that is, personal property, because of the destination to which it is applied. "Things," says section 334 of the Porto Rican Code, "may be immovable either by their own nature or by their destination or the object to which they are applicable." Numerous illustrations are given in the fifth subdivision of section 335, which is as follows: "Machinery, vessels, instruments or implements intended by the owner of the tenements for the industrial or works that they may carry on in any building or upon any land and which tend directly to meet the needs of the said industry or works." (See also Code Nap., articles 516, 518 et seq. to and inclusive of article 534, recapitulating the things which, though in themselves movable, may be immobilized.) So far as the subject-matter with which we are dealing machinery placed in the plant it is plain, both under the provisions of the Porto Rican Law and of the Code Napoleon, that machinery which is movable in its nature only becomes immobilized when placed in a plant by the owner of the property or plant. Such result would not be accomplished, therefore, by the placing of machinery in a plant by a tenant or a usufructuary or any person having only a temporary right. (Demolombe, Tit. 9, No. 203; Aubry et Rau, Tit. 2, p. 12, Section 164; Laurent, Tit. 5, No. 447; and decisions quoted in FuzierHerman ed. Code Napoleon under articles 522 et seq.) The distinction rests, as pointed out by Demolombe, upon the fact that one only having a temporary right to the possession or enjoyment of property is not presumed by the law to have applied movable property belonging to him so as to deprive him of it by causing it by an act of immobilization to become the property of another. It follows that abstractly speaking the machinery put by the Altagracia Company in the plant belonging to Sanchez did not lose its character of movable property and become immovable by destination. But in the concrete immobilization took place because of the express provisions of the lease under which the Altagracia held, since the lease in substance required the putting in of improved machinery, deprived the tenant of any right to charge against the lessor the cost such machinery, and it was expressly stipulated that the machinery so put in should become a part of the plant belonging to the owner without compensation to the lessee. Under such conditions the tenant in putting in the machinery was acting but as the agent of the owner in compliance with the obligations resting upon him, and the immobilization of the machinery which resulted arose in legal effect from the act of the owner in giving by contract a permanent destination to the machinery. xxx xxx xxx

5. Machinery, liquid containers, instruments or implements intended by the owner of any building or land for use in connection with any industry or trade being carried on therein and which are expressly adapted to meet the requirements of such trade of industry. Appellant emphasizes the first paragraph, and appellees the last mentioned paragraph. We entertain no doubt that the trial judge and appellees are right in their appreciation of the legal doctrines flowing from the facts. In the first place, it must again be pointed out that the appellant should have registered its protest before or at the time of the sale of this property. It must further be pointed out that while not conclusive, the characterization of the property as chattels by the appellant is indicative of intention and impresses upon the property the character determined by the parties. In this connection the decision of this court in the case of Standard Oil Co. of New Yorkvs. Jaramillo ( [1923], 44 Phil., 630), whether obiter dicta or not, furnishes the key to such a situation. It is, however not necessary to spend overly must time in the resolution of this appeal on side issues. It is machinery which is involved; moreover, machinery not intended by the owner of any building or land for use in connection therewith, but intended by a lessee for use in a building erected on the land by the latter to be returned to the lessee on the expiration or abandonment of the lease.

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

they had the right to levy on it under the execution upon the judgment in their favor, and the exercise of that right did not in a legal sense conflict with the claim of Valdes, since as to him the property was a part of the realty which, as the result of his obligations under the lease, he could not, for the purpose of collecting his debt, proceed separately against. (Valdes vs. Central Altagracia [192], 225 U.S., 58.) Finding no reversible error in the record, the judgment appealed from will be affirmed, the costs of this instance to be paid by the appellant.

in respect to the registration of chattel mortgage are of a purely ministerial character; and no provision of law can be cited which confers upon him any judicial or quasi-judicial power to determine the nature of any document of which registration is sought as a chattel mortgage. The original provisions touching this matter are contained in section 15 of the Chattel Mortgage Law (Act No. 1508), as amended by Act No. 2496; but these have been transferred to section 198 of the Administrative Code, where they are now found. There is nothing in any of these provisions conferring upon the register of deeds any authority whatever in respect to the "qualification," as the term is used in Spanish law, of chattel mortgage. His duties in respect to such instruments are ministerial only. The efficacy of the act of recording a chattel mortgage consists in the fact that it operates as constructive notice of the existence of the contract, and the legal effects of the contract must be discovered in the instrument itself in relation with the fact of notice. Registration adds nothing to the instrument, considered as a source of title, and affects nobody's rights except as a specifies of notice. Articles 334 and 335 of the Civil Code supply no absolute criterion for discriminating between real property and personal property for purpose of the application of the Chattel Mortgage Law. Those articles state rules which, considered as a general doctrine, are law in this jurisdiction; but it must not be forgotten that under given conditions property may have character different from that imputed to it in said articles. It is undeniable that the parties to a contract may by agreement treat as personal property that which by nature would be real property; and it is a familiar phenomenon to see things classed as real property for purposes of taxation which on general principle might be considered personal property. Other situations are constantly arising, and from time to time are presented to this court, in which the proper classification of one thing or another as real or personal property may be said to be doubtful. The point submitted to us in this case was determined on September 8, 1914, in an administrative ruling promulgated by the Honorable James A. Ostrand, now a Justice of this Court, but acting at that time in the capacity of Judge of the fourth branch of the Court of First Instance of the Ninth Judicial District, in the City of Manila; and little of value can be here added to the observations contained in said ruling. We accordingly quote therefrom as follows: It is unnecessary here to determine whether or not the property described in the document in question is real or personal; the discussion may be confined to the point as to whether a register of deeds has authority to deny the registration of a document purporting to be a chattel mortgage and executed in the manner and form prescribed by the Chattel Mortgage Law. Then, after quoting section 5 of the Chattel Mortgage Law (Act No. 1508), his Honor continued: Based principally upon the provisions of section quoted the Attorney-General of the Philippine Islands, in an opinion dated August 11, 1909, held that a register of deeds has no authority to pass upon the capacity of the parties to a chattel mortgage which is presented to him for record. A fortiori a register of deeds can have no authority to pass upon the character of the property sought to be encumbered by a chattel mortgage. Of course, if the mortgaged property is real instead of personal the chattel mortgage would no doubt be held ineffective as against third parties, but this is a question to be determined by the courts of justice and not by the register of deeds.

Villa-Real, Imperial, Butte, and Goddard, JJ., concur.

G.R. No. L-20329 March 16, 1923

THE STANDARD OIL COMPANY OF NEW YORK, petitioner, vs. JOAQUIN JARAMILLO, as register of deeds of the City of Manila, respondent.

Ross, Lawrence and Selph for petitioner. City Fiscal Revilla and Assistant City Fiscal Rodas for respondent.
STREET, J.: This cause is before us upon demurrer interposed by the respondent, Joaquin Jaramillo, register of deeds of the City of Manila, to an original petition of the Standard Oil Company of New York, seeking a peremptory mandamusto compel the respondent to record in the proper register a document purporting to be a chattel mortgage executed in the City of Manila by Gervasia de la Rosa, Vda. de Vera, in favor of the Standard Oil Company of New York. It appears from the petition that on November 27, 1922, Gervasia de la Rosa, Vda. de Vera, was the lessee of a parcel of land situated in the City of Manila and owner of the house of strong materials built thereon, upon which date she executed a document in the form of a chattel mortgage, purporting to convey to the petitioner by way of mortgage both the leasehold interest in said lot and the building which stands thereon. The clauses in said document describing the property intended to be thus mortgage are expressed in the following words: Now, therefore, the mortgagor hereby conveys and transfer to the mortgage, by way of mortgage, the following described personal property, situated in the City of Manila, and now in possession of the mortgagor, to wit: (1) All of the right, title, and interest of the mortgagor in and to the contract of lease hereinabove referred to, and in and to the premises the subject of the said lease; (2) The building, property of the mortgagor, situated on the aforesaid leased premises. After said document had been duly acknowledge and delivered, the petitioner caused the same to be presented to the respondent, Joaquin Jaramillo, as register of deeds of the City of Manila, for the purpose of having the same recorded in the book of record of chattel mortgages. Upon examination of the instrument, the respondent was of the opinion that it was not a chattel mortgage, for the reason that the interest therein mortgaged did not appear to be personal property, within the meaning of the Chattel Mortgage Law, and registration was refused on this ground only. We are of the opinion that the position taken by the respondent is untenable; and it is his duty to accept the proper fee and place the instrument on record. The duties of a register of deeds

In Leung Yee vs. Frank L. Strong Machinery Co. and Williamson (37 Phil., 644), this court held that where the interest conveyed is of the nature of real, property, the placing of the document on record in the chattel mortgage register is a futile act; but that decision is not decisive of the question now before us, which has reference to the function of the register of deeds in placing the document on record. In the light of what has been said it becomes unnecessary for us to pass upon the point whether the interests conveyed in the instrument now in question are real or personal; and we declare it to be the duty of the register of deeds to accept the estimate placed upon the document by the petitioner and to register it, upon payment of the proper fee. The demurrer is overruled; and unless within the period of five days from the date of the notification hereof, the respondent shall interpose a sufficient answer to the petition, the writ of mandamus will be issued, as prayed, but without costs. So ordered.

On June 6, 1952, Republic Act 711 was approved dividing the province of Zamboanga into two (2): Zamboanga del Norte and Zamboanga del Sur. As to how the assets and obligations of the old province were to be divided between the two new ones, Sec. 6 of that law provided: Upon the approval of this Act, the funds, assets and other properties and the obligations of the province of Zamboanga shall be divided equitably between the Province of Zamboanga del Norte and the Province of Zamboanga del Sur by the President of the Philippines, upon the recommendation of the Auditor General. Pursuant thereto, the Auditor General, on January 11, 1955, apportioned the assets and obligations of the defunct Province of Zamboanga as follows: 54.39% for Zamboanga del Norte and 45.61% for Zamboanga del Sur. Zamboanga del Norte therefore became entitled to 54.39% of P1,294,244.00, the total value of the lots and buildings in question, or P704,220.05 payable by Zamboanga City. On March 17, 1959, the Executive Secretary, by order of the President, issued a ruling 4 holding that Zamboanga del Norte had a vested right as owner (should be co-owner proindiviso) of the properties mentioned in Sec. 50 of Commonwealth Act 39, and is entitled to the price thereof, payable by Zamboanga City. This ruling revoked the previous Cabinet Resolution of July 13, 1951 conveying all the said 50 lots and buildings thereon to Zamboanga City for P1.00, effective as of 1945, when the provincial capital of the then Zamboanga Province was transferred to Dipolog. The Secretary of Finance then authorized the Commissioner of Internal Revenue to deduct an amount equal to 25% of the regular internal revenue allotment for the City of Zamboanga for the quarter ending March 31, 1960, then for the quarter ending June 30, 1960, and again for the first quarter of the fiscal year 1960-1961. The deductions, all aggregating P57,373.46, was credited to the province of Zamboanga del Norte, in partial payment of the P764,220.05 due it. However, on June 17, 1961, Republic Act 3039 was approved amending Sec. 50 of Commonwealth Act 39 by providing that All buildings, properties and assets belonging to the former province of Zamboanga and located within the City of Zamboanga are hereby transferred, free of charge, in favor of the said City of Zamboanga. (Stressed for emphasis). Consequently, the Secretary of Finance, on July 12, 1961, ordered the Commissioner of Internal Revenue to stop from effecting further payments to Zamboanga del Norte and to return to Zamboanga City the sum of P57,373.46 taken from it out of the internal revenue allotment of Zamboanga del Norte. Zamboanga City admits that since the enactment of Republic Act 3039, P43,030.11 of the P57,373.46 has already been returned to it. This constrained plaintiff-appellee Zamboanga del Norte to file on March 5, 1962, a complaint entitled "Declaratory Relief with Preliminary Mandatory Injunction" in the Court of First Instance of Zamboanga del Norte against defendants-appellants Zamboanga City, the Secretary of Finance and the Commissioner of Internal Revenue. It was prayed that: (a) Republic Act 3039 be declared unconstitutional for depriving plaintiff province of property without due process and just compensation; (b) Plaintiff's rights and obligations under said law be declared; (c) The Secretary of Finance and the Internal Revenue Commissioner be enjoined from reimbursing the sum of

Araullo, C.J., Malcolm, Avancea, Ostrand, Johns, and Romualdez, JJ., concur.
Republic of the Philippines SUPREME COURT ManilaEN BANC G.R. No. L-24440 March 28, 1968

THE PROVINCE OF ZAMBOANGA DEL NORTE, plaintiffappellee, vs. CITY OF ZAMBOANGA, SECRETARY OF FINANCE and COMMISSIONER OF INTERNAL REVENUE,defendants-appellants.

Fortugaleza, Lood, Sarmiento, M. T. Yap & Associates for plaintiff-appellee. Office of the Solicitor General for defendantsappellants.
BENGZON, J.P., J.: Prior to its incorporation as a chartered city, the Municipality of Zamboanga used to be the provincial capital of the then Zamboanga Province. On October 12, 1936, Commonwealth Act 39 was approved converting the Municipality of Zamboanga into Zamboanga City. Sec. 50 of the Act also provided that Buildings and properties which the province shall abandon upon the transfer of the capital to another place will be acquired and paid for by the City of Zamboanga at a price to be fixed by the Auditor General. The properties and buildings referred to consisted of 50 lots and some buildings constructed thereon, located in the City of Zamboanga and covered individually by Torrens certificates of title in the name of Zamboanga Province. As far as can be gleaned from the records, 1 said properties were being utilized as follows It appears that in 1945, the capital of Zamboanga Province was transferred to Dipolog. 2 Subsequently, or on June 16, 1948, Republic Act 286 was approved creating the municipality of Molave and making it the capital of Zamboanga Province. On May 26, 1949, the Appraisal Committee formed by the Auditor General, pursuant to Commonwealth Act 39, fixed the value of the properties and buildings in question left by Zamboanga Province in Zamboanga City at P1,294,244.00. 3

P57,373.46 to defendant City; and (d) The latter be ordered to continue paying the balance of P704,220.05 in quarterly installments of 25% of its internal revenue allotments. On June 4, 1962, the lower court ordered the issuance of preliminary injunction as prayed for. After defendants filed their respective answers, trial was held. On August 12, 1963, judgment was rendered, the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered declaring Republic Act No. 3039 unconstitutional insofar as it deprives plaintiff Zamboanga del Norte of its private properties, consisting of 50 parcels of land and the improvements thereon under certificates of title (Exhibits "A" to "A-49") in the name of the defunct province of Zamboanga; ordering defendant City of Zamboanga to pay to the plaintiff the sum of P704,220.05 payment thereof to be deducted from its regular quarterly internal revenue allotment equivalent to 25% thereof every quarter until said amount shall have been fully paid; ordering defendant Secretary of Finance to direct defendant Commissioner of Internal Revenue to deduct 25% from the regular quarterly internal revenue allotment for defendant City of Zamboanga and to remit the same to plaintiff Zamboanga del Norte until said sum of P704,220.05 shall have been fully paid; ordering plaintiff Zamboanga del Norte to execute through its proper officials the corresponding public instrument deeding to defendant City of Zamboanga the 50 parcels of land and the improvements thereon under the certificates of title (Exhibits "A" to "A-49") upon payment by the latter of the aforesaid sum of P704,220.05 in full; dismissing the counterclaim of defendant City of Zamboanga; and declaring permanent the preliminary mandatory injunction issued on June 8, 1962, pursuant to the order of the Court dated June 4, 1962. No costs are assessed against the defendants. It is SO ORDERED. Subsequently, but prior to the perfection of defendants' appeal, plaintiff province filed a motion to reconsider praying that Zamboanga City be ordered instead to pay the P704,220.05 in lump sum with 6% interest per annum. Over defendants' opposition, the lower court granted plaintiff province's motion. The defendants then brought the case before Us on appeal. Brushing aside the procedural point concerning the property of declaratory relief filed in the lower court on the assertion that the law had already been violated and that plaintiff sought to give it coercive effect, since assuming the same to be true, the Rules anyway authorize the conversion of the proceedings to an ordinary action, 5 We proceed to the more important and principal question of the validity of Republic Act 3039. The validity of the law ultimately depends on the nature of the 50 lots and buildings thereon in question. For, the matter involved here is the extent of legislative control over the properties of a municipal corporation, of which a province is one. The principle itself is simple: If the property is owned by the municipality (meaning municipal corporation) in its public and governmental capacity, the property is public and Congress has absolute control over it. But if the property is owned in its private or proprietary capacity, then it is patrimonial and Congress has no absolute control. The municipality cannot be deprived of it without due process and payment of just compensation. 6

The capacity in which the property is held is, however, dependent on the use to which it is intended and devoted. Now, which of two norms, i.e., that of the Civil Code or that obtaining under the law of Municipal Corporations, must be used in classifying the properties in question? The Civil Code classification is embodied in its Arts. 423 and 424 which provide:1wph1.t ART. 423. The property of provinces, cities, and municipalities is divided into property for public use and patrimonial property. ART. 424. Property for public use, in the provinces, cities, and municipalities, consists of the provincial roads, city streets, municipal streets, the squares, fountains, public waters, promenades, and public works for public service paid for by said provinces, cities, or municipalities.

All other property possessed by any of them is patrimonial and

shall be governed by this Code, without prejudice to the provisions of special laws. (Stressed for emphasis). Applying the above cited norm, all the properties in question, except the two (2) lots used as High School playgrounds, could be considered as patrimonial properties of the former Zamboanga province. Even the capital site, the hospital and leprosarium sites, and the school sites will be considered patrimonial for they are not for public use. They would fall under the phrase "public works for public service" for it has been held that under theejusdem generis rule, such public works must be for free and indiscriminate use by anyone, just like the preceding enumerated properties in the first paragraph of Art 424. 7 The playgrounds, however, would fit into this category. This was the norm applied by the lower court. And it cannot be said that its actuation was without jurisprudential precedent for in Municipality of Catbalogan v. Director of Lands, 8 and in Municipality of Tacloban v. Director of Lands, 9 it was held that the capitol site and the school sites in municipalities constitute their patrimonial properties. This result is understandable because, unlike in the classification regarding State properties, properties for public service in the municipalities are not classified as public. Assuming then the Civil Code classification to be the chosen norm, the lower court must be affirmed except with regard to the two (2) lots used as playgrounds. On the other hand, applying the norm obtaining under the principles constituting the law of Municipal Corporations, all those of the 50 properties in question which are devoted to public service are deemed public; the rest remain patrimonial. Under this norm, to be considered public, it is enough that the property be held and, devoted for governmental purposes like local administration, public education, public health, etc. 10 Supporting jurisprudence are found in the following cases: (1) HINUNANGAN V. DIRECTOR OF LANDS, 11where it was stated that "... where the municipality has occupied lands distinctly for public purposes, such as for the municipal court house, the public school, the public market, or other necessary municipal building, we will, in the absence of proof to the contrary, presume a grant from the States in favor of the municipality; but, as indicated by the wording, that rule may be invoked only as to property which is used distinctly for public purposes...." (2) VIUDA DE TANTOCO V. MUNICIPAL COUNCIL OF ILOILO 12 held that municipal properties necessary for governmental purposes are public in nature. Thus, the auto trucks used by the municipality for street sprinkling, the police

patrol automobile, police stations and concrete structures with the corresponding lots used as markets were declared exempt from execution and attachment since they were not patrimonial properties. (3) MUNICIPALITY OF BATANGAS VS. CANTOS 13 held squarely that a municipal lot which had always been devoted to school purposes is one dedicated to public use and is not patrimonial property of a municipality. Following this classification, Republic Act 3039 is valid insofar as it affects the lots used as capitol site, school sites and its grounds, hospital and leprosarium sites and the high school playground sites a total of 24 lots since these were held by the former Zamboanga province in its governmental capacity and therefore are subject to the absolute control of Congress. Said lots considered as public property are the following We noticed that the eight Burleigh lots above described are adjoining each other and in turn are between the two lots wherein the Burleigh schools are built, as per records appearing herein and in the Bureau of Lands. Hence, there is sufficient basis for holding that said eight lots constitute the appurtenant grounds of the Burleigh schools, and partake of the nature of the same. Regarding the several buildings existing on the lots above-mentioned, the records do not disclose whether they were constructed at the expense of the former Province of Zamboanga. Considering however the fact that said buildings must have been erected even before 1936 when Commonwealth Act 39 was enacted and the further fact that provinces then had no power to authorize construction of buildings such as those in the case at bar at their own expense, 14 it can be assumed that said buildings were erected by the National Government, using national funds. Hence, Congress could very well dispose of said buildings in the same manner that it did with the lots in question. But even assuming that provincial funds were used, still the buildings constitute mere accessories to the lands, which are public in nature, and so, they follow the nature of said lands, i.e., public. Moreover, said buildings, though located in the city, will not be for the exclusive use and benefit of city residents for they could be availed of also by the provincial residents. The province then and its successors-in-interest are not really deprived of the benefits thereof. But Republic Act 3039 cannot be applied to deprive Zamboanga del Norte of its share in the value of the rest of the 26 remaining lots which are patrimonial properties since they are not being utilized for distinctly, governmental purposes. Said lots are: Moreover, the fact that these 26 lots are registered strengthens the proposition that they are truly private in nature. On the other hand, that the 24 lots used for governmental purposes are also registered is of no significance since registration cannot convert public property to private. 16 We are more inclined to uphold this latter view. The controversy here is more along the domains of the Law of Municipal Corporations State vs. Province than along that of Civil Law. Moreover, this Court is not inclined to hold that municipal property held and devoted to public service is in the same category as ordinary private property. The consequences are dire. As ordinary private properties, they can be levied upon and attached. They can even be acquired thru adverse possession all these to the detriment of the local community. Lastly, the classification of properties other than those for public use in the municipalities as patrimonial under Art. 424 of the Civil Code is "... without prejudice to the provisions of special

laws." For purpose of this article, the principles, obtaining under the Law of Municipal Corporations can be considered as "special laws". Hence, the classification of municipal property devoted for distinctly governmental purposes as public should prevail over the Civil Code classification in this particular case. Defendants' claim that plaintiff and its predecessor-ininterest are "guilty of laches is without merit. Under Commonwealth Act 39, Sec. 50, the cause of action in favor of the defunct Zamboanga Province arose only in 1949 after the Auditor General fixed the value of the properties in question. While in 1951, the Cabinet resolved transfer said properties practically for free to Zamboanga City, a reconsideration thereof was seasonably sought. In 1952, the old province was dissolved. As successor-in-interest to more than half of the properties involved, Zamboanga del Norte was able to get a reconsideration of the Cabinet Resolution in 1959. In fact, partial payments were effected subsequently and it was only after the passage of Republic Act 3039 in 1961 that the present controversy arose. Plaintiff brought suit in 1962. All the foregoing, negative laches. It results then that Zamboanga del Norte is still entitled to collect from the City of Zamboanga the former's 54.39% share in the 26 properties which are patrimonial in nature, said share to computed on the basis of the valuation of said 26 properties as contained in Resolution No. 7, dated March 26, 1949, of the Appraisal Committee formed by the Auditor General. Plaintiff's share, however, cannot be paid in lump sum, except as to the P43,030.11 already returned to defendant City. The return of said amount to defendant was without legal basis. Republic Act 3039 took effect only on June 17, 1961 after a partial payment of P57,373.46 had already been made. Since the law did not provide for retroactivity, it could not have validly affected a completed act. Hence, the amount of P43,030.11 should be immediately returned by defendant City to plaintiff province. The remaining balance, if any, in the amount of plaintiff's 54.39% share in the 26 lots should then be paid by defendant City in the same manner originally adopted by the Secretary of Finance and the Commissioner of Internal Revenue, and not in lump sum. Plaintiff's prayer, particularly pars. 5 and 6, read together with pars. 10 and 11 of the first cause of action recited in the complaint 17 clearly shows that the relief sought was merely the continuance of the quarterly payments from the internal revenue allotments of defendant City. Art. 1169 of the Civil Code on reciprocal obligations invoked by plaintiff to justify lump sum payment is inapplicable since there has been so far in legal contemplation no complete delivery of the lots in question. The titles to the registered lots are not yet in the name of defendant Zamboanga City. WHEREFORE, the decision appealed from is hereby set aside and another judgment is hereby entered as follows:. (1) Defendant Zamboanga City is hereby ordered to return to plaintiff Zamboanga del Norte in lump sum the amount of P43,030.11 which the former took back from the latter out of the sum of P57,373.46 previously paid to the latter; and (2) Defendants are hereby ordered to effect payments in favor of plaintiff of whatever balance remains of plaintiff's 54.39% share in the 26 patrimonial properties, after deducting therefrom the sum of P57,373.46, on the basis of Resolution No. 7 dated March 26, 1949 of the Appraisal Committee formed by the Auditor General, by way of quarterly payments from the allotments of defendant City, in the manner originally adopted by the Secretary of Finance and the Commissioner of Internal Revenue. No costs. So ordered.