Property Case Digests Compendium Done

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Table Contents
Leung Yee V. Strong Machinery, 37 Phil. 644. .............................................................................. 1
Antonio Punsalan, Jr., Petitioner, Vs. Remedios Vda. De Lacsamana And The Honorable Judge Rodolfo
A. Ortiz, Respondents. .............................................................................................................. 1
The Standard Oil Company Of New York V. Joaquin Jaramillo, Gr No. L-20329, 16 March 1923, En
Banc, Street ............................................................................................................................ 2
Davao Sawmill Co. V. Castillo, 61 Phil. 709 ................................................................................. 3
Board Of Assessment V. Manila Electric, 10 Scra 68 [1964] ........................................................... 3
Makati Leasing V. Wearever Textile Mills, Inc, 122 Scra 296. ......................................................... 4
Mindanao Bus V. City Assessor, 116 Phil. 501. ............................................................................. 5
Caltex V. Central Board Of Assessment Appeals And The City Assessor Of Pasay, Gr No. L-50466, 31
May 1982. ............................................................................................................................... 5
Serg Products V. Pci Leasing And Finance, Inc., Gr No. 137705, 22 August 2000. ............................ 6
Tumalad Vs. Vicencio, Gr No. L-30173, 30 September 1971. ......................................................... 6
Star Two V Paper City Corp. Gr No. 192088. October 9, 2012. 2
nd
Div. Perez .................................. 7
Pastor D. Ago V. Ca, Cfi Agusan Judge Ortiz, Provincial Sheriff Of Surigao And Grace Park Engineering,
Gr No. L 17898, 31 October 1962, En Banc, Labrador. ............................................................... 8
Us V. Ignacio Carlos, Gr No. 6295, 1 September 1911, Per Curiam ................................................ 9
Luis Marcos P. Laurel V. Hon. Zeus Abrogar, Makati Rtc 50, And Pldt, Gr No. 155076, 27 February
2006, First Division, Callejo. ...................................................................................................... 9
Municipality Of Cavite V. Hilario Rojas, G.R. No. L-9069, 31 March 1915, En Banc, Torres ................ 11
Maneclang V. Iac, G.R. No. L-66575, 30 September 1986, Second Division, Fernan. ....................... 11
Republic Of The Philippines V. Democrito T. Mendoza, Gr No. 153726, 28 March 2007, Third Division,
Chico-Nazario ......................................................................................................................... 12
Faustino Ignacio V. The Director Of Lands And Valeriano, G.R. No. L-12958 30 May 1960, En Banc,
Montemayor ........................................................................................................................... 13
Levy Macasiano V. Hon. Roberto Diokno, G.R. No. 97764, 10 August 1992, En Banc, Medialdea ....... 13
Cebu Oxygen And Acetylene, Gr No. L40474, 39 August 1975, Second Division, Concepcion. ........... 14
Laurel V. Garcia, Gr No. 92013, 25 July 1995, En Banc, Gutierrez ................................................. 15
Manila International Airport Authority V. Ca, City Of Paraaque, Et.Al., Gr No. 155650, 20 July 2006,
En Banc, Carpio. ..................................................................................................................... 16
Philippine Ports Authority V. City Of Iloilo, Gr No 109791, 14 July 2003, First Division, Azcuna. ........ 16
Philippine Fisheries Development Authority Vs.Ca, Office Of The President, Et. Al., Gr No. 169863, 31
July 2007, Third Division, Ynares-Santiago. ................................................................................ 17
Republic (Philippine Reclamation Authority) Vs. City Of Paranaque, Gr No. 191109, 18 July 2012, Third
Division, Mendoza. .................................................................................................................. 18
Jean Tan Vs. Republic, Gr No. 193443, 16 April 2012, Second Division, Reyes. ............................... 19
Ideals, Inc. V Psalm Gr No. 192088. October 9, 2012. 2
nd
Div. Villarama, Jr. .................................. 21
Woodridge School Inc Vs. Arb Construction ................................................................................ 21
Francisco Chavez V. Public Estates Authority And Amari Coastal Bay Dev. Co., Gr No 133250, 9 July
2002. En Banc, Carpio. ............................................................................................................ 23
Francisco Chavez V. Nha, Gr No. 164527, 15 August 2007, En Banc, Velasco. ................................ 25
Estate Of The Late Yujuico V. Republic And Ca, Gr No. 168661, 26 October 2007, Second Division,
Velasco .................................................................................................................................. 27
Land Bank Of The Philippines V. Republic Of The Philippines, Gr No. 150824, 4 February 2008, Third
Division, Reyes. ...................................................................................................................... 28
Heirs Of Malabanan V. Republic, Gr No. 179987, 29 April 2009, En Banc, Tinga .............................. 29
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Secretary Of Denr V. Mayor Jose Yap, G.R. No. 167707, October 8, 2008. En Banc, Reyes. .............. 31
Vda De Tan Toco Vs. Municipal Council Of Iloilo, 49 Phil. 52. ........................................................ 32
Espiritu Vs. Municipal Council Of Pozorrubio, 102 Phil 867. ........................................................... 33
The Province Of Zamboanga Del Norte Vs. City Of Zamboanga, Gr No. L-24440, 28 March 1968....... 34
Rafael Salas Vs. Jarencio, 46 Scra 734. ..................................................................................... 36
Manila Lodge 761 V. Ca, Gr No. L-41001, 30 September 1976, First Division, Castro. ...................... 37
Commissioner Of Public Highways V. San Diego, Gr No. L-30098, 18 February 1970. ...................... 42
Philippine National Bank V. Judge Javier Pabalan, Gr No. L-3312, 15 June 1978. ............................. 43
Professional Video, Inc. v TESDA GR No. 155504. June 26, 2009. Brion. ........................................ 44
Dr. Lorna Villa V. Heirs Of Altavas, Gr No 162028, 14 July 2008, Third Division, Austria-Martinez. ... 44
Estate Of Soledad Manantan V. Aniceto Somera, Gr No. 145867, 7 April 2009, Third Division, Chico-
Nazario. ................................................................................................................................. 45
Casilang V. Casilang-Dizon, Gr No. 180269, 20 February 2013, First Division, Reyes. ...................... 46
City Government Of Quezon Vs. Ericta, 122 Scra 759 .................................................................. 46
City Of Manila V. Judge Laguio And Malate Tourist Development Co., Gr No. 118127, 12 April 2005, En
Banc, Tinga. ........................................................................................................................... 48
Office Of The Solicitor General V. Ayala Land, Robinsons, Shangrila And Sm Prime Holdings, Gr No.
177056, 18 September 2009, Third Division, Chico-Nazario. ........................................................ 48
Mmda V. Trackworks G.R. No. 179554 December 16, 2009 .......................................................... 49
Air Transportation Office And Mciaa V. Gopuco G.R. No. 158563. June 30, 2005. ........................... 50
Heirs Of Moreno V. Mciaa G.R. No. 156273. October 15, 2003. ..................................................... 51
Mciaa V. Lozada G.R. No. 176625. February 25, 2010 ................................................................. 53
Lunod V. Meneses G.R. No. 4223. August 19, 1908. .................................................................... 54
Roman Catholic Archbishop Of Manila Et. Al. V. Court Of Appeals G.R. No. 77425. June 19, 1991. .... 55
German Management And Services V. Ca And Villeza .................................................................. 56
Napocor V. Maruhom, Et. Al., Gr No. 168732, 29 June 2007, First Division, Azcuna. ........................ 57
Republic (Director Of Forest Development) V. Ca And Jose De La Rosa, Gr No. L-43938, 15 April 1988,
First Division, Cruz .................................................................................................................. 58

1

Leung Yee V. Strong Machinery, 37 Phil. 644.
1

Principles Of Law: The Mere Fact That The Parties Seem To Have Dealt With It Separate And Apart
From The Land On Which It Stood In No Wise Changed Its Character As Real Property; One Who
Purchases Real Estate With Knowledge Of A Defect Or Lack Of Title In His Vendor Cannot Claim That
He Has Acquired Title Thereto In Good Faith As Against The True Owner Of The Land Or Of An Interest
Therein; And The Same Rule Must Be Applied To One Who Has Knowledge Of Facts Which Should Have
Put Him Upon Such Inquiry And Investigation As Might Be Necessary To Acquaint Him With The
Defects In The Title Of His Vendor
Facts:
Compania Agricola Bought Rice-Cleaning Machinery From Respondent And Executed A Chattel
Mortgage Of Such Machinery And The Building Where The Machinery Was Found In Favor Of
Respondent; There Was No Reference As To The Land Where The Building Was Found;
Due To Failure To Pay Of Agricola, The Property Was Sold Through Public Auction By Sheriff
Wherein Respondent Was Able To Buy Said Property;
Few Weeks After, Agricola Executed A Deed Of Sale Which Was Not Registered Over The Land
Of The Building But Made No Reference As To Building Itself; As A Result, Respondent Took
Possession Of The Building;
Incidentally, The Same Building Was Apparently Subject Of Chattel Mortgage In Favor Of
Petitioner Executed By Agricola; For Failure To Pay The Debt, Sheriff Foreclosed The Property
Which Was Won By Plaintiff Through Public Auction After The Latter Has Secured Indemnity
Bond Of P 12,000.00; This Was Due To The Fact That During The Levy, Agricola Has Set Up Its
Claim Over The Building And Demanded That It Be Release From Levy;
Court A Quo Rendered Judgment In Favor Of Strong On The Basis That Respondent Was Able
To Register The Building First;
Issues
1. Was There A Proper Mortgage?
2. Who Is The Proper Owner Of The Building? Incidentally, Is Good Faith A Requirement In The
Inscription Of A Mortgage?
Held
1. No, There Was Not. The Building Of Strong Materials In Which The Rice-Cleaning Machinery
Was Installed By The "Compaia Agricola Filipina" Was Real Property, And The Mere Fact That
The Parties Seem To Have Dealt With It Separate And Apart From The Land On Which It Stood
In No Wise Changed Its Character As Real Property.
2. Respondent. We Are Of Opinion, However, That The Judgment Must Be Sustained On The
Ground That The Agreed Statement Of Facts In The Court Below Discloses That Neither The
Purchase Of The Building By The Plaintiff Nor His Inscription Of The Sheriff's Certificate Of Sale
In His Favor Was Made In Good Faith And Further, That The Building And The Land Were Sold
To The Machinery Company Long Prior To The Date Of The Sheriff's Sale To The Plaintiff. The
Agreed Statement Of Facts Clearly Discloses That The Plaintiff, When He Bought The Building
At The Sheriff's Sale And Inscribed His Title In The Land Registry, Was Duly Notified That The
Machinery Company Had Bought The Building From Plaintiff's Judgment Debtor; That It Had
Gone Into Possession Long Prior To The Sheriff's Sale; And That It Was In Possession At The
Time When The Sheriff Executed His Levy.
Miscellaneous:
1. One Who Purchases Real Estate With Knowledge Of A Defect Or Lack Of Title In His Vendor
Cannot Claim That He Has Acquired Title Thereto In Good Faith As Against The True Owner Of
The Land Or Of An Interest Therein; And The Same Rule Must Be Applied To One Who Has
Knowledge Of Facts Which Should Have Put Him Upon Such Inquiry And Investigation As Might
Be Necessary To Acquaint Him With The Defects In The Title Of His Vendor
Antonio Punsalan, Jr., Petitioner,
Vs.
Remedios Vda. De Lacsamana And The Honorable Judge Rodolfo A. Ortiz, Respondents.
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1
Cesista. 21 June 2014.
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Principles Of Law: The Prevalent Doctrine Is That An Action For The Annulment Or Rescission Of A
Sale Of Real Property Does Not Operate To Efface The Fundamental And Prime Objective And Nature
Of The Case, Which Is To Recover Said Real Property. It Is A Real Action.; A Building Always
Considered Immovable Notwithstanding That Parties To A Contract Treat It Apart From The Land It
Stands;
Facts:
Punsalan Was The Registered Owner Of A Property Situated In Tarlac; Such Property Was
Mortgaged In Favor Of Pnb Which Foreclosed The Same After Petitioner Failed To Pay His
Debts
Petitioner, Allegedly With The Consent Of Pnb Continued Occupying The Land And In Fact
Constructed A Warehouse Thereat Which Was Leased To One Sibal For A Period Of 10 Years;
In 1978, The Property (Land) Was Sold By Pnb To Lacsamana And A Separate Title Of The
Land As Well As Tax Declaration Over The Building Was Acquired By Lacsamana;
Obviously, Punsalan Sued To Impugn The Validity Of The Sale In Quezon City; Lacsama Used
The Defense Of Accessory Follows The Principal; Further, Lacsamana Claims That There Was
No Cause Of Action As The Case Was Impugning Real Property And Hence, Should Have Been
Filed In A Different Venue
As A Response, Punsalan Claimed That The Action For Annulment Of Deed Of Sale With
Damages Is In The Nature Of A Personal Action, Which Seeks To Recover Not The Title Nor
Possession Of The Property But To Compel Payment Of Damages, Which Is Not An Action
Affecting Title To Real Property
Issue:
1. Whether The Impugned Action Concerns Real Property And Hence The Action Should Have
Been Filed In The Court Where The Property Is Found
2. Whether There Is Merit In Petitioners Claim That What He Seeks Does Not In Any Way Involve
The Possession Or Title To Real Property
Held
1. Punsalan Is Clearly Confused. The Warehouse Claimed To Be Owned By Petitioner Is An
Immovable Or Real Property As Provided In Article 415(L) Of The Civil Code. Buildings Are
Always Immovable Under The Code.
7
A Building Treated Separately From The Land On Which
It Stood Is Immovable Property And The Mere Fact That The Parties To A Contract Seem To
Have Dealt With It Separate And Apart From The Land On Which It Stood In No Wise Changed
Its Character As Immovable Property.
2. The Stance Is Bereft Of Merit. While It Is True That Petitioner Does Not Directly Seek The
Recovery Of Title Or Possession Of The Property In Question, His Action For Annulment Of Sale
And His Claim For Damages Are Closely Intertwined With The Issue Of Ownership Of The
Building Which, Under The Law, Is Considered Immovable Property, The Recovery Of Which Is
Petitioner's Primary Objective. The Prevalent Doctrine Is That An Action For The Annulment Or
Rescission Of A Sale Of Real Property Does Not Operate To Efface The Fundamental And Prime
Objective And Nature Of The Case, Which Is To Recover Said Real Property. It Is A Real
Action.

The Standard Oil Company Of New York V. Joaquin Jaramillo,
Gr No. L-20329, 16 March 1923, En Banc, Street
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Principles Of Law: Register Of Deeds Performs A Purely Ministerial Function; 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 Specifies Of Notice.
Facts

2
3
3

A Chattel Mortgage Was Executed By One Gervasia In Favor Of Standard Oil Company Of New
York; The Case Stems From The Refusal Of The Register Of Deeds Of Manila To Record The
Same;
Gervasia Is A Lessee Of A Land On Which She Built A House Of Strong Material; Such House
Was The Subject Of The Chattel Mortgage; Apparently, The Chattel Mortgage Which
Indubitably Talked Of Personal Property Included Therein The Building Situated On The Lot In
Question;
Issue
1. May The Register Of Deeds Refuse To Record The Registration Of The Building As Chattel
Mortgage?
2. What Is The Effect Of Registration To The Contract?
Held:
1. No, The Register Of Deeds Performs A Purely Ministerial Function. It Is His Duty To Accept The
Proper Fee And Place The Instrument On Record. The Duties Of A Register Of Deeds In
Respect To The Registration Of Chattel Mortgage Are Of A Purely Ministerial Character; And No
Provision Of Law Can Be Cited Which Confers Upon Him Any Judicial Or Quasi-Judicial Power
To Determine The Nature Of Any Document Of Which Registration Is Sought As A Chattel
Mortgage.
2. Registration Adds Nothing To The Instrument, Considered As A Source Of Title, And Affects
Nobody's Rights Except As Specifies Of Notice. 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.
Davao Sawmill Co. V. Castillo, 61 Phil. 709
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Principles Of Law: When Machinery Is Not Owned By The Lessee Occupying A Property Belonging To
Another, The Rule Is That When Such Machinery Will Revert Back To The Owner Of The Land, The
Same Will Be Charged Realty, Otherwise, The Machinery Will Not Be Charged With Real Property Tax;
Otherwise Stated 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.
Facts:
Davao Sawmill Erected A Building And Had Machinery In It With Cement Foundation, Upon The
Land Which Does Not Belong To It;
In A Provision Of Such Lease, Davao Sawmill Is To Concede The Building In Favor Of The
Lessor Upon The Expiration Of The Contract;
It Should Be Noted That In A Number Of Occasions, Davao Sawmill Has Treated The
Machinery Therein As A Personal Property Such As When It Executed A Chattel Mortgage Over
Them; This Notwithstanding, In A Separate Case, Davao Sawmills Machinery Were Levied In
Favor Of Davao Light As The Court Took The Machinery To Be Real Rather Than Personal;
Issue
1. Were The Machinery Introduced In The Building Personal Or Real?
Held
1. They Were Personal Property For Two Reasons: A) . 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; And B) 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.
Board Of Assessment V. Manila Electric, 10 Scra 68 [1964]
5

4
4

Principles Of Law: The Case Emphasizes That Steel Towers, By Their Nature And Destination Are
Movables, For They Can Be Removed At The Will Of The One Who Put Them There And The Land
Wherein They Stood Are Not Necessarily The Primary Industry With Which Such Steel Towers Are Built
For;
Facts
Mr. Swift Won The Bid Providing For The Construction Of Street Lights, Lamps And Heats And
The Maintenance And Management Of The Same; Such Was Granted By Municipal Board Of
Manila Pursuant To Ca 484 Executed In 1902;
On November 15, 1955, Petitioner City Assessor Of Quezon City Declared The Aforesaid Steel
Towers For Real Property Tax Under Tax Declaration Nos. 31992 And 15549
After Denying Respondent's Petition To Cancel These Declarations, An Appeal Was Taken By
Respondent To The Board Of Assessment Appeals Of Quezon City, Which Required Respondent
To Pay The Amount Of P11,651.86 As Real Property Tax On The Said Steel Towers For The
Years 1952 To 1956.
Issue
1. Whether The Steel Towers Are Realty And Hence, Respondent Is Liable To Pay For Realty Tax
Held
1. They Are Movables. The Steel Towers Or Supports In Question, Do Not Come Within The
Objects Mentioned In Paragraph 1, Because They Do Not Constitute Buildings Or Constructions
Adhered To The Soil. They Are Not Construction Analogous To Buildings Nor Adhering To The
Soil. As Per Description, Given By The Lower Court, They Are Removable And Merely Attached
To A Square Metal Frame By Means Of Bolts, Which When Unscrewed Could Easily Be
Dismantled And Moved From Place To Place. They Can Not Be Included Under Paragraph 3, As
They Are Not Attached To An Immovable In A Fixed Manner, And They Can Be Separated
Without Breaking The Material Or Causing Deterioration Upon The Object To Which They Are
Attached. Each Of These Steel Towers Or Supports Consists Of Steel Bars Or Metal Strips,
Joined Together By Means Of Bolts, Which Can Be Disassembled By Unscrewing The Bolts And
Reassembled By Screwing The Same. These Steel Towers Or Supports Do Not Also Fall Under
Paragraph 5, For They Are Not Machineries, Receptacles, Instruments Or Implements, And
Even If They Were, They Are Not Intended For Industry Or Works On The Land. Petitioner Is
Not Engaged In An Industry Or Works In The Land In Which The Steel Supports Or Towers Are
Constructed.

Makati Leasing V. Wearever Textile Mills, Inc, 122 Scra 296.
6

Principles Of Law: Reiterates That Doctrine That An Object, Even If It Is Immovable By Nature, May
Be Subject Of Chattel Mortgage
7
; A Party Suffers From Estoppel When Upon Declaration That The
Property In Question Is Personal Subsequently Changes The Declaration In Order To Avoid Contractual
Obligations;
Facts
In Order To Secure Financial Accommodation From Makati Leasing, Respondent Executed A
Receivable Purchase Agreement With Petitioner Which Likewise Included Executing A Chattel
Mortgage Over Certain Raw Materials And Machinery In Favor Of Makati Leasing;
Due To Failure Of Respondent To Pay The Debt, An Extrajudicial Foreclosure Was Instituted,
But The Same Failed; Hence, A Judicial Foreclosure Was Sought By Respondent;
Ca Reversed The Decision Of Lower Court Claiming That The Property Cannot Be Subject Of
Replevin And Chattel Mortgage For The Same Was A Real Property It Being Attached To The
Floor Of The Building And Taking It Out Would Mean Drilling Out Or Destroying The Concrete
Floor;
Issue

5
6
7
NOTE: the discussion here involved machinery, the digest should not be misinterpreted to mean that all
machinery are construed to be immovables
5

1. May Such Machinery Be Considered As Personal Property?
Held
1. Yes, It May. There Is Absolutely No Reason Why A Machinery, Which Is Movable In Its Nature
And Becomes Immobilized Only By Destination Or Purpose, May Not Be Likewise Treated As
Such. This Is Really Because One Who Has So Agreed Is Estopped From Denying The
Existence Of The Chattel Mortgage.
It Must Be Pointed Out That The Characterization Of The Subject Machinery As Chattel By The
Private Respondent Is Indicative Of Intention And Impresses Upon The Property The Character
Determined By The Parties. As Stated Instandard Oil Co. Of New York V. Jaramillo, 44 Phil.
630, It Is Undeniable That The Parties To A Contract May By Agreement Treat As Personal
Property That Which By Nature Would Be Real Property, As Long As No Interest Of Third
Parties Would Be Prejudiced Thereby.

Mindanao Bus V. City Assessor, 116 Phil. 501.
8

Principles Of Law: So That Movable Equipments To Be Immobilized In Contemplation Of The Law
Must First Be "Essential And Principal Elements" Of An Industry Or Works Without Which Such
Industry Or Works Would Be "Unable To Function Or Carry On The Industrial Purpose For Which It Was
Established."
Facts
Several Machinery Of Mindanao Bus Was Charged With Realty Tax Of The City Assessor Of Cdo
For As The Latter Claims, They Are Sitting On Cement Or Wooden Platforms;
These Machinery Mostly Include Those Which Are Aimed To Maintain Buses And Other Vehicles
Of Mindanao Bus;
Cta Rejected Petitioners Contention That They Are Personal Property; Hence, This Case;

Issue
1. What Should Be The Characterization Of A Movable For It To Be Considered Realty?
2. Are The Machinery In This Case Considered Real Property?
Held
1. So That Movable Equipments To Be Immobilized In Contemplation Of The Law Must First Be
"Essential And Principal Elements" Of An Industry Or Works Without Which Such Industry Or
Works Would Be "Unable To Function Or Carry On The Industrial Purpose For Which It Was
Established."
2. In The Case At Bar The Equipments In Question Are Destined Only To Repair Or Service The
Transportation Business,Which Is Not Carried On In A Building Or Permanently On A Piece Of
Land, As Demanded By The Law. Said Equipments May Not, Therefore, Be Deemed Real
Property.
Caltex V. Central Board Of Assessment Appeals And The City Assessor Of Pasay,
Gr No. L-50466, 31 May 1982.
9

Principles Of Law: The Nature Of Machinery Whether As Movable Or Immovable Does Not Change
Even When Leased To A Third Person; The Onus Should Be Whether The Machinery Is To Be Returned
To The Owner Of The Land Or Not; In The Prior Case, It Is Chargeable With Real Property Tax
Facts
Caltex Installed Tanks, Underwater And Otherwise On A Leased Land;
The Said Machines And Equipment Are Loaned By Caltex To Gas Station Operators Under An
Appropriate Lease Agreement Or Receipt. It Is Stipulated In The Lease Contract That The

8
9
6

Operators, Upon Demand, Shall Return To Caltex The Machines And Equipment In Good
Condition As When Received, Ordinary Wear And Tear Excepted.
Issue
1. The Issue Is Whether The Pieces Of Gas Station Equipment And Machinery Already
Enumerated Are Subject To Realty Tax.
2. Whether The Nature Of Machinery As Immovables Change When Used By Tenants
Held
1. We Hold That The Said Equipment And Machinery, As Appurtenances To The Gas Station
Building Or Shed Owned By Caltex (As To Which It Is Subject To Realty Tax) And Which
Fixtures Are Necessary To The Operation Of The Gas Station, For Without Them The Gas
Station Would Be Useless, And Which Have Been Attached Or Affixed Permanently To The Gas
Station Site Or Embedded Therein, Are Taxable Improvements And Machinery Within The
Meaning Of The Assessment Law And The Real Property Tax Code.
2. No.
Serg Products V. Pci Leasing And Finance, Inc., Gr No. 137705, 22 August 2000.
10

Principles Of Law: After Agreeing To A Contract Stipulating That A Real Or Immovable Property
Be Considered As Personal Or Movable, A Party Is Estopped From Subsequently Claiming
Otherwise. Hence, Such Property Is A Proper Subject Of A Writ Of Replevin Obtained By The
Other Contracting Party.

Facts
Pci Filed A Case Of Replevin Against Serg And Resulted To The Sheriff Seizing One Of The
Machinery Of Serg;
Serg Avers That The Machinery Were Not Subject Of Replevin For They Are Not Personal
Property;
Serg Likewise Claims That The Machinery Were Real Property As Under The Civil Code And
Hence, Parties Cannot Designate Them To Be Personalty As It May Prejudice Third Persons;
Issue
1. Whether The Machinery May Be Under The Writ Of Replevin
Held
1. Yes, They May Be. The Writ Of Replevin Will Lie Since Parties Themselves Designated A Real
Property As A Subject Of Chattel Mortgage. Provided That Such Does Not Prejudice Third
Persons, The Designation By The Parties Bind Them.
Tumalad Vs. Vicencio, Gr No. L-30173, 30 September 1971.
11

Facts:
In This Case, Vicencio And Simeon Executed A Chattel Mortgage In Favor Of Tumalad Over
Their House Of Strong Materials Built On A Lot Rented From Madrigal & Company, Inc. When
Vicencio And Simeon Defaulted In The Payment Of Their Obligation, The Mortgage Was
Extrajudicially Foreclosed And The House Was Sold At Public Auction. Tumalad Emerged As
The Highest Bidder During The Auction.
Subsequently, Tumalad Filed An Action For Ejectment Against Vicencio And Simeon. In Their
Answer, The Defendants Impugned The Legality Of The Chattel Mortgage And Its Subsequent
Foreclosure On The Ground That The House, Being An Immovable, Could Only Be The Subject
Of A Real Estate Mortgage And Not A Chattel Mortgage.
Issue:
1. May The Tumalad Now Claim That The Chattel Mortgage They Entered Into Was
Unenforceable?
Held:

10
11
Degamo
7

1. No. This Case Was Likewise Compared With Associated Ins. & Surety Co., Inc. V. Iya, Lopez V.
Orosa, Jr. And Plaza Theatre, Inc. And Leung Yee V. Strong Machinery Co. Unlike In These
Three Cases, Wherein Third Persons Assailed The Validity Of The Chattel Mortgage, It Is The
Debtors-Mortgagors Who Are Attacking The Validity Of The Chattel Mortgage In This Case.
Hence, The Doctrine Of Estoppel Applies. When The Case nally Reached The Supreme
Court, The Said Court Again Applied The Principle Of Estoppel Since The Parties Treated The
Subject House As Personalty. The Court Explained That Although There Is No Specic
Statement Referring To The Subject House As Personal Property, Yet By Ceding, Selling Or
Transferring A Property By Way Of Chattel Mortgage (Vicencio And Simeon) Could Only Have
Meant To Convey The House As Chattel, Or At Least, Intended To Treat The Same As Such, So
That They Should Not Now Be Allowed To Make An Inconsistent Stand By Claiming Otherwise.

Star Two V Paper City Corp.
12

Gr No. 192088. October 9, 2012. 2
nd
Div. Perez

Facts:
Paper City Was Granted Several Loans By Rcbc, Metrobank And Union Bank. These Loans Were
Secured By Four Deeds Of Continuing Chattel Mortgages On Its Machineries And Equipment Found
Inside The Paper Plants.
However, Rcbc Eventually Executed A Unilateral Cancellation Of Deed Of Continuing Chattel
Mortgage.
In 1992, Rcbc, As The Trustee Bank, Together With Metrobank And Union Bank, Entered Into A
Mortgage Trust Indenture (Mti), With Paper City. In The Said Mti, Paper City Acquired Additional
Loans Secured By Five (5) Deed Of Real Estate Mortgage, Plus Real And Personal Properties In An
Annex To The Mti, Which Covered The Machineries And Equipment Of Paper City. The Mti Was
Later On Amended And Supplemented Three (3) Times, Wherein The Loan Was Increased And
Included The Same Mortgages With An Additional Building And Other Improvements In The Plant
Site.
Paper City Was Able To Comply With The Loans But Only Until 1997 Due To An Economic Crisis.
Rcbc Filed A Petition For Extra-Judicial Foreclosure Against The Real Estate Executed By Paper City
Including All The Improvements Because Of Payment Default. The Property Was Foreclosed And
Subjected To Public Auction. The Three Banks As The Highest Bidders Were Issued A Certificate Of
Sale.
Paper City Filed A Complaint Alleging That The Sale Was Null And Void Due To Lack Of Prior
Notice. During The Pendency Of The Complaint, Paper City Filed A Motion To Remove Machinery
Out Of The Foreclosed Land And Building, That The Same Were Not Included In The Foreclosure Of
The Real Estate Mortgage. The Trial Court Denied The Motion, Ruling That The Machineries And
Equipment Were Included. Thereafter, Paper City's Motion For Reconsideration, The Trial Court
Granted The Same And Justified The Reversal By Finding That The Machineries And Equipment Are
Chattels By Agreement Thru The Four Deeds Of Continuing Chattel Mortgages; And That The Deed
Of Cancellation Executed By Rcbc Of Said Mortgage Was Not Valid Because It Was One
Unilaterally.
Rcbc's Motion For Reconsideration Was Denied.
The Case Was Petitioned At Ca That
1. That Paper City Gave Its Consent To Consider The Disputed Machineries And Equipment
As Real Properties When They Signed The Mti's And All Its Amendments;
2. That The Machineries And Equipment Are The Same As In The Mti's, Hence Treated By
Agreement Of The Parties As Real Properties.
The Ca Affirmed The Orders Of The Trial Court Because It Relied On The Plain Language Of The
Mti's Stating That Nowhere From Any Of The Mtis Executed By The Parties Can We Find The
Alleged "Express" Agreement Adverted To By Petitioner. There Is No Provision In Any Of The
Parties Mti, Which Expressly States To The Effect That The Parties Shall Treat The Equipments
And Machineries As Real Property. On The Contrary, The Plain And Unambiguous Language Of
The Aforecited Mtis, Which Described The Same As Personal Properties, Contradicts Petitioners
Claims.

Issues:
1. Whether The Subsequent Contracts Of The Parties Such As Mortgage Trust Indenture As Well
As The Subsequent Supplementary Amendments Included In Its Coverage Of Mortgaged
Properties The Subject Machineries And Equipment;
2. Whether Or Not The Subject Machineries And Equipment Were Considered Real Properties And
Should Therefore Be Included In The Extra-Judicial Foreclosure Which In Turn Were Sold To
The Banks.

Held:
Petition Was Granted.

12
Avila.
8

1. 1.Repeatedly, The Parties Stipulated That The Properties Mortgaged By Paper City To Rcbc Are
Various Parcels Of Land Including The Buildings And Existing Improvements Thereon As Well As The
Machineries And Equipments, Which As Stated In The Granting Clause Of The Original Mortgage, Are
"More Particularly Described And Listed That Is To Say, The Real And Personal Properties Listed In
Annexes A And B X X X Of Which The Paper City Is The Lawful And Registered Owner." Significantly,
Annexes "A" And "B" Are Itemized Listings Of The Buildings, Machineries And Equipments Typed Single
Spaced In Twenty-Seven Pages Of The Document Made Part Of The Records. As Held In Gateway
Electronics Corp. V. Land Bank Of The Philippines,49 The Rule In This Jurisdiction Is That The
Contracting Parties May Establish Any Agreement, Term, And Condition They May Deem Advisable,
Provided They Are Not Contrary To Law, Morals Or Public Policy. The Right To Enter Into Lawful
Contracts Constitutes One Of The Liberties Guaranteed By The Constitution.

2. Contrary To The Finding Of The Ca, The Extra-Judicial Foreclosure Of Mortgage Includes The
Machineries And Equipment Of Respondent. Considering That The Indenture Which Is The Instrument
Of The Mortgage That Was Foreclosed Exactly States Through The Deed Of Amendment That The
Machineries And Equipment Listed In Annexes "A" And "B" Form Part Of The Improvements Listed And
Located On The Parcels Of Land Subject Of The Mortgage, Such Machineries And Equipment Are Surely
Part Of The Foreclosure Of The "Real Estate Properties, Including All Improvements Thereon" As
Prayed For In The Petition. The Real Estate Mortgages Which Specifically Included The Machineries
And Equipments Were Subsequent To The Chattel Mortgages. Without Doubt, The Real Estate
Mortgages Superseded The Earlier Chattel Mortgages.
The Real Estate Mortgage Over The Machineries And Equipments Is Even In Full Accord With The
Classification Of Such Properties By The Civil Code Of The Philippines As Immovable Property Under
Art. 415 (3). The Machineries And Equipment Were Integral Parts Of Said Plant Hence Included As
Real Properties.

Pastor D. Ago V. Ca, Cfi Agusan Judge Ortiz, Provincial Sheriff Of Surigao And Grace Park
Engineering, Gr No. L 17898, 31 October 1962, En Banc, Labrador.
13

Principles Of Law: A Machinery Once Under 415 (Real Property) Is Subsequently Auctioned,
Publication And Personal Notice Are Essential Requisites. Publication Of The Advertisement Of Sale In
A Newspaper Is And Indispensable Requirement On The Execution Sale Of A Real Property
Facts
Ago Bought Sawmill Machinery And Equipment From Grace Park Engineering, Over Which A
Chattel Mortgage Was Had To Secure The Balance Of P32, 000.00;
Upon Default, An Extrajudicial Foreclosure Was Instituted By Grace Park But A Compromise
Agreement Was Reached;
A Year Later, Ago Again Defaulted And So Foreclosure Was Had Once Again;
This Time, The Trial Court Ordered The Writ Of Execution And The Sheriff Levied The Property
Without Publication;
The Machinery In Question Was Sawmill Machinery In Building Of Gold Pacific Sawmill For The
Use Of Sawing Logs;
Issue
1. The Primary Question Is Whether The Machineries Were Real Or Personal
2. Incidentally, Whether Publication And Personal Notice Are Required
Held
1. Yes, Under Art. 415, The Machineries In Question Are Real Property. Art. 415 (5) Machinery,
Receptacles, Instruments Or Implements Intended By The Owner Of The Tenement For An
Industry Or Works Which May Be Carried On In A Building Or On A Piece Of Land, And Which
Tend Directly To Meet The Needs Of The Said Industry Or Works. Hence, The Machinery
Forming As Essential Parts Of The Industry/Business Of Such Establishment Makes Such
Machineries Real Property.
2. Being So, Publication Is A Necessary Requirement Before The Same Can Be Disposed In A
Public Auction. Further, Personal Notice Is Not Sufficed By The Fact That The Judgment Was
Read In Open Court.

13
9

Us V. Ignacio Carlos, Gr No. 6295, 1 September 1911, Per Curiam
14

Principles Of Law: The True Test Of Whether A Thing Is A Personal Property And Therefore May Be
Subject Of Larceny Is Whether The Same May Be Appropriated By Another Other Than The Owner
Facts
13 Feb 1909 3 March 1910, Carlos Is Charged With Stealing 2273 Kilowatts Of Electric
Current Of Manila Electric Railroad And Light Company, Then Valued At P909.20;
One Of The Defences Given By Counsel Of Carlos Was That The Charge Did Not Constitute A
Public Offense; However, He Was Still Given 1 Year 8 Months And Twenty Days Presidio
Correccional;
The Electricians Installed A Separate Meter Outside The House Of The Accused; Electricity
Passed By The Two Meters But The First One Showed 218 2718 And The Other 745 968;
Issue
1. Is There Merit In Defendants Contention That Electricity Cannot Be Stolen?
2. What Is The Test To Determine Whether Something Can Be Regarded As A Personal Property?
Held
1. No, Electricity May Be Subject Of The Crime Of Larceny. Counsel For The Appellant Insists
That The Only Corporeal Property Can Be The Subject Of The Crime Of Larceny, And In The
Support Of This Proposition Cites Several Authorities For The Purpose Of Showing That The
Only Subjects Of Larceny Are Tangible, Movable, Chattels, Something Which Could Be Taken
In Possession And Carried Away, And Which Had Some, Although Trifling, Intrinsic Value, And
Also To Show That Electricity Is An Unknown Force And Cannot Be A Subject Of Larceny.
2. It Is True That Electricity Is No Longer, As Formerly, Regarded By Electricians As A Fluid, But
Its Manifestation And Effects, Like Those Of Gas, May Be Seen And Felt. The True Test Of
What Is A Proper Subject Of Larceny Seems To Be Not Whether The Subject Is Corporeal, But
Whether It Is Capable Of Appropriation By Another Than The Owner. Electricity, The Same As
Gas, Is A Valuable Article Of Merchandise, Bought And Sold Like Other Personal Property And
Is Capable Of Appropriation By Another. So No Error Was Committed By The Trial Court In
Holding That Electricity Is A Subject Of Larceny.

Luis Marcos P. Laurel V. Hon. Zeus Abrogar, Makati Rtc 50, And Pldt, Gr No. 155076, 27
February 2006, First Division, Callejo.
15

Principles Of Law: Brilliantly Argued That Voice Passing By Transmission Lines Cannot Be Made
Subject Of Appropriation Being Taken From A Whole, Hence, The Same Cannot Be Personal Property
Subject Of Larceny; Telephone Calls Are Not Personal Properties. However, Use Of These
Communications Facilities Without The Consent Of Service Provider Constitutes The Crime Of Theft,
Which Is The Unlawful Taking Of The Telephone Services And Business
Facts
Pldt Alleges That One Of The Means Of Committing Fraud Regarding Phone Lines Is By The
Use Of International Simple Resale; Isr Is A Method Of Routing And Completing International
Long Distance Calls Using International Private Leased Lines (Ipl) And Bypassing International
Gateway Facility, Which In This Case, Is Maintained By Pldt;
Baynet With Laurel As Its Secretary Was Charged For Using Isr To Transmit Long Distance
Calls From Japan To The Philippines And Make It Appear As Though The Calls Are From Manila;
Baynet Was Proven To Have A Total Of 123 Telephone Lines/Numbers;
Laurel Argued That The Caller Merely Uses The Facilities Of Pldt, And What The Latter Owns
Are The Telecommunication Infrastructures Or Facilities Through Which The Call Is Made. He
Also Asserted That Pldt Is Compensated For The Callers Use Of Its Facilities By Way Of Rental;
For An Outgoing Overseas Call, Pldt Charges The Caller Per Minute, Based On The Duration Of
The Call. Thus, No Personal Property Was Stolen From Pldt. According To Laurel, The
P20,370,651.92 Stated In The Information, If Anything, Represents The Rental For The Use Of
Pldt Facilities, And Not The Value Of Anything Owned By It;

14
Cesista. 29 June 2014
15
10

The Prosecution Asserted That The Use Of Pldts Intangible Telephone Services/Facilities
Allows Electronic Voice Signals To Pass Through The Same, And Ultimately To The Called
Partys Number. It Averred That Such Service/Facility Is Akin To Electricity Which, Although An
Intangible Property, May, Nevertheless, Be Appropriated And Be The Subject Of Theft.
He Insisted That Telephone Calls Are Considered Privileged Communications Under The
Constitution And Cannot Be Considered As "The Property Of Pldt." He Further Argued That
There Is No Kinship Between Telephone Calls And Electricity Or Gas, As The Latter Are Forms
Of Energy Which Are Generated And Consumable, And May Be Considered As Personal
Property Because Of Such Characteristic. On The Other Hand, The Movant Argued, The
Telephone Business Is Not A Form Of Energy But Is An Activity.
Thus, In Prosecutions For Theft Of Certain Forms Of Energy, It Is The Electricity Or Gas Which
Is Alleged To Be Stolen And Not The "Business" Of Providing Electricity Or Gas. However,
Since A Telephone Company Does Not Produce Any Energy, Goods Or Merchandise And Merely
Renders A Service Or, In The Words Of Pldt, "The Connection And Interconnection To Their
Telephone Lines/Facilities," Such Service Cannot Be The Subject Of Theft As Defined In Article
308 Of The Revised Penal Code.
For Its Part, Respondent Pldt Asserts That Personal Property Under Article 308 Of The Revised
Penal Code Comprehends Intangible Property Such As Electricity And Gas Which Are Valuable
Articles For Merchandise, Brought And Sold Like Other Personal Property, And Are Capable Of
Appropriation.
Issue
1. Are International Telephone Calls Placed By Baynet Personal Properties Of Pldt?
2. Why Are Voices Or Waves Passing Through Telephone Lines Are Not The Same As Gas Or
Electricity?
3. Do Voices That Pass By Pldt Lines Covered By The Crime Of Theft?
Held
1. Apparently Not. On The Second Issue, We Find And So Hold That The International Telephone
Calls Placed By Bay Super Orient Card Holders, The Telecommunication Services Provided By
Pldt And Its Business Of Providing Said Services Are Not Personal Properties Under Article 308
Of The Revised Penal Code. The Construction By The Respondents Of Article 308 Of The Said
Code To Include, Within Its Coverage, The Aforesaid International Telephone Calls,
Telecommunication Services And Business Is Contrary To The Letter And Intent Of The Law.

One Is Apt To Conclude That "Personal Property" Standing Alone, Covers Both Tangible And
Intangible Properties And Are Subject Of Theft Under The Revised Penal Code. But The Words
"Personal Property" Under The Revised Penal Code Must Be Considered In Tandem With The
Word "Take" In The Law. The Statutory Definition Of "Taking" And Movable Property Indicates
That, Clearly, Not All Personal Properties May Be The Proper Subjects Of Theft. The General
Rule Is That, Only Movable Properties Which Have Physical Or Material Existence And
Susceptible Of Occupation By Another Are Proper Objects Of Theft.

According To Cuello Callon, In The Context Of The Penal Code, Only Those Movable Properties
Which Can Be Taken And Carried From The Place They Are Found Are Proper Subjects Of
Theft. Intangible Properties Such As Rights And Ideas Are Not Subject Of Theft Because The
Same Cannot Be "Taken" From The Place It Is Found And Is Occupied Or Appropriated.

2. Gas And Electrical Energy May Be Taken, Carried Away And Appropriated. In People V.
Menagas, The Illinois State Supreme Court Declared That Electricity, Like Gas, May Be Seen
And Felt. Electricity, The Same As Gas, Is A Valuable Article Of Merchandise, Bought And Sold
Like Other Personal Property And Is Capable Of Appropriation By Another. It Is A Valuable
Article Of Merchandise, Bought And Sold Like Other Personal Property, Susceptible Of Being
Severed From A Mass Or Larger Quantity And Of Being Transported From Place To Place.
Electrical Energy May, Likewise, Be Taken And Carried Away.

In Defining Theft, Under Article 308 Of The Revised Penal Code, As The Taking Of Personal
Property Without The Consent Of The Owner Thereof, The Philippine Legislature Could Not
Have Contemplated The Human Voice Which Is Converted Into Electronic Impulses Or
Electrical Current Which Are Transmitted To The Party Called Through The Pstn Of Respondent
Pldt And The Isr Of Baynet Card Ltd. Within Its Coverage.
11

3. No, They Are Not. The Legislature, In Making Rpc 38, Did Not Have Any Idea Of Voices Passing
Through Electric Transmission Lines For They Are Not Yet Existing At The Time.

Municipality Of Cavite V. Hilario Rojas, G.R. No. L-9069, 31 March 1915, En Banc, Torres
16

Principles Of Law: Things Which Are Outside The Commerce Of Men And Subjected To Contract
Produce No Effect; The Remedy Is Restitution Of Things On Both Parties; A Municipal Council Cannot
Sell Or Lease Communal Or Public Property, Such As Plazas, Streets, Common Lands, Rivers, Bridges,
Etc., Because They Are Outside The Commerce Of Man; And If It Has Done So By Leasing Part Of A
Plazas The Lease Is Null And Void, For It Is Contrary To The Law, And The Thing Leased Cannot Be
The Object Of A Contract. The Lessee Must Restore Possession Of The Land By Vacating It And The
Municipality Must Thereupon Restore To Him Any Sums It May Have Collected As Rent.
Facts
Rojas Leased A Parcel Of Land In The Municipality Plaza With The Understanding That His
Family Is To Vacate The Place Within Sixty Days Upon Notice To Vacate By The Municipality Of
Cavite If And When The Municipality Needs The Land For Decoration Purposes;
Rojas Argues That If They Refused To Vacate, It Is Because They Have Acquired The Right Of
Possession Thereof;
Supreme Court Cited A Previous Case Of Nicolas V. Jose
17
Ruling That The Plaza Should Be
Kept Open For Public Transit; Hence, The Defendant In The Cited Case Has No Right To
Occupy The Plaza For It For Public Use And Common Benefit;
According To Article 344 Of The Civil Code: "Property For Public Use In Provinces And In
Towns Comprises The Provincial And Town Roads, The Squares, Streets, Fountains, And Public
Waters, The Promenades, And Public Works Of General Service Supported By Said Towns Or
Provinces";
Issue
1. Whether The Municipality Of Cavite Has The Authority To Lease The Land Which Is Part Of The
Plaza
2. May The Defendant Claim Damages For The House That Was Built?
Held
1. No, It Does Not. In Deciding The Case, The Supreme Court Cited A Decision By The Supreme
Court Of Spain Ruling In This Wise - "Communal Things That Cannot Be Sold Because They
Are By Their Very Nature Outside Of Commerce Are Those For Public Use, Such As The Plazas,
Streets, Common Lands, Rivers, Fountains, Etc."
2. No, The Defendant Cannot. The Clear Import Of The Law Is That Since The Subject Of The
Contract Is Outside The Commerce Of Men, Such Contract Is Null And Void And Produces No
Effect. For This Reason, The Municipality Of Cavite Must Restore To The Defendant What It
Has Received By Virtue Of Lease And The Defendant To Return The Improperly Leased Land
To The Municipality.

Maneclang V. Iac, G.R. No. L-66575, 30 September 1986, Second Division, Fernan.
18

Principles Of Law: A Body Of Water Is Part Of The Public Domain And Cannot Be Subject Of A
Contract Or A Compromise Agreement Between Private Individuals; In Fact, It Cannot Be Made
Subject Of Torrens In Favor Of A Private Individual; A Creek, Defined As A Recess Of Arm Extending
From A River And Participating In The Ebb And Flow Of The Sea, Is A Property Belonging To The Public
Domain Which Is Not Susceptible To Private Appropriation And Acquisitive Prescription, And As Public
Water, It Cannot Be Registered Under The Torrens System In The Name Of Any Individual.
Facts

16
17
Cesista. 6 Phil Rep 589
18
12

1975 - A Case Of Quieting Of Title Over A Certain Fishpond Filed By Maneclangs With Further
Prayer To Annul Salomague, Bugallon, Pangasinan Municipal Resolution Nos 38 And 95;
Resolutions 38 And 95 Order For An Ocular Inspection On The Creek That Traverses Within
The Property Land Of The Maneclangs, And Allows For Public Bidding Of The Same; Such
Creek Being An Extension Of The Agno River; The Creek In Question Was Turned Into A
Fishpond By The Winner Of The Bidding Alfredo Maza;
Prior To The Case Being Settled, The Petitioners Manifested That An Amicable Settlement Has
Been Reached By Them And The Winners In The Bidding; And That For This Reason, It Is More
Beneficial If The Court Will Recognize The Maneclangs To Be The Owner Of The Creek In
Question;
Issue
1. May The Creek Be Subject Of Compromise Agreement Between Two Parties Partaking The
Nature Of An Award Of The Same?
2. Does It Matter That The National Irrigation Administration Constructed A Dike Preventing The
Water From Flowing Out Of The Property Of Maneclangs?
Held
1. No. The Compromise Agreement Cannot Subject The Creek To The Effect Of Transferring Its
Ownership In Favor Of A Private Individual. A Creek, Defined As A Recess Or Arm Extending
From A River And Participating In The Ebb And Flow Of The Sea, Is A Property Belonging To
The Public Domain Which Is Not Susceptible To Private Appropriation And Acquisitive
Prescription, And As A Public Water, It Cannot Be Registered Under The Torrens System In The
Name Of Any Individual.
2. No, It Matters Not. Considering Further That Neither The Mere Construction Of Irrigation Dikes
By The National Irrigation Administration Which Prevented The Water From Flowing In And Out
Of The Subject Fishpond, Nor Its Conversion Into A Fishpond, Alter Or Change The Nature Of
The Creek As A Property Of The Public Domain, The Court Finds The Compromise Agreement
Null And Void And Of No Legal Effect, The Same Being Contrary To Law And Public Policy.

Republic Of The Philippines V. Democrito T. Mendoza, Gr No. 153726, 28 March 2007, Third
Division, Chico-Nazario
19

Facts:
Present Controversy Involves A Considerable Spread Of Silot Bay Situated In Liloan Cebu.
On 13 Jan. 1954, Mendoza Was Accorded An Ordinary Fishpond Permit Within Silot Bay, Which
Was Previously Leased By His Father Who Waived The Leasehold Rights In His Favor. He Was
Also Issue The Nipa- Bacauan Permit Also In Silot Bay. 7 May 1969, Mendoza Was Then Again
Issued An Ordinary Fishpond Permit Which Consisted Of Both Permits.
Marcos Then Issued A Memo Giving The Bureau Of Forestry The Power To Release Such
Fishpond Areas As Alienable And Disposable. Mendoza Then Applied For Sales Patent To
Purchase Said Area Covered By The Ordinary Fishpond Permit.
Thereafter, The Acting Director Of Forestry Also Issued A Letter Certification Certifying The
Alienability Of Said Land In Pursuant To Marcos Memo. Afterwards, Mendoza Followed All The
Procedures.
Day Before The Scheduled Action Sale, Mayor Bugtai Opposed The Sale Of Such Property
Claiming That Such Was Intended For Development By The Local Government As A Tourist
Attraction. District Land Office Of Cebu Still Proceeded With The Auction And Mendoza Won.
Issue:
1. Whether There Was Fraud In The Application Of Sales Patent By Mendoza
2. Whether Estoppel Lies On The Government
Ruling:
1. No, It Was Not. There Was Positive Act By The Government Declaring The Land Alienable And
Disposable. Even The President, Through A Presidential Decree, Testified On Its Veracity.

19
Degamo.
13

Hence, This Is A Plain And Simple Case Wherein The Government Allowed A Fishpond Permit
To Ripe Into Actual Ownership. Note That Though The Decree Of Registration Is Conclusive
Upon All Persons, Including The Government As Well As All Its Branches; However, Facts Show
That The Mendozas Has Already Appropriated Such Land For P.
2. Estoppel Lies. In Mendoza, No Mistakes Because The Issuance Of The Sales Patent Sprung
From Declaration Of Marcos That Was Why They Were Able To Issue Sales Patent. Theres No
Mistake. So You Can Validly Claim Estoppel. Sc, In This Case, Justified That It Was About Fair
Play And Justice. Estopped. **We Have To Respect The Prerogative Of The Executive
Reclassifying The Public Domain -> Alienable

Faustino Ignacio V. The Director Of Lands And Valeriano, G.R. No. L-12958 30 May 1960, En
Banc, Montemayor
20

Principles Of Law: The Article (457) Cited Is Clearly Inapplicable Because It Refers To Accretion Or
Deposits On The Banks Of Rivers, While The Accretion In The Present Case Was Caused By Action Of
The Manila Bay. A Bay Is A Part Of The Sea. Thus It Is Part Of The Public Domain, Not Susceptible To
Private Appropriation And Acquisitive Prescription
Facts
1950 Ignacio Filed For Application Of Registration Over A Parcel Of Mangrove Lands; He
Claims That He Applies The Same By Right Of Accretion;
The Director Of Lands Argued That Ignacio Or His Predecessors-In-Interest Had Not Acquired
Sufficient Title Thereto And That The Land In Question Is A Foreshore Which Is Public Domain;
On The Other Hand, Ignacio Argues That His Possession Thereof Was Continuous, Adverse And
Public For A Period Of Twenty Years Until Possession Was Distributed By Oppositor Veleriano;
The Petitioner Likewise Wants The Court To Declare That Granting The Land Be Part Of Public
Domain, That It Is Not Anymore Necessary For Public Use And Should Therefore Be Declared
As Part Of Public Domain;
Issue
1. Whether The Rules On Accretion Apply In This Case
2. Whether Ignacio Can Indeed Have The Parcel Of Land Registered
3. Whether Acquisitive Prescription Applies To Land Of Public Domain
Held
1. No, The Article Cited Is Clearly Inapplicable Because It Refers To Accretion Or Deposits On The
Banks Of Rivers, While The Accretion In The Present Case Was Caused By Action Of The Manila
Bay.
2. No, He Cannot. It Forms Part Of The Public Domain And Even If It Were Not Anymore
Necessary, Only The Executive Or Legislative Can Declare The Same To Be So.
3. No. In Answer, Suffice It To Say That Land Of The Public Domain Is Not Subject To Ordinary
Prescription. In The Case Of Insular Government Vs. Aldecoa & Co., 19 Phil., 505. The
Occupation Or Material Possession Of Any Land Formed Upon The Shore By Accretion, Without
Previous Permission From The Proper Authorities, Although The Occupant May Have Held The
Same As Owner For Seventeen Years And Constructed A Wharf On The Land, Is Illegal And Is
A Mere Detainer, Inasmuch As Such Land Is Outside Of The Sphere Of Commerce; It Pertains
To The National Domain; It Is Intended For Public Uses And For The Benefit Of Those Who Live
Nearby.

Levy Macasiano V. Hon. Roberto Diokno, G.R. No. 97764, 10 August 1992, En Banc,
Medialdea
21

Principles Of Law: Discussion On Two Different Properties Of Lgu; When May Public Property Be
Used By Lgu For Lease Purpose; Properties Of Public Dominion Devoted To Public Use And Made
Available To The Public In General Are Outside The Commerce Of Man And Cannot Be Disposed Of Or
Leased By The Lgu To Private Persons

20
21
14

Facts
1990 Municipal Ordinance 86 Ordered The Closure Of Certain Streets In Paraaque, Metro
Manila And The Establishment Of A Flea Market Thereon;
On June 1990 Then Mayor Ferrer Was Authorized Through A Municipal Resolution To Enter
Into A Contract With A Private Entity In The Establishment, Management And Operation Of
Flea Market, Respondent Palanyag Kilusang Bayan Was The Private Entity That Engaged With
The Municipality;
On Sept. 1990 Brig. Gen. Macasiano Ordered The Destruction And Confiscation Of Stalls In
The Flea Market; He Likewise Gave Palanyag 10 Days To Cease And Desist From The Market
Operation;
Palanyag And Municipality Of Paraaque Filed Before The Trial Court Mandamus To Enjoin The
Petitioner From Executing His Order-Letter Destroying And Confiscating The Stalls In The
Market; The Trial Court Ruled In Favor Of The Respondent; Petitioner Filed The Case Through
The Solicitor Generals Office Alleging Grave Abuse Of Discretion; Hence, This Petition Before
The Supreme Court;
In Sc, Petitioner And Sol Gen Claims That The Road Is Public Property And As Such, It Is
Already Devoted For A Public Purpose; Petitioner Claims That A Property Already Devoted For
Public Purpose Cannot Be Subject To Another Public Purpose Without Express Grant From The
Legislature;

Issue
1. Whether The Ordinance Allowing The Lease Of The Public Streets And Thoroughfares As Flea
Market Is Valid
2. Whether The Lease Was Valid
3. When May A Public Property Be Subject To A Contract Of Lease?
Held
1. In Resolving The Issue, The Supreme Court Looked Into The Law At The Time The Ordinance
Was Made Which Was Bp 337 Distinguishing Municipal Properties To Public Use And
Patrimonial Property. Based On The Foregoing, J. Gabriel G.G. Cruz, Bayanihan, Lt. Garcia
Extension And Opena Streets Are Local Roads Used For Public Service And Are Therefore
Considered Public Properties Of Respondent Municipality. Properties Of The Local Government
Which Are Devoted To Public Service Are Deemed Public And Are Under The Absolute Control
Of Congress
2. No. The Land Being A Public Property, It Cannot Be Subject Of Lease Contract.
3. When It Is Already Withdrawn From Public Use, The Property Then Becomes Patrimonial
Property Of The Local Government Unit Concerned (Article 422, Civil Code; Cebu Oxygen, Etc.
Et Al. V. Bercilles, Et Al., G.R. No. L-40474, August 29, 1975, 66 Scra 481). It Is Only Then
That The Respondent Municipality Can "Use Or Convey Them For Any Purpose For Which Other
Real Property Belonging To The Local Unit Concerned Might Be Lawfully Used Or Conveyed" In
Accordance With The Last Sentence Of Section 10, Chapter Ii Of Blg. 337, Known As Local
Government Code.

Cebu Oxygen And Acetylene, Gr No. L40474, 39 August 1975, Second Division,
Concepcion.
22

Principles Of Law: In Determining Whether Land Of Public Domain May Be Patrimonial Will Have To
Depend On The Law Governing The Lgu;
Facts
1968 The Terminal Portion Of M. Borces And Mabolo Streets Was Declared By The City
Government Of Cebu As Abandoned Lot; Hence, A Resolution Was Passed By The City Council
Allowing The Mayor To Sell The Same; The Lot In Question Was Sold To Petitioner For A Total
Consideration Of P10,800.00; An Application For Land Registration Was Filed By Petitioner
Before Cebu Cfi

22
15

1974 The Assistant Provincial Fiscal Of Cebu Filed A Case In Court To Dismiss The
Application For Registration The Subject Lot Being Part Of The Public Domain And Hence,
Cannot Be Subject To Registration Of Any Private Individual. The Property, As Argued By
Fiscal, Is Beyond The Commerce Of Men;
Cfi Favoured The Fiscal, Hence, A Petition Before Sc Was Filed;
Issue
1. Does The Declaration Of The Road, As Abandoned, Make It The Patrimonial Property Of The
City Of Cebu Which May Be The Object Of A Common Contract?
Held
1. In Order To Answer The Same, The Supreme Court Resorted To The Revised Charter Of Cebu
City. Legislative Powers. Any Provision Of Law And Executive Order To The Contrary
Notwithstanding, The City Council Shall Have The Following Legislative Powers: ...; To Close
Any City Road, Street Or Alley, Boulevard, Avenue, Park Or Square. Property Thus Withdrawn
From Public Servitude May Be Used Or Conveyed For Any Purpose For Which Other Real
Property Belonging To The City May Be Lawfully Used Or Conveyed.

Hence, It Appears That The Power To Declare A Land Withdrawn From Public Domain And
Available For Disposal Is Within The City Government Of Cebu.
Laurel V. Garcia, Gr No. 92013, 25 July 1995, En Banc, Gutierrez
23

Principles Of Law: Eo Is Not A Sufficient Ground To Conclude That Property Is Not Anymore For
Public Purpose; A Clear And Definite Act Of The Government Is Required; Mere Non-Usage Of A
Property Does Not Ipso Facto Make It Patrimonial; A Property Continues To Be Part Of The Public
Domain, Not Available For Private Appropriation Or Ownership Until There Is A Formal Declaration On
The Part Of The Government To Withdraw It From Being Such
Facts
1956 Under The Reparations Agreement Between Japan And The Republic Of The
Philippines, The Latter Has Acquired Four (4) Properties, One Of Them, The Roponggi
Property, All In Japan;
The Roponggi Property Used To Be Where The Philippine Embassy In Japan Was Located But It
Was Later Moved To Nempeidai Property;
By Then, Eo 296 Was Already Issued By President Cory Aquino, Showing Much Intention To
Sell The Property Even To Non-Filipinos;
By This Time Likewise, The Property Has Not Been Used For A Very Long Time (Has Been Idle
For A Long Time);
Several Individuals Filed A Case Against Government Representatives With Some Connections
With Properties In Japan;
Note That The Respondents In This Case Argued That Lex Situs (Which Will Be Japan) Should
Be Applied In The Present Case In Determining Which Law Is Applicable; Hence, Philippine
Laws Are Not Applicable;
Issue
1. Whether The Public Purpose Of The Property Was Altered By The Fact That The Property Was
Idle For Some Time?
2. What Is The Effect Of The Eo Issued By The President?
Held
1. No. The Character Of The Property Being For Public Purpose Does Not Suddenly Become
Patrimonial Just Because The Property Has Not Been Used For A Long Time. There Must Be A
Positive Declaration And A Positive Act From The Government Withdrawing Such From Public
Purpose And Making It Patrimonial.
2. Executive Order No. 296, Though Its Title Declares An "Authority To Sell", Does Not Have A
Provision In This Text Expressly Authorizing The Sale Of The Four Properties Procured From
Japan For The Government Sector. The Executive Order Does Not Declare That The Properties

23
16

Lost Their Public Character. It Merely Intends To Make The Properties Available To Foreigners
And Not To Filipinos Alone In Case Of A Sale, Lease Or Other Disposition.
Manila International Airport Authority V. Ca, City Of Paraaque, Et.Al., Gr No. 155650, 20
July 2006, En Banc, Carpio.
24

Principles Of Law: A Government Instrumentality May Also Perform Commercial Functions, In That
Sense, It Is Exempt From Tax; Provided That Such Instrumentality: (A) Has A Personality Not
Separate And Distinct From Government And (B) It Must Neither Be A Non-Stock, Nor A Stock
Instrumentality; Miaa Is Not A Government-Owned Or Controlled Corporation But An Instrumentality
Of The National Government And Thus Exempt From Local Taxation.The Real Properties Of Miaa Are
Owned By The Republic Of The Philippines And Thus Exempt From Real Estate Tax. The Airport Lands
And Buildings Of Miaa Are Property Of Public Dominion And Therefore Owned By The State Or The
Republic Of The Philippines. The Airport Lands And Buildings Are Devoted To Public Use Because They
Are Used By The Public For International And Domestic Travel And Transportation. The Fact That The
Miaa Collects Terminal Fees And Other Charges From The Public Does Not Remove The Character Of
The Airport Lands And Buildings As Properties For Public Use. The Operation By The Government Of A
Tollway Does Not Change The Character Of The Road As One For Public Use.
Facts
Miaa Is A Government Instrumentality Which Has Been Adjudged By Paraaque To Have
Remised Of Its Obligation To Pay Realty Tax;
As A Defense, Miaa Claims That Its Lands Belong To The Government, And In Fact, It Is A
Government Instrumentality, Hence, It Is Exempt From Taxation;
Paraaque Claims That Miaa Is A Gocc And According To Lgc, Goccs Are Not Exempt From
Realty Tax;
Issues
1. May Miaa Be Charged Realty Tax?
2. Are Its Properties Parts Of Public Dominion?
3. What Is The Effect Of Charging Terminal Fee?
4. Is It A Gocc Or A Government Instrumentality?
5. Characterize Miaa Being Neither A Stock, Nor A Non-Stock Corporation?
Held
1. No, Miaa May Not Be Charged Realty Tax For It Is A Government Instrumentality Which Is
Neither Stock, Nor Non-Stock.
2. Yes, The Properties Of Miaa Form Part Of Public Dominion. The Term Ports In Art. 420 Of Ncc
Contemplate Airports As Well. Further, The Lands And Buildings Are Used For Public
International And Domestic Travel.
3. It Does Not Change The Nature Of Miaa As A Public Corporation. Be It Noted That The
Terminal Fees Are Called Users Tax Which Means That Only A Part Of The Public (The One
Who Uses) Are The Only Ones Charged By Such Tax Measure (Terminal Fees). It Is In Essence
A Particular And Specific Kind Of Tax.
4. It Is A Government Instrumentality But Vested With Corporate Powers. Note That It Does Not
Have A Separate Personality Than The Government.
5. Miaa Is Not A Stock Corporation Because It Has No Capital Stock Divided Into Shares. Miaa
Has No Stockholders Or Voting Shares. Miaa Is Also Not A Non-Stock Corporation Because It
Has No Members. A Non-Stock Corporation Must Have Members.

Philippine Ports Authority V. City Of Iloilo, Gr No 109791, 14 July 2003, First Division,
Azcuna.
25

Principles Of Law: Strange Decision. But It Says Warehouse Is Distinct From Port, Hence, Not
Exempt From Tax; Real Property Tax Code Provides That Real Properties Of The Government, Or Any
Of Its Political Subdivision Or Government-Owned Corporation Are Not Exempt From Tax When It
Grants Beneficial Use Of Its Property To A Taxable Person

24
Cesista. 21 July 2014.
25
Cesista. 21 July 2014
17

Facts
Philippine Ports Authority Was Created Under Pd 857 As A Government Corporation; It Is
Arguably A Property Of Public Dominion;
The City Of Iloilo Filed A Case Against Ppa For Realty Tax Allegedly Because Of The
Stevedoring And Arrastre Services It Does Through The Warehouse In Its Iloilo Port;
Ppa Argues First That It Is A Gocc Then It Claimed To Be A Gov Instrumentality
Issue
1. Whether The Warehouse Built On Iloilo Port Is Exempt From Realty Tax
Held
1. No, It Is Not. The Warehouse Being Taxed In The Present Case Is Absolutely Distinct From The
Port. Hence, It Is Not Exempt From Realty Tax.
Comment
This Forms Part Of A Line Of Strange Decisions Including Lrta V. Central Board. Consider This,
The Port Is Obviously Where Ships Will Dock And Inevitably, It Will Require Some Forms Of
Storage Place Or Warehouse. In Fact, Sc Argues That The Warehouse Is Not Accessible To
Anyone. Two Responses: (1) Just Because It Is Not Accessible To Anyone Does Not Make It
Not Public (Iglesia Case) And (2) Its Primary And Only Purpose Is To Be An Appendage Of The
Port, Which Without It, The Port Wouldnt Be Able To Efficiently Function.
Philippine Fisheries Development Authority Vs.Ca, Office Of The President, Et. Al.,
Gr No. 169863, 31 July 2007, Third Division, Ynares-Santiago.
26

Principle Of Law: There Are Some Properties Which Are Under The Institutions Name Which Are
Subject To Commercial Ventures Are They Liable For Property Tax?? Yes. When They Are Used By
Taxable Entities (Engaged In Proprietary Functions); Can The Tax Liabilities Be In Form Of Seizure Of
The Properties Owned By The Authority? Sc Claimed That In Using Miaa - Pfda Is Not Organized As A
Gocc In Accordance With Corp Code, It Is Just A Mere Govt Instrumentality. Even If The Properties Are
Registered Under Its Name The True Owner Is The Government. Liable But Not Enforceable.

Facts:
August 11, 1976 - Pd 977, As Amended Created The Authority And Placed It Under The
Supervision Of The Secretary Of Natural Sources Attaching It To The Ministry Of Natural
Resources
October 31, 1981 The Ministry Of Public Works And Highways Reclaimed From The Sea A
21-Hectare Parcel Of Land In Barangay Tanz Upon Its Completion The Ministry Turned Over
The Ifpc (Iloilo Fishing Port Complex) To The Authority. Title Of The Land And All Others,
Remained With The Republic.
The Authority Thereafter Leased Portions Of Ifpc To Private Firms And Individuals Engaged In
Fishing Related Businesses.
The Assessment Remained Unpaid Until The Alleged Total Tax Delinquency Of The Authority
For The Fiscal Years 1988 And 1989 Amounted To P5,057,349.67, Inclusive Of Penalties And
Interests. To Satisfy The Tax Delinquency, The City Of Iloilo Scheduled On August 30, 1990,
The Sale At Public Auction Of The Ifpc.
Authority Claimed For Tax Exemption. However, Department Of Finance Ruled That Authority
Is Liable To Pay Real Property Taxed. There Were Subsequent Denials. Hence, Instant Petition.

Issues:

1. Is The Authority Liable To Pay Real Property Taxes To The City Of Iloilo? Whether The
Authority Is A Government Owned Or Controlled Corporation (Gocc) Or An Instrumentality Of
The National Government
2. If In The Affirmative, May The Ifpc Be Sold At Public Auction To Satisfy The Tax Delinquency?
Whether The Ifpc Is A Property Of Public Domain.

Ruling:

26
By Degamo.
18

1. The Court Rules That The Authority Is Not A Gocc But An Instrumentality Of The National
Government Which Is Generally Exempt From Payment Of Real Property Tax. However, Said
Exemption Does Not Apply To The Portions Of The Ifpc Which The Authority Leased To Private
Entities. With Respect To These Properties, The Authority Is Liable To Pay Real Property Tax.

Nonetheless, Being A Property Of Public Dominion Cannot Be Sold At Public Auction To Satisfy
The Tax Delinquency.

2. Cannot Sell To Pay For Tax Delinquency: The Salient Provisions Of Ca No. 141 - Since Then
And Until Now, The Only Way The Government Can Sell To Private Parties Government
Reclaimed And Marshy Disposable Lands Of The Public Domain Is For The Legislature To Pass
A Law Authorizing Such Sale. Ca No. 141 Does Not Authorize The President To Reclassify
Government Reclaimed And Marshy Lands Into Other Non-Agricultural Lands Under Section 59
(D). Lands Classified Under Section 59 (D) Are The Only Alienable Or Disposable Lands For
Non-Agricultural Purposes That The Government Could Sell To Private Parties.

Petition Granted. Assessment Void Except Those Pertaining To The Portions Leased To Private
Parties. The City Of Iloilo Is Directed To Refrain From Levying On The Iloilo Fishing Port
Complex To Satisfy The Payment Of The Real Property Tax Delinquency.

Miscellaneous:
1. This Case Cited Mmia Case

The Miaa Case Held17 That Unlike Goccs, Instrumentalities Of The National Government, Like
Miaa, Are Exempt From Local Taxes Pursuant To Section 133(O) Of The Local Government
Code.
2. Exception: Applying Section 234(A) Of The Local Government Code, The Court Ruled That
When An Instrumentality Of The National Government Grants To A Taxable Person The
Beneficial Use Of A Real Property Owned By The Republic, Said Instrumentality Becomes
Liable To Pay Real Property Tax.
3. In Light Of The Foregoing, The Authority Should Be Classified As An Instrumentality Of The
National Government Which Is Liable To Pay Taxes Only With Respect To The Portions Of The
Property, The Beneficial Use Of Which Were Vested In Private Entities.
4. When Local Governments Invoke The Power To Tax On National Government
Instrumentalities, Such Power Is Construed Strictly Against Local Governments. The Rule Is
That A Tax Is Never Presumed And There Must Be Clear Language In The Law Imposing The
Tax. Any Doubt Whether A Person, Article Or Activity Is Taxable Is Resolved Against Taxation.
This Rule Applies With Greater Force When Local Governments Seek To Tax National
Government Instrumentalities.20
5. Thus, The Real Property Tax Assessments Issued By The City Of Iloilo Should Be Upheld Only
With Respect To The Portions Leased To Private Persons. In Case The Authority Fails To Pay
The Real Property Taxes Due Thereon, Said Portions Cannot Be Sold At Public Auction To
Satisfy The Tax Delinquency.

Republic (Philippine Reclamation Authority) Vs. City Of Paranaque, Gr No. 191109, 18 July
2012, Third Division, Mendoza.
27

Facts
Pea Is A Gocc By Virtue Of Prd 1084 (Creating Public Estates Authority) Which Took Effect On
Feb 4, 1977. By Virtue Of A Decree By Marcos, It Was Responsible For Integrating, Directing
And Coordinating All Reclamation Projects For And On Behalf Of The National Government.
Eo 380 Pea Into Pta Same Functions Relating To Reclamation.
By Virtue Of Its Mandate, Pra Reclaimed Several Portions Of The Foreshore And Offshore Areas
Of Manila Bay, Including Those Located In Paraaque Over The Reclaimed Lands.
On February 19, 2003, Then Paraaque City Treasurer Liberato M. Carabeo (Carabeo) Issued
Warrants Of Levy On Pras Reclaimed Properties (Central Business Park And Barangay San
Dionisio) Located In Paraaque City Based On The Assessment For Delinquent Real Property
Taxes Made By Then Paraaque City Assessor Soledad Medina Cue For Tax Years 2001 And
2002.

27
Degamo
19

Pra Filed For Tro At Trc. Rtc Denied And Dismissed Pras Petition Ruling That It Was Not
Exempt From Payment Of Real Property Taxed, The Rtc Reasoned Out That It Was A Gocc
Under Se 3 Of Pf 1084. It Was Organized As A Stock Corporation Because It Had An
Authorized Capital Stock Divided Into No Par Value Shares. And That Being A Gocc, Local Tax
Exemption Has Been Withdrawn By Lgc.
Pra: Insists That, As An Incorporated Instrumentality Of The National Government, It Is
Exempt From Payment Of Real Property Tax Except When The Beneficial Use Of The Real
Property Is Granted To A Taxable Person. Pra Claims That Based On Section 133(O) Of The
Lgc, Local Governments Cannot Tax The National Government Which Delegate To Local
Governments The Power To Tax.
City Of Paranaque: Argues That Pra Is A Stock Corporation With Capital Stock. Hence, Not
Exempt From Real Property Tax.

Issue:

1. Whether The Petitioner Is An Incorporated Instrumentality Of The National Government And
Is, Therefore, Exempt From Payment Of Real Property Tax Under Sections 234(A) And 133(O)
Of Republic Act 7160 Or The Local Government Code Vis--Vis Manila International Airport
Authority V. Court Of Appeals

Held:
1. Yes, Petitioner Is An Incorporated Instrumentality Of The Government And Thus, The Petition
To Levy Is Void. In The Case At Bench, Pra Is Not A Gocc Because It Is Neither A Stock Nor A
Non-Stock Corporation.

Pra Cannot Be Considered A Non-Stock Corporation Either Because It Does Not Have
Members. A Non-Stock Corporation Must Have Members.8 Moreover, It Was Not Organized For
Any Of The Purposes Mentioned In Section 88 Of The Corporation Code. Specifically, It Was
Created To Manage All Government Reclamation Projects.

In This Case, Pra May Have Passed The First Condition Of Common Good But Failed The
Second One - Economic Viability. Undoubtedly, The Purpose Behind The Creation Of Pra Was
Not For Economic Or Commercial Activities

It Is Clear From Section 234 Of Lgc That Real Property Owned By The Republic Of The
Philippines (The Republic) Is Exempt From Real Property Tax Unless The Beneficial Use
Thereof Has Been Granted To A Taxable Person. In This Case, There Is No Proof That Pra
Granted The Beneficial Use Of The Subject Reclaimed Lands To A Taxable Entity. There Is No
Showing On Record Either That Pra Leased The Subject Reclaimed Properties To A Private
Taxable Entity.

Miscellaneous:

1. When The Law Vests In A Government Instrumentality Corporate Powers, The Instrumentality
Does Not Necessarily Become A Corporation. Many Government Instrumentalities Are Vested
With Corporate Powers But They Do Not Become Stock Or Non-Stock Corporations, Which Is A
Necessary Condition Before An Agency Or Instrumentality Is Deemed A Gocc.
2. The Fundamental Provision Above Authorizes Congress To Create Goccs Through Special
Charters On Two Conditions: 1) The Gocc Must Be Established For The Common Good; And 2)
The Gocc Must Meet The Test Of Economic Viability.
3. Reclaimed Lands Such As The Subject Lands In Issue Are Reserved Lands For Public Use. They
Are Properties Of Public Dominion. The Ownership Of Such Lands Remains With The State
Unless They Are Withdrawn By Law Or Presidential Proclamation From Public Use.

Jean Tan Vs. Republic, Gr No. 193443, 16 April 2012, Second Division, Reyes.
28

Facts:

28
Degamo
20

On June 14, 2001, The Petitioners Filed With The Regional Trial Court (Rtc) Of Naic, Cavite,
An Application For Land Registration Covering A Parcel Of Land Identified As Lot 9972, Cad-
459-D Of Indang Cadastre, Situated In Barangay Bancod, Indang, Cavite And With An Area Of
6,920 Square Meters.
Acquired The Property From Gregorio Gatdula To A Deed Of Absolute Sale And Have Been In
Ocenp Since For More Than 30 Years
Rtc Granted Petitioners Application On July 29 2006
Ca Gave Due Course To Appeal Filed By Republic Since Petitioners Failed To Prove That Their
Predecessors-In Interest Have Been In Ocenp For 30 Years
If Appellees Have The Right To Register Their Title On Such Land Despite The Fact That Their
Possession Commenced Only After 12 June 1945.
Records Show That The Appellees Possession Over The Subject Property Can Be Reckoned
Only From 21 June 1983, The Date When According To Evidence, The Subject Property
Became Alienable And Disposable. From Said Date Up To The Filing Of The Application For
Registration Of Title Over The Subject Property On 14 June 2001, Only Eighteen (18) Years
Had Lapsed. Thus, Appellees Possession Of The Subject Property Fell Short Of The
Requirement Of Open, Continuous And Exclusive Possession Of At Least 30 Years
Ca Granted And Reversed Rtc

Issue:
1. Whether The Petitioners Have Proven Themselves Qualified To The Benefits Under The
Relevant Laws On The Confirmation Of Imperfect Or Incomplete Titles.

Held:
1. No, Petitioners Have Not Proven Themselves To Be Qualified. Commonwealth Act No. 141,
Otherwise Known As The Public Land Act Governs The Classification And Disposition Of Lands
Forming Part Of The Public Domain. Section 11 Thereof Provides That One Of The Modes Of
Disposing Public Lands Suitable For Agricultural Purposes Is By Confirmation Of Imperfect Or
Incomplete Titles. Section 48 Thereof Enumerates Those Who Are Considered To Have
Acquired An Imperfect Or Incomplete Title Over An Alienable And Disposable Public Land. The
Petitioners Application Is Obviously Anchored On Section 14(2) Of P.D. No. 1529 As They Do
Not Claim To Have Possessed, By Themselves Or Their Predecessors-In-Interest, The Subject
Property Since June 12, 1945 Or Earlier. That It Was Thru Prescription That They Had
Acquired An Imperfect Title Over The Subject Property Is The Foundation Upon Which The
Petitioners Rest Their Application. Unfortunately, This Court Finds The Evidence Presented By
The Petitioners To Be Wanting. The Petitioners Failed To Demonstrate That They And Their
Predecessors-In-Interest Possessed The Property In The Requisite Manner

On This Basis, Respondent Would Have Been Eligible For Application For Registration Because
His Claim Of Ownership And Possession Over The Subject Property Even Exceeds Thirty (30)
Years. However, It Is Jurisprudentially Clear That The Thirty (30)-Year Period Of Prescription
For Purposes Of Acquiring Ownership And Registration Of Public Land Under Section 14 (2) Of
P.D. No. 1529 Only Begins From The Moment The State Expressly Declares That The Public
Dominion Property Is No Longer Intended For Public Service Or The Development Of The
National Wealth Or That The Property Has Been Converted Into Patrimonial.

Miscellaneous:

1. In Heirs Of Malabanan, This Court Ruled That Possession And Occupation Of An Alienable And
Disposable Public Land For The Periods Provided Under The Civil Code Do Not Automatically
Convert Said Property Into Private Property Or Release It From The Public Domain. There Must
Be An Express Declaration That The Property Is No Longer Intended For Public Service Or
Development Of National Wealth. Without Such Express Declaration, The Property, Even
If Classified As Alienable Or Disposable, Remains Property Of The State, And Thus,
May Not Be Acquired By Prescription.
2. Presidential Decree No. 1529 (P.D. No. 1529), Otherwise Known As The Property Registration
Decree, Is A Codification Of All The Laws Relative To The Registration Of Property And Section
14 Thereof Specifies Those Who Are Qualified To Register Their Incomplete Title Over An
Alienable And Disposable Public Land Under The Torrens System.
3. Article 420 (2) Makes Clear That Those Property 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 Are Public Dominion Property
21

4. Possession Is Open When It Is Patent, Visible, Apparent, Notorious And Not Clandestine. It Is
Continuous When Uninterrupted, Unbroken And Not Intermittent Or Occasional; Exclusive
When The Adverse Possessor Can Show Exclusive Dominion Over The Land And An
Appropriation Of It To His Own Use And Benefit; And Notorious When It Is So Conspicuous
That It Is Generally Known And Talked Of By The Public Or The People In The Neighborhood.
The Party Who Asserts Ownership By Adverse Possession Must Prove The Presence Of The
Essential Elements Of Acquisitive Prescription
5. Tax Declarations Per Se Do Not Qualify As Competent Evidence Of Actual Possession For
Purposes Of Prescription.

Ideals, Inc. V Psalm
29

Gr No. 192088. October 9, 2012. 2
nd
Div. Villarama, Jr.

Facts:
Power Sector Assets And Liabilities Management Corporation (Psalm) Is A Gocc Created Under The
Electric Power Industry Reform Act (Epira). Under Epira, Psalm Is Mandated To The Management And
Sale Of The Assets Of Npc.
Sometime In August 2005, Psalm Commenced The Privatization Of The 246 Mw Angat Hydro-Electric
Power Plant (Ahepp). Ahepp Became The Subject Of Bidding Where Korea-Waters Emerged As The
Highest Bidder After The Post-Bid Evaluation On May 5, 2010.
On May 19, 2010, Initiative For Dialogue And Empowerment Through Alternative Legal Services,
Inc. (Ideals), Et. Al., Filed A Petition With Prayer For Tro. Ideals Argued, Among Others That K-Water
Is A Foreign Corporation; Thus, The Award Of Sale By Psalm To The Former Is A Violation Of The
Constitutional Provision On The Appropriation And Utilization Of Water As A Natural Resource Limiting
Water Rights To Filipino Citizens And Corporations Which Are At Least 60% Filipino-Owned.

Issue: Whether The Sale Of Ahepp To K-Water Is A Valid

Held: No.
Sale Of The Ahepp To A Foreign Corporation Is Not Prohibited But Only Filipino Citizens And
Corporations 60% Of Whose Capital Is Owned By Filipinos May Be Granted Water Rights.
The State Policy Under Sec. 2, Art. Xii Of The Constitution About The Exploration, Development And
Utilization Of Natural Resources Is Implemented Through The Regulation Of Water Rights. Pd 1067,
The Water Code Of The Philippines, Is The Governing Law Regulating Water Resources And Rights.
This Law Is Clear That The Grant Of Water Rights Is Limited Only To Filipino Citizens And Juridical
Entities Duly Qualified By Law To Exploit And Develop Water Resources, Including Private Corporations
With Sixty Percent Of Their Capital Owned By Filipinos. However, What Was Sold To K-Water Was Not
The Water Rights But The Physical Plant Only.
What Is Water Right? Water Right Is The Privilege Granted By The Government To Appropriate
And Use Water. It Is The Right To Have The Water Flow So That Some Portion Of It May Be Reduced
To Possession And Be Made Private Property Of Individual, And It Is Therefore The Right To Divert
Water From Natural Stream By Artificial Means And Apply The Same To Beneficial Use.
The Process Of Generating Electric Power Using The Water From The Angat Dam Does Not
Constitute Water Appropriation; Hence Is Not The Acquisition Of Water Rights. K-Water Will
Be A Mere Operator Of The Angat Dam. In The Power Generation Activity, K-Water Will Have To Utilize
The Waters Already Extracted From The River And Impounded On The Dam. This Process Of
Generating Electric Power From The Dam Water Entering The Power Plants Does Not Constitute
Appropriation Within The Meaning Of Natural Resource Utilization In The Constitution And The Water
Code.
Rationale Why Power Generation Is Not An Exercise Of Water Right; Hence, Not Within
The Proscription. The Imposed Nationality Requirement By The Water Code Refers To The Privilege
To Appropriate And Use Water. This Means The Extraction Of Water Directly From Its Natural
Resources. Once Removed Therefrom, They Cease To Be Part Of The Natural Resources Of The
Country And Are The Subject Of Ordinary Commerce And May Be Acquired By Foreigners. Thus, A
Foreign Entity May Legally Process Or Treat Water After Its Removal From A Natural Source By A
Qualified Person, Natural Or Juridical. In The Present Case, The Non-Power Components And
Structures Shall Be Retained And Maintained By The Government Entities Concerned. This Is Not Only
A Sufficient Compliance Of Constitutional Requirement Of Full Control And Supervision Of The State In
The Exploitation, Development And Utilization Of Natural Resources. It Is Also Enough Safeguard
Against The Evil Sought To Be Avoided By The Constitutional Reservation.

Woodridge School Inc Vs. Arb Construction
30

29
Avila.
30
Degamo.
22

Principle Of Law: The Use Of The Subdivision Roads By The General Public Does Not Strip It Of Its
Private Character. The Road Is Not Converted Into Public Property By Mere Tolerance Of The Tolerance
Of The Subdivision Owner Of The Publics Passage Through It. The Transfer Of Ownership From The
Subdivision Owner-Developer To The Local Government Is Not Automatic But Requires A Positive Act
From The Owner-Developer Before The City Or Municipality Can Acquire Dominion Over The
Subdivision Roads. Therefore, Until And Unless The Roads Are Donated, Ownership Remains With The
Owner-Developer

Facts:
Woodridge Is The Usufructuary Of A Parcel Of Land Of Spouses Ernesto T. Matugas And
Filomena U. Matugas. Its Co-Petitioner, Miguela Jimenez-Javier, Is The Registered Owner Of
The Adjacent Lot Under Tct No. T-330688.
Arb Is The Owner And Developer Of Soldiers Hills Subdivision In Bacoor, Cavite, Which Is
Composed Of Four Phases. Phase I Of The Subdivision Was Already Accessible From The
Marcos Alvarez Avenue. To Provide The Same Accessibility To The Residents Of Phase Ii Of The
Subdivision, Arb Constructed The Disputed Road To Link The Two Phases.
Petitioners Properties Sit Right In The Middle Of Several Estates. Initially, Petitioners Offered
To Pay Arb 50k As Indemnity For The Use Of The Road. Arb Refused The Offer And Fenced The
Perimeter Of The Road Fronting The Properties Of Petitioner. By Doing So, Arb Effectively Cut
Off Petitioners Access To And From The Public Highway.
Failed To Settle The Matter Amicably. Petitioners Jointly Filed A Complaint In Rtc To Enjoin Arb
From Depriving Them Of The Use Of The Disputed Subdivision Road And Seek To A
Compulsory Right Of Way After Payment Of Proper Indemnity. Tc Found For Petitioner. The
Government Automatically Becomes The Owner Of The Subdivisions Roads The Moment The
Subdivision Plan Is Approved. Thus, The Subdivision Owner Can No Longer Sell Or Alienate
The Roads For They Are Already Owned By The Government. Accordingly, Arb Cannot Prevent
Plaintiffs From Using The Road As The Same Belongs To The Government.
Arb Elevated The Case To Ca - Respondent Arb Elevated Case To Ca. Appellate Court Reversed
Tc Decision And Went On To Rule That A Compulsory Right Of Way Exists In Favor Of
Petitioners As There Is No Other Existing Outlet To And From Petitioners Properties To The
Highway. Awarded 500,00 To Arb As Compensation For The Wear And Tear That Petitioners
Use Of Road Would Contribute To.
Hence, Present Petition. Contested That Road Lot Is Of Public Dominion Pursuant To Article
420cc Which Falls Under The Last Category Others Of Similar Character. Hence, It Is A
Public Dominion Which Can Be Used By The General Public Without Need For Compensation.
Also Assert That 50k Should Be Enough To Compensate Them.

Issues
1. Whether Subject Road Has Already Become Part Of The Public Property As Contemplated
Under The Law Art 420 (1), And As Such Not A Valid Subject For Easement.
2. Whether Petitioners Need Not Pay Arb For Use Of Disputed Road

Ruling
1. First Issue: Sc Disagrees
In The Case Of Abellana, Sr. V. Court Of Appeals, The Court Held That "The Road Lots In A
Private Subdivision Are Private Property, Hence, The Local Government Should First Acquire
Them By Donation, Purchase, Or Expropriation, If They Are To Be Utilized As A Public Road."
Otherwise, They Remain To Be Private Properties Of The Owner-Developer.
a. Contrary To Petitioner, The Use Of The Subdivision Roads By General Public Does Not Strip
It Of Its Private Character. The Road Is Not Converted Into Public Property By Mere
Tolerance Of The Subdivision Owner Of The Public's Passage Through It. To Repeat, "The
Local Government Should First Acquire Them By Donation, Purchase, Or Expropriation, If
They Are To Be Utilized As A Public Road." This Is Provided For Under Section 2, Pd No.
1216:
o Upon Their Completion As Certified To By The Authority, The Roads, Alleys, Sidewalks
And Playgrounds Shall Be Donated By The Owner Or Developer To The City Or
Municipality And It Shall Be Mandatory For The Local Governments To Accept Them
Provided, However, That The Parks And Playgrounds May Be Donated To The
Homeowners Association Of The Project With The Consent Of The City Or Municipality
Concerned
b. The Law Is Clear. The Transfer Of Ownership From The Subdivision Owner-Developer To
The Local Government Is Not Automatic But Requires A Positive Act From The Owner-
Developer Before The City Or Municipality Can Acquire Dominion Over The Subdivision
23

Roads. Therefore, Until And Unless The Roads Are Donated, Ownership Remains With The
Owner-Developer.
c. Since No Donation Has Been Made In Favor Of Any Local Government And The Title To The
Road Lot Is Still Registered Under Arbs Name, The Disputed Property Remains Private.
2. Second Issue: Sc Says No.
a. In Order To Be Entitled To A Legal Easement Of Right Of Way, The Following Requisites
Must Concur: (1) The Dominant Estate Is Surrounded By Other Immovables And Has No
Adequate Outlet To A Public Highway; (2) Payment Of Proper Indemnity; (3) The Isolation
Was Not Due To Acts Of The Proprietor Of The Dominant Estate And; (4) The Right Of Way
Claimed Is At The Point Least Prejudicial To The Servient Estate. In The Present Case, All
Of The Requisites Are Present Except For Number Two.
d. The Appellate And Trial Courts Found That The Properties Of Petitioners Are Enclosed By
Other Estates Without Any Adequate Access To A Public Highway Except The Subject Road
Lot Which Leads To Marcos Alvarez Avenue. Although It Was Shown That The Shortest
Distance From The Properties To The Highway Is Toward The East Across A Creek, This
Alternative Route Does Not Provide An Adequate Outlet For The Students Of The Proposed
School.
e. The Civil Code Categorically Provides For The Measure By Which The Proper Indemnity
May Be Computed. Under Article 649, Paragraph 2, It Is Stated:
a. Should This Easement Be Established In Such A Manner That Its Use May Be
Continuous For All The Needs Of The Dominant Estate, Establishing A Permanent
Passage, The Indemnity Shall Consist Of The Value Of The Land Occupied And The
Amount Of The Damage Caused To The Servient Estate.
f. Having Settled The Legal Issues, The Supreme Court Ordered The Remand Of The Case
To The Trial Court For The Reception Of Evidence And Determination Of The Limits Of The
Property To Be Covered By The Easement, The Proper Indemnity To Be Paid And The
Respective Contributions Of Petitioners.

Francisco Chavez V. Public Estates Authority And Amari Coastal Bay Dev. Co., Gr No 133250,
9 July 2002. En Banc, Carpio.
3132

Principles Of Law: Note: Distinguish Between Foreshore Lands Which Have Already Been Declared
Available For Public Disposition And Alienation And Those Which Are Still Submerged In Water; In This
Case, While Freedom Islands Are Available For Disposition And Alienation As Conceded By The Acts Of
Corazon Aquino, The Inclusion Of 592.15 Hectares In The Jva Is Ultra Vires;
Facts
1973 Commissioner Of Public Highways Signed A Contract With Cdcp To Reclaim Certain
Offshore And Foreshore Lands Of Manila Bay;
1977 Marcos Issued Pd 1084 And 1085 Giving Power To Pea To Sell, Acquire, Transfer And
Kinds Of Lands; 1085 Transferred To Pea The Lands Reclaimed In Manila Bay;
1981 Marcos Ordered Pea To Fund And Own All Future Projects In Manila Cavite Coastal
Road Reclamation Project; A Moa Between Pea And Cdcp Was Executed In The Same Year;
In Short, The Works Are To Be Done By Cdcp While Pea Was To Fund The Project;
1988 Aquino Transferred To Pea Parcels Of Lands Called Freedom Islands Reclaimed Under
The Mccrrp;
1995 A Joint Venture Agreement Was Signed Between Pea And Amari To Develop Freedom
Islands Which Likewise Required Inclusion Of 250 Hectares Of Submerged Areas Surrounding
The Freedom Islands; The Jva Was Approved By Pea Board As Well As By Then President
Ramos; All This Happened Without Public Bidding;
1996 Because Of The Privilege Speech Of Then Senate President Maceda, The Committee On
Government Corporations And Public Enterprises And Blue Ribbon Conducted A Joint
Investigation Which Concluded That The Jva Was Illegal, And That Pea Cannot Transfer The
Reclaimed Lands To Amari Because They Were Lands Of Public Domain;
1998 Chavez Filed A Case As A Taxpayer Claiming That The Sale To Amari Was Invalid As
The Same Was An Inalienable Land And Cannot Be Disposed; He Likewise Claimed That Pea
Should Disclose The Terms Of The Sale Between Pea And Amari;

31
Cesista. 6 July 2014. This is the first Chavez case.
32
Very tricky case. Please note the nuances.
24

Under The Amended Jva, Amari Will Reimburse Pea The Sum Of P1,894,129,200.00 For Peas
Actual Cost In Partially Reclaiming The Freedom Islands. Amari Will Also Complete, At Its
Own Expense, The Reclamation Of The Freedom Islands. Amari Will Further Shoulder All The
Reclamation Costs Of All The Other Areas, Totaling 592.15 Hectares, Still To Be Reclaimed.
Amari And Pea Will Share, In The Proportion Of 70 Percent And 30 Percent, Respectively, The
Total Net Usable Area Which Is Defined In The Amended Jva As The Total Reclaimed Area Less
30 Percent Earmarked For Common Areas. Title To Amaris Share In The Net Usable Area,
Totaling 367.5 Hectares, Will Be Issued In The Name Of Amari.
Issues
1. Whether Transferors Of The Private Corporations Claimed Or Could Claim The Right To Judicial
Confirmation Of Their Imperfect Titles Under Title Ii Of Commonwealth Act. 141 (Ca No. 141
For Brevity)
2. Whether The Stipulations In The Amended Joint Venture Agreement For The Transfer To Amari
Of Certain Lands, Reclaimed And Still To Be Reclaimed, Violate The 1987 Constitution
3. Whether The Constitutional Right To Information Includes Those On-Going Negotiations
Held
1. No, They Cannot Claim Judicial Confirmation Of Their Imperfect Title Under Ca 141. Amari
Seeks To Acquire From Pea, A Public Corporation, Reclaimed Lands And Submerged Areas For
Non-Agricultural Purposes By Purchase Under Pd No. 1084 (Charter Of Pea) And Title Iii Of Ca
No. 141. Certain Undertakings By Amari Under The Amended Jva Constitute The
Consideration For The Purchase. Neither Amari Nor Pea Can Claim Judicial Confirmation Of
Their Titles Because The Lands Covered By The Amended Jva Are Newly Reclaimed Or Still To
Be Reclaimed. Judicial Confirmation Of Imperfect Title Requires Open, Continuous, Exclusive
And Notorious Occupation Of Agricultural Lands Of The Public Domain For At Least Thirty Years
Since June 12, 1945 Or Earlier.
2. Yes, It Did. Since Then And Until Now, The Only Way The Government Can Sell To Private
Parties Government Reclaimed And Marshy Disposable Lands Of The Public Domain Is For The
Legislature To Pass A Law Authorizing Such Sale. Ca No. 141 Does Not Authorize The
President To Reclassify Government Reclaimed And Marshy Lands Into Other Non-Agricultural
Lands Under Section 59 (D). Lands Classified Under Section 59 (D) Are The Only Alienable Or
Disposable Lands For Non-Agricultural Purposes That The Government Could Sell To Private
Parties.
3. Disclosure Includes Those Of On-Going Negotiations. Article Ii, Sec 28 States Policy Of Full
Public Disclosure Of All Its Transactions Involving Public Interest. When Sc Consulted The
1986 Con Com, It Was Disclosed That Steps And Consummated Transactions Are Both
Included. We Rule, Therefore, That The Constitutional Right To Information Includes Official
Information On On-Going Negotiations Before A Final Contract. The Information, However,
Must Constitute Definite Propositions By The Government And Should Not Cover Recognized
Exceptions Like Privileged Information, Military And Diplomatic Secrets And Similar Matters
Affecting National Security And Public Order. Congress Has Also Prescribed Other Limitations
On The Right To Information In Several Legislations
Miscellaneous
1. The Rationale Behind This State Policy Is Obvious. Government Reclaimed, Foreshore And
Marshy Public Lands For Non-Agricultural Purposes Retain Their Inherent Potential As Areas
For Public Service. This Is The Reason The Government Prohibited The Sale, And Only Allowed
The Lease, Of These Lands To Private Parties. The State Always Reserved These Lands For
Some Future Public Service.
2. Foreshore Lands Are Lands Of Public Dominion Intended For Public Use. So Too Are Lands
Reclaimed By The Government By Dredging, Filling, Or Other Means. Act 1654 Mandated That
The Control And Disposition Of The Foreshore And Lands Under Water Remained In The
National Government. Said Law Allowed Only The Leasing Of Reclaimed Land. The Public
Land Acts Of 1919 And 1936 Also Declared That The Foreshore And Lands Reclaimed By The
Government Were To Be Disposed Of To Private Parties By Lease Only And Not Otherwise.
Before Leasing, However, The Governor-General, Upon Recommendation Of The Secretary Of
Agriculture And Natural Resources, Had First To Determine That The Land Reclaimed Was Not
Necessary For The Public Service. This Requisite Must Have Been Met Before The Land Could
Be Disposed Of. But Even Then, The Foreshore And Lands Under Water Were Not To Be
25

Alienated And Sold To Private Parties. The Disposition Of The Reclaimed Land Was Only By
Lease. The Land Remained Property Of The State.
3. Contrary To Amaris Contention, The Commissioners Of The 1986 Constitutional Commission
Understood That The Right To Information Contemplates Inclusion Of Negotiations Leading To
The Consummation Of The Transaction. Certainly, A Consummated Contract Is Not A
Requirement For The Exercise Of The Right To Information. Otherwise, The People Can Never
Exercise The Right If No Contract Is Consummated, And If One Is Consummated, It May Be
Too Late For The Public To Expose Its Defects.
4. The Amended Jva Is Not An Ordinary Commercial Contract But One Which Seeks To Transfer
Title And Ownership To 367.5 Hectares Of Reclaimed Lands And Submerged Areas Of Manila
Bay To A Single Private Corporation.
5. The Spanish Law Of Waters Of 1866 Was The First Statutory Law Governing The Ownership
And Disposition Of Reclaimed Lands In The Philippines. On May 18, 1907, The Philippine
Commission Enacted Act No. 1654 Which Provided For The Lease, But Not The Sale, Of
Reclaimed Lands Of The Government To Corporations And Individuals. Later, On November
29, 1919, The Philippine Legislature Approved Act No. 2874, The Public Land Act, Which
Authorized The Lease, But Not The Sale, Of Reclaimed Lands Of The Government To
Corporations And Individuals. On November 7, 1936, The National Assembly Passed
Commonwealth Act No. 141, Also Known As The Public Land Act, Which Authorized The Lease,
But Not The Sale, Of Reclaimed Lands Of The Government To Corporations And Individuals.
Ca No. 141 Continues To This Day As The General Law Governing The Classification And
Disposition Of Lands Of The Public Domain.
6. The Distinction Between This Case And The Nha Case Is That Pea Is Not An End User. It
Merely Redistributes The Land.
Case Mind Map
1. Is The Reclamation Devoted For Public Use Or Is It One For Public Service? Either Way, They
Are Part Of Public Dominion. Property Of Public Dominion Referred Not Only To Property
Devoted To Public Use, But Also To Property Not So Used But Employed To Develop The
National Wealth. This Class Of Property Constituted Property Of Public Dominion Although
Employed For Some Economic Or Commercial Activity To Increase The National Wealth.
2. Act No. 1654 Mandated That The Government Should Retain Title To All Lands Reclaimed By
The Government. The Act Also Vested In The Government Control And Disposition Of
Foreshore Lands. Private Parties Could Lease Lands Reclaimed By The Government Only If
These Lands Were No Longer Needed For Public Purpose. Act No. 1654 Mandated Public
Bidding In The Lease Of Government Reclaimed Lands. Act No. 1654 Made Government
Reclaimed Lands Sui Generis In That Unlike Other Public Lands Which The Government Could
Sell To Private Parties, These Reclaimed Lands Were Available Only For Lease To Private
Parties.
Francisco Chavez V. Nha, Gr No. 164527, 15 August 2007, En Banc, Velasco.
3334

Principles Of Law: Public Land Previously Declared Alienable And Disposable (Through Positive
Executive Or Legislative Act) May Be Transferred To A Corporation Provided That Such Corporation Is
At Least 60% Filipino-Owned; Foreshore And Submerged Lands May Be Disposed, Alienated Or Sold
Provided That There Is An Act Declaring It To Be Alienable And Disposable And Further, That It Has
Been Declared To Be Not Necessarily For Public Use; This Is Different From The First Chavez Case As
The First One Absolutely Did Not Have Bidding, And In The First Chavez Case, The Foreshore And
Submerged Lands Surrounding The Freedom Island Were Not Declared By Executive Of Legislative To
Be Alienable And Disposable
Facts
1988 President Corazon Aquino Issued Mo 161 Creating The Mm Waste Management Plan;
Included Therein Are 15 Government Agencies; More Specifically, Nha Was Tasked To Develop
Low-Cost Housing Projects While Denr Was Tasked To Ensure Compliance With Environmental
Rules;
1990 The Build-Operate-And-Transfer Law Was Promulgated Which Recognized The
Indispensable Role Of Private Sector In Certain Infrastructure Facilities Program By The
Government; The Law Described A Relationship Between Private Sector And Government

33
34
Second Chavez case.
26

Whereby The Private Sector May Be Granted A Portion Of The Estate [Reclaimed] In
Accordance With The Constitution;
Pursuant To The Law (Ra 6957), The Smokey Mountain Dev And Reclamation Project Was
Initiated By The Congress Which, Among Others, Allowed The Development To Be Coursed
Through A Venture With A Private Institution; Bids For Developers Were Published And R-Ii
(One Of Respondents) Won Along With San Jose Builders;
Among The Powers Granted By Congress To Nha Was These Parcels Of Land Of Public
Domain Are Hereby Placed Under The Administration And Disposition Of The National Housing
Authority To Develop, Subdivide And Dispose To Qualified Beneficiaries, As Well As Its
Development For Mix Land Use (Commercial/Industrial) To Provide Employment Opportunities
To On-Site Families And Additional Areas For Port-Related Activities.
The Joint Venture Plan Laid Down The Following Profit Sharing Rbi Gets 40 Hectares Of
Reclaimed Land; Commercial Area In Sm Composed Of 1.3 Hectares And To Own All The
Constructed Units Of Medium Rise Low Cost Permanent Housing Units Beyond The 3,500 Units
Share Of The [Nha];
The Joint Venture Plan Was Later On Approved By The Office Of The President With A
Stipulation That 79 Hectares Of The Radial Road In The Manila Bay Will Be Paid In Favor Of
The Developer;
1994 Ramos, Through The Recommendation Of Sm Execomm Increased The Foreshore Or
Submerged Area To Be Reclaimed From 400k To 790k;
1998 A Suspension On The Project Was Instituted By Both Parties Due To The Depreciation
Of Peso And Increasing Cost Of Production; At About The Same Time, The Developer
Demanded For Payment On The Works Already Done In The Original Project And The
Extension Of 220 Hectares;
2002 The Transaction Eventually Led To The Nha Unilaterally Terminating The Project; As A
Result, Developer Demanded Payment Of Just Compensation And Payment Of All The
Advanced Costs Incurred In The Development; A Settlement Was Reached Whereby Nha Paid
Developer 250m Plus A Concession Of 3 Hectares Of Vitas Industrial Area;
Meanwhile, Asset Pool (Smokey Mountain Asset Pool) Entered Into An Agreement With
Harbour Centre For Development And Operations Of Port In The Area; In Order To Pay The
Agreement (Which Required Subscription To Shares Of The Harbour Centre), Asset Pool Paid
Via The 10 Hectare Land It Acquired From Nha;
Issue
1. Whether It Was Valid For Nha And Developers To Reclaim Foreshore And Submerged Lands Of
Public Domain As This Is Vested With The Pea Exclusively
2. Whether Denr Has Given Nha And Developer To Reclaim Foreshore And Submerged Lands
3. Whether The Reclaimed And Foreshore Lands May Be Acquired By Developers
4. Whether The Foreshore And Submerged Lands Have Been Declared Alienable And Disposable
5. Whether The Foreshore And Submerged Lands Are Still Needed For Public Use
6. Whether This Land Can Be Sold To A Corporation
Held
1. Yes. Eo 525 Laid Down 3 Requisites For A Valid Reclamation Project: A) Approval By The
President, B) Favourable Recommendation Of Pea And C) Undertaken By Pea Or By Any
Person Or Entity Pursuant To A Contract It Executed With Pea Or By The National Government
Agency Or Entity Authorized Under Its Charter To Reclaim Lands Subject To Consultation With
Pea
2. It Is Not Needed In The Case At Bar. The President Himself Has Given Authority For The
Project. Hence, He Has Exercised Power Of Control Over The Subject Matter.
3. Yes. Rbi May Validly Acquire The Reclaimed Foreshore And Submerged Lands For Several
Reasons. First, Mo 415 Issued By President Aquino, Of Which Sec. 4 States That [T]He Land
Covered By The Smokey Mountain Dumpsite Is Hereby Conveyed To The National Housing
Authority As Well As The Area To Be Reclaimed Across R-10. Second, The Directive To
Transfer The Lands Once Reclaimed To The Nha Implicitly Carries With It The Declaration That
Said Lands Are Alienable And Disposable. Otherwise, The Nha Cannot Effectively Use Them In
Its Housing And Resettlement Project. Third, Pn 465 By Ramos Allowing Nha To Dispose The
Reclaimed Lands To Qualified Beneficiaries May Only Be Given Life If Nha Can Dispose And
Convey Lands To The Public;
27

4. Apparently Yes. In This Rbi Case, Mo 415 Of Former President Aquino And Proclamation No. 39
Of Then President Ramos, Coupled With Special Patents Nos. 3591, 3592, And 3598, Classified
The Reclaimed Lands As Alienable And Disposable
5. While There Was No Categorical Statement That These Lands Are Not Anymore Needed For
Public Use, The Supreme Court Argued In Respondents Favor Stating That The Declaration Of
Aquino And Ramos Are Both Implicit Executive Determination That The Land Is No Longer
Needed For Public Use Or Public Service. Since The Lands May Only Be Sold In Relation To The
Purpose In Smokey Mountain Disqualifying The Rest Of The Filipino People, The Land Is
Therefore Not Needed For Public Use.
6. Ra 6957 As Amended By Ra 7718 Explicitly States That A Contractor Can Be Paid A Portion As
Percentage Of The Reclaimed Land Subject To The Constitutional Requirement That Only
Filipino Citizens Or Corporations With At Least 60% Filipino Equity Can Acquire The Same. It
Cannot Be Denied That Rbi Is A Private Corporation, Where Filipino Citizens Own At Least 60%
Of The Stocks. Thus, The Transfer To Rbi Is Valid And Constitutional.
Miscellaneous
1. Pea Is A Custodian Of Public Lands; Nha Is An End-User (Distinction Between Pea And Nha)
2. Effect Of Special Patent Converts The Land To Alienable And Agricultural Land
3. However, Issuance Of Patent Is Not Enough To Transfer Ownership To Corporation
4. The Rule On Non Acquisition By Prescription In Cases Of Public Domain Does Not Apply In
Patrimonial Lands

How To Transfer Reclaimed Case
1. Declare Alienable And Disposable
2. President Issues Special Patent
35
In Favor Of Nha (Miscellaneous, Special Patent, Homestead
Patent, Emancipation Patent)
36

3. Apply Certificate Of Title In Favor Of Nha In The Strength Of The Patent
37

Estate Of The Late Yujuico V. Republic And Ca, Gr No. 168661, 26 October 2007, Second
Division, Velasco
38

Principles Of Law: Doctrine Of Equitable Estoppel Against The Government; Definition Of Laches
(Misc.); A Judicial Compromise Has The Effect Of Res Judicata;
Facts
1973 Fermina Castro Applied For Registration And Confirmation Of Her Lot Situated In
Paraaque; A Private Oppositor And The Solicitor General Intervened But Both Were Dismissed
By The Court The Private One Having Filed After The Expiration Given By The Court And The
Sol Gens Was Filed After The Entry Of The Order Of General Default;
An Order In Favor Of Castro Was Given By The Trial Court And An Oct Was Issued; The Land
Was Later On Sold To Yujuico Which Land Was Divided Into Two, One In Yujuicos Name And
The Other, A Vendee Named Carpio;
Records Will Show That Both Lands Of Yujuico And Carpio Were At Some Point Mortgaged;
1977 Pd 1085 Was Issued Conveying The Land Subject Of Manila-Cavite Coastal Road
Project In Favor Of Pea; Yujuico And Carpio Soon Found That The Road Overlapped Their
Property And That Pea In Fact Sold Part Of Their Property;
A Compromise Agreement Was Initially Reached Exchanging Properties Between The
Petitioners And Pea; A Subsequent Administration In Pea Deferred From The Agreement And
Decided To File A Case Cancelling The Compromise; Both Rtc And Ca Dismissed For Lack Of
Merit;

35
Patent is not a title but a basis of acquisition of title
36
At this time, the land is still property of public dominion.
37
The land then becomes patrimonial property
38
28

2001 The Republic Filed A Case Against Herein Petitioners Claiming That When Castro
Registered The Land In 1973, It Was In Fact Still Part Of The Manila Bay And Could Not Have
Been Disposed Or Alienated; Hence, The Titles Acquired By Yujuico And Carpio Are Both Void;
Trial Court Ordered That It Has Been 28 Years Since A Finding Was Issued By Court In
Regards With The Registration Of Castro; Further, Osg Had Participated In The Lrc Case But
Did Not Raise Said Defense; Hence, The Republic Is Barred By Prior Judgment;
Ca Ruled That (A) Foreshores Are Properties Of The State Intended For Public Purpose And (B)
Res Judicata Does Not Apply To Lands Of Public Domains;
Issues
1. Is The Reversion Suit Proper?
2. Is The Present Petition Estopped By Laches?
3. Did Ca Apply Res Judicata Erroneously?
Held
1. No, It Was Not. First Of All, The Reversion Suit Was Filed In The Paraaque Rtc When It
Should Have Been Filed In The Ca As Mandated By Bp 129
2. Yes, The Government Is Estopped In This Particular Case. Estoppels Against The Public Are
Little Favored. They Should Not Be Invoked Except In Rare And Unusual Circumstances, And
May Not Be Invoked Where They Would Operate To Defeat The Effective Operation Of A Policy
Adopted To Protect The Public. They Must Be Applied With Circumspection And Should Be
Applied Only In Those Special Cases Where The Interests Of Justice Clearly Require It.
Nevertheless, The Government Must Not Be Allowed To Deal Dishonorably Or Capriciously
With Its Citizens, And Must Not Play An Ignoble Part Or Do A Shabby Thing; And Subject To
Limitations X X X, The Doctrine Of Equitable Estoppel May Be Invoked Against Public
Authorities As Well As Against Private Individuals
3. Yes, Ca Should Have Recognized That Res Judicata Is Applicable In The Case At Bar. A
Judicial Compromise Has The Effect Of Res Judicata. We Also Made Clear That A Judgment
Based On A Compromise Agreement Is A Judgment On The Merits, Wherein The Parties Have
Validly Entered Into Stipulations And The Evidence Was Duly Considered By The Trial Court
That Approved The Agreement. In The Instant Case, The May 18, 1998 Resolution Approving
The Compromise Agreement Confirmed The Favorable Decision Directing The Registration Of
The Lot To Castros Name In Lrc Case No. N-8239.
Miscellaneous:
1. Equitable Estoppel May Be Invoked Against Public Authorities When As In This Case, The Lot
Was Already Alienated To Innocent Buyers For Value And The Government Did Not Undertake
Any Act To Contest The Title For An Unreasonable Length Of Time.
2. Laches Is The Failure Or Neglect, For An Unreasonable And Unexplained Length Of Time, To
Do That Which By Exercising Due Diligence Could Or Should Have Been Done Earlier. It Is
Negligence Or Omission To Assert A Right Within A Reasonable Time, Warranting A
Presumption That The Party Entitled Thereto Has Either Abandoned Or Declined To Assert It
Land Bank Of The Philippines V. Republic Of The Philippines, Gr No. 150824, 4 February
2008, Third Division, Reyes.
39

Principles Of Law: As Correctly Pointed Out By The Osg, Mortgagees Of Non-Disposable Lands, Titles
To Which Were Erroneously Issued, Acquire No Protection Under The Land Registration Law; Public
Land Fraudulently Included In Patents Or Certificates Of Title May Be Recovered Or Reverted To The
State
Facts
1969 Mother Title Was Issued In Favor Of Bugayong Covering A Lot In Davao Which Is
Marshy And Under Water During High Tide And Used To Be A Portion Of A Dry River Bed Near
The Mouth Of Davao River; The Original Title Was Divided Into Four Titles Which Were All
Named Under Bugayong;
Vital Fact: Only In 1981 Was The Land Declared Alienable And Disposable

39
7 July 2014.
29

The Land Was Initially Transferred To Sps Du Who Sold Parcel Of It To Sps. Dayola While
Retaining A Part Of It Still; The Remaining Lot Of Sps. Du Was Later On Sold To Lourdes Farm
And Later Executed A Mortgage Over The Property In Favor Of Land Bank;
1981 Some Residents Of The Land Subject Of This Dispute Filed A Petition To Assail The
Validity Of The Original Title; It Was Found Out That When Bugayong Applied For The
Registration, The Land Was Still A Forest Land And That He In Fact, Did Not Take Possession
Of Said Land;
A Case Was Then Filed By The Republic Through Osg To Declare The Titles Void; Rtc Favoured
The Republic And Declared The Titles Void And Ordered The Land To Be Returned To The
Mass Of Public Lands; Ca Likewise Went Against Lbp;
Lbps Defense: That It Was A Mortgagee In Good Faith And That If The Titles Will Be Declared
Void,Lourdes Farms Should Pay The Outstanding Debt Or Provide A Different Collateral;
Issues
1. Does Lbp Have A Mortgage Right Over The Land?
2. Will Laches Bar The Government From Assailing The Validity Of The Mother Title?
3. Was It A Valid Exercise Of Police Power?
Held
1. No. In The First Place, The Mortgagor Does Not Even Own The Land. Hence, Lbp Could Not
Have A Valid Mortgage Over The Land When The Same Is Not Even Alienable. Note That In
Art. 2085, One Of The Essential Requisites Of A Valid Mortgage Is - That The Pledgor Or
Mortgagor Be The Absolute Owner Of The Thing Pledged Or Mortgaged;
2. No, Even Prescription May Not Be Used As A Defense Against The Republic. And In So Far As
The Timeliness Of The Action Of The Government Is Concerned, It Is Basic That Prescription
Does Not Run Against The State. When The Government Is The Real Party In Interest, And Is
Proceeding Mainly To Assert Its Own Rights And Recover Its Own Property, There Can Be No
Defense On The Ground Of Laches Or Limitation. Public Land Fraudulently Included In
Patents Or Certificates Of Title May Be Recovered Or Reverted To The State In Accordance
With Section 101 Of The Public Land Act. Prescription Does Not Lie Against The State In Such
Cases For The Statute Of Limitations Does Not Run Against The State. The Right Of Reversion
Or Reconveyance To The State Is Not Barred By Prescription.
3. Yes, All Contracts Are Inferior To The Police Power Of The State. Further, Because Of The
Importance Of Forests To The Nation, The States Police Power Has Been Wielded To Regulate
The Use And Occupancy Of Forest And Forest Reserves.

Heirs Of Malabanan V. Republic, Gr No. 179987, 29 April 2009, En Banc, Tinga
40

Principles Of Law: 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. Accordingly, There Must Be
An Express Declaration By The State That The Public Dominion Property Is No Longer Intended For
Public Service Or The Development Of The National Wealth Or That The Property Has Been Converted
Into Patrimonial. Without Such Express Declaration, The Property, Even If Classified As Alienable Or
Disposable, Remains Property Of The Public Dominion. Thus Incapable Of Acquisition By Prescription.
It Is Only When Such Alienable And Disposable Lands Are Expressly Declared By The State To Be No
Longer Intended For Public Service Or For The Development Of The National Wealth That The Period
Of Acquisitive Prescription Can Begin To Run. Such Declaration Shall Be In The Form Of A Law Duly
Enacted By Congress Or A Presidential Proclamation In Cases Where The President Is Duly Authorized
By Law.
Facts
1998 Mario Malabanan Applied For Registration Of A Lot In Silang, Cavite, Which As He
Alleged, Was Bought For Eduardo Velasco;
One Of The Evidences Presented Was A Certification (Dated 2001) By Cenro Denr Stating
That The Property In Question Is Alienable And Disposable;
2002 A Decision In Favor Of Malaban Was Issued By The Trial Court; Osg Filed An Appeal
Before The Ca; Ca Reversed The Decision Claiming That The Requirement On Continuous
Possession Must Not Include The Time Prior To The Declaration Of The Land As Alienable And
Disposable;

40
7 July 2014.
30

Petitioners Submit That Open, Continuous, Exclusive And Notorious Possession Of An Alienable
Land Of The Public Domain For More Than 30 Years Ipso Jure Converts The Land Into Private
Property
Issue
1. Should The Open, Continuous, Exclusive And Notorious Possession And Occupation Start From
The Time The Land Was Declared As Alienable And Disposable?
2. May They Apply For Registration Under 14(1) Of Pd 1529?
3. May They Apply Fore Registration Under 14(2) Of Pd 1529?
Held
1. No. Such Interpretation Will Result In Absurd Consequences Such As That All Lands Prior To
June 12, 1945 Cannot Be Registered Notwithstanding The Fact That The Petitioners
Possession There Is Unchallenged For More Than 30 Years. The Law Seeks To Perfect An
Imperfect Title Springing Out Of A Bona Fide Claim Of Ownership.
2. No, They Cannot. There Is No Showing That They Have Been In Actual, Continuous, Exclusive
And Notorious Possession And Occupation Of The Land Since 12 June 1945 Or Earlier
3. No, They Cannot. Even If The Land Was Declared To Be Alienable And Disposable, It Is
Necessary That The Land Be Declared Not Anymore Needed For Public Use.
Miscellaneous
1. [T]He More Reasonable Interpretation Of Section 14(1) Is That It Merely Requires The
Property Sought To Be Registered As Already Alienable And Disposable At The Time The
Application For Registration Of Title Is Filed. If The State, At The Time The Application Is
Made, Has Not Yet Deemed It Proper To Release The Property For Alienation Or Disposition,
The Presumption Is That The Government Is Still Reserving The Right To Utilize The Property;
Hence, The Need To Preserve Its Ownership In The State Irrespective Of The Length Of
Adverse Possession Even If In Good Faith. However, If The Property Has Already Been
Classified As Alienable And Disposable, As It Is In This Case, Then There Is Already An
Intention On The Part Of The State To Abdicate Its Exclusive Prerogative Over The Property.
41

(Naguit Case)
2. History Of The 30-Year Rule:
a. 1957 Ra 1942 Was Promulgated Requiring Ocen Possession And Occupation Of Land
For 30 Years (First Source)
b. 1977 Pd 1073 Repealed Ra 1942 And Required That The Reckoning Period Must Be
June 12, 1945 (First Source)
c. Section 48(B) Of The Public Land Act, As Amended By Rep. Act No. 1942 - Did Not
Refer To Or Call Into Application The Civil Code Provisions On Prescription. It Merely
Set Forth A Requisite Thirty-Year Possession Period Immediately Preceding The
Application For Confirmation Of Title, Without Any Qualification As To Whether The
Property Should Be Declared Alienable At The Beginning Of, And Continue As Such,
Throughout The Entire Thirty-(30) Years. There Is Neither Statutory Nor
Jurisprudential Basis To Assert Rep. Act No. 1942 Had Mandated Such A Requirement,
Similar To Our Earlier Finding With Respect To The Present Language Of Section
48(B), Which Now Sets 12 June 1945 As The Point Of Reference.
d. Art 1137, Ncc Rule On Extraordinary Prescription Is 30 Years!
3. Accordingly, There Must Be An Express Declaration By The State That The Public Dominion
Property Is No Longer Intended For Public Service Or The Development Of The National Wealth
Or That The Property Has Been Converted Into Patrimonial. Without Such Express Declaration,
The Property, Even If Classified As Alienable Or Disposable, Remains Property Of The Public
Dominion, Pursuant To Article 420(2), And Thus Incapable Of Acquisition By Prescription. It Is
Only When Such Alienable And Disposable Lands Are Expressly Declared By The State To Be
No Longer Intended For Public Service Or For The Development Of The National Wealth That
The Period Of Acquisitive Prescription Can Begin To Run. Such Declaration Shall Be In The
Form Of A Law Duly Enacted By Congress Or A Presidential Proclamation In Cases Where The
President Is Duly Authorized By Law.
4. Declaration Of Alienable And Disposable Not Enough For Property To Be Patrimonial
5. Requisites For Property To Be Patrimonial
a. Declaration That It Is Alienable And Disposable

41
Judicial confirmation of imperfect title
31

b. Express Manifestation That Property Is No Longer Needed For Public Use And Service
Secretary Of Denr V. Mayor Jose Yap, G.R. No. 167707, October 8, 2008. En Banc, Reyes.
42

Principles Of Law: A) The Courts Have A Right To Presume, In The Absence Of Evidence To The
Contrary, That In Each Case The Lands Are Agricultural Lands Until The Contrary Is Shown; B) A
Positive Act Declaring Land As Alienable And Disposable Is Required Before Occupants Of Lands Can
Survey And Acquire Title To The Same
Facts
On One Hand, Respondents In This Case Are Inhabitants Of Boracay Island Who Intend To
Perfect Their Titles To Their Boracay Lands Through A Titling Survey;
On The Other, Pp 1801 Was Declared By Then Pres. Marcos On 10 November 1978 Which
Pronounced Boracay To Be Tourist Zones And Marine Reserves; According To Respondents,
This Declaration Has Precluded Them From Perfecting Their Titles;
Claimants Argue That They Have Been In Open, Continuous, Exclusive And Notorious
Possession And Occupation In Boracay Since 12 June 1945; Osg Responds By Saying That
Boracay Is An Unclassified Land And Thus, Part Of The Public Forest Not Available For
Alienation;
Both Rtc And Ca Confirmed That Pp 1801 Did Not Pose Any Obstacle In The Titling Of Boracay
Lands
On 2006, Pgma Issued Pn 1064 Classifying Boracay Into 400 Hectares Of Reserved Forest
Land And 628.96 Hectares Of Agricultural Land; Claimants Argue That Pn 1064 Infringe On
Their Prior Vested Right;
Issues
1. What Are The Requisites For Judicial Confirmation Of An Imperfect Title Under Ca 141?
2. Was Boracay A Classified Land?
3. What Is The Regalian Doctrine?
4. Do The Claimants Have The Right To Conduct Survey And Secure Titles Over Their Lands In
Boracay?
5. Is There Merit In Claimants Position That Their Continued Possession Under Act 926 (First
Public Land Act) Ipso Facto Converted Parcels Of Boracay Island Into Private Lands?
6. Is There A Distinction Between A Forest And A Forest Land?
Held
1. There Are Two Requisites For Judicial Confirmation Of Imperfect Or Incomplete Title Under Ca
No. 141, Namely: (1) Open, Continuous, Exclusive, And Notorious Possession And Occupation
Of The Subject Land By Himself Or Through His Predecessors-In-Interest Under A Bona
Fide Claim Of Ownership Since Time Immemorial Or From June 12, 1945; And (2) The
Classification Of The Land As Alienable And Disposable Land Of The Public Domain.
2. No, It Is Not. It Has Not Been Classified Into Any Of The Grand Divisions Provided By The
Three Preceding Constitutions Of The Philippines. Such Unclassified Lands, Under Pd No. 705
Are Considered Public Forest.
3. The Regalian Doctrine Dictates That All Lands Of The Public Domain Belong To The State, That
The State Is The Source Of Any Asserted Right To Ownership Of Land And Charged With The
Conservation Of Such Patrimony.
4. No, They Do Not. Boracay Islands Being An Unclassified Land Is Covered Under The
Presumption That It Is A Forest Land. However, Note That Pn 1064 Has Classified Boracay Into
Reserved Forest And Agricultural Lands.
5. No, Act No. 926 Merely Provided The Manner Through Which Land Registration Courts Would
Classify Lands Of The Public Domain
6. There Is A Big Difference Between Forest As Defined In A Dictionary And Forest Or Timber
Land As A Classification Of Lands Of The Public Domain As Appearing In Our Statutes. One Is
Descriptive Of What Appears On The Land While The Other Is A Legal Status, A Classification
For Legal Purposes. At Any Rate, The Court Is Tasked To Determine The Legal Status
Of Boracay Island, And Not Look Into Its Physical Layout.
Miscellaneous:

42
32

1. On February 1, 1903, The Philippine Legislature Passed Act No. 496, Otherwise Known As The
Land Registration Act. The Act Established A System Of Registration By Which Recorded Title
Becomes Absolute, Indefeasible, And Imprescriptible. This Is Known As The Torrens System
2. After The Passage Of The 1935 Constitution, Ca No. 141 Amended Act No. 2874 On December
1, 1936. To This Day, Ca No. 141, As Amended, Remains As The Existing General Law
Governing The Classification And Disposition Of Lands Of The Public Domain Other Than
Timber And Mineral Lands, And Privately Owned Lands Which Reverted To The State.
3. On June 11, 1978, Act No. 496 Was Amended And Updated By Pd No. 1529, Known As The
Property Registration Decree. It Was Enacted To Codify The Various Laws Relative To
Registration Of Property.[78] It Governs Registration Of Lands Under The Torrens System As
Well As Unregistered Lands, Including Chattel Mortgages.[79]
4. A Positive Act Declaring Land As Alienable And Disposable Is Required.

Vda De Tan Toco Vs. Municipal Council Of Iloilo, 49 Phil. 52.
43

Facts:
Widow Of Tan Toco Sued The Municipal Council For A Certain Amount Being The Purchase
Price Of Two Strips Of Land Which The Municipality Has Appropriated For Widening Said
Street. Cfi Sentenced Municipality To Pay.

Due To Lack Of Funds, Municipality Was Unable To Pay Said Judgment, Thus A Writ Of
Execution Was Issued. The Sheriff Attached Two Auto Trucks Used For Street Sprinkling, One
Police Automobile, The Police Stations And Concrete Structures With Corresponding Lots Which
Were Used As Markets.

The Provincial Fiscal Then Filed A Motion That Said Attachment On The Said Property Be
Dissolved It Being Violative Of The Rights Of The Municipality.

Issue: Won Said Aforementioned Property Of The Defendant Municipality Levied Upon Is Exempt
From Execution.

Ruling:
1. No. 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.
Miscellaneous:
1. The Principle Is That The Property For Public Use Of The State Is Not Within The Commerce Of
Man And, Consequently, Is Inalienable And Not Subject To Prescription. Likewise, Property
For Public Use Of The Municipality Is Not Within The Commerce Of Man So Long As It
Is Used By The Public And, Consequently, Said Property Is Also Inalienable.

2. It Is Generally Held That Property Owned By A Municipality, Where Not Used For A Public
Purpose But For Quasi Private Purposes, Is Subject To Execution On A Judgment Against The
Municipality, And May Be Sold. This Rule Applies To Shares Of Stock Owned By A Municipal
Corporation, And The Like. But The Mere Fact That Corporate Property Held For Public Uses Is
Being Temporarily Used For Private Purposes Does Not Make It Subject Execution
3. Whether Such Property Is Leviable Or Not Is To Be Determined By The Usage And
Purposes For Which It Is Held. The Rule Is That Property Held For Public Uses, Such As
Public Buildings, Streets, Squares Parks, Promenades, Wharves, Landing Places Fire Engines,
Hose And Hose Carriages, Engine Houses, Public Markets, Hospitals, Cemeteries, And
Generally Everything Held For Governmental Purposes, Is Not Subject To Levy And Sale Under
Execution Against Such Corporation. The Rule Also Applies To Funds In The Hands Of A Public
Officer

43
Degamo.
33

4. It Is Evident That The Movable And Immovable Property Of A Municipality,
Necessary For Governmental Purpose, May Not Be Attached And Sold For The
Payment Of A Judgment Against The Municipality. The Supreme Reason For This Rule Is
The Character Of The Public Use To Which Such Kind Of Property Is Devoted. The Necessity
For Government Service Justifies That The Property Of Public Of The Municipality Be Exempt
From Execution Just As It Is Necessary To Exempt Certain Property Of Private Individuals In
Accordance With Section 452 Of The Code Of Civil Procedure.
Pasay City Government Vs. Cfi, Gr No. L-32162, 28 September 1984.
44

Facts:
This Is A Petition For Review On Certiorari On Order Rendered By Cfi Of Manila Which Ordered
Writ Of Execution And Garnishment By Taking Possession Of The Amount Of P613,096.00
From The Deposits Of The Pasay City Government In The Branch Of The Philippine National
Bank In Pasay City And Delivering Them To The Plaintiff.
Respondents Appellee Vd Isip, Sons & Associates Represented By Vicente David Isip Entered
Into A Contract With City Of Pasay By Then Mayor Pablo Cuneta. Contract Was A Contract
And Agreement For The Construction Of A New Pasay City Hall. Pertinent Provision Of
Contract Stated That Contractor Shall Start Construction Advancing Needed Amount Of Money
For Each Stage And Pasay City To Reimburse Amount Spent By The Contractor.
Soon Thereafter, Contractor Progressed With The Construction Which Had The Estimated Value
Of 1.7m Of The Total Contract Price 4.9m. Appellants Paid Only P1.1m Leaving 600k
Immediately Due. Notwithstanding The Demands Made By Contractor, The City Of Pasay
Failed To Remit Lacking Reimbursement.
Issue:
1. Whether The Amount Of The Performance Bond Should Cover The Whole Unfinished Project Or
Only The Next Stage Of Work To Be Done
Ruling:
1. Yes. Sub-Paragraph B Of Paragraph 1 Of The Compromise Agreement Contemplated A
Divisible Obligation. Therefore, The Performance Bond Should Be In Proportion To The
Uncompleted Work.
o The Said Stipulation, If Read Together With The Stage-By-Stage Construction And
Payment Approach From The Agreements, Leads To The Conclusion That Parties
Contemplated A Divisible Obligation, Which Necessitates That The Performance Bond
Be In Proportion To The Uncompleted Work
o What Is Crucial In Sub-Paragraph B Of Paragraph 1 Of The Compromise Agreement
Are The Words "In Proportion." If The Parties Really Intended The Performance Bond
To Refer To The Whole Unfinished Work, Then The Provision Should Have Required
The Plaintiff Contractor To Submit And File A New Performance Bond To Cover The
Remaining Value Cost Of The Unfinished Work Of The Construction. Using The Words
In Proportion Then Significantly Changed The Meaning Of The Paragraph To Ultimately
Mean A Performance Bond Equal To 20% Of The Next Stage Of Work To Be Done.
Espiritu Vs. Municipal Council Of Pozorrubio, 102 Phil 867.
45

Principles Of Law: Town Plazas Are Properties Of Public Dominion, To Be Devoted To Public Use And
To Be Made Available To The Public In General. They Are Outside The Commerce Of Man And Cannot
Be Disposed Of Or Even Leased By The Municipality To Private Parties. They Cannot Be Used For The
Construction Of Market Stalls, Specially Of Residences, And Such Structures Constitute A Nuisance
Subject To Abatement According To Law. While In Case Of War Or During An Emegency, Town Plazas
May Be Occupied Temporarily By Private Individuals, When The Emergency Has Ceased, Said
Temporary Occupation Or Use Must Also Cease, And The Town Officials Should See To It That The
Town Plazas Should Ever Be Kept Open To The Public And Free From Encumbrances Or Illegal Private
Constructions
Facts:

44
Degamo.
45
Degamo.
34

This Is An Appeal Which Dismissed The Petition For Prohibition And The Preliminary Injunction
Against Appellees And Ordering The Removal Of Appellants Stalls From The Public Plaza Of
Appellee Municipality.

Appellants Voluntarily Vacated Public Plaza Of Pozorrubio By Transferring And Removing Their
Buildings And Therefrom To Private Lots Fronting The Plaza.

Municipality Then Begun The Construction Of Concrete Fences In The Premises, Formerly
Occupied By Appellants, Without Any Complaint Whatsoever From Them Or Their Counsel.

During Last World War, The Market Building Of The Town Of Pozorrubio Was Destroyed, And
After, Liberation, The Market Vendors Began Constructing Temporary And Make-Shifts Stalls
As Residence, On A Portion Of The Town Plaza. The Municipal Treasurer, However, Collected
Fees From These Stall Owners.

Issue:
1. Won Said Aforementioned Property Of The Defendant Municipality Levied Upon Is Exempt
From Execution.

Ruling:
1. Said Town Plaza Cannot Be Used For The Construction Of Market Stalls, Specially Of
Residences, And That Such Structures Constitute A Nuisance Subject To Abatement According
To Law.

The Province Of Zamboanga Del Norte Vs. City Of Zamboanga, Gr No. L-24440, 28 March
1968.
46

Principles Of Law: If The Property Is Owned By The Municipal Corporation Or Municipality In Its
Public And Governmental Capacity, The Property Is Public And Congress Has Absolute Control Over It;
If The Property Is Owned In Its Private Or Proprietary Capacity, Then It Is Patrimonial And Congress
Has No Absolute Control, In Which Case, The Municipality Cannot Be Deprived Of It Without Due
Process And Payment Of Just Compensation. Municipal Property Held And Devoted To Public Service Is
Not In The Same Category As Ordinary Private Property
Facts:
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 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. There Were 50 Lots.
In 1948, Ra 286was Approved Creating The Municipality Of Molave As Capital Of Zamboanga
Province. Auditor-General Formed An Appraisal Committee (1949) To Fix Value Of The
Properties And Buildings In Question At P 1,294,244.00.
On June 6, 1952, Republic Act 711 Was Approved Dividing The Province Of Zamboanga Into
Two (2): Zamboanga Del Norte And Zamboanga Del Sur. Sec 6 Provided That The Money Will
Be Divided Equitably. However, Ra 3039 Was Enacted Amended Ca 39 Sec 50 - Stating
That All Properties And Assets Hereby Transferred, Be Free Of Charge, In Favor Of Said City Of
Zamboanga. Sec. Of Finance Ordered The Commissioner Of Internal Revenue To Stop
Effecting Further Payments To Zamboanga And To Return The Sum To City Of Zamboanga.
Constrained, Plaintiff Appellee Zamboanga Del Norte Filed A Complaint For Declaratory Relief
With Prelim Mandatory Injunction In Cfa - : Among Others That -> (A) Republic Act 3039 Be
Declared Unconstitutional For Depriving Plaintiff Province Of Property Without Due Process And
Just Compensation; Xxx.
Cfi Found For Plaintiffs; And Then, Present Recourse.
Issue:

46
Degamo.
35

1. Whether Ra 3039 Is Valid.
2. Is Property Of Public Use The Same As Property Of Public Service?
Held:
1. Literally, The Province Of Zamboanga Is Correct. However, Even If The Property For Public
Use, It Does Not Mean That It Is Patrimonial Such That The Properties They Are Claiming To
Be Private Property Of Zamboanga Are Properties Of Pd. 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.
The Capacity In Which The Property Is Held Is, However, Dependent On The Use To Which
It Is Intended And Devoted.

Lower Court Vouched On Art 423-424 Of The Cc All The Properties In Question, Except 2
Lots Could Be Considered As Patrimonial Properties Of The Former Z Province. They Would Fall
Under The Phrase "Public Works For Public Service" For It Has Been Held That Under
The Ejusdem 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.

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.

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.

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. These Lots Being Registered
Strengthens Its Truly Private Nature.

2. Yes. Seeming Inconsistency Of Article 424 Is Reconciled By Sc. 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.. 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.

Miscellaneous:
1. So, Who Has The Ultimate Control Over Properties Of Public Services = State Since The
Municipalities Are Just Agents Of The State.
2. How Did The State Exercise Control(Which Was Upheld By The Sc)? Property Of Pd, The State
Has The Residual Power Of Control Over Them. Despite The Fact That It Was Named Under
The Lgu, As Long As It Is For Public Use Or Service Lgu Must Seek Consent Of The State. Or
36

The State May Enact The Statute, And You Cannot Complain (Well, Not Literally). Ultimate
Control Of These Properties Lies With The State.
3. What Is The Consequence? If The Lgu Would Attempt To Sell, It Cannot Sell It Without
Authorization From Congress Or President.

Rafael Salas Vs. Jarencio, 46 Scra 734.
47

Principles Of Law: The City Of Manila Could Validly Acquire Property In Its Corporate Or Private
Capacity, Following The Accepted Doctrine On The Dual Character Public And Private Of A
Municipal Corporation. And When It Acquires Property In Its Private Capacity, It Acts Like An Ordinary
Person Capable Of Entering Into Contracts Or Making Transactions For The Transmission Of Title Or
Other Real Rights. When It Comes To Acquisition Of Land, It Must Have Done So Under Any Of The
Modes Established By Law For The Acquisition Of Ownership And Other Real Rights. If There Is No
Showing That Land Was Acquired With Private Funds, Presumption Is That State Is Source.

Facts:
On February 1919, Cfi Manila As Land Registration Court Rendered Judgment Declaring City Of
Manila The Owner In Fee Simple Of A Parcel Of Land Under Cadastral Survey. Rod Issued Oct
4329 Covering Parcel Of Land. On Various Dates In 1924, City Of Manila Sold Portions Of
Land To Pura Villanueva Resulting To The Cancellation Of Oct And Issuance Of Tct No 21974.
Last Sale To Pura Villanueva Was Effected On August 22 1924 With Tct 22547 Covering
Residue Of The Original Parcel Lot 1.

On Sept 1960, Municipal Board Of Manila, Adopted Resolution Requesting President Of Phils To
Consider Declaring The Property Bounded Under Tct As Patrimonial Property For The Purpose
Of Reselling These Lots To Actual Occupants Thereof.

Thereafter, A Bill Was Proposed To Congress And The Ra 4118 Was Passed. Pertinent
Provision:
Lot I-B-2-B Of Block 557 Of The Cadastral Survey Of The City Of Manila, Situated In The
District Of Malate, City Of Manila, Which Is Reserved As Communal Property, Is Hereby
Converted Into Disposal Or Alienable Land Of The State, To Be Placed Under The Disposal Of
The Land Tenure Administration. The Land Tenure Administration Shall Subdivide The Property
Into Small Lots, None Of Which Shall Exceed One Hundred And Twenty Square Meters In Area
And Sell The Same On Installment Basis To The Tenants Or Bona Fide Occupants Thereof And
To Individuals, In The Order Mentioned: Pursuant To Implementation Of This Act, The Deputy
Of Lra Addressed Mayor For A Copy Of Proposed Subdivision Plant. And It Was Complied With
By The Mayors Adviser. Surrendered The Tcts And Was Issued A New One In The Name Of
The Lra.
Due To Some Reasons, Mayor Of City Of Manila, As A Duly Organized Public Corp, Brought An
Action For Injunction For Implementing The Ra 4118 And To Hold It Unconsititutional.

Issues:
1. Is The Property Involved Private Or Patrimonial Property Of The City Of Manila?
2. Is Republic Act No. 4118 Valid And Not Repugnant To The Constitution?

Ruling:

1. Although Declared By The Cadastral Court As Owner In Fee Simple, Has Not Shown Any
Evidence As To What Manner Has It Acquired The Said Land As Its Private Or Patrimonial
Property. In The Absence Of A Title Deed To Any Land Claimed By The City Of Manila As Its
Own, Showing That It Was Acquired With Its Private Or Corporate Funds, The Presumption Is
That Such Land Came From The State Upon The Creation Of The Municipality. Originally The
Municipality Owned No Patrimonial Property Except Those That Were Granted By The State
Not For Its Public But For Private Use.

2. As To The Second Issue:

47
Degamo.
37

The Trial Court Declared Republic Act No. 4118 Unconstitutional For Allegedly Depriving
The City Of Manila Of Its Property Without Due Process Of Law And Without Payment Of
Just Compensation. It Is Now Well Established That The Presumption Is Always In Favor Of
The Constitutionality Of A Law.
Respondent Court Held That By Converting The Land In Question To Disposable Land Of
The State Under The Disposal Of Lta Violates Constiutional Provision Of Prohibition On
Depriving One Of His Property Without Due Just Compensation.
Decisive Factor Was When The City Of Manila Recognized The Paramount Title Of The
State When It Asked The Office Of The President To Declare The City Property As
Patrimonial Property.
Republic Act No. 4118 Was Never Intended To Expropriate The Property Involved But
Merely To Confirm Its Character As Communal Land Of The State And To Make It Available
For Disposition By The National Government: And This Was Done At The Instance Or Upon
The Request Of The City Of Manila Itself.
Consequently, The City Of Manila Was Not Deprived Of Anything It Owns, Either Under The
Due Process Clause Or Under The Eminent Domain Provisions Of The Constitution. If It
Failed To Get From The Congress The Concession It Sought Of Having The Land Involved
Given To It As Its Patrimonial Property, The Courts Possess No Power To Grant That Relief.
Republic Act No. 4118 Does Not, Therefore, Suffer From Any Constitutional Infirmity

Miscellaneous:
1. Gr: Regardless Of The Source Or Classification Of Lain In The Possession Of The Municipality Is
Held In Trust For The State For The Benefit Of The Inhabitants, Whether It Be Governmental
Or Propriety Purposes
Exc: Except Those Acquired With Its Own Funds In Its Private Or Corporate Capacity
True That Legislative Control Is Not Absolute, For Such Control Should Not Deprive Persons Of
Their Property Or Rights Without Due Process Of Law. Hwever, When It Comes To Property Of
The Municipality Which It Did Not Acquire In Its Corporate Capacity With Its Own Funds, The
Congress Can Transfer And Dispose To An Agency Of The National Government At Its
Discretion. Which Is Evident In The Case At Bar.

2. Sc Also Described How Municipality Is Created Created By Law. Theres A Territory Which Is
Granted By The State Through Congress. Pursuant To The Law, Would It Be Sufficient To Say
That The Title Holder Is The Lgu? Yes. But Who Is The Real Owner Here? State. For Example,
Lgu Declares Self As Owner Of The Land. You Have To Prove It That You Acquired It Through
The Funds Of The Local Government.

Manila Lodge 761 V. Ca, Gr No. L-41001, 30 September 1976, First Division, Castro.
48

Principles Of Law: A Reclaimed Are Which Is An Extension To A Plaza, Must Also A Public Park Or
Plaza And For Public Use. Thus, It Is Part Of The Public Domain, Not Susceptible To Appropriation And
Outside The Commerce Of Man.
Facts:
On 26 June 1905 The Philippine Commission Enacted Act 1360 Which Authorized The City Of
Manila To Reclaim A Portion Of Manila Bay. The Reclaimed Area Was To Form Part Of The
Luneta Extension. The Act Provided That The Reclaimed Area "Shall Be The Property Of The
City Of Manila" And That "The City Of Manila Is Hereby Authorized To Set Aside A Tract Of The
Reclaimed Land Formed By The Luneta Extension At The North End Not To Exceed 500 Feet By
600 Feet In Size, For A Hotel Site, And To Lease The Same, With The Approval Of The
Governor General, To A Responsible Person Or Corporation For A Term Not To Exceed 99
Years." Subsequently, The Philippine Commission Passed On 18 May 1907 Act 1657, Amending
Act 1360, So As To Authorize The City Of Manila Either To Lease Or To Sell The Portion Set
Aside As A Hotel Site.

48
Degamo.
38

The Total Area Reclaimed Was A Little Over 25 Hectares. The City Of Manila Applied For The
Registration Of The Reclaimed Area, And On 20 January 1911, Oct 1909 Was Issued In The
Name Of The City Of Manila. On 13 July 1911 The City Of Manila, Affirming A Prior Sale Dated
16 January 1909, Conveyed 5,543.07 Sq. M. Of The Reclaimed Area To The Manila Lodge No.
761, Benevolent And Protective Order Of Elks Of The U.S.A. (Bpoe) On The Basis Of Which Tct
2195 Was Issued To The Latter Over The Parcel Of Land Which Was Part Of Luneta Extension
In The District Of Ermita. For The Remainder Of The Luneta Extension, I.E. After Segregating
Therefrom The Portion Sold To The Manila Lodge No. 761, Bpoe, A New Certificate Of Title
2196 Was Issued On 17 July 1911 To The City Of Manila. Manila Lodge Subsequently Sold Said
5,543.07 Sq. M. To The Elks Club, Inc., To Which Was Issued Tct 67488. The Registered
Owner, "The Elks Club, Inc.," Was Later Changed By Court Order To "Manila Lodge No. 761,
Benevolent And Protective Order Of Elks, Inc." In January 1963 The Bpoe Petitioned The Cfi
Manila, Branch Iv, For The Cancellation Of The Right Of The City Of Manila To Repurchase The
Property. This Petition Was Granted On 15 February 1963.
On 19 November 1963 The Bpoe Sold The Land Together With All The Improvements Thereon
To The Tarlac Development Corporation Which Paid P1,700,000 As Down Payment And
Mortgaged To The Vendor The Same Realty To Secure The Payment Of The Balance To Be Paid
In Quarterly Installments. At The Time Of The Sale, There Was No Annotation Of Any
Subsisting Lien On The Title To The Property. On 12 December 1963 Tct 73444 Was Issued To
Tdc. In June 1964 The City Of Manila Filed With The Cfi Manila A Petition For The Reannotation
Of Its Right To Repurchase; The Court, After Hearing, Issued An Order, Dated November 19,
1964, Directing The Register Of Deeds Of The City Of Manila To Reannotate In Toto The Entry
Regarding The Right Of The City Of Manila To Repurchase The Property After 50 Years. From
This Order Tdc And Bpoe Appealed To The Supreme Court Which On 31 July 1968 Affirmed
The Trial Court's Order Of Reannotation, But Reserved To Tdc The Right To Bring Another
Action For The Clarification Of Its Rights.
On 28 April 1971, As A Consequence Of Such Reservation, Tdc Filed A Complaint Against The
City Of Manila And Manila Lodge 761, Bpoe With The Cfi Manila Praying That Entry 4608/T-
1635 Found In Tct 73444 Covering The Parcel Of Land With Buildings And Improvements
Thereon Purchased From Bpoe Be Cancelled; That Manila Pays Tds The Sum Of P100,000 As
Damages, That Tdc Reserve The Right To Recover Amounts From Bpoe In Case That The
Judgment On The Parcel Of Land Declares It A Public Park. The City Of Manila Set Up A Special
And Affirmative Defense Claiming That Tdc Is Not A Purchaser In Good Faith. Manila Lodge
761 Admitted To Have Sold The Land In Good Faith, And That It Had Received Quarterly
Installments From Tdc Until 15 October 1964 When The Latter Failed Without Justifiable Cause
To Pay The Subsequent Installments. After Due Trial The Court A Quo Rendered On 14 July
1972 Its Decision Finding The Subject Land To Be Part Of The "Public Park Or Plaza" And,
Therefore, Part Of The Public Domain. The Court Consequently Declared That The Sale Of The
Subject Land By The City Of Manila To Manila Lodge No. 761, Bpoe, Was Null And Void; That
Plaintiff Tdc Was A Purchaser Thereof In Good Faith And For Value From Bpoe And Can Enforce
Its Rights Against The Latter; And That Bpoe Is Entitled To Recover From The City Of Manila
Whatever Consideration It Had Paid The Latter. From Said Decision, Tdc And Manila Lodge
761, Bpoe Appealed To The Court Of Appeals.
In Its Decision Promulgated On 30 June 1975, The Court Of Appeals Concurred In The Findings
And Conclusions Of The Lower Court Upon The Ground That They Are Supported By The
39

Evidence And Are In Accordance With Law, And Accordingly Affirmed The Lower Court's
Judgment. Hence, The Petitions For Review On Certiorari.
Discussion/Ruling:
The Supreme Court Denied The Petitions For Lack Of Merit, And Affirmed The Decision Of
The Court Of Appeals, At Petitioners Cost.
1. Statutory Construction; Courts Must Give Effect To The General Legislative Intent
It Is A Cardinal Rule Of Statutory Construction That Courts Must Give Effect To The General Legislative
Intent That Can Be Discovered From Or Is Unraveled By The Four Corners Of The Statute, And In
Order To Discover Said Intent, The Whole Statute, And Not Only A Particular Provision Thereof, Should
Be Considered. In The Present Case, It Is Thus Necessary To Analyze All The Provisions Of Act 1360,
As Amended, In Order To Unravel The Legislative Intent.
2. Grant Of Public Nature Strictly Construed Against The Grantee
The Grant Made By Act 1360 Of The Reclaimed Land To The City Of Manila Is A Grant Of A "Public"
Nature, The Same Having Been Made To A Local Political Subdivision. Such Grants Have Always Been
Strictly Construed Against The Grantee. One Compelling Reason Given For The Strict Interpretation Of
A Public Grant Is That There Is In Such Grant A Gratuitous Donation Of, Public Money Or Resources
Which Results In An Unfair Advantage To The Grantee And For That Reason, The Grant Should Be
Narrowly Restricted In Favor Of The Public. This Reason For Strict Interpretation Obtains Relative To
The Aforesaid Grant For Although The City Of Manila Was To Pay For The Construction Of Such Work
And Timber Bulkheads Or Sea Walls As May Be Necessary For The Making Of The Luneta Extension,
The Area To Be Reclaimed Would Be Filled At The Expense Of The Insular Government And Without
Cost To The City Of Manila, With Material Dredged From Manila Bay. Hence, The Letter Of The Statute
Should Be Narrowed To Exclude Matters Which If Included Would Defeat The Policy Of The Legislation.
3. Reclaimed Area Of Public Dominion, Intended For Public Use
The Reclaimed Area, An Extension To The Luneta, Is Declared To Be Property Of The City Of Manila;
And Is Of Public Dominion, Intended For Public Use. It Cannot Be Patrimonial Property As Act 1360, As
Amended, Provides By Necessary Implication, That The City Of Manila Could Not Dispose Of The
Reclaimed Area Without Being Authorized By The Lawmaking Body.
4. Ownership Defined
Article 348 Of The Civil Code Of Spain Provides That "Ownership Is The Right To Enjoy And Dispose Of
A Thing Without Further Limitations Than Those Established By Law." The Right To Dispose ( Jus
Disponendi) Of One's Property Is An Attribute Of Ownership.
5. Statutory Construction; Every Word, Clause Of Statute Interpreted In A Way That No Part
Becomes Inoperative Or Superfluous
If The Reclaimed Area Were Patrimonial Property Of The City, The Latter Could Dispose Of It Without
Need Of The Authorization Provided By The Statute, And The Authorization To Set Aside, Lease, Or
Sell Given By The Statute Would Indeed Be Superfluous. To So Construe The Statute As To Render
The Term "Authorize," Which Is Repeatedly Used By The Statute, Superfluous Would Violate The
Elementary Rule Of Legal Hermeneutics That Effect Must Be Given To Every Word, Clause, And
Sentence Of The Statute And That A Statute Should Be So Interpreted That No Part Thereof Becomes
Inoperative Or Superflous. To Authorize Means To Empower, To Give A Right To Act. Act 1360
Furthermore Qualifies The Verb "Authorize" With The Adverb "Hereby," Which Means "By Means Of
This Statute Or Section." Hence Without The Authorization Expressly Given By Act 1360, The City Of
Manila Could Not Lease Or Sell Even The Northern Portion; Much Less Could It Dispose Of The Whole
40

Reclaimed Area. At Most, Only The Northern Portion Reserved As A Hotel Site Could Be Said To Be
Patrimonial Property, For, By Express Statutory Provision It Could Be Disposed Of, And The Title
Thereto Would Revert To The City Should The Grantee Fail To Comply With The Terms Provided By
The Statute.
6. Presumption Of Full Knowledge Of Prior Laws And Legislation When Lawmaking Body
Enacts A Statute
It Is Presumed That When The Lawmaking Body Enacted The Statute, It Had Full Knowledge Of Prior
And Existing Laws And Legislation On The Subject Of The Statute And Acted In Accordance Or With
Respect Thereto. If By Another Previous Law, The City Of Manila Could Already Dispose Of The
Reclaimed Area, Which It Could Do If Such Area Were Given To It As Its Patrimonial Property, It
Would Be A Superfluity For Act 1360 To Authorize The City To Dispose Of The Reclaimed Land.
7. Extension To Luneta Is Also A Public Park Or Plaza And For Public Use
The Reclaimed Area, Being An "Extension To The Luneta In The City Of Manila," It Is Of The Same
Nature Or Character As The Old Luneta. Anent This Matter, It Has Been Said That A Power To Extend
(Or Continue An Act Or Business) Cannot Authorize A Transaction That Is Totally Distinct. It Is Not
Disputed That The Old Luneta Is A Public Park Or Plaza And It Is So Considered By Section 859 Of The
Revised Ordinances Of The City Of Manila. Hence The "Extension To The Luneta" Must Be Also A Public
Park Or Plaza And For Public Use.
8. Extension Defined
Extension Signifies Enlargement In Any Direction In Length, Breadth, Or Circumstance.
9. Bays, Roadsteads, Coast Sea, Inlets And Shores Are Part Of The National Domain Open
For Public Use
A Bay Is Nothing More Than An Inlet Of The Sea. Pursuant To Article 1 Of The Law Of Waters Of 1866,
Bays, Roadsteads, Coast Sea, Inlets And Shores Are Parts Of The National Domain Open To Public
Use. These Are Also Property Of Public Ownership Devoted To Public Use, According To Article 339 Of
The Civil Code Of Spain. In The Present Case, The Reclaimed Area Was Formerly A Part Of The Manila
Bay.
10. When Shore Or Part Of Bay Is Reclaimed, It Does Not Lose Character Of Being Property
For Public Use
When The Shore Or Part Of The Bay Is Reclaimed, It Does Not Lose Its Character Of Being Property
For Public Use, According To Government Of The Philippine Islands Vs. Cabangis. When The Tract Of
Land Owned By A Private Individual Wears Away And Later On Is Submerged In Water In Ordinary
Tides (Thus Becoming Part Of The Shore), Until The Government Later On Undertakes The Dredging
Of The Estuary And Dumping The Sand And Silt From Estuary On The Low Lands Completely
Submerged In Water Forming The Reclaimed Lots, They Belong To The Public Domain For Public Use.
Hence, A Part Of The Shore, And For That Purpose, A Part Of The Bay, Did Not Lose Its Character Of
Being For Public Use After It Was Reclaimed.
11. Expressio Unius Est Exclusio Alterius; Southern Portion Is Not The Northern Portion
Authorized To Be Leased Or Sold
Act 1360, As Amended, Authorized The Lease Or Sale Of The Northern Portion Of The Reclaimed Area
As A Hotel Site. The Subject Property Is Not That Northern Portion Authorized To Be Leased Or Sold;
The Subject Property Is The Southern Portion. Hence, Applying The Rule Of Expresio Unius Est
Exclusio Alterius, The City Of Manila Was Not Authorized To Sell The Subject Property. The Application
Of This Principle Of Statutory Construction Becomes The More Imperative Inasmuch As Not Only Must
41

The Public Grant Of The Reclaimed Area To The City Of Manila Be Strictly Construed Against The City
Of Manila, But Also Because A Grant Of Power To A Municipal Corporation, As Happens In This Case
Where The City Is Authorized To Lease Or Sell The Northern Portion Of The Luneta Extension, Is
Strictly Limited To Such As Are Expressly Or Impliedly Authorized Or Necessarily Incidental To The
Objectives Of The Corporation.
12. Property Of Public Use; Intention To Consider Property For Public Use Important, Not
Actual Construction Or Layout
Article 344 Of The Civil Code Of Spain Provides That "Property Of Public Use, In Provinces And In
Towns, Comprises The Provincial And Town Roads, The Squares, Streets, Fountains, And Public
Waters, The Promenades, And Public Works Of General Service Paid For By Such Towns Or Provinces."
A Park Or Plaza, Such As The Extension To The Luneta, Is Undoubtedly Comprised In Said Article.
Properties Of Provinces And Towns For Public Use Are Governed By The Same Principles As Properties
Of The Same Character Belonging To The Public Domain. In Order To Be Property Of Public Domain An
Intention To Devote It To Public Use Is Sufficient. It Is Not Necessary, Therefore, That A Plaza Be
Already Construed Or Laid Out As A Plaza In Order That It Be Considered Property For Public Use. It Is
Sufficient That It Be Intended To Be Such.
13. Conversion Of Property Of Public Us To Patrimonial Property Requires Explicit
Declaration By The Executive And The Legislative Department
As Held In Ignacio Vs. The Director Of Lands, It Is Only The Executive And Possibly The Legislative
Department That Has The Authority And The Power To Make The Declaration That Said Property Is No
Longer Required For Public Use, And Until Such Declaration Is Made The Property Must Continue To
Form Part Of The Public Domain. In The Present Case, There Has Been No Such Explicit Or
Unequivocal Declaration. The Courts Are Undoubtedly Not Primarily Called Upon, And Are Not In A
Position, To Determine Whether Any Public Land Is Still Needed For The Purposes Specified In Article 4
Of The Law Of Waters.
14. Circumstantial Evidence Far Removed In Time To Be Considered Contemporaneous To
The Enactment Of Act 1360
All Items Of Alleged Circumstantial Evidence Are Acts Far Removed In Time From The Date Of The
Enactment Of Act 1360 Such That They Cannot Be Considered Contemporaneous With Its Enactment.
Moreover, It Is Not Far-Fetched That This Mass Of Circumstantial Evidence Might Have Been
Influenced By The Antecedent Series Of Invalid Acts, I.E. The City's Having Obtained Over The
Reclaimed Area Oct 1909 (20 January 1911); The Sale Made By The City Of The Subject Property To
Manila Lodge No. 761; And The Issuance To The Latter Of Tct 2195. It Cannot Be Gainsaid That If The
Subsequent Acts Constituting The Circumstantial Evidence Have Been Based On, Or At Least
Influenced, By Those Antecedent Invalid Acts And Torrens Titles, They Can Hardly Be Indicative Of The
Intent Of The Lawmaking Body In Enacting Act 1360 And Its Amendatory Act.
15. Mention As Boundary Owner Is Not A Means Of Acquiring Title
Oct 7333 (13 November 1935), Covering The Lot Where The American Embassy [Chancery] Stands,
States That The Property Is "Bounded On The Northwest By Properties Of Army And Navy Club And
Elks Club." Even If Said Boundaries Were Delineated By The Philippine Legislature In Act 4269, This
Does Not Mean That The Legislature "Recognized And Conceded The Existence Of The Elks Club
Property As A Private Property And Not As A Public Park Or Plaza. A Contrary Argument Is Non
Sequitur, Plain And Simple. Said Original Certificate Of Title Cannot Be Considered As An Inconvertible
Declaration That The Elks Club Was In Truth And In Fact The Owner Of Such Boundary Lot. Such
42

Mention As Boundary Owner Is Not A Means Of Acquiring Title Nor Can It Validate A Title That Is Null
And Void.
16. Government Not Estopped By Mistake Or Errors On The Part Of Its Agents
The Government Is Never Estopped By Mistakes Or Errors On The Part Of Its Agents, And Estoppel
Does Not Apply To A Municipal Corporation To Validate A Contract That Is Prohibited By Law Or Its
Against Public Policy. In The Present Case, The 13 July 1911 Sale Executed By The City Of Manila To
Manila Lodge Was Certainly A Contract Prohibited By Law. Estoppel Cannot Be Urged Even If The City
Of Manila Accepted The Benefits Of Such Contract Of Sale And The Manila Lodge No. 761 Had
Performed Its Part Of The Agreement, For To Apply The Doctrine Of Estoppel Against The City Of
Manila In This Case Would Be Tantamount To Enabling It To Do Indirectly What It Could Not Do
Directly.
17. Sale Void And Existent; Cannot Be Ratified By Lapse Of Time Or By Express Ratification
The Sale Of The Subject Property Executed By The City Of Manila To The Manila Lodge No. 761, Bpoe,
Was Void And Inexistent For Lack Of Subject Matter. It Suffered From An Incurable Defect That Could
Not Be Ratified Either By Lapse Of Time Or By Express Ratification. The Manila Lodge No. 761
Therefore Acquired No Right By Virtue Of The Said Sale. Hence To Consider Now The Contract
Inexistent As It Always Has Been, Cannot Be, As Claimed By The Manila Lodge No. 761, An
Impairment Of The Obligations Of Contracts, For There Was In Contemplation Of Law, No Contract At
All.
18. Good Faith Of Purchaser Cannot Create Title Where None Exist
The Inexistence Of Said Sale Can Be Set Up Against Anyone Who Asserts A Right Arising From It, Not
Only Against The First Vendee But Also Against All Its Successors, Which Are Not Protected By Law.
The Doctrine Of Bona Fide Purchaser Without Notice Does Not Apply Where There Is A Total Absence
Of Title In The Vendor, And The Good Faith Of The Purchaser Cannot Create Title Where None Exists.

Commissioner Of Public Highways V. San Diego, Gr No. L-30098, 18 February 1970.
49

Principles Of Law: Judgments Against The State Or Its Agencies And Instrumentalities In Cases
Where The State Has Consented To Be Sued, Operate Merely To Liquidate And Establish The Plaintiff's
Claim; Such Judgments May Not Be Enforced By Writs Of Execution Or Garnishment And It Is For The
Legislature To Provide For Their Payment Through The Corresponding Appropriation.
Facts
1940 Gpi Expropriated Property Of Hashim For Edsa; An Amount Was Registered With The
City Treasurer;
1958 A Case For Sum Of Money Was Filed By Hashim Before The City Engineerings Office
Claiming More Than Half A Million As The Fair Market Value Of His Property;
An Amount Of More Than 200k Was Ordered By The Court To Be Garnished From The Pnb
Account Of Bureau Of Public Works And Auditor General;
Chief Documentation Staff Replied That Indeed The Funds Are Available; Same Chief Docu
Officer Released The Money In The Execution Notice;
Bureau Of Public Highways Filed A Case Before The Rizal Cfi To Credit Its Account For The
Amount Garnished; This Was Ordered By The Court And Followed By Pnb
Issue
1. Whether There Was A Valid Garnishment Of Funds
2. Was The Compromise Agreement Valid?
3. Can An Executor Garnish More Than The Deposit Initially Appropriated For The Expropriation?

49
43

4. When Does The Power Of The Court End?
Held
1. Yes, There Was. The Fact That There Was Already A Fait Accompli Negates The Defense Of
Non Suability Of State. This Case Is Merely A Continuation Of A Pre-War Proceedings.
2. Yes, Sol Gen Approved It With The Concurrence Of Government Officials.
3. No. A Legislative Act Is Required.
4. The Universal Rule That Where The State Gives Its Consent To Be Sued By Private Parties
Either By General Or Special Law, It May Limit Claimant's Action "Only Up To The Completion
Of Proceedings Anterior To The Stage Of Execution" And That The Power Of The Courts Ends
When The Judgment Is Rendered, Since Government Funds And Properties May Not Be Seized
Under Writs Of Execution Or Garnishment To Satisfy Such Judgments, Is Based On Obvious
Considerations Of Public Policy. Disbursements Of Public Funds Must Be Covered By The
Corresponding Appropriation As Required By Law.
Miscellaneous
1. As The Official Depositary Of The Philippine Government, Respondent Bank And Its Officials
Should Be The First Ones To Know That All Government Funds Deposited With It By Any
Agency Or Instrumentality Of The Government, Whether By Way Of General Or Special
Deposit, Remain Government Funds, Since Such Government Agencies Or Instrumentalities Do
Not Have Any Non-Public Or Private Funds Of Their Own.
2. Assuming For The Nonce The Creation Of Such Relationship Of Creditor And Debtor, Petitioner
Bureau Thereby Held A Credit Against Respondent Bank Whose Obligation As Debtor Was To
Pay Upon Demand Of Said Petitioner-Creditor The Public Funds Thus Deposited With It; Even
Though Title To The Deposited Funds Passes To The Bank Under This Theory Since The Funds
Become Mingled With Other Funds Which The Bank May Employ In Its Ordinary Business,
What Was Garnished Was Not The Bank's Own Funds But The Credit Of Petitioner Bureau
Against The Bank To Receive Payment Of Its Funds, As A Consequence Of Which Respondent
Bank Delivered To Respondent Estate The Garnished Amount Of P209,076.00 Belonging To
Said Petitioner.
3. Petitioner Bureau's Credit Against Respondent Bank Thereby Never Lost Its Character As A
Credit Representing Government Funds Thus Deposited. The Moment The Payment Is Made By
Respondent Bank On Such Deposit, What It Pays Out Represents The Public Funds Thus
Deposited Which Are Not Garnishable And May Be Expended Only For Their Legitimate Objects
As Authorized By The Corresponding Legislative Appropriation.
4. Bank Should Have Notified The Government Officials Of The Attempt To Garnish Funds As Held
In The Case Of Republic V. Palacio

Philippine National Bank V. Judge Javier Pabalan, Gr No. L-3312, 15 June 1978.
50

Principles Of Law: A Government Corporation Entering Into An Exclusively Commercial Contract
Cannot Put Up The Defense Of Non-Suability.
Facts
Philippine Virginia Tobacco Is Public Corporation Possessed Of The Attribute Of Exemption
From Execution; A Quality That Exempts Its Properties From Garnishment Or Execution
A Case Was Filed Against Pvt And Judge Pabalan Issued Writ And Notice Of Garnishment Of
Properties Of Pvt Deposited In Pnb;
Pnbs Defense Was Non-Suability As A Government Entity, Etc;
Issue
1. Can The Pnb Put Up The Defense Of Non-Suability And Hence, Prevent The Funds From Being
Subject To Garnishment? (Or Retroact The Invalidity Of Garnishment)
Held

50
44

1. No. Pnb Cant Do This Because Public Corporation That Can Sue And Be Sued Are Not Exempt
From Garnishment. This Is Exactly What Pvt Is. Further, Pvt Has A Distinct Personality Making
It Open To Lawsuits.

Professional Video, Inc. v TESDA
51

GR No. 155504. June 26, 2009. Brion.

Facts:
PROVI is engaged in the sale of high technology equipment and various information technology
products, among which are plastic cards and technology facilities.
TESDA is an instrumentality of the government mandated to develop and establish a national
system skills standardization, testing and certification in the country. In order to fulfill this mandate,
TESDA entered into a contract with PROVI for the latter to supply TESDA PVC ID Cards and system
and equipment for the printing and encoding of PVC Cards. In turn, TESDA is obligated to pay PROVI
P39,475,000 within 15 days after TESDAs acceptance of the contracted goods and services.
PROVI delivered to TESDA cards, answer sheets, customized die and custom hologram foil.
However, TESDA paid only P3,739,500, leaving a balance of P33,735,000.
On July 11, 2001, PROVI filed a complaint for sum of money against TESDA with a prayer for the
issuance of writ of preliminary attachment/garnishment against TESDA. The RTC granted the prayer
and issued the writ of preliminary attachment against the properties of TESDA not exempt from
execution to satisfy the balance of P33 million.

Issue: Whether the writ of attachment against TESDA and its funds is valid

Held: The writ of attachment is invalid.
Public funds cannot be the object of garnishment proceedings even if the consent to be sued had
been previously granted and the state liability adjudged. Disbursement of public funds must be
covered by the corresponding appropriation as required by law. The functions and public services
rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds
from their legitimate and specific objects, as appropriated by law.
TESDA is an instrumentality of the government undertaking governmental functions.
TESDA is an unincorporated instrumentality of the government directly attached to the DOLE, for the
performance of governmental functions.
TESDAs funds are public in character, hence exempt from attachment or garnishment.
Even assuming that TESDA entered into a proprietary contract with PROVI and thereby gave its
implied consent to be sued, TESDAs funds are still public in nature and, thus, cannot be the valid
subject of a writ of garnishment or attachment.
By virtue of the TESDA Act, TESDAs budget is included in the General Appropriations Act; hence,
TESDA funds, being sourced from the Treasury, are money belonging to the government, or any of its
departments, in the hands of the public officials.

Dr. Lorna Villa V. Heirs Of Altavas,
Gr No 162028, 14 July 2008, Third Division, Austria-Martinez.
52

Principles Of Law: For A Right Of Possession To Be Protected It Must Come From The Owner. If Your
Claim Right To Possession Comes From Somebody Who Is Not An Owner, Then You Are Not Shielded
From Unlawful Detainer Suit. It Is Not Enough To Say That You Are In Good Faith In Relying In The
Representation Of One Who Claims To Be The Owner. It Is Incumbent Upon You To Determine The
Nature Of The Right Of The One Who Transfer His Or His Possession Over The Questioned Land
Facts
Heirs Of Altavas Filed An Ejectment Case Against Villas Claiming That They (Altavas) Have
Been In Actual Possession Through Their Administrator (Virginia Roxas);
That The Administrator Has Leased The Property Without Their Consent;
When Case Was Filed Before Mctc, Villas Claim That They Do Not Have Contractual
Relationship Of Lease With Altavas, Hence, There Is No Cause Of Action;
Villa Failed To File Memo In Rtc; Virginia Withdrew The Memo;
Issue

51
Avila.
52
45

1. Will Ejectment Suffice To Recover Lot When Petitioners Have Not Occupied The Land For
Years?
Held
1. Yes. The Lessee Steps On The Shoes Of The Lessor. Hence, The Judgment/Ruling Of Mctc
Binds Them.

Estate Of Soledad Manantan V. Aniceto Somera, Gr No. 145867, 7 April 2009, Third Division,
Chico-Nazario.
53

Principles Of Law: A Case For Unlawful Detainer Must Be Instituted Before The Proper Municipal Trial
Court Or Metropolitan Trial Court Within One Year From Unlawful Withholding Of Possession. Such One
Year Period Should Be Counted From The Date Of Plaintiff's Last Demand On Defendant To Vacate The
Real Property, Because Only Upon The Lapse Of That Period Does The Possession Become Unlawful. If
The Complaint Was Filed Beyond The Prescribed One Year Period, Then It Cannot Properly Qualify As
An Action For Unlawful Detainer Over Which The Mtcc Can Exercise Jurisdiction. It May Be An Accion
Publiciana Or Accion Reivindicatoria.
Facts
An Ejectment Case Filed By Manantan Against Tavera And Somera For Manantan Is To Sell
The Land To A Third Person; Such Sale Will Only Materialize If The Respondents Will Vacate
The Land
A Case Of Ejectment Was Filed Before The Mtcc But Respondents Claim That Mtcc Will Have No
Jurisdiction Because It Is Not For Forcible Entry Or Unlawful Detainer
They Further Argued That They Have Been Using The Land And That They Have Built Concrete
Materials Thereon
Respondent And Tavera Alternatively Argued In Their Joint Answer That In Case Manantan
Would Be Declared As The Lawful Owner Of The Subject Property, The Mtcc Should Not
Disregard The Fact That They Were "Builders In Good Faith." As Builders In Good Faith, They
Should Be Allowed To Pay A Reasonable Price For The Portions Of The Subject Property On
Which Their Driveway/Access Road, And Other Improvements Were Situated
Ca Ruled That The Controversy Involves Boundary Dispute, And The Proper Remedy Is To The
Rtc;
Issue
1. Whether The Case Is Of Forcible Entry
2. Rationale Behind Requirements Of Allegation In Complaint Before Mtcc
Held
1. Compliance With The Prescribed One Year Period To File An Action For Unlawful Detainer. It
Does Not State The Material Dates That Would Have Established That It Was Filed Within One
Year From The Date Of Manantan's Last Demand Upon Respondent To Vacate The Disputed
Portion Of Land. Such Allegations Are Jurisdictional And Crucial, Because If The Complaint Was
Filed Beyond The Prescribed One Year Period, Then It Cannot Properly Qua||| (Estate Of
Manantan V. Somera, G.R. No. 145867, April 07, 2009)Mtcc Has Jurisdiction Over Unlawful
Detainer Cases. The Discussion Of The Supreme Court, However, Revolved On When An
Unlawful Detainer May Exist. It Shall Be Commenced Within One Year From The Last Demand.
If Not, It Becomes An Accion Publiciana (Right To Recover Possession) Or Accion
Reinvindicatoria (Action To Recover Ownership). The Latter Must Be Filed In The Proper Rtc,
Miscellaneous:
1. An Action For Forcible Entry Or Unlawful Detainer Is Governed By Rule 70 Of The Rules Of
Court||| (Estate Of Manantan V. Somera, G.R. No. 145867, April 07, 2009)
2. Unlawful Detainer Is A Summary Action For The Recovery Of Possession Of Real Property. 16
This Action May Be Filed By A Lessor, Vendor, Vendee, Or Other Person Against Whom The
Possession Of Any Land Or Building Is Unlawfully Withheld After The Expiration Or Termination

53
Cesista. 22 July 2014
46

Of The Right To Hold Possession By Virtue Of Any Contract, Express Or Implied. ||| (Estate Of
Manantan V. Somera, G.R. No. 145867, April 07, 2009)
3. If The Court Has No Jurisdiction Over The Nature Of An Action, It May Dismiss The Same Ex
Mero Motu Or Motu Proprio||| (Estate Of Manantan V. Somera, G.R. No. 145867, April 07,
2009)

Casilang V. Casilang-Dizon, Gr No. 180269, 20 February 2013, First Division, Reyes.
54

Facts
Spouses Casilang Died Intestate; Some Of Their Children Also Died; The Total Property Of The
Spouses Consisted Three (3) Parcels Of Lands In Pangasinan
An Unlawful Detainer Was Filed By Rosario (Niece) Against Jose (Uncle); Rosario Claims It Was
His Fathers Land As Proved By Td; Jose Claims Otherwise Since It Was His Intestate Share;
Apparently, The Children Entered To A Verbal Partition; Lot 4676 Was Agreed To Go To Ireneo
And 4618 Was Agreed To Go To Jose (This Lot Is The One In Question); 7/8 Of The Children
Filed An Annulment Of Documents Because Ireneo, During His Lifetime, Executed Deed Of
Extrajudicial Partition Before The Rtc;
Rtc Rendered A Decision Annulling The Documents Executed By Ireneo And Granting The Lot
To Jose;
Why The Verbal Partition That The Land Is Of Jose And Not Of Ireneo Based On Written
Partition? Because The Children Of Jose Recognized That They Have Already Received Their
Shares;
Issues
1. What Is Accion Interdictal?
2. What Is The Presumption On Title Over Real Estate Property?
3. Which Court Has Jurisdiction Over Accion Interdictal?
Held
1. Accion Interdictal Consists Of (Unlawful Detainer And Forcible Entry) Mtc Will Have The Right
To Determine Physical Possession De Facto But Not To Determine Ownership;
2. A Possessor Of Real Estate Property Is Presumed To Have Title Thereto Unless The Adverse
Claimant Establishes A Better Right. 59 Moreover, Under Article 541 Of The Civil Code, One
Who Possesses In The Concept Of Owner Has In His Favor The Legal Presumption That He
Possesses With A Just Title, And He Cannot Be Obliged To Show Or Prove It. ||| (Casilang, Sr.
V. Casilang-Dizon, G.R. No. 180269, February 20, 2013)
3. General Rule: Mtc Exercising Jurisdiction Over Unlawful Detainer And Ejectment Suits (Action
Interdictal) Cannot Rule On The Ownership Of Said Property;

Exc: When Ownership Is Essential To Determine Possession; Provided: That Such
Determination Of Ownership In Not Conclusive.

Ca Relied On The Determination Of Ownership As Determined By Mtc. This Shouldnt Have
Been Done. Ownership Determined By Mtc Is Not Conclusive!
Miscellaneous:
1. Accion Interdictal Physical Possession, Possession De Facto Independent Of Title (Within 1
Year, In Inferior Courts); Quieting Processes
2. Accion Publiciana Determination Of Possession; Possession De Jure; Better Right Of
Possession Independent Of Title Or Ownership (After 1 Year)
3. Accion Reivindicatoria Action To Exercise Ownership, Jus Possessionis
City Government Of Quezon Vs. Ericta, 122 Scra 759.
55

Facts:

54
55
Degamo.
47

Quezon City Created Ordinance No. 6118, S-64, Entitled "Ordinance Regulating The
Establishment, Maintenance And Operation Of Private Memorial Type Cemetery Or Burial
Ground Within The Jurisdiction Of Quezon City And Providing Penalties For The Violation
Thereof"
Sec. 9 Of Such Ordinance States That: At Least Six 6% Of The Total Area Of The Memorial
Park Cemetery Shall Be Set Aside For Charity Burial Of Deceased Persons Who Are Paupers
7 Yrs After, Qc Council Passed A Resolution: Resolved That The Council Hereby Request The
City Engineer To Stop Any Further Selling And/Or Transaction Of Memorial Park Lots In
Quezon City Because The Owners Have Failed To Donate The Required 6% Space Intended For
Paupers Burial
Himlayang Pilipino Filed A Petition For Declaratory Relief Before Cfi (Grounds: Resolution
Contrary To Constitution)
Rtc: Ordinance 6118, Sec 9 Null And Void
Issue:
1. Won Section 9 Of The Ordinance In Question Is A Valid Exercise Of The Police Power
Qcs Arguments Himlayangs Arguments
Taking Of The Respondent's Property Is A
Valid And Reasonable Exercise Of Police
Power
Land Is Taken For A Public Use As It Is
Intended For The Burial Ground Of
Paupers
Quezon City Council Is Authorized Under
Its Charter, In The Exercise Of Local
Police Power, " To Make Such Further
Ordinances And Resolutions Not
Repugnant To Law Necessary To Carry
Into Effect And Discharge The Powers And
Duties And To Provide For The Health And
Safety, Promote The Prosperity, Improve
The Morals, Peace, Good Order, Comfort
And Convenience Of The City And The
Inhabitants Thereof, And For The
Protection Of Property Therein
The Questioned Ordinance Permanently
Restricts The Use Of The Property Such
That It Cannot Be Used For Any
Reasonable Purpose And Deprives The
Owner Of All Beneficial Use Of His
Property.
If An Owner Is Deprived Of His Property
Outright Under The State's Police Power,
The Property Is Generally Not Taken For
Public Use But Is Urgently And Summarily
Destroyed In Order To Promote The
General Welfare.

Held:
1. Cfis Decision Affirmed. Sec 9 Ordinance 6118 Null & Void.
Ruling Grounds
Power To Regulate Does Not Include The Power To Prohibit
The Ordinance In Question Not Only Confiscates But Also Prohibits The Operation Of A
Memorial Park Cemetery, Because Under Section 13 Of Said Ordinance, 'Violation Of The
Provision Thereof Is Punishable With A Fine And/Or Imprisonment And That Upon
Conviction Thereof The Permit To Operate And Maintain A Private Cemetery Shall Be
Revoked Or Cancelled.' The Confiscatory Clause And The Penal Provision In Effect Deter
One From Operating A Memorial Park Cemetery.
(Art. Ill, Section 1 Subparagraph 1, Constitution) 'No Person Shall Be Deprived Of Life,
Liberty Or Property Without Due Process Of Law'
Section 9 Of Ordinance No. 6118, Series Of 1964 Of Quezon City Is Not A Mere Police
Regulation But An Outright Confiscation. It Deprives A Person Of His Private Property
Without Due Process Of Law, Nay, Even Without Compensation.
The Ordinance Is Actually A Taking Without Compensation Of A Certain Area From A
Private Cemetery To Benefit Paupers Who Are Charges Of The Municipal Corporation.
Instead Of Building Or Maintaining A Public Cemetery For This Purpose, The City Passes
The Burden To Private Cemeteries.
The Questioned Ordinance Was Passed Only After Himlayang Pilipino, Inc. Had
Incorporated. Received Necessary Licenses And Permits And Commenced Operating.
Miscellaneous:
1. Police Power Of Quezon City Is Defined In Sub-Section 00, Sec. 12, Rep. Act 537
Which Reads As Follows: To Make Such Further Ordinance And Regulations Not Repugnant To
Law As May Be Necessary To Carry Into Effect And Discharge The Powers And Duties
Conferred By This Act And Such As It Shall Deem Necessary And Proper To Provide For The
48

Health And Safety, Promote, The Prosperity, Improve The Morals, Peace, Good Order, Comfort
And Convenience Of The City And The Inhabitants Thereof, And For The Protection Of Property
Therein; And Enforce Obedience Thereto With Such Lawful Fines Or Penalties As The City
Council May Prescribe Under The Provisions Of Subsection (Jj) Of This Section.

2. 3 Inherent Powers Of Government (1) Police Power, (2) Eminent Domain, (3) Taxation.
These Are Said To Exist Independently Of The Constitution As Necessary Attributes Of
Sovereignty.

3. Police Power
a. The Power Of Promoting The Public Welfare By Restraining And Regulating The Use Of
Liberty And Property'
b. To Merely Regulate The Use And Enjoyment Of Property Of The Owner. If He Is Deprived
Of His Property Outright, It Is Not Taken For Public Use But Rather To Destroy In Order To
Promote The General Welfare. In Police Power, The Owner Does Not Recover From The
Government For Injury Sustained In Consequence Thereof
c. The Most Essential Of Government Powers, At Times The Most Insistent, And Always One
Of The Least Limitable Of The Powers Of Government
d. Does Not Need To Be Expressed Or Defined In Its Scope. Being Coextensive With Self-
Preservation And Survival Itself, It Is The Most Positive And Active Of All Governmental
Processes
e. Scope Of Police Power Have Become Almost Boundless
f. Courts Cannot Foresee The Needs And Demands Of Public Interest And Welfare, They
Cannot Delimit Beforehand The Extent Or Scope Of The Police Power By Which And
Through Which The State Seeks To Attain Or Achieve Public Interest And Welfare

City Of Manila V. Judge Laguio And Malate Tourist Development Co., Gr No. 118127, 12 April
2005, En Banc, Tinga.
56

Facts
Malate Tourist Development Co., Is An Owner Of Certain Establishments Such As Motels,
Hotels And Lodging Houses In The Malate, Manila Area;
An Ordinance Was Passed Prohibiting Certain Forms Of Entertainments; Mtdc Argues That
Hotels And Motels Are Not Forms Of Entertainments, And Are Not Likewise Disturbance To The
Community;
Judge Laguio Decided In Favor Of Mtdc, Hence, Appeal Via Rule 42 Was Had In The Sc;
Issue
1. Was The Ordinance A Proper Exercise Of Police Power?
2. Was The Modality Used A Lawful Taking?
Held
1. No, It Was Not A Proper Exercise Of Police Power. It Is Not Only The Substantive Aspect Of
The Regulation That Must Be Looked Into But Whether The Means Employed Are Reasonable.
If Indeed The City Of Manila Wanted To Eradicate Prostitution, Etc, It Could Have Done So
Through Less Restrictive Means Such As Daily Inspection For Violation. Also, Just Because
There Is A Possibility That Immoral Things Might Happen Inside A Motel, Does Not And Should
Not Be A Basis In Making Such Establishment An Establishment Of Ill-Repute.
2. It As A Regulatory Taking. It Is An Ordinance Which Permanently Restricts The Use Of
Property That It Can Not Be Used For Any Reasonable Purpose Goes Beyond Regulation And
Must Be Recognized As A Taking Of The Property Without Just Compensation. It Is Intrusive
And Violative Of The Private Property Rights Of Individuals.
There Are Two Different Types Of Taking That Can Be Identified. A Possessory Taking Occurs
When The Government Confiscates Or Physically Occupies Property. A Regulatory Taking
Occurs When The Governments Regulation Leaves No Reasonable Economically Viable Use Of
The Property.

Office Of The Solicitor General V. Ayala Land, Robinsons, Shangrila And Sm Prime Holdings,
Gr No. 177056, 18 September 2009, Third Division, Chico-Nazario.
57

56
49

Facts
The Controversy Started When The Senate Committee On Trade And Commerce Looked Into
The Parking Arrangements Of The Respondents In This Case;
The Committee Found Out That The Arrangements Are Illegal As They Are Against The
National Building Code Section 803 And Rule 19 Of Its Irr; Being So, Solgen Was Tasked To
Enjoin Respondents From Applying Said Parking Fees;
Ca Agreed With Respondents Arguing That There Is Really No Direct Obligation In The Building
Code Requiring That Parking Spaces Of Malls Should Be Free;
Issues
1. Does The Nbc Require Free Parking Spaces?
2. Does The Regulation Pass The Classic Test Of Reasonableness And Propriety Of Measure?
3. Was The Exercise Of Police Power Proper?
58

Held
1. No. The Requirement As Clearly Set-Out In The Nbc Is That There Must Be 1 Parking Slot For
Every 100 Square Meters. However, The Nbc Did Not Require The Same To Be Free.
2. No. It Is Hard To Imagine That In Order To Regulate Light And Ventilation In A Mall That The
Legitimate Shoppers Of The Mall Must Necessarily Be Given Free Parking Spaces. The Only
Requirement In Nbc And Its Irr Is That There Must Be A Minimum Number Of Parking Spaces
According To The Size Of The Building, But There Was No Mention Whether Such Spaces
Should Be Free.
3. No. Police Power Is The Power Of Promoting The Public Welfare By Restraining And Regulating
The Use Of Liberty And Property. It Is Usually Exerted In Order To Merely Regulate The Use
And Enjoyment Of The Property Of The Owner. The Power To Regulate, However, Does Not
Include The Power To Prohibit. A Fortiori, The Power To Regulate Does Not Include The Power
To Confiscate. Police Power Does Not Involve The Taking Or Confiscation Of Property, With
The Exception Of A Few Cases Where There Is A Necessity To Confiscate Private Property In
Order To Destroy It For The Purpose Of Protecting Peace And Order And Of Promoting The
General Welfare; For Instance, The Confiscation Of An Illegally Possessed Article, Such As
Opium And Firearms

Mmda V. Trackworks
59

G.R. No. 179554 December 16, 2009

Principles Of Law: (A) Entering Into A Contract Concerning Ones Property Is A Valid Exercise Of
Ownership Over The Property; (B) Mmdas Charter Does Not Grant It Police Power

Facts:
The Government, Entered Into A Build-Lease-Transfer Agreement (Blt Agreement) With Metro
Rail Transit Corporation (Mrtc) Under Which Mrtc Undertook To Build Mrt3 Subject To The
Condition That Mrtc Would Own Mrt3 For 25 Years, Upon The Expiration Of Which The
Ownership Would Transfer To The Government.
The Blt Agreement Stipulated, Among Others, That Mrtc Could Build And Develop Commercial
Premises In The Mrt3 Structures, Or Obtain Advertising Income Therefrom.
Respondent Trackworks Rail Transit Advertising, Vending & Promotions, Inc. (Trackworks)
Entered Into A Contract For Advertising Services With MrtcTrackworks Thereafter Installed
Commercial Billboards, Signages And Other Advertising Media In The Different Parts Of The
Mrt3.
Mmda Requested Trackworks To Dismantle The Billboards, Signages And Other Advertising
Media Pursuant To Mmda Regulation No. 96-009, Whereby Mmda Prohibited The Posting,

57
58
Note here that OSG did not use the term police power outright but the Supreme Court went on to argue
anyway.
59
Pandi.
50

Installation And Display Of Any Kind Or Form Of Billboards, Signs, Posters, Streamers, In Any
Part Of The Road, Sidewalk, Center Island, Posts, Trees, Parks And Open Space.
After Trackworks Refused The Request Of Mmda, Mmda Proceeded To Dismantle The Formers
Billboards And Similar Forms Of Advertisement.

Issues:
1. Whether The Metropolitan Manila Development Authority (Mmda) Could Unilaterally Dismantle
The Billboards, Signages And Other Advertising Media In The Structures Of The Metro Rail
Transit 3 (Mrt3) Installed By Respondent Advertising Company By Virtue Of Its Existing
Contract With The Owner Of The Mrt3.
2. Whether Mmda May Invoke Its Legal Mandate To Justify The Dismantling Of Trackworks
Billboards, Signages And Other Advertising Media.

Held:
1. No.
a) The Prohibition Against Posting, Installation And Display Of Billboards, Signages And
Other Advertising Media Applied Only To Public Areas, But Mrt3, Being Private Property
Pursuant To The Blt Agreement Between The Government And Mrtc, Was Not One Of
The Areas As To Which The Prohibition Applied.
b) Considering That Mrtc Remained To Be The Owner Of The Mrt3 During The Time
Material To This Case, Mrtcs Entering Into The Contract For Advertising Services With
Trackworks Was A Valid Exercise Of Ownership By The Former.
c) Mmc Memorandum Circular No. 88-09 Did Not Apply To Trackworks Billboards,
Signages And Other Advertising Media In Mrt3, Because It Did Not Specifically Cover
Mrt3, And Because It Was Issued A Year Prior To The Construction Of Mrt3 On The
Center Island Of Edsa.

2. No. Mmdas Powers Are Limited To The Formulation, Coordination, Regulation,
Implementation, Preparation, Management, Monitoring, Setting Of Policies, Installing A
System, And Administration. Nothing In Mmdas Charter Grants It Police Power, Let Alone
Legislative Power.

Air Transportation Office And Mciaa V. Gopuco
G.R. No. 158563. June 30, 2005.
60

Principle Of Law: When Real Property Has Been Acquired For Public Use Unconditionally, Either By
Eminent Domain Or By Purchase, The Abandonment Or Non-Use Of The Real Property, Does Not Ipso
Facto Give To The Previous Owner Of Said Property Any Right To Recover The Same.
Facts:
Respondent Apolonio Gopuco, Jr. Was The Owner Of Cadastral Lot No. 72 Consisting Of 995
Square Meters Located In The Vicinity Of The Lahug Airport In Cebu City.
Sometime In 1949, The National Airport Corporation (Nac) Informed The Owners Of The
Various Lots Surrounding The Lahug Airport (Including The Herein Respondent), That The
Government Was Acquiring Their Lands For Purposes Of Expansion.
Some Landowners Sold Their Properties On The Assurance That They Would Be Able To
Repurchase The Same When These Would No Longer Be Used By The Airport. Gopuco,
Refused To Do So.
In View Of Gopucos Refusal, Expropriation Proceedings Over Lot No. 72 Commenced.
Consequently, Absolute Title To Lot No. 72 Was Transferred To The Republic Of The
Philippines.
Lahug Airport Was Closed When Mactan International Airport Commenced Operations; Lot No.
72 Was Thus Virtually Abandoned.
Consequently, Apolonio Gopuco, Jr. Filed A Complaint For Recovery Of Ownership Of Lot No.
72 Against The Air Transportation Office And The Province Of Cebu Claiming That By Virtue Of
The Closure Of The Lahug Airport, The Original Purpose For Which The Property Was
Expropriated Had Ceased Or Otherwise Been Abandoned, And Title To The Property Had
Therefore Reverted To Him.

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Pandi.
51

Gopuco Further Alleged That When The Original Judgment Of Expropriation Had Been Handed
Down, And Before They Could File An Appeal Thereto, The Caa Offered Them A Compromise
Settlement Whereby They Were Assured That The Expropriated Lots Would Be Resold To Them
For The Same Price As When It Was Expropriated In The Event That The Lahug Airport Would
Be Abandoned. Gopuco Claims To Have Accepted This Offer. However, He Failed To Present
Any Proof On This Matter, And Later Admitted That Insofar As The Said Lot Was Concerned,
No Compromise Agreement Was Entered Into By The Government And The Previous Owners.

Issue:
1. Whether The Former Owner Of An Expropriated Land Can Acquire A Cause Of Action For
Recovery Of The Property Upon The Abandonment Of The Particular Public Purpose For
Which The Land Was Expropriated.
2. Whether In Cases Of Expropriation There Exists An Implied Contract To The Effect That
The Properties Will Be Used Only For The Public Purpose For Which They Were Acquired.

Held:
1. The Answer Depends Upon The Character Of The Title Acquired By The Expropriator.
a) If The Land Is Expropriated For A Particular Purpose, With The Condition That
When That Purpose Is Ended Or Abandoned The Property Shall Return To Its
Former Owner, Then, Of Course, When The Purpose Is Terminated Or Abandoned
The Former Owner Reacquires The Property So Expropriated.
b) If The Decree Of Expropriation Gives To The Entity A Fee Simple Title, Then Of
Course, The Land Becomes The Absolute Property Of The Expropriator, Whether It
Be The State, A Province, Or Municipality, And In That Case The Non-User Does
Not Have The Effect Of Defeating The Title Acquired By The Expropriation
Proceedings.

2. No Such Contract Exists.
a) Eminent Domain Is Generally Described As The Highest And Most Exact Idea Of
Property Remaining In The Government That May Be Acquired For Some Public
Purpose Through A Method In The Nature Of A Forced Purchase By The State.
b) Notwithstanding The Grant To Individuals, The Eminent Domain, The Highest And
Most Exact Idea Of Property, Remains In The Government, Or In The Aggregate
Body Of People In Their Sovereign Capacity; And They Have The Right To Resume
The Possession Of The Property Whenever The Public Interest So Requires It.

Note: In This Case, Gopuco Failed To Adduce Any Evidence Concerning A Right Of Repurchase In His
Favor. This Is What Separates The Case From Heirs Of Moreno.

Heirs Of Moreno V. Mciaa
G.R. No. 156273. October 15, 2003.
61

Principle Of Law: Former Owners Of Expropriated Lands No Longer Used For The Specific Purpose
For Which They Were Acquired May Recover/Repurchase The Same Under The Principle Of
Constructive/Implied Trust Referred To In Articles 1454 And 1190 Of The Civil Code

Facts:
The Factual Antecedents Of This Case Are Similar To That In Gopuco. Petitioners In This Case
Are Successors-In-Interest Of The Former Registered Owners Of Two (2) Parcels Of Lands
Situated In Lahug, Cebu City.
Such Lands Were Also Expropriated For The Proposed Expansion Of Lahug Airport. When
Lahug Airport Ceased To Operate, Petitioners Filed A Complaint For Reconveyance Against
Mciaa To Compel The Purchase Of Their Lots.

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What Makes This Case Different From Gopuco:
1. There Exists An Undeniable Historical Narrative That The Predecessors Of Respondent Mciaa
Had Suggested To The Landowners Of The Properties Covered By The Lahug Airport Expansion
Scheme That They Could Repurchase Their Properties At The Termination Of The Airports
Venture.
2. Mciaa Did Not Object To Petitioners Preponderant Evidence (Not Particularly Mentioned In The
Case) Establishing The Asserted Right Of Repurchase.
3. The Trial Court In Its Decision In Civil Case No. R-1881 Prefixed Its Finding Of Public Purpose
Upon Its Understanding That "Lahug Airport Will Continue To Be In Operation." This Statement
In The Body Of The Decision Warrant The Conclusion That The Expropriated Properties Would
Remain To Be So Until It Was Confirmed That Lahug Airport Was No Longer "In Operation."
Issue:
Whether The Action For Reconveyance Would Prosper.
Held: Yes.
1. The Predicament Of Petitioners Involves A Constructive Trust, One That Is Akin To The Implied
Trust Referred To In Art. 1454 Of The Civil Code:

"If An Absolute Conveyance Of Property Is Made In Order To Secure The Performance Of An
Obligation Of The Grantor Toward The Grantee, A Trust By Virtue Of Law Is Established. If
The Fulfillment Of The Obligation Is Offered By The Grantor When It Becomes Due, He May
Demand The Reconveyance Of The Property To Him."

In The Case At Bar, Petitioners Conveyed Lots Nos. 916 And 920 To The Government With The
Latter Obliging Itself To Use The Realties For The Expansion Of Lahug Airport; Failing To Keep
Its Bargain, The Government Can Be Compelled By Petitioners To Reconvey The Parcels Of
Land To Them, Otherwise, Petitioners Would Be Denied The Use Of Their Properties Upon A
State Of Affairs That Was Not Conceived Nor Contemplated When The Expropriation Was
Authorized.

2. The Rights And Obligations Between The Constructive Trustee And The Beneficiary, In This
Case, Respondent Mciaa And Petitioners Over Lots Nos. 916 And 920, Are Echoed In Art. 1190
Of The Civil Code:
"When The Conditions Have For Their Purpose The Extinguishment Of An
Obligation To Give, The Parties, Upon The Fulfillment Of Said Conditions, Shall
Return To Each Other What They Have Received X X X X In Case Of The Loss,
Deterioration Or Improvement Of The Thing, The Provisions Which, With
Respect To The Debtor, Are Laid Down In The Preceding Article Shall Be
Applied To The Party Who Is Bound To Return X X X X"
Respondent Mciaa As Representative Of The State Is Obliged To Reconvey Lots Nos.
916 And 920 To Petitioners Who Shall Hold The Same Subject To Existing Liens
Thereon, I.E., Leasehold Right Of Dpwh. In Return, Petitioners As If They Were
Plaintiff-Beneficiaries Of A Constructive Trust Must Restore To Respondent Mciaa What
They Received As Just Compensation For The Expropriation Of Lots Nos. 916 And 920
In Civil Case No. R-1881.
3. The Return Or Repurchase Of The Condemned Properties Of Petitioners Could Be Readily
Justified As The Manifest Legal Effect Or Consequence Of The Trial Courts Underlying
Presumption That "Lahug Airport Will Continue To Be In Operation" When It Granted The
Complaint For Eminent Domain And The Airport Discontinued Its Activities.

53

Mciaa V. Lozada
G.R. No. 176625. February 25, 2010
62

Principle Of Law: (A) Former Owners Of Expropriated Lands No Longer Used For The Specific
Purpose For Which They Were Acquired May Recover/Repurchase The Same Under The Principle Of
Constructive/Implied Trust Referred To In Articles 1454 And 1190 Of The Civil Code; (B) The Statute
Of Frauds Operates Only With Respect To Executory Contracts, And Does Not Apply To Contracts
Which Have Been Completely Or Partially Performed

Facts:
Like The Previous Cases, This Case Involved A Parcel Of Land Expropriated For The Expansion And
Improvement Of The Lahug Airport:

1. Spouses Bernardo And Rosario Lozada Were The Registered Owners Of Lot No. 88 Covered By
Tct No. 9045;
2. In The Early 1960s, The Republic Sought To Acquire By Expropriation Lot No. 88, Among
Others, In Connection With Its Program For The Improvement And Expansion Of
The Lahug Airport;
3. A Decision Was Rendered By The Court Of First Instance In Favor Of The Government And
Against The Land Owners, Among Whom Was Bernardo Lozada, Sr. Appealed Therefrom;
4. During The Pendency Of The Appeal, The Parties Entered Into A Compromise Settlement To
The Effect That The Subject Property Would Be Resold To The Original Owner At The Same
Price When It Was Expropriated In The Event That The Government Abandons
The Lahug Airport;
5. Title To Lot No. 88 Was Subsequently Transferred To The Republic Of The Philippines (Tct
No. 25057);
6. The Projected Expansion And Improvement Of The Lahug Airport Did Not Materialize;
7. Plaintiffs Sought To Repurchase Their Property From Then Caa Director Vicente Rivera. The
Latter Replied By Giving As Assurance That Priority Would Be Given To The Previous Owners,
Subject To The Approval Of The President, Should Caa Decide To Dispose Of The Properties;
8. On November 29, 1989, Then President Corazon C. Aquino, Through A Memorandum To The
Department Of Transportation And Communications (Dotc), Directed The Transfer Of General
Aviation Operations At The Lahug Airport To The Mactan-Cebu International Airport Authority;

What Makes This Case Distinct:
The Trial Court Gave Credence To Lozadas Testimony That Government Representatives Verbally
Promised Him And His Late Wife While The Expropriation Proceedings Were On-Going That The
Government Shall Return The Property If The Purpose For The Expropriation No Longer Exists. The
Testimony Of Lozada Was Based On Personal Knowledge As The Assurance From The Government Was
Personally Made To Him.

Issues:
1. Whether Lozada May Validly Repurchase Lot No. 88.
2. Whether Lozadas Testimonial Evidence Violated The Statute Of Frauds.

Held:
1. Yes. The Right Of Respondents To Repurchase Lot No. 88 May Be Enforced Based On A
Constructive Trust Constituted On The Property Held By The Government In Favor Of
The Former. (The Court Cited Heirs Of Moreno In This Pronouncement.)

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54

2. No. The Statute Of Frauds Operates Only With Respect To Executory Contracts, And
Does Not Apply To Contracts Which Have Been Completely Or Partially Performed.
In This Case, The Statute Of Frauds, Invoked By Petitioners To Bar The Claim
Of Respondents For The Reacquisition Of Lot No. 88 Cannot Apply. The Oral
Compromise Settlement Has Been Partially Performed. By Reason Of Such
Assurance Made In Their Favor, Respondents Relied On The Same By Not
Pursuing Their Appeal Before The Ca.

Lunod V. Meneses
63

G.R. No. 4223. August 19, 1908.

Principles Of Law: (A) Right Of Ownership May Be Limited By Law; (B) An Easement Is Charge
Imposed Upon One Estate For The Benefit Of Another Estate Belonging To A Different Owner; (C)
Every Owner Has The Right To Enclose His Estate/Property By Means Of Walls, Ditches Fences Or Any
Other Device, But His Right Is Limited By The Easement Imposed Upon His Estate
Facts:
1. Plaintiff Lunod And Other Townsfolk Owned Farm Lands In An Elevated Area Of The
Town (Theres A Small Lake In This Area Too).
2. Meneses Was The Owner Of A Fish-Pond And A Strip Of Land Situated In Paraanan.
3. Since Time Immemorial There Existed And Still Exists In Favor Of The Rice Fields Of The
Plaintiffs A Statutory Easement Permitting The Flow Of Water Over The Said Land In Paraanan
And Unto Taliptip River.
4. However, In 1901, Meneses Converted The Land In Paraanan Into A Fishpond And By Means Of
A Dam And A Bamboo Net, Prevented The Free Passage Of The Water Through Said Place Into
The Taliptip River.
5. As A Result, The Lands Of The Plaintiff Became Flooded And Damaged By The Stagnant Waters,
There Being No Outlet Except Through The Land In Paraanan.
6. Plaintiffs Filed A Complaint Against Meneses And Asked That Judgment Be Entered Declaring
That The Said Tract Of Land In Paraanan Be Subject To A Statutory Easement Permitting The
Flow Of Water From The Property Of The Plaintiffs.

Issue:
Whether The Defendant Can Be Ordered To Remove And Destroy The Obstructions That Impede The
Passage Of The Waters Through Paraanan And Abstain From Closing In Any Manner The Aforesaid
Tract Of Land

Held:
Yes.
1. The Lands Of Paraanan Being 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; It Is Of A
Statutory Nature, And The Law Had Imposed It For The Common Public Utility In View Of The
Difference In The Altitude Of The Lands In The Barrio.

2. Article 552 Of The Civil Code Provides:

Lower Estates Must Receive The Waters Which Naturally And Without The Intervention
Of Man Descend From The Higher Estates, As Well As The Stone Or Earth Which They
Carry With Them.

Neither May The Owner Of The Lower Estates Construct Works Preventing This
Easement, Nor The One Of The Higher Estate Works Increasing The Burden.

3. Article 563 Of The Said Code Reads Also:

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55

The Establishment, Extent, Form, And Conditions Of The Easements Of Waters To
Which This Section Refers Shall Be Governed By The Special Law Relating Thereto In
Everything Not Provided For In This Code.

Special Law: Article 111 Of The Law Of Waters Of August 3, 1866 Which Treats Of
Natural Easements Relating To Waters, Provides:
Lands Situated At A Lower Level Are Subject To Receive The Waters That Flow
Naturally, Without The Work Of Man, From The Higher Lands Together With
The Stone Or Earth Which They Carry With Them.
4. Higino Meneses Could Not Lawfully Injure The Owners Of The Dominant Estates By Obstructing
The Outlet To The Taliptip River Of The Waters Flooding The Upper Lands Belonging To The
Plaintiffs. As The Owner Of The Servient Estate, Is Obliged To Give Passage To And Allow The
Flow Of The Waters Descending From The Calalaran Lake And From The Land Of The Plaintiffs
Through His Lands In Paraanan For Their Discharge Into The Taliptip River.

Roman Catholic Archbishop Of Manila Et. Al. V. Court Of Appeals
64

G.R. No. 77425. June 19, 1991.

Principles Of Law: (A) Ownership Of Property May Be Limited By The Grantor; (B) Donor May
Impose Certain Conditions In The Deed Of Donation But The Same Must Not Be Contrary To Law,
Morals, Good Customs, Public Order And Public Policy; (C) The Right To Dispose Is An
Indispensable Attribute Of Ownership

Facts:
1. Private Respondents Marina Rieta Granados And Theresa Rieta Tolentino Alleged That
Spouses Eusebio De Castro And Martina Rieta, Now Both Deceased, Executed A Deed Of
Donation In Favor Of Defendant Roman Catholic Archbishop Of Manila.
2. The Deed Of Donation Allegedly Provides That The Donee Shall Not Dispose Or Sell The
Property Within A Period Of One Hundred (100) Years From The Execution Of The Deed Of
Donation, Otherwise A Violation Of Such Condition Would Render Ipso Facto Null And Void
The Deed Of Donation And The Property Would Revert To The Estate Of The Donors.
3. While Still Within The Prohibitive Period To Dispose Of The Property, Petitioner Roman
Catholic Bishop Of Imus, In Whose Administration All Properties Within The Province Of
Cavite Owned By The Archdiocese Of Manila Was Transferred, Executed A Deed Of
Absolute Sale Of The Property Subject Of The Donation In Favor Of Petitioners Florencio
And Soledad C. Ignao In Consideration Of The Sum Of P114,000.00.
4. Consequently, Private Respondents As Plaintiffs Filed A Complaint For Nullification Of Deed
Of Donation, Rescission Of Contract And Reconveyance Of Real Property With Damages
Petitioners Florencio And Soledad C. Ignao And The Roman Catholic Bishop Of Imus,
Cavite, Together With The Roman Catholic Archbishop Of Manila.
5. The Trial Court Dismissed The Complaint On The Ground That The Cause Of Action Has
Prescribed. The Court Of Appeals Reversed The Decision Of The Trial Court.

Issues:
1. Whether The Cause Of Action Of Private Respondents Has Already Prescribed
2. Whether Private Respondents Have A Cause Of Action Against Petitioners

Held:
1. Although It Is True That Under Article 764 Of The Civil Code An Action For The Revocation Of
A Donation Must Be Brought Within Four (4) Years From The Non-Compliance Of The
Conditions Of The Donation, The Same Is Not Applicable In The Case At Bar. The Deed Of
Donation Involved Herein Expressly Provides For Automatic Reversion Of The Property

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Donated In Case Of Violation Of The Condition Therein, Hence A Judicial Declaration Revoking
The Same Is Not Necessary.
When A Deed Of Donation, As In This Case, Expressly Provides For Automatic
Revocation And Reversion Of The Property Donated, The Rules On Contract And The
General Rules On Prescription Should Apply, And Not Article 764 Of The Civil Code.

2. Although The Action Filed By Private Respondents May Not Be Dismissed By Reason Of
Prescription, The Same Should Be Dismissed On The Ground That Private Respondents Have
No Cause Of Action Against Petitioners.
The Cause Of Action Of Private Respondents Is Based On The Alleged Breach By
Petitioners Of The Resolutory Condition In The Deed Of Donation That The Property
Donated Should Not Be Sold Within A Period Of One Hundred (100) Years From The
Date Of Execution Of The Deed Of Donation. Said Condition, Constitutes An Undue
Restriction On The Rights Arising From Ownership Of Petitioners And Is, Therefore,
Contrary To Public Policy.
Donation, As A Mode Of Acquiring Ownership, Results In An Effective Transfer Of Title
Over The Property From The Donor To The Donee. Once A Donation Is Accepted, The
Donee Becomes The Absolute Owner Of The Property Donated. Although The Donor
May Impose Certain Conditions In The Deed Of Donation, The Same Must Not Be
Contrary To Law, Morals, Good Customs, Public Order And Public Policy.
The Condition Imposed In The Deed Of Donation In The Case Before Us Constitutes A
Patently Unreasonable And Undue Restriction On The Right Of The Donee To Dispose Of
The Property Donated, Which Right Is An Indispensable Attribute Of Ownership. Such A
Prohibition Against Alienation, In Order To Be Valid, Must Not Be Perpetual Or For An
Unreasonable Period Of Time.

German Management And Services V. Ca And Villeza
65

Principle Of Law: Doctrine Of Self-Help Is Also Available Not Only To Owners Of The Property But
Also To Any Of Its Lawful Possessors
Facts:
Cuyugjeng Spouses Originally Owned A Property In The Province Of Rizal Registered In The
Rd;
Spa Was Made By Spouses In Favor Of Petitioner To Develop The Land Into A Subdivision;
However, Several Individuals Were Living In Said Land; Petitioner Demanded For Them To
Vacate And Continued Developing The Project;
The Private Individuals Argue That They Are Farmers Who Were Assured That They Will Be
Given Right Of Way From The Owners Of Their Lots; And That They Have Been Tilling The
Land For 12 15 Years Now; But By The Time That Petitioner Started Its Project That It
Destroyed The Barbed Wires Protecting Their Farm Holdings; They Also Claimed That Their
Rice And Corn Fields Were Bulldozered By Petitioner;
Ca Ruled That Since Private Respondents Were In Actual Possession Of The Lot In Question At
The Time Of Taking Of German, Then, They Have The Right To File For Forcible Entry,
Regardless Of The Legality Of Their Claim;
Issue
1. May The Private Respondents, Although Not Being Owners Of The Land, Maintain A Case Of
Forcible Entry Against Petitioner?
2. Is There Merit In The Contention That Bulldozing The Crops Was Within Doctrine Of Self-Help?
Held
1. Yes. Although Admittedly Petitioner May Validly Claim Ownership Based On The Muniments Of
Title It Presented, Such Evidence Does Not Responsively Address The Issue Of Prior Actual
Possession Raised In A Forcible Entry Case. It Must Be Stated That Regardless Of The Actual
Condition Of The Title To The Property, The Party In Peaceable Quiet Possession Shall Not Be
Turned Out By A Strong Hand, Violence Or Terror. 9 Thus, A Party Who Can Prove Prior
Possession Can Recover Such Possession Even Against The Owner Himself. Whatever May Be
The Character Of His Prior Possession, If He Has In His Favor Priority In Time, He Has The

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Security That Entitles Him To Remain On The Property Until He Is Lawfully Ejected By A Person
Having A Better Right By Accion Publiciana Or Accion Reivindicatoria.
2. No. Both The Municipal Trial Court And The Regional Trial Court Have Rationalized Petitioner's
Drastic Action Of Bulldozing And Destroying The Crops Of Private Respondents On The Basis Of
The Doctrine Of Self-Help Enunciated In Article 429 Of The New Civil Code. 11 Such
Justification Is Unavailing Because The Doctrine Of Self-Help Can Only Be Exercised At The
Time Of Actual Or Threatened Dispossession Which Is Absent In The Case At Bar. When
Possession Has Already Been Lost, The Owner Must Resort To Judicial Process For The
Recovery Of Property. This Is Clear From Article 536 Of The Civil Code Which States, "(I)N No
Case May Possession Be Acquired Through Force Or Intimidation As Long As There Is A
Possessor Who Objects Thereto. He Who Believes That He Has An Action Or Right To Deprive
Another Of The Holding Of A Thing, Must Invoke The Aid Of The Competent Court, If The
Holder Should Refuse To Deliver The Thing."
Miscellaneous (Not Related To Case)
1. In Actions To Recover, Petitioner Must Allege Title To Land And Identity Of Land (Requisites In
An Action To Recover)
2. Without Oct Or Tct, You Must Show Tax Dec + Proof Of Possession; Tax Dec Is Easy To Prove
3. Proof Of Possession May Be Proved By Plants You Planted; Or Testimonies Of Neighbours;

Napocor V. Maruhom, Et. Al., Gr No. 168732, 29 June 2007, First Division, Azcuna.
66

Facts
Respondents Claim That They Are Owners Of A Parcel Of Land In Lanao Del Sur; They Filed
For Recovery Of Possession Of Land And Damages Before The Rtc For They Discovered That
The Underground Portion Of Their Land Was Being Used By Napocor As Tunnels To Siphon
Waters;
Napocor Claims That Respondents Never Even Took Possession Of The Underground Portion Of
The Land; Hence, Respondents Cannot Claim Ownership;
Napocor Likewise Argues That The Underground Tunnels Form Part Of An Easement To Their
Property; It Further Argues That Sub-Terranian Portion Of The Land Where The Underground
Tunnels Were Constructed Does Not Form Part Of The Of The Private Respondents Property
Even If They Owned The Land Because Their Right To The Subsoil Does Not Extend Beyond
What Is Necessary To Enable Them To Obtain All Utility And Convenience That Such Property
Can Normally Give;
Issues
1. Could The Tunnels Validly Be Classified As Easements?
2. Can Respondents Be Granted Just Compensation Given That Only The Underground Portion Of
The Property Was Used?
3. Was There Taking In The Case At Bar?
Held
1. No, They Cannot Be. Easements Still Require Notice And Even Indemnity. In The Case At Bar,
The Napocor Lines Were Placed In Stealth.
2. Yes, They Should Be Given Just Compensation. Notwithstanding The Fact That Petitioner Only
Occupies The Sub-Terrain Portion, It Is Liable To Pay Not Merely An Easement Fee But Rather
The Full Compensation For Land. This Is So Because In This Case, The Nature Of The
Easement Practically Deprives The Owners Of Its Normal Beneficial Use. Respondents, As The
Owners Of The Property Thus Expropriated, Are Entitled To A Just Compensation Which Should
Be Neither More Nor Less, Whenever It Is Possible To Make The Assessment, Than The Money
Equivalent Of Said Property.
3. There Is A Taking In This Sense When The Owners Are Actually Deprived Or Dispossessed Of
Their Property, Where There Is A Practical Destruction Or A Material Impairment Of The Value
Of Their Property, Or When They Are Deprived Of The Ordinary Use Thereof. There Is A
Taking In This Context When The Expropriator Enters Private Property Not Only For A
Momentary Period But For More Permanent Duration, For The Purpose Of Devoting The

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Property To A Public Use In Such A Manner As To Oust The Owner And Deprive Him Of All
Beneficial Enjoyment Thereof.

Republic (Director Of Forest Development) V. Ca And Jose De La Rosa,
Gr No. L-43938, 15 April 1988, First Division, Cruz
67

Facts
1965 An Application For Registration Of A Parcel Of Land Was Initiated By Jose De La Rosa
On His Behalf On Those Of His Three Children; The Land In Question Was Purchased From The
Albertos In 1964;
Opposition Was Had By Republic, Benguet Mining And Atok; The Latter Two Claim That They
Have Mining Claim Over The Property While Republic Contends That The Land Is Included In
The Central Cordillera Forest Reserve;
Ca Affirmed The Surface Rights Of De La Rosa But At The Same Time Recognized The Sub-
Surface Rights Of Atok And Benguet;
The Benguet Claim Is For The Underground Tunnels In Said Land Which Have Been Acquired
From Kelly Prior To 1935;
The Atok Claim On The Other Hand Is From The Emma And Fredia Claims Which Were The
Harrison Registered In 1931 (June Bug Claim);
Ca Gave A Decision Awarding The Surface Right To De La Rosa But The Sub-Surface Right To
Benguet And Atok;
Issue
1. Whether The Land Can Be Partly Mineral And Partly Agricultural
Held
1. No. For Obvious Reasons. Land Cannot Be Divided As Mineral And Agricultural. Land Cannot
Be Dissected And Treated Differently.

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