FABIE VS DAVID

GR No. L-123
FACTS:
The petitioner Josefa Fabie is the usufructuary of the income of certain houses located at 372376 Santo Cristo, Binondo, and 950-956 Ongpin, Santa Cruz, Manila, under the ninth clause of
the will of the deceased Rosario Fabie y Grey. The owner of Santo Cristo property
abovementioned is the respondent Juan Grey, while those of the Ongpin property are other
person not concern herein. Previous to September 1944 litigation arose between Josefa Fabie as
plaintiff and Juan Grey as defendant and the owner of the Ongpin property as intervenors,
involving the administration of the houses mentioned.
ISSUE:
Whether or not the action instituted by the petitioner Josefa Fabie is a purely possessory action
and as such within the jurisdiction of said court, or an action founded on property right and
therefore beyond the jurisdiction of the municipal court.
HELD:
Yes. It is admitted by the parties that the petitioner Josefa Fabie is the usufructuary of the income
of the property in question and that the respondent Juan Grey is the owner thereof. It is likewise
admitted that by virtue of a final judgment entered in Civil Case No. 1659 of the Court of First
Instance of Manila between the usufructuary and the owner, the former has the right to collect all
the rents of said property for herself with the obligation on her part to pay all the
real estate taxes, special assessments, and insurance premiums, and make all necessary repairs
thereon, and in case default on her part the owner shall have the right to do all those things, in
which event he shall be entitled to collect all subsequent rents of the property concerned until
the amount paid by him and the expenses of collection are fully satisfied, after which the
usufructuary shall again collect the rents. There is therefore no dispute as to the title to or the
respective interests of the parties in the property in question. The naked title to the property is to
admittedly in the respondent Juan Grey, but the right to all the rents thereof, with the obligation
to pay the taxes and insurance premiums and make the necessary repairs is, also admittedly,
vested in the usufructuary, the petitioner Josefa Fabie, during her lifetime. Construing said
judgment in the light of the ninth clause of the will of the deceased Rosario Fabie y Grey, which
was quoted in the decision and by which Josefa Fabie was made by the usufructuary during her
lifetime of the income of the property in question, we find that the said usufructuary has the
right to administer the property in question. All the acts of administration to collect the rents
for herself, and to conserve the property by making all necessary repairs and paying all the
taxes, special assessments, and insurance premiums thereon were by said judgment vested in
the usufructuary.

BOARD OF ASSESSMENT APPEALS OF ZAMBOANGA DEL SUR VS SAMAR MINING CO.

INC.
GR No. L-28034

FACTS:
Samar Mining (Samico) owned a mine and mill in Buug, Zamboanga del Sur. To connect them to
the pier in Pamintayan, Zamboanga del Sur, the company built the 42-km gravel pit Samico
Road, construction of which was finished in 1959. Since the road traversed public lands, Samico
filed miscellaneous lease applications for right of way with the Bureau of Lands and the Bureau of
Forestry in 1958 and 1959, respectively. Temporary permits were granted, and eventually the
lease applications were granted on Oct. 7, 1965; but the lease contracts were never executed.
On June 5, 1964, Samico received an assessment letter from the petitioner Provincial Assessor,
charging them P1,117,900.00 as real estate tax on the taxable portion of Samico Road. Samico
appealed the assessment to petitioner BAA on the ground that the road was not a taxable
improvement because it was constructed entirely on public land within the meaning of Sec. 2 of
CA 470 and the decision of the SC in Bislig Bay Lumber Co. v. Surigao. The BAA upheld the
assessment but held it unenforceable until the lease contracts were executed. Samico moved for
reconsideration, but the BAA, in a decision dated Aug. 3, 1965, not only denied the appeal but
made the assessment immediately enforceable, with the amount due accruing from the date of
completion of the road in 1959. Upon second denial by the BAA, Samico elevated its case to the
Court of Tax Appeals. The Provincial Assessor and the BAA assailed the CTAs jurisdiction over the
case on the ground that Samico should have paid the tax under protest first before appealing. On
June 28, 1967, the CTA ruled that it has jurisdiction over the case and then decided in favor of
Samico. The CTA held that since the road was constructed on public lands such that it is an
integral part of the lands and not an independent improvement thereon, and that upon the
termination of the lease the national government will acquire ownership of the road, Samico
should be exempted from paying.
ISSUE:
W/N the road constructed on alienable public land leased to Samico is taxable.
HELD:
(NO) BAA and the Provincial Assessor argue that the road is an improvement and, therefore,
taxable under Section 2 of the Assessment Law (Commonwealth Act No. 470) which provides as
follows: "Sec. 2. Incidence of real property tax. - Except in chartered cities, there shall be levied,
assessed, and collected, an annual ad valorem tax on real property including land, buildings,
machinery, and other improvements not hereinafter specifically exempted." SC: The road is
indeed an improvement, but it is not taxable under Sec. 2 of the Assessment Law pursuant to the
ruling in Bislig Bay Lumber Co. v. Provl. Govt. of Surigao (100 Phil 303), which held that a
private party who introduces improvements on public land subject to a lease is only a partial
usufructuary of the road and therefore cannot be made to pay real estate tax; because in such
cases ownership ultimately remains with the Government and the improvements remain open to
public use. In Municipality of Cotabato, et al. v. Santos, (105 Phil 963), it was held that
improvements which form an integral part (such as dikes and gates) of a publicly- owned
immovable (such as swampland converted into fishponds) are tax-exempt.
BALURAN VS. NAVARRO
GR No. L-44428
FACTS:

Baluran and Paraiso (ancestor of Obedencio) entered into a contract which they called barter, but
in fact stipulated that they would only transfer the material possession of their respective
properties to each other. Thus, Baluran will be allowed to construct a residential house on the
land of Paraiso while Paraiso is entitled to reap the fruits of the riceland of Baluran. The contract
prohibited them from alienating the properties of the other and contained a stipulation that
should the heirs of Paraiso desire to re-possess the residential lot, Baluran is obliged to return the
lot. Indeed, years after, Obedencio (grandchild of Paraiso) acquired the ownership of the
residential lot from his mother and demanded that Baluran, who was in possession, vacate.
Baluran now counters that the barter already transferred ownership.
ISSUE:
W/N the contract was barter or something else.
RULING:
IT IS USUFRUCT. First, the contract is what the law defines it to be and not what the parties call it.
It is very clear that what the parties exchanged was not ownership, but merely material
possession or the right to enjoy the thing. Now, because it is usufruct, the law allows the parties
to stipulate the conditions including the manner of its extinguishment. In this case, it was subject
to a resolutory condition which is in case the heir of Paraiso (a third party) desires to repossess
the property. Upon the happening of the condition, the contract is extinguished. Therefore,
Baluran must return the land to Obedencia. But since Art. 579 allows the usufructuary to remove
improvements he made, Baluran may remove the house he constructed. One last point. At the
time of this case, the Obedencias were also in possession of the riceland of Baluran. Although it
was not proper to decide the issue of possession in this case, the Court nevertheless decided on
the matter and order the Obedencias to vacate the property inasmuch as there was an
extinguishment of a reciprocal obligations and rights.
NATIONAL HOUSING AUTHORITY VS. COURT OF APPEALS
GR No. 14883
FACTS:
On June 13, 1986, Respondent Grace Baptist Church wrote a letter to NHA manifesting
their intent to purchase Lot 4 and 17 of the General Mariano Alvarez Resettlement Project in
Cavite. The latter granted request hence respondent entered into possession of the lots and
introduced improvements thereon. On February 22, 1991, NHA passed a resolution approving the
sale of the subject lots to respondent Church for 700 per square meter, a total of P430,500.
respondents were duly informed. On April 8, 1991, respondent church tendered a check
amounting to P55,350 contending that this was the agreed price. NHA avers stating that the
price now (1991) is different from before (1986).The trial court rendered a decision in favour of
NHA stating that there was no contract of sale, ordering to return the said lots to NHA and to pay
NHA rent of 200 pesos from the time it took
possession
of
the
lot.
Respondent Church appealed to the CA which affirms the decision of RTC regarding no contract
of sale but modifying it by ordering NHA to execute the sale of the said lots to Church for 700
per square, with 6% interest per annum from March1991. Petitioner NHA filed a motion for recons
ideration which was denied.
ISSUE:

WON NHA can be compelled to sell the lots under market value?
HELD:
No, because the contract has not been
perfected.
The Church despite knowledge that its
intended contract of sale with the NHA had not been perfected proceeded to introduce
improvements on the land. On the other hand, NHA knowingly granted the Church temporary use
of the subject properties and did not prevent the Church from making improvements thereon.
Thus the Church and NHA, who both acted in bad faith shall be treated as if they were both in
good faith. In this connection Art 448provides: the owner of the land in which anything has been
built, sown or planted in good faith, shall have the right to appropriate as his own the works,
sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or to
oblige the one who built or planted to pay the price of the land, and the one who sowed, the
proper rent. However, the builder or planter cannot be obliged to buy the land and if its value is
considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if
the owner of the land does not choose to appropriate the building or trees after proper indemnity.
The parties shall agree, on case of disagreement, court shall fix.

ALUNAN VS. VELOSO

GR No. 29158

This case
these
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settlement
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This case deals with an account filed in these intestate proceedings for the settlement of the
estate of the deceased Rosendo Hernaez by his judicial administrator, Rafael Alunan, and
approved by the court below. Jose Hernaez, one of the heirs interested in this proceedings,
assigned the whole of his portion to Eleuteria Ch. Veloso, and the latter objects to some of the
items of the account filed, assigning four errors to the resolution of the court below.
One of the alleged errors is made to consist in the lower court having admitted the partition
proposed by the administrator in his account. According to this account, the total amount to be
partitioned among the heirs is P88,979.08, which the administrator distributed equally among all
the heirs, including the widow's, each one receiving P11,122.38.
This partition with respect to the widow is being objected. It is alleged that the distributed
amount is in money, and since the widow's right is only a usufruct, and as there can be no
usufruct of money, since it is a fungible thing, the adjudication made to the widow was
erroneous. It is incorrect to say that there can be no usufruct of money, because it is a fungible
thing (art. 482, Civil Code).
It is likewise alleged, that, at any rate, this amount which should go to the widow should be offset
by the P55,000 which she has already received as a pension. Neither do we find any ground for
this error, since, according to the agreement of the heirs already referred to, her portion in the
inheritance either wholly or in part.
Lastly, it is alleged, that the portion given to the widow is not in accordance with law. We find the
objection with respect to this point to be correct. The widow, according to the law, only has a
right to a portion of the estate equal to that of the legitime of each of the children without
betterment. In the instant case none of the children received a betterment. Consequently, the
widow should receive a portion equal to the share of each in the two-thirds of the distributable

amount making up the legitime, to be taken from the one-third forming the betterment. Then,
the other free third, which the decedent failed to dispose of, must be partitioned among the heirs
to the exclusion of the widow, as an addition to their legitime. Working out the computations on
this basis, the widow should receive only P8,474.19.
Therefore, it being understood that there be eliminated from the decision the holding that
the Panaogao Hacienda, which was adjudged to the appellant, should answer for the amount of
P20,000 as a lien in favor of Rafael Alunan should the latter be ordered to pay it in civil case No.
6391 of the Court of First Instance of Iloilo, and it being further understood that the widow's
portion is only P8,474.19, the remainder of the P88,979.08 which is distributable, pertaining to
the heirs, share and share alike, excluding the widow, the judgment appealed from is affirmed,
without special pronouncement as to costs.