CASE NO.

G.R. No. L-11658 February 15, 1918

LEUNG YEE, plaintiff-appellant,

vs.
FRANK L. STRONG MACHINERY COMPANY and J. G. WILLIAMSON, defendants-
appellees.

FACTS:
The "Compaia Agricola Filipina" bought a considerable quantity of rice-
cleaning machinery company from the defendant machinery company, and
executed a chattel mortgage on the machines and the building on which
they had been installed thereon to secure payment of the purchase
price.The registered mortgage was foreclosed upon the failure of the CEF to
pay and Strong Machinery Co. purchased the building. This sale was
annotated in the Chattel Mortgage Registry.
Later, Strong Machinery Co. also purchased from Agricola the lot on which
the building was constructed. The sale wasn't registered in the Registry of
Property BUT Strong Machinery Co. took possession of the building and the
lot.
However, the same building had been previously purchased by Leung Yee, a
creditor of Agricola, at a sheriff's sale despite his knowledge of the prior sale
in favor of Strong Machinery Co.. The sale to Leung Yee was registered in the
Registry of Property.

ISSUES:

1. Was the property's nature changed by its registration in the Chattel

Mortgage Registry?

2. Who has a better right to the property?

HELD:

1. Where the interest conveyed is of the nature of real property, the

placing of the document on record in the Chattel Mortgage Registry is a
futile act.
Chattel Mortgage refers to the mortgage of Personal Property executed in
the manner and form prescribed in the statute.

Since the building is REAL PROPERTY, its sale as annotated in the

Chattel Mortgage Registry cannot be given the legal effect of registration in
the Registry of Real Property.

The mere fact that the parties decided to deal with the building as personal
property does not change its character as real property.

Neither the original registry in the chattel mortgage registry, nor the
annotation in said registry of the sale of the mortgaged property had any
effect on the building.

2. Strong Machinery Co.has a better right to the property since it first

purchased the same ahead of Leung Yee, the latter not being a purchaser in
good faith following the rule on possessory rights provided in Art. 1473.

Article 1473 of the Civil Code is as follows:

If the same thing should have been sold to different vendees, the
ownership shall be transfer to the person who may have the first taken
possession thereof in good faith, if it should be personal property.

Should it be real property, it shall belong to the person acquiring it who

first recorded it in the registry.

Should there be no entry, the property shall belong to the person who
first took possession of it in good faith, and, in the absence thereof, to
the person who presents the oldest title, provided there is good faith.

Since Leung Yee purchased the property despite knowledge of the

previous purchase of the same by Strong Machinery Co., it follows that
Leung Yee was not a purchaser in good faith.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. 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.

Good Faith, or the want of it, is a state or condition of mind which can
only be judged of by actual or fancied tokens or signs. (Wilder vs. Gilman,
55Vt., 504, 505; Cf. Cardenas Lumber Co. vs. Shadel, 52 La. Ann., 2094-
2098; Pinkerton Bros. Co. vs. Bromley, 119Mich., 8, 10, 17.) Honesty Of
Intention is the honest lawful intent constituting good faith. It implies
a freedom from knowledge and circumstances which ought to put a person
on inquiry. As such, proof of such knowledge overcomes the presumption of
good faith.

CASE NO. 2

G.R. No. L-64261 December 26, 1984

JOSE BURGOS, SR., JOSE BURGOS, JR., BAYANI SORIANO and J. BURGOS MEDIA
SERVICES, INC.,petitioners,
vs.
THE CHIEF OF STAFF, ARMED FORCES OF THE PHILIPPINES, THE CHIEF,
PHILIPPINE CONSTABULARY, THE CHIEF LEGAL OFFICER, PRESIDENTIAL
SECURITY COMMAND, THE JUDGE ADVOCATE GENERAL, ET AL., respondents.

Facts:
On 7 December 1982, Judge Ernani Cruz-Pao, Executive Judge of the
then CFI Rizal [Quezon City], issued 2 search warrants where the premises
at 19, Road 3, Project 6, Quezon City, and 784 Units C & D, RMS Building,
Quezon Avenue, Quezon City, business addresses of the Metropolitan Mail
and We Forum newspapers, respectively, were searched, and office and
printing machines, equipment, paraphernalia, motor vehicles and other
articles used in the printing, publication and distribution of the said
newspapers, as well as numerous papers, documents, books and other
written literature alleged to be in the possession and control of Jose Burgos,
Jr. publisher-editor of the We Forum newspaper, were seized.
A petition for certiorari, prohibition and mandamus with preliminary
mandatory and prohibitory injunction was filed after 6 months following the
raid to question the validity of said search warrants, and to enjoin the Judge
Advocate General of the AFP, the city fiscal of Quezon City, et.al. from using
the articles seized as evidence in Criminal Case Q-022782 of the RTC
Quezon City (People v. Burgos).

Issue:
Whether allegations of possession and printing of subversive materials may
be the basis of the issuance of search warrants.

Held:

No. Allegations of possession and printing of subversive materials is not

a sufficient basis for the finding of a probable cause upon which a warrant may validly be
issued in accordance with Section 3, Article IV of the 1973 Constitution which provides:

SEC. 3. ... and no search warrant or warrant of arrest shall issue except upon
probable cause to be determined by the judge, or such other responsible
officer as may be authorized by law, after examination under oath or
affirmation of the complainant and the witnesses he may produce, and
particularly describing the place to be searched and the persons or things to
be seized.

The Constitution requires no less than personal knowledge by the

complainant or his witnesses of the facts upon which the issuance of a
search warrant may be justified. Herein, a statement in the effect that
Burgos is in possession or has in his control printing equipment and other
paraphernalia, news publications and other documents which were used and
are all continuously being used as a means of committing the offense of
subversion punishable under PD 885, as amended is a mere conclusion of
law and does not satisfy the requirements of probable cause.

Probable cause for a search is defined as such facts and circumstances

which would lead a reasonably discreet and prudent man to believe that an
offense has been committed and that the objects sought in connection with
the offense are in the place sought to be searched.
Thus said allegation cannot serve as basis for the issuance of a search
warrant. Further, when the search warrant applied for is directed against a
newspaper publisher or editor in connection with the publication of
subversive materials, the application and/or its supporting affidavits must
contain a specification, stating with particularity the alleged subversive
material he has published or is intending to publish. Mere generalization will
not suffice.

CASE NO. 3

G.R. NO. 133250, NOV. 11, 2003

CHAVEZ V. PUBLIC ESTATE AUTHORITY

FACTS:
 On February 4, 1977, President Ferdinand E. Marcos issued Presidential Decree No.
1084 creating PUBLIC ESTATE AUTHORITY (PEA). PD No. 1084 tasked PEA to reclaim land,
including foreshore and submerged areas and to develop, improve, acquire, lease and
sell any and all kinds of lands.

On the same date, President Marcos issued Presidential Decree No. 1085
transferring to PEA the lands reclaimed in the foreshore and offshore of the Manila Bay
under the Manila-Cavite Coastal Road and Reclamation Project (MCCRRP).

On December 29, 1981, President Marcos issued a memorandum directing PEA to

amend its contract with CDCP, so that all future works in MCCRRP shall be funded and
owned by PEA.

On April 25, 1995, PEA entered into a Joint Venture Agreement with AMARI, a
private corporation, to develop the Freedom Islands. PEA and AMARI entered into the
Joint Venture Agreement, several hectares of reclaimed lands comprising the Freedom
Islands and several portions of submerged areas of Manila Bay were going to be
transferred to AMARI through negotiation without public bidding.

On April 28, 1995, the Board of Directors of PEA, in its Resolution No. 1245,
confirmed the Joint Venture Agreement. On June 8, 1995, President Fidel V. Ramos,
through then Executive Secretary Ruben Torres, approved the Joint Venture Agreement.

ISSUE:
Whether or not the stipulations in the Amended Joint Venture Agreement for the transfer
to AMARI of lands, reclaimed or to be reclaimed, violate the Constitution.

RULING:

YES. The ownership of lands reclaimed from foreshore and submerged areas is
rooted in the Regalian doctrine which holds that the State owns all lands and waters of
the public domain. The Regalian doctrine is the foundation of the time-honored principle
of land ownership that "all lands that were not acquired from the Government, either by
purchase or by grant, belong to the public domain." 43 Article 339 of the Civil Code of
1889, which is now Article 420 of the Civil Code of 1950, incorporated the Regalian
doctrine.

Under the Public Land Act (CA 141, as amended), reclaimed lands are classified as
alienable and disposable lands of the public domain Section 3 of the Constitution:
Alienable lands of the public domain shall be limited to agricultural lands. Private
corporations or associations may not hold such alienable lands of the public domain
except by lease The 157.84 hectares of reclaimed lands comprising the Freedom Islands,
now covered by certificates of title in the name of PEA, are alienable lands of the public
domain. PEA may lease these lands to private corporations but may not sell or transfer
ownership of these lands to private corporations. PEA may only sell these lands to
Philippine citizens, subject to the ownership limitations in the 1987 Constitution and
existing laws. Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of
the 1987 Constitution. The Court with its duty to defend and uphold the Constitution,
declares the Amended JVA null and void ab initio.