Beruflich Dokumente
Kultur Dokumente
Leung Yee, another creditor of CAF, bought the same building where the machines were installed and registered in the land registry of
the Province of Cavite.
Issue: Was the property's nature changed by its registration in the Chattel Mortgage Registry?
Held:
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.
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. It follows that neither the original registry in the chattel mortgage registry of the instrument
purporting to be a chattel mortgage of the building and the machinery installed therein, nor the annotation in that registry of the sale
of the mortgaged property, had any effect whatever so far as the building was concerned.
2. ANTONIO PUNZALAN ET. AL. VS. REMEDIOS LACSAMANA (GR NO. L-55729)
FACTS: It appears that petitioner, Antonio Punsalan, Jr., was the former registered owner of a parcel of land consisting of 340 square
meters situated in Bamban, Tarlac. In 1963, petitioner mortgaged said land to respondent PNB (Tarlac Branch) in the amount of
P10,000.00, but for failure to pay said amount, the property was foreclosed on December 16, 1970. Respondent PNB (Tarlac Branch)
was the highest bidder in said foreclosure proceedings. However, the bank secured title thereto only on December 14, 1977.
In the meantime, in 1974, while the properly was still in the alleged possession of petitioner and with the alleged acquiescence of
respondent PNB (Tarlac Branch), and upon securing a permit from the Municipal Mayor, petitioner constructed a warehouse on said
property. Petitioner declared said warehouse for tax purposes for which he was issued Tax Declaration No. 5619. Petitioner then
leased the warehouse to one Hermogenes Sibal for a period of 10 years starting January 1975.
On July 26, 1978, a Deed of Sale was executed between respondent PNB (Tarlac Branch) and respondent Lacsamana over the
property. This contract was amended on July 31, 1978, particularly to include in the sale, the building and improvement thereon.
On November 22, 1979, petitioner commenced suit for "Annulment of Deed of Sale with Damages" against herein respondents PNB
and Lacsamana before respondent Court of First Instance of Rizal, Branch XXXI, Quezon City, essentially impugning the validity of the
sale of the building as embodied in the Amended Deed of Sale.
On March 14, 1980, respondent PNB filed a Motion to Dismiss on the ground that venue was improperly laid considering that the
building was real property under article 415 (1) of the New Civil Code and therefore section 2(a) of Rule 4 should apply. 4
Opposing said Motion to Dismiss, petitioner contended 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. On April 25, 1980, respondent Court granted respondent PNB's Motion to Dismiss.
ISSUE: WON the building was real property under article 415 (1) of the New Civil Code and WON related case should be dismissed on
the ground of improper venue
HELD: We affirm respondent Court's Order denying the setting for pre-trial.
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. 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.
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. 9
Issue:
Whether or not the machinery in suit is real or personal property from the point of view of the parties.
Held:
It is similar to that of the Tumalad v Vicencio case. If a house of strong materials, like what was involved in the Tumalad case, may be
considered as personal property for purposes of executing a chattel mortgage thereon as long as the parties to the contract so agree
and no innocent third party will be prejudiced thereby, 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 the denying the existence of the chattel mortgage.
In rejecting petitioners assertion on the applicability of the Tumalad doctrine, the CA lays stress on the fact that the house involved
therein was built on a land that did not belong to the owner of such house. But the law makes no distinction with respect to the
ownership of the land on which the house is built and we should not lay down distinctions not contemplated by law.
It must be pointed out that the characterization by the private respondent is indicative of the intention and impresses upon the
property the character determined by the parties. As stated in Standard 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 a real property as long as
no interest of third parties would be prejudiced thereby.
The status of the subject matter as movable or immovable property was not raised as an issue before the lower court and the CA,
except in a supplemental memorandum in support of the petition filed in the appellate court. There is no record showing that the
Mindanao Bus Company is a public utility engaged in transporting passengers and cargoes by motor trucks in Mindanao Island;
City Assessor of Cagayan assessed the machineries of the respondent, which are either sitting on cement or wooden platforms, as
real properties for P4,400. Petitioner is the owner of the land where it operates and garage for its buses, a repair shop; blacksmith
and carpentry shops where the buses are made; body constructed and repaired for it to be serviceable. The said machines were never
used as industrial equipments to produce finished products for sale or offered to the general public for business.
Issue:
WON the Honorable Court of tax Appeals erred in upholding respondents contention that the questioned assessment are valid; and
that the said tools, equipments or machineries are immovable taxable real properties;
Held:
Respondents contend that said equipments, though movable, are immobilized by destination, in accordance with paragraph 5 of
Article 415 of the New Civil Code which provides:
Art. 415. The following are immovable properties:
xxx xxx xxx
(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. (Emphasis
ours.)
Note that the stipulation expressly states that the equipments are placed on wooden or cement platforms. They can be moved
around and about in petitioner's repair shop. The tools and equipments in question in this instant case are, by their nature, not
essential and principle municipal elements of petitioner's business of transporting passengers and cargoes by motor trucks. They are
merely incidentals acquired as movables and used only for expediency to facilitate and/or improve its service. Even without such
tools and equipments, its business may be carried on, as petitioner has carried on, without such equipments, before the war. The
transportation business could be carried on without the repair or service shop if its rolling equipment is repaired or serviced in another
shop belonging to another.
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.
We hold that the equipments in question are not absolutely essential to the petitioner's transportation business, and petitioner's
business is not carried on in a building, tenement or on a specified land, so said equipment may not be considered real estate within
the meaning of Article 415 (c) of the Civil Code.
8. CALTEX PHILIPPINES INC. VS. CENTRAL BOARD OF ASSESSMENT APPEALS AND CITY ASSESSOR OF PASAY (GR NO. L-
50466)
FACTS: This case is about the realty tax on machinery and equipment installed by Caltex (Philippines) Inc. in its gas stations located
on leased land.
The machines and equipment consists of underground tanks, elevated tank, elevated water tanks, water tanks, gasoline pumps,
computing pumps, water pumps, car washer, car hoists, truck hoists, air compressors and tireflators.
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 operators, upon demand, shall return to Caltex the machines and equipment in good condition
as when received, ordinary wear and tear excepted.
The lessor of the land, where the gas station is located, does not become the owner of the machines and equipment installed therein.
Caltex retains the ownership thereof during the term of the lease.
The city assessor of Pasay City characterized the said items of gas station equipment and machinery as taxable realty. The realty tax
on said equipment amounts to P4,541.10 annually (p. 52, Rollo). The city board of tax appeals ruled that they are personalty. The
assessor appealed to the Central Board of Assessment Appeals.
ISSUE:
Issue: Whether the said machines are personal, not immovable, property which may be a proper subject of a writ of replevin
Issue:
Whether or not the court erred in declaring that the electrical energy may be stolen.
Held:
Based on this
Article 517 of the Penal Code above referred to reads as follows:
The following are guilty of larceny:
(1) Those who with intent of gain and without violence or intimidation against the person, or force against things, shall take another's
personal property without the owner's consent.
It is true that electricity is no longer, as formerly regarded by electricians, as fluid. But its manifestation and effects, like those of gas,
may be seen and felt. The true test of what may be stolen is not whether it is corporeal or incorporeal, but whether, being possessed
of value, a person other than the owner, may appropriate the same. Electricity, like gas, is valuable merchandise, and may thus be
stolen.
13. LUIS MARCOS LAUREL VS. HON. ZEUS ABROGAR (GR NO. 155076)
Facts:
Laurel was charged with Theft under Art. 308 of the RPC for allegedly taking, stealing, and using PLDT's international long distance
calls by conducting International Simple Resale (ISR) a method of outing and completing international long-distance calls using
lines, cables, antennae, and/or air wave frequency which connect directly to the local/domestic exchange facilities of the country
where the call is destined. PLDT alleged that this service was stolen from them using their own equipment and caused damage to
them amounting to P20,370,651.92;
The Court held that Amended Information does not contain material allegations charging petitioner with theft of personal property
since international long distance calls and the business of providing telecommunication or telephone services are not personal
properties under Article 308 of the Revised Penal Code.
Issue:
WON International Simple Resale (international long-distance calls) maybe be considered as personal property, thus constituting
theft
Held:
The elements of theft under Article 308 of the Revised Penal Code are as follows: (1) that there be taking of personal property; (2)
that said property belongs to another; (3) that the taking be done with intent to gain; (4) that the taking be done without the consent
of the owner; and (5) that the taking be accomplished without the use of violence against or intimidation of persons or force upon
things. SDHETI
Any personal property, tangible or intangible, corporeal or incorporeal, capable of appropriation can be the object of theft. In Article
335 of the Civil Code of Spain, "personal property" is defined as "anything susceptible of appropriation and not included in the
foregoing chapter (not real property)". The only requirement for a personal property to be the object of theft under the penal code is
that it be capable of appropriation. It need not be capable of "asportation", which is defined as "carrying away".
To appropriate means to deprive the lawful owner of the thing. The word "take" in the Revised Penal Code includes any act
intended to transfer possession which, as held in the assailed Decision, may be committed through the use of the offenders' own
hands, as well as any mechanical device, such as an access device or card as in the instant case. This includes controlling the
destination of the property stolen to deprive the owner of the property, such as the use of a meter tampering, use of a device to
fraudulently obtain gas and the use of jumper to divert electricity. In the instant case, the act of conducting ISR operations by illegally
connecting various equipment or apparatus to private respondent PLDT's telephone system, through which petitioner is able to resell
Issue:
Whether or not Cebu Oxygen can validly own said land.
Held:
Yes. Under Cebus Charter (RA 3857), the city council may 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. Since that portion of the city street subject of Cebu Oxygens application for registration
of title was withdrawn from public use, it follows that such withdrawn portion becomes patrimonial property which can be the object
of an ordinary contract.
Article 422 of the Civil Code expressly provides that Property of public dominion, when no longer intended for public use or for public
service, shall form part of the patrimonial property of the State.
19. LAUREL VS. GARCIA (GR NO. 92013)
Facts:
The subject property in this case is one of the four (4) properties in Japan acquired by the Philippine government under the
Reparations Agreement entered into with Japan on May 9, 1956;
The properties and the capital goods and services procured from the Japanese government for national development projects are part
of the indemnification to the Filipino people for their losses in life and property and their suffering during World War II.
The Roponggi property consists of the land and building "for the Chancery of the Philippine Embassy". As intended, it became the site
of the Philippine Embassy until the latter was transferred to Nampeidai on July 22, 1976 when the Roppongi building needed major
repairs. Due to the failure of our government to provide necessary funds, the Roppongi property has remained undeveloped since that
time.
A proposal was presented to President Corazon C. Aquino by former Philippine Ambassador to Japan, Carlos J. Valdez, to make the
property the subject of a lease agreement with a Japanese firm Kajima. At the end of the lease period, all the three leased buildings
shall be occupied and used by the Philippine government. No change of ownership or title shall occur. The Philippine government
retains the title all throughout the lease period and thereafter. However, the government has not acted favorably on this proposal
which is pending approval and ratification between the parties. On August 11, 1986, President Aquino created a committee to study
the disposition/utilization of Philippine government properties in Tokyo and Kobe, Japan.
On July 25, 1987, the President issued Executive Order No. 296 entitling non-Filipino citizens or entities to avail of reparations' capital
goods and services in the event of sale, lease or disposition. The four properties in Japan including the Roppongi were specifically
mentioned in the first "Whereas" clause.
Amidst opposition by various sectors, the Executive branch of the government has been pushing, with great vigor, its decision to sell
the reparations properties starting with the Roppongi lot.
Issue:
WON the subject property can be alienated
Held:
The Roppongi site and the three related properties were acquired through reparations agreements and the Poppongi site was
specifically designated under the Reparations Agreement to house the Philippine Embassy. The nature of the Roppongi lot as property
for public service is expressly spelled out. It is dictated by the terms of the Reparations Agreement and the corresponding contract of
procurement which bind both the Philippine government and the Japanese government. There can be no doubt that it is of public
dominion unless it is convincingly shown that the property has become patrimonial.
As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot be alienated. Its ownership is a special
collective ownership for general use and enjoyment, an application to the satisfaction of collective needs, and resides in the social
group. The applicable provisions of the Civil Code are:
"ART. 419.Property is either of public dominion or of private ownership.
"ART. 420.The following things are property of public dominion:
MIAA admits that the MIAA Charter has placed the title to the Airport Lands and Buildings in the name of MIAA. However, MIAA points
out that it cannot claim ownership over these properties since the real owner of the Airport Lands and Buildings is the Republic of the
Philippines. The MIAA Charter mandates MIAA to devote the Airport Lands and Buildings
for the benefit of the general public. Since the Airport Lands and Buildings are devoted to public use and public service, the ownership
of these properties remains with the State. The Airport Lands and Buildings are thus inalienable and are not subject to real estate tax
by local governments.
MIAA also points out that Section 21 of the MIAA Charter specifically exempts MIAA from the payment of real estate tax. MIAA insists
that it is also exempt from real estate tax under Section 234 of the Local Government Code because the Airport Lands and Buildings
are owned by the Republic. To justify the exemption, MIAA invokes the principle that the government cannot tax itself. MIAA points
out that the reason for tax exemption of public property is that its taxation would not inure to any public advantage, since in such a
case the tax debtor is also the tax creditor.
Respondents invoke Section 193 of the Local Government Code, which expressly withdrew the tax exemption privileges of
"government-owned and-controlled corporations" upon the effectivity of the Local Government Code. Respondents also argue that a
basic rule of statutory construction is that the express mention of one person, thing, or act excludes all others. An international airport
is not among the exceptions mentioned in Section 193 of the Local Government Code. Thus, respondents assert that MIAA cannot
claim that the Airport Lands and Buildings are exempt from real estate tax.
ISSUE: Whether the Airport Lands and Buildings of MIAA are exempt from real estate tax under existing laws. If so exempt, then the
real estate tax assessments issued by the City of Paraaque, and all proceedings taken pursuant to such assessments, are void.
HELD: We rule that MIAA's Airport Lands and Buildings are exempt from real estate tax imposed by local governments.
First, MIAA is not a government-owned or controlled corporation but an instrumentality of the National Government and thus exempt
from local taxation. Second, the real properties of MIAA are owned by the Republic of the Philippines and thus exempt from real estate
tax.
A government instrumentality like MIAA falls under Section 133(o) of the Local Government Code, which states:
SEC. 133.Common Limitations on the Taxing Powers of Local Government Units. Unless otherwise provided herein, the exercise of
the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following:
xxx xxx xxx
(o)Taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities and local government units.
There is also no reason for local governments to tax national government instrumentalities for rendering essential public services to
inhabitants of local governments. The only exception is when the legislature clearly intended to tax government instrumentalities for
the delivery of essential public services for sound and compelling policy considerations. There must be express language in the law
empowering local governments to tax national government instrumentalities. Any doubt whether such power exists is resolved against
local governments.
Thus, Section 133 of the Local Government Code states that "unless otherwise provided" in the Code, local governments cannot tax
national government instrumentalities. As this Court held in Basco v. Philippine Amusements and Gaming Corporation:
The states have no power by taxation or otherwise, to retard, impede, burden or in any manner control the operation of constitutional
laws enacted by Congress to carry into execution the powers vested in the federal government. (MC Culloch v. Maryland, 4 Wheat
316, 4 L Ed. 579)
The transfer of the Airport Lands and Buildings from the Bureau of Air Transportation to MIAA was not meant to transfer beneficial
ownership of these assets from the Republic to MIAA. The purpose was merely to reorganize a division in the Bureau of Air
Transportation into a separate and autonomous body. The Republic remains the beneficial owner of the Airport Lands and Buildings.
MIAA itself is owned solely by the Republic. No party claims any ownership rights over MIAA's assets adverse to the Republic.
The MIAA Charter expressly provides that the Airport Lands and Buildings "shall not be disposed through sale or through any other
mode unless specifically approved by the President of the Philippines." This only means that the Republic retained the beneficial
ownership of the Airport Lands and Buildings because under Article 428 of the Civil Code, only the "owner has the right to . . . dispose
of a thing." Since MIAA cannot dispose of the Airport Lands and Buildings, MIAA does not own the Airport Lands and Buildings.
SEC. 193.Withdrawal of Tax Exemption Privileges Unless otherwise provided in this Code, tax exemptions or incentives granted to,
or presently enjoyed by all persons, whether natural or juridical, including government-owned or controlled corporations, except local
water districts, cooperatives duly registered under R.A. No. 6938, non-stock and non-profit hospitals and educational institutions are
hereby withdrawn upon effectivity of this Code. (Emphasis supplied) ESacHC
The minority states that MIAA is indisputably a juridical person. The minority argues that since the Local Government Code withdrew
the tax exemption of all juridical persons, then MIAA is not exempt from real estate tax. Thus, the minority declares:
It is evident from the quoted provisions of the Local Government Code that the withdrawn exemptions from realty tax cover not just
GOCCs, but all persons. To repeat, the provisions lay down the explicit proposition that the withdrawal of realty tax exemption applies
to all persons. The reference to or the inclusion of GOCCs is only clarificatory or illustrative of the explicit provision.
The term "All persons" encompasses the two classes of persons recognized under our laws, natural and juridical persons. Obviously,
MIAA is not a natural person. Thus, the determinative test is not just whether MIAA is a GOCC, but whether MIAA is a juridical person
at all. (Emphasis and underscoring in the original)
The minority's theory violates Section 133(o) of the Local Government Code which expressly prohibits local governments from
imposing any kind of tax on national government instrumentalities. Section 133(o) does not distinguish between national government
instrumentalities with or without juridical personalities. Where the law does not distinguish, courts should not distinguish. Thus,
Section 133(o) applies to all national government instrumentalities, with or without juridical personalities. The determinative test
whether MIAA is exempt from local taxation is not whether MIAA is a juridical person, but whether it is a national government
instrumentality under Section 133(o) of the Local Government Code. Section 133(o) is the specific provision of law prohibiting local
governments from imposing any kind of tax on the national government, its agencies and instrumentalities.
The exception to the exemption in Section 234(a) is the only instance when the national government, its agencies and
instrumentalities are subject to any kind of tax by local governments. The exception to the exemption applies only to real estate tax
and not to any other tax. The justification for the exception to the exemption is that the real property, although owned by the
Republic, is not devoted to public use or public service but devoted to the private gain of a taxable person.
----
To summarize, MIAA is not a government-owned or controlled corporation under Section 2(13) of the Introductory Provisions of the
Administrative Code because it is not organized as a stock or non-stock corporation. Neither is MIAA a government-owned or
controlled corporation under Section 16, Article XII of the 1987 Constitution because MIAA is not required to meet the test of
economic viability. MIAA is a government instrumentality vested with corporate powers and performing essential public services
pursuant to Section 2(10) of the Introductory Provisions of the Administrative Code. As a government instrumentality, MIAA is not
subject to any kind of tax by local governments under Section 133(o) of the Local Government Code. The exception to the exemption
in Section 234(a) does not apply to MIAA because MIAA is not a taxable entity under the Local Government Code. Such exception
applies only if the beneficial use of real property owned by the Republic is given to a taxable entity.
Finally, the Airport Lands and Buildings of MIAA are properties devoted to public use and thus are properties of public dominion.
Properties of public dominion are owned by the State or the Republic. Article 420 of the Civil Code provides:
Art. 420.The following things are property of public dominion:
(1)Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores,
roadsteads, andothers of similar character;
(2)Those which belong to the State, without being for public use, and are intended for some public service or for the development of
the national wealth. (Emphasis supplied)
The term "ports . . . constructed by the State" includes airports and seaports. The Airport Lands and Buildings of MIAA are intended
for public use, and at the very least intended for public service. Whether intended for public use or public service, the Airport Lands
and Buildings are properties of public dominion. As properties of public dominion, the Airport Lands and Buildings are owned by the
Republic and thus exempt from real estate tax under Section 234(a) of the Local Government Code.
Under Article 420 of the Civil Code, the Airport Lands and Buildings of MIAA, being devoted to public use, are properties of public
dominion and thus owned by the State or the Republic of the Philippines. Article 420 specifically mentions "ports . . . constructed by
the State," which includes public airports and seaports, as properties of public dominion and owned by the Republic. As properties of
public dominion owned by the Republic, there is no doubt whatsoever that the Airport Lands and Buildings are expressly exempt from
real estate tax under Section 234(a) of the Local Government Code. This Court has also repeatedly ruled that properties of public
dominion are not subject to execution or foreclosure sale.
WHEREFORE, we GRANT the petition. We SET ASIDE the assailed Resolutions of the Court of Appeals of 5 October 2001 and 27
September 2002 in CA-G.R. SP No. 66878. We DECLARE the Airport Lands and Buildings of the Manila International Airport Authority
EXEMPT from the real estate tax imposed by the City of Paraaque. We declare VOID all the real estate tax assessments, including the
final notices of real estate tax delinquencies, issued by the City of Paraaque on the Airport Lands and Buildings of the Manila
International Airport Authority, except for the portions that the Manila International Airport Authority has leased to private parties. We
also declare VOID the assailed auction sale, and all its effects, of the Airport Lands and Buildings of the Manila International Airport
Authority
21. PHILIPPINE PORTS AUTHORITY VS. CITY OF ILOILO (GR NO. 109791)
Facts: Petitioner Philippine Ports Authority (PPA) is asking the court on Petition for Review on Certiorari to set aside the ruling ordering
it to pay real property and business taxes to respondent City of Iloilo.
The City of Iloilo filed an action for recovery of sum of money against PPA, seeking to collect real property taxes as well as
business taxes, computed from the last quarter of 1984 to the fourth quarter of 1988.
It was alleged that the PPA is engaged in the business of arrastre services, stevedoring services, leasing of real estate, and a
registered owner of a wharehouse which is used in the operation of its business. From these, PPA was alleged to be obligated to pay
business taxes and real property taxes.
The Regional Trial Court (RTC) of Iloilo held PPA liable for the payment of real property taxes and for business taxes. However,
it held that the City of Iloilo may not collect business taxes on PPAs arrastre and stevedoring services, as these form part of PPAs
governmental functions.
The following issues were raised on appeal:
1. Whether or not the RTC erred in decreeing a property of public dominion (port facility) as subject to realty taxes just
because the mentioned property is being administered by what it perceives to be a taxable government corporation.
2. Whether or not the petitioner is subject to business taxes for leasing to private entities real estate without considering
that the petitioner is not engaged in business.
The City countered by stating in its Comment that PPA changed its theory of the case on appeal citing that the allegation
regarding the subject property as public dominion which was never raised during trial nor in its memorandum filed with the lower
court.
Issues: 1. Whether or not a party can change its theory of the case on appeal.
2. Whether or not improvements introduced by PPA on public properties are exempted from tax.
Held: As a rule, a party who deliberately adopts a certain theory upon which the case is tried and decided by the lower court will not
be permitted to change theory on appeal. Points of law, theories, issues and arguments not brought to the attention of the lower court
need not be, and ordinarily will not be, considered by a reviewing court, as these cannot be raised for the first time at such late stage.
However, there is an exception to the rule as enunciated in Lianga Lumber Co. vs. Lianga Timber Co. Inc., 76 SCRA 197, where the
court said;
In the interest of justice and within the sound discretion of the appellate court, a party may change theory on appeal only
when the factual bases thereof would not require presentation of any further evidence by the adverse party in order to enable it to
properly meet the issue raised in the new theory.
But this exception is not applicable in this case. It must be emphasized that the enumeration of properties of public dominion
under Article 420 of the New Civil Code specifically states ports constructed by the State. Thus, in order to consider the port in this
case as falling under the said classification, the fact that the port was constructed by the State must first be established by sufficient
19 PROPERTY - CASE DIGESTS
evidence. Here, there was no proof adduced to establish that the port was constructed by the State, hence, the court cannot just
automatically conclude that the property is of public dominion.
It is also noted that the PPA failed to raise the issue of ownership during the pre-trial. The pretrial is primarily intended to
make certain that all issues necessary to the disposition of the case are properly raised. Consequently, the determination of issues at a
pre-trial conference bars the consideration of other questions on appeal. In the case at bar, the fact that the issue of ownership is
outside of what has been delimited during the pre-trial further justifies the disallowance of PPAs new theory. Hence, PPA may not be
permitted to change its theory on appeal.
Granting that the petitioners present theory is allowed, the court still found its contentions untenable. It must be stressed that
what is being taxed in the present case is PPAs warehouse, which, although located within the port is distinct from the port itself.
Considering the warehouses separable nature as an improvement upon the port, and the fact that it is not open for use by
everyone and freely accessible to the public, it is not part of the port as stated in Article 420 of the Civil Code. In the same way that it
was ruled that the exemption of public property from taxation does not extend to improvements made thereon by homesteaders or
occupants at their own expense. Also, it was held that the taxability of the warehouse in this case, it being a mere improvement built
on an alleged property of public dominion.
As regards the second issue raised by PPA regarding the lease of its property to private persons, the Court ruled that its own
admission that it leases out to private persons for convenience and not necessarily as part of its governmental function of
administering port operations is an admission that the act was a corporate power, which, is actually expressly stated as so in its
charter. Any income or profit generated by an entity, even of a corporation organized without any intention of realizing profit in the
conduct of its activities, is subject to tax (CIR vs. CA, 329 SCRA 237). What matters is the established fact that it leased out its
building to private entities from which it regularly earned substantial income. Thus, in the absence of any proof of exemption
therefrom, PPA is declared liable for the assessed business taxes.
The petition is denied.
22. PHILIPPINE FISHERIES DEVELOPMENT AUTHORITY VS. CA (GR NO. 169836)
Facts: Petitioner is an instrumentality of government which was a recipient of the lands and buildings of Iloilo Fishing Port Complex
(IFPC) which was reclaimed by the Ministry of Public Works and Highways. Portions of the IFPC were leased by PFDA to private firms
and individuals engaged in fish related businesses. In 1988, the LGU of Iloilo taxed the entire IFPC with real property tax, and
delinquency amounted to P5M thus City of Iloilo auctioned IFPC to satisfy such delinquency. Authority sought for tax exemption but
was rejected by the City assessor thus elevated the question to DOF which favored the taxation but as to the auction the properties of
PFDA should be ones auctioned and not IFPC because it was owned by government. Office of the Pres., RTC and CA affirmed such
decisions but opined that IFPC may then be sold at public auction to satisfy the delinquency.
Issues:
(1) Is PFDA liable to pay real property tax?
(2) Is IPFC a property of public dominion thus cannot be auctioned?
Held:
(1) PFDA is not a GOCC but an INSTRUMENTALITY of the government thus generally EXEMPTED from payment of real property tax.
PFDA is characterized as not a Govt Owned and Controlled Corp. (GOCC) on the basis of the MIAA vs. CA which stated that for one to
be a GOCC two reqs must concur: (1) that it has capital stock divided into shares, and (2) that it is authorized to distribute dividends
and allotments of surplus and profits to its stockholders; which is absent in the case at bar. Pursuant to Sec. 133 (o) of LGC,
instrumentalities of the national government, like MIAA, are exempt from local taxes. However, submits of an exception, Section 234
(a) of the LGC, 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. 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. The real property tax assessments issued by the City of Iloilo
should be upheld only with respect to the portions leased to private persons.
(2) Yes, it cannot be auctioned in case PDF fails to pay real property tax due them. Taking basis from Chavez vs. PEA, reclaimed lands
are lands of public domain and thus cannot be subject of sale , WITHOUT CONGRESSIONAL authorization. SC said, In the same vein,
the port built by the State in the Iloilo fishing complex is a property of the public dominion and cannot therefore be sold at public
auction.
23. IDEALS VS. PSALM (GR NO. 192088)
24. WOODRIDGE SCHOOL, INC. ET. AL. VS. ARB CONSTRUCTION INC. (GR NO. 157285)
Facts:
Javier, is the registered owner of the adjacent lot to that of Woodridge. Respondent ARB Construction is the owner and developer of
Soldiers Hills Subdivision in Bacoor, Cavite, which is composed of four phases. Phase 1 of the subdivision was already accessible from
Issues:
Whether the disputed road is a property of public dominion pursuant to the last clause of Article 420 (1), and, as such, is not a valid
subject for legal easement.
Whether the offer of petitioners amounting to P50,000 is a sufficient compensation for their use of the road.
Held:
With regard to the first issue, the Supreme Court says, no.
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. 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 subdivision owner of the public's passage through it. The local
government should first acquire them by donation, purchase, or expropriation, if they are to be utilized as a public road. In the
present case, since no donation has been made in favor of any local government and the title to the road lot is still registered in the
name of ARB, the disputed property remains private.
With regard to the second issue, the Supreme Court again says, no.
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. 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. The Civil Code
categorically provides for the measure by which the proper indemnity may be computed. Under Article 649, paragraph 2, it is stated:
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.
Issues:
1. Whether RBI can acquire reclaimed foreshore and submerged land areas because they are allegedly inalienable lands of the
public domain
2. Whether RBI can acquire reclaimed lands when there was no declaration that said lands are no longer needed for public use.
3. Whether RBI, being a private corporation, is barred from the Constitution to acquire lands of the public domain.
Held:
1. Yes. The reclaimed lands across R-10 were classified alienable and disposable lands of public domain of the State. First, there
were three presidential proclamations classifying the reclaimed lands across R-10 as alienable or disposable hence open to disposition
or concession. These were MO 415 issued by President Aquino, Proclamation No. 39 and Proclamation No. 465 both issued by
President Ramos. Secondly, Special Patents Nos. 3591, 3592, and 3598 issued by the DENR classified the reclaimed areas as alienable
and disposable.
Admittedly, it cannot be said that MO 415, Proclamations Nos. 39 and 465 are explicit declarations that the lands to be reclaimed
are classified as alienable and disposable. We find however that such conclusion is derived and implicit from the authority given to the
NHA to transfer the reclaimed lands to qualified beneficiaries. In line with the ruling in Chavez v. PEA, the court held that MO 415 and
Proclamations Nos. 39 and 465 cumulatively and jointly taken together with Special Patent Nos. 3591, 3592, and 3598 more than
2. Yes. Even if it is conceded that there was no explicit declaration that the lands are no longer needed for public use or public
service, there was however an implicit executive declaration that the reclaimed areas R-10 are not necessary anymore for public use
or public service. President Aquino through MO 415 conveyed the same to the NHA partly for housing project and related
commercial/industrial development intended for disposition to and enjoyment of certain beneficiaries and not the public in general and
partly as enabling component to finance the project. Also, President Ramos, in issuing Proclamation No. 39, declared, though
indirectly, that the reclaimed lands of the Smokey Mountain project are no longer required for public use or service. In addition,
President Ramos issued Proclamation No. 465 increasing the area to be reclaimed from forty (40) hectares to seventy-nine (79)
hectares, elucidating that said lands are undoubtedly set aside for the beneficiaries of SMDRP and not the public. MO 415 and
Proclamations Nos. 39 and 465 are declarations that proclaimed the non-use of the reclaimed areas for public use or service as the
SMDRP cannot be successfully implemented without the withdrawal of said lands from public use or service.
3. Yes. When Proclamations Nos. 39 and 465 were issued, inalienable lands covered by said proclamations were converted to
alienable and disposable lands of public domain. When the titles to the reclaimed lands were transferred to the NHA, said alienable
and disposable lands of public domain were automatically classified as lands of the private domain or patrimonial properties of the
State because the NHA is an agency NOT tasked to dispose of alienable or disposable lands of public domain. The only way it can
transfer the reclaimed land in conjunction with its projects and to attain its goals is when it is automatically converted to patrimonial
properties of the State. Being patrimonial or private properties of the State, then it has the power to sell the same to any qualified
personunder the Constitution, Filipino citizens as private corporations, 60% of which is owned by Filipino citizens like RBI.
28. ESTATE OF YUJUICO VS. REPUBLIC (GR NO. 168661)
Facts: Land in question was originally owned by a certain Fermina Castro which she sought to register on 1973 which was opposed by
the OSG but was then dismissed and as such attaining finality (Dir. Of lands did not appeal) then an OCT was subsequently issued in
Castros favor. The said land was then sold to Jesus Yujuico which then was subdivided into two, one for him and the other portion
sold to a certain Carpio (also petitioner in said case). Sometime in 1997, Pub. Estates Authority (PEA) was established for reclamation
purposes and then was tasked to create the Manila Coastal Road. Both Y and C discovered that in the plan, it overlapped their land
and a portion of their lands were sold by PEA to Manila Bay Dev Corp (MDBC). Y and C filed a petition for quieting title with damages
but in 1998, parties entered into a Compromise Agreement approved by the RTC. A deed of exchange of property transpired where a
1.4 has of PEA land will be conveyed to Y and C in exchange for a combined property of 1.7 has. Subsequently, a new PEA GM was
appointed, such held in abeyance the compromise agreement which led to the filing of a petition for relief which reached the SC,
however was dismissed for being filed out of time. In 2001, however, the OSG filed a petition for annulment and cancellation was
filed claiming that the land surveyed for Fermina Castro in 1973 was part of the Manila Bay thus claiming further that Castro had no
registrable rights on said land because it forms part of public dominion. RTC held that action was barred by res judicata however, it
was overturned by the CA claiming that res judicata does not apply to lands of Public Domain.
Issue: WON Equitable Estoppel applies in said case?
Held: Yes. GR is that Estoppel does not operate against the state, certain deviation has been allowed citing the case of Manila Lodge
No. 761 vs. CA where it stated: 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, the doctrine of equitable estoppel may be
invoked against public authorities as well as against private individuals. SC said EE may be invoked against public authorities when
said land was already alienated to innocent purchasers of value. Not only was the land barred by estoppel but by laches as well
because Yujuico acquired the land from Castro in 1974 or more than 27 years have lapsed until the case for reversion was filed in
2001. Another law cited is Sec. 32 of PD 1529 which recognizes the rights of innocent purchasers for value, it states but in no case
shall such petition be entertained by the court where an innocent purchaser for value has acquired the land or an interest therein,
whose rights may be prejudiced. According to SC, Yujuico relied on the clean title of Castro and acquired it through good faith and for
value, and there was no showing that he acquired such fraudulently. Thus, he should be protected under the Torrens system as well
as subsequent buyer Carpio. Aside from such grounds, SC relied on the grounds of res judicata and Laches. On RJ, a similar case
existed thus applying Doctrine of Precedent plus by virtue of the Comp Agreement govt recognized ownership of Yujuico of said
disputed land. On laches, 27 years.
29. LAND BANK OF THE PHILIPPINES VS. REPUBLIC (GR NO. 150824)
FACTS:
On September 26, 1969, Angelito C. Bugayong was issued OCT No. P-2823, which emanated from Sales Patent No. 4576 issued on
September 22, 1969. It covered a parcel of land located in Bocana, Kabacan, Davao City, with an area of 41,276 square meters. It
was originally surveyed as Lot No. 4159 and identified as marshy and under water during high tide and that it used to be a portion of
a dry river bed near the mouth of Davao River.
Issues:
1. In order that an alienable and disposable land of the public domain may be registered under Section 14(1) of Presidential Decree
No. 1529, otherwise known as the Property Registration Decree, should the land be classified as alienable and disposable as of June
12, 1945 or is it sufficient that such classification occur at any time prior to the filing of the applicant for registration provided that it is
established that the applicant has been in open, continuous, exclusive and notorious possession of the land under a bona fide claim of
ownership since June 12,1945 or earlier?
2. For purposes of Section 14(2) of the Property Registration Decree may a parcel of land classified as alienable and disposable be
deemed private land and therefore susceptible to acquisition by prescription in accordance with the Civil Code?
Held:
The Petition is denied.
1.) In connection with Section 14(1) of the Property Registration Decree, Section 48(b) of the Public Land Act recognizes and confirms
that those who by themselves or through their predecessors in interest have been in open, continuous, exclusive, and notorious
possession and occupation of alienable and disposable lands of the public domain, under a bona fide claim of acquisition of ownership,
since June 12, 1945 have acquired ownership of, and registrable title to, such lands based on the length and quality of their
possession.
(a) Since Section 48(b) merely requires possession since 12 June 1945 and does not require that the lands should have
been alienable and disposable during the entire period of possession, the possessor is entitled to secure judicial confirmation of his
title thereto as soon as it is declared alienable and disposable, subject to the timeframe imposed by Section 47 of the Public Land Act.
(b) The right to register granted under Section 48(b) of the Public Land Act is further confirmed by Section 14(1) of the
Property Registration Decree.
It is clear that the evidence of petitioners is insufficient to establish that Malabanan has acquired ownership over the subject property
under Section 48(b) of the Public Land Act. There is no substantive evidence to establish that Malabanan or petitioners as his
predecessors-in-interest have been in possession of the property since 12 June 1945 or earlier. The earliest that petitioners can date
back their possession, according to their own evidencethe Tax Declarations they presented in particularis to the year 1948. Thus,
they cannot avail themselves of registration under Section 14(1) of the Property Registration Decree.
Neither can petitioners properly invoke Section 14(2) as basis for registration. While the subject property was declared as alienable or
disposable in 1982, there is no competent evidence that is no longer intended for public use service or for the development of the
national evidence, conformably with Article 422 of the Civil Code. The classification of the subject property as alienable and disposable
land of the public domain does not change its status as property of the public dominion under Article 420(2) of the Civil Code. Thus, it
is insusceptible to acquisition by prescription.
31. DENR, ET. AL. VS. MAYOR YAP, ET. AL. (GR NO. 167707)
Facts:
On November 10, 1978, then President Marcos issued Proc. No. 1801 declaring Boracay Island, among other islands, caves and
peninsulas in the Philippines, as tourist zones and marine reserves under the administration of the Philippine Tourism Authority (PTA).
President Marcos later approved the issuance of PTA Circular 3-82 dated September 3, 1982, to implement Proclamation No. 1801.
Claiming that Proclamation No. 1801 and PTA Circular No 3-82 precluded them from filing an application for judicial confirmation of
imperfect title or survey of land for titling purposes, respondents-claimants Mayor . Yap, Jr., and others filed a petition for
declaratory relief with the RTC in Kalibo, Aklan.
In their petition, respondents-claimants alleged that Proc. No. 1801 and PTA Circular No. 3-82 raised doubts on their right to secure
titles over their occupied lands. They declared that they themselves, or through their predecessors-in-interest, had been in open,
continuous, exclusive, and notorious possession and occupation in Boracay since June 12, 1945, or earlier since time immemorial.
They declared their lands for tax purposes and paid realty taxes on them. Respondents-claimants posited that Proclamation No. 1801
and its implementing Circular did not place Boracay beyond the commerce of man. Since the Island was classified as a tourist zone, it
was susceptible of private ownership. Under Section 48(b) of the Public Land Act, they had the right to have the lots registered in
their names through judicial confirmation of imperfect titles.
The Republic, through the OSG, opposed the petition for declaratory relief. The OSG countered that Boracay Island was an
unclassified land of the public domain. It formed part of the mass of lands classified as public forest, which was not available for
disposition pursuant to Section 3(a) of the Revised Forestry Code, as amended. The OSG maintained that respondents-claimants
reliance on PD No. 1801 and PTA Circular No. 3-82 was misplaced. Their right to judicial confirmation of title was governed by Public
Land Act and Revised Forestry Code, as amended. Since Boracay Island had not been classified as alienable and disposable, whatever
possession they had cannot ripen into ownership.
On July 14, 1999, the RTC rendered a decision in favor of respondents-claimants, declaring that, PD 1810 and PTA Circular No. 3-82
Revised Forestry Code, as amended.
The OSG moved for reconsideration but its motion was denied. The Republic then appealed to the CA. On In 2004, the appellate court
affirmed in toto the RTC decision. Again, the OSG sought reconsideration but it was similarly denied. Hence, the present petition under
Rule 45.
On May 22, 2006, during the pendency the petition in the trial court, President Gloria Macapagal-Arroyo issued Proclamation No. 1064
classifying Boracay Island partly reserved forest land (protection purposes) and partly agricultural land (alienable and disposable).
On November 21, 2006, this Court ordered the consolidation of the two petitions
Issue:
WON private claimants have a right to secure titles over their occupied portions in Boracay
Held:
Except for lands already covered by existing titles, Boracay was an unclassified land of the public domain prior to Proclamation No.
1064. Such unclassified lands are considered public forest under PD No. 705.
PD No. 705 issued by President Marcos categorized all unclassified lands of the public domain as public forest. Section 3(a) of PD No.
705 defines a public forest as a mass of lands of the public domain which has not been the subject of the present system of
classification for the determination of which lands are needed for forest purpose and which are not. Applying PD No. 705, all
unclassified lands, including those in Boracay Island, are ipso facto considered public forests. PD No. 705, however, respects titles
already existing prior to its effectivity.
The 1935 Constitution classified lands of the public domain into agricultural, forest or timber, such classification modified by the 1973
Constitution. The 1987 Constitution reverted to the 1935 Constitution classification with one addition: national parks. Of these, only
agricultural lands may be alienated. Prior to Proclamation No. 1064 of May 22, 2006, Boracay Island had never been expressly and
administratively classified under any of these grand divisions. Boracay was an unclassified land of the public domain.
A positive act declaring land as alienable and disposable is required. In keeping with the presumption of State ownership, the Court
has time and again emphasized that there must be a positive act of the government, such as a presidential proclamation or an
executive order; an administrative action; investigation reports of Bureau of Lands investigators; and a legislative act or a statute. The
applicant may also secure a certification from the government that the land claimed to have been possessed for the required number
of years is alienable and disposable. The burden of proof in overcoming such presumption is on the person applying for registration
(or claiming ownership), who must prove that the land subject of the application is alienable or disposable.
In the case at bar, no such proclamation, executive order, administrative action, report, statute, or certification was presented to the
Court. The records are bereft of evidence showing that, prior to 2006, the portions of Boracay occupied by private claimants were
subject of a government proclamation that the land is alienable and disposable. Matters of land classification or reclassification cannot
be assumed. They call for proof.
Proc. No. 1801 cannot be deemed the positive act needed to classify Boracay Island as alienable and disposable land. If President
Marcos intended to classify the island as alienable and disposable or forest, or both, she would have identified the specific limits of
each, as President Arroyo did in Proclamation No. 1064. This was not done in Proclamation No. 1801.
32. VDA. TE TAN TOCO VS. MUNICIPAL COUNCIL OF ILOILO (49 PHIL 52)
It appears from the record that the widow of Tan Toco had sued the municipal council of Iloilo for the amount of P42,966.40, being
the purchase price of two strips of land, one on Calle J. M. Basa consisting of 592 square meters, and the other on Calle Aldiguer
consisting of 59 square meters, which the municipality of Iloilo had appropriated for widening said street. The Court of First Instance
of Iloilo sentenced the said municipality to pay the plaintiff the amount so claimed, plus the interest, and the said judgment was on
appeal affirmed by this court.
On account of lack of funds the municipality of Iloilo was unable to pay the said judgment, wherefore plaintiff had a writ of execution
issue against the property of the said municipality, by virtue of which the sheriff attached two auto trucks used for street sprinkling,
one police patrol automobile, the police stations on Mabini street, and in Molo and Mandurriao and the concrete structures, with the
corresponding lots, used as markets by Iloilo, Molo, and Mandurriao.
ISSUE: Whether or not the property levied upon is exempt from execution.
HELD:
The principle is that the property for public use of the State is not within the commerce of man and, consequently, is unalienable 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.
Issue: WON the funds of the Pasay City Government which were garnished by the City Sheriff are by law exempt from execution
and/or garnishment.
Held: A compromise has upon the parties the effect and authority of res judicata; but there shall be no execution except in compliance
with a judicial compromise. A compromise agreement not contrary to law, public order, public policy, morals or good customs is a valid
contract which is the law between the parties themselves. A judgment on a compromise is a final and executory. It is immediately
executory in the absence of a motion to set the same aside on the ground of fraud, mistake or duress. In fact in the herein case
before Us, execution has already been issued. Considering this in the light of Article 2041 of the New Civil Code, to wit: Art. 2041. If
one of the parties fails or refuses to abide by the compromise, the other party may either enforce the compromise or regard it as
rescinded and insist upon his original demand.
It is obvious that the respondent-appellee did not only succeed in enforcing the compromise but said plaintiff-appellee likewise
wants to rescind the said compromise. It is clear from the language of the law, specifically Article 2041 of the New Civil Code that one
of the parties to a compromise has two options: 1) to enforce the compromise; or 2) to rescind the same and insist upon his original
demand. The respondent-appellee in the case herein before Us wants to avail of both of these options. This can not be done. The
respondent-appellee cannot ask for rescission of the compromise agreement after it has already enjoyed the first option of enforcing
the compromise by asking for a writ of execution resulting thereby in the garnishment of the Pasay City funds deposited with the
Philippine National Bank which eventually was delivered to the respondent-appellee.
Upon the issuance of the writ of execution, the petitioner-appellants moved for its quashal alleging among other things the
exemption of the government from execution. This move on the part of the petitioner-appellant is at first glance laudable for "all
government funds deposited with the Philippine National Bank by any agency or instrumentality of the government, whether by way of
general or special deposit, remain government funds and may not be subject to garnishment or levy. But, inasmuch as an ordinance
has already been enacted expressly appropriating the amount of P613,096.00 of payment to the respondent-appellee, then the herein
Issue:
1.Whether or not the property involved is a private or patrimonial property of the City of Manila.
2.Whether or not Republic Act No. 4118 valid and not repugnant to the Constitution.
Held:
1. NO, it is the property of the State.
2. Yes, it is valid.
Consequently, the City of Manila was not deprived of anything it owns, either under the dueprocess clause or under the eminent
domain provisions of the Constitution. If it failed to getfrom 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
37. MANILA LODGE NO. 761 VS. COURT OF APPEALS (73 SCRA 162)
Facts:
June 26, 1905, Philippine Commission enacted Act No. 1360 authorizing the city of Manila to reclaim a portion of Manila Bay. It was
to form part of Luneta extension. It was stipulated 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 not to exceed 500 ft. x 600 ft. for a hotel site for lease with a term not to
exceed 99 years.
Act No. 1657 was enacted to amend Act No. 1360 which authorize the city of Manila either to lease or to sell the portion set aside
as a hotel site.
The reclaimed area, 25 hectares, was registered and on January 20, 1911 OCT No. 1909 was issued in the name of the city of
Manila.
The City of Manila conveyed 5,543.07sq.m. of reclaimed area to Manila Lodge No. 761 which was then sold to Tarlac Development
Corporation together with all the improvements.
Issue:
WON the said subject land is part of the public domain
Held:
We hold that it is of public dominion, intended for public use.
Firstly, if the reclaimed area was granted to the City of Manila as its patrimonial property, the City could, by virtue of its ownership,
dispose of the whole reclaimed area without need of authorization to do so from the lawmaking body. Thus 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." 36 The right to dispose ( jus disponendi) of one's property is an attribute of ownership. Act No. 1360, as amended, however,
provides by necessary implication, that the City of Manila could not dispose of the reclaimed area without being authorized by the
lawmaking body. 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 authorize means to empower, to give a right to act. 38 Act No. 1360 furthermore qualifies the verb "authorize" with
the adverb "hereby," which means "by means of this statue or section." Hence without the authorization expressly given by Act No.
1360, the City of Manila could not lease or sell even the northern portion; much less could it dispose of the whole reclaimed area.
Consequently, the reclaimed area was granted to the City of Manila, not as its patrimonial property. 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.
Secondly, the reclaimed area is an "extension to the Luneta in the City of Manila." 40 If the reclaimed area is an extension of the
Luneta, then it is of the same nature or character as the old Luneta. 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. 42 Hence the "extension to the Luneta" must be
also a public park or plaza and for public use.
Thirdly, the reclaimed area was formerly a part of the Manila Bay. 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.When the shore
or part of the bay is reclaimed, it does not lose its character of being property for public use.
HELD: Funds of public corporations which can sue and be sued are not exempt from garnishment. PVTA is also a public corporation
with the same attributes, a similar outcome is attributed. The government has entered with them into a commercial business hence it
has abandoned its sovereign capacity and has stepped down to the level of a corporation. Therefore, it is subject to rules governing
ordinary corporations and in effect can be sued. Therefore, the petition of PNB La Union is denied.
40. PROFESSIONAL VIDEO INC. VS. TESDA (GR NO. 155504)
Facts: TESDA procured the services of PROVI for the creation of polyvinyl (PVC) Identification Cards which TESDA issues to trainees
who passed its certification process. TESDA failed to pay an outstanding balance of P35M which led PROVI to file a complaint with RTC
for sum of money with damages against TESDA which also prayed for a Writ of Attachment/garnishment against TESDA. RTC granted
the PROVIs Writ against the properties of TESDA amounting to P35M. The CA reversed the RTC which stated that TESDAs funds are
public in nature thus exempt from garnishment and second, purchase of PVC Cards was a necessary incident of its govt function.
Issue: WON the writ of attachment against TESDA and its funds, to cover PROVI's claim against TESDA, is valid.
Held: INVALID. SC upheld CA. First, TESDA as an unincorporated instrumentality of the government operating under a specific charter
and performing governmental functions, STATE IMMUNITY apply to it. By reason of Public Policy, performance of governmental
function cannot be hindered or delayed by suits, nor can these suits control the use and disposition of the means for the performance
of governmental functions. Second, selling of the PVC cards does not characterize such transaction as industrial or business but rather
part of TESDAs general govtal function as they are undertaken to discharge such functions. Third, TESDA's funds are still public in
nature and, thus, cannot be the valid subject of a writ of garnishment or attachment. Under Section 33 of the TESDA Act, the TESDA
budget for the implementation of the Act shall be included in the annual General Appropriation Act; hence, TESDA funds, being
sourced from the Treasury, are moneys belonging to the government, or any of its departments, in the hands of public officials. As
reiterated in many cases, 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. Thus, there should be a specific appropriation covering such payment for PROVI to
be able to garnish.
41. VILLA VS. HEIRS OF ALTAVAS (GR NO. 162028)
FACTS:
On November 26, 1997, respondents filed a Complaint for ejectment with the MCTC petitioner together with Virginia Bermejo and
Rolito Roxas, alleging that respondents are heirs of the registered owner of two parcels of fishpond designated as Lot No. 2816 and
Lot No. 2817, who have been in actual possession through their administrator, overseer and representative, the late councilor
Mussolini C. Bermejo, the husband of Virgina. It was further alleged that on January 31, 1994, after the death of Mussolini, Virgina
took over the possession of the premises in question without the consent or permission of respondents. Virginia leased in favor of
petitioner a portion of about five hectares of Lot No. 2816, without any right to do so. On October 21, 1997, respondents through
counsel formally sent demand letters to Virginia and petitioner to vacate the respective portions occupied by them; however, despite
said demands, they persisted in continuing their illegal possession of the premises.
The MCTC subsequently rendered a decision in favor of the respondents, declaring them the rightful owners and legal possessors of
the subject parcels of land. Aggrieved by the Decision of the MCTC, petitioner and Virginia filed an appeal with the RTC; however, the
RTC dismissed the appeal of petitioner for her failure to file her appeal memorandum, while, the RTC dismissed Virginia's appeal
because of the latters withdrawal of the appeal. Petitioner then filed a Motion for Reconsideration but the same was denied by the
RTC. Petitioner filed a special civil action for certiorari with the CA contending that the RTC committed grave abuse of discretion in
dismissing her appeal on technical ground. This was, however, dismissed by the CA and the orders of the RTC were affirmed by the
CA.
In this petition for certiorari, petitioner avers that respondents failed to establish that they are in actual possession of the lots in
question; that, in fact, they have not proven that they are the owners of the said properties; and that petitioner has a valid contract of
lease with Virginia which entitles her to the possession of Lot No. 2817. Petitioner further argues that respondents have no cause of
action against her as they are not lessors, vendors or persons with whom petitioner has a contract, express or implied and that
respondents failed to aver facts constitutive of either forcible entry or unlawful detainer. As such, the MCTC did not acquire jurisdiction
over the case.
ISSUE(S):
35 PROPERTY - CASE DIGESTS
Whether or not petitioner has claim over the subject property.
RULING:
Petitioners contention is without merit.
The Court reiterated the well-settled rule that the trial courts findings of fact, especially when affirmed by the CA are generally binding
and conclusive. In the case at bar, the CA sustained the following findings of the MCTC, to wit: that respondents' predecessor, Enrique
Altavas, was not divested of his ownership of the subject lots; that the titles over the subject properties remain in his name; that, not
being the owner or administrator of the said lots, Virginia has no right to enter into any contract for the lease of the said properties;
and that petitioner's possession of portions of the disputed properties is merely upon tolerance of respondents.
Petitioner failed to show that any of the following exceptions to the general rules was present in this case: (1) the conclusion is
grounded on speculations, surmises or conjectures; (2) the inference is manifestly mistaken, absurd or impossible; (3) there is grave
abuse of discretion; (4) the judgment is based on a misapprehension of facts; (5) the findings of fact are conflicting; (6) there is no
citation of specific evidence on which the factual findings are based; (7) the finding of absence of facts is contradicted by the presence
of evidence on record; (8) the findings of the CA are contrary to the findings of the trial court; (9) the CA manifestly overlooked
certain relevant and undisputed facts that, if properly considered, would justify a different conclusion; (10) the findings of the CA are
beyond the issues of the case; and (11) such findings are contrary to the admissions of both parties. Thus, it does not warrant a
review of the findings of fact of the lower courts.
As to respondents' ownership and right of possession of the subject properties, records show that the MCTC based its Decision not
only on the Position Paper of respondents but also on the pieces of evidence submitted by them. Respondents attached the Original
Certificates of Title Nos. RO-4326 and RO-4327 in the name of Enrique, covering Lot Nos. 2816 and 2817, respectively, as evidence of
their ownership and right to possess the disputed properties.
Moreover, being a mere lessee, petitioner steps into the shoes of her lessor, Virginia. However, Virginia's claim of ownership was not
sustained by the MCTC, which instead found that she was not the owner of and had no right to possess the disputed property or to
transfer possession of the same, through lease, in favor of another person. Virginia later withdrew her appeal filed with the RTC. By
reason of such withdrawal, she is bound by the findings of the MCTC.
42. ESTATE OF SOLEDED MANANTAN VS. ANICETO SOMERA (GR NO. 145867)
Facts:
Manantan alleged in her Complaint that she was the owner of a 214- square meter parcel of land. After causing a relocation survey of
the subject property, she discovered that respondent and Tavera occupied certain portions thereof [disputed portions]. Manantan
advised respondent and Tavera to vacate the disputed portions as soon as she would decide to sell the subject property to an
interested buyer. Later, a prospective buyer approached Manantan about the subject property. However, upon learning that
respondent and Tavera occupied some portions of the subject property, the prospective buyer decided not to proceed with the sale
until after respondent and Tavera vacated the same. Manantan repeatedly requested respondent and Tavera to abandon the disputed
portions of the subject property, but the two refused. Hence, Manantan hired the services of a lawyer who immediately sent a formal
letter of demand to respondent and Tavera requesting them to leave the disputed portions. Respondent and Tavera, however,
ignored the demand letter.
In her Complaint in Civil Case, Manantan prayed that respondent, Tavera, and all persons claiming rights under them, be ordered to
vacate the portions of the subject property they were occupying. Respondent and Tavera filed a Joint Answer to Manantans
Complaint, he averred that the MTCC had no jurisdiction over the case, because it was neither an action for forcible entry nor for
unlawful detainer. The Complaint did not allege that Manantan was deprived of possession of the disputed portions by force,
intimidation, threat, strategy, or stealth, which would make a case for forcible entry. It also did not state that respondent and Tavera
withheld possession of the disputed portions from Manantan after expiration or termination of the right to hold possession of the same
by virtue of an express or implied contract, which would build a case for unlawful detainer. Respondent and Tavera argued that even
if there was dispossession, it was evident from the face of the Complaint that it was not committed through any of the means
enumerated under Rule 70 of the Rules of Court and, thus, forcible entry or unlawful detainer could not be the proper remedy for
Manantan.
Issue:
Whether or not the MTCC had jurisdiction over the action?
Held:
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 plaintiffs last demand on defendant to
vacate the real property, because only upon the lapse of that period does the possession become unlawful. Well-settled is the rule that
the jurisdiction of the court, as well as the nature of the action, are determined by the allegations in the complaint. To vest the court
with the jurisdiction to effect the ejectment of an occupant from the land in an action for unlawful detainer, it is necessary that the
Issue: WON private respondents are entitled to file a forcible entry case against petitioner.
Held: YES, they are entitled to file a forcible entry case. Since private respondents were in actual possession of the property at the
time they were forcibly ejected by petitioner, private respondents have a right to commence an action for forcible entry regardless of
the legality or illegality of possession.
Private respondents, as actual possessors, can commence a forcible entry case against petitioner because ownership is not in
issue. Forcible entry is merely a quieting process and never determines the actual title to an estate. Title is not involved, only actual
possession. It is undisputed that private respondents were in possession of the property and not the petitioners nor the spouses Jose.
Although the petitioners have a valid claim over ownership this does not in any way justify their act of forcible entry.
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. Thus, a party who can prove prior possession can recover such possession
even against the owner himself.Whatever may be the character of his possession, if he has in his favor priority in time, he has the
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. The doctrine of self help, which the petitioners were using to justify their actions, are not applicable in the
case because it can only be exercised at the time of actual or threatened dispossession which is absent in the case at bar (in fact they
are the ones who are threatening to remove the respondents with the use of force.) Article 536 basically tells us that the owner or a
person who has a better right over the land must resort to judicial means to recover the property from another person who possesses
the land.
When possession has already been lost, the owner must resort to judicial process for the recovery of property. As clearly stated
in Article 536- In 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 holder should refuse to deliver the thing.
46. AIR TRANSPORTATION OFFICE AND MACTAN-CEBU INTERNATIONAL AIRPORT VS. ANTIONIO GOPUCO (GR NO.
158563)
Facts: Eminent Domain case where original owner Gapuco sought for the recovery of a portion of a land which previously constituted
the LAHUG Airport. In 1949, landowners surrounding the vicinity of Lahug airport were informed of an expropriation of their lands for
the purpose of expansion with reassurance that they would be able to repurchase the same when said airport would be abandoned.
Defendant was one of the few who refused. However, CFI promulgated a decision in favor of Civil Aeronautics Authority (CAA) which
approved the lawful expropriation proceedings that was not appealed by Gopuco thus attaining finality. However, Lahug was
subsequently abandoned due to the creation of the MIA. A law was then passed that created MCIAA upon which the assets of Lahug
Airport was transferred thus including the titles to such lands. Gapuco then wanted to get back his land by asserting that by 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 should be reverted to him. Furthermore, he claims that he agreed to a compromise settlement that assured
that such expropriated lots will be resold to them at the same price as it was expropriated in the event the lahug airport will be
abandoned. RTC dismissed Gapucos claim but CA reversed the RTC and upheld the reconveyance to Gapuco. RTCs claim that the fact
of abandonment does not ipso facto give the original owner to recover the same. CAs claim was about the existence of genuine
necessity, that when it ceases to exist govt interest must yield to the private rights of the original owner.
Issue:
(1) When private land is expropriated for a particular public use, and that particular public use is abandoned, does its former owner
acquire a cause of action for recovery of the property?
(2) WON Gapuco had the right to get back his land.
Held:
(1) It depends upon the character of the title acquired by expropriator. SC said, If, for example, 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. On the other hand,
when land has been acquired for public use in fee simple, unconditionally, either by the exercise of eminent domain or by purchase,
the former owner retains no rights in the land, and the public use may be abandoned or the land may be devoted to a different use,
without any impairment of the estate or title acquired, or any reversion to the former owner.
(2) No. The SC enunciated that Gapucos case was similar to that of CHIONGBIAN where, there was no condition imposed to the effect
that the lot would return to CHIONGBIAN or that CHIONGBIAN had a right to repurchase the same if the purpose for which it was
Issue:
Whether or not a constructive trust was constituted in this case, and as such, the respondents herein are entitled to the restitution of
the expropriated property which was not used for a public purpose.
Held:
YES. Art. 1454 of the Civil Code provides: 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 fulfilment of the obligation is offered by the
grantor when it becomes due, he may demand the reconveyance of the property to him.
Constructive trusts are fictions of equity which are bound by no unyielding formula when they are used by courts as devices to remedy
any situation in which the holder of legal title may not in good conscience retain the beneficial interest.
In constructive trusts, the arrangement is temporary and passive in which the trustees sole duty is to transfer the title and possession
over the property to the plaintiff-beneficiary. Of course, the wronged party seeking the aid of a court of equity in establishing a
constructive trust must himself do equity. Accordingly, the court will exercise its discretion in deciding what acts are required of the
plaintiff-beneficiary as conditions precedent to obtaining such decree and has the obligation to reimburse the trustee the consideration
received from the latter just as the plaintiff-beneficiary would if he proceeded on the theory of rescission. In the good judgment of the
court, the trustee may also be paid the necessary expenses he may have incurred in sustaining the property, his fixed costs for
improvements thereon, and the monetary value of his services in managing the property to the extent that plaintiff-beneficiary will
secure a benefit from his acts.
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 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.
49. APO FRUITS CORPORATION VS. COURT OF APPEALS (GR NO. 164195)
Facts:
ISSUE: Validity of Ordinance No. 7783 (the Ordinance) of the City of Manila.
The tests of a valid ordinance are well established. A long line of decisions has held that for an ordinance to be valid, it must not only
be within the corporate powers of the local government unit to enact and must be passed according to the procedure prescribed by
law, it must also conform to the following substantive requirements: (1) must not contravene the Constitution or any statute; (2) must
not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be
general and consistent with public policy; and (6) must not be unreasonable.
The Ordinance was passed by the City Council in the exercise of its police power, an enactment of the City Council acting as agent of
Congress. Local government units, as agencies of the State, are endowed with police power in order to effectively accomplish and
carry out the declared objects of their creation. 41 This delegated police power is found in Section 16 of the Code, known as the
general welfare clause, viz:
SECTION 16.General Welfare. Every local government unit shall exercise the powers expressly granted, those necessarily implied
therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are
essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure
and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the
people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological
capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents,
maintain peace and order, and preserve the comfort and convenience of their inhabitants.
The object of the Ordinance was, accordingly, the promotion and protection of the social and moral values of the community. Granting
for the sake of argument that the objectives of the Ordinance are within the scope of the City Council's police powers, the means
employed for the accomplishment thereof were unreasonable and unduly oppressive.
The closing down and transfer of businesses or their conversion into businesses "allowed" under the Ordinance have no reasonable
relation to the accomplishment of its purposes. Otherwise stated, the prohibition of the enumerated establishments will not per se
protect and promote the social and moral welfare of the community; it will not in itself eradicate the alluded social ills of prostitution,
adultery, fornication nor will it arrest the spread of sexual disease in Manila.
This is not warranted under the accepted definitions of these terms. The enumerated establishments are lawful pursuits which are not
per se offensive to the moral welfare of the community.
The problem, it needs to be pointed out, is not the establishment, which by its nature cannot be said to be injurious to the health or
comfort of the community and which in itself is amoral, but the deplorable human activity that may occur within its premises. While a
motel may be used as a venue for immoral sexual activity, it cannot for that reason alone be punished. It cannot be classified as a
house of ill-repute or as a nuisance per se on a mere likelihood or a naked assumption.
Means employed are constitutionally infirm
Distinction should be made between destruction from necessity and eminent domain. It needs restating that the property taken in the
exercise of police power is destroyed because it is noxious or intended for a noxious purpose while the property taken under the
power of eminent domain is intended for a public use or purpose and is therefore "wholesome."
The foregoing premises show that the Ordinance is an unwarranted and unlawful curtailment of property and personal rights of
citizens. For being unreasonable and an undue restraint of trade, it cannot, even under the guise of exercising police power, be upheld
as valid.
51. NATIONAL POWER CORPORATION VS. LUCMAN IBRAHIM (GR NO. 168732)
Facts: The National Power Corporation constructed underground tunnels on several parcels of land owned in common by Ibrahim and
his co-owners situated in Lanao del Sur. NAPOCOR constructed the tunnels in 1978 but its existence was discovered by the land
owners only in 1992. The tunnels were apparently being used by the NAPOCOR in siphoning the water of Lake Lanao and in the
operation of NAPOCOR's other projects located in other parts of Mindanao.
The existence of the tunnels came to the attention of the co-owners only when one of them applied for a permit with the
Marawi City Water District to construct and/or install a motorized deep well. The application was denied on the ground that the
construction of the deep well would cause danger to lives and properties because Marawi City lies in the area of volcanic and tectonic
activity and because of the existence of tunnels underneath the surface of their property. He was then informed that underneath the
land are underground tunnels of the NAPOCOR. Upon such discovery, the co-owners filed an action against NAPOCOR for recovery of
land and damages.
The trial court denied the prayer of the co-owners for the dismantling of the tunnels but ordered NAPOCOR to pay them just
compensation since there was "taking" of their property. the Court of Appeals sustained the decision of the trial court. Hence,
NAPOCOR elevated the matter to the Supreme Court.
NAPOCOR maintains that the sub-terrain portion where the underground tunnels were constructed does not belong to Ibrahim
and his co-owners even if they owned the property because their right to subsoil does not extend beyond what is necessary to enable
them to obtain all the utility and convenience that such property can normally give. NAPOCOR also asserts that Ibrahim and his co-
owners were still able to use the subject property even with the existence of the tunnels.
Held: The Supreme Court held that pursuant to Article 437 of the Civil Code, the ownership of the land extends to the surface as well
as to the subsoil under it. The Court explained that the argument by the petitioner that the landowner's right extends to the subsoil
insofar as necessary for their practical interests serves only to further weaken its case because the theory would limit the right to the
subsoil upon the economic utility which such area offer to the surface owners.
Presumably, according to the Court, the landowner's right extends to such height or depth where it is possible for them to
obtain some benefit or enjoyment, and it is extinguished beyond such limit as there would be no more interest protected by law.
In this case, the landowners could have dug upon their property motorized deep wells but were prevented from doing so by
the authorities precisely because of the construction and existence of the tunnels underneath the surface of their property. Hence, the
Issue:
1. Whether or not Ernesto was in good faith.
2. Whether or not Sarmiento could exercise both refusal to pay the spouses and give option to purchase.
Held:
1.Yes. The Court agree that Ernesto and wife were builders in good faith in view of the peculiar circumstances under which they had
constructed the residential house. As far as they knew, the LAND was owned by Ernesto's mother-in-law who, having stated they
could build on the property, could reasonably be expected to later on give them the land.
In regards to builders in good faith, Article 448 of the Code provides:
ART. 448.
The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own
the works, sowing or planting, after payment of the indemnity provided for in articles 546and 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 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 upon the terms of the
lease and in case of disagreement, the court shall fix the terms thereof.
2. No. The owner of the building erected in good faith on a land owned by another, is entitled to retain the possession of the land until
he is paid the value of his building, under article 453 (now Article 546).
The owner, of the land upon, the other hand, has the option, under article 361 (now Article 448),either to pay for the building or to
sell his land to the owner of the building.
But he cannot, as respondents here did, refuse both to pay for the building and to sell the land
and compel the owner of the building to remove it from the land where it is erected. He is entitled to such remotion only when, after
having chosen to sell his land, the other party fails to pay for the same. We hold, therefore, that the order of Judge Natividad
compelling defendants-petitioners to remove their buildings from the land belonging to plaintiffs-respondents only because the latter
chose neither to pay for such buildings nor to sell the land, is null and void, for it amends substantially the judgment sought to be
executed and is, furthermore, offensive to articles 361 (nowArticle 448) and 453 (now Article 546) of the Civil Code.
56. BALUCANAG VS. JUDGE FRANCISCO (GR NO. L-34199)
Facts:
Balucanag bought the land from Mrs. Charvet that was leased by Richard Stohner for a period of 5 years with the following
agreements: 40.00 monthly rental to be paid in advance during the first 10 days of the month, and that Stohner may make such
improvements to the leased land provided that he should remove that improvements within a period of 2 months after the expiration
of the agreement otherwise, the lessor may remove the said buildings/improvements at the expense of the lessee.
During the existence of the lease, Stohner made some fillings and built a house. Said improvements were valued at 35,000;
When Stohner failed to pay his rents, the counsel of Balucanag wrote a demand letter that he vacate the premises. Stohner replied
thru his counsel that he was a builder in good faith.
Issue:
WON Stohner is a builder in good faith
Held:
Respondent Stohner cannot be considered a builder in good faith Article 448 of the Civil Code, relied upon by respondent judge,
applies only to a case where one builds on land in the belief that he is the owner thereof and it does not apply where one's only
47 PROPERTY - CASE DIGESTS
interest in the land is that of a lessee under a rental contract. In the case at bar, there is no dispute that the relation between
Balucanag and Stohner is that of lessor and lessee, the former being the successor in interest of the original owner of the lot.
". . . the principle of possessor in good faith refers only to a party who occupies or possess property in the belief that he is the
owner thereof and said good faith ends only when he discovers a flaw in his title so as to reasonably advise or inform him that after all
he may not be the legal owner of said property. It cannot apply to a lessee because as such lessee he knows that he is not the owner
of he leased premises. Neither can he deny the ownership or title of his lessor. . . . A lessee who introduces improvements in the
leased premises, does so at his own risk in the sense that he cannot recover their value from the lessor, much less retain the premises
until such reimbursement. . . ."
57. FLOREZA VS. EVANGELISTA (96 SCRA 130)
Plaintiffs Maria de Evangelista and Sergio Evangelista, who are mother and son, (the EVANGELISTAS, for short) are the owners of a
residential lot located at Sumilang St., Tanay, Rizal, with an area of 204.08 sq. ms., assessed at P410.00.
In May 1945, the EVANGELISTAS borrowed from FLOREZA the amount of P100.00. On or about November 1945, with the consent of
the EVANGELISTAS, FLOREZA occupied the above residential lot and built thereon a house of light materials (barong-barong) without
any agreement as to payment for the use of said residential lot owing to the fact that the EVANGELISTAS has then a standing loan of
P100.00 in favor of FLOREZA. 1
On the following dates, the EVANGELISTAS again borrowed the indicated amounts: September 16, 1946 - P100.00; 2 August 17, 1947
P200.00; 3 January 30, 1949 P200.00; 4 April 1, 1949 P140.00, 5 or a total of P740.00 including the first loan. The last three
items are evidenced by private documents stating that the residential lot stands as security therefor and that the amounts covered
thereunder are payable within six years from date, without mention of interest. The document executed on September 16, 1946
stated specifically that the loan was without interest "walang anumang patubo."
On January 10, 1949, FLOREZA demolished this house of light materials and in its place constructed one of strong materials assessed
in his name at P1,410.00 under Tax Declaration No. 4448. FLOREZA paid no rental as before.
On August 1, 1949, the EVANGELISTAS, for and in consideration of P1,000.00 representing the total outstanding loan of P740.00 plus
P260.00 in cash, sold their residential lot to FLOREZA, with a right to repurchase within a period of 6 years from date, or up to August
1, 1955, as evidenced by a notarial document, Exh. B, registered under Act 3344 on December 6, 1949, as Inscription No. 2147. 7
On January 2, 1955, or seven months before the expiry of the repurchase period, the EVANGELISTAS paid in full the repurchase price
of P1,000.00.
On April 25, 1956, the EVANGELISTAS, through their counsel, wrote FLOREZA a letter 8 asking him to vacate the premises as they
wanted to make use of their residential lot besides the fact that FLOREZA had already been given by them more than one year within
which to move his house to another site. On May 4, 1956, the EVANGELISTAS made a formal written demand to vacate, within five
days from notice, explaining that they had already fully paid the consideration for the repurchase of the lot. 9 FLOREZA refused to
vacate unless he was first reimbursed the value of his house. Hence, the filing of this Complaint on May 18, 1956 by the
EVANGELISTAS.
During the pendency of this appeal, petitioner Maria D. de Evangelista died and was ordered substituted by her son, petitioner Sergio,
as her legal representative, in a Resolution dated May 14, 1976. On October 20, 1978, the EVANGELISTAS filed a Motion to Dismiss
stating that FLOREZA had since died and that his heirs had voluntarily vacated the residential lot in question. The date FLOREZA
passed away and the date his heirs had voluntarily vacated the property has not been stated.
ISSUES:
1. WON petitioner Floreza was a builder in bad faith and WON the EVANGELISTAS should also be held in bad faith, so that both of
them being in bad faith, Article 453 of the Civil Code should apply
2. WON petitioner IS entitled to reimbursement for the value of his house and WON he should remove the same at his expense
3. WON petitioner should vacate respondents' lot in question and to pay rentals commencing until he shall have vacated the premises
HELD:
1. We uphold the Court of Appeals in its conclusion that Article 448 of the Civil Code is inapplicable to the factual milieu herein. Said
codal provision applies only when the builder, planter, or sower believes he had the right so to build, plant or sow because he thinks
he owns the land or believes himself to have a claim of title. 13 In this case, petitioner makes no pretensions of ownership
whatsoever.
Petitioner concedes that he was a builder in bad faith but maintains that the EVANGELISTAS should also be held in bad faith, so that
both of them being in bad faith, Article 453 of the Civil Code 14 should apply. By the same token, however, that Article 448 of the
same Code is not applicable, neither is Article 453 under the ambiance of this case.
2. Would petitioner, as vendee a retro, then be entitled to the rights granted in Article 1616 of the Civil Code (Art. 1518 of the old
Code)? To quote:
"Art. 1616.The vendor cannot avail himself of the right of repurchase without returning to the vendee the price of the sale, and in
addition:
(1)The expenses of the contract, and any other legitimate payments made by reason of the sale;
(2)The necessary and useful expenses made on the thing sold."
48 PROPERTY - CASE DIGESTS
The question again calls for a negative answer. It should be noted that petitioner did not construct his house as a vendee a retro. The
house had already been constructed as far back as 1949 (1945 for the house of light materials) even before the pacto de retro sale in
1949. Petitioner incurred no useful expense, therefore, after that sale. The house was already there at the tolerance of the
EVANGELISTAS in consideration of the several loans extended to them. Since petitioner cannot be classified as a builder in good faith
within the purview of Article 448 of the Civil Code, nor as a vendee a retro, who made useful improvements during the lifetime of the
pacto de retro, petitioner has no right to reimbursement of the value of the house which he had erected on the residential lot of the
EVANGELISTAS, much less to retention of the premises until he is reimbursed. The rights of petitioner are more akin to those of a
usufructuary who, under Article 579 of the Civil Code (Art. 487 of the old- Code), may make on the property useful improvements but
with no right to be indemnified therefor. He may, however, remove such improvements should it be possible to do so without damage
to the property: For if the improvements made by the usufructuary were subject to indemnity, we would have a dangerous and unjust
situation in which the usufructuary could dispose of the owner's funds by compelling him to pay for improvements which perhaps he
would not have made.
3. We come now to the issue of rentals. It is clear that from the date that the redemption price had been paid by the EVANGELISTAS
on January 2, 1955, petitioner's right to the use of the residential lot without charge had ceased. Having retained the property
although a redemption had been made, he should be held liable for damages in the form of rentals for the continued use of the
subject residential lot 16 at the rate of P10.00 monthly from January 3, 1955, and not merely from the date of demand on May 4,
1956, as held by the Court of Appeals, until the house was removed and the property vacated by petitioner or his heirs.
58. FILIPINAS COLLEGES, INC. VS. TIMBANG (GR NO. L-12812)
Facts: This is an appeal taken from an order of the Court of First Instance of Manila dated May 10, 1957 (a) declaring from the
Sheriff's certificate of sale covering a school building sold at public auction null and void within 15 days from notice of said order. The
successful bidders, defendant-appellants, spouses Maria Garcia Timbang and Marcelino Timbang shall pay to, appelle, Maria Gervacio
Blas directly or through the Sheriff of Manila, the sum of Php5,750, that the spouses Timbang had bid for the building at the Sheriff's
sale; (b) that the other appelle Filipinas Colleges, Inc. owner of 34,500/3,285,934 undivided interest in Lot 2-A covered by certificate
of title no. 45970 on which the building sold in auction sale is situated; and (c) ordering the sale in public auction of the said undivided
interest of the Filipinas Colleges, Inc. in the amount of Php8,200 minus the sum of Php5,750 mentioned in (a) above. The order
appealed from is the result of three motions filed in court a quo in the course of the execution of a final judgment of the Court of
Appeals rendered in 2 cases appealed to it in which the spouses Timbang, the Filipinas Colleges, Inc., and Maria Gervacio Blas were
the parties. The spouses Timbang presented their opposition to each and all of this motion. In assailing the order of the court a quo
directing the appellants to pay the appellee Blas the amount of their bid (Php5,750) made at the public auction, the appellants'
counsel has presented a novel albeit ingenious, argument. They contend that since the builder in good faith has failed to pay the price
of the land after the owners thereof exercised their option under Article 448 of the Civil Code, the builder has lost his right and the
appellants as owners of the land became the owners ipso facto.
Issue:
1. WON the contention of the appellants is valid. If not, what are the remedies left to the owners of the land if the builder fails to
pay?
2.WON the appellants, as owners of the land, may seek the recovery of the value of their land by writ of execution; levy the house
of the builder and sell it in public auction.
Held/Rationale:
NO, the appellants contention is superfluous. There is nothing in the language of these two articles 448 & 546, which would
justify the conclusion of the appellants, that, upon the failure of the builder to pay the value of the land, when such is demanded by
the landowner, the latter becomes automatically the owner of the improvement under Article 445. Although it is true, it was declared
therein that in the event of the failure of the builder to pay the land after the owner thereof has chosen this alternative, the builder's
right of retention provided in Article 546 is lost, nevertheless there was nothing said that as a consequence thereof, the builder loses
entirely all rights over his own building. The remedy left to the parties in such eventuality in which the builder fails to pay the value of
the land, though the Code is silent on this Court, a builder in good may not be required to pay rentals. He has right to retain the land
on which he has built in good faith until he is reimbursed with the expenses incurred by him. Possibly he might be made to pay rental
only when the owner of the land chooses not to appropriate the improvements and requires the builder in good faith to pay for the
land but that the builder is unwilling or unable to pay the land, and they decide to leave things as they are and assume the relation of
lessor-lessee, and should they disagree as to the amount of rental then they could to the court to fix that amount.
The second contention was without merit. In the instant case, the Court of Appeals has already adjudged that appellee Blas is
entitled to the payment of the unpaid balance of the purchase price of the school building. With respect to the order of the court
declaring appellee Filipinas Colleges, Inc., part owner of the land to the extent of the value of its personal properties sold at public
auction in favor of the Timbangs. This Court likewise finds the same as justified, for such represents, in effect, a partial payment of
the value of the land. Failure of the Timbang spouses to pay to the Sheriff or to Maria Gervacio Blas said sum of Php5,750 within 15
Held:
To better understand the main issue, it is important to note that the possession of the petitioner is not merely a tolerated
possession.
The Court has consistently held that those who occupy the land of another at the latter's tolerance or permission, without any
contract between them, are necessarily bound by an implied promise that the occupants will vacate the property upon demand. A
summary action for ejectment is the proper remedy to enforce this implied obligation. The unlawful deprivation or withholding of
possession is to be counted from the date of the demand to vacate.
Toleration is defined as "the act or practice of permitting or enduring something not wholly approved of."
We hold that the facts of the present case rule out the finding of possession by mere tolerance. Petitioners were able to establish that
respondents had invited them to occupy the subject lots in order that they could all live near one other and help in resolving family
problems. By occupying those lots, petitioners demonstrated their acceptance of the invitation. Hence, there was a meeting of minds,
and an agreement regarding possession of the lots impliedly arose between the parties.
The CFI found for the Grandes and ordered the Calalungs to vacate the premises and pay for damages. Upon appeal to the CA,
however, the decision was reversed.
Issue: Whether or not the alluvium deposited land automatically belongs to the riparian owners?
Held: Art. 457 dictates that alluvium deposits on land belong to the owners of the adjacent land. However, this does not ipso jure
become theirs merely believing that said land have become imprescriptible. The land of the Grandes only specifies a specific portion,
of which the alluvial deposits are not included, and are thus, subject to acquisition by prescription.
Since the Calalungs proved that they have been in possession of the land since 1934 via two credible witnesses, as opposed to
the Grandes single witness who claims that the Calalungs only entered the land in 1948, the Calalungs have been held to have
acquired the land created by the alluvial deposits by prescription. This is because the possession took place in 1934, when the law to
be followed was Act 190, and not the New Civil Code, which only took effect in 1950.
66. REPUBLIC VS. COURT OF APPEALS, ET. AL. (GR NO. 61647)
Facts: Respondents Tancincos claim as Riparian owners sought for the registration of lots 2 & 3 as accretions to their adjacent lands
(fishponds) found near the Meycauayan River. Both the RTC and the CA had the same findings and approved the applications of said
respondents. On the other hand, petitioner Republic claims that there was no accretion to speak of under Art. 457 but rather it was
artificial and man-made due to respondents transfer of dikes near the river bed thus falling short of the requirement of Art. 457 that
accretion should be natural.
Issue: WON there was accretion under Art. 457?
Held: NO accretion. For Art. 457 to apply, it requires the concurrence of three requisites before an accretion covered by this particular
provision is said to have taken place: (1) that the deposit be gradual and imperceptible; (2) that it be made through the effects of the
current of the water; and (3) that the land where accretion takes place is adjacent to the banks of rivers. The SC claimed that there is
no evidence whatsoever to prove that the addition to the said property was made gradually through the effects of the current of the
Meycauayan and Bocaue rivers. SC also refuted the claim of the lone witness of the respondents that if the accretion of 4 hectares
took place on 1939 and she testified on same year, then the accretion could have been SUDDEN which was impossible. Furthermore,
what the SC gave more credence is that there was evidence that the alluvial deposits were MAN-MADE and ARTIFICIAL, it claimed,
the alleged alluvial deposits came into being not because of the sole effect of the current of the rivers but as a result of the transfer
of the dike towards the river and encroaching upon it. SC simply states that what transpired in this case is not accretion but rather an
encroachment of a portion of the river by reclamation. In this light, the Riparian owner CANNOT CLAIM the additions to his lands
caused by SPECIAL WORKS EXPRESSLY INTENDED OR DESIGNED TO BRING ABOUT ACCRETION.
67. DIONESIA BAGAIPO VS. COURT OF APPEALS (GR NO. 116290)
FACTS:
Petitioner Bagaipo is the registered owner of Lot No. 415, a 146,900 square meter agricultural land situated in Ma-a, Davao City under
TCT No. T-15757 and bounded on the southeast by the Davao River. Private respondent Lozano, on the other hand, is the owner of a
registered parcel of land located across and opposite the southeast portion of the petitioners lot facing the Davao River. Lozano
acquired and occupied her property in 1962 when his wife inherited the land from her father who died that year.
On May 26, 1989, Bagaipo filed a complaint for Recovery of Possession with Mandatory Writ of Preliminary Injunction and Damages
against Lozano for: (1) the surrender of possession by Lozano of a certain portion of land measuring 29,162 square meters which is
supposedly included in the area belonging to Bagaipo under TCT No. T-15757; and (2) the recovery of a land area measuring 37,901
square meters which Bagaipo allegedly lost when the Davao River traversed her property. Bagaipo contended that as a result of a
change in course of the said river, her property became divided into three lots, namely: Lots 415-A, 415-B and 415-C.
Bagaipo then commissioned a resurvey of Lot 415 and presented before the trial court a survey plan prepared by Geodetic Engineer
Magno. The survey plan allegedly showed that: a) the area presently occupied by Bagaipo, identified as Lot 415-A, now had an area of
only 79,843 square meters; b) Lot 415-B, with an area measuring 37,901 square meters, which cut across Bagaipo's land was taken
up by the new course of the Davao River; and c) an area of 29,162 square meters designated as Lot 415-C was illegally occupied by
Issues:
Whether or not Baes is the owners of the lot, because of article 461?
Whether or not the owner, Baes, is entitled to compensation?
Held:
The dispute relates to Lot 1-B which the petitioners, relying on Article461 of the Civil Code, are claiming as their own.
Article 461 of the Civil Code states:
River beds which are abandoned through the natural change in the course of the waters ipso facto belong to the owners whose lands
are occupied by the new course in proportion to the area lost. However, the owners of the land adjoining the old bed shall have the
right to acquire the same by paying the value thereof, which value shall not exceed the value of the area occupied by the new bed.
A portion of the Tripa de Gallina creek was diverted to a man-made canal which totallyoccupied Lot 2958-B (with an area of 3,588
sq.m.) belonging to Felix Baes. Thus, the petitioners claim that they became the owners of the old bed (which was eventually filled up
by soil excavated from Lot 2958-B) by virtue of Article 461.
The petitioners rely heavily on Dr. Arturo M. Tolentino's interpretation of this Article, to wit:
This article (461) refers to a natural change in the course of a stream. If the change of the course is due to works constructed by
concessioners authorized by the government, the concession may grant the abandoned river bed to the concessioners. If there is no
such grant, then, by analogy, the abandoned river bed will belong to the owners of the land covered by the waters, as provided in this
article, without prejudice to a superior right of third persons with sufficient title. (Citing 3 Manresa 251-252; 2 Navarro Amandi, 100-
101; 3 Sanchez Roman 148)
The Court agreed with this interpretation but, as the government avers, the petitioners had already been fully compensated for it on
June 20, 1970 when they agreed to exchange their Lot 2958-B with Lot 3271-A belonging to the government. This makes the
difference as Baes had receive something in exchange thereof.
Thus, with the second issue, Baes is not also entitled for compensation.
If the riparian owner is entitled to compensation for the damage to or loss of his property due to natural causes, there is all the
more reason to compensate him when the change in the course of the river is effected through artificial means. The loss to the
petitioners of the land covered by the canal was the result of a deliberate act on the part of the government when it sought to
improve the flow of the Tripa de Gallina creek. It was therefore obligated to compensate the Baeses for their loss.
We find, however, that the petitioners have already been so compensated. Felix Baes was given Lot 3271-A in exchange for the
affected Lot 2958-B through the Deed of Exchange of Real Property dated June 20, 1970.
This was a fair exchange because the two lots were of the same area and value and the agreement was freely entered into by the
parties. The petitioners cannot now claim additional compensation because, as correctly observed by the Solicitor General. Baes
cannot claim additional compensation because allowing Baes to acquire ownership of the dried-up portion of the creek would be a
clear case of double compensation and unjust enrichment at the expense of the state.
69. MARIO RONQUILLO VS. COURT OF APPEALS, ET. AL. (GR NO. 43346)
Facts:
Rosendo del Rosario was a registered owner of a parcel of land known as Lot 34, Block 9, Sulucan Subdivision, situated at
Sampaloc, Manila and covered by Transfer Certificate of Title No. 34797 of the Registry of Deeds of Manila. The other plaintiffs
Florencia and Amparo del Rosario were daughters of said Rosendo del Rosario. Adjoining said lot is a dried-up portion of the old
Estero Calubcub occupied by the defendant since 1945 which is the subject matter of the present action.
.That said property of the plaintiffs abuts and is adjacent to the dried-up river bed of Estero Calubcub, Sampaloc, Manila;
After a relocation survey of the land in question sometime in 1960, plaintiffs learned that defendant was occupying a portion of their
land and thus demanded defendant to vacate said land when the latter refused to pay the reasonable rent for its occupancy. However,
despite said demand defendant refused to vacate.
ISSUE:
1) Whether or not ownership was transferred to Gallar?
2) Whether or not the action has already prescribed?
RULING:
1) YES, ownership has been transferred to Gallar. The right of repurchase may be exercised only by the vendor in whom the
right is recognized by contract or by any person to whom the right may have been transferred. Graciana Husain must, therefore, be
deemed to have acquired the land in her own right, subject only to Teodoro Husain's right of redemption. As the new owner she had a
perfect right to dispose of the land as she in fact did when she exchanged it for a cattle with Gallar.
2) NO, the action is imprescriptible. This action is not for specific performance; all it seeks is to quiet title, to remove the cloud
cast on appellee's ownership as a result of appellant's refusal to recognize the sale made by their predecessor. And, as plaintiff-
appellee is in possession of the land, the action is imprescriptible. Appellant's argument that the action has prescribed would be
correct if they were in possession as the action to quiet title would then be an action for recovery of real property which must be
brought within the statutory period of limitation governing such actions.
72. CORONEL VS. INTERMEDIATE APPELLATE COURT (GR NO. L-70191)
Facts: The lot involved in this case is the 2/8 share of the NAIC ESTATE of Bernabela Lontoc which was subdivided into 3 portions:
1/3, Bernardino Merlan (Grandson), 1/3, Jose and Brigido Merlan (defendants), 1/3, Daniel and Paz Anuat (grandchildren). Sometime
in 1950, the 2/3 share of BERNARDINO and DANIEL&PAZ s undivided portion of BERNABELA of the NAIC ESTATE was sold to
IGNACIO MANALO became Lot 1950 which was later subdivided and became Lot 1950-A containing 12, 189 sq. m. IGNACIO
subsequently sold it (Lot 1950-A) to MARIANO MANALO. The OCT issued in favor of MARIANO did not mention of the 1/3 share of the
defendants (JOSE and BRIGIDO) which was NOT sold to them because what was sold was merely 2/3 (BERNARDINO and D& P).
Petitioner (CORONEL) subsequently bought Lot. 1950-A from MARIANO and it became T-75543. What is clear is that respondents
never sold their 1/3 portion over Lot 1950-A of the NAIC Estate. There was a mistake when TCT 75543 was issued to Mariano because
such covered the entire Lot 1950-A. Respondents was in peaceful possession of said land even before first sale in 1950 until 1975
when the complaint was filed against them. Petitioner contends respondents are barred by prescription since 25 years has already
elapsed when registration of Lot. 1950-A took place and further claims that annulment should have been brought within 4 years.
Petitioner further alleges he was purchaser in good faith.
Issue: (1)WON respondents are barred by prescription.
(2) The Issue of Good Faith.
Held: (1) Respondents are not barred by prescription. The facts of the case show that the private respondents have always been in
peaceful possession of the 1/3 portion of the subject lot, exercising ownership thereto for more than 25 years disrupted only in 1975.
It was only at that time that the statutory period of prescription may be said to have commenced to run against them. It was only at
this point that private respondents knew about the supposed sale of their 1/3 portion of Lot 1950-A of the Naic Estate and they
immediately resisted.
Issue:
Whether or not petitioners filed the right action
Ruling:
No, Petitioners filed the wrong action. This is obviously a boundary dispute and as such the action must fail.
Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument, record, claim,
encumbrance or proceeding which is apparently valid or effective but is, in truth and in fact, invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being cast upon a title to real property or any interest therein.
Petitioners fail to point out any instrument, record, claim, encumbrance or proceeding that could been a cloud to their title. In fact,
both plaintiffs and defendant admitted the existence of the agreement of partition dated June 8, 1957 and in accordance therewith, a
fixed area was allotted to them and that the only controversy is whether these lands were properly measured.
A special civil action for quieting of title is not the proper remedy for settling a boundary dispute, and that petitioners should have
instituted an ejectment suit instead. An action for forcible entry, whenever warranted by the period prescribed in Rule 70, or for
recovery of possession de facto, also within the prescribed period, may be availed of by the petitioners, in which proceeding the
boundary dispute may be fully threshed out.
75. AZNAR BROTHERS REALTY COMPANY VS. AYING (458 SCRA 495)
FACTS:
The disputed property is Lot No. 4399 with an area of 34,325 square meters, to which Crisanta Maloloy-on petitioned for the issuance
of a cadastral decree in her favor. After her death in 1930, the Cadastral Court issued a Decision directing the issuance of a decree in
ISSUE(S):
1. Whether or not the respondents cause of action is imprescriptible.
2. If the action is indeed imprescriptible, whether or not the principle of laches apply.
RULING:
The Court held that the RTC and the CA that were correct in ruling that the Extra-Judicial Partition of Real Estate with Deed of
Absolute Sale is valid and binding only as to the heirs who participated in the execution thereof, hence, the heirs of Emiliano, Simeon
and Roberta Aying, who undisputedly did not participate therein, cannot be bound by said document.