PROPERTY (OCT 11) – POSSESSION (cont’d) and USUFRUCT
POSSESSION (Cont’d)
Case # 1: Alfonso Yu vs Honorable Judge Honrado
Facts:
 Detective Nuestro of the police department of Makati filed with the CFI an
application for a search warrant, entitled "People vs. Alfonso Yu, Proprietor,
Soledad Junk Shop, 171-173 Maria Clara Street, Corner 8th Avenue, Grace
Park, Caloocan, Metro Manila.”
 In that application, Nuestro alleged that he "has been informed and verily
believes that Alfonso Yu" was in possession of "about 55 metric tons of
unstripped assorted cast iron engine blocks embezzled" and that he "has
verified the report and found (it) to be a fact"
 In his testimony, Nuestro declared that he had personal knowledge that Alfonso
Yu kept the said engine blocks, which were "embezzled"; that the said goods
were purchased by Carlito Refuerzo from Marcelo Steel Corporation; that
Refuerzo paid for the goods with a check in the sum of P61,808.25, which check
was dishonored for insufficient funds; that Refuerzo sold the engine blocks to
the Soledad Junk Shop and that Refuerzo was later apprehended and detained
in the municipal jail of Makati.
 Respondent Judge issued a search warrant and four policemen implemented
the search warrant. They seized from the Soledad Junk Shop 42.8 metric tons
of engine block.
 Spouses Alfonso Yu and Soledad Yu filed with respondent Judge a motion to
set aside the search warrant and for the return of the engine blocks. Marcelo
Steel Corporation opposed the motion.
 Respondent Judge denied the motion.
 Parallel to or contemporaneously with the search warrant proceeding was the
complaint for estafa filed by Marcelo Steel Corporation against Refuerzo,
Soledad Yu and Refuerzo's confederates in the office of the provincial fiscal of
Rizal.
 Assistant Fiscal Sumaway in a resolution in the case of Marcelo Steel
Corporation vs. Refuerzo, et al. found that Refuerzo, Ernesto Dumlao, Jose Alla
and two other persons named Larry and Boy defrauded Marcelo Steel
Corporation in the sum of P95,434.50 as the value of 90,890 kilos of scrap
materials delivered to Refuerzo which were not paid for and that the Soledad
Junk Shop paid Refuerzo P44,000 for 50,000 kilos of scrap materials.
 Fiscal Sumaway found that Soledad Yu was not a co-conspirator of Refuerzo
and that she was an innocent purchaser for value
Issue: Whether Spouses Yu has a better right against Marcelo Steel Corporation with
respect to the scrap engine blocks
Held: Yes, Spouses Yu are entitled to retain possession of the scrap engine blocks.
This case is governed by the ruling in Chua Hai vs. Kapunan, Jr.; etc. and Ong Shu,
104 Phil. 110 "that the acquirer and possessor in good faith of a chattel or movable
property is entitled to be respected and protected in his possession, as if he were the
true owner thereof, until a competent court rules otherwise". In addition the Court held
in this case that "the possession of movable property acquired in good faith is
equivalent to a title" and "every possessor has a right to be respected in his
possession" (Arts. 539 and 559, Civil Code).
It was further ruled in the Chua Hai case that "the filing of an information charging
that the chattel was illegally obtained through estafa from its true owner by the
transferor of the bona fide possessor does not warrant disturbing the possession of
the chattel against the will of the possessor".
The instant case is similar to the Chua Hai case. The Yu spouses bought the scrap
engine blocks in good faith for P44,000 from the alleged swindler without any notice
that the same were obtained under false pretenses or by means of a bouncing check.
The purchase by the Yu spouses of the scrap engine blocks from Refuerzo, doing
business under the tradename C. C. Varried Corporation, was covered by a sales
invoice and seemed to have been made in the ordinary course of business.
Respondent Marcelo Steel Corporation is ordered to return and deliver to the Yu
spouses within ten days from notice of the entry of judgment in this case the 42.8
tons of scrap engine blocks in question
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PROPERTY (OCT 11) – POSSESSION (cont’d) and USUFRUCT

faith. However, their good faith ceased when they were served with summons to
POSSESSION (Cont’d) answer the complaint. As possessors in bad faith from the service of the
summons they "shall reimburse the fruits received and those which the
Case #2: FELIPA CORDERO (Deceased) MAURO OCAMPO, legitimate possessor could have received
CASIMIRO OCAMPO and ELISEA OCAMPO v. VICTORIA P. CABRAL AND
CA [G.R. No. L-36789, 25 July 198]

FACTS:
Mr. Gregorio Z. Ocampo, husband of Felipa Cordero and father of the other
petitioners, died on May 17, 1958, and left several properties. Petitioners took
possession of the properties left by him, among others is a Riceland.
However, they found out that a portion of the same was possessed by Victoria P.
Cabral, Alejandro Berboso and Damacio Montaos. Petitioners filed a civil case
alleging that Victoria P. Cabral continued claiming to be the owner of the land
while her co-defendants continued recognizing her as the owner thereof
instead of the plaintiffs despite demands to vacate the property. They also
claim that due to respondents' occupancy of the aforementioned portion of
land, petitioners failed to realize a yearly harvest of at least ten (10)
cavans of palay at the rate of P10.00 per cavan, from the harvest-time of 1958
up to the present. RTC dismissed the complaint. On appeal, even though the
CA found that the disputed piece of land is registered in the name of the
petitioners but because of the supposed oral sale of the same to the predecessors of
the defendants mentioned by the petitioners on appeal, it affirmed the judgment of
the trial court dismissing the complaint for the recovery of the land.

ISSUES:
1. Are the heirs of the registered owner entitled to the land?

2. May the respondents be held liable for reimbursement of fruits received?

RULING:
1. YES. The Court of Appeals found as a fact that the disputed portion of
the land is admittedly part of the land originally registered in the name of
petitioners’ predecessor in interest. There should be no question that that title had
become imprescriptible and the original registrant as well as his
successors had the right to vindicate their ownership against anybody else.

2. YES. The respondents, by their own admission, are in possession of the

disputed land. There is no evidence that they were possessors in bad
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PROPERTY (OCT 11) – POSSESSION (cont’d) and USUFRUCT

of the parties, and the judgment of the court. He cannot manage or administer the
USUFRUCT property after all the acts of management s and administration have been vested by
the court, with his consent, in the usufructuary. He admitted that before said judgment
Case #1: JOSEFA FABIA, petitioner vs JOSE GUTIERREZ DAVID, Judge of First he had been collecting the rents as agent of the usufructuary under an agreement
Instance of Manila, NGO BOO SOO and JUAN GREY, respondents with the latter.
FACTS
Jose Fabie is the usufructuary of the income of certain house under the 9th As long as the property is properly conserved and insured he can have no cause for
clause of the will of the deceased Rosario Febie y Grey. complaint, and his right in that regard is fully protected by the terms of the stipulation
Juan Grey is the owner of the house to which Jose Fabie derived its usufructuary and the judgment of the court above mentioned. To permit him is to arrogate to
rights. himself the privilege to choose the tenant, to dictate the conditions of the lease,
Litigation arose between Fabie and Grey involving the administration of the house. and to sue when the lessee fails to comply therewith, would be to place the
Jose Fabie commenced an action of unlawful detainer against Ngo Boo Soo alleging usufructuary entirely at his mercy. It would place her in the absurd situation of
that the defendant is occupying the premises located at Santo Cristo on a month to having a certain indisputable right without the power to protect, enforce and
month rental payable in advance not later than the 5th of each month; the she is the full enjoy it.
administriatrix and usufructuary of said premises; that the defendant offered to
pay P300 monthly rent payable in advance not later than the 5th of every month,
beginning the month of April 1945, for the said premises, including the one door
which said defendant, without plaintiff’s condent and contrary to their agreement, had
subleased to another Chinese, but plaintiff refused, based on the fact that the plaintiff
very badly need the said house to live in, as her house was burned by the Japanese
on the occasion of the entry of the American liberators in the City; that defendant was
duly notified to leave said premises, but he refused; and she prayed for judgment of
eviction and for unpaid rentals.
Ngo Boo Contention. She is the tenant of the premises in question, which he was
using and had always used principally as a store and secondarily for living quarters,
that he was renting it from its owner and administrator Juan Grey. That the Jose
Fabie is merely usufructuary of the income and his only right is to receive the income,
that he is has no right or authority to eject tenants.
ISSUE
Who is entitled to administer the property and who should be the tenant?
Ruling
The usufructury has the right to administer the property in question. All the acts of
administration – to collect the rents for herself, and to conserve the property by
making all necessary repairs and paying all the taxes, special assessments, and
insurance premiums thereon – were by court judgment vested in the usufructuary.
The pretension if the respondent Juan Grey that he is the administrator of the
property with the right to choose the tenants and to dictate the conditions of the lease
is contrary to both the letter and the spirit of the said clause of the will, the stipulation
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PROPERTY (OCT 11) – POSSESSION (cont’d) and USUFRUCT
Case #2: The Board of Assessment Appeals of Zamboanga vs Samar Mining Co
and CTA
Facts: Samar Mining (Samar) owned a mine and mill in Zamboanga del Sur. To
connect them to the pier in Pamintayan, Zamboanga del Sur, the company built the
42-km gravel pit Samico Road, construction of which was finished in 1959. Since the
road traversed public lands, Samar filed miscellaneous lease applications for right of
way with the Bureau of Lands and the Bureau of Forestry.
Temporary permits were granted, and eventually the lease applications were granted
on October 7, 1965 but the lease contracts were never executed.
In June 1964, Samar received an assessment letter from the petitioner Provincial
Assessor, charging them P1,117,900.00 as real estate tax on the taxable portion of
Samico Road. Samar appealed the assessment to petitioner Board of Assessment
Appeals (BAA) on the ground that the road was not a taxable improvement because it
3as constructed entirely on public land within the meaning of Sec. 2 of CA 470 and
invoking the decision of the SC in Bislig Bay Lumber Co. v. Surigao
The BAA upheld the assessment but held it unenforceable until the lease contracts
were executed. Samar moved for reconsideration, but the BAA not only denied the
appeal but made the assessment immediately enforceable, with the amount due
accruing from the date of completion of the road in 1959. Upon second denial by the
BAA, Samar elevated its case to the Court of Tax Appeals.
The CTA held that since the road has constructed on public lands such that it is an
integral part of the lands and not an independent improvement thereon, and that
upon the termination of the lease the national government will acquire ownership of
the road, Samar should be exempted from paying realty tax.
Issue: Whether Samar should pay realty tax on the assessed value of the road it
constructed on alienable or disposable public lands that are leased to it by the
government
Held: No, Samar is not liable to pay realty tax.
Petitioners maintain that the road is an improvement and, therefore, taxable under
Section 2 of the Assessment Law (Commonwealth Act No. 470) which provides as
follows:
"Sec. 2. Incidence of real property tax. — Except in chartered cities, there
shall be levied, assessed, and collected, an annual, ad valorem tax on real
property including land, buildings, machinery, and other improvements not
hereinafter specifically exempted."
There is no question that the road constructed by respondent Samar on the public
lands leased to it by the government is an improvement.
In the case of Bislig Bay Lumber Co., Inc. vs. Provincial Government of Surigao,
where a similar issue was raised as to whether the timber concessionaire should be
required to pay realty tax for the road it constructed at its own expense within the
territory of the lumber concession granted to it, this Court, after citing Section 2 of
Commonwealth Act 470, held:
It cannot be disputed that the ownership of the road that was constructed by
appellee belongs to the government by right of accession not only because it
is inherently incorporated or attached to the timber land leased to appellee
but also because upon the expiration of the concession, said road would
ultimately pass to the national government.
It is contended by petitioners that the ruling in the Bislig case is not applicable in the
present case because if the concessionaire in the Bislig case was exempt from
paying the realty tax it was because the road in that case was constructed on a
timberland or on an indisposable public land, while in the instant case what is being
taxed is 13.8 kilometer portion of the road traversing alienable public lands. This
contention has no merit. The pronouncement in the Bislig case contains no hint
whatsoever that the road was not subject to tax because it was constructed on
inalienable public lands. What is emphasized in the lease is that the improvement is
exempt from taxation because it is an integral part of the public land on which it is
constructed and the improvement is the property of the government by right of
accession. Under Section 3(a) of the Assessment Law (Com. Act 470), all properties
owned by the government, without any distinction, are exempt from taxation.
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PROPERTY (OCT 11) – POSSESSION (cont’d) and USUFRUCT
Case #3: AVELINO BALURAN, petitioner, vs. HON. RICARDO Y. NAVARRO,
Presiding Judge, Court of First Instance of Ilocos Norte, Branch I and ANTONIO
OBEDENCIO, respondents. [G.R. No. L-44428. September 30, 1977.]
FACTS:
 Spouses Domingo Paraiso and Fidela Q. Paraiso were the owners of a
residential lot located in Sarrat, Ilocos Norte.
 In 1964, the Paraisos executed an agreement entitled "BARTER" whereby
as party of the first part they agreed to "barter and exchange" with spouses
Avelino and Benilda Baluran their residential lot with the latter's unirrigated
riceland situated in Sarrat, Ilocos Norte.
 In their ‘BARTER AGREEMENT,’ it stated that both parties shall enjoy the
material possession of their respective properties and the Party of the First
Part shall reap the fruits of the unirrigated riceland and the Party of the
Second Part shall have a right to build his own house in the residential lot.
 In the same agreement, it stated that in the event any of the children of
Natividad Paraiso-Obedencio, daughter of the First Part, shall choose to
reside in Sarrat and build his own house in the residential lot, the Party of
the Second Part shall be obliged to return the lot such children with
damages to be incurred.
 In 1975 Antonio Obendencio filed with the CFI a complaint to recover the
above-mentioned residential lot from Avelino Baluran claiming that he is the
rightful owner of said residential lot having acquired the same from his
mother, Natividad Paraiso-Obedencio, and that he needed the property for
purpose of constructing his house.
 Obedencio prayed that he be declared owner of the residential lot and that
defendant Baluran be ordered to vacate the same forfeiting his (Obedencio)
favor the improvements defendant Baluran had built in bad faith.
 However, petitioner Avelino Baluran alleged that the "barter agreement"
transferred to him the ownership of the residential lot in exchange for the
unirrigated riceland conveyed to plaintiff's Predecessor-in-interest, Natividad
Obedencio, who in fact is still in possession and that the plaintiff's cause of
action if any had prescribed.
 It was likewise admitted that the aforementioned residential lot was donated
on October 4, 1974 by Natividad Obedencio to her son Antonio Obedencio,
and that since the execution of the agreement of February 2, 1964 Avelino
Baluran was in possession of the residential lot, paid the taxes of the
property, and constructed a house thereon with an value of P250.00.
 In 1975, the defendant Judge Navarro rendered a decision declaring
Obedencio the owner of the question, the Baluran was ordered to vacate the
same with costs against defendant.
 Hence, petitioner Baluran sought review of Judge Navarro’s decision.
ISSUE: Whether the AGREEMENT is barter or usufruct
FACTS:
It is a settled rule that to determine the nature of a contract courts are not
bound by the name or title given to it by the contracting parties. This Court has
held that contracts are not what the parties may see fit to call them but what
they really are as determined by the principles of law. Thus, in the instant case,
the use of the, term "barter" in describing the agreement of February 2, 1964, is
NOT CONTROLLING. The stipulations in said document are clear enough to
indicate that there was no intention at all on the part of the signatories thereto
to convey the ownership of their respective properties; all that was intended,
and it was so provided in the agreement, was to transfer the material
possession thereof.
With the material possession being the only one transferred, ALL THAT THE
PARTIES ACQUIRED WAS THE RIGHT OF USUFRUCT which in essence is the
right to enjoy the Property of another. Under the document in question,
spouses Paraiso would harvest the crop of the unirrigated riceland while the
other party, Avelino Baluran, could build a house on the residential lot, subject,
however, to the condition, that when any of the children of Natividad Paraiso
Obedencio, daughter of spouses Paraiso, shall choose to reside in the
municipality and build his house on the residential lot, Avelino Baluran shall be
obliged to return the lot to said children "With damages to be incurred."
Art. 1306 of the Civil Code states:
The contracting parties may establish such stipulations, clauses,
terms and conditions as they may deem convenient, provided they are
not contrary to law, Morals, good customs, public order, or public
policy.
The agreement of the parties of February 2, 1964, is NOT ONE OF BARTER OR
EXCHANGE or even sale with right to repurchase, but is one of or akin the
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PROPERTY (OCT 11) – POSSESSION (cont’d) and USUFRUCT
other is the use or material possession or enjoyment of each other's real
property.
Usufruct may be constituted by the parties for any period of time and under
such conditions as they may deem convenient and beneficial subject to the
provisions of the Civil Code, Book II, Title VI on Usufruct. The manner of
terminating or extinguishing the right of usufruct is primarily determined by the
stipulations of the parties which in this case is the happening of the event
agreed upon. Necessarily, the plaintiff or respondent Obedencio could not
demand for the recovery of possession of the residential lot in question, not
until he acquired that right from his mother, Natividad Obedencio, and which he
did acquire when his mother donated to him the residential lot on October 4,
1974. Even if We were to go along with petitioner in his argument that the
fulfillment of the condition cannot be left to an indefinite, uncertain period,
nonetheless, in the case at bar, the respondent, in whose favor the resolutory
condition was constituted, took immediate steps to terminate the right of
petitioner herein to the use of the lot. Obedencio's present complaint was filed
in May of 1975, barely several months after the property was donated to him.
However, the Supreme Court applies Art. 579 of the Civil Code and hold that
petitioner will not forfeit the improvement he built on the lot but may remove
the same without causing damage to the property.
The usufructuary may make on the property held in usufruct such
useful improvements or expenses for mere pleasure as he may deem
proper, provided he does not alter its form or substance; but he shall
have no right to be indemnified therefor. He may, however. He may,
however, removed such improvements, should it be possible to do so
without damage to the property.
Case #4: NATIONAL HOUSING AUTHORITY (NHA) vs. CA, BULACAN GARDEN
CORPORATION (BGC) and MANILA SEEDLING BANK FOUNDATION, INC.
(MSBF), 2005
Owner NHA vs usufructuary MSBF | lessee BGC
FACTS:
-Proclamation No. 481 (1968) issued by then President Ferdinand Marcos set
aside a 120-hectare portion of land in Quezon City owned by the NHA as
reserved property for the site of the National Government Center (NGC).
**-President Marcos issued Proclamation No. 1670 (1977), which removed a 7-
hectare portion from the coverage of the NGC > Proclamation No. 1670 gave
MSBF usufructuary rights over this segregated portion (for use in its operation
and projects, subject to private rights if any there be, and to future survey, under
the administration of the MSBF - note: This parcel of land (7 hectares), shall be
determined by the future survey based on the technical descriptions found in
Proclamation No. 481).
**-So, MSBF occupied the area. —— Over the years, MSBF's occupancy
exceeded the seven-hectare area subject to its usufructuary rights. MSBF occupied
approximately 16 hectares. By then the land occupied by MSBF was bounded by
EDSA west, Agham Road to the east, Quezon Avenue to the south and a creek to
the north.
**-MSBF leased a portion of the area it occupied to BGC and other stallholders.
BGC leased the portion facing EDSA, which occupies 4,590 square meters of the
16-hectare area.
-President Corazon Aquino issued Memorandum Order No. 127 which revoked
the reserved status of "the 50 hectares, more or less, remaining out of the 120
hectares of the NHA property reserved as site of the NGC." MO 127 also
authorized the NHA to commercialize the area and to sell it to the public.
-acting on the power granted under MO 127, the NHA gave BGC ten (10) days to
vacate its occupied area. Any structure left behind after the expiration of the
ten-day period will be demolished by NHA.
-BGC then filed a complaint for injunction before the TC > BGC amended its
complaint to include MSBF as its co-plaintiff
Both the NHA and MSBF conducted survey on the subject parcel.
TC:
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PROPERTY (OCT 11) – POSSESSION (cont’d) and USUFRUCT
-agreed with BGC and MSBF that Proclamation No. 1670 gave MSBF the right to
conduct the survey, which would establish the 7-hectare area covered by
MSBF's usufructuary rights. However, the trial court held that MSBF failed to act
seasonably on this right to conduct the survey.
-previous surveys conducted by MSBF covered 16 hectares, and were thus
inappropriate to determine the seven-hectare area.
-to allow MSBF to determine the seven-hectare area now would be grossly unfair to
the grantor of the usufruct.
—-trial court dismissed BGC's complaint for injunction
so the NHA demolished BGC's facilities soon thereafter.
CA:
-agreed with the trial court that Proclamation No. 1670 granted MSBF the right to
determine the location of the seven-hectare area covered by its usufructuary
rights. However, the appellate court ruled that MSBF did in fact assert this right
by conducting two surveys and erecting its main structures in the area of its
choice.
—reversed the trial court's ruling
-NHA filed a motion for reconsideration, which was denied by the appellate court.
Hence, this petition.
ISSUE:
WHETHER THE PREMISES LEASED BY BGC FROM MSBF IS WITHIN THE
SEVEN- HECTARE AREA THAT PROCLAMATION NO. 1670 GRANTED TO MSBF
BY WAY OF USUFRUCT?
HELD:
SC remand the petition to the TC for a joint survey to determine finally the
metes and bounds of the seven-hectare area subject to MSBF's usufructuary rights.
The entire area bounded by Agham Road to the east, EDSA to the west, Quezon
Avenue to the south and by a creek to the north measures approximately 16
hectares. Proclamation No. 1670 gave MSBF a usufruct over only a seven-
hectare area. The BGC's leased portion is located along EDSA.
[A usufruct may be constituted for a specified term and under such conditions
as the parties may deem convenient subject to the legal provisions on usufruct.
A usufructuary may lease the object held in usufruct.]
-Thus, the NHA may not evict BGC if the 4,590 square meter portion MSBF
leased to BGC is within the seven-hectare area held in usufruct by MSBF.
[The owner of the property must respect the lease entered into by the
usufructuary so long as the usufruct exists.] However, the NHA has the right to
evict BGC if BGC occupied a portion outside of the seven-hectare area covered
by MSBF's usufructuary rights.
MSBF's survey shows that BGC's stall is within the seven-hectare area. On the
other hand, NHA's survey shows otherwise. The entire controversy revolves on the
question of whose land survey should prevail.
>MSBF's survey - SURVEYOR Malto for MSBF, based his survey method on the
fact that MSBF's main facilities are located within this area.
>NHA's survey - SURVEYOR Inobaya for NHA, based his survey method on the
fact that he saw MSBF's gate fronting Agham Road.
__
ART. 565, CC. The rights and obligations of the usufructuary shall be those
provided in the TITLE CONSTITUTING THE USUFRUCT; in default of such title,
or in case it is deficient, the provisions contained in the two following Chapters
shall be observed.
-In the present case, Proclamation No. 1670 is the title constituting the usufruct.
Proclamation No. 1670 categorically states that the seven-hectare area shall be
determined "by future survey under the administration of the Foundation
subject to private rights if there be any."
-The CA and the TC agree that MSBF has the latitude to determine the location of its
seven-hectare usufruct portion within the 16-hectare area. The CA and the TC
disagree, however, whether MSBF seasonably exercised this right.
-Proclamation No. 1670 authorized MSBF to determine the location of the
seven- hectare area. This authority, coupled with the fact that Proclamation No.
1670 did not state the location of the seven-hectare area, leaves no room for
doubt that Proclamation No. 1670 left it to MSBF to choose the location of the
seven-hectare area under its usufruct.
__
Inobaya (NHA’s side) testified that his main consideration in using Agham Road as
the starting point for his survey was the presence of a gate there. The location of the
gate is not a sufficient basis to determine the starting point. MSBF's right as a
usufructuary as granted by Proclamation No. 1670 should rest on something
more substantial than where MSBF chose to place a gate.
__
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PROPERTY (OCT 11) – POSSESSION (cont’d) and USUFRUCT
To prefer the NHA's survey to MSBF's survey will strip MSBF of most of its
main facilities. Only the main building of MSBF will remain with MSBF since the
main building is near the corner of EDSA and Quezon Avenue. The rest of MSBF's
main facilities will be outside the seven-hectare area.
__
On the other hand, SC cannot countenance MSBF's act of exceeding the seven-
hectare portion granted to it by Proclamation No. 1670.
A usufruct is not simply about rights and privileges. A usufructuary has the
duty to protect the owner's interests.
duty~
ART. 601, CC. The usufructuary shall be obliged to NOTIFY the owner of any
act of a third person, of which he may have KNOWLEDGE, THAT MAY BE
PREJUDICIAL TO THE RIGHTS OF OWNERSHIP, and he shall be LIABLE
SHOULD HE NOT DO SO, FOR DAMAGES, as if they had been CAUSED
through his own fault.
-A usufruct gives a right to enjoy the property of another with the obligation of
preserving its form and substance, unless the title constituting it or the law
otherwise provides.
-This controversy would not have arisen had MSBF respected the limit of the
beneficial use given to it. MSBF's encroachment of its benefactor's property
gave birth to the confusion that attended this case.
-MSBF has abused the privilege given it under Proclamation No. 1670. The
direct corollary of enforcing MSBF's rights within the seven-hectare area is the
negation of any of MSBF's acts beyond it.
-At this point, the determination of the seven- hectare portion cannot be made to
rely on a choice between the NHA's and MSBF's survey. There is a need for a
new survey, one conducted jointly by the NHA and MSBF, to remove all doubts
on the exact location of the seven-hectare area and thus avoid future
controversies. This new survey should consider existing structures of MSBF. It
should as much as possible include all of the facilities of MSBF within the
seven-hectare portion without sacrificing contiguity.
ART. 605, CC. Usufruct cannot be constituted in favor of a town, corporation, or
association for more than 50 years.
-The law clearly limits any usufruct constituted in favor of a corporation or association
to 50 years. A usufruct is meant only as a lifetime grant. Unlike a natural person, a
corporation or association's lifetime may be extended indefinitely. The usufruct
would then be perpetual. This is especially unpleasant in cases where the
usufruct given to a corporation or association covers public land. Proclamation
No. 1670 was issued 19 September 1977, or 28 years ago. Hence, under Article
605, the usufruct in favor of MSBF has 22 years left.
-MO 127 released approximately 50 hectares of the NHA property as reserved site for
the National Government Center. However, MO 127 does not affect MSBF's seven-
hectare area since under Proclamation No. 1670, MSBF's seven-hectare area
was already "excluded from the operation of Proclamation No. 481 (1968),
which established the National Government Center Site."
=> WHEREFORE, the CA’s decisions are SET ASIDE. This case is REMANDED to
Branch 87 of the RTC of Quezon City, which shall order a joint survey by the
National Housing Authority and Manila Seedling Bank Foundation, Inc. to
determine the metes and bounds of the seven-hectare portion of Manila
Seedling Bank Foundation, Inc. under Proclamation No. 1670. The seven-
hectare portion shall be contiguous and shall include as much as possible all
existing major improvements of Manila Seedling Bank Foundation, Inc. The
parties shall submit the joint survey to the Regional Trial Court for its approval within
sixty days from the date ordering the joint survey.
_
Note: baka lang tanungin….
Evidences presented-
BGC presented the testimony of Mr. Bertol, General Manager of MSBF. Bertol
presented a map, which detailed the area presently occupied by MSBF. The map had
a yellow-shaded portion, which was supposed to indicate the seven-hectare area. It
was clear from both the map and Bertol's testimony that MSBF knew that it had
occupied an area in excess of the seven-hectare area granted by Proclamation
No. 1670. Upon cross-examination, Bertol admitted that he personally did not
know the exact boundaries of the seven-hectare area + admitted that MSBF
prepared the map without consulting NHA, the owner of the property.
BGC also presented the testimony of Malto, a registered forester and the
Assistant VP of Planning, Research and Marketing of MSBF. Malto testified that
he conducted the land survey, which was used to construct the map presented by
Bertol. Bertol clarified that he authorized two surveys, one in 1984 when he first
joined MSBF, and the other in 1986. In both instances, Mr. Malto testified that he
was asked to survey a total of 16 hectares, not just seven hectares. Malto
testified that he conducted the second survey in 1986 on the instruction of
8
PROPERTY (OCT 11) – POSSESSION (cont’d) and USUFRUCT

MSBF's general manager. According to Malto, it was only in the second survey
that he was told to determine the seven-hectare portion. Malto further clarified
that he based the technical descriptions of both surveys on a previously existing
survey of the property.
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The NHA presented the testimony of Inobaya, a geodetic engineer employed by
the NHA. Inobaya testified that as part of the NHA's Survey Division, his duties
included conducting surveys of properties administered by the NHA. Inobaya
conducted his survey in May 1988 to determine whether BGC was occupying an area
outside the seven-hectare area MSBF held in usufruct. Inobaya surveyed the area
occupied by MSBF following the same technical descriptions used by Malto. Inobaya
also came to the same conclusion that the area occupied by MSBF, as indicated
by the boundaries in the technical descriptions, covered a total of 16 hectares.
He further testified that the seven-hectare portion in the map presented by BGC,
which was constructed by Malto, does not tally with the boundaries BGC and
MSBF indicated in their complaint.