Jacque v. SteenBerg Homes Inc.
Tanner
FACTS
Plaintiffs Lois and Harvey Jacques, an elderly couple, are very sensitive about people being
on their land. The Jacque’s neighbors purchased a mobile home from the defendant
SteenBerg Homes. SteenBerg tried on several occasions to get permission from the Jacques to
cross their land because this was the easiest way to deliver the mobile home and they refused.
On the day of delivery SteenBerg employees made an attempt to cross the land and were
stopped by the Jacques. The SteenBerg assistant manager attempting bargaining for the right
to cross and they again refused. The assistant manager subsequently told his employees “I
don’t give a—— what Mr. Jacque said just get the home in there any way you can.” The
employees followed that order and delivered the home across the Jacque’s property.
Steenberg proceeded to deliver the mobile home across the Jacques’ property anyway.
ISSUE
Whether punitive damages may be awarded in an intentional trespass case when the Plaintiff
are only entitled to nominal damages because there is no actual harm to their property.
RULING
Yes. Punitive damages are appropriate in intentional trespass cases even if there are no actual
damages. The purpose of the punitive damage in this case is deterrence. Landowners have an
interest in protecting his or her land from trespass and the United States Supreme Court has
held that the right to exclude others from his or her land is one of the most essential […]
property rights. If landowners are only allowed compensation for trespass actions that have
compensatory damages it makes that right a hollow one. It does not take actual harm to a
person’s property for actual harm to occur when someone intentional trespasses upon that
land. An award will not be considered excessive in violation of the Due Process clause when
the acts are egregious. Here, SteenBerg was unequivocally told no, and still continued on the
land. That disregard for the Jacque’s rights amounts to that egregious conduct.
Lloyd Corporation, Ltd. v.
FACTS
Donald Tanner was a Vietnam War protestor who was distributing anti-war handbills inside
Lloyd Center Mall in Portland, Oregon. The handbills were unrelated to the operations of
Lloyd Center. Lloyd Center was privately owned by Lloyd Corporation, which prohibited the
distribution of handbills inside the mall. While distributing handbills, Tanner and other
protestors were informed by mall security that they should stop their distribution or be subject
to arrest. The protestors ended their distribution, left the mall, and filed suit against Lloyd
Corporation in United States District Court for the District of Oregon alleging their First
Amendment right to free speech had been violated. The District Court ruled in their favor.
The United States Court of Appeals for the Ninth Circuit.
A corporation owns a shopping center that is bounded by four public streets. Then center has
a policy which prohibits people from distributing handbills within the mall. A group of
people entered the mall and began distributing handbill invitations to a meeting to protest the
draft and the Vietnam War. The distribution was done quietly with no littering. The group
brought a suit seeking declaratory and injunctive relief.
ISSUE
May a privately owned shopping center prohibit the distribution of handbills on its property
when the handbills are unrelated to the shopping center’s operations?
RULING
In a 5-4 decision, the Court reversed the Ninth Circuit and held that Tanner was not entitled
to distribute handbills within Lloyd Center. Writing for the majority, Justice Lewis F. Powell
contrasted this case with Amalgamated Food Employees Union v. Logan Valley Plaza, which
allowed protestors to picket a shopping center when their picketing was "directly related" to
the shopping center and no "reasonable opportunities to convey their message…were
available." Here, Tanner's were unrelated to the operations of the mall, and the protestors had
an alternative on the sidewalks immediately outside the mall, which were owned by the City
of Portland. Powell characterized equating public property with private property intended for
public use – such as the mall – as "reach[ing] too far." Therefore, Tanner and the protestors
did not have a First Amendment right to distribute their handbills within the mall.
Yes. Judgment reversed and remanded. Alternative means of communication exist for the
demonstrators. The handbills could have been distributed on public streets or in a park, or as
the patrons left the mall. The handbills had no relation to the shopping center because the
handbills were about the Vietnam War. The First Amendment only applies to state action.
Property does not lose its privacy rights merely because the public is invited in. So, a store
does not become public because the public is invited to shop in it. Since adequate alternative
means of communication exist, it would be an invasion of the shopping center’s property
rights to require it to allow the distribution of the anti-war handbills.
Uston v. Resorts International Hotel, Inc
FACTS
Uston has a card counting strategy that increases his odds of winning at blackjack. The Resort
has excluded him from playing because of his strategy. Uston contends that there is no
common law or statutory right to exclude him because of his blackjack strategy.
ISSUE
Does an amusement place owner have the absolute right to exclude any unwanted person
from the premises?
RULING
No. When property owners open their premises to the general public in the pursuit of their
own property interests, they have no right to exclude people unreasonably. Property owners
have no legitimate interest in unreasonably excluding particular members of the public when
they open their premises for public use. Sometimes, proprietors have a duty to remove
disorderly or dangerous people from the premises. Casinos may bar the disorderly, the
intoxicated, and the repetitive petty offender. If someone is not causing any of these types of
distractions, then they have the right of reasonable access to the blackjack tables.
The right of reasonable access extends to all businesses open to the public. There is a duty to
serve members of the public without discrimination unless there is a good reason not to
provide services to an individual.
Desnick v. American Broadcasting Companies, Inc
FACTS
A producer for PrimeTime Live, a television program on ABC (Defendant) called Dr.
Desnick, the owner of Desnick Eye Center (Plaintiff) and asked permission to shoot footage
for an upcoming program. Unknown to Plaintiff, Defendant dispatched people with hidden
camera to Defendant to pose as patients and request eye exams. Defendant took the
recordings of the patient exams and used them as part of the program, which aired nationally.
Defendant claims a trespass occurred when the undercover patients entered his office.
ISSUE
When a landowner permits entry into his property to another based on the other’s
misrepresentation or a misleading omission, will that constitute a trespass?
RULING
No. To enter the land of another without consent is a trespass. There is no journalists’
privilege to trespass. But, consent is sometimes deemed to exist, even though it was gotten
through fraud. Consent to entry is often given legal effect even though the entrant has
intentions that, if known to the owner of the property, would cause him to revoke his consent.
The law of trespass was made in order to protect a person’s property. Plaintiff’s property was
not affected by the patients. The undercover patients entered the medical office, which was
open to anyone wanting services. The cameras were used to record professional
communications with the patients carrying the cameras. The activities of the office were not
interrupted and no embarrassing intimate details of anyone’s life were broadcast.
There was no eavesdropping because the patients were recording their own conversations.
Doctor-patient privilege was not violated. Though they gained entry through a misleading
omission, the entry was not invasive. It did not interfere with the ownership or possession of
land.
Even though a person may enter another’s land with a different intention than what the owner
believes, a trespass will not occur until there has been an interference with the ownership or
possession of land. Undercover videos of professional communications do not interfere with
ownership or possession of land.
G.R. No. L-58469 May 16, 1983
MAKATI LEASING and FINANCE CORPORATION vs. WEAREVER TEXTILE
MILLS, INC., and HONORABLE COURT OF APPEALS,
FACTS
Weaverer Textile obtained financial accommodations from Makati Leasing through
discounted and assigned receivables under a Receivable Purchase Agreement. And to secure
the collection of the receivables assigned, Weaverer executed a Chattel Mortgage over raw
materials and machinery - Artos Aero Dryer Stentering Range. However, Weaverer defaulted
thus the properties mortgaged were extrajudically foreclosed. The sheriff enforced the seizure
order, repaired to the premises of private respondent and removed the main drive motor of the
Dryer. The CA reversed the order of the CFI, ordering the return of the drive motor since it
cannot be the subject of a replevin suit being an immovable bolted to the ground. Thus the
case at bar.
ISSUE
W/N the dryer is an immovable property
RULING
NO. The SC relied on its ruling in Tumalad v. Vicencio, that if a house of strong materials
can be the subject of a Chattel Mortgage as long as the parties to the contract agree and no
innocent third party will be prejudiced then more so that a machinery may treated as a
movable since it is movable by nature and becomes immobilized only by destination. And
treating it as a chattel by way of a Chattel Mortgage, Wearever is estopped from claiming
otherwise.
THE STANDARD OIL COMPANY OF NEW YORK vs.
JOAQUIN JARAMILLO, as register of deeds of the City of Manila, respondent.
FACTS
Gervasia De la Rosa was a lessee of a parcel of land and owner of the house of strong
materials built thereon, upon which she executed a document in the form of a chattel
mortgage purporting to convey to Standard Oil both the leasehold interest and the building
which stands thereon.
After said document had been duly acknowledged and delivered, Standard Oil presented it to
Joaquin Jaramillo, as register of deeds of the City of Manila, for the purpose of having the
same recorded in the book of record of chattel mortgages. Upon examination of the
instrument, Jaramillo opined that it was not chattel mortgage, for the reason that the interest
therein mortgaged did not appear to be personal property, within the meaning of the Chattel
Mortgage Law, and registration was refused on this ground only.
ISSUE
W/N The register of deeds (Joaquin) is correct in refusing the registration of the property
mortgaged under the Chattel Mortgage Law on the ground that it is not a personal property
RULING
NO. Articles 334 and 335 of the Civil Code supply no absolute criterion for discriminating
between real property and personal property for purpose of the application of the Chattel
Mortgage Law. Those articles state rules which, considered as a general doctrine, are law in
this jurisdiction; but it must not be forgotten that under given conditions property may have
character different from that imputed to it in said articles. It is undeniable that the parties to a
contract may by agreement treat as personal property that which by nature would be real
property; and it is a familiar phenomenon to see things classed as real property for purposes
of taxation which on general principle might be considered personal property. Other
situations are constantly arising, and from time to time are presented to this court, in which
the proper classification of one thing or another as real or personal property may be said to be
doubtful.
In the light of what has been said it becomes unnecessary for us to pass upon the point
whether the interests conveyed in the instrument now in question are real or personal; and we
declare it to be the duty of the register of deeds to accept the estimate placed upon the
document by the petitioner and to register it, upon payment of the proper fee.
LEUNG YEE vs. FRANK L. STRONG MACHINERY COMPANY and J. G. DAVAO SAW MILL CO., INC., vs.
WILLIAMSON, APRONIANO G. CASTILLO and DAVAO LIGHT & POWER CO., INC.,

FACTS
Compania Agricola Filipina bought a considerable quantity of rice-cleaning machinery from
Frank L Strong Machinery Company and executed a chattel mortgage thereon to secure
payment of the purchase price. It included in the mortgage deed the building of strong
materials in which the machinery was installed, without any reference to the land on which it
stood. Compania Agricola defaulted, the chattel mortgage was foreclosed, the Sheriff sold the
mortgaged property, in public auction, which was bought in machinery company. The
mortgage was registered in the chattel mortgage registry and the sale was annotated.
Days after, the Compania Agricola Filipina executed a deed of sale over the land to which the
building stood in favor of the machinery company. This was done to cure any defects that
may arise in the machinery company’s ownership of the building.
FACTS
Davao Saw Mill Co., a holder of a lumbar concession, operated a sawmill in Davao.
However, the land upon which the business was conducted belonged to another person. On
the land, the sawmill company erected a building which housed the machinery used by it.
Some of the implements thus used were clearly personal property, the conflict concerning
machines which were placed and mounted on foundations of cement. In the contract of lease
between the sawmill company and the owner of the land there appeared the following
provision: That on the expiration of the period agreed upon, all the improvements and
buildings introduced and erected by the party of the second part shall pass to the exclusive
ownership of the lessor without any obligation on its part to pay any amount for said
improvements and buildings; which do not include the machineries and accessories in the
improvements.

Second mortgage: on or about the date to which the chattel In another action wherein the Davao Light & Power Co., Inc., was the plaintiff and the
mortgage was excecuted, Compania executed a real estate Davao, Saw, Mill Co., Inc., was the defendant, a judgment was rendered in favor of the
mortgage over the building in favor of Leung Yee, distinct and plaintiff in that action against the defendant; a writ of execution issued thereon, and the
separate from the land. This is to secure payment for its indebtedness for the properties now in question were levied upon as personalty by the sheriff. No third party claim
construction of the building. Upon failure to pay, the mortgage was foreclosed. was filed for such properties at the time of the sales thereof as is borne out by the record
made by the plaintiff herein.
The machinery company then filed a case, demanding that it be
declared the rightful owner of the building. The trial court held that it was the It must be noted also that on number of occasion, Davao Sawmill treated the machinery as
machinery company which was the rightful personal property by executing chattel mortgages in favor of third persons. One of such is the
owner as it had its title before the building was registered prior to the date of registry appellee by assignment from the original mortgages.
of Leung Yee’s certificate.
ISSUE
ISSUE W/N the machinery is a personal property
Who is the owner of the building?
RULING
HELD YES. The machinery must be classified as personal property.
The SC ruled that Strong Machinery has a better right to the contested property. Yee cannot
be regarded as a buyer in good faith as he was already aware of the fact that there was a prior The lessee placed the machinery in the building erected on land belonging to another, with
sale of the same property to Strong Machinery. the understanding that the machinery was not included in the improvements which would
pass to the lessor on the expiration of the
The SC also noted that the Chattel Mortgage Law expressly contemplates provisions for lease agreement. The lessee also treated the machinery as personal property in executi
chattel mortgages which only deal with personal properties. The fact that the parties dealt the ng chattel mortgages in favor of third persons. The machinery was levied upon by the
building as if it’s a personal property does not change the nature of the thing. It is still a real sheriff as personalty pursuant to a writ of execution obtained without any protest being
property. Its inscription in the Chattel Mortgage registry does not modify its inscription the registered.
registry of real property.
- Furthermore, machinery only becomes immobilized when placed in a plant by the owner of
The building in which the machinery was installed was real property, and the property or plant, but not when so placed by a tenant, usufructuary,
the mere fact that the parties seem to have dealt with it separate and apart from the or any person having temporary right, unless such person acted as the agent of the
land on which it stood in no wise changed the character as real property. owner.

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 the registry of the
sale of the mortgaged property, had any effect whatever so far as the building is
concerned. *LANDMARK CASE
B.H. BERKENKOTTER vs. CU UNJIENG E HIJOS, YEK TONG LIN FIRE AND
MARINE INSURANCE COMPANY, MABALACAT SUGAR COMPANY and THE
PROVINCE SHERIFF OF PAMPANGA
FACTS
Mabalacat Sugar Co., Inc., owner of the sugar central in Pampanga, obtained from Cu
Unjieng e Hijos, a loan secured by a first mortgage constituted on two parcels of land. Shortly
after said mortgage has been constituted, Mabalacat Sugar Co. decided to increase the
capacity of its sugar central, by buying additional machinery and equipment. In order to carry
out the plan, B.A. Green President of Mabalacat Sugar proposed to BH BERKENKOTTER to
advance necessary amount for he purchase of said items promising to reimburse him as soon
as he could obtain an additional loan from Cu Unjieng.
Not long after, BA Green applied to Cu Unjieng for an additional loan offering as security the
additional machinery and equipment acquired by Green and installed after the execution of
the original mortgage deed. Green failed to obtain the loan.
ISSUE:
RULING:
Article 344 (Now Art. 415), paragraph (5) of the Civil Code, gives the character of real
property to "machinery, liquid containers, instruments or implements intended by the owner
of any building or land for use in connection with any industry or trade being carried on
therein and which are expressly adapted to meet the requirements of such trade or industry."
If the installation of the machinery and equipment in question in the central of the Mabalacat
Sugar Co., Inc., in lieu of the other of less capacity existing therein, for its sugar and industry,
converted them into real property by reason of their purpose, it cannot be said that their
incorporation therewith was not permanent in character because, as essential and principle
elements of a sugar central, without them the sugar central would be unable to function or
carry on the industrial purpose for which it was established. Inasmuch as the central is
permanent in character, the necessary machinery and equipment installed for carrying on the
sugar industry for which it has been established must necessarily be permanent. (Emphasis
ours.)
(1) That the installation of a machinery and equipment in a mortgaged sugar central, in lieu
of another of less capacity, for the purpose of carrying out the industrial functions of the latter
and increasing production, constitutes a permanent improvement on said sugar central and
subjects said machinery and equipment to the mortgage constituted thereon (article 1877,
Civil Code); (2) that the fact that the purchaser of the new machinery and equipment has
bound himself to the person supplying him the purchase money to hold them as security for
the payment of the latter's credit, and to refrain from mortgaging or otherwise encumbering
them does not alter the permanent character of the incorporation of said machinery and
equipment with the central; and (3) that the sale of the machinery and equipment in question
by the purchaser who was supplied the purchase money, as a loan, to the person who supplied
the money, after the incorporation thereof with the mortgaged sugar central, does not vest the
creditor with ownership of said machinery and equipment but simply with the right of
redemption.
MANUEL C. MANARANG and LUCIA D. MANARANG vs. MACARIO M.
OFILADA, Sheriff of the City of Manila and ERNESTO ESTEBAN
FACTS
Lucia Manarang obtained a loan of P200 from Ernesto Esteban and to secure its payment she
executed a chattel mortgage over a house of mixed materials. Upon failure to pay, Esteban
brought an action against her for its recovery. Judgment entered in Estaban, execution was
issued against the mortgaged property.
On the basis of the above facts counsel for Manarang contended in the court that the house in
question should be considered as personal property and the publication of the notice of its
sale at public auction in execution considered unnecessary. The Court of First Instance held
that although real property may sometimes be considered as personal property, the sheriff was
in duty bound to cause the publication of the notice of its sale in order to make the sale valid
or to prevent its being declared void or voidable, and he did not, therefore, err in causing such
publication of the notice. So it denied the petition.
ISSUE
Does the fact that the parties entering into a contract regarding a house gave said property the
consideration of personal property in their contract, bind the sheriff in advertising the
property’s sale at public auction as personal property?
RULING
NO. The action was to collect a loan secured by a chattel mortgage on the house. It is also to
be remembered that in practice it is the judgment creditor who points out to the sheriff the
properties that the sheriff is to levy upon in execution, and the judgment creditor in the case at
bar is the party in whose favor the owner of the house and conveyed it by way of chattel
mortgage and, therefore, knew its consideration as personal property.
These considerations notwithstanding, we hold that the rules on execution do not allow, and
we should not interpret them in such a way as to allow, the special consideration that parties
to a contract may have desired to impart to real estate, for example, as personal property,
when they are not ordinarily so. Sales on execution affect the public and third
persons. Enforcement of regulations would be difficult were the convenience or agreement of
private parties to determine or govern the nature of the proceedings. We, therefore, hold that
the mere fact that a house was the subject of a chattel mortgage and was considered as
personal property by the parties does not make said house personal property for purposes of
the notice to be given for its sale at public auction. This ruling is demanded by the need for a
definite, orderly and well- defined regulation for official and public guidance and which
would prevent confusion and misunderstanding.
GOVERNMENT SERVICE INSURANCE SYSTEM vs.
CALSONS, INC., CESARIO P. CALANOC, and NENITA GODINEZ,
FACTS
Calsons applied for a loan of P2Million to GSIS to pay the balance of the purchase price of
certain parcels of land in Quiapo and to finance the construction of a two-storey textile
market building on said land, which was later approved. In connection with the loan, Calsons,
Cesario and Nenita executed a promissory note binding themselves jointly and severally
liable to pay the amount. To secure the payment of the note, appellants executed a first
mortgage on 5 parcels of land acquired by Calsons under a deed of assignment.
GSIS filed a complaint for the foreclosure of the mortgage alleging a number of violations of
the mortgage contract. Among others, is that without the prior written consent of plaintiff
defendants removed and disposed of the complete band sawmill and filing machine which
formed part of the properties mortgaged.
ISSUE
W/N the machineries on the mortgaged properties are part of the mortgage and that the
removal and subsequent disposal of the same therefrom by the defendants violated the said
mortgage contract
RULING
YES. The mortgage was on the lands "together with all the buildings and improvements now
existing or which may hereafter be constructed" thereon. And the machineries, as found by
the trial court, were permanently attached to the property, and installed there by the former
owner to meet the needs of certain works or industry therein. They were therefore part of the
immovable pursuant to Article 415 of the Civil Code, and need not be the subject of a
separate chattel mortgage in order to be deemed duly encumbered in favor of appellee.
MINDANAO BUS COMPANY vs. THE CITY ASSESSOR & TREASURER and the
BOARD OF TAX APPEALS of Cagayan de Oro City
FACTS
This is a petition for the review of the decision of the CTA holding that the petitioner Mindanao
Bus Company is liable to the payment of the realty tax on its maintenance and repair equipment
hereunder referred to. Respondent City Assessor of Cagayan de Oro City assessed at P4,400
petitioner's above-mentioned equipment. Petitioner appealed the assessment to the respondent
Board of Tax Appeals on the ground that the same are not realty. The Board of Tax Appeals of the
City sustained the city assessor, so petitioner herein filed with the Court of Tax Appeals a petition
for the review of the assessment.
Respondents contend that said equipments, tho 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 equipment are placed on wooden or cement
platforms. They can be moved around and about in petitioner's repair shop.
ISSUE W/N the equipment in question form part of real property
RULING
So that movable equipments to be immobilized in contemplation of the law must first be "essential
and principal elements" of an industry or works without which such industry or works would be
"unable to function or carry on the industrial purpose for which it was established." We may here
distinguish, therefore, those movable which become immobilized by destination because they
are essential and principal elements in the industry for those which may not be so considered
immobilized because they are merely incidental, not essential and principal.
The tools and equipment 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 equipment, its business may be
carried on, as petitioner has carried on, without such equipment 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.
In the case at bar the equipments in question are destined only to repair or service the
transportation business, which is not carried on in a building or permanently on a piece of land, as
demanded by the law. Said equipments may not, therefore, be deemed real property.
Resuming what we have set forth above, 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.
SERGS PRODUCTS, INC., and SERGIO T. GOQUIOLAY, petitioners, vs. PCI
LEASING AND FINANCE, INC
FACTS
PCI Leasing and Finance, Inc. filed a complaint for a sum of money with an application for a
writ of replevin, later issued by the judge, directing its sheriff to seize and deliver the
machineries and equipment to PCI Leasing. Sergs Products filed a motion for special
protective order which was opposed by PCI Leasing on the ground that the properties were
still personal.
Sergs asserted that the properties sought to be seized were immovable/real property. Sheriff
sought to enforce the writ of seizure and take possession of the remaining properties.
ISSUE
Whether or not the machineries purchased and imported by SERGS became real property by
virtue of immobilization.
RULING
YES. In the present case, the machines that were the subjects of the Writ of Seizure were
placed by petitioners in the factory built on their own land. Indisputably, they were essential
and principal elements of their chocolate-making industry. Hence, although each of them was
movable or personal property on its own, all of them have become immobilized by
destination because they are essential and principal elements in the industry.[16] In that
sense, petitioners are correct in arguing that the said machines are real, not personal, property
pursuant to Article 415 (5) of the Civil Code.
PASTOR D. AGO vs. THE HON. COURT OF APPEALS, HON. MONTANO A.
ORTIZ, Judge of the Court of First Instance of Agusan, THE PROVINCIAL SHERIFF
OF SURIGAO and GRACE PARK ENGINEERING, INC.
FACTS
Pastor Ago bought sawmill machineries and equipment from Grace Park Engineer
domineering executing chattel mortgage over said items to secure payment of balance of the
price. Pastor defaulted in his payment so Grace Park instituted extra-judicial foreclosure
proceedings of the mortgage. A compromise agreement was entered into by the parties
however despite such, Pastor continued to default in his payments. A writ of execution later
followed.
Sheriff acting upon the writ of execution, levied upon and ordered the sale of the sawmill
machineries and equipment in question. These machineries and equipment had been taken to
and installed in a sawmill building located in Lianga, Surigao del Sur, and owned by the
Golden Pacific Sawmill, Inc., to whom, Pastor alleges, he had sold them.
Pastor contended among others that the respondent Provincial Sheriff was acting illegally
upon the allegedly void writ of execution by levying the same upon the sawmill machineries
and equipment which have become real properties of the Golden Pacific sawmill, Inc., and is
about to proceed in selling the same without prior publication of the notice of sale thereof in
some newspaper of general circulation as required by the Rules of Court.
ISSUE
W/N the machineries are real property
RULING
The record shows that after petitioner herein Pastor D. Ago had purchased the sawmill
machineries and equipments he assigned the same to the Golden Pacific Sawmill, Inc. in
payment of his subscription to the shares of stock of said corporation. Thereafter the sawmill
machinery and equipments were installed in a building and permanently attached to the
ground. By reason of such installment in a building, the said sawmill machineries and
equipment became real estate properties in accordance with the provision of Art. 415 (5) of
the Civil Code
Court held that by the installment of the sawmill machineries in the building of the Gold
Pacific Sawmill, Inc., for use in the sawing of logs carried on in said building, the same
became a necessary and permanent part of the building or real estate on which the same was
constructed, converting the said machineries and equipments into real estate within the
meaning of Article 415(5) above-quoted of the Civil Code of the Philippines.
MANILA ELECTRIC COMPANY vs. CENTRAL BOARD OF ASSESSMENT
APPEALS, BOARD OF ASSESSMENT APPEALS OF BATANGAS and
PROVINCIAL ASSESSOR OF BATANGAS,
FACTS
This case is about the imposition of the realty tax on two oil storage tanks installed in 1969 by
Manila Electric Company on a lot in San Pascual, Batangas which it leased in 1968 from
Caltex (Phil.), Inc. The tanks are within the Caltex refinery compound. They have a total
capacity of 566,000 barrels. They are used for storing fuel oil for Meralco's power plants.
Meralco filed this special civil action of certiorari to annul the Board's decision and
resolution. It contends that the Board acted without jurisdiction and committed a grave error
of law in holding that its storage tanks are taxable real property. Meralco contends that the
said oil storage tanks do not fall within any of the kinds of real property enumerated in article
415 of the Civil Code and, therefore, they cannot be categorized as realty by nature, by
incorporation, by destination nor by analogy. Stress is laid on the fact that the tanks are not
attached to the land and that they were placed on leased land, not on the land owned by
Meralco.
ISSUE
W/N the storage tanks are real property subject to realty tax
RULING
YES. Section 2 of the Assessment Law provides that the realty tax is due "on real property,
including land, buildings, machinery, and other improvements" not specifically exempted in
section 3 thereof. This provision is reproduced with some modification in the Real Property
Tax Code.
We hold that while the two storage tanks are not embedded in the land, they may,
nevertheless, be considered as improvements on the land, enhancing its utility and rendering
it useful to the oil industry. It is undeniable that the two tanks have been installed with some
degree of permanence as receptacles for the considerable quantities of oil needed by Meralco
for its operations.
Oil storage tanks were held to be taxable realty in Standard Oil Co. of New Jersey vs.
Atlantic City, 15 Atl. 2nd 271.
For purposes of taxation, the term "real property" may include things which should generally
be regarded as personal property(84 C.J.S. 171, Note 8). It is a familiar phenomenon to see
things classed as real property for purposes of taxation which on general principle might be
considered personal property (Standard Oil Co. of New York vs. Jaramillo, 44 Phil. 630,
633).
G.R. No. L-30173 September 30, 1971
GAVINO A. TUMALAD and GENEROSA R. TUMALAD vs. ALBERTA VICENCIO
and EMILIANO SIMEON,
FACTS
Alberta Vicencio and Emiliano Simeon executed a chattel mortgage in favor of Tumalad
Spouses over their house of strong materials in Quiapo. When Alberta and Emiliano
defaulted, the mortgage was extra judicially foreclosed and the house was sold at public
auction.
Tumalad spouses commenced a Civil case praying that the house be vacated and its
possession be surrendered to them and for Alberta and Emiliano to pay the rent of P200
monthtly. Alberta and Emiliano, in their answer, impugned the legality of the chattel
mortgage on two grounds, which are: (a) that, their signatures on the chattel mortgage were
obtained through fraud, deceit, or trickery; and (b) that the subject matter of the mortgage is a
house of strong materials, and, being an immovable, it can only be the subject of a real estate
mortgage and not a chattel mortgage.
ISSUE W/N the chattel mortgage is void since the subject land is an immovable
RULING
In the contract now before Us, the house on rented land is not only expressly designated as
Chattel Mortgage; it specifically provides that "the mortgagor ... voluntarily CEDES, SELLS
and TRANSFERS by way of Chattel Mortgage23 the property together with its leasehold
rights over the lot on which it is constructed and participation ..." 24 Although there is no
specific statement referring to the subject house as personal property, yet by ceding, selling or
transferring a property by way of chattel mortgage defendants-appellants could only have
meant to convey the house as chattel, or at least, intended to treat the same as such, so that
they should not now be allowed to make an inconsistent stand by claiming otherwise.
When Vicencio executed the Chattel Mortgage, it specifically provides that the mortgagor
cedes, sells and transfers by way of Chattel mortgage. They intended to treat it as chattel
therefore are now estopped from claiming otherwise. Also the house stood on rented land
which was held in previous jurisprudence to be personalty since it was placed on the land by
one who had only temporary right over the property thus it does not become immobilized by
attachment.
[Vicencio though was not made to pay rent since the action was instituted during the period
of redemption therefore Vicencio still had a right to remain in possession of the property]
G.R. No. L-18456 November 30, 1963 G.R. No. 106041 January 29, 1993
CONRADO P. NAVARRO vs. RUFINO G. PINEDA, RAMONA REYES, ET AL BENGUET CORPORATION vs. CENTRAL BOARD OF ASSESSMENT APPEALS, BOARD OF
ASSESSMENT APPEALS OF ZAMBALES, PROVINCIAL ASSESSOR OF ZAMBALES,
PROVINCE OF ZAMBALES, and MUNICIPALITY OF SAN MARCELINO
FACTS
Rufino Pineda and his mother Juana Gonzales borrowed from Conrado Navarro P2k and to CRUZ, J.:
secure indebtedness, Rufino executed a Deed of Real Estate and Chattel Mortgages. The The realty tax assessment involved in this case amounts to P11,319,304.00. It has been imposed on the
REM covered a parcel of land owned by the mother while the chattel mortgage covered a petitioner's tailings dam and the land thereunder over its protest.
residential house. Due to the failure to pay the loan, they asked for The controversy arose in 1985 when the Provincial Assessor of Zambales assessed the said properties as
extensions to pay for the loan. On the second extension, Pineda executed a PROMISE taxable improvements. The assessment was appealed to the Board of Assessment Appeals of the Province
wherein in case of default in payment, he wouldn’t ask for any additional extension and there of Zambales. On August 24, 1988, the appeal was dismissed mainly on the ground of the petitioner's
would be no need for any formal demand. In spite of this, they still failed to pay. "failure to pay the realty taxes that fell due during the pendency of the appeal."
The petitioner seasonably elevated the matter to the Central Board of Assessment Appeals, 1 one of the
Navarro then filed for the foreclosure of the mortgages. The court decided in his favor.
herein respondents. In its decision dated March 22, 1990, the Board reversed the dismissal of the appeal
but, on the merits, agreed that "the tailings dam and the lands submerged thereunder (were) subject to
ISSUE realty tax."
For purposes of taxation the dam is considered as real property as it comes within
RULING the object mentioned in paragraphs (a) and (b) of Article 415 of the New Civil
Where a house stands on a rented land belonging to another person, it may be the Code. It is a construction adhered to the soil which cannot be separated or detached
subject matter of a chattel mortgage as personal property if so stipulated in the document of without breaking the material or causing destruction on the land upon which it is
mortgage, and in an action by the mortgagee for the foreclosure, the validity of the chattel attached. The immovable nature of the dam as an improvement determines its
character as real property, hence taxable under Section 38 of the Real Property Tax
mortgage cannot be assailed by one of the parties to the contract of mortgage.
Code. (P.D. 464).
Although the dam is partly used as an anti-pollution device, this Board cannot
Furthermore, although in some instances, a house of mixed materials has been considered as a accede to the request for tax exemption in the absence of a law authorizing the
chattel between the parties and that the validity of same.
the contract between them, has been recognized, it has been a constant xxx xxx xxx
criterion that with respect to third persons, who are not parties to the contract, and We find the appraisal on the land submerged as a result of the construction of the
specially in execution proceedings, the house is considered as immovable property. tailings dam, covered by Tax Declaration Nos.
002-0260 and 002-0266, to be in accordance with the Schedule of Market Values
for Zambales which was reviewed and allowed for use by the Ministry
(Department) of Finance in the 1981-1982 general revision. No serious attempt
was made by Petitioner-Appellant Benguet Corporation to impugn its
reasonableness, i.e., that the P50.00 per square meter applied by Respondent-
Appellee Provincial Assessor is indeed excessive and unconscionable. Hence, we
find no cause to disturb the market value applied by Respondent Appellee
Provincial Assessor of Zambales on the properties of Petitioner-Appellant Benguet
Corporation covered by Tax Declaration Nos. 002-0260 and 002-0266.
This petition for certiorari now seeks to reverse the above ruling.
The principal contention of the petitioner is that the tailings dam is not subject to realty tax because it is
not an "improvement" upon the land within the meaning of the Real Property Tax Code. More
particularly, it is claimed —
(1) as regards the tailings dam as an "improvement":
(a) that the tailings dam has no value separate from and
independent of the mine; hence, by itself it cannot be
considered an improvement separately assessable;
(b) that it is an integral part of the mine;
(c) that at the end of the mining operation of the petitioner
corporation in the area, the tailings dam will benefit the
local community by serving as an irrigation facility;
(d) that the building of the dam has stripped the property of
any commercial value as the property is submerged under
water wastes from the mine;
(e) that the tailings dam is an environmental pollution
control device for which petitioner must be commended
rather than penalized with a realty tax assessment;
 (f) that the installation and utilization of the tailings dam as
a pollution control device is a requirement imposed by law;
(2) as regards the valuation of the tailings dam and the submerged lands:
(a) that the subject properties have no market value as they
cannot be sold independently of the mine;
(b) that the valuation of the tailings dam should be based on
its incidental use by petitioner as a water reservoir and not
on the alleged cost of construction of the dam and the annual
build-up expense;
(c) that the "residual value formula" used by the Provincial
Assessor and adopted by respondent CBAA is arbitrary and
erroneous; and
(3) as regards the petitioner's liability for penalties for
non-declaration of the tailings dam and the submerged lands for realty tax
purposes:
(a) that where a tax is not paid in an honest belief that it is
not due, no penalty shall be collected in addition to the basic
tax;
(b) that no other mining companies in the Philippines
operating a tailings dam have been made to declare the dam
for realty tax purposes.
The petitioner does not dispute that the tailings dam may be considered realty within the meaning of
Article 415. It insists, however, that the dam cannot be subjected to realty tax as a separate and
independent property because it does not constitute an "assessable improvement" on the mine although a
considerable sum may have been spent in constructing and maintaining it.
To support its theory, the petitioner cites the following cases:
1. Municipality of Cotabato v. Santos (105 Phil. 963), where this Court considered the dikes and gates
constructed by the taxpayer in connection with a fishpond operation as integral parts of the fishpond.
2. Bislig Bay Lumber Co. v. Provincial Government of Surigao (100 Phil. 303), involving a road
constructed by the timber concessionaire in the area, where this Court did not impose a realty tax on the
road primarily for two reasons:
In the first place, 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 . . . but also
because upon the expiration of the concession said road would ultimately pass to
the national government. . . . In the second place, while the road was constructed
by appellee primarily for its use and benefit, the privilege is not exclusive, for . . .
appellee cannot prevent the use of portions of the concession for homesteading
purposes. It is also duty bound to allow the free use of forest products within the
concession for the personal use of individuals residing in or within the vicinity of
the land. . . . In other words, the government has practically reserved the rights to
use the road to promote its varied activities. Since, as above shown, the road in
question cannot be considered as an improvement which belongs to appellee,
although in part is for its benefit, it is clear that the same cannot be the subject of
assessment within the meaning of Section 2 of C.A.
No. 470.
Apparently, the realty tax was not imposed not because the road was an integral part of the lumber
concession but because the government had the right to use the road to promote its varied activities.
3. Kendrick v. Twin Lakes Reservoir Co. (144 Pacific 884), an American case, where it was declared that
the reservoir dam went with and formed part of the reservoir and that the dam would be "worthless and
useless except in connection with the outlet canal, and the water rights in the reservoir represent and
include whatever utility or value there is in the dam and headgates."
4. Ontario Silver Mining Co. v. Hixon (164 Pacific 498), also from the United States. This case involved
drain tunnels constructed by plaintiff when it expanded its mining operations downward, resulting in a
constantly increasing flow of water in the said mine. It was held that:
Whatever value they have is connected with and in fact is an integral part of the
mine itself. Just as much so as any shaft which descends into the earth or an
underground incline, tunnel, or drift would be which was used in connection with
the mine.
On the other hand, the Solicitor General argues that the dam is an assessable improvement because it
enhances the value and utility of the mine. The primary function of the dam is to receive, retain and hold
the water coming from the operations of the mine, and it also enables the petitioner to impound water,
which is then recycled for use in the plant.
There is also ample jurisprudence to support this view, thus:
. . . The said equipment and machinery, as appurtenances to the gas station
building or shed owned by Caltex (as to which it is subject to realty tax) and which
fixtures are necessary to the operation of the gas station, for without them the gas
station would be useless and which have been attached or affixed permanently to
the gas station site or embedded therein, are taxable improvements and machinery
within the meaning of the Assessment Law and the Real Property Tax Code.
(Caltex [Phil.] Inc. v. CBAA, 114 SCRA 296).
We hold that while the two storage tanks are not embedded in the land, they may,
nevertheless, be considered as improvements on the land, enhancing its utility and
rendering it useful to the oil industry. It is undeniable that the two tanks have been
installed with some degree of permanence as receptacles for the considerable
quantities of oil needed by MERALCO for its operations. (Manila Electric Co. v.
CBAA, 114 SCRA 273).
The pipeline system in question is indubitably a construction adhering to the soil.
It is attached to the land in such a way that it cannot be separated therefrom
without dismantling the steel pipes which were welded to form the pipeline.
(MERALCO Securities Industrial Corp. v. CBAA, 114 SCRA 261).
The tax upon the dam was properly assessed to the plaintiff as a tax upon real
estate. (Flax-Pond Water Co. v. City of Lynn, 16 N.E. 742).
The oil tanks are structures within the statute, that they are designed and used by
the owner as permanent improvement of the free hold, and that for such reasons
they were properly assessed by the respondent taxing district as improvements.
(Standard Oil Co. of New Jersey v. Atlantic City, 15 A 2d. 271)
The Real Property Tax Code does not carry a definition of "real property" and simply says that the realty
tax is imposed on "real property, such as lands, buildings, machinery and other improvements affixed or
attached to real property." In the absence of such a definition, we apply Article 415 of the Civil Code, the
pertinent portions of which state:
Art. 415. The following are immovable property.
(1) Lands, buildings and constructions of all kinds adhered to the soil;
xxx xxx xxx
(3) Everything attached to an immovable in a fixed manner, in such a way that it
cannot be separated therefrom without breaking the material or deterioration of the
object.
Section 2 of C.A. No. 470, otherwise known as the Assessment Law, provides that the realty tax is due
"on the real property, including land, buildings, machinery and other improvements" not specifically
exempted in Section 3 thereof. A reading of that section shows that the tailings dam of the petitioner does
not fall under any of the classes of exempt real properties therein enumerated.
Is the tailings dam an improvement on the mine? Section 3(k) of the Real Property Tax Code defines
improvement as follows:
(k) Improvements — is a valuable addition made to property or an amelioration in
its condition, amounting to more than mere repairs or replacement of waste,
costing labor or capital and intended to enhance its value, beauty or utility or to
adopt it for new or further purposes.
The term has also been interpreted as "artificial alterations of the physical condition of the ground that
are reasonably permanent in character."2
The Court notes that in the Ontario case the plaintiff admitted that the mine involved therein could not be
operated without the aid of the drain tunnels, which were indispensable to the successful development
and extraction of the minerals therein. This is not true in the present case.
Even without the tailings dam, the petitioner's mining operation can still be carried out because the
primary function of the dam is merely to receive and retain the wastes and water coming from the mine.
There is no allegation that the water coming from the dam is the sole source of water for the mining There is no need for this time-wasting procedure. The Court may resolve the issue in this petition instead
operation so as to make the dam an integral part of the mine. In fact, as a result of the construction of the of referring it back to the local authorities. We have studied the facts and circumstances of this case as
dam, the petitioner can now impound and recycle water without having to spend for the building of a above discussed and find that the petitioner has acted in good faith in questioning the assessment on the
water reservoir. And as the petitioner itself points out, even if the petitioner's mine is shut down or ceases tailings dam and the land submerged thereunder. It is clear that it has not done so for the purpose of
operation, the dam may still be used for irrigation of the surrounding areas, again unlike in the Ontario evading or delaying the payment of the questioned tax. Hence, we hold that the petitioner is not subject to
case. penalty for its
As correctly observed by the CBAA, the Kendrick case is also not applicable because it involved water non-declaration of the tailings dam and the submerged lands for realty tax purposes.
reservoir dams used for different purposes and for the benefit of the surrounding areas. By contrast, the WHEREFORE, the petition is DISMISSED for failure to show that the questioned decision of respondent
tailings dam in question is being used exclusively for the benefit of the petitioner. Central Board of Assessment Appeals is tainted with grave abuse of discretion except as to the
Curiously, the petitioner, while vigorously arguing that the tailings dam has no separate existence, just as imposition of penalties upon the petitioner which is hereby SET ASIDE. Costs against the petitioner. It is
vigorously contends that at the end of the mining operation the tailings dam will serve the local so ordered.
community as an irrigation facility, thereby implying that it can exist independently of the mine.
From the definitions and the cases cited above, it would appear that whether a structure constitutes an
improvement so as to partake of the status of realty would depend upon the degree of permanence
intended in its construction and use. The expression "permanent" as applied to an improvement does not
imply that the improvement must be used perpetually but only until the purpose to which the principal
realty is devoted has been accomplished. It is sufficient that the improvement is intended to remain as
long as the land to which it is annexed is still used for the said purpose.
The Court is convinced that the subject dam falls within the definition of an "improvement" because it is
permanent in character and it enhances both the value and utility of petitioner's mine. Moreover, the
immovable nature of the dam defines its character as real property under Article 415 of the Civil Code
and thus makes it taxable under Section 38 of the Real Property Tax Code.
The Court will also reject the contention that the appraisal at P50.00 per square meter made by the
Provincial Assessor is excessive and that his use of the "residual value formula" is arbitrary and
erroneous.
Respondent Provincial Assessor explained the use of the "residual value formula" as follows:
A 50% residual value is applied in the computation because, while it is true that
when slime fills the dike, it will then be covered by another dike or stage, the stage
covered is still there and still exists and since only one face of the dike is filled,
50% or the other face is unutilized.
In sustaining this formula, the CBAA gave the following justification:
We find the appraisal on the land submerged as a result of the construction of the
tailings dam, covered by Tax Declaration Nos.
002-0260 and 002-0266, to be in accordance with the Schedule of Market Values
for San Marcelino, Zambales, which is fifty (50.00) pesos per square meter for
third class industrial land (TSN, page 17, July 5, 1989) and Schedule of Market
Values for Zambales which was reviewed and allowed for use by the Ministry
(Department) of Finance in the 1981-1982 general revision. No serious attempt
was made by Petitioner-Appellant Benguet Corporation to impugn its
reasonableness, i.e, that the P50.00 per square meter applied by Respondent-
Appellee Provincial Assessor is indeed excessive and unconscionable. Hence, we
find no cause to disturb the market value applied by Respondent-Appellee
Provincial Assessor of Zambales on the properties of Petitioner-Appellant Benguet
Corporation covered by Tax Declaration Nos. 002-0260 and 002-0266.
It has been the long-standing policy of this Court to respect the conclusions of quasi-judicial agencies
like the CBAA, which, because of the nature of its functions and its frequent exercise thereof, has
developed expertise in the resolution of assessment problems. The only exception to this rule is where it
is clearly shown that the administrative body has committed grave abuse of discretion calling for the
intervention of this Court in the exercise of its own powers of review. There is no such showing in the
case at bar.
We disagree, however, with the ruling of respondent CBAA that it cannot take cognizance of the issue of
the propriety of the penalties imposed upon it, which was raised by the petitioner for the first time only
on appeal. The CBAA held that this "is an entirely new matter that petitioner can take up with the
Provincial Assessor (and) can be the subject of another protest before the Local Board or a negotiation
with the local sanggunian . . ., and in case of an adverse decision by either the Local Board or the
local sanggunian, (it can) elevate the same to this Board for appropriate action."
G.R. No. L-5075 December 1, 1909
MAURICIO RAMIREZ, administrator of the estate of MOISES RAMIREZ, deceased, plaintiff-
appellee,
vs.
SIMEON BAUTISTA, ET AL.
Facts:
The subject of this complaint is two fish ponds, left by Moises Ramirez on his demise, and subsequently
illegally sold. This action was brought for the purpose of having the sale declared to be void, to secure
the recovery of possession of the fish ponds, their restitution to the administrator of the estate of the
deceased owner, and indemnity for damages.
Moises was married twice with five children by the first marriage and three by the second marriage, of
whom Isabel alone survives, two wives are likewise dead. Upon his death, he left two fish ponds
somewhere in Bulacan, acquired during his first marriage, which was later sold by the children of first
marriage to Simeon Bautista and Raymundo Duran. Isabel, the only surviving child of second marriage
was not a party to the sale, hence this suit is filed by Mauricio, the administrator of the intestate estate, to
have the sale declared null and void and to restore the fish ponds to the intestate estate of Moises.
Bautista and Duran proved their purchase by two documents, one was private and the other was a notarial
one executed for the purpose. Vendors was summoned to answer complaint but they did not appear in
trial.
The action proceeded with against the purchasers (Bautista and Duran) before the CFI which rendered
judgment holding that the fish ponds in question pertained to the intestate estate of Moises and that the
sale was null and void. Hence, the appeal by the purchasers.
Issue: W/N the sale was valid
Ruling: YES
By virtue of the conjugal partnership, these two fish ponds belonged half to the husband and half to the
wife upon the dissolution of the marriage by reason of the death of either of them.
Consequently, upon the death of Apolinaria Guillermo one-half of the fish ponds belonged to Moises
Ramirez, and the other half, that belonging to Apolinaria Guillermo, to the children of the said married
couple, Rosa, Carmen, Francisco, Mauricia, and Ignacia, as the lawful heirs of their mother.
By the second marriage three additional children survived the father, and upon his death the first five
children, together with the latter three, became his heirs, and all are entitled to divide the said half share
belonging to their father into eight parts. By the death of two of these last three children, their respective
shares fell to Isabel sole heir, inasmuch as they were children of the same parents.
In view of these considerations, the claim of the appellants is entirely legal that thirteen-sixteenths should
be apportioned among the children of the first marriage — to wit, eight as their own, already inherited
from their mother, Apolinaria Guillermo, and five subsequently inherited from their deceased father,
Moises Ramirez — and three-sixteenths should be the share of the three children of the second marriage,
which accrued to Isabel Ramirez.
The present status of the two fish ponds in question is that of community of property.
It is certain that when two or more heirs appear at the opening of a testamentary succession, or during the
progress of the settlement of an intestate estate, and each turns out to be an owner pro indiviso of the
inheritance, by reason of the share he may be entitled to receive, a community of property then exists
between the participants as long as the estate remains undivided . . . and nothing more tangible can be
imagined than this necessary community, which arose at the moment when the coheirs assumed the entire
representation of the person of the deceased with respect to all of his property, rights, and actions, both
active and passive.
With regard to the community of property the Civil Code provides that —
Every coowner shall have full ownership of his part and in the fruits and benefits derived
therefrom, and he therefore may alienate, assign, or mortgage it, and even substitute another
person in its enjoyment, unless personal rights are in question. But the effect of the alienation
or mortgage, with regard to the coowners, shall be limited to the share which may be awarded
him in the division on the dissolution of the community.
The Court laid down the following rules:
1. When two or more heirs appear at the opening of a testamentary succession, or during the
progress of the settlement of an intestate estate, and each turns out to be an owner pro
indiviso of the inheritance, by reason of the share he may be entitled to receive, a community
of property then exists between the participants as long as the estate remains undivided and
nothing more tangible can be imagined than this necessary community, which arose at
the moment when the coheirs assumed the entire representation of the person of the deceased
with respect to all of his property, rights, and actions, both active and passive.
2. Every co-owner shall have full ownership of his part and in the fruits and benefits derived
there from, and he therefore may alienate, assign, or mortgage it, and even substitute another
person in its enjoyment, unless personal rights are in question. But the effect of
the alienation or mortgage, with regard to the co-owners, shall be limited to the share which
may be awarded him in the division on the dissolution of the community.
Applying the said rules, the death of the mother vested in the children of the first marriage their mothers
half share. The death of Moises entitled his eight children to a share each in the fishponds.
Therefore, Isabella, being the lone survivor of her siblings, was entitled to a 3/16 share of the total
property.
The Court held that Rosa, Carmen, Francisco, Mauricia, and Ignacia Ramirez could have lawfully
alienated their respective shares in the joint ownership of the two parcels of land. The sale to
the defendants, Simeon Bautista and Raymundo Duran was the sale of 13/16 of the said two properties
and could not have been void. It was the sale of the 3/16 which belonged to Isabela alone which was
void.
Simeon Bautista and Raymundo Duran succeed to the vendors should have been validly subrogated in the
joint ownership of the two fish ponds sold and that the shares that redounded to them were the same that
were owned by the vendors, which was, 13/16 of the two properties.
[G.R. No. 152766. June 20, 2003]
LILIA SANCHEZ, petitioner, vs. COURT OF APPEALS, HON. VICTORINO S. ALVARO as
Presiding Judge, RTC-Br. 120, Caloocan City, and VIRGINIA TERIA, respondents.
Facts:
Lilia Sanchez, constructed a house on a 76-square meter lot owned by her parents-in-law. The lot was
registered under TCT No. 263624 with the following co-owners: Eliseo Sanchez married to Celia
Sanchez, Marilyn Sanchez married to Nicanor Montalban, Lilian Sanchez, widow, Nenita Sanchez,
single, Susana Sanchez married to Fernando Ramos, and Felipe Sanchez.
Later, the lot was registered under the name of Virgina Teria by virtue of a Deed of Absolute Sale by all
six co-owners in her favor. Lilia claimed that she did not affix her signature on the document and refused
to vacate the lot. An action for recovery of possession was filed by Teria before the MeTC which ruled in
her favor declaring that the sale was valid only to the extent of 5/6 of the lot.
MeTC later issued an order for issuance of writ of execution in favor of Teria. Subsequently, a Notice to
Vacate was served by the sheriff upon Lilia who refused to heed the Notice.
Teria started demolishing the house without any special permit of demolition from the court. Hence, Lilia
was forced to inhabit the portion of premises.
Issue: W/N the sale was valid
Ruling: NO. Before the partition of a land or thing held in common, no individual or co-owner can claim
title to any definite portion thereof. All that the co-owner has is an ideal or abstract quota or proportionate
share in the entire land or thing.
Article 493 of the Civil Code gives the owner of an undivided interest in the property the right to freely
sell and dispose of it, i.e., his undivided interest. He may validly lease his undivided interest to a third
party independently of the other co-owners. But he has no right to sell or alienate a concrete, specific or
determinate part of the thing owned in common because his right over the thing is represented by a quota
or ideal portion without any physical adjudication.
Although assigned an aliquot but abstract part of the property, the metes and bounds of petitioners lot has
not been designated. As she was not a party to the Deed of Absolute Sale voluntarily entered into by the
other co-owners, her right to 1/6 of the property must be respected. Partition needs to be effected to
protect her right to her definite share and determine the boundaries of her property. Such partition must
be done without prejudice to the rights of private respondent Virginia Teria as buyer of the 5/6 portion of
the lot under dispute.
Sanchez Roman defines co-ownership as the right of common dominion which two or more persons have
in a spiritual part of a thing, not materially or physically divided. Manresa defines it as the manifestation
of the private right of ownership, which instead of being exercised by the owner in an exclusive manner
over the things subject to it, is exercised by two or more owners and the undivided thing or right to which
it refers is one and the same.
The characteristics of co-ownership are: (a) plurality of subjects, who are the co-owners, (b) unity of or
material indivision, which means that there is a single object which is not materially divided, and which
is the element which binds the subjects, and, (c) the recognition of ideal shares, which determines the
rights and obligations of the co-owners.
[G.R. No. 133638. April 15, 2005]
PERPETUA VDA. DE APE, petitioner, vs. THE HONORABLE COURT OF APPEALS and
GENOROSA CAWIT VDA. DE LUMAYNO, respondents.
Facts:
Cleopas Ape was the registered owner of the subject parcel of land. Upon Cleopas’ death, the property
passed on to his wife, Maria Ondoy and their eleven children. The children never formally divided the
property amongst themselves except through hantal-hantal whereby each just occupied a certain portion
and developed each.
Sometime thereafter, Generosa Cawit de Lumayno, joined by her husband, instituted a case for Specific
Performance of a Deed of Sale with Damages against Fortunato (one of the children) and his wife,
alleging that they entered into a contract of sale of land covering the share of Fortunato in the subject lot
for a consideration of P5K.
Fortunato and his wife denied the material allegation of the complaint and claimed that Fortunato never
sold his share to Generosa and that his signature was forged.
In 1973, Lumayno compelled Fortunato to make the the delivery to her of the registrable deed of sale
over Fortunato’s portion of the Lot No. 2319. Fortunato assailed the validity of the contract of sale. He
also invoked his right to redeem (as a co-owner) the portions of land sold by his siblings to Lumayno.
Fortunato died during the pendency of the case.
Issue:
Ruling: In this case, the records are bereft of any indication that Fortunato was given any written notice
of prospective or consummated sale of the portions of Lot No. 2319 by the vendors or would-be vendors.
The thirty (30)-day redemption period under the law, therefore, has not commenced to run.
Despite this, however, we still rule that petitioner could no longer invoke her right to redeem from private
respondent for the exercise of this right presupposes the existence of a co-ownership at the time the
conveyance is made by a co-owner and when it is demanded by the other co-owner or co-owners.[42] The
regime of co-ownership exists when ownership of an undivided thing or right belongs to different
persons.[43]By the nature of a co-ownership, a co-owner cannot point to specific portion of the property
owned in common as his own because his share therein remains intangible. [44] As legal redemption is
intended to minimize co-ownership,[45] once the property is subdivided and distributed among the co-
owners, the community ceases to exist and there is no more reason to sustain any right of legal
redemption.[46]
In this case, records reveal that although Lot No. 2319 has not yet been formally subdivided, still, the
particular portions belonging to the heirs of Cleopas Ape had already been ascertained and they in fact
took possession of their respective parts.
From the foregoing, it is evident that the partition of Lot No. 2319 had already been effected by the heirs
of Cleopas Ape. Although the partition might have been informal is of no moment for even an oral
agreement of partition is valid and binding upon the parties.[50] Likewise, the fact that the respective
shares of Cleopas Apes heirs are still embraced in one and the same certificate of title and have not been
technically apportioned does not make said portions less determinable and identifiable from one another
nor does it, in any way, diminish the dominion of their respective owners.
-
As can be gleaned from Floress testimony, while he was very much aware of Fortunatos inability to read
and write in the English language, he did not bother to fully explain to the latter the substance of the
receipt (Exhibit G). He even dismissed the idea of asking somebody else to assist Fortunato considering
that a measly sum of thirty pesos was involved. Evidently, it did not occur to Flores that the document he
himself prepared pertains to the transfer altogether of Fortunatos property to his mother-in-law. It is
precisely in situations such as this when the wisdom of Article 1332 of the Civil Code readily becomes
apparent which is to protect a party to a contract disadvantaged by illiteracy, ignorance, mental weakness
or some other handicap.[58]
In sum, we hold that petitioner is no longer entitled to the right of redemption under Article 1632 of the
Civil Code as Lot No. 2319 had long been partitioned among its co-owners. This Court likewise annuls
the contract of sale between Fortunato and private respondent on the ground of vitiated consent.
G.R. No. L-4656 November 18, 1912
RICARDO PARDELL Y CRUZ and VICENTA ORTIZ Y FELIN DE PARDELL, plaintiffs-
appellees, vs. GASPAR DE BARTOLOME Y ESCRIBANO and MATILDE ORTIZ Y FELIN DE
BARTOLOME, defendants-appellants.
Facts:
Calixta Felin y Paula, spouse of Miguel Ortiz and mother of 4 children (Manuel, Francisca, Vicenta and
Matilde), prior to her death, executed a nuncupative will whereby she made her four children her sole
and universal heirs of all her properties. Manuel and Francisca died leaving Vicenta and Matilde as the
only existing heirs of said testatrix.
In 1888, defendants Matilde and Gaspar, without judicial authorization, nor any agreement, took upon
themselves the administration and enjoyment of said properties, and collected the rents, fruits and
products thereof to the serious detriment of Ricardo and Vicenta’s interest.
Matilde denied the allegations of Vicenta saying they never refused to give to Vicenta her share of the
said properties and had in fact solicited the partition of the same.
Both of the litigating sisters assented to a partition by halves of the property left in her will by their
mother at her death; in fact, during the course of this suit, proceedings were had, in accordance with the
agreement made, for the division between them of the said hereditary property of common ownership,
which division was recognized and approved in the findings of the trial court, as shown by the judgment
appealed from.
Issue:
Ruling: Notwithstanding the acquiescence on the part of the plaintiffs, assenting to the said finding
whereby the defendants were absolved from the complaint, yet, as such absolution is based on the
compensation established in the judgment of the trial court, between the amounts which each party is
entitled to claim from the other, it is imperative to determine whether the defendant Matilde Ortiz, as
coowner of the house on Calle Escolta, was entitled, with her husband, to reside therein, without paying
to her coowner, Vicenta Ortiz, who, during the greater part of the time, lived with her husband abroad,
one-half of the rents which the upper story would have produced, had it been rented to a stranger.
Article 394 of the Civil Code prescribes:
Each coowner may use the things owned in common, provided he uses them in accordance with their
object and in such manner as not to injure the interests of the community nor prevent the coowners from
utilizing them according to their rights.
Matilde Ortiz and her husband occupied the upper story, designed for use as a dwelling, in the house of
joint ownership; but the record shows no proof that, by so doing, the said Matilde occasioned any
detriment to the interest of the community property, nor that she prevented her sister Vicenta from
utilizing the said upper story according to her rights. It is to be noted that the stores of the lower floor
were rented and accounting of the rents was duly made to the plaintiffs.
Each coowner of realty held pro indiviso exercises his rights over the whole property and may use and
enjoy the same with no other limitation than that he shall not injure the interests of his coowners, for the
reason that, until a division be made, the respective part of each holder can not be determined and every
one of the coowners exercises, together with his other coparticipants, joint ownership over the pro
indiviso property, in addition to his use and enjoyment of the same.
G.R. No. L-2812 October 18, 1906
LONGINOS JAVIER, plaintiff-appellee, vs. SEGUNDO JAVIER, ET AL.,
Facts:
This case involves a house and lot in Malate, Manila; the land belongs to Longinos Javier as
administrator of his father Manuel Javier while the house belonged to Isabel Hernandez and her son.
Judgment was rendered in favor of Longinos Javier for the possession of property, but giving defendants
a reasonable opportunity to remove the house.
The evidence sustains the findings of fact to the effect that the land belongs to the estate represented by
the plaintiff. There was evidence to show that the land was, in 1860, in the possession of Manuel Javier,
the father of the defendant Segundo Javier, and that since that time it has been occupied by his children
and that no one of these children ever made any claim to the ownership thereof, and no one them ever
occupied the property as owner.
Issue: W/N the house and lot should belong to Longinos
Ruling: YES. The appellants claim in their brief that they were possessors in good faith, and by reason
thereof and of the provisions of article 451 of the Civil Code they cannot be compelled to pay rent. It is to
be observed, however, that the appellants do not come within the definition of a possessor in good faith
found in article 433 of the Civil Code cited in their brief. As said by the appellants themselves in that
brief, the two defendants, Segundo Javier and his wife, Isabel Hernandez, always believed that the land
did not belong to them but belonged to the estate of Manuel Javier. It is to be observed, moreover, that
the judgment of the court does not allow any recovery at all for the use or occupation of the house, and
the recovery of rent for the use of the land is limited to the time elapsed since April 24, 1904, when a
demand was made upon the defendants for the possession of the property.
It is also claimed by the appellants that, in accordance with article 453 of the Civil Code, they are entitled
to be reimbursed for the expenses of constructing the house. These expenses are only allowed in
accordance with the article cited by the appellants to a possession in good faith, and the appellants were
not such possessors.
Article 397 of the Civil Code relates to improvements made upon the common property by one of the
coowners. The burden of proof was on the appellants to show that the house was built with the consent of
their cotenants. Even if a tacit consent was shown this would not require such cotenants to pay for the
house.
**Appellants are not possessors in good faith – not entitled to reimbursement of expenses; compelled to
pay the rent – also, the evidence only shows the possession of Manuel (father) and since that time, the
children never made any claim to the ownership
G.R. No. L-7180 March 30, 1912
RAFAEL ENRIQUEZ, ET AL. vs. A.S. WATSON & CO. LTD.
Facts:
This action was brought by Enriquezs and Gascon as owners and lessors of the subject property against
A.S. Watson as lessee of said property. The owners alleged that they executed a contract of mortgage and
lease (12 yrs w/ permission to renew the lease for another period of 6 years) in favor of A.S. Watson
upon their interest in the same property. Subsequently, they alleged that the contract of lease has been
terminated by the payment by the plaintiffs to AS Watsons of the principal and interest of the mortgage.
And that Gascon is a minor hence, the contract should be void.
A.S. Watson commenced to destroy and remove the principal wall of a building existing in the lot. The
plaintiffs therefore prayed that the defendant be prohibited from destroying and removing said wall; that
it be ordered to rebuild or replace that part which it had removed or destroyed; and that the contract of
lease be declared terminated and rescinded.
AS Watson’s defenses:
(1) wall in question was not a principal wall and did not extend the entire length of the building, that the
said wall was very old, deteriorated and week, that under the contract of lease, AS Watson has the right to
remove the wall and change it to another material;
(2) that the contract of lease is independent of the mortgage contract;
(3) that it expended the sum of P60k in improving the leased premises
Philippine Drug Company appeared and asked leave to intervene as an interested party alleging that it is
the actual owner of the pharmacy situated in the leased premises which belonged to AS Watsons. Also
alleged the necessity of the removal of the wall in question.
Issue: whether or not the appellees have violated the terms of the contract of lease and thereby entitle
appellants to have said contract of lease rescinded. (removal of the wall)
Ruling: NO. The noncompliance by the lessor of his obligations, among which was that of maintaining
the lessee in the peaceable enjoyment of the lease during the period of the contract, and the prohibition to
change the form of the thing leased, confers upon the lessee the right to ask for the rescission of the
contract, such circumstances are not found in the present case since the trial court says that the appellant
was not disturbed in the possession of the house, the object of the lease, nor was he impeded from using
the premises as a tavern, for which use he had intended the same, and these findings of fact have not been
legally impugned.
The lessee may make on the property which is the object of the lease any improvements, useful or for
recreation, which may be deem proper, provided he does not change its form or substance. He is
obligated to use the thing leased as a diligent father of a family would, and to return the thing leased at
the expiration of the lease in the same condition in which he received it, except what may have been
destroyed or impaired by time or unavoidable reasons.
There is nothing in the contract of lease in the case at bar which even tends to prohibit the lessee from
subletting the whole or any part of the leased premises. The lessee's right to do this cannot be questioned,
and his subtenant is not only obligated to carry out his part of the contract with the sublessor, but he is
also bound to the lessors for all of the acts which refer to the use and preservation of the premises, in the
manner agreed upon between the lessors and the lessee. The lessors can compel the subtenant to comply
with these conditions. This sets up the privity between the lessors and the subtenant. But it is said that the
contract of lease in question is not assignable. This contract is an ordinary one, under which the lessee as
we have said, has a perfect right to sublet the whole of the premises for the entire time. Should the lessee
do this, would it not amount to an assignment of the contract of the lease? The power of assignment is
incident to the state of every lessee of things, unless he has been restrained by the terms of his lease. In
the contract of lease in question, the lessors, by Clause M, agree that the lessee may make such changes
as its business requires, provided that neither the solidity nor the value of the building is prejudiced. This
is a specific right granted to the lessee. This right is a part of the lease itself and affects directly the thing
leased. It is not, therefore, a personal obligation between the lessors and the lessee.
G.R. No. L-13298 November 19, 1918 G.R. No. L-14869 October 27, 1920
CORNELIO RAMOS vs. THE DIRECTOR OF LANDS THE DIRECTOR OF LANDS vs. THE ROMAN CATHOLIC ARCHBISHOP OF
MANILA, objector-appellant. JUSTA DE GUZMAN, ET AL., objectors-appellees.
Facts:
Restituto Romero Ponce gained possession of a considerable tract of land in Nueva Ecija, by taking
advantage of the Royal Decree in 1894 to obtain a possessory information title to the land, registered as Facts:
such.

Ramos instituted appropriate proceedings to have his title registered, however, opposed by Director of
Lands on the ground that Ramos had not acquired a good title from the Spanish government and by the
Director of Forestry on the ground that the first parcel was forest land.

The Solicitor-General would emphasize that for land to come under the protective ægis of the Maura
Law, it must have been shown that the land was cultivated for six years previously, and that it was not
land which pertained to the "zonas forestales." As proof that the land was, even as long ago as the years
1894 to 1896, forestal and not agricultural in nature is the fact that there are yet found thereon trees from
50 to 80 years of age.

Issue: Is that actual occupancy of a part of the land described in the instrument giving color of title
sufficient to give title to the entire tract of land?

Ruling: YES. The general rule is that the possession and cultivation of a portion of a tract under claim of
ownership of all is a constructive possession of all, if the remainder is not in the adverse possession of
another. Of course, there are a number of qualifications to the rule, one particularly relating to the size of
the tract in controversy with reference to the portion actually in possession of the claimant. It is here only
necessary to apply the general rule.

The claimant has color of title; he acted in good faith; and he has had open, peaceable, and notorious
possession of a portion of the property, sufficient to apprise the community and the world that the land
was for his enjoyment. (See arts. 446, 448, Civil Code.) Possession in the eyes of the law does not mean
that a man has to have his feet on every square meter of ground before it can be said that he is in
possession. Ramos and his predecessor in interest fulfilled the requirements of the law on the supposition
that he premises consisted of agricultural public land.

The idea would appear to be to determine, by exclusion, if the land is forestal or mineral in nature and, if
not so found, to consider it to be agricultural land. Here, again, Philippine law is not very helpful. For
instance, section 1820 of the Administrative Code of 1917 provides: "For the purposes of this chapter,
'public forest' includes, except as otherwise specially indicated, all unreserved public land, including nipa
and mangrove swamps, and all forest reserves of whatever character." This definition of "public forest,"
it will be noted, is merely "for the purposes of this chapter." A little further on, section 1827 provides:
"Lands in public forests, not including forest reserves, upon the certification of the Director of Forestry
that said lands are better adapted and more valuable for agricultural than for forest purposes and not
required by the public interests to be kept under forest, shall be declared by the Department Head to be
agricultural lands." With reference to the last section, there is no certification of the Director of Forestry
in the record, as to whether this land is better adapted and more valuable for agricultural than for forest
purposes.