FELS ENERGY, INC., Petitioner, vs THE
It was later
PROVINCE OF BATANGAS and THE OFFICE OF
THE PROVINCIAL ASSESSOR OF BATANGAS,
Respondents.
G.R. No. 168557, February 16, 2007
CALLEJO, SR., J.:
FACTS:
Two consolidated cases were filed by FELS
Energy, Inc. (FELS) and National Power
Corporation (NPC), respectively.
NPC entered into a lease contract with
Polar Energy, Inc. over diesel engine power barges
moored at Batangas. The contract, denominated as
an Energy Conversion Agreement, was for a period
of five years wherein, NPC shall be responsible for
the payment of:
(a) all taxes, import duties, fees, charges and other
levies imposed by the National Government
(b) all real estate taxes and assessments, rates and
other charges in respect of the Power Barges
Subsequently, Polar Energy, Inc. assigned
its rights under the Agreement to FELS. Thereafter,
FELS received an assessment of real property
taxes on the power barges. The assessed tax,
which likewise covered those due for 1994,
amounted to P56,184,088.40 per annum. FELS
referred the matter to NPC, reminding it of its
obligation under the Agreement to pay all real
estate taxes. It then gave NPC the full power and
authority to represent it in any conference regarding
the real property assessment of the Provincial
Assessor.
NPC sought reconsideration of the
Provincial Assessor’s decision to assess real
property taxes on the power barges. However, the
motion was denied. The Local Board of
Assessment Appeals (LBAA) ruled that the power
plant facilities, while they may be classified as
movable or personal property, are nevertheless
considered real property for taxation purposes
because they are installed at a specific location
with a character of permanency.
FELS appealed the LBAA’s ruling to the
Central Board of Assessment Appeals (CBAA). The
CBAA rendered a Decision finding the power
PROPERTY
barges exempt from real property tax.
reversed by the CBAA upon reconsideration and
affirmed by the CA.
ISSUE:
Whether or not power barges, which are
floating and movable, are personal properties and
therefore, not subject to real property tax.
RULING:
No. Article 415 (9) of the New Civil Code
provides that "[d]ocks and structures which, though
floating, are intended by their nature and object to
remain at a fixed place on a river, lake, or coast"
are considered immovable property. Thus, power
barges are categorized as immovable property by
destination, being in the nature of machinery and
other implements intended by the owner for an
industry or work which may be carried on in a
building or on a piece of land and which tend
directly to meet the needs of said industry or work.
The findings of the LBAA and CBAA that the
owner of the taxable properties is petitioner FELS is
the entity being taxed by the local government. As
stipulated under the Agreement:
OWNERSHIP OF POWER BARGES.
POLAR shall own the Power Barges and all the
fixtures, fittings, machinery and equipment on the
Site used in connection with the Power Barges
which have been supplied by it at its own cost.
POLAR shall operate, manage and maintain the
Power Barges for the purpose of converting Fuel of
NAPOCOR into electricity.
It follows then that FELS cannot escape
liability from the payment of realty taxes by invoking
its exemption in Section 234 (c) of R.A. No. 7160,
…the law states that the machinery must be
actually, directly and exclusively used by the
government owned or controlled corporation;
The agreement POLAR undertakes that
until the end of the Lease Period, it will operate the
Power Barges to convert such Fuel into electricity.
Therefore, FELS shall be liable for the realty taxes
and not the NPC who is not actually, directly and
exclusively using the same. It is a basic rule that
obligations arising from a contract have the force of
law between the parties
1
Petitions are DENIED.
CHINA BANKING CORPORATION, petitioner, vs.
HON. COURT OF APPEALS, PAULINO ROXAS
CHUA and KIANG MING CHU CHUA,
respondents.
G.R. No. 129644. March 7, 2000
YNARES-SANTIAGO, J.:
Facts:
In connection with a civil case filed by
Metropolitan Bank against Alfonso Roxas Chua, a
notice of levy affecting the residential land of
Alfonso and his wife was issued. Meanwhile, in
1985, the trial court rendered another decision in
favor of China Banking Corporation against Alfonso
in a collection case. A certificate of sale covering ½
of the undivided portion of the property was
executed in favor of Metro Bank. In 1988, Alfonso
executed “Assignment of Right to Redeem” to his
son Paulino who redeemed the said property on the
same day. On the other hand, another levy on
execution in favor of China Bank was issued on the
same property. Thereafter, a certificate of sale on
execution was issued to China Bank in 1992.
Paulino instituted a civil case arguing that he has a
better right over the title of China Bank, the
property having been redeemed by him in 1988
while China Bank acquired its right in 1991. The
trial court ruled that the assignment was made for a
valuable consideration and was executed two years
before China Bank levied the conjugal share of
Chua. China Bank argued that the assignment of
right of redemption made by Alfonso to Paulino was
done in fraud of creditors and may be rescinded
under Article 1387, NCC.
ISSUE:
Whether or not the assignment by Alfonso to
Paulino of the right of redemption done to defraud his
creditors and may be rescinded under Art. 1387, NCC
RULING:
YES. The assignment was done in fraud of
creditors. China Bank is, therefore entitled to
rescind the same. Under Article 1381(3) of the Civil
Code, contracts which are undertaken in fraud of
creditors when the latter cannot in any manner
collect the claims due them are rescissible. The
existence of fraud with intent to defraud creditor
may either be presumed in accordance with Article
1387, NCC or duly proved in accordance with the
PROPERTY
ordinary rules of evidence. Hence, the law
presumes that there is fraud of creditors when:
a) There is alienation of property by gratuitous title
by the debtor who has not reserved sufficient
property to pay his debts contracted before such
alienation; or
b) There is alienation of property by onerous title
made by a debtor against whom some judgment
has been rendered in any instance or some writ of
attachment has been issued. The decision or
attachment need not refer to the property alienated
and need not have been obtained by the party
seeking rescission.
Inasmuch as the judgment of the trial court
in favor of China Bank against Alfonso was
rendered as early as 1985, there is a presumption
that the 1988 sale of his property, in this case the
right of redemption, is fraudulent under Article 1387
of the Civil Code. The fact that private respondent
Paulino redeemed the property and caused its
annotation on the TCT more than two years ahead
of petitioner China Bank is of no moment. The
Court of Appeals maintained that although the
transfer was made between father and son, the
conveyance was not fraudulent since Paulino has
indeed paid the redemption fee of P1,463,375.39 to
Metrobank and the sum of P100,000 to his father.
In determining whether or not a certain conveyance
is fraudulent, the question in every case is whether
the conveyance was a bona fide transaction or a
trick and contrivance to defeat creditors or whether
it conserves to the creditor to the debtor or a
special right. It is not sufficient that it is founded on
good considerations or is made with bona fide
intent. It must have both elements. If defective in
either of these, although good between the parties,
it is voidable as to creditors. The mere fact that the
conveyance was founded on valuable consideration
does not necessarily negate the presumption of
fraud under Art. 1387, NCC. There has to be a
valuable consideration and the transaction must
have been made bona fide. In the case at bar, the
presumption that the conveyance is fraudulent has
not been overcome. At the time a judgment was
rendered in favor of China Bank against Alfonso,
Paulino was still living with his parents in the
subject property. Paulino himself admitted that he
knew his father was heavily indebted and could not
afford to pay his debts. The transfer was
undoubtedly made between father and son at the
2
time when the father was insolvent and had no
other property to pay his creditors.
Salvador H. Laurel, petitioner, vs. Ramon Garcia,
as head of the Asset Privatization Trust, Raul
Manglapus, as Secretary of Foreign Affairs, and
Catalino Macaraig, as Executive Secretary,
respondents.
G.R. No. 92013 July 25, 1990
Facts:
These two (2) petitions for prohibition seek
to enjoin respondents from proceeding with the
bidding for the sale of the 3,179 square meters of
land at 306 Roppongi, 5-Chrome Minato-ku Tokyo,
Japan. The latter case also, prays for a writ of
mandamus to fully disclose to the public the basis
of their decision to push through with the sale of the
Roppongi property.
The subject property in this case is one of
the 4 properties in Japan acquired by the Philippine
government under the Reparations Agreement
entered into with Japan, the Roppongi property.
The said property was acquired from the
Japanese government through Reparations
Contract No. 300. It consists of the land and
building for the Chancery of the Philippine
Embassy. As intended, it became the site of the
Philippine Embassy until the latter was transferred
to Nampeidai when the Roppongi building needed
major repairs.
indeed true that the Roppongi property is valuable
not so much because of the inflated prices fetched
by real property in Tokyo but more so because of its
symbolic value to all Filipinos, veterans and
civilians alike. Whether or not the Roppongi and
related properties will eventually be sold is a policy
determination where both the President and
Congress must concur. Considering the properties'
importance and value, the laws on conversion and
disposition of property of public dominion must be
faithfully followed.
The Roppongi property was acquired
together with the other properties through
reparation agreements. They were assigned to
the government sector and that the Roppongi
property was specifically designated under the
agreement to house the Philippine embassy.
It is of public dominion unless it is
convincingly shown that the property has become
patrimonial. The respondents have failed to do so.
As property of public dominion, the
Roppongi lot is outside the commerce of man. It
cannot be alienated. Its ownership is a special
collective ownership for general use and payment,
in application to the satisfaction of collective needs,
and resides in the social group. The purpose is
not to serve the State as the juridical person but the
citizens; it is intended for the common and public
welfare and cannot be the object of appropriation.

President Aquino created a committee to

study the disposition/utilization of Philippine
government properties in Tokyo and Kobe, Japan.
The President issued EO 296 entitling non-Filipino
citizens or entities to avail of separations' capital
goods and services in the event of sale, lease or
disposition.

Issues:
Whether or not the Chief Executive, her
officers and agents, have the authority and
jurisdiction, to sell the Roppongi property.

Held:
It is not for the President to convey valuable
real property of the government on his or her own
sole will. Any such conveyance must be authorized
and approved by a law enacted by the Congress. It
requires executive and legislative concurrence. It is

PROPERTY 3
 wide discretionary legislative power, which will not
be interfered by the courts.

The Acts in question were intended to

Benjamin Rabuco, et. al., petitioners, vs
Hon. Antonio J. Villegas substituted by Hon.
Ramon Bagatsing as City Mayor of Manila
G.R. No. L-24916 February 28, 1974
Teehankee, J.:
implement the social justice policy of the
Constitution and the government program of land
for the landless and that they were not intended to
expropriate the property involved but merely to
confirm its character as communal land of the State
and to make it available for disposition by the
National Government.

FACTS: The subdivision of the land and conveyance

of the resulting subdivision lots to the occupants by
The constitutionality of Republic Act No. Congressional authorization in violation of Section
3120 was assailed by the city officials of the City of 1, subsection (2), Article III of the Constitution, but
Manila contending that the conversion of the lots in simply as a manifestation of its right and power to
Malate area into disposable and alienable lands of deal with the state property.
the state and placing its administration and disposal
to the Land Tenure Administration (LTA) to be
subdivided into small lots not exceeding 120 square
meters per lot for sale on installment basis to the
tenants and selling it to bona fide occupants
thereof in installments constitutes a deprivation of
the City of Manila of its property by providing for its
sale without the payment of just compensation and
expressly prohibited ejectment and demolition of
petitioners’ home under Section 2 of the Act.

Respondent contends that the Act is invalid

and unconstitutional for it constitutes deprivation of
property without due process of law and without
just compensation.

ISSUE:

Whether or not the properties in dispute

may be disposed without paying just compensation
or RA No. 3120 is constitutional

HELD:

Yes. The court held that the assailed RA

3120 is constitutional. The lots in question are
owned by the City of Manila in its public and
governmental capacity and are therefore public
property over which Congress has absolute control
as distinguished from patrimonial property owned
by it which cannot be deprived from the City without
just compensation and without due process.

It is established doctrine that the act of

classifying State property calls for the exercise of

PROPERTY 4
 On 23 October 1990, the municipality and
Palanyag filed with the trial court a joint petition for
prohibition and mandamus with damages and
prayer for preliminary injunction. On 17 December
LEVY D. MACASIANO, Brigadier General/PNP
Superintendent, Metropolitan Traffic Command, 1990, the trial court issued an order upholding the
petitioner, vs. HONORABLE ROBERTO C. DIOKNO, validity of Ordinance 86 s. 1990 of the Municipality
Presiding Judge, Branch 62, Regional Trial Court of of Parañaque and enjoining Macasiano from
Makati, Metro Manila, MUNICIPALITY OF enforcing his letter-order against Palanyag. Hence,
PARAÑAQUE, METRO MANILA, PALANYAG a petition for certiorari under Rule 65 was filed by
KILUSANG BAYAN FOR SERVICE, respondents. Macasiano through the Office of the Solicitor
G.R. No. 97764. August 10, 1992 General (OSG).
Medialdea, J.: ISSUES:
FACTS:
Whether or not an ordinance/resolution
issued by the municipal council of Parañaque
On 13 June 1990, the Municipality of
authorizing the lease and use of public
Paranaque passed Ordinance 86, s. 1990 which
streets/thoroughfares as sites for the flea market is
authorized the closure of J. Gabrielle, G.G. Cruz,
valid.
Bayanihan, Lt. Garcia Extension and Opena
Streets located atBaclaran, Parañaque, Metro
HELD:
Manila and the establishment of a flea market
thereon. The said ordinance was approved by the
No. The property of provinces, cities and
municipal council pursuant to MCC Ordinance 2, s.
municipalities is divided into property for public use
1979, authorizing and regulating the use of certain
and patrimonial property (Art. 423, Civil Code). As
city and/or municipal streets, roads and open
to property for public use, Article 424 of Civil Code
spaces within Metropolitan Manila as sites for flea
provides that "property for public use, in the
market and/or vending areas, under certain terms
provinces, cities and municipalities, consists of the
and conditions. On 20 July 1990, the Metropolitan
provincial roads, city streets, the squares,
Manila Authority approved Ordinance 86, s. 1990 of
fountains, public waters, promenades, and public
the municipal council subject to conditions. On 20
works for public service paid for by said provinces,
June 1990, the municipal council issued a
cities or municipalities. All other property possessed
resolution authorizing the Parañaque Mayor to
by any of them is patrimonial and shall be governed
enter into contract with any service cooperative for
by this Code, without prejudice to the provisions of
the establishment, operation, maintenance and
special laws."
management of flea markets and/or vending areas.
On 8 August 1990, the municipality and Palanyag,
In the present case, thus, J. Gabrielle G.G.
a service cooperative, entered into an agreement
Cruz, Bayanihan, Lt. Gacia Extension and Opena
whereby the latter shall operate, maintain and
streets are local roads used for public service and
manage the flea market with the obligation to remit
are therefore considered public properties of the
dues to the treasury of the municipal government of
municipality. Properties of the local government
Parañaque. Consequently, market stalls were put
which are devoted to public service are deemed
up by Palanyag on the said streets. On 13
public and are under the absolute control of
September 1990 Brig. Gen. Macasiano, PNP
Congress. Hence, local government have no
Superintendent of the Metropolitan Traffic
authority whatsoever to control or regulate the use
Command, ordered the destruction and
of public properties unless specific authority is
confiscation of stalls along G.G. Cruz and J.
vested upon them by Congress.
Gabrielle St. in Baclaran. These stalls were later
returned to Palanyag. On 16 October 1990,
Macasiano wrote a letter to Palanyag giving the
latter 10 days to discontinue the flea market;
otherwise, the market stalls shall be dismantled.

PROPERTY 5