National Housing Authority vs.

Court of Appeals

Facts:
President Ferdinand Marcos issued Proclamation No.481 last October 24, 1989 which
reserved 120 hectares of land owned by the National Housing Authority for the site of National
Government Center. Subsequently, Proclamation No. 1610 was issued in 1997 which removed
7-hectares land from the coverage of NGC. This give Manila Seedling Bank Foundation Inc.
(MSBF) usufructuary rights subject to future survey under its administration. MSBF occupied
the area but years later, it exceeded the 7-hectare area and occupied approximately 16 hectares.
It then leased 4,590 sq.m. Of land to Bulacan Garden Corporation (BGC).
On November 11, 1987, Prs.Corazon Aquino issued Memorandum Order No. 128 which
removed the reserved status of the 50 heactres of land out of the 120. NHA then gave BGC 10
days to vacate its occupied area or else it will be demolished. BGC filed a complaint for
injunction/ The trial court ruled that MSBF failed to act seasonably on the right to survey but the
CA reversed the decision. Hence, this petition.

Issue:
Whether or not the MSBF has the right to determine the subject 7-hectare portion of land.

Arguments:
NHA-No, because MSBF failed to act seasonably in exercising its right to survey.
MSBF-Yes,MSBF act seasonably in exercising its right to survey.

Ruling:
-Yes.
-ART. 565. The rights and obligations of the usufructuary shall be those provided in the title
constituting the usufruct;
-In the present case, Proclamation No. 1670 is the title constituting the usufruct.
-Proclamation No. 1670 categorically states that the seven-hectare area shall be determined by
future survey under the administration of the Foundation subject to private rights if there be any.
-ART. 605. Usufruct cannot be constituted in favor of a town, corporation, or association for
more than fifty years. If it has been constituted, and before the expiration of such period the
town is abandoned, or the corporation or association is dissolved, the usufruct shall be
extinguished by reason thereof.
-The law clearly limits any usufruct constituted in favor of a corporation or association to
50 years.
-Unlike a natural person, a corporation or associations lifetime may be extended
indefinitely. The usufruct would then be perpetual. This is especially invidious in cases
where the usufruct given to a corporation or association covers public land.
-Proclamation No. 1670 was issued 19 September 1977, or 28 years ago.
Hence, under Article 605, the usufruct in favor of MSBF has 22 years left.