BENGUET CORPORATION, petitioner,

vs.
CENTRAL BOARD OF ASSESSMENT APPEALS, BOARD OF ASSESSMENT APPEALS OF ZAMBALES,
PROVINCIAL ASSESSOR OF ZAMBALES, PROVINCE OF ZAMBALES, and MUNICIPALITY OF SAN
MARCELINO, respondents.
The realty tax assessment involved in this case amounts to P11,319,304.00. It has been imposed on the
petitioner's tailings dam and the land thereunder over its protest.
The controversy arose in 1985 when the Provincial Assessor of Zambales assessed the said properties as
taxable improvements. The assessment was appealed to the Board of Assessment Appeals of the Province
of Zambales. On August 24, 1988, the appeal was dismissed mainly on the ground of the petitioner's
"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
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
realty tax."
For purposes of taxation the dam is considered as real property as it comes within the object mentioned in
paragraphs (a) and (b) of Article 415 of the New Civil Code. It is a construction adhered to the soil which
cannot be separated or detached without breaking the material or causing destruction on the land upon
which it is 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 Code. (P.D. 464).
Although the dam is partly used as an anti-pollution device, this Board cannot accede to the request for
tax exemption in the absence of a law authorizing the same.
xxx xxx xxx
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 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;
(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
arereasonably 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
operation so as to make the dam an integral part of the mine. In fact, as a result of the construction of the
dam, the petitioner can now impound and recycle water without having to spend for the building of a
water reservoir. And as the petitioner itself points out, even if the petitioner's mine is shut down or ceases
operation, the dam may still be used for irrigation of the surrounding areas, again unlike in the Ontario
case.
As correctly observed by the CBAA, the Kendrick case is also not applicable because it involved water
reservoir dams used for different purposes and for the benefit of the surrounding areas. By contrast, the
tailings dam in question is being used exclusively for the benefit of the petitioner.
Curiously, the petitioner, while vigorously arguing that the tailings dam has no separate existence, just as
vigorously contends that at the end of the mining operation the tailings dam will serve the local
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."
There is no need for this time-wasting procedure. The Court may resolve the issue in this petition instead
of referring it back to the local authorities. We have studied the facts and circumstances of this case as
above discussed and find that the petitioner has acted in good faith in questioning the assessment on the

tailings dam and the land submerged thereunder. It is clear that it has not done so for the purpose of
evading or delaying the payment of the questioned tax. Hence, we hold that the petitioner is not subject
to penalty for its
non-declaration of the tailings dam and the submerged lands for realty tax purposes.
WHEREFORE, the petition is DISMISSED for failure to show that the questioned decision of respondent
Central Board of Assessment Appeals is tainted with grave abuse of discretion except as to the imposition
of penalties upon the petitioner which is hereby SET ASIDE. Costs against the petitioner. It is so ordered.
MUNICIPALITY OF SAN MIGUEL, BULACAN, petitioner,
vs.
HONORABLE OSCAR C. FERNANDEZ, in his capacity as the Presiding Judge, Branch IV, Baliuag,
Bulacan, The PROVINCIAL SHERIFF of Bulacan, MARGARITA D. VDA. DE IMPERIO, ADORACION
IMPERIO, RODOLFO IMPERIO, CONRADO IMPERIO, ERNESTO IMPERIO, ALFREDO IMPERIO,
CARLOS IMPERIO, JR., JUAN IMPERIO and SPOUSES MARCELO PINEDA and LUCILA
PONGCO, respondents.
In Civil Case No. 604-B, entitled "Margarita D. Vda. de Imperio, et al. vs. Municipal Government of San
Miguel, Bulacan, et al.", the then Court of First Instance of Bulacan, on April 28, 1978, rendered judgment
holding herein petitioner municipality liable to private respondents, as follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs and against the
defendant Municipal Government of San Miguel Bulacan, represented by Mayor Mar Marcelo G. Aure and
its Municipal Treasurer:
1. ordering the partial revocation of the Deed of Donation signed by the deceased Carlos Imperio in favor
of the Municipality of San Miguel Bulacan, dated October 27, 1947 insofar as Lots Nos. 1, 2, 3, 4 and 5,
Block 11 of Subdivision Plan Psd-20831 are concerned, with an aggregate total area of 4,646 square
meters, which lots are among those covered and described under TCT No. T-1831 of the Register of Deeds
of Bulacan in the name of the Municipal Government of San Miguel Bulacan,
2. ordering the defendant to execute the corresponding Deed of Reconveyance over the aforementioned
five lots in favor of the plaintiffs in the proportion of the undivided one-half () share in the name of
plaintiffs Margarita D. Vda. de Imperio, Adoracion, Rodolfo, Conrado, Ernesto, Alfredo, Carlos, Jr. and
Juan, all surnamed Imperio, and the remaining undivided one-half () share in favor of plaintiffs uses
Marcelo E. Pineda and Lucila Pongco;
3. ordering the defendant municipality to pay to the plaintiffs in the proportion mentioned in the
immediately preceding paragraph the sum of P64,440.00 corresponding to the rentals it has collected from
the occupants for their use and occupation of the premises from 1970 up to and including 1975, plus
interest thereon at the legal rate from January 1970 until fully paid;
4. ordering the restoration of ownership and possession over the five lots in question in favor of the
plaintiffs in the same proportion aforementioned;
5. ordering the defendant to pay the plaintiffs the sum of P3,000.00 for attomey's fees; and to pay the
cost of suit.
The counterclaim of the defendant is hereby ordered dismissed for lack of evidence presented to
substantiate the same.

SO ORDERED. (pp. 11-12, Rollo)

The foregoing judgment became final when herein petitioner's appeal was dismissed due to its failure to
file the record on appeal on time. The dismissal was affirmed by the then Court of Appeals in CA-G.R. No.
SP-12118 and by this Court in G.R. No. 59938. Thereafter, herein private respondents moved for issuance
of a writ of execution for the satisfaction of the judgment. Respondent judge, on July 27, 1982, issued an
order, to wit:
Considering that an entry of judgment had already been made on June 14, 1982 in G. R. No. L-59938
and;
Considering further that there is no opposition to plaintiffs' motion for execution dated July 23, 1983;
Let a writ of execution be so issued, as prayed for in the aforestated motion. (p. 10, Rollo)
Petitioner, on July 30, 1982, filed a Motion to Quash the writ of execution on the ground that the
municipality's property or funds are all public funds exempt from execution. The said motion to quash was,
however, denied by the respondent judge in an order dated August 23, 1982 and the alias writ of
execution stands in full force and effect.
On September 13, 1982, respondent judge issued an order which in part, states:
It is clear and evident from the foregoing that defendant has more than enough funds to meet its
judgment obligation. Municipal Treasurer Miguel C, Roura of San Miguel, Bulacan and Provincial Treasurer
of Bulacan Agustin O. Talavera are therefor hereby ordered to comply with the money judgment rendered
by Judge Agustin C. Bagasao against said municipality. In like manner, the municipal authorities of San
Miguel, Bulacan are likewise ordered to desist from plaintiffs' legal possession of the property already
returned to plaintiffs by virtue of the alias writ of execution.
Finally, defendants are hereby given an inextendible period of ten (10) days from receipt of a copy of this
order by the Office of the Provincial Fiscal of Bulacan within which to submit their written compliance, (p.
24, Rollo)
When the treasurers (provincial and municipal) failed to comply with the order of September 13, 1982,
respondent judge issued an order for their arrest and that they will be release only upon compliance
thereof.
Hence, the present petition on the issue whether the funds of the Municipality of San Miguel, Bulacan, in
the hands of the provincial and municipal treasurers of Bulacan and San Miguel, respectively, are public
funds which are exempt from execution for the satisfaction of the money judgment in Civil Case No. 604B.
Well settled is the rule that public funds are not subject to levy and execution. The reason for this was
explained in the case of Municipality of Paoay vs. Manaois, 86 Phil. 629 "that they are held in trust for the
people, intended and used for the accomplishment of the purposes for which municipal corporations are
created, and that to subject said properties and public funds to execution would materially impede, even
defeat and in some instances destroy said purpose." And, in Tantoco vs. Municipal Council of Iloilo, 49
Phil. 52, it was held that "it is the settled doctrine of the law that not only the public property but also the
taxes and public revenues of such corporations Cannot be seized under execution against them, either in
the treasury or when in transit to it. Judgments rendered for taxes, and the proceeds of such judgments in
the hands of officers of the law, are not subject to execution unless so declared by statute." Thus, it is

clear that all the funds of petitioner municipality in the possession of the Municipal Treasurer of San
Miguel, as well as those in the possession of the Provincial Treasurer of Bulacan, are also public funds and
as such they are exempt from execution.
Besides, Presidential Decree No. 477, known as "The Decree on Local Fiscal Administration", Section 2 (a),
provides:
SEC. 2. Fundamental Principles. Local government financial affairs, transactions, and operations shall be
governed by the fundamental principles set forth hereunder:
(a) No money shall be paid out of the treasury except in pursuance of a lawful appropriation or other
specific statutory authority.
xxx xxx xxx
Otherwise stated, there must be a corresponding appropriation in the form of an ordinance duly passed by
the Sangguniang Bayan before any money of the municipality may be paid out. In the case at bar, it has
not been shown that the Sangguniang Bayan has passed an ordinance to this effect.
Furthermore, Section 15, Rule 39 of the New Rules of Court, outlines the procedure for the enforcement of
money judgment:
(a) By levying on all the property of the debtor, whether real or personal, not otherwise exempt from
execution, or only on such part of the property as is sufficient to satisfy the judgment and accruing cost, if
he has more than sufficient property for the purpose;
(b) By selling the property levied upon;
(c) By paying the judgment-creditor so much of the proceeds as will satisfy the judgment and accruing
costs; and
(d) By delivering to the judgment-debtor the excess, if any, unless otherwise, directed by judgment or
order of the court.
The foregoing has not been followed in the case at bar.
ACCORDINGLY, the petition is granted and the order of respondent judge, dated July 27, 1982, granting
issuance of a writ of execution; the alias writ of execution, dated July 27, 1982; and the order of
respondent judge, dated September 13, 1982, directing the Provincial Treasurer of Bulacan and the
Municipal Treasurer of San Miguel, Bulacan to comply with the money judgments, are SET ASIDE; and
respondents are hereby enjoined from implementing the writ of execution.

THE DIRECTOR OF LANDS, petitioner,

vs.
MANILA ELECTRIC COMPANY and HON. RIZALINA BONIFACIO VERA, as Presiding Judge, Court
of First Instance of Rizal, Pasig, Branch XXIII, respondents.

This is an appeal by certiorari of a decision of the respondent Judge in Land Registration Case No. N10317 LRC Record No. N-54803 entitled "In Re: Application for Registration of Title, Manila Electric
Company, applicant," dated May 29, 1981.
The facts are not disputed. Manila Electric Company filed an amended application for registration of a
parcel of land located in Taguig, Metro Manila on December 4, 1979. On August 17, 1976, applicant
acquired the land applied for registration by purchase from Ricardo Natividad (Exhibit E) who in turn
acquired the same from his father Gregorio Natividad as evidenced by a Deed of Original Absolute Sale
executed on December 28, 1970 (Exhibit E). Applicant's predecessors-in-interest have possessed the
property under the concept of an owner for more than 30 years. The property was declared for taxation
purposes under the name of the applicant (Exhibit 1) and the taxes due thereon have been paid (Exhibits
J and J-1).
On May 29, 1981 respondent Judge rendered a decision ordering the registration of the property in the
name of the private respondent. The Director of Lands interposed this petition raising the issue of whether
or not a corporation may apply for registration of title to land. After comments were filed by the
respondents, the Court gave the petition due course. The legal issue raised by the petitioner Director of
Lands has been squarely dealt with in two recent cases (The Director of Lands v. Intermediate Appellate
Court and Acme Plywood & Veneer Co., Inc., etc., No. L-73002 (December 29, 1986), 146 SCRA 509. The
Director of Lands v. Hon. Bengzon and Dynamarine Corporation, etc., No. 54045 (July 28, 1987)], and
resolved in the affirmative. There can be no different answer in the case at bar.
In the Acme decision, this Court upheld the doctrine that open, exclusive and undisputed possession of
alienable public land for the period prescribed by law creates the legal fiction whereby the land, upon
completion of the requisite period ipso jure and without the need of judicial or other sanction, ceases to be
public land and becomes private property.
As the Court said in that case:
Nothing can more clearly demonstrate the logical inevitability of considering possession of public land
which is of the character and duration prescribed by statute as the equivalent of an express grant from the
State than the dictum of the statute itself that the possessor(s) "... shall be conclusively presumed to have
performed all the conditions essential to a Government grant and shall be entitled to a certificate of
title .... " No proof being admissible to overcome a conclusive presumption, confirmation proceedings
would in truth be little more than a formality, at the most limited to ascertaining whether the possession
claimed is of the required character and length of time; and registration thereunder would not confer title,
but simply recognize a title already vested. The proceedings would not originally convert the land from
public to private land, but only confirm such a conversion already affected (sic) from the moment the
required period of possession became complete.
Coming to the case at bar, if the land was already private at the time Meralco bought it from Natividad,
then the prohibition in the 1973 Constitution against corporations holding alienable lands of the public
domain except by lease (1973 Const., Art. XIV, See. 11) does not apply.
Petitioner, however, contends that a corporation is not among those that may apply for confirmation of
title under Section 48 of Commonwealth Act No. 141, the Public Land Act.
As ruled in the Acme case, the fact that the confirmation proceedings were instituted by a corporation is
simply another accidental circumstance, "productive of a defect hardly more than procedural and in nowise
affecting the substance and merits of the right of ownership sought to be confirmed in said proceedings."
Considering that it is not disputed that the Natividads could have had their title confirmed, only a rigid

subservience to the letter of the law would deny private respondent the right to register its property which
was validly acquired.
WHEREFORE, the petition is DENIED. The questioned decision of the respondent Judge is AFFIRMED.
SO ORDERED.
NICOLAS LUNOD, ET AL., plaintiffs-appellees,
vs.
HIGINO MENESES, defendant-appellant.
On the 14th of March, 1904, Nicolas Lunod, Juan de la Vega, Evaristo Rodriguez, Fernando Marcelo,
Esteban Villena, Benito Litao, Ventura Hernandez, and Casimiro Pantanilla, residents of the town of
Bulacan, province of the same name, filed a written complaint against Higino Meneses, alleging that they
each owned and possessed farm lands, situated in the places known as Maytunas and Balot, near a small
lake named Calalaran; that the defendant is the owner of a fish-pond and a strip of land situated in
Paraanan, adjoining the said lake on one side, and the River Taliptip on the other; that from time
immemorial, and consequently for more than twenty years before 1901, there existed and still exists in
favor of the rice fields of the plaintiffs a statutory easement permitting the flow of water over the said land
in Paraanan, which easement the said plaintiffs enjoyed until the year 1901 and consisted in that the
water collected upon their lands and in the Calalaran Lake flow through Paraanan into the Taliptip River.
From that year however, the defendant, without any right or reason, converted the land in Paraanan into a
fishpond and by means of a dam and a bamboo net, prevented the free passage of the water through said
place into the Taliptip River, that in consequence the lands of the plaintiff became flooded and damaged by
the stagnant waters, there being no outlet except through the land in Paraanan; that their plantation were
destroyed, causing the loss and damages to the extent of about P1,000, which loss and damage will
continue if the obstructions to the flow of the water are allowed to remain, preventing its passage through
said land and injuring the rice plantations of the plaintiffs. They therefore asked that judgment be entered
against the defendant, declaring that the said tract of land in Paraanan is subject to a statutory easement
permitting the flow of water from the property of the plaintiffs, and that, without prejudice to the issuing
of a preliminary injunction, the defendant be ordered to remove and destroy the obstructions that impede
the passage of the waters through Paraanan, and that in future, and forever, he abstain from closing in
any manner the aforesaid tract of land; that, upon judgment being entered, the said injunction be
declared to be final and that the defendant be sentenced to pay to the plaintiffs an indemnity of P1,000,
and the costs in the proceedings; that they be granted any other and further equitable or proper remedy
in accordance with the facts alleged and proven.
In view of the demurrer interposed by the plaintiffs to the answer of the defendant, the latter, on the 29th
of August, 1904, filed an amended answer, denying each and everyone of the allegations of the complaint,
and alleged that no statutory easement existed nor could exist in favor of the lands described in the
complaint, permitting the waters to flow over the fish pond that he, together with his brothers, owned in
the sitio of Bambang, the area and boundaries of which were stated by him, and which he and his brothers
had inherited from their deceased mother.
Apolinara de Leon; that the same had been surveyed by a land surveyor in September, 1881, he also
denied that he had occupied or converted any land in the barrio of Bambang into a fishpond; therefore,
and to sentence the plaintiffs to pay the costs and corresponding damages.
Upon the evidence adduced by both parties to the suit, the court, on the 13th of March, 1907, entered
judgment declaring that the plaintiffs were entitled to a decision in their favor, and sentenced the
defendant to remove the dam placed on the east of the Paraanan passage on the side of the Taliptip River

opposite the old dam in the barrio of Bambang, as well as to remove and destroy the obstacles to the free
passage of the waters through the strip of land in Paraanan; to abstain in future, and forever, from
obstructing or closing in any manner the course of the waters through the said strip of land. The request
that the defendant be sentenced to pay an indemnity was denied, and no ruling was made as to costs.
The defendant excepted to the above judgment and furthermore asked for a new trial which was denied
and also excepted to, and, upon approval of the bill of exceptions, the question was submitted to this
court.
Notwithstanding the defendant's denial in his amended answer, it appears to have been clearly proven in
this case that the lands owned by the plaintiffs in the aforesaid barrio, as well as the small adjoining lake,
named Calalaran, are located in places relatively higher than the sitio called Paraanan where the land and
fish pond of the defendant are situated, and which border on the Taliptip River; that during the rainy
season the rain water which falls on he land of the plaintiffs, and which flows toward the small Calalaran
Lake at flood time, has no outlet to the Taliptip River other than through the low land of Paraanan: that
the border line between Calalaran and Paraanan there has existed from time immemorial a dam,
constructed by the community for the purpose of preventing the salt waters from the Taliptip River, at high
tide, from flooding the land in Calalaran, passing through the lowlands of Paraanan; but when rainfall was
abundant, one of the residents was designated in his turn by the lieutenant or justice of the barrio to open
the sluice gate in order to let out the water that flooded the rice fields, through the land of Paraanan to
the above-mentioned river, that since 1901, the defendant constructed another dam along the boundary
of this fishpond in Paraanan, thereby impeding the outlet of the waters that flood the fields of Calalaran, to
the serious detriment of the growing crops.
According to article 530 of the Civil Code, an easement is charge imposed upon one estate for the benefit
of another estate belonging to a different owner, and the realty in favor of which the easement is
established is called the dominant estate, and the one charged with it the servient estate.
The lands of Paraanan being the lower are subject to the easement of receiving and giving passage to the
waters proceeding from the higher lands and the lake of Calalaran; this easement was not constituted by
agreement between the interested parties; it is of a statutory nature, and the law had imposed it for the
common public utility in view of the difference in the altitude of the lands in the barrio Bambang.
Article 552 of the Civil code provides:
Lower estates must receive the waters which naturally and without the intervention of man
descend from the higher estates, as well as the stone or earth which they carry with them.
Neither may the owner of the lower estates construct works preventing this easement, nor the one
of the higher estate works increasing the burden.
Article 563 of the said code reads also:
The establishment, extent, form, and conditions of the easements of waters to which this section
refers shall be governed by the special law relating thereto in everything not provided for in this
code.
The special law cited in the Law of Waters of August 3, 1866, article 111 of which, treating of natural
easements relating to waters, provides:

Lands situated at a lower level are subject to receive the waters that flow naturally, without the
work of man, from the higher lands together with the stone or earth which they carry with them.
Hence, the owner of the lower lands can not erect works that will impede or prevent such an easement or
charge, constituted and imposed by the law upon his estate for the benefit of the higher lands belonging
to different owners; neither can the latter do anything to increase or extend the easement.
According to the provisions of law above referred to, the defendant, Meneses, had no right to construct
the works, nor the dam which blocks the passage, through his lands and the outlet to the Taliptip River, of
the waters which flood the higher lands of the plaintiffs; and having done so, to the detriment of the
easement charged on his estate, he has violated the law which protects and guarantees the respective
rights and regulates the duties of the owners of the fields in Calalaran and Paraanan.
It is true that article 388 of said code authorizes every owner to enclose his estate by means of walls,
ditches fences or any other device, but his right is limited by the easement imposed upon his estate.
The defendant Meneses might have constructed the works necessary to make and maintain a fish pond
within his own land, but he was always under the strict and necessary obligation to respect the statutory
easement of waters charged upon his property, and had no right to close the passage and outlet of the
waters flowing from the lands of the plaintiffs and the lake of Calalaran into the Taliptip River. He could not
lawfully injure the owners of the dominant estates by obstructing the outlet to the Taliptip River of the
waters flooding the upper lands belonging to the plaintiffs.
It is perhaps useful and advantageous to the plaintiffs and other owners of high lands in Calalaran, in
addition to the old dike between the lake of said place and the low lands in Paraanan, to have another
made by the defendant at the border of Paraanan adjoining the said river, for the purpose of preventing
the salt waters of the Taliptip River flooding, at high tide, not only the lowlands in Paraanan but also the
higher ones of Calalaran and its lake, since the plaintiffs can not prevent the defendant from protecting his
lands against the influx of salt water; but the defendant could never be permitted to obstruct the flow of
the waters through his lands to the Taliptip River during the heavy rains, when the high lands in Calalaran
and the lake in said place are flooded, thereby impairing the right of the owners of the dominant estates.
For the above reasons, and accepting the findings of the court below in the judgment appealed from in so
far as they agree with the terms of this decision, we must and do hereby declare that the defendant,
Higino Meneses, as the owner of the servient estate, is obliged to give passage to and allow the flow of
the waters descending from the Calalaran Lake and from the land of the plaintiffs through his lands in
Paraanan for their discharge into the Taliptip River; and he is hereby ordered to remove any obstacle that
may obstruct the free passage of the waters whenever there may be either a small or large volume of
running water through his lands in the sitio of Paraanan for their discharge into the Taliptip River; and in
future to abstain from impeding, in any manner, the flow of the waters coming from the higher lands. The
judgment appealed from is affirmed, in so far as it agrees with decision, and reversed in other respects,
with the costs of this instance against the appellants. So ordered.