I

Serg’s Products and Goquiola v. PCI Leasing and Finance

338 SCRA 499

DOCTRINE: After agreeing to a contract stipulating that a real or immovable property be

considered as personal or movable, a party is estopped from subsequently claiming otherwise.
Hence, such property is a proper subject of a writ of replevin obtained by the other contracting
party.

FACTS:
PCI Leasing and Finance, Inc. filed a complaint with the RTC for a sum of money with an
application for a writ of replevin. Upon an ex-parte application of PCI Leasing, respondent judge
issued a writ of replevin directing its sheriff to seize and deliver the machineries and equipment
to PCI Leasing after 5 days and upon the payment of the necessary expenses.

Serg’s filed a motion for special protective order. This motion was opposed by PCI Leasing on
the ground that the properties [were] still personal and therefore still subject to seizure and a writ
of replevin.

In their Reply, petitioners asserted that the properties sought to be seized were immovable as
defined in Article 415 of the Civil Code, the parties’ agreement to the contrary notwithstanding.
They argued that to give effect to the agreement would be prejudicial to innocent third parties.
They further stated that PCI Leasing was estopped from treating these machineries as personal
because the contracts in which the alleged agreement were embodied were totally sham and
farcical.

Citing the Agreement of the parties, the appellate court held that the subject machines were
personal property, and that they had only been leased, not owned, by petitioners. It also ruled
that the “words of the contract are clear and leave no doubt upon the true intention of the
contracting parties.”

ISSUE:
Whether or not the machineries purchased and imported by SERG’S became real property by
virtue of immobilization.

HELD:
The machineries herein are real properties but are considered personal by the parties’ agreement.

The Court will resolve whether the said machines are personal, not immovable, property which
may be a proper subject of a writ of replevin. Rule 60 of the Rules of Court provides that writs of
replevin are issued for the recovery of personal property only. Section 3 thereof reads:

“SEC. 3. Order. -- Upon the filing of such affidavit and approval of the bond, the
court shall issue an order and the corresponding writ of replevin describing the
personal property alleged to be wrongfully detained and requiring the sheriff
forthwith to take such property into his custody.”

On the other hand, Article 415 of the Civil Code enumerates immovable or real property as follows:

“ART. 415. The following are immovable property:

x x x....................................x x x....................................x x x
 (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;

x x x....................................x x x....................................x x x”

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.” 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.

Be that as it may, we disagree with the submission of the petitioners that the said machines are
not proper subjects of the Writ of Seizure.

The Court has held that contracting parties may validly stipulate that a real property be considered
as personal. After agreeing to such stipulation, they are consequently estopped from claiming
otherwise. Under the principle of estoppel, a party to a contract is ordinarily precluded from
denying the truth of any material fact found therein.

Hence, in Tumalad v. Vicencio, the Court upheld the intention of the parties to treat a house as a
personal property because it had been made the subject of a chattel mortgage.

It should be stressed, however, that our holding -- that the machines should be deemed personal
property pursuant to the Lease Agreement – is good only insofar as the contracting parties are
concerned. Hence, while the parties are bound by the Agreement, third persons acting in good
faith are not affected by its stipulation characterizing the subject machinery as personal. In any
event, there is no showing that any specific third party would be adversely affected.

II
PRUDENTIAL BANK V. PANIS
153 SCRA 390
FACTS:
Spouses Magcale secured a loan from Prudential Bank. To secure payment, they executed a
real estate mortgage over a residential building. The mortgage included also the right to occupy
the lot and the information about the sales patent applied for by the spouses for the lot to which
the building stood. After securing the first loan, the spouses secured another from the same
bank. To secure payment, another real estate mortgage was executed over the same
properties.
The Secretary of Agriculture then issued a Miscellaneous Sales Patent over the land which was
later on mortgaged to the bank.
The spouses then failed to pay for the loan and the REM was extrajudicially foreclosed and sold
in public auction despite opposition from the spouses. The respondent court held that the REM
was null and void.
ISSUE:
Whether or not a valid RE mortgage can be constituted on the building erected on the belonging
to another.
HELD:
A real estate mortgage can be constituted on the building erected on the land belonging to
another.
The inclusion of building distinct and separate from the land in the Civil Code can only mean
that the building itself is an immovable property.
While it is true that a mortgage of land necessarily includes in the absence of stipulation of the
improvements thereon, buildings, still a building in itself may be mortgaged by itself apart from
the land on which it is built. Such a mortgage would still be considered as a REM for the building
would still be considered as immovable property even if dealt with separately and apart from the
land.
The original mortgage on the building and right to occupancy of the land was executed before
the issuance of the sales patent and before the government was divested of title to the land.
Under the foregoing, it is evident that the mortgage executed by private respondent on his own
building was a valid mortgage.
As to the second mortgage, it was done after the sales patent was issued and thus prohibits
pertinent provisions of the Public Land Act.
III
Fels Energy, Inc. v. Province of Batangas, et al.
G.R. No. 168557

DOCTRINE: Article 415 (9) of the New Civil Code provides that “docks 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.

FACTS:
On January 18, 1993, National Power Corporation (NPC) entered into a lease contract with Polar
Energy, Inc. over 3×30 MW diesel engine power barges moored at Balayan Bay in Calaca,
Batangas. The contract, denominated as an Energy Conversion Agreement, was for a period of
five years. Article 10 states that NPC shall be responsible for the payment of taxes. (other than
(i) taxes imposed or calculated on the basis of the net income of POLAR and Personal Income
Taxes of its employees and (ii) construction permit fees, environmental permit fees and other
similar fees and charges. Polar Energy then assigned its rights under the Agreement to Fels
despite NPC’s initial opposition.

FELS received an assessment of real property taxes on the power barges from Provincial
Assessor Lauro C. Andaya of Batangas City. 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 filed a petition with the Local Board Assessment Appeals (LBAA). The LBAA
ordered Fels to pay the real estate taxes. The 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. The LBAA also pointed out that the owner of the barges–FELS, a private
corporation–is the one being taxed, not NPC. A mere agreement making NPC responsible for the
payment of all real estate taxes and assessments will not justify the exemption of FELS; such a
privilege can only be granted to NPC and cannot be extended to FELS. Finally, the LBAA also
ruled that the petition was filed out of time.

Fels appealed to the Central Board Assessment Appeals (CBAA). The CBAA reversed and ruled
that the power barges belong to NPC; since they are actually, directly and exclusively used by it,
the power barges are covered by the exemptions under Section 234(c) of R.A. No. 7160. As to
the other jurisdictional issue, the CBAA ruled that prescription did not preclude the NPC from
pursuing its claim for tax exemption in accordance with Section 206 of R.A. No. 7160. Upon MR,
the CBAA reversed itself.

ISSUE: Whether or not barges are considered as real property, thus can be subject to real
property tax -- YES

HELD:
The CBAA and LBAA power barges are real property and are thus subject to real property tax.

In Consolidated Edison Company of New York, Inc., et al. v. The City of New York, et al., a power
company brought an action to review property tax assessment. On the city’s motion to dismiss,
the Supreme Court of New York held that the barges on which were mounted gas turbine power
plants designated to generate electrical power, the fuel oil barges which supplied fuel oil to the
power plant barges, and the accessory equipment mounted on the barges were subject to real
property taxation.

Moreover, Article 415 (9) of the New Civil Code provides that “docks 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.

IV
Davao Sawmill Co. v. Castillo
G.R. No. 40411,

DOCTRINE: Generally, machinery becomes immobilized when placed by the owner of the plant
or property. This rule does not apply should the machinery be placed by any other person such
as a tenant or usufructuary.

FACTS:
● The petitioner company operates a sawmill in barrio Tigatu, Davao.
● Said facility contained both movable and immovable property (machines and other
such implements).
● However, the land on which it is situated belongs to another person.
● The parties executed a lease contract providing that upon the expiration or
 termination of such lease, the following shall happen:
o The ownership of all structures and improvements introduced by the petitioner
company shall be transferred to the respondents without any cost or obligation to
pay.
o The machines and their accessories shall not be included in said transfer.
● It was noted by the court that in a previous case between the two parties, judgment
was rendered against the petitioner company upon which a writ of execution was brought
against its machines (as personalty) in favor of Castilllo, et al.
● Additionally, the records of the current case reflected that the petitioner company
had treated its machinery as personal property by executing chattel mortgages on them in
favor of third persons.
● Petitioner company contends that its machines are immovable under the first and
fifth paragraphs of Article 334 (now Article 415) of the Civil Code.

ISSUE:
W/N the machines of the petitioner company are movable or immovable property.

HELD:
The machines are movable.

The court observed that the petitioner company failed to register its protest at the time its
machines were sold. Generally, this inaction would be inconclusive but it is indicative of the
intention impressed upon the property in question.

This is so because while machines are generally movable property, they may nevertheless be
“immobilized” by destination or purpose subject to several conditions.

This conclusion finds its ground under the fifth paragraph of Article 415. Here, machinery
becomes immobilized when placed by the owner of the plant or property. This rule does not apply
should the machinery be placed by any other person such as a tenant or usufructuary.

Applying the rule to the case on hand, the machinery was placed by the petitioner company who
was merely a lessee. As such, the equipment was never immobilized in the first place.

V
Tumalad v. Vicencio
41 SCRA 143

DOCTRINE: The view that parties to a deed of chattel mortgage may agree to consider a house
as personal property for the purposes of said contract, "is good only insofar as the contracting
parties are concerned. It is based, partly, upon the principle of estoppel.”

FACTS:
On 1 September 1955 defendants executed a chattel mortgage in favor of plaintiffs over their
house located at Quiapo, Manila, which were being rented from Madrigal & Company, Inc. The
mortgage was registered in the Registry of Deeds of Manila on 2 September 1955. The mortgage
was executed to guarantee a loan of P4,800.00 received from plaintiffs. It was also agreed that
default in the payment of any of the amortizations, would cause the remaining unpaid balance to
become immediately due and Payable and the Chattel Mortgage will be enforceable in
accordance with the provisions of Special Act No. 3135, and for this purpose, the Sheriff of the
City of Manila or any of his deputies is hereby empowered and authorized to sell all the
Mortgagor's property after the necessary publication in order to settle the financial debts of
P4,800.00, plus 12% yearly interest, and attorney's fees.

When defendants defaulted in paying, the mortgage was extrajudicially foreclosed, and the house
was sold at public auction pursuant to the said contract. As highest bidder, plaintiffs were issued
the corresponding certificate of sale. Thereafter, plaintiffs commenced Civil Case No. 43073 in
the municipal court of Manila, praying, among other things, that the house be vacated and its
possession surrendered to them, and for defendants to pay rent of P200.00 monthly from 27
March 1956 up to the time the possession is surrendered. MTC granted petition.

Defendants, in their answers in both the municipal court and court a quo impugned the legality of
the chattel mortgage, claiming that they are still the owners of the house. During the pendency of
the appeal to the Court of First Instance, defendants failed to deposit the rent as ordered in the
decision of the municipal court. As a result, the court granted plaintiffs motion for execution.
However, the judgment regarding the surrender of possession to plaintiffs could not be executed
because the subject house had been already demolished pursuant to the order of the court in a
separate civil case for ejectment against the present defendants for non-payment of rentals on
the land on which the house was constructed.

ISSUE:
W/N the house may be a subject of a Chattel Mortgage. – YES, it may be the subject of a chattel
mortgage.

HELD:
Defendants predicate their theory of nullity of the chattel mortgage on the ground 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.

The rule about the status of buildings as immovable property is that it is obvious that the inclusion
of the building, separate and distinct from the land, in the enumeration of what may constitute real
properties could only mean one thing — that a building is by itself an immovable property
irrespective of whether or not said structure and the land on which it is adhered to belong to the
same owner.

It is undeniable that the parties to a contract may by agreement treat as personal property that
which by nature would be real property. The view that parties to a deed of chattel mortgage may
agree to consider a house as personal property for the purposes of said contract, "is good only
insofar as the contracting parties are concerned. It is based, partly, upon the principle of estoppel.”

In a case, a mortgaged house built on a rented land was held to be a personal property, not only
because the deed of mortgage considered it as such, but also because it did not form part of the
land for it is now settled that an object placed on land by one who had only a temporary right to
the same, such as the lessee or usufructuary, does not become immobilized by attachment.
Hence, if a house belonging to a person stands on a rented land belonging to another person, it
may be mortgaged as a personal property as so stipulated in the document of mortgage. It should
be noted, however that the principle is predicated on statements by the owner declaring his house
to be a chattel, a conduct that may conceivably estop him from subsequently claiming otherwise.

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 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.
Moreover, the subject house stood on a rented lot to which defendants merely had a temporary
right as lessee, and although this can not in itself alone determine the status of the property, it
does so when combined with other factors to sustain the interpretation that the parties, particularly
the mortgagors, intended to treat the house as personalty. Finally, because it is the defendants
themselves, as debtors-mortgagors, who are attacking the validity of the chattel mortgage in this
case, the doctrine of estoppel therefore applies to the defendants, having treated the subject
house as personalty.

VI
Associated Insurance and Surety Company v. Iya
103 SCRA 972

DOCTRINE: A building is an immovable property irrespective of where or not said structure and
the land on which it is adhered to belong to the same owner.

FACTS:
Spouses Adriano Valino and Lucia A. Valino own a house of strong materials. They filed a bond
of P 11,000.00 subscribed by the Associated Insurance and Surety Co., Inc. and as a counter-
guaranty, the spouses Valino executed an alleged chattel mortgage on the aforementioned house
in favor of the surety company.

The parcel of land on which the house is erected was still registered in the name of the Philippine
Realty Corporation but was able to obtain the same from them after full payment of the purchase
price. The Valinos acquired another loan from Isabel Iya for P12,000.00, executing a real estate
mortgage over the house and lot. However, they were unable to pay off their other loan which
caused the foreclosure of the chattel mortgage. The surety company was awarded the land as
the highest bidder in the auction but later on discovered that the land was subject to a real estate
mortgage. The surety company then requested that the house and lot be excluded from the real
estate mortgage. Iya, in her answer, said that she had a real right over the property and that the
chattel mortgage on which the foreclosure was based should be declared null and void for non-
compliance with the form required by law. The CA ruled that the foreclosure of the real estate
mortgage is limited to the land alone and they awarded the structure to the surety company saying
that the house is a personal property and may be subject to chattel mortgage.

ISSUE:
Which of the mortgages should have preference?

HELD:
It was held in Lopez vs. Orosa that the building is an immovable itself, separate and distinct from
the land. A building is an immovable property irrespective of whether or not said structure and the
land on which it is adhered to belong to the same owner.

Only personal properties can be the subject of a chattel mortgage and since the structure in this
case is an immovable, it cannot subject to a chattel mortgage. Therefore the chattel mortgage
and the sale on which it was based should be declared null and void. Also, while it is true that
said document was registered in the Chattel Mortgage Register of Rizal, this act produced no
effect whatsoever for where the interest conveyed is in the nature of a real property, the
registration of the document in the registry of chattels is merely a futile act which would produce
no legal effect insofar as the building is concerned.

VII
Mindanao Bus Co. v. City Assessor and Treasurer
G.R. No. L-17870

DOCTRINE: Movable equipment, to be immobilized in contemplation of Article 415 of the Civil

Code, must be the essential and principal elements of an industry or works which are carried on
in a building or on a piece of land. Thus, where the business is one of transportation, which is
carried on without a repair or service shop, and its rolling equipment is repaired or serviced in a
shop belonging to another, the tools and equipment in its repair shop which appear movable are
merely incidentals and may not be considered immovables, and, hence, not subject to
assessment as real estate for purposes of the real estate tax.

FACTS:
Petitioner is a public utility solely engaged in transporting passengers and cargoes by motor
trucks, over its authorized lines in the Island of Mindanao, collecting rates approved by the Public
Service Commission.

The petitioner is the owner of the land where it maintains and operates a garage for its TPU motor
trucks; a repair shop; blacksmith and carpentry shops, and with these machineries which are
placed therein, its TPU trucks are made; body constructed; and same are repaired in a condition
to be serviceable in the TPU land transportation business it operates.

These machineries have never been or were never used as industrial equipments to produce
finished products for sale, nor to repair machineries, parts and the like offered to the general
public indiscriminately for business or commercial purposes for which petitioner has never
engaged in,

The City Assessor of CDO then assessed a P4,400 realty tax on said machineries and repair
equipment. This was then appealed to the Court of Tax Appeals (CTA) who sustained the
respondent city assessor's ruling.

ISSUE:
Whether or not the machineries and the equipments are considered immobilized and thus subject
to a realty tax. -- NO

HELD:
The Supreme Court held a decision for the petition for review to be set aside and the equipments
in question declared not subject to assessment as real estate for the purposes of the real estate
tax.

The law that governs the determination of the question at issue is as follows:

Art. 415. The following are immovable property:

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; (Civil Code
of the Phil.)

Aside from the element of essentiality the above-quoted provision also requires that the industry
or works be carried on in a building or on a piece of land. Thus in the case of Berkenkotter vs. Cu
Unjieng, supra, the "machinery, liquid containers, and instruments or implements" are found in a
building constructed on the land. A sawmill would also be installed in a building on land more or
less permanently, and the sawing is conducted in the land or building.

But 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.

Said equipments are not considered immobilized as they are merely incidental, not essential and
principal to the business of the petitioner. The transportation business could be carried on without
repair or service shops of its rolling equipment as they can be repaired or services in another
shop belonging to another

VIII
Makati Leasing and Financial Corporation v. Wearever Textile Mills, Inc.
G.R. No. L-58469

DOCTRINE: If a house of strong materials, like what was involved in the above Tumalad case,
may be considered as personal property for purposes of executing a chattel mortgage thereon as
long as the parties to the contract so agree and no innocent third party will be prejudiced thereby,
there is absolutely no reason why a machinery, which is movable in its nature and becomes
immobilized only by destination or purpose, may not be likewise treated as such. This is really
because one who has so agreed is estopped from denying the existence of the chattel mortgage.

FACTS:
The private respondent Wearever Textile Mills, Inc., discounted and assigned several receivables
with the former under a Receivable Purchase Agreement in order to obtain financial
accommodations from herein petitioner Makati Leasing and Finance Corporation. To secure the
collection of the receivables assigned, private respondent executed a Chattel Mortgage over
certain raw materials inventory as well as a machinery described as an Artos Aero Dryer
Stentering Range.

Upon default, petitioner filed a petition for extrajudicial foreclosure of the properties mortgage to
it. The Deputy Sheriff assigned to implement the foreclosure failed to gain entry into private
respondent's premises and was not able to effect the seizure of the aforedescribed machinery.
Petitioner thereafter filed a complaint for judicial foreclosure with the Court of First Instance of
Rizal.

Acting on petitioner's application for replevin, the lower court issued a writ of seizure, the
enforcement of which was however subsequently restrained upon private respondent's filing of a
motion for reconsideration. After several incidents, the lower court finally issued an order lifting
the restraining order for the enforcement of the writ of seizure and an order to break open the
premises of private respondent to enforce said writ. The lower court reaffirmed its stand upon
private respondent's filing of a further motion for reconsideration.
The Court of Appeals, in certiorari and prohibition proceedings subsequently filed by herein
private respondent, set aside the Orders of the lower court and ordered the return of the drive
motor seized by the sheriff pursuant to said Orders, after ruling that the machinery in suit cannot
be the subject of replevin, much less of a chattel mortgage, because it is a real property pursuant
to Article 415 of the new Civil Code, the same being attached to the ground by means of bolts
and the only way to remove it from respondent's plant would be to drill out or destroy the concrete
floor, the reason why all that the sheriff could do to enfore the writ was to take the main drive
motor of said machinery. The appellate court rejected petitioner's argument that private
respondent is estopped from claiming that the machine is real property by constituting a chattel
mortgage thereon.

ISSUE:
Whether or not the property in suit is real property – NO. It is a personal property

HELD:
Examining the records of the instant case, We find no logical justification to exclude the rule out,
as the appellate court did, the present case from the application of the abovequoted
pronouncement. If a house of strong materials, like what was involved in the above Tumalad case,
may be considered as personal property for purposes of executing a chattel mortgage thereon as
long as the parties to the contract so agree and no innocent third party will be prejudiced thereby,
there is absolutely no reason why a machinery, which is movable in its nature and becomes
immobilized only by destination or purpose, may not be likewise treated as such. This is really
because one who has so agreed is estopped from denying the existence of the chattel mortgage.

In rejecting petitioner's assertion on the applicability of the Tumalad doctrine, the Court of Appeals
lays stress on the fact that the house involved therein was built on a land that did not belong to
the owner of such house. But the law makes no distinction with respect to the ownership of the
land on which the house is built and We should not lay down distinctions not contemplated by
law.

It must be pointed out that the characterization of the subject machinery as chattel by the private
respondent is indicative of intention and impresses upon the property the character determined
by the parties. As stated in Standard Oil Co. of New York v. Jaramillo, 44 Phil. 630, it is undeniable
that the parties to a contract may by agreement treat as personal property that which by nature
would be real property, as long as no interest of third parties would be prejudiced thereby.

IX
Evangelista v. Alto Surety & Insurance Co., Inc.
G.R. No. L-11139

DOCTRINE: Sales on execution affect the public and third persons. The regulation governing
sales on execution are for public officials to follow. The form of proceedings prescribed for each
kind of property is suited to its character, not to the character, which the parties have given to it
or desire to give it. When the rules speak of personal property, property which is ordinarily so
considered is meant; and when real property is spoken of, it means property which is generally
known as real property. The regulations were never intended to suit the consideration that parties
may have privately given to the property levied upon.

FACTS:
Petitioner Santos Evangelista instituted a Civil Case for a sum of money. He obtained a writ of
attachment, which levied upon a house, built by Rivera on a land situated in Manila and leased to
him, by filing copy of said writ and the corresponding notice of attachment with the Office of the
Register of Deeds of Manila. Judgment was rendered in favor of Evangelista, who, bought the
house at public auction held in compliance with the writ of execution issued in said case. The
definite deed of sale was issued to him upon expiration of the period of redemption. When
Evangelista sought to take possession of the house, Rivera refused to surrender it, upon the
ground that he had leased the property to the Alto Surety & Insurance Co., Inc., respondent
herein, and that the latter is now the true owner of said property. It appears that a definite deed
of sale of the same house had been issued to respondent, as the highest bidder at an auction
sale held in compliance with a writ of execution. Hence, Evangelista instituted the present action
against respondent and Rivera, for the purpose of establishing his (Evangelista) title over said
house, securing possession thereof, apart from recovering damages.

In its answer, respondent alleged that it has a better right to the house, because the sale made,
and the definite deed of sale executed, in its favor, on September 29, 1950 and May 10, 1952,
respectively, precede the sale to Evangelista (October 8, 1951) and the definite deed of sale in
his favor (October 22, 1952). Rivera, in effect, joined forces with respondent.

CFI rendered judgment for Evangelista, sentencing Rivera and respondent to deliver the house
in question to petitioner herein and to pay him, jointly and severally from October, 1952, until said
delivery, plus costs.

On appeal taken by respondent, the above decision was reversed by the CA which absolved Alto
Surety from the complaint on account that although the writ of attachment in favor of Evangelista
had been filed with the Register of Deeds of Manila prior to the sale in favor of Alto Surety,
Evangelista did not acquire thereby a preferential lien, the attachment having been levied as if
the house in question were immovable property.

Evangelista now seeks a review by certiorari.

ISSUE:
Whether a house, constructed by the lessee of the land on which it is built, should be dealt with,
for purpose of attachment, as immovable property, or as personal property.

HELD:
Said house is not personal property, much less a debt, credit or other personal property not
capable of manual delivery, but immovable property. As explicitly held, in Laddera vs. Hodges, "a
true building (not merely superimposed on the soil) is immovable or real property, whether it is
erected by the owner of the land or by usufructuary or lessee.

It is true that the parties to a deed of chattel mortgage may agree to consider a house as personal
property for purposes of said contract. However, this view is good only insofar as the contracting
parties are concerned. It is based, partly, upon the principle of estoppel. Neither this principle, nor
said view, is applicable to strangers to said contract. Much less is it in point where there has been
no contract whatsoever, with respect to the status of the house involved, as in the case at bar.

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. The regulation governing sales on execution are for public officials to
follow. The form of proceedings prescribed for each kind of property is suited to its character, not
to the character, which the parties have given to it or desire to give it. When the rules speak of
personal property, property which is ordinarily so considered is meant; and when real property is
spoken of, it means property which is generally known as real property. The regulations were
never intended to suit the consideration that parties may have privately given to the property
levied upon. Enforcement of regulations would be difficult were the convenience or agreement of
private parties to determine or govern the nature of the proceedings.

The mere fact that a house was the subject of the 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 of public auction. This ruling is demanded by the need for a definite,
orderly and well defined regulation for official and public guidance and would prevent confusion
and misunderstanding.

The foregoing considerations apply, with equal force, to the conditions for the levy of attachment,
for it similarly affects the public and third persons.

X
Sibal v. Valdez
G.R. No. L-27532

DOCTRINE: For the purpose of attachment and execution, and for the purposes of the Chattel
Mortgage Law, "ungathered products" have the nature of personal property. (batasnatin)

FACTS:
As a first cause of action the plaintiff alleged that the defendant Vitaliano Mamawal, deputy sheriff
of the Province of Tarlac, by virtue of a writ of execution issued by the Court of First Instance of
Pampanga, attached and sold to the defendant Emiliano J. Valdez the sugar cane planted by the
plaintiff and his tenants on seven parcels of land. That within one year from the date of the
attachment and sale the plaintiff offered to redeem said sugar cane and tendered to the defendant
Valdez the amount sufficient to cover the price paid by the latter, the interest thereon and any
assessments or taxes which he may have paid thereon after the purchase, and the interest
corresponding thereto and that Valdez refused to accept the money and to return the sugar cane
to the plaintiff.

One of the defenses of the defendant Emiliano J. Valdez is that the sugar cane in question had
the nature of personal property and was not, therefore, subject to redemption. The trial court hold
that the sugar cane in question was personal property and, as such, was not subject to
redemption.

ISSUE:
Whether the sugar cane in question is personal or real property under civil code? Under chattel
mortgage law?

HELD:
The court ruled that It is contended that sugar cane comes under the classification of real property
as "ungathered products" in paragraph 2 of article 334 of the Civil Code. Said paragraph 2 of
article 334 enumerates as real property the following: Trees, plants, and ungathered products,
while they are annexed to the land or form an integral part of any immovable property."

We may, therefore, conclude that paragraph 2 of article 334 of the Civil Code has been modified
by section 450 of the Code of Civil Procedure and by Act No. 1508, in the sense that, for the
purpose of attachment and execution, and for the purposes of the Chattel Mortgage Law,
"ungathered products" have the nature of personal property. The lower court, therefore,
committed no error in holding that the sugar cane in question was personal property and, as such,
was not subject to redemption.

XI
BOARD OF ASSESSMENT APPEALS V. MERALCO
G.R. No. L-15334. January 31, 1964

FACTS:
Meralco’s electric power is generated by its hydro-electric plant located at Botocan Falls, Laguna
and is transmitted to the City of Manila by means of electric transmission wires, running from the
province of Laguna to the said City. These electric transmission wires which carry high voltage
current, are fastened to insulators attached on steel towers. Meralco has constructed 40 of these
steel towers within Quezon City, on land belonging to it.

The QC City Assessor declared the MERALCO's steel towers subject to real property tax. After
the denial of MERALCO's petition to cancel these declarations, an appeal was taken to the QC
Board of Assessment Appeals, which required respondent to pay real property tax on the said
steel towers for the years 1952 to 1956.

MERALCO paid the amount under protest, and filed a petition for review in the Court of Tax
Appeals (CTA) which rendered a decision ordering the cancellation of the said tax declarations
and the refunding to MERALCO by the QC City Treasurer.

ISSUE: Whether or not the steel towers of an electric company constitute real property for the
purposes of real property tax.

HELD:
NO. The steel towers of an electric company do not constitute real property for the purposes of
real property tax. Steel towers are not immovable property under paragraph 1, 3 and 5 of
Article 415 (NCC) because they do not constitute buildings or constructions adhered to the soil.
As per description, given by the lower court, they are removable and merely attached to a square
metal frame by means of bolts, which when unscrewed could easily be dismantled and moved
from place to place.
They cannot be included under paragraph 3, as they are not attached to an immovable in a fixed
manner, and they can be separated without breaking the material or causing deterioration upon
the object to which they are attached. These steel towers or supports do not also fall under
paragraph 5, for they are not machineries or receptacles, instruments or implements, and even if
they were, they are not intended for industry or works on the land.

Petitioner is not engaged in an industry or works on the land in which the steel supports or towers
are constructed.
 XII
Chavez v. Public Estates Authority
384 SCRA 152

DOCTRINE: Until now, the only way the government can sell to private parties government
reclaimed and marshy disposable lands of the public domain is for the legislature to pass a law
authorizing such sale. However, there exists a constitutional ban wherein private corporations are
prohibited from acquiring alienable lands of the public domain. These corporations may only lease
the lands from a period granted by the law.

FACTS:
The government, through the Commissioner of Public Highways, signed a contract with CDCP to
reclaim certain foreshore and offshore areas of Manila Bay under the MCCRRP. Later on
President Marcos signed PD No. 1084 and 1085 creating PEA and transferring to PEA the
reclaimed lands in the foreshore and offshore of the Manila Bay. In addition, a Memorandum of
Agreement was executed between PEA and CDCP wherein the latter acceded and transferred
its rights and interest in favor of the former as regards CDCP’s reclaimed lands under MCCRRP.
During Aquino’s administration, special patents as well as 3 TCTs (the lands were known as
Freedom Islands) were issued in favor of PEA.

PEA and AMARI, a private corporation, through negotiation but without conducting any public
bidding entered into a Joint Venture Agreement (JVA for brevity) for the development of the
Freedom Islands. A year later, Senate President Maceda described such JVA during his
privileged speech as the “grandmother of all scams”. Consequently, a joint investigation was
conducted and the report concluded that the JVA is illegal because what PEA seeks to do is to
transfer ownership of the reclaimed lands which are public lands hence inalienable to AMARI.
However, the Legal Task formed by Pres. Ramos upheld the legality of the JVA.

Phillipine Daily Inquirer and Today published reports that Pres. Ramos ordered that renegotiations
regarding the JVA be again made. Such JVA (now called Amended JVA) was later on approved
by Pres. Estrada. Petitioner Chavez prays that the Amended JVA be declared null and void for it
violating the Constitutional and statutory provisions.

ISSUE:
Whether or not AMARI, a private corporation may acquire the reclaimed lands? NO

HELD:
In this case, the SC traced back the laws governing reclaimed lands as regards its alienability.
The previous Constitutions including the 1987 Constitution has adopted the Regalian Doctrine
wherein it states that all public lands and waters are owned by the State. The court discussed and
emphasized also CA No. 141 which states that the only way the government can sell to private
parties’ government reclaimed and marshy disposable lands of the public domain is for the
legislature to pass a law authorizing such sale. In addition, the Constitution has established that
private corporations (such as AMARI) cannot acquire the reclaimed lands however; these
corporations are allowed to lease them. This rule is absolute.

Applying these provisions to the case, the reclaimed lands are classified as public property and
in order for PEA to sell these lands; there must be a legislative act granting such right to sell. In
addition, even if there exist an express provision in favor of PEA, such would still subject of the
constitutional ban as regards private corporation acquiring reclaimed alienable lands.
As mentioned and established already, these reclaimed lands are considered inalienable public
property. PD No. 1085 granting PEA the power to oversee the Freedom Islands did not in any
way convert the lands into alienable or disposable lands. The issuance of special patents by Pres.
Aquino as well as the TCTs also did not convert it into private lands. It must be noted that the
registration of public lands under Torrens system cannot convert it into private property.

XIII
REPUBLIC V. CA 299 SCRA 199

XIV

Manila Lodge No. 761 Benevolent and Protective Order of the Elks v. CA
G.R. No. L-41001, 30 September 1976

FACTS:
The Philippine Commission enacted Act No. 1360 which authorized the City of Manila to reclaim
a portion of Manila Bay. Subsequently Act No. 1657 amended the former act which states that
the City of Manila was authorized to sell or lease the set aside for hotel site. The City of Manila
sells the land to Manila Lodge No. 761 then the latter sold the land to Tarlac Development
Corporation. The City of Manila filed a petition for re-annotation of its right to repurchased. The
TDC then filed a complaint that the City of Manila was estopped from repurchasing the property.

ISSUE:

Whether or not the City of Manila was estopped from quetioning the validity of the sale.

RULING:

The Government is never estopped by mistakes or errors on the pan of its agents, and estoppel
does not apply to a municipal corporation to validate a contract that is prohibited by law or is
against Republic policy, and the sale executed by the City of Manila to Manila Lodge was certainly
a contract prohibited by law. Moreover, estoppel cannot be urged even if the City of Manila
accepted the benefits of such contract of sale and the Manila Lodge No. 761 had performed its
part of the agreement, for to apply the doctrine of estoppel against the City of Manila in this case
would be tantamount to enabling it to do indirectly what it could not do directly.

The sale of the subject property executed by the City of Manila to the Manila Lodge No. 761,
BPOE, was void and inexistent for lack of subject matter. It suffered from an incurable defect that
could not be ratified either by lapse of time or by express ratification. The Manila Lodge No. 761
therefore acquired no right by virtue of the said sale. Hence to consider now the contract inexistent
as it always has seen, cannot be, as claimed by the Manila Lodge No. 761, an impairment of the
obligations of contracts, for there was it, contemplation of law, no contract at all.

XV
Cebu Oxygen and Acetylene Co. v. Bercilles
66 SCRA 431

FACTS:
A portion of land, sought to be registered, was declared, through law, an abandoned road. The
lot was awarded to the petitioner for being the highest bidder.

The Assistant Provincial Fiscal of Cebu filed a motion to dismiss the application on the ground
that the property sought to be registered being a public road intended for public use is considered
part of the public domain and therefore outside the commerce of man.

ISSUE:
WON the portion of land is susceptible to registration by a private individual. -- YES

HELD:
Revised Charter of Cebu, under section 31, provides that, the City Council shall have the power
to close any city road, street or alley, etc, withdrawn from public servitude, may be used or
conveyed for any purpose.

It is undoubtedly clear that the City of Cebu is empowered to close a city road or street. Such
power is discretionary and will not ordinarily be controlled or interfered with by the courts, absent
a plain case of abuse or fraud or collusion. It follows that such withdrawn portion becomes
patrimonial property which can be the object of an ordinary contract.

XVI
Laurel v. Garcia
187 SCRA 797

DOCTRINE: An abandonment of the intention to use the property for public service and to make
it patrimonial property under Article 422 of the Civil Code must be definite Abandonment and it
cannot be inferred from the non-use alone specially if the non-use was attributable not to the
government's own deliberate and indubitable will but to a lack of financial support to repair and
improve the property Abandonment must be a certain and positive act based on correct legal
premises.

FACTS:
These are two petitions for prohibition seeking to enjoin respondents, their representatives and
agents from proceeding with the bidding for the sale of the 3,179 square meters of land at Tokyo,
Japan scheduled on February 21, 1990.

The subject property in this case is 1 of the 4 properties in Japan acquired by the Philippine
government under the Reparations Agreement entered into with Japan on May 9, 1956. The
properties and the capital goods and services procured from the Japanese government for
national development projects are part of the indemnification to the Filipino people for their losses
in life and property and their suffering during World War II.

A proposal was presented to President Corazon C. Aquino by former Philippine Ambassador to

Japan, Carlos J. Valdez, to make the property the subject of a lease agreement with a Japanese
firm. No change of ownership or title shall occur. The Philippine government retains the title all
throughout the lease period and thereafter. However, the government has not acted favorably.

On July 25, 1987, the President issued Executive Order No. 296 entitling non-Filipino citizens or
entities to avail of separations' capital goods and services in the event of sale, lease or disposition.
The four properties in Japan including the Roppongi were specifically mentioned in the first
"Whereas" clause.
Amidst opposition by various sectors, the Executive branch of the government has been pushing
its decision to sell the reparations properties starting with the Roppongi lot. The property has twice
been set for bidding at a minimum floor price of $225 million.

ISSUE:
W/N the Roppongi property and others of its kind be alienated by the Philippine Government. --
NO

HELD:
NO, the subject property cannot be alienated by the government, even if the property has not
been in use for a long time.

Vice President Laurel asserts that the lands were acquired as part of the reparations for diplomatic
and consular use by the Philippine government. Laurel states that the Roppongi property is
classified as one of public dominion, and not of private ownership under Article 420 of the Civil
Code.

The petitioner submits that the Roppongi property comes under "property intended for public
service" in paragraph 2 of the above provision. He states that being one of public dominion, no
ownership by anyone can attach to it, not even by the State. The Roppongi and related properties
were acquired for "sites for chancery, diplomatic, and consular quarters, buildings and other
improvements. The petitioner states that they continue to be intended for a necessary service.
They are held by the State in anticipation of an opportune use. (Citing 3 Manresa 65-66). Hence,
it cannot be appropriated, is outside the commerce of man, or to put it in more simple terms, it
cannot be alienated nor be the subject matter of contracts (Citing Municipality of Cavite v. Rojas,
30 Phil. 20 [1915]). Noting the non-use of the Roppongi property at the moment, the petitioner
avers that the same remains property of public dominion so long as the government has not used
it for other purposes nor adopted any measure constituting a removal of its original purpose or
use.

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 enjoyment, an
application to the satisfaction of collective needs, and resides in the social group. The purpose is
not to serve the State as a juridical person, but the citizens; it is intended for the common and
public welfare and cannot be the object of appropration

The applicable provisions of the Civil Code are:

ART. 419. Property is either of public dominion or of private ownership.
ART. 420. The following things are property of public dominion
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports
and bridges constructed by the State, banks shores roadsteads, and others
of similar character;
(2) Those which belong to the State, without being for public use, and are
intended for some public service or for the development of the national
wealth.
ART. 421. All other property of the State, which is not of the character stated in the
preceding article, is patrimonial property.

The Roppongi property is correctly classified under paragraph 2 of Article 420 of the Civil Code
as property belonging to the State and intended for some public service.
The fact that the Roppongi site has not been used for a long time for actual Embassy service
does not automatically convert it to patrimonial property. Any such conversion happens only if the
property is withdrawn from public use. A property continues to be part of the public domain, not
available for private appropriation or ownership until there is a formal declaration on the part of
the government to withdraw it from being such.

An abandonment of the intention to use the Roppongi property for public service and to make it
patrimonial property under Article 422 of the Civil Code must be definite Abandonment cannot be
inferred from the non-use alone specially if the non-use was attributable not to the government's
own deliberate and indubitable will but to a lack of financial support to repair and improve the
property Abandonment must be a certain and positive act based on correct legal premises.

A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not relinquishment of the
Roppongi property's original purpose.

Moreover, President Aquino’s approval of the recommendation by the investigating committee to

sell the Roppongi property was premature or, at the very least, conditioned on a valid change in
the public character of the Roppongi property. It does not have the force and effect of law since
the President already lost her legislative powers. The Congress had already convened for more
than a year. Assuming that the Roppongi property is no longer of public dominion, there is another
obstacle to its sale by the respondents. There is no law authorizing its conveyance, and thus, the
Court sees no compelling reason to tackle the constitutional issue raised by petitioner Ojeda.

XVII
Laurel v. Garcia [G.R. No. 92013 & 92047. July 25, 1990.]
Ojeda v. Macaraig [G.R. No. 92047. July 25, 1990.]
En Banc, Gutierrez, Jr. (J): 5 concur

Facts: The subject Roppongi property is one of the four properties in Japan acquired by the
Philippine government under the Reparations Agreement entered into with Japan on 9 May
1956, the other lots being the Nampeidai Property (site of Philippine Embassy Chancery), the
Kobe Commercial Property (Commercial lot used as warehouse and parking lot of consulate
staff), and the Kobe Residential Property (a vacant residential lot). The properties and the
capital goods and services procured from the Japanese government for national development
projects are part of the indemnification to the Filipino people for their losses in life and property
and their suffering during World War II. The Reparations Agreement provides that reparations
valued at $550 million would be payable in 20 years in accordance with annual schedules of
procurements to be fixed by the Philippine and Japanese governments (Article 2, Reparations
Agreement). RA 1789, the Reparations Law, prescribes the national policy on procurement and
utilization of reparations and development loans; those which belong to the government and
which may be availed of by private entities. The Roppongi property was acquired from the
Japanese government under the Second Year Schedule and listed under the heading
“Government Sector”, through Reparations Contract 300 dated 27 June 1958. The Roponggi
property consists of the land and building “for the Chancery of the Philippine Embassy.” As
intended, it became the site of the Property, 2003 ( 105 ) Philippine Embassy until the latter
was transferred to Nampeidai on 22 July 1976 when the Roppongi building needed major
repairs. Due to the failure of our government to provide necessary funds, the Roppongi property
has remained undeveloped since that time. During the incumbency of President Aquino, a
proposal was made by former Philippine Ambassador to Japan, Carlos J. Valdez, to lease the
subject property to Kajima Corporation, a Japanese firm, in exchange of the construction of 2
buildings in Roppongi, 1 building in Nampeidai, and the renovation of the Philippine Chancery in
Nampeidai. The Government did not act favorably to said proposal, but instead, on 11 August
1986, President Aquino created a committee to study the disposition or utilization of Philippine
government properties in Tokyo and Kobe though AO-3, and AO 3-A to 3-D. On 25 July 1987,
the President issued EO 296 entitling non-Filipino citizens or entities to avail of reparations’
capital goods and services in the event of sale, lease or disposition. The four properties in
Japan including the Roppongi were specifically mentioned in the first “Whereas” clause. Amidst
opposition by various sectors, the Executive branch of the government has been pushing, with
great vigor, its decision to sell the reparations properties starting with the Roppongi lot. Two
petitions for prohibition were filed seeking to enjoin respondents, their representatives and
agents from proceeding with the bidding for the sale of the 3,179 sq. m. of land at 306
Ropponggi, 5-Chome Minato-ku, Tokyo, Japan scheduled on 21 February 1990; the temporary
restaining order of which was granted by the court on 20 February 1990. In G.R. No. 92047, a
writ of mandamus was prayed for to compel the respondents to fully disclose to the public the
basis of their decision to push through with the sale of the Roppongi property inspite of strong
public opposition and to explain the proceedings which effectively prevent the participation of
Filipino citizens and entities in the bidding process. After multiple motions for extension to file
comment by the respondents, the Supreme Court resolved to decide the 2 cases; thereby
granting the petitions and enjoining the respondents from proceeding with the sale of the
Roppongi property in Tokyo, Japan. The Court also made permanent the 20 February 1990
temporary restaining order.
1. Roponggi lot is a property of public dominion The nature of the Roppongi lot as property for
public service is expressly spelled out. It is dictated by the terms of the Reparations Agreement
and the corresponding contract of procurement which bind both the Philippine government and
the Japanese government, that these were assigned to the government sector and that the
Roppongi property itself was specifically designated under the Reparations Agreement to house
the Philippine Embassy. There can be no doubt that it is of public dominion unless it is
convincingly shown that the property has become patrimonial; which respondents have failed to
show.
2. Property of public dominion outside the commerce of man 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 enjoyment, an application to the satisfaction of
collective needs, and resides in the social group. The purpose is not to serve the State as a
juridical person, but the citizens; it is intended for the common and public welfare and cannot be
the object of appropriation.
3. Pertinent provisions of the Civil Code Article 419 provides that “property is either of public
dominion or of private ownership.” Article 420 provides that property of public dominion includes
“(1) those intended for public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores, roadsteads, and others of similar character; (2) those
which belong to the State, without being for public use, and are intended for some public service
or for the development of the national wealth.” Article 421 provides that “all other property of the
State, which is not of the character stated in the preceding article, is patrimonial property.” In the
present case, the Roppongi property is correctly classified under paragraph 2 of Article 420 of
the Civil Code as property belonging to the State and intended for some public service.
Property, 2003 ( 106 )
4. Conversion to patrimonial property happen if property is withdrawn from public use;
Abandonment must be certain and positive act based on correct legal premises The fact that the
Roppongi site has not been used for a long time for actual Embassy service does not
automatically convert it to patrimonial property. Any such conversion happens only if the
property is withdrawn from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA
481 [1975]). A property continues to be part of the public domain, not available for private
appropriation or ownership “until there is a formal declaration on the part of the government to
withdraw it from being such (Ignacio v. Director of Lands, 108 Phil. 335 [1960]) An
abandonment of the intention to use the Roppongi property for public service and to make it
patrimonial property under Article 422 of the Civil Code must be definite. Abandonment cannot
be inferred from the non-use alone specially if the non-use was attributable not to the
government’s own deliberate and indubitable will but to a lack of financial support to repair and
improve the property (See Heirs of Felino Santiago v. Lazarao, 166 SCRA 368 [1988]).
Abandonment must be a certain and positive act based on correct legal premises. In the present
case, the recent Administrative Orders authorizing a study of the status and conditions of
government properties in Japan were merely directives for investigation but did not in any way
signify a clear intention to dispose of the properties. Further EO 296 does not declare that the
properties lost their public character, but merely intends to make the properties available to
foreigners and not to Filipinos alone in case of a sale, lease or other disposition.
5. RA 6657 does not authorize the disposition of Roppongi property as it is outside the
commerce of man; EO 296 amended nationality provision for the sale of procurements for the
private sector, not the procurements for the government (the latter which includes Roppongi
property) EO 296 is based on the wrong premise or assumption that the Roppongi and the three
other properties were earlier converted into alienable real properties. RA 1789 differentiates the
procurements for the government sector and the private sector (Sections 2 and 12, RA 1789).
Only the private sector properties can be sold to end-users who must be Filipinos or entities
owned by Filipinos. It is this nationality provision which was amended by EO 296. Further,
Section 63 (c) of RA 6657 (the CARP Law) which provides as one of the sources of funds for its
implementation, the proceeds of the disposition of the properties of the Government in foreign
countries, did not withdraw the Roppongi property from being classified as one of public
dominion when it mentions Philippine properties abroad. Section 63 (c) refers to properties
which are alienable and not to those reserved for public use or service. RA 6657, therefore,
does not authorize the Executive Department to sell the Roppongi property. It merely
enumerates possible sources of future funding to augment (as and when needed) the Agrarian
Reform Fund created under EO 299. Obviously any property outside of the commerce of man
cannot be tapped as a source of funds.
6. Conflict of law rule does not apply when conflict of law situation does not exist A conflict of
law rule cannot apply when no conflict of law situation exists. A conflict of law situation arises
only when: (1) There is a dispute over the title or ownership of an immovable, such that the
capacity to take and transfer immovables, the formalities of conveyance, the essential validity
and effect of the transfer, or the interpretation and effect of a conveyance, are to be determined;
and (2) A foreign law on land ownership and its conveyance is asserted to conflict with a
domestic law on the same matters. Hence, the need to determine which law should apply. In the
present case, none of the above elements exists.
7. Issue on the authority of officials to dispose property belonging to state, and not validity of
ownership or title, in question; governed by Philippine law The issues are not concerned with
validity of ownership or title. There is no question that the property belongs to the Philippines.
The issue is the authority of the respondent officials to validly dispose of property belonging to
the State. And the validity of the procedures adopted to effect its sale. This is governed by
Philippine Law. The rule of lex situs does not apply.
8. Opinion of Secretary of Justice irrelevant; Issue of whether the property can be sold precedes
Property, 2003 ( 107 ) the issue of who can acquire The assertion that the opinion of the
Secretary of Justice sheds light on the relevance of the lex situs rule is misplaced. The opinion
does not tackle the alienability of the real properties procured through reparations nor the
existence in what body of the authority to sell them. In discussing who are capable of acquiring
the lots, the Secretary merely explains that it is the foreign law which should determine who can
acquire the properties so that the constitutional limitation on acquisition of lands of the public
domain to Filipino citizens and entities wholly owned by Filipinos is inapplicable. There is no
need to discuss who can acquire the Roppongi lot when there is no showing that it can be sold.
9. Approval of the President of the recommendation of the committee to sell the Roppongi
property premature, and without force and effect of law The subsequent approval on 4 October
1988 by President Aquino of the recommendation by the investigating committee to sell the
Roppongi property was premature or, at the very least, conditioned on a valid change in the
public character of the Roppongi property. Moreover, the approval does not have the force and
effect of law since the President already lost her legislative powers. The Congress had already
convened for more than a year.
10. There is no law authorizing the conveyance of the Roppongi property; Conveyance must be
authorized by law enacted by Congress and requires executive and legislative concurrence
Section 79 (f) of the Revised Administrative Code of 1917 (Conveyances and contracts to which
the Government is a party) provides that “in cases in which the Government of the Republic of
the Philippines is a party to any deed or other instrument conveying the title to real estate or to
any other property the value of which is in excess of P100,000, the respective Department
Secretary shall prepare the necessary papers which, together with the proper
recommendations, shall be submitted to the Congress of the Philippines for approval by the
same. Such deed, instrument, or contract shall be executed and signed by the President of the
Philippines on behalf of the Government of the Philippines unless the Government of the
Philippines unless the authority therefor be expressly vested by law in another officer.” The
requirement has been retained in Section 48, Book I of the Administrative Code of 1987 (EO
292; Official authorized to convey real property), which provides that “Whenever real property of
the Government is authorized by law to be conveyed, the deed of conveyance shall be executed
in behalf of the government by the following: (1) for property belonging to and titled in the name
of the Republic of the Philippines, by the President, unless the authority therefor is expressly
vested by law in another officer; (2) for property belonging to the Republic of the Philippines but
titled in the name of any political subdivision or of any corporate agency or instrumentality, by
the executive head of the agency or instrumentality.” Thus, 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.
11. 1989 case on the Roppongi property: Ojeda v. Bidding Committee; Issue different The
resolution of the Supreme Court in Ojeda v. Bidding Committee, et al., did not pass upon the
constitutionality of EO 296 nor did it uphold the authority of the President to sell the Roppongi
property. The Court stated that the constitutionality of the executive order was not the real issue
and that resolving the constitutional question was “neither necessary nor finally determinative of
the case.” The Court noted that “[W]hat petitioner ultimately questions is the use of the proceeds
of the disposition of the Roppongi property.” In emphasizing that “the decision of the Executive
to dispose of the Roppongi property to finance the CARP cannot be questioned” in view of
Section 63 (c) of RA 6657, the Court did not acknowledge the fact that the property became
alienable nor did it indicate that the President was authorized to dispose of the Roppongi
property. The resolution should be read to mean that in case the Roppongi property is re-
classified to be patrimonial and alienable by authority of law, the proceeds of a sale may be
used for national economic development projects including the CARP.
12. Constitutional questions raised in the Supreme Court Property, 2003 ( 108 ) The Court does
not ordinarily pass upon constitutional questions unless these questions are properly raised in
appropriate cases and their resolution is necessary for the determination of the case (People v.
Vera, 65 Phil. 56 [1937]). The Court will not pass upon a constitutional question although
properly presented by the record if the case can be disposed of on some other ground such as
the application of a statute or general law (Siler v. Louisville and Nashville R. Co., 213 U.S. 175,
[1909], Railroad Commission v. Pullman Co., 312 U.S. 496 [1941]).
13. Value of the Roppongi property; besides economic and financial benefits 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. The
Roppongi property is not just like any piece of property. It was given to the Filipino people in
reparation for the lives and blood of Filipinos who died and suffered during the Japanese military
occupation, for the suffering of widows and orphans who lost their loved ones and kindred, for
the homes and other properties lost by countless Filipinos during the war. The Tokyo properties
are a monument to the bravery and sacrifice of the Filipino people in the face of an invader.
Roppongi is a reminder that cannot — should not — be dissipated.
XVIII
Antipolo v. Zapanta [G.R. No. 65334. December 26, 1984.]
First Division, Melencio-Herrera (J): 4 concurring, 1 took no part.
Facts: The Municipality of ANTIPOLO, for more than 50 years now, has considered the disputed
property, described below, to be public land subject to ANTIPOLO’s use and permission to use
within the prerogatives and purposes of a municipal corporation. There is indication to the effect
that it had been the site of the public market as far back as 1908, or at the latest, since 1920 “up
to today.” Gradually, additional public structures were built thereon, like the Puericulture and
Family Planning Center, the Integrated National Police Building, the Office of the Municipal
Treasurer, and the public abattoir. Those public structures occupy almost the entire area of the
land.
On 8 August 1977, a single application for the registration of two distinct parcels of land was
filed by two distinct applicants before the then CFI Rizal, Branch XV, Makati (the Registration
Court). One of the two applicants was Conrado Eniceo. He had applied for registration under
the Torrens system of a parcel of land containing 258 sq. m. The other applicant was “Heirs of
Joaquin Avendaño”, and the land they were applying for registration was a parcel containing
9,826 sq. m. (the disputed property) surveyed in the name of the Municipality of Antipolo. Both
parcels were situated in the Municipality of Antipolo. The application were approved by the
Registration Court on 26 February 1980. ANTIPOLO took steps to interpose an appeal but
because it failed to amend the Record on Appeal, its appeal was disallowed.
On 22 May 1981, ANTIPOLO filed a complaint (Civil Case 41353) of the CFI Rizal, Branch XIII,
Pasig against named “Heirs of Joaquin Avendaño”, and their assignees praying for nullification
of the judgment rendered by the Registration Court. The defendants, in their Answer, pleaded a
special defense of res judicata. After a preliminary hearing on the mentioned special defense,
the case was dismissed. ANTIPOLO perfected an appeal to the then Court of Appeals. A notice
to file Brief was issued by the Appellate Court, which ANTIPOLO claimed it had not received.
Upon motion of the Avendano heirs to dismiss on the ground the ANTIPOLO had not filed its
Brief within the reglementary period, the appeal was dismissed on 23 August 1983 despite the
fact that before the dismissal, ANTIPOLO had submitted its Appellant’s Brief. ANTIPOLO filed a
motion for reconsideration, which the Appellate Court denied on 27 September 1983 for lack of
legal and factual basis. Hence, the petition for review on certiorari.
The Supreme Court (1) set aside the resolutions of the appellate court (now IAC) dated 23
August 1983 and 27 September 1983; (2) set aside the judgment of the CFI Rizal in Civil Case
41353 and rendered the judgment and decree of the CFI Rizal in LRC N-9995, LRC Record N-
52176 null and void in respect of the “Heirs of Joaquin Avendano; (3) ordered the Register of
Deed of Rizal to cancel all certificates issued by virtue of decree issued in LRC N-9995, LRC
Rec. N-52176 in respect of the “Heirs of Isabela Avendano”; and (4) declared the certificate of
title issuied in the name of Conrado Eniceo, and transfers therefrom as decreed in LRC N-995,
LRC Rec. N-52176 to continue to be valid; without pronouncements as to costs.
1. Technicality yields to broader interests of substantial justice; When jurisdiction is questioned
Although failure to file Brief within the time provided by the Rules is, indeed, a ground for
dismissal of an appeal, this Court had held that rules of technicality must yield to the broader
interests of substantial justice specially where, as in this case, the important issue of lack of
jurisdiction over the subject matter of the Land Registration Court has been raised.
2. Remand is ordinarily the appropriate relief; Court resolves merits due to 3 motions for early
decision filed Property, 2003 ( 9 ) Haystacks (Berne Guerrero) A remand to the lower Court, for
the entertainment of the appeal on the merits, would ordinarily be the appropriate relief.
However, considering the three Motions for Early Decision filed by private respondents, we shall
resolve the substantive merits of the appeal to the appellate tribunal from the judgment
rendered in the case.
3. Disputed property devoted to public use and public service; Possession does not presuppose
ownership; Lands presumed to be public lands unless contrary is proven; Tax declaration mere
indicia of a claim to ownership At the time the application for registration was filed on 8 August
1977, the disputed property was already devoted to public use and public service. Therefore, it
was outside the commerce of man and could no longer be subject to private registration. The
claim of the Avendano heirs that they merely tolerated occupancy by ANTIPOLO which had
borrowed the disputed property from them, since they had been in possession, since as far back
as 1916, erroneously presupposes ownership thereof since that time. They forget that all lands
are presumed to be public lands until the contrary is established. The fact that the disputed
property may have been declared for taxation purposes in their names or of their predecessors-
in-interest as early as 1918 does not necessarily prove ownership. They are merely indicia of a
claim of ownership. ANTIPOLO had also declared the disputed property as its own in Tax
Declarations 909, 993 and 454.
4. Res judicata does not apply since Land Registration Court had no jurisdiction to entertain the
registration of public property Since the Land Registration Court had no jurisdiction to entertain
the application for registration of public property of ANTIPOLO, its Decision adjudicating the
disputed property as of private ownership is null and void. It never attained finality, and can be
attacked at any time. It was not a bar to the action brought by ANTIPOLO for its annulment by
reason of res judicata.
5. Effects of decision which is null and void by virtue of lack of jurisdiction The want of
jurisdiction by a court over the subject-matter renders the judgment void and a mere nullity, and
considering that a void judgment is in legal effect no judgment, by which no rights are divested,
from which no rights can be obtained, which neither binds nor bars any one, and under which all
acts performed and all claims flowing out of are void, and considering, further, that the decision,
for want of jurisdiction of the court, is not a decision in contemplation of law, and hence, can
never become executory, it follows that such a void judgment cannot constitute a bar to another
case by reason of res judicata.
6. Titles null and void; Cancellation pursued through ordinary action When the titles issued by a
Court, or by virtue of the decision or decree of the court, with no jurisdiction over the subject
matter; such are to be held to be null and void and perforce, they must be ordered cancelled. It
follows that ‘if a person obtains a title under the Public Land Act which includes, by oversight,
lands which cannot be registered under the Torrens System, or when the Director of Lands did
not have jurisdiction over the same because it is a public forest, the grantee does not, by virtue
of the said certificate of title alone, become the owner of the land illegally included’ (Republic vs.
Animas, 56 SCRA 499, 503; Ledesma vs. Municipality of Iloilo, 49 Phi. 769). Under these
circumstances, the certificate of title may be ordered cancelled and the cancellation may be
pursued through an ordinary action therefor. This action cannot be barred by the prior judgment
of the land registration court, since the said court had no jurisdiction over the subject matter.
And if there was no such jurisdiction, then the principle of res judicata does not apply.
XIX
Province of Zamboanga del Norte v. City of Zamboanga
G.R. No. L-24440

DOCTRINE: Under the law of Municipal Corporations, properties which are devoted to public
service are deemed public and the rest remain patrimonial. Under this norm, to be considered
public, it is enough that the property be held and, devoted for governmental purposes like local
administration, public education, public health, etc.

FACTS:
On October 12, 1936, Commonwealth Act 39 was approved converting the Municipality of
Zamboanga into Zamboanga City. It further provided that buildings and properties which the
province shall abandon upon the transfer of the capital to another place will be acquired and paid
for by the City of Zamboanga at a price to be fixed by the Auditor General.
The properties and buildings referred to consisted of 50 lots and some buildings constructed
thereon, located in the City of Zamboanga and covered individually by Torrens certificates of title
in the name of Zamboanga Province. Pursuant to CA 39, the Auditor General fixed the value of
the properties and buildings in question left by Zamboanga Province in Zamboanga City at
P1,294,244.00.

When RA 711 was approved dividing the province of Zamboanga into Zamboanga del Norte and
Zamboanga del Sur, assets and obligations of the previous Zamboanga province were divided as
follows: 54.39% for Zamboanga del Norte and 45.61% for Zamboanga del Sur. Zamboanga del
Norte therefore became entitled to 54.39% of P1,294,244.00, the total value of the lots and
buildings in question, or P704,220.05 payable by Zamboanga City.

The Executive Secretary issued a ruling holding that Zamboanga del Norte had a vested right as
owner of the properties mentioned in Sec. 50 of CA 39, and is entitled to the price thereof, payable
by Zamboanga City. This ruling revoked the previous Cabinet Resolution conveying all the said
50 lots and buildings thereon to Zamboanga City when the provincial capital of the then
Zamboanga Province was transferred to Dipolog.

The Secretary of Finance then authorized the Commissioner of Internal Revenue to deduct an
amount equal to 25% of the regular internal revenue allotment for the City of Zamboanga. The
deductions, all aggregating P57,373.46, was credited to the province of Zamboanga del Norte, in
partial payment of the P704,220.05 due it.

On June 17, 1961, RA 3039 was approved amending Sec. 50 of CA 39 by providing that buildings,
properties and assets belonging to the former province of Zamboanga and located within the City
of Zamboanga are transferred, free of charge, in favor of the said City of Zamboanga.

Consequently, the Secretary of Finance ordered the CIR to stop from effecting further payments
to Zamboanga del Norte and to return to Zamboanga City the sum taken from it out of the internal
revenue allotment of Zamboanga del Norte.

Zamboanga del Norte filed a complaint for relief with Preliminary Mandatory Injunction against
Zamboanga City, the Secretary of Finance and the Commissioner of Internal Revenue. They
prayed that 1) RA 3039 be declared unconstitutional, 2) plaintiff's rights and obligations under
said law be declared, 3) they be reimbursed the sum paid to defendant City, and 4) the latter be
ordered to continue paying the balance of its internal revenue allotments.

The lower court ruled in favor of the plaintiff.

ISSUE:
WON RA 3039 is valid – PARTLY VALID

HELD:
Applying the norm obtaining under the principles constituting the law of Municipal Corporations,
all those of the 50 properties in question which are devoted to public service are deemed public;
the rest remain patrimonial. Under this norm, to be considered public, it is enough that the property
be held and, devoted for governmental purposes like local administration, public education, public
health, etc.

Following this classification, RA 3039 is valid insofar as it affects the lots used as capitol site,
school sites and its grounds, hospital and leprosarium sites and the high school playground sites
— a total of 24 lots — since these were held by the former Zamboanga province in its
governmental capacity and therefore are subject to the absolute control of Congress.

Regarding the several buildings existing on the lots above-mentioned, the records do not disclose
whether they were constructed at the expense of the former Province of Zamboanga. Considering
however the fact that said buildings must have been erected even before 1936 when CA 39 was
enacted and the further fact that provinces then had no power to authorize construction of
buildings at their own expense, it can be assumed that said buildings were erected by the National
Government, using national funds. Even assuming that provincial funds were used, still the
buildings constitute mere accessories to the lands, which are public in nature, and so, they follow
the nature of said lands, i.e., public.

But RA 3039 cannot be applied to deprive Zamboanga del Norte of its share in the value of the
rest of the 26 remaining lots which are patrimonial properties since they are not being utilized for
distinctly, governmental purposes. Moreover, the fact that these 26 lots are registered strengthens
the proposition that they are truly private in nature. However, the fact that the 24 lots used for
governmental purposes are also registered is of no significance since registration cannot convert
public property to private.

It results then that Zamboanga del Norte is still entitled to collect from the City of Zamboanga the
former's 54.39% share in the 26 properties which are patrimonial in nature.

XX
Salas, et al v Jarencio, et al
G.R. No. L-29788 August 30, 1972
Facts:
City of Manila – owner in fee simple of a parcel of land known as Lot 1, Block 557 of Cadastral
Survey of City of Manila, containing an area of 9689.80 sqm. On various dates in 1927, City of
Manila sold portions of the parcel of land. When the last sale was effected August 1924,
Transfer Certificate of Title 22547 covering the residue of the land 7490.10 sam was issued in
the name of City of Manila.

On September 1960, Municipal Board of Manila adopted a resolution requesting the President
to consider the feasibility of declaring the land under Transfer Certificate of Title 25545-25547
as patrimonial property of Manila for the purpose of selling these lots to the actual occupants
thereof. The resolution was then transmitted to the Congress. The bill was then passed by
Congress and approved by President, and became Republic Act 4118, converting the land from
communal property to disposable and alienable land of State.

To implement RA 4118, Land Authority requested City of Manila to deliver the City’s TCT 22547
in order to obtain title thereto in the name of Land Authority. The request was granted with the
knowledge and consent of City mayor, cancelling TCT 22547 and issuing TCT 80876 in the
name of Land Authority.

City of Manila, for some reasons, brought an action to restrain, prohibit, and enjoin Land
Authority and Register of Deeds from implementing RA 4118, and praying for the declaration of
RA 4118 as unconstitutional.
Trial court declared RA 4118 to be unconstitutional and invalid on the ground that it deprived
City of its property without due process of law and payment of just compensation.

Land Authority and Register of Deeds argued that the land is a communal land, or a portion of
public domain owned by State; that the land has not been used by City of Manila for any public
purpose; that it was originally a communal land not because it was needed in connection with its
organisation as a municipality but rather for the common use of its inhabitants; that the City
mayor merely enjoys the usufruct over said land and its exercise of acts of ownership by selling
parts thereof did not necessarily convert the land into a patrimonial property of City of Manila
nor divert the State of its paramount title.

Issue:
Whether the aforementioned land is a private or patrimonial property of the City of Manila.
Held:
The land is public property.

As a general rule, regardless of the source or classification of the land in the possession of
municipality, excepting those which it acquired in its own funds in its private or corporate
capacity, such property is held for the State for the benefit of its inhabitants, whether it be for
governmental or proprietary purposes. The legal situation is the same if the State itself holds the
property and puts it to a different use.

When it comes to property of municipality which it did not acquire in its private or corporate
capacity with its own funds (the land was originally given to City by Spain), the legislature can
transfer its administration and disposition to an agency of the National Government to be
disposed of according to its discretion. Here it did so in obedience to the constitutional mandate
of promoting social justice to insure the well-being and economic security of the people.

The property was not acquired by the City of Manila with its own funds in its private or
proprietary capacity. The land was part of the territory of City of Manila granted by sovereign in
its creation. Furthermore, City expressly recognised the paramount title of the State over its land
when it requested the President to consider the feasibility of declaring the lot as patrimonial
property for selling.

There could be no more blatant recognition of the fact that said land belongs to the State and
was simply granted in usufruct to the City of Manila for municipal purposes. But since the City
did not actually use said land for any recognized public purpose and allowed it to remain idle
and unoccupied for a long time until it was overrun by squatters, no presumption of State grant
of ownership in favor of the City of Manila may be acquiesced in to justify the claim that it is its
own private or patrimonial property.

WHEREFORE, the appealed decision is hereby reversed, and petitioners shall proceed with the
free and untrammeled implementation of Republic Act No. 4118 without any obstacle from the
respondents. Without costs.
 XXI
Rabuco v. Villegas
G.R. No. L-24661

DOCTRINES:
1. RA 3120 converting communal lands into alienable lands is constitutional.
2. Legislative body has wide discretion to reclassify State property.

FACTS:
The legislatures enacted RA3120 converting certain parcels of land in the City of Manila which
are reserved as communal property into disposable or alienable lands of the state and providing
for their subdivision and sale. It includes a lot located in San Andres, Malate, which was occupied
by petitioners (illegal settlers). The City Mayor of Manila wanted to demolish and eject said
occupants. Subsequently, a large fire gutted the Malate area, which includes said property. City
officials then took over the lot and kept petitioners reconstructing or repairing their burned
dwellings. The petitioners insisted that RA 3120 should be implemented to them as the tenants
and bona fide occupants thereof.

ISSUE:
Can a communal property be converted into disposable or alienable land through legislation? --
YES

HELD:
The Court herein upholds the constitutionality of Republic Act 3120 on the strength of the
established doctrine that the subdivision of communal land of the State (although titled in the
name of the municipal corporation) and conveyance of the resulting subdivision lots by sale on
installment basis to bona fide occupants by Congressional authorization and disposition does not
constitute infringements of the due process clause or the eminent domain provisions of the
Constitution but operates simply as a manifestation of the legislature's right of control and power
to deal with State property.

Respondents city officials' contention that the Act must be stricken down as unconstitutional for
depriving the city of Manila of the lots in question and providing for their sale in subdivided small
lots to bona fide occupants or tenants without payment of just compensation is untenable and
without basis, since the lots in question are manifestly owned by the city in its public and
governmental capacity and are therefore public property over which Congress had absolute
control as distinguished from patrimonial property owned by it in its private or proprietary capacity
of which it could not be deprived without due process and without just compensation.

Here, Republic Act 3120 expressly declared that the properties were "reserved as communal
property" and ordered their conversion into "disposable and alienable lands of the State" for sale
in small lots to the bona fide occupants thereof. It is established doctrine that the act of classifying
State property calls for the exercise of wide discretionary legislative power which will not be
interfered with by the courts.

The case of Salas vs. Jarencio wherein the Court upheld the constitutionality of Republic Act 4118
whereby Congress in identical terms as in Republic Act 3120 likewise converted another city lot
(Lot 1-B-2-B of Block 557 of the cadastral survey of Manila also in Malate) which was reserved
as communal property into disposable land of the State for resale in small lots by the Land Tenure,
Administration to the bona fide occupants is controlling in the case at bar.
The Court therein reaffirmed the established general rule that "regardless of the source or
classification of land in the possession of a municipality, excepting those acquired with its own
funds in its private or corporate capacity, such property is held in trust for the State for the benefit
of its inhabitants, whether it be for governmental or proprietary purposes. It holds such lands
subject to the paramount power of the legislature to dispose of the same, for after all it owes its
creation to it as an agent for the performance of a part of its public work, the municipality being
but a subdivision or instrumentality thereof for purposes of local administration. Accordingly, the
legal situation is the same as if the State itself holds the property and puts it to a different use" 9
and stressed that "the property, as has been previously shown, was not acquired by the City of
Manila with its own funds in its private or proprietary capacity. That it has in its name a registered
title is not questioned, but this title should be deemed to be held in trust for the State as the land
covered thereby was part of the territory of the City of Manila granted by the sovereign upon its
creation."

There as here, the Court holds that the Acts in question (Republic Acts 4118 in Salas and Republic
Act 3120 in the case at bar) were intended to 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: ... The subdivision of
the land and conveyance of the resulting subdivision lots to the occupants by Congressional
authorization does not operate as an exercise of the power of eminent domain without just
compensation in violation of Section 1, subsection (2), Article III of the Constitution, but simply as
a manifestation of its right and power to deal with state property."

XXII
Macasiano v. Diokno
G.R. No. 97764

DOCTRINE: "Verily, the powers of a local government unit are not absolute. They are subject to
limitations laid down by the Constitution and the laws such as our Civil Code. Moreover, the
exercise of such powers should be subservient to paramount considerations of health and well-
being of the members of the community."

FACTS:
On June 13, 1990, the respondent municipality passed Ordinance No. 86, Series of 1990 which
authorized the closure of J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena
Streets located at Baclaran, Paranaque, Metro Manila and the establishment of a flea market
thereon. July 20, 1990, the Metropolitan Manila Authority approved Ordinance No. 86, s. 1990 of
the municipal council of respondent municipality subject to the following conditions:
1. That the aforenamed streets are not used for vehicular traffic, and that the majority of the
residents do not oppose the establishment of the flea market/vending areas thereon;
2. That the 2-meter middle road to be used as flea market/vending area shall be marked
distinctly, and that the 2 meters on both sides of the road shall be used by pedestrians;
3. That the time during which the vending area is to be used shall be clearly designated;
4. That the use of the vending areas shall be temporary and shall be closed once the
reclaimed areas are developed and donated by the Public Estate Authority.

June 20, 1990, Mayor Walfrido N. Ferrer to enter into contract with any service cooperative for
the establishment, operation, maintenance and management of flea markets and/or vending
areas. On August 8, 1990, respondent municipality and respondent Palanyag, a service
cooperative, entered into an agreement whereby the latter shall operate, maintain and manage
the flea market in the aforementioned streets with the obligation to remit dues to the treasury of
the municipal government of Paranaque. Consequently, market stalls were put up by respondent
Palanyag on the said streets. On September 13, 1990, petitioner Brig. Gen. Macasiano, PNP
Superintendent of the Metropolitan Traffic Command, ordered the destruction and confiscation of
stalls along G.G. Cruz and J. Gabriel St. in Baclaran. These stalls were later returned to
respondent Palanyag. October 16, 1990, petitioner Brig. General Macasiano wrote a letter to
respondent Palanyag giving the latter ten (10) days to discontinue the flea market; otherwise, the
market stalls shall be dismantled. Hence, on October 23, 1990, respondents municipality and
Palanyag filed with the trial court a joint petition for prohibition and mandamus with damages and
prayer for preliminary injunction, to which the petitioner filed his memorandum/opposition to the
issuance of the writ of preliminary injunction. October 24, 1990, the trial court issued a temporary
restraining order to enjoin petitioner from enforcing his letter-order of October 16, 1990 pending
the hearing on the motion for writ of preliminary injunction. On December 17, 1990, the trial court
issued an order upholding the validity of Ordinance No. 86 s. 1990 of the Municipality of
Paranaque and enjoining petitioner Brig. Gen. Macasiano from enforcing his letter-order against
respondent Palanyag.

ISSUE:
W/N an ordinance or resolution issued by the municipal council of Paranaque authorizing the
lease and use of public streets or thoroughfares as sites for flea markets is valid. -- NO

HELD:
The Executive Order issued by acting Mayor Robles authorizing the use of Heroes del '96 Street
as a vending area for stallholders who were granted licenses by the city government contravenes
the general law that reserves city streets and roads for public use. Mayor Robles' Executive Order
may not infringe upon the vested right of the public to use city streets for the purpose they were
intended to serve: i.e., as arteries of travel for vehicles and pedestrians. The Solicitor General
furthers the matter with his observation, "Verily, the powers of a local government unit are not
absolute. They are subject to limitations laid down by the Constitution and the laws such as our
Civil Code. Moreover, the exercise of such powers should be subservient to paramount
considerations of health and well-being of the members of the community. Every local government
unit has the sworn obligation to enact measures that will enhance the public health, safety and
convenience, maintain peace and order, and promote the general prosperity of the inhabitants of
the local units. Based on this objective, the local government should refrain from acting towards
that which might prejudice or adversely affect the general welfare." Moreover, the municipality did
not even comply with the guidelines set forth by the Metropolitan Manila Authority. Even if we
were to argue for purposes of debate, the city of Paranaque's claim would still be bereft and
lacking in reason.

ACCORDINGLY, the petition is GRANTED and the decision of the respondent Regional Trial
Court dated December 17, 1990 which granted the writ of preliminary injunction enjoining
petitioner as PNP Superintendent, Metropolitan Traffic Command from enforcing the demolition
of market stalls along J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena streets
is hereby RESERVED and SET ASIDE.
SO ORDERED.
 XXIII
Republic v. CA
131 SCRA 532

DOCTRINE: Laguna de bay is a lake and that part around it which becomes covered with water
four to five months a year, not due to tidal actions, but due to rains cannot be considered as part
of the bed or basin of Laguna de Bar nor as a foreshore land; Property being so, the land is
registerable under the LRA.

FACTS:
The subject land in this case is situated 20 meters away from the shores of Laguna de Bay. Said
land was owned by Benedicto del Rio. After the death of Benedicto, the land was acquired by his
son Santos Del Rio. The private oppositors in this case sought and obtained permission from
Santos Del Rio to construct duck houses on said land. The private oppositors, however, violated
their agreement and instead constructed residential houses thereon. Santos then filed an
ejectment suit against the private oppositors and later on sought to register the land. Meanwhile,
private oppositors simultaneously filed their respective sales applications with Bureau of Lands,
and they opposed Santos del Rio’s application for registration.

The CFI of Laguna dismissed the application for registration. Applicant appealed and obtained a
favourable judgment from the Court of Appeals. The Director of Lands and the private oppositors
filed their respective petitions for review on said decision to the Supreme Court.

The Director of Lands contends that since a portion of the land is covered with water four to five
months a year, the same is part of the lake bed of Laguna de Bay and therefore it cannot be the
subject of registration.

ISSUE:
1. Whether or not the parcel of land in question is public land; and
2. Whether or not applicant private respondent has registerable title to the land.

HELD:
The inundation of a portion of the land is not due to "flux and reflux of tides." It cannot be
considered a foreshore land, hence it is not a public land and therefore capable of registration as
private property provided that the applicant proves that he has a registerable title. The purpose of
land registration under the Torrens System is not the acquisition of lands but only the registration
of title which applicant already possesses over the land.

While it is true that by themselves tax receipts and declarations of ownership for taxation purposes
are not incontrovertible evidence of ownership, they become strong evidence of ownership
acquired by prescription when accompanied by proof of actual possession of the property.
Applicant by himself and through his father before him, has been in open, continuous, public,
peaceful, exclusive and adverse possession of the disputed land for more than thirty (30) years
and has presented tax declarations and tax receipts.

Applicant has more than satisfied the legal requirements. Thus, he is clearly entitled to the
registration in his favor of said land.

Republic v. Alagad
[G.R. No. 66807. January 26, 1989.]
Topic: Non-Registrable Properties (Properties of Public Dominion)

Facts:On Oct. 11, 1951, Melitona, Carmen (with spouse Espiridion Kolimlim), Justo, Carlos,
Librada (with spouse Emerson Abano), Demetrio, and Antonio Alagad filed an application for
registration of their title over a parcel of land situated at Linga, Pila, Laguna, with an area of
8.1263 hectares, which was amended after the land was divided into two parcels, namely, Lot 1
withan area of 5.2476 hectares and Lot 2 with an area of 2.8421 hectares. The Republic
opposed the application on the stereo-typed ground that applicants and their predecessors have
not been in possession of the land openly, continuously, publicly and adverselyunder a bona
fide claim of ownership since July 26, 1894 and the land has not ceased to be a part of the
public domain. It appearsthat barrio folk also opposed the application. On 16 January 1956, by
virtue of a final judgment in said case, supplemented by orders issued on March 21, 1956 and
Aug. 13, 1956, the Alagads were declared owners of Lot 1 and the remaining portion, or Lot2,
was declared public land. In August 1966, the Alagads filed before the Municipal Court of Pila,
Laguna an action to evict the barrio folk occupying portions of Lot 1. On 8 August 1968,
judgment was rendered in the eviction case ordering the barrio folk therein to return possession
of the premises to the Alagads. The barrio folk did not appeal.

The Republic filed a petition for “annulment of title and reversion, insofar as the 1.42 hectare
northwestern portion on end of Lot 1 is concerned, contending that such is foreshore land, and
that the Alagads could not have had an imperfect title to it as it was the barrio folk who filled up
the land to elevate the land to its present condition. The Court, issued a writ of preliminary
injunction enjoining the Provincial Sheriff of Laguna or his deputies from enforcing a writ of
execution, and the Alagads from selling, mortgaging, disposing or otherwise entering into any
transaction affecting the area. The case was set for pre-trial on July 6, 1971, to which the
attorney representing the Republic did not appear. On July 16, 1971, the court dismissed the
complaint. TheRepublic filed a motion for reconsideration, was set for hearing, and finally
denied by the court. Appeal was made to the Court of Appeals, which sustained the trial court
for failure to show in the record on appeal that the appeal was perfected on time. Hence, the
appeal.The Supreme Court reversed the decision of the lower courts, and reinstated the
Republic’s complaint and thus remanded the caseto the trial court for further proceedings.

Issue:Whether or not a property of public dominion is capable of appropriation?

Held:

"Property, according to the Civil Code, is either of public dominion or of private ownership
." Property is of public dominion if it is:

(1) ... intended for public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads and others of similar
character; 14 or if it:

(2) . . . belong[s] to the State, without being for public use, and are intended for
some public service or for the development of the national wealth. 15

All other property of the State, it is provided further, which is not of the character
mentioned in ... article [4201, is patrimonial property,16 meaning to say, property
'open to disposition17 by the Government, or otherwise, property pertaining to the
national domain, or public lands.18 Property of the public dominion, on the other
 hand, refers to things held by the State by regalian right. They are things res
publicae in nature and hence, incapable of private appropriation. Thus, under the
present Constitution, [w]ith the exception of agricultural lands, all other natural
resources shall not be alienated.'19

Specifically:

ART. 502. The following are of public dominion:

(1) Rivers and their natural beds;

(2) Continuous or intermittent waters of springs and brooks

running in their natural beds and the beds themselves;

(3) Waters rising continuously or intermittently on lands of public

dominion;

(4) Lakes and lagoons formed by Nature on public lands, and their
beds;

(5) Rain waters running through ravines or sand beds, which are
also of public dominion;

(6) Subterranean waters on public lands;

(7) Waters found within the zone of operation of public works,

even if constructed by a contractor;

(8) Waters rising continuously or intermittently on lands belonging

to private persons, to the State, to a province, or to a city or
municipality from the moment they leave such lands;

(9) The waste waters of fountains, sewers and public

establishments.20

So also is it ordained by the Spanish Law of Waters of August 3, 1866:

Art. 44. Natural ponds and lakes existing upon public lands and fed by public
waters, belong to the public domain.

Lakes, ponds, and pools existing upon the lands of private individuals, or the State or provinces,
belong to the respective owners of such lands, and those situated upon lands of communal use
belong to their respective pueblos.21

Assuming, therefore, for purposes of this petition, that the lands subject of the Republic's
reversion efforts are foreshore in nature, the Republic has legitimate reason to demand
reconveyance. In that case, res judicata or estoppel is no defense.22
Of course, whether or not the properties in question are, indeed, foreshore lands is the core of
controversy. According to the trial court, the aforementioned parcel of land is a portion of the
public domain belonging to the Republic of the Philippines, 23 and hence, available disposition
and registration. As we have pointed out, the Government holds otherwise, and that as
foreshore laud, it is not registerable.

The question, so it follows, is one of fact: Is the parcel foreshore or is it part and parcel of the
public domain?

Laguna de Bay has long been recognized as a lake .24 Thus:

Laguna de Bay is a body of water formed in depressions of the earth; it contains fresh water
coming from rivers and brooks or springs, and is connected with Manila Bay by the Pasig River.
According to the definition just quoted, Laguna de Bay is a lake. 25

And, "[i]nasmuch as Laguna de Bay is a lake, so Colegio de San Jose further tells us, "we must
resort to the legal provisions governing the ownership and use of lakes and their beds and
shores, in order to determine the character and ownership of the parcels of land in
question.26 The recourse to legal provisions is necessary, for under Article 74 of the Law of
Waters, [T]he natural bed or basin of lakes ... is the ground covered by their waters when at
their highest ordinary depth. 27 and in which case, it forms part of the national dominion. When
Laguna de Bay's waters are at their highest ordinary depth has been defined as:

... the highest depth of the waters of Laguna de Bay during the dry season, such
depth being the regular, common, natural, which occurs always or most of the
time during the year . . . 28

Otherwise, where the rise in water level is due to the extraordinary action of nature, rainfall for
instance, the portions inundated thereby are not considered part of the bed or basin of the body
of water in question. It cannot therefore be said to be foreshore land but land outside of the
public dominion, and land capable of registration as private property.

A foreshore land, on the other hand, has been defined as follows:

. . . that part of (the land) which is between high and low water and left dry by the
flux and reflux of the tides... 29

The strip of land that lies between the high and low water marks and that is
alternatively wet and dry according to the flow of the tide.30

If the submergence, however, of the land is due to precipitation, it does not become foreshore,
despite its proximity to the waters.

The case, then, has to be decided alongside these principles and regretfully, the Court cannot
make a ruling, in the first place, because it is not a trier of facts, and in the second, it is in
possession of no evidence to assist it in arriving at a conclusive disposition 31 We therefore
remand the case to the court a quo to determine whether or not the property subject of
controversy is foreshore. We, consequently, reverse both the Court of Appeals and the trial
court and reinstate the Republic's complaint.
WHEREFORE, this case is hereby REMANDED to the trial court for further proceedings.

XXIV
Binalay v. Manalo
195 SCRA 374

DOCTRINE: For accretion to take place as a mode of acquiring ownership over the land, the land
formed should be directly adjacent to the land owned.

FACTS:
Guillermo Manalo bought parcels of land in Isabela; 8.65 hectares from was acquired from
Faustino Taccad and 1.80 hectares was bought from Gregorio Taguba. The parcels of land were
described as having the Cagayan River on their west.

During a cadastral survey conducted, the two parcels of land was consolidated into one lot and
was designated as Lot No. 307. But since the survey was conducted on a rainy day, a portion of
the land bought from Taccad was covered with water and was not included in Lot No. 37.

The Sketch Plan shows that the Cagayan River running from south to north, forks at a certain
point to form 2 branches (eastern and western branches) and then unites at the other end, further
north, to form a narrow strip of land. It appears that eastern branch of the river cuts through the
land of Manalo and is inundated with water during rainy season. The bed of the eastern branch
is the unsurveyed portion of the land belonging to Manalo, and is, for most part of the year (about
8 months), dry and susceptible to cultivation.

Lot 821 is located directly opposite Lot 307 and is separated from it during the rainy season. Being
a portion of the land bought from Taccad, Manalo claims that Lot 821 also belongs to him by way
of accretion to the submerged portion of the property to which it is adjacent. Petitioners (Binalay
et al) however claims ownership over the land as they have possessed it, occupied it and have
cultivated it.

ISSUES:
Whether or not Manalo owns Lot 821?

HELD:
The Court held in the negative saying that 1.) it is part of public dominion and 2.) it fails to meet
all the requisites needed for accretion to take place.

First, it must be noted that Art. 70 of the Law of Waters defines the natural bed or channel of a
creek or river as the ground covered by its waters during the highest floods. The periodic swelling
of the water was taken into consideration and it was concluded that the submerged portion of the
land during rainy days forms part of the natural bed of the river. In connection with this conclusion,
Art. 420 of the Civil Code provides that rivers form part of public dominion.

Second, accretion as a mode of acquiring property under Art. 457 of the Civil Code requires the
concurrence of 3 requisites: 1) that the deposition of soil or sediment be gradual and
imperceptible; 2) that it be the result of the action of the waters of the river (or sea); and 3) that
the land where accretion takes place is adjacent to the banks of rivers (or the sea coast). In this
case, the claimed accretion lies on the bank of the river not adjacent to Lot 307 but directly
opposite Lot 307 across the river.
Lastly, SC held that it is difficult to suppose that a land with an area of 22.72 hectares resulted
from slow accretion to another lot of almost equal size. If Manalo’s contention is accepted, then
his land would have doubled in a span of 10 years.

All these considered, the Court held that the land in question is part of public dominion and neither
Manalo nor the petitioners were held owners of the land.