2C PROPERTY

CLASS CASE DIGESTS

7 September 2020
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CASE DOCTRINES
Ladera v. Hodges Vol. 48 No. 12 Official Gazette 5374

The law makes no distinction as to whether the owner of the land is or is not the owner of
the building. In the case of immovable by destination, the code requires that they be
placed by the owner of the tenement, in order to acquire the same nature or consideration
of real property. In cases of immovable by incorporation, the code nowhere required that
the attachment or incorporation be made by the owner of the land. The only criterion is
union or incorporation with the soil.

Mindanao Bus Co. v. City Assessor and Treasurer, G.R. No. L-17870, September
29, 1962

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

must be the essential and principal elements of an industry 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 ship, and its rolling equipment is repaired or serviced
in a shop belonging to another, the tolls and equipment in its repair shop are merely
incidental, and may not be considered immovables.

Makati Leasing & Finance Corp., v. Wearever Textile Mills, Inc., G.R. No. L-58469.
May 16, 1983

Parties to a contract may by agreement treat as personal property that which by nature
would be real property, as long as no interests of third parties would be prejudiced
thereby.

Santos Evangelista v. Alto Surety & Insurance Co., Inc. 103 Phil. 401 (1958)

A house is not a personal property, much less a debt, credit or other personal property
capable of manual delivery, but immovable property. 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.

Tsai v. Court of Appeals, G.R. Nos. 120098 and 120109, October 2, 2001

Despite the fact that the machines and equipment are heavy, bolted or cemented on the
real property mortgaged do not make them ipso facto immovable. If there is a stipulation,
an immovable property may be considered a personal property as when it is used as
security in the payment of an obligation where a chattel mortgage is executed over it.

Serg’s Products, Inc. v. PCI Leasing and Finance, Inc., G.R. No. 137705, August 22,
2000

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.

Burgos, Sr. v. Chief of Staff, G.R. No. 64261, December 26, 1984

Machinery which is movable by nature becomes immobilized when placed by the owner
of the tenement, property or plant, but not so when placed by a tenant, usufructuary, or
any other person having only a temporary right, unless such person acted as the agent
of the owner.

Lopez v. Orosa, Jr., and Plaza Theater, Inc. 103 Phil. 98 (1968)

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.

The interest of the mortgagee over the land is superior and cannot be made subject to the said
materialman's lien.

Yap v. Tañada, G.R. No. L-32917, July 18, 1988

The Civil Code considers as immovable property, among others, anything "attached to an
immovable in a fixed manner, in such a way that it cannot be separated therefrom without
breaking the material or deterioration of the object."
Machinery & Engineering Supplies, Inc. v. Court of Appeals 96 Phil. 70 (1954)

Machinery and equipment which appears to be attached to the land, particularly to the
concrete foundation of a building, in a fixed manner, in such a way that the former could
not be separated from the latter without breaking the material or deterioration of the object
is considered an immovable object. It does not matter if it can be mobilized for its purpose,
the intent of permanence is one which is taken into consideration. Real property is not
subject to replevin—it is well settled that, when the restitution of what has been ordered,
the goods in question shall be returned in substantially the same condition as when taken.

Manila Electric Company v. City Assessor, G.R. No. 166102, August 5, 2015

For determining whether machinery is real property subject to real property tax, the
definition and requirements under the LGC are controlling, not the NCC. Sections 199(o)
and 232 of the LGC, respectively, gives an extensive definition of what constitutes
“machinery” and unequivocally subjects such machinery to real property tax.

Capitol Wireless, Inc., v. Provincial Treasurer of Batangas, G.R. No. 180110, May
30, 2016

In disputes involving real property taxation, the general rule is to require the taxpayer to
first avail of administrative remedies and pay the tax under protest before allowing any
resort to a judicial action, except when the assessment itself is alleged to be illegal or is
made without legal authority.

FELS Energy v. Province of Batangas, GR 168557, February 16, 2007

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 and work.

Laurel v. Garcia, G.R. Nos. 92013, 92047, July 25, 1990

A property of public dominion 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. It is intended for
the common and public welfare and cannot be the object of appropriation.
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]).

Rabuco v. Villegas, G.R. Nos. L-24661, L-24915, L-24916, February 28, 1974

Lands that are manifestly owned by the city in its public and governmental capacity and
are 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.

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.

Macasiano v. Diokno, G.R. No. 97764, August 10, 1992

Properties of the local government which are devoted to public service are deemed public
and are under the absolute control of Congress.

Properties of public dominion devoted to public use and made available to the public in
general are outside the commerce of men and cannot be disposed of or leased by the
local government unit to private persons.

Republic v. Court of Appeals, G.R. No. 100709, November 14, 1997

Encumbrance has been defined as “[a]nything that impairs the use or transfer of property;
anything which constitutes a burden on the title; a burden or charge upon property; a
claim or lien upon property.”

In a contract of lease, or mortgage is an encumbrance, since the owner temporarily grants

the use of his or her property to another who undertakes to pay rent, and the latter
constitutes a burden on the title. Even if only part of the property has been sold or
alienated, such is a sufficient cause for the reversion of the whole estate to the State.
A foreshore land is that part of the land which is between high and low water and left dry
by the flux and reflux of the tides. It is 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.
Such land then passes to the public domain, but the owner thus dispossessed does not
retain any right to the natural products resulting from their new nature; it is a de facto case
of eminent domain, and not subject to indemnity.

Province of Zamboanga del Norte v. City of Zamboanga , G.R. No. L-24440, March
28, 1968

If the property is owned by the municipality (meaning municipal corporation) in its public
and governmental capacity, the property is public and Congress has absolute control over
it. But if the property is owned in its private or proprietary capacity, then it is patrimonial
and Congress has no absolute control. The municipality cannot be deprived of it without
due process and payment of just compensation.

Chaves v. Public Estates Authority, G.R. No. 133250, July 9, 2002

Under Sec. 2, Article XII of the Constitution, the foreshore and submerged areas of
Manila Bay are part of lands of the public domain, and consequently owned by the State.
As such, these areas shall not be alienated, unless they are classified as agricultural
lands of the public domain.

Villarico v. Sarmiento, G.R. No. 136438, November 11, 2004

A lot on which stairways were built for the use of the people as passageway to the
highway is property of public dominion covered by the first paragraph of Article 420 of the
Civil Code. Public use is “use that is not confined to privileged individuals, but is open to
the indefinite public.”

Property of public dominion is outside the commerce of man and hence (1) it cannot be
alienated or leased or otherwise be subject matter of contracts; (2) cannot be acquired by
prescription against the State; (3) is not subject to attachment and execution; and (4)
cannot be burned by any voluntary easement.

Heirs of Malabanan v. Republic, G.R. No. 179987, September 3, 2013

Lands classified as forest or timber, mineral, or national parks are not susceptible of
alienation or disposition unless they are reclassified as agricultural. A positive act of the
Government is necessary to enable such reclassification, and the exclusive prerogative
to classify public lands under existing laws is vested in the Executive Departm ent, not in
the courts.

Republic v. Santos, III, G.R. No. 160453, November 12, 2012

By law, accretion — the gradual and imperceptible deposit made through the effects of
the current of the water — belongs to the owner of the land adjacent to the banks of rivers
where it forms. The drying up of the river is not accretion. Hence, the dried-up river bed
belongs to the State as property of public dominion, not to the riparian owner, unless a
law vests the ownership in some other person.

Navy Officers’ Village Association, Inc. v. Republic, G.R. No. 177168, August 3, 2015

Parcels of land classified as reservations for public or quasi-public uses under Section 9
(d) of C.A. No. 141 are still non-alienable and non- disposable, even though they are, by
the general classification under Section 6, alienable and disposable lands of the public
domain. By specific declaration under Section 88, in relation with Section 8, these lands
classified as reservations are non-alienable and non-disposable.

City of Lapu-Lapu v. PEZA, G.R. Nos. 184203, 187583, November 26, 2014

Properties of public dominion, even if titled in the name of an instrumentality, remained

owned by the Republic of the Philippines, thus exempting such properties from taxes
pursuant to the Local Government Code.

Republic v. Aboitiz, G.R. No. 174626, October 23, 2013

For acquisitive prescription to commence and operate against the State, the land must
not only be classified as alienable and disposable, but the State must also expressly
declare through either a law enacted by Congress or a proclamation issued by the
President that the subject land is no longer retained for public service or the development
of the national wealth or that the property has been converted into patrimonial.

Alolino v. Flores, G.R. No. 198774, April 4, 2016

Properties of Local Government Units (LGUs) are classified as either property for public
use or patrimonial property. Article 424 of the Civil Code distinguishes between the two
classifications. From the said article, the barrio road adjacent to petitioner’s house is
property of public dominion devoted to public use.
A barrio road is outside the commerce of man and as a consequence: (1) it is not alienable
or disposable; (2) it is not subject to registration under Presidential Decree No. 1529 and
cannot be the subject of a Torrens title; (3) it is not susceptible to prescription; (4) it cannot
be leased, sold, or otherwise be the object of a contract (5) it is not subject to attachment
and execution; and (6) it cannot be burdened by any voluntary easements.To convert a
barrio road into patrimonial property, the law requires the LGU to enact an ordinance,
approved by at least two-thirds of the Sanggunian members, permanently closing the
road. In this case, the Sanggunian did not enact an ordinance but merely passed a
resolution

Dumo v. Republic of the Philippines, G.R.No. 218269, June 6, 2018

Land of the public domain is converted into patrimonial property when there is an express
declaration by the State that the public dominion property is no longer intended for public
service or the development of the national wealth. Mere classification of agricultural land
as alienable and disposable does not make such land patrimonial property of the State –
an express declaration by the State that such land is no longer intended for public use,
public service or the development of national wealth is imperative. This is because even
with such classification, the land remains to be part of the lands of the public domain.

Republic of the Philippines v. Sps. Alejendre, G.R. No. 217336, October 17, 2018

Public lands not shown to have been classified, reclassified or released as alienable
agricultural land or alienated to a private person by the State remain part of the inalienable
lands of public domain. Therefore, the onus to overturn, by incontrovertible evidence, the
presumption that the land subject of an application for registration is alienable and
disposable rests with the applicant.

Hi-Lon Manifacturing Inc. v. COA, G.R. No. 210669, August 1, 2017

As a property of public dominion akin to a public thoroughfare, a road right-of-way cannot

be registered in the name of private persons under the Land Registration Law and be the
subject of a Torrens Title; and if erroneously included in a Torrens Title, the land involved
remains as such a property of public dominion.
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 CASE DIGESTS

Ladera v. Hodges
G. R. No. 8027-R, September 23, 1952
Reyes, J.B.L., J.

Facts: Petitioner Ladera and Respondent Hodges entered into a contract whereby the
latter promised to sell a parcel of land stipulating therein that failure of the purchaser to
make the monthly payment within sixty (60) days after it became due, the contract would
be taken and considered as annulled and rescinded.

After the execution of the contract, the petitioner built a house on the lot. However, the
respondent rescinded the contract and filed an action for ejectment due to failure to pay
the agreed monthly installments.

MTC rendered a decision upon the agreement of the parties that Ladera should vacate
and surrender the possession of the lot. The sheriff posted the notices of the sale but did
not publish the same in a newspaper of general circulation. Later on, the sheriff sold the
house to Magno at an auction sale. Respondent sold the lot to Villa but on the same day
the latter also purchased the house from Magno.

As a result, Ladera sought to redeem the house. He filed an action to set aside the sale
and recover the house. While the respondent contended that a house built on a land
owned by another person should be considered as movable or personal property.

Issue: Whether the house built on a land owned by another be regarded as movable or
personal property.

Held: No. The law makes no distinction as to whether the owner of the land is or is not
the owner of the building. In the case of immovable by destination, the code requires that
they be placed by the owner of the tenement, in order to acquire the same nature or
consideration of real property. In cases of immovable by incorporation, the code nowhere
required that the attachment or incorporation be made by the owner of the land. The only
criterion is union or incorporation with the soil.

Since Ladera did not declare his house to be a chattel mortgage, hence the property is
immovable or real property. Moreover, the publication in a newspaper of general
circulation was indispensable. It being admitted that no publication was ever made, the
execution sale was void and conferred no title on the purchaser.
Mindanao Bus Co. v. City Assessor and Treasurer,
G.R. No. L-17870, September 29, 1962
Labrador, J.

Facts: Petitioner, Mindanao Bus Company, is a public utility solely engaged in

transporting passengers and cargoes by motor trucks, over its authorized lines in
Mindanao. The machineries sought to be assessed by respondent as real properties are
engines and other machineries. Said machineries are sitting on platforms. Petitioner is
the owner of the land where it maintains a garage for its motor trucks; a repair shop;
blacksmith; and carpentry shops. Said machineries are placed therein. In addition, said
machineries were used to make trucks, to construct the trucks’ bodies, and repair the
trucks to be serviceable.

Respondent, City Assessor of Cagayan de Oro, assessed realty tax for petitioner’s
maintenance and repair equipment. Petitioner then appealed said assessment to co-
respondent, Board of Tax Appeals, on the ground that the subject machineries are not
realty. However, said board sustained the city assessor. Hence, petitioner filed with the
Court of Tax Appeals for review, who also sustained the respondent’s ruling.

Petitioners aver that said court erred as the questioned properties were movable
properties, not subject to realty tax. On the other hand, respondents contend that said
equipment, though movable, are immobilized by destination, in accordance with Article
415(5) of the New Civil Code.

Issue: Whether said machineries are immovable properties

Held: No. Article 415, par. 5 of the Civil Code provides: The following are immovable
properties:“(5) Machinery, receptacles, instruments or implements intended by the owner
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.”

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. The tools and equipment in question in this instant
case are, by their nature, not essential and principal elements of petitioner's business of
transporting passengers and cargoes by motor trucks. They are merely incidentals—
acquired as movables and used only for expediency to improve its service. Even without
such tools and equipment its business may be carried on.
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.

Makati Leasing & Finance Corp., v. Wearever Textile Mills, Inc.

G.R. No. L-58469. May 16, 1983
De Castro, J.

Facts: In order to obtain financial accommodations from petitioner Makati Leasing and
Finance Corporation, the private respondent Wearever Textile Mills, Inc., discounted and
assigned several receivables with the former under a Receivable Purchase Agreement.
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.

Respondent defaulted on the obligation. The trial court issued a writ of seizure upon
petitioner’s application for replevin. The sheriff enforcing the seizure order of the trial court
removed the main drive motor of the subject machinery.

The Court of Appeals ordered the return of the drive motor seized by the sheriff 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 enforce the writ was to take the main drive motor of said
machinery.

Issue: Whether subject machinery is real property or personal property.

Held: The Court held that the subject machinery is personal property.

If a house of strong materials, as held in a previous 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.
Santos Evangelista v. Alto Surety & Insurance Co.
G.R. No. L-11139 April 23, 1958
Concepcion, J:

Facts: On June 4, 1949, petitioner, Santos Evangelista, instituted Civil Case No. 8235
entitled “Santos Evangelista v Ricardo Rivera” for a sum of money. On the same date, he
obtained a writ of attachment, which was levied upon a house, built by Rivera.

The judgment was in favor of Evangelista, who bought the same house through a public
auction as a compliance with the writ of execution issued in the said case. When
Evangelista sought to take possession of the house, Rivera refused. According to Rivera,
he can not surrender the house because the same is leased to Alto Surety & Insurance
Co Inc.

It appears that a definite deed of sale of the same house had been issued to herein
respondent as the highest bidder at an auction held on September 29, 1950. Evangelista
filed an action against Alto Surety and Rivera to secure title and possession of the
disputed house on which the respondent answered that he has a better right to the house
because the sale was executed earlier than the sale to Evangelista.

Issue: Whether or not the house of Ricardo Rivera should be dealt with as an immovable
property for the purpose of attachment.

Held: The said house is an immovable property. Applying the case of Ladera v 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 a usufructuary or lessee xxx”. 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 the principle, nor said view, is applicable to strangers to said contract.

Tsai v. Court of Appeals

G.R. Nos. 120098 and 120109, October 2, 2001
Quisimbing, J.

Facts: EVERTEX obtained a loan from PBCOM. As security, a deed of Real and Chattel
Mortgage over its lot and the chattels located therein was executed. Upon the execution
of 2nd mortgage, EVERTEX purchased various machines and equipment. Later on,
however, EVERTEX filed insolvency proceedings and its properties were sold in a public
auction which included the machineries and equipment. PBCOM won as highest bidder
and consolidated its ownership over the lot and all the properties in it. Consequently, it
leased and subsequently sold the entire factory premises to Tsai. EVERTEX argues that
the contested properties appropriated by PBCOM were not included in the Real and
Chattel Mortgage nor in the Chattel Mortgage executed. Furthermore, it contends that the
nature of the disputed machineries being cemented make them ipso facto immovable.
Both the RTC and CA held that the machineries are not real properties deemed part of
the mortgage.

Issue: Whether or not the machineries which are cemented on a real property are
considered immovable properties

Held: No. Despite the fact that the machines and equipment are heavy, bolted or
cemented on the real property mortgaged do not make them ipso facto immovable. If
there is a stipulation, an immovable property may be considered a personal property as
when it is used as security in the payment of an obligation where a chattel mortgage is
executed over it. While the subject properties appear to be immobile, a perusal of the
contract of Real and Chattel Mortgage executed by the parties gives a contrary indication.
iI indeed their intention is to treat all properties included therein as immovable, they could
have real estate mortgage and a separate list of machineries and equipment.

Serg’s Products, Inc. v. PCI Leasing and Finance, Inc.

G.R. No. 137705, August 22, 2000
Panganiban, J.

Facts: Serg’s Products, Inc. is engaged in the chocolate-making business. On March 6,

1998, upon an ex-parte application of PCI Leasing, a writ of replevin was issued by the
RTC directing the seizure and delivery to PCI of petitioner’s machineries and equipment.
Petitioner contends that the subject machineries and equipment were essential and
principal elements of their chocolate-making industry. Hence, although each of them is
movable on its own, all of them have become immobilized by destination.

Issue: Whether or not the subject machineries are immovable properties.

Held: No. The Court held that the parties may validly stipulate that a real property be
considered personal. However, after agreeing to such stipulation, they are consequently
estopped from claiming otherwise. The Lease Agreement between the parties clearly
provides that the machineries are to be considered as personal property. There was no
showing that specific third-party would be adversely affected, therefore, the stipulation
that the machineries and equipment are personal properties shall prevail.
Burgos, Sr. v. Chief of Staff
G.R. No. 64261, December 26, 1984
Escolin, J.

Facts: Two warrants were issued against petitioners for the search on the premises of
“Metropolitan Mail” and “We Forum” newspapers and the seizure of items alleged to have
been used in subversive activities. Petitioners prayed that a writ of preliminary mandatory
and prohibitory injunction be issued for the return of the seized articles, and that
respondents be enjoined from using the articles thus seized as evidence against
petitioner.

Petitioners questioned the validity of the warrants arguing that the items seized and are
subject to the warrant were real properties; as opposed to the legal requirement that only
personal properties can be the subject of seizure.

Issue: Whether or not the items seized were real properties.

Held: As to the issue that the items seized were real properties, the court applied the
principle in the case of Davao Sawmill Co. v. Castillo, ruling “that machinery which is
movable by nature becomes immobilized when placed by the owner of the tenement,
property or plant, but not so when placed by a tenant, usufructuary, or any other person
having only a temporary right, unless such person acted as the agent of the owner.” In
the case at bar, petitioners did not claim to be the owners of the land and/or building on
which the machineries were placed. This being the case, the machineries in question,
while in fact bolted to the ground remain movable property susceptible to seizure under
a search warrant.

However, the Court declared the two warrants null and void.

Lopez v. Orosa, Jr., and Plaza Theater, Inc.

G.R. Nos. L-10817-18. February 28, 1958
Felix, J.

Facts: Sometime in May, 1946, Vicente Orosa, Jr., invited Lopez to make an investment in the
theatre business to be known as Plaza Theatre, Inc. Although Lopez expressed his unwillingness
to invest on the same, he agreed to supply the lumber necessary for the construction of the
proposed theatre. Out of the total cost of the materials amounting to P62,255.85, Lopez was paid
only P20,848.50, thus leaving a balance of P41,771.35.
As Lopez was pressing Orosa for payment of the remaining unpaid obligation, the latter and
Belarmino Rustia, the president of the corporation, promised to obtain a bank loan by mortgaging
the properties of the Plaza Theatre, Inc., to pay the balance, to which assurance Lopez had to
accede.

Unknown to him, however, as early as November, 1946, the corporation already got a loan for
P30,000 from the Philippine National Bank with the Luzon Surety Company as surety, and the
corporation in turn executed a mortgage on the land and building in favor of said company as
counter-security.

As the land at that time was not yet brought under the operation of the Torrens System.
Subsequently, when the corporation applied for the registration of the land under Act 496, such
mortgage was not revealed and thus Original Certificate of Title No. O-391 was correspondingly
issued on October 25, 1947, without any encumbrance appearing thereon.

As the obligation still remained unsettled, Lopez fi�led on November 12, 1947, a complaint with
the CFI of Batangas against Vicente Orosa Jr. and Plaza Theatre, Inc.

Plaintiff also caused the annotation of a notice of lis pendens on said properties with the Register
of Deeds.

The surety company, in the meantime, upon discovery that the land was already registered under
the Torrens System and that there was a notice of lis pendens thereon, fi�led on August 17, 1948,
or within the 1-year period after the issuance of the certificate of title, a petition for review of the
decree of the land registration court dated October 18, 1947, which was made the basis of OCT
No. 0-319, in order to annotate the lights and interests of the surety company over said properties
(Land Registration Case No. 17 GLRO Rec. No. 296).

Opposition thereto was offered by Enrique Lopez, asserting that the amount demanded by him
constituted a preferred lien over the properties of the obligors; that the surety company was guilty
of negligence when it failed to present an opposition to the application for registration of the
property; and that if any annotation of the rights and interest of said surety would ever be made,
same must be subject to the lien in his favor.

In making the pronouncement that the lien was merely confined to the building and did not extend
to the land on which the construction was made, the trial judge took into consideration the fact
that when plaintiff started the delivery of lumber in May, 1946, the land was not yet owned by the
corporation; that the mortgage in favor of Luzon Surety Company was previously registered under
Act No. 3344; that the codal provision (Art. 1923 of the old Spanish Civil Code) specifying that
refection credits are preferred could refer only to buildings, which are also classified as real
properties, upon which said refection was made. It was, however, declared that plaintiff's lien on
the building was superior to the right of the surety company. And fi�nding that the Plaza Theatre,
Inc., had no objection to the review of the decree issued in its favor by the land registration court
and the inclusion in the title of the encumbrance in favor of the surety company, the court a quo
granted the petition fi�led by the latter company. and that the encumbrance in favor of the surety
company be endorsed at the back of OCT No. 0- 391, with the notation that with respect to the
building, said mortgage was subject to the materialman's lien in favor of Enrique Lopez.

The matter was thus appealed to the Court of Appeals, which affirmed the lower court's ruling,
and then to this Tribunal.

Issues:

1. Whether a materialman's lien for the value of the materials used in the construction of a building
attaches to said structure alone and does not extend to the land on which the building is adhered
to; and

2. Whether the lower court and the Court of Appeals erred in not providing that the materialman's
lien is superior to the mortgage executed in favor of the surety company not only on the building
but also on the land.

Held:

1. No

Appellant, however, contends that the lien created in favor of the furnisher of the materials used
for the construction, repair or refection of a building, is also extended to the land on which the
construction was made, and in support thereof he relies on Article 1923 of the Spanish Civil Code,
the pertinent law on the matter, which reads as follows:

ART. 1923. With respect to determinate real property and real rights of the debtor, the following
are preferred:
xxx xxx xxx

5. Credits for refection, not entered or recorded, with respect to the real estate upon which the
refection was made, and only with respect to other credits different from those mentioned in four
next preceding paragraphs.

It is argued that in view of the employment of the phrase real estate or immovable property, and
inasmuch as said provision does not contain any specification delimiting the lien to the building,
said article must be construed as to embrace both the land and the building or structure adhering
thereto. We cannot subscribe to this view, for while it is true that generally, real estate connotes
the land and the building constructed thereon, it is obvious that the inclusion of the building,
separate and distinct from the land, in the enumeration of what may constitute real properties 1
could mean only one thing — that a building is by itself an immovable property, a doctrine already
pronounced by this Court in the case of Leung Yee vs. Strong Machinery Co., 37 Phil., 644.
Moreover, and in view of the absence of any specific provision of law to the contrary,
2. No.

A close examination of the provision of the Civil Code invoked by appellant reveals that the law
gives preference to unregistered refectionary credits only with respect to the real estate upon
which the refection or work was made. This being so, the inevitable conclusion must be that the
lien so created attaches merely to the immovable property for the construction or repair of which
the obligation was incurred. Evidently, therefore, the lien in favor of appellant for the unpaid value
of the lumber used in the construction of the building attaches only to said structure and to no
other property of the obligors.

Considering the conclusion thus arrived at, i.e., that the materialman's lien could be charged only
to the building for which the credit was made or which received the bene�tfi of refection, the lower
court was right in holding that the interest of the mortgagee over the land is superior and cannot
be made subject to the said materialman's lien.

Wherefore, and on the strength of the foregoing considerations, the decision appealed from is
hereby affirmed, with costs against appellant. It is so ordered.

Yap v. Tañada
G.R. No. L-32917, July 18, 1988
Narvasa, J.

Facts: Goulds Pumps International (Phil.) is seeking recovery from Sps. Yap of
P1,459.30,the balance of the price and installation cost of a water pump in the latter's
premises.

The Trial court decided in Goulds’ favor and ordered the attachment of the said pump for
auction.

Yap argues to the SC that the writ of attachment with the said pump is invalid since the
pump being installed in his property had become an immovable property.

Issue: Whether the water pump being installed in the petitioner’s property is an
immovable property?

Held: No, The Civil Code considers as immovable property, among others, anything
"attached to an immovable in a fixed manner, in such a way that it cannot be separated
therefrom without breaking the material or deterioration of the object."

The pump does not fit this description. It could be, and was in fact separated from Yap's
premises without being broken or suffering deterioration. Obviously the separation or
removal of the pump involved nothing more complicated than the loosening of bolts or
dismantling of other fasteners.

Machinery & Engineering Supplies, Inc. v. Court of Appeals

G.R. No. L-7057 October 29, 1954
Concepcion, J.

Facts:
1. Machinery & Engineering Supplies, Inc. (MESI) filed a replevin for the recovery of
property delivered to Defendant Company Ipo Limestone Co. Inc. (Ipo). Said order
was carried out by two sheriffs. Replevin is a procedure whereby seized goods
may be provisionally restored to their owner pending the outcome of an action to
determine the rights of the parties concerned.
2. Ipo’s manager, Pedro Torres, handed the sheriffs a letter protesting against the
seizure of the properties. Torres asserts that the machineries are not personal
properties and could not possibly be dismantled without causing damages or
injuries to the wooden frames attached to them.
3. Nevertheless, MESI insisted on dismantling the equipment despite a letter from a
lawyer saying that the properties in question were immovable properties. Thus, the
machineries were taken. Upon order of the court, the deputy sheriffs returned the
properties by depositing them on the road, without the benefit of inventory or
reinstalling them from their former position which rendered their use impracticable.

Issues:
1. Whether or not the machines in question are movable or immovable properties
2. Whether the Provincial Sheriff of Bulacan, at the Petitioner's instance, was justified
in destroying the machinery and in refusing to restore them to their original form,
at the expense of the Petitioner.

Held:
1. Yes. Such machines are considered immovable pursuant to paragraph 3 and 5 of
Article 415 of Civil Code of the Philippines. The machines are deemed attached
permanently to the property or to the land with concrete cement in a fixed manner,
in such a way that the former could not be separated from the latter without
breaking the material or deterioration of the object.

2. No. The special Civil action, Replevin, is only applicable to personal property.
Ordinarily replevin may be brought to recover any specific personal property
unlawfully taken or detained from the owner thereof, provided such property is
 capable of identification and delivery; but replevin will not lie for the recovery of
real property or incorporeal personal property.

Manila Electric Company v. City Assessor

G.R. No. 166102, August 5, 2015
Leonardo-de Casto, J:

Facts: MERALCO is a private corporation organized and existing under Philippine laws
to operate as a public utility engaged in electric distribution. MERALCO has been
successively granted franchises to operate in Lucena City beginning 1922 until present
time.

MERALCO received from the City Assessor of Lucena a copy of Tax Declaration No. 019-
6500 covering the following electric facilities, classified as capital investment, of the
company: (a) transformer and electric post; (b) transmission line; (c) insulator; and (d)
electric meter, located in Quezon Ave. Ext., Brgy. Gulang-Gulang, Lucena City. Under
Tax Declaration No. 019-6500, these electric facilities had a market value of
P81,811,000.00 and an assessed value of P65,448,800.00, and were subjected to real
property tax as of 1985.

MERALCO appealed Tax Declaration No. 019-6500 before the LBAA of Lucena City,
claiming that its capital investment consisted only of its substation facilities, the true and
correct value of which was only P9,454,400.00; and that MERALCO was exempted from
payment of real property tax on said substation facilities. LBAA rendered the decision that
MERALCO was required to pay the City Government of Lucena a tax equal to 5% of its
gross earnings.

The appellate court affirmed the Decision of the Central Board of Assessment Appeals
(CBAA) in CBAA Case No. L-20-98, which, in turn, affirmed with modification the Decision
of the Local Board of Assessment Appeals (LBAA) of Lucena City, Quezon Province, as
regards Tax Declaration Nos. 019-6500 and 019-7394, ruling that MERALCO is liable for
real property tax on its transformers, electric posts (or poles), transmission lines,
insulators, and electric meters, beginning 1992. Hence, this petition.

Issue: Whether the poles, wires, insulators, transformers, and electric meters of
MERALCO were real properties

Held: Yes. The Local Government Code still does not provide for a specific definition of
"real property," Sections 199 (o) and 232 of the said Code, respectively, gives an
extensive definition of what constitutes "machinery" and unequivocally subjects such
machinery to real property tax. The Court reiterates that the machinery subject to real
property tax under the Local Government Code "may or may not be attached,
permanently or temporarily to the real property;" and the physical facilities for production,
installations, and appurtenant service facilities, those which are mobile, self-powered or
self-propelled, or are not permanently attached must (a) be actually, directly, and
exclusively used to meet the needs of the particular industry, business, or activity; and (b)
by their very nature and purpose, be designed for, or necessary for manufacturing,
mining, logging, commercial, industrial, or agricultural purposes.

Article 415, paragraph (5) of the Civil Code considers as immovables or real properties
"[m]achinery, 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." The Civil
Code, however, does not define "machinery."

The properties under Article 415, paragraph (5) of the Civil Code are immovables by
destination, or "those which are essentially movables, but by the purpose for which they
have been placed in an immovable, partake of the nature of the latter because of the
added utility derived therefrom." These properties, including machinery, become
immobilized if the following requisites concur: (a) they are placed in the tenement by the
owner of such tenement; (b) they are destined for use in the industry or work in the
tenement; and (c) they tend to directly meet the needs of said industry or works. The first
two requisites are not found anywhere in the Local Government Code.

As between the Civil Code, a general law governing property and property relations, and
the Local Government Code, a special law granting local government units the power to
impose real property tax, then the latter shall prevail.

Capitol Wireless, Inc., v. Provincial Treasurer of Batangas

G.R. No. 180110, May 30, 2016
Peralta, J.

Facts: This case is a petition for review on certiorari under Rule 45 of the Rules of Court
seeking to annul and set aside the Court of Appeals’ Decision and Resolution, which both
both denied the appeal of petitioner against the decision of the Regional Trial Court.

Petitioner Capitol Wireless Inc. (Capwire) is a Philippine corporation in the business of

providing international telecommunications services. As such provider, Capwire has
signed agreements with other local and foreign telecommunications companies covering
an international network of submarine cable systems such as the Asia Pacific Cable
Network System (APCN). The agreements provide for co-ownership and other rights
among the parties over the network.

Petitioner Capwire claims that it is co-owner only of the so-called "Wet Segment" of the
APCN, which is laid in international waters while the landing stations or terminals and
Segment E of APCN are allegedly owned by the Philippine Long Distance Telephone
Corporation (PLDT). However, for loan restructuring purposes, Capwire claims that "it
was required to register the value of its right," hence, it engaged an appraiser to "assess
the market value of the international submarine cable system and the cost to Capwire,”
and was determined that the submarine cable systems described in Capwire's Sworn
Statement of True Value of Real Properties are taxable real property.

Capwire received a Warrant of Levy and a Notice of Auction Sale, respectively, from the
respondent, and filed a Petition for Prohibition and Declaration of Nullity of Warrant of
Levy, Notice of Auction Sale and/or Auction Sale with the Regional Trial Court (RTC) of
Batangas City. This was dismissed by the trial court which the Court of Appeals affirmed.

Issue: Whether or not the submarine cable system is considered as a real property which
can be subjected to real property tax?

Held: Yes. The submarine cable system is considered real properties subject to real
property tax.

Submarine or undersea communications cables are akin to electric transmission lines

which this Court has recently declared in Manila Electric Company v. City Assessor and
City Treasurer of Lucena City, as "no longer exempted from real prope1iy tax" and may
qualify as "machinery" subject to real property tax under the Local Government Code. To
the extent that the equipment's location is determinable to be within the taxing authority's
jurisdiction, the Court sees no reason to distinguish between submarine cables used for
communications and aerial or underground wires or lines used for electric transmission,
so that both pieces of property do not merit a different treatment in the aspect of real
property taxation. Both electric lines and communications cables, in the strictest sense,
are not directly adhered to the soil but pass through posts, relays or landing stations, but
both may be classified under the term "machinery" as real property under Article 415(5)
of the Civil Code for the simple reason that such pieces of equipment serve the owner's
business or tend to meet the needs of his industry or works that are on real estate.

Thus, absent any showing from Capwire of any express grant of an exemption for its lines
and cables from real property taxation, then this interpretation applies and Capwire’s
submarine cable may be held subject to real property tax.
FELS Energy v. Province of Batangas.
GR 168557, February 16, 2007
CALLEJO, SR., J.:

Facts: A lease contract was entered into between Polar Energy and NPC over power
barges. The latter agreed to be responsible for the payment of all taxes, fees, charges or
levies to which Polar may become subject to in relation to the performance of its
obligations under the agreement. Thereafter, Polar assigned its rights under the contract
to FELS.

An assessment notice for real property taxes was sent by the respondent over the Barges
which also covers the tax due for 1994, amounting to 56 million per annum. The petitioner,
FELS told NPC about the assessment sent by the respondent and it gave NPC full power
and authority to represent it in any conference regarding the real property assessment of
the Provincial Assessor

Issue: Whether Barges are considered Real Property

Held: Yes. Under Article 415 (9) of the New Civil Code,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, Barges are immovable by
destination and subject to real property tax.

Laurel v. Garcia
G.R. Nos. 92013, 92047, July 25, 1990
Gutierrez, Jr., J.

Facts: The Philippine government acquired 4 properties in Japan under the Reparations
Agreement with the latter. The Roponggi property became the site of the Philippine
Embassy until the latter was transferred to Nampeidai 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.

Former Philippine Ambassador to Japan presented to then President Corazon Aquino to

make the property the subject of a lease agreement with a Japanese firm, which shall
construct buildings in Roppongi and Nampeidai, and renovate the present Philippine
Chancery in Nampeidai. At the end of the lease period, all leased buildings shall be
occupied and used by the Philippine government. No change of ownership or title shall
occur. The government has not acted favorably on the proposal which is pending approval
and ratification.
President Aquino issued EO No. 296 entitling non-Filipino citizens or entities to avail of
reparations' capital goods and services in the event of sale, lease or disposition. 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.

Petitioners contend that the properties are governed by Article 420 of the Civil Code,
classifying the Roppongi property as one of public dominion, and not of private ownership.
Respondents, on the other hand, claim that the subject property is governed by laws of
Japan where property is located, relying on the rule of lex situs. The respondents add that
even assuming for the sake of argument that the Civil Code is applicable, the Roppongi
property has ceased to become property of public dominion when the Philippine
government manifested its intention to convert the properties to private use through overt
actS.

Issues:
1. Whether or not the Roponggi property is of public dominion.
2. Whether or not the Roponggi property may be alienated.

Held:

1. Yes. 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. There can be no doubt that it is of public dominion
unless it is convincingly shown that the property has become patrimonial. This, the
respondents have failed to do.

The applicable provisions of the Civil Code are Arts. 419, 420, and 421. 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.

2. No. 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.
 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 especially 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. Lazaro 166 SCRA 368 [1988]).

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.

Rabuco v. Villegas
G.R. Nos. L-24661, L-24915, L-24916, February 28, 1974
Teehankee, J

Facts: Case L-24915 involves petitioners' independent petition for injunction filed directly
with the Court of Appeals January 29, 19655 to forestall the demolition overnight of their
houses pursuant to the order of demolition set for January 30, 1965 at 8 a.m. issued by
respondents city officials pending the elevation of their appeal. The appellate court gave
due course thereto and issued the writ of preliminary injunction as prayed for.

Case L-24916 involves petitioners' appeal to the Court of Appeals from the decision of
the Manila Court of first instance dismissing their petition for injunction and mandamus to
enjoin the demolition of their houses and the ejectment from the public lots in question
and to direct respondent administrator of the Land Authority (now Secretary of Agrarian
Reform) to implement the provisions of Republic Act3120 for the subdivision and sale on
installment basis of the subdivided lots to them as the tenants and bona fide occupants
thereof, and instead ordering their ejectment.

Case L-24661 for the continuation and maintenance of the writ of preliminary injunction
previously issued by the Court of Appeals for preservation of the status quo was filed by
petitioners directly with this Court on June 21, 1965, pending transmittal of the records of
Cases L-24915 and L-24916 to this Court as certified by the Court of Appeals which
declared itself without jurisdiction over the principal and decisive issue of constitutionality
of Republic Act 3120.

On 1970, a large fire of undetermined origin gutted the Malate area including the lot on
which petitioners had built their homes and dwellings. Respondents city officials then took
over the lot and kept petitioners from reconstructing or repairing their burned dwellings.

At petitioners' instance, the Court issued on June 17, 1970 a temporary restraining order
enjoining respondents city officials "from performing any act constituting an interference
in or disturbance of herein petitioners' possession of Lot No. 21-B, Block No. 610, of the
Cadastral Survey of the City of Manila" as safeguarded them under the Court's subsisting
preliminary injunction of August 17, 1965.

The "dominant and inextricable issue" in the herein consolidated case is the
constitutionality of Republic Act 3120 whereby Congress converted the lot in question
together with another lot in San Andres, Malate "which are reserved as communal
property" into "disposable or alienable lands of the State to be placed under the
administration and disposal of the Land Tenure Administration" for subdivision into small
lots not exceeding 120 square meters per lot for sale on installment basis to the tenants
or bona fide occupants thereof and expressly prohibited ejectment and demolition of
petitioners' homes.

Issue: Whether or not Republic Act 3120 is constitutional

Held: Yes. Republic Act 3120 is constitutional. 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.

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 Court also 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.

The Court holds that the Act in question was 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."

Macasiano v. Diokno
G.R. No. 97764, August 10, 1992
Medialdea, J.

Facts: On June 13, 1990, Municipality of Paranaque 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 in Baclaran, Paranaque, Metro Manila to be used
for establishment of flea markets thereon. A few days later, the municipal council of
paranaque issued a resolution authorizing Mayor Ferrer to enter into a contract with any
service cooperative for the establishment, operation, maintenance and management of
flea markets and/or vending areas. Mayor Ferrer contracted Palanyag to operate the said
flea market. 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. Trial Court uphold
the validity of Ordinance No. 86 s. 1990 hence the petition was filed by the petitioner thru
the Office of the Solicitor General.

Issue: Whether or not Ordinance No. 86, series of 1990 valid

Held: No. Ordinance No. 86, series of 1990 is not valid, this is because streets which
were closed by this ordinance are local roads used for public service. Properties of the
local government which are devoted to public service are deemed public and are under
the absolute control of Congress. Hence, Local governments have no authority
whatsoever to control or regulate the use of public properties unless specific authority is
vested upon them by congress. Article 424 of the Civil Code lays down the basic principle
that properties of public dominion devoted to public use and made available to the public
in general are outside the commerce of man and cannot be disposed of or leased by the
local government unit to private persons.

Republic of the Philippines vs. Court of Appeals, Josefina L. Morato, Spouses

Nenita Co and Antonio Quilatan and the Register of Deeds of Quezon Province
G.R. No. 100709, November 14, 1997
Panganiban, J.:

Facts: Sometime on December 1972, Josefina L. Morato filed a Free Patent Application
for a parcel of land. On January 16, 1974, the patent was approved, and the Register of
Deeds issued on February 4, 1974 an Original Certificate of Title. Both the free patent
and the title specifically mandate that the land shall not be alienated nor encumbered
within five years from the date of the issuance of the patent.

Thereafter, the subject land is found to be a portion of the Calauag Bay, five to six feet
deep under water during high tide and two feet deep at low tide, and not suitable to
vegetation. Moreover, on October 24, 1974, a portion of the land was mortgaged by
Morato to Nenita Co and Antonio Quilatan. The spouses Quilatan constructed a house
on the land. Another portion of the land was leased to Perfecto Advincula on February 2,
1976, where a warehouse was constructed.

Issue:

1. Do the contracts of lease and mortgage executed within five years from the
issuance of the patent constitute an “encumbrance” and violate the terms and
conditions of the patent?
2. Will Morato be unjustly deprived of his property due to the fact that a portion thereof
is immersed in water?

Held:

1. Yes. Such contracts of lease and mortgage constitute an “encumbrance” and

violate the terms and conditions of the patent.

Encumbrance has been defined as “[a]nything that impairs the use or transfer of property;
anything which constitutes a burden on the title; a burden or charge upon property; a
claim or lien upon property.” It may be a “legal claim on an estate for the discharge of
which the estate is liable; an embarrassment of the estate or property so that it cannot be
disposed of without being subject to it; an estate, interest, or right in lands, diminishing
their value to the general owner; a liability resting upon an estate.”
In a contract of lease, the owner temporarily grants the use of his or her property to
another who undertakes to pay rent. Morato being unable to fully use or enjoy the land
during the duration of the lease contract, thus, “impairs the use of the property” by the
grantee. Even if only part of the property has been sold or alienated, such is a sufficient
cause for the reversion of the whole estate to the State.
It is to be noted that prior to the fulfillment of the requirements of law, Morato had only an
inchoate right to the property; such property remained part of the public domain and,
therefore, not susceptible to alienation or encumbrance.

2. No. Morato will not be unjustly deprived of his property.

When the sea moved towards the estate and the tide invaded it, the invaded property
became foreshore land and passed to the realm of the public domain. In fact, the
registration of land subject of cadastral proceedings may be annulled when the parcel
subsequently became foreshore land, or registration decree by a trial court avoided since
said court had no jurisdiction to award foreshore land to any private person or entity.
A foreshore land is that part of the land which is between high and low water and left dry
by the flux and reflux of the tides. It is 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.
Such land then passes to the public domain, but the owner thus dispossessed does not
retain any right to the natural products resulting from their new nature; it is a de facto case
of eminent domain, and not subject to indemnity.

Province of Zamboanga del Norte v. City of Zamboanga

G.R. No. L-24440, March 28, 1968
Bengzon, J.P., J.

Facts: On October 12, 1936, Commonwealth Act 39 was approved converting the
Municipality of Zamboanga into Zamboanga City. Section 50 of the Act also provided that
the 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
fixed by the Auditor General. There were 50 properties and buildings in question, and
covered individually by Torrens certificates of title in the name of the province.

However, on June 17, 1961, RA 3039 was approved, amending Section 50 of the
Commonwealth Act 39 providing that all buildings, properties and assets belonging to the
former province of Zamboanga and located within the City of Zamboanga are hereby
transferred, free of charge, in favor of Zamboanga City. Thus, Zamboanga City was
ordered by the CIR to stop from effecting further payments to Zamboanga del Norte
relating to the properties and buildings in question. Zamboanga del Norte subsequently
filed a complaint questioning the validity of RA 3039 for depriving the province of property
without due process and just compensation.

Issue: Whether or not the properties involved are for public use or patrimonial.

Held: The court ruled that 24 lots were for public use, while 26 lots were patrimonial.
Republic Act 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 since
these were held by the former Zamboanga province in its governmental capacity and are
subject to the absolute control of Congress. However, 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. These 26 lots are registered and strengthens the proposition
that they are truly private in nature.

Chaves v. Public Estates Authority

G.R. No. 133250, July 9, 2002
Carpio, J.

Facts: PEA (Public Estates Authority) was created by President Marcos under P.D. 1084,
tasked with developing and leasing reclaimed lands. These lands were transferred to the
care of PEA under P.D. 1085 as part of the Manila Cavite Road and Reclamation Project
(MCRRP). CDCP and PEA entered into an agreement that all future projects under the
MCRRP would be funded and owned by PEA.

Subsequently, PEA entered into a Joint Venture Agreement with AMARI, a private
corporation. Under the JVA, several hectares of reclaimed lands comprising the Freedom
Islands and several portions of submerged areas of Manila Bay were going to be
transferred to AMARI.

Issue: Whether or not the Joint Venture Agreement which will transfer lands to AMARI is
valid.

Held: No. Under Sec. 2, Article XII of the Constitution, the foreshore and submerged areas
of Manila Bay are part of lands of the public domain, and consequently owned by the
State. As such, these areas shall not be alienated, unless they are classified as
agricultural lands of the public domain.
The mere reclamation of these areas by PEA does not convert these into alienable or
disposable lands of the public domain. There must be a law or presidential proclamation
officially or classifying these reclaimed lands as alienable or disposable and open to
disposition or concession. Moreover, these reclaimed lands cannot be classified as
alienable or disposable if the law has reserved them for some public or quasi -public use.
Absent these two official acts classification as alienable and a declaration that these lands
are not needed for public service, lands reclaimed by PEA remain inalienable lands of
public domain that cannot be transferred even by Joint Venture Agreement. Hence, The
Joint Venture Agreement is unconstitutional.

Villarico v. Sarmiento,
G.R. No. 136438, November 11, 2004
Sandoval-Gutierrez, J:

Facts: The petitioner, Teofilo C Villarico (Villarico), is the owner of a lot in La Huerta,
Parañaque City with an area of 66sqm. Villarico’s lot was separated from the Ninoy
Aquino Avenue (Highway) by a strip of land belonging to the government. The highway
was elevated by 4 meters, higher than the adjoining area. The Department of Public
Works and Highways (DPWH) then constructed stairways of several public land to enable
the people to have access to the highway.

In 1991, Vivencio Sarmiento and his daughter Bessie Sarmiento and her husband Beth
Del Mundo, (Respondents), constructed a building on a portion of the government land
and was later on occupied by Andok’s Litson Corp. and Marites’ Carinderia.

In 1993, Villarico owned 74.30sqm portion of the same area owned by the government
covered by T.C.T. No. 74430 by means of a Deed of Exchange of Real Property.

In 1995, Villarico filed a complaint for accion pauliana against the Respondents alleging
that the latter’s building closed his “right of way” to the Highway and encroached a portion
of his lot.

The Respondents denied Villarico’s claim alleging that they have been issued licenses
and permits to construct their building on the area and that Villarico had no right to the
subject property as it belongs to the government. The RTC and the CA ruled in favor of
the Respondents. Hence, this petition.

Issue: Whether or not Villarico has the better right of the subject portion of the lot.
Held: No. Villarico does not have the better right of the subject portion of land. It was not
disputed that the subject lot on which Villarico’s “right of way” exists is a public dominion
which is intended for public use. Being a property of public dominion, it is outside the
commerce of men and hence cannot be burdened by any voluntary easement.

Considering that the stairways were constructed as a public dominion, i t cannot be

burdened by a voluntary easement of right of way in favor of Villarico. In fact, the public
use of the said stairs was a mere tolerance of the government through DPWH. Villarico
cannot appropriate it for himself nor claim any right of possession over it.

It must also be noted that even the Respondents have no better right to the subject lot,
as it is a public dominion. However, the RTC and CA found that the Respondent’s building
was constructed on the same portion of the same lot now covered by T.C.T. No. 74439
in Villarico’s name. Being its owner, he is entitled to its possession.

Heirs of Malabanan v. Republic

G.R. No. 179987, September 3, 2013
Bersamin, J.

Facts: On February 20, 1998, Mario Malabanan purchased from Eduardo Velazco a
parcel of land in Brgy. Tibig, Silang, Cavite (Lot 9864-A, Cad-452-D). Malabanan filed for
land registration in the RTC of Tagaytay City, Cavite claiming that the property formed
part of the alienable and disposable land of the public domain, and that his predecessors-
in-interest had been in open, continuous, uninterrupted, public and adverse possession
and occupation of the land for more than 30 years, thereby entitling him to the judicial
confirmation of his title. Malabanan presented proof that the property was alienable and
disposable land of the public domain through the June 11, 2001 certification issued by
the Community Environment and Natural Resources Office (CENRO) of the DENR:
“verified to be within the Alienable or Disposable land...and approved as such under FAO
4-1656 on March 15, 1982”.

RTC rendered judgment granting Malabanan’s application for land registration. The OSG
appealed the judgment to the CA arguing that Malabanan had failed to prove that the
property belonged to the alienable and disposable land of the public domain. CA reversed
the RTC decision and dismissed Malabanan’s application for registration. Due to
Malabanan’s demise during the appeal, his heirs elevated the CA's decision of February
23, 2007 to this Court through a petition for review on certiorari.

Issue: Whether or not the property is alienable and disposable.

Held: No. Based on the foregoing, the Constitution places a limit on the type of public
land that may be alienated. Under Section 2, Article XII of the 1987 Constitution, only
agricultural lands of the public domain may be alienated; all other natural resources may
not be.

Alienable and disposable lands of the State fall into two categories, to wit: (a) patrimonial
lands of the State, or those classified as lands of private ownership under Article 425 of
the Civil Code, without limitation; and (b) lands of the public domain, or the public lands
as provided by the Constitution, but with the limitation that the lands must only be
agricultural. Consequently, lands classified as forest or timber, mineral, or national parks
are not susceptible of alienation or disposition unless they are reclassified as agricultural.
A positive act of the Government is necessary to enable such reclassification, and the
exclusive prerogative to classify public lands under existing laws is vested in the
Executive Department, not in the courts. If, however, public land will be classified as
neither agricultural, forest or timber, mineral or national park, or when public land is no
longer intended for public service or for the development of the national wealth, thereby
effectively removing the land from the ambit of public dominion, a declaration of such
conversion must be made in the form of a law duly enacted by Congress or by a
Presidential proclamation in cases where the President is duly authorized by law to that
effect. Thus, until the Executive Department exercises its prerogative to classify or
reclassify lands, or until Congress or the President declares that the State no longer
intends the land to be used for public service or for the development of national wealth,
the Regalian Doctrine is applicable.

Republic v. Santos, III

G.R. No. 160453, November 12, 2012
Bersamin, J:

Facts: Arcadio Ivan amended his application for land registration of Lot 4998-B to include
Arcadio, Jr. as his co-applicant because of the latter's co-ownership of the property which
was located in Parañaque City, and was bounded in the Southeast by the Parañaque
River. He alleged that the property had been formed through accretion and had been in
their joint open, notorious, public, continuous and adverse possession for more than 30
years.

The City of Parañaque (the City) opposed the application for land registration stating title
to the property could not be registered in favor of the applicants for the reason that the
property was an orchard that had dried up and had not resulted from accretion.

The RTC granted the application for land registration which was affirmed by the Court of
Appeals.
Issues:

a. Whether or not Lot 4998-B resulted from accretion

b. Whether or not Lot 499-B is a property of public domain

c. Whether or not Lot 4998-B was already classified as alienable and disposable by the
Government

Held:

a. No. Lot 4998-B did not result from accretion.

Accretion is the process whereby the soil is deposited along the banks of rivers. The
deposit of soil, to be considered accretion, must be: (a) gradual and imperceptible; (b)
made through the effects of the current of the water; and (c) taking place on land adjacent
to the banks of rivers.

Respondents did not establish at all that the increment of land had formed from the
gradual and imperceptible deposit of soil by the effects of the current. Also, it seems to
be highly improbable that the large volume of soil that ultimately comprised the dry land
with an area of 1,045 square meters had been deposited in a gradual and imperceptible
manner by the current of the river in the span of about 20 to 30 years. The only plausible
explanation for the substantial increment was that Lot 4988-B was the dried-up bed of the
Parañaque River

That land was definitely not an accretion. The process of drying up of a river to form dry
land involved the recession of the water level from the river banks, and the dried-up land
did not equate to accretion, which was the gradual and imperceptible deposition of soil
on the river banks through the effects of the current. In accretion, the water level did not
recede and was more or less maintained. Hence, respondents as the riparian owners had
no legal right to claim ownership of Lot 4998-B

b. Yes. Lot 499-B is a property of public domain

The State exclusively owned Lot 4998-B and may not be divested of its right of ownership.
Article 502 of the Civil Code expressly declares that rivers and their natural beds are
public dominion of the State. It follows that the river beds that dry up, like Lot 4998-B,
continue to belong to the State as its property of public dominion, unless there is an
express law that provides that the dried-up river beds should belong to some other
person.

c. No. Lot 4998-B was not classified as alienable and disposable by the Government
To prove that the land subject of an application for registration is alienable, an applicant
must conclusively establish the existence of a positive act of the Government, such as a
presidential proclamation, executive order, administrative action, investigation reports of
the Bureau of Lands investigator, or a legislative act or statute. Until then, the rules on
confirmation of imperfect title do not apply.

These rulings of the Court indicate that the notation on the survey plan of Lot 4998B, Cad-
00-000343 to the effect that the "survey is inside a map classified as alienable/disposable
by the Bureau of Forest Dev't" did not prove that Lot 4998-B was already classified as
alienable and disposable.

Navy Officers’ Village Association, Inc. v. Republic

G.R. No. 177168, August 3, 2015
Brion, J.

Facts: A TCT was issued in Navy Officers’ Village Association, In’s (NOVAI) name which
covers a parcel of land situated inside the former Fort Andres Bonifacio Military
Reservation (FBMR) in Taguig, Metro Manila and was previously in the name of the
Republic of the Philippines.

On July 12, 1957, then President Carlos P. Garcia issued Proclamation No. 423
"reserving for military purposes certain parcels of the public domain situated in the
municipalities of Pasig, Taguig, Parañaque, province of Rizal, and Pasay City," which
included the parcel of land in question.

On September 29, 1965, then Pres. Diosdado Macapagal issued Proclamation No. 461
which excluded from Fort McKinley "a certain portion of land embraced therein, situated
in the municipalities of Taguig and Parañaque, Province of Rizal, and Pasay City," and
declared the excluded area as "AFP O�cers' Village" to be disposed of under the
provisions of Republic Act Nos. 274 and 730.

Barely a month after, or on October 25, 1965, Pres. Macapagal issued Proclamation No.
478 "reserving for the veterans rehabilitation, medicare and training center site purposes"
part of the land previously declared as AFP O�cers' Village under Proclamation No. 461,
and placed the reserved area under the administration of the Veterans Federation of the
Philippines (VFP).

Thereafter, the Republic sought to cancel NOVAI's title based on the following grounds:
(a) the land covered by NOVAI's title is part of a military reservation;
(b) the deed of sale conveying the property to NOVAI, which became the basis for the
issuance of TCT No. 15387, is fictitious;
(c) the LMB has no records of any application made by NOVAI for the purchase of the
property, and of the NOVAI's alleged payment of P14,250,270.00 for the property; and
(d) the presidential proclamation, i.e., Proclamation No. 2487, claimed to have been
issued by then President Corazon C. Aquino in 1991 that authorized the transfer and
titling of the property to NOVAI, is fictitious.

In its answer to the Republic's complaint, NOVAI counter-argued that the property was
no longer part of the public dominion, as the land had long been segregated from the
military reservation pursuant to Proclamation No. 461.

Issue: Whether or not the property, at the time of the sale, was a reserved public domain
land and its sale, therefore, and the corresponding title issued in favor of petitioner
NOVAI, is void.

Held: Yes. The Supreme Court agreed with the Court of Appeals that the property
remains a part of the public domain that could not have been validly disposed of in
NOVAI's favor. NOVAI failed to discharge its burden of proving that the property was
withdrawn from the intended public or quasi- public use or purpose. While the parties
disagree on the character and nature of the property at the time of the questioned sale,
they agree, however, that the property formed part of the FBMR — a military reservation
belonging to the public domain.

While it is true that Proclamation No. 461 withdrew a certain area or parcel of land from
the FBMR and made the covered area available for disposition in favor of the AFPOVAI,
Proclamation No. 478 subsequently withdrew the property from the total disposable
portion and reserved it for the use of the VRMTC. With the issuance of Proclamation No.
478, the property was transferred back to that class of public domain land reserved for
public or quasi-public use or purpose which, consistent with Article 420 of the Civil Code,
is property of the public dominion, not patrimonial property of the State.

Parcels of land classified as reservations for public or quasi-public uses under Section 9
(d) of C.A. No. 141 are still non-alienable and non- disposable, even though they are, by
the general classification under Section 6, alienable and disposable lands of the public
domain. By specific declaration under Section 88, in relation with Section 8, these lands
classified as reservations are non-alienable and non-disposable.
City of Lapu-Lapu v. PEZA
G.R. Nos. 184203, 187583, November 26, 2014
Leonen, J.

Facts: In these consolidated petitions, plaintiffs primarily questioned the non-taxable

character, as lower courts ruled, of the Philippine Economic Zone Authority (PEZA).

In 1972, former President Ferdinand Marcos issued Presidential Decree No. 66 creating
the Export Processing Zone Authority (EPZA), among others, which was also declared
non-profit in character. To maintain this character, EPZA was declared exempt from all
taxes that may be due to the Republic of the Philippines, its provinces, cities,
municipalities, and other government agencies and instrumentalities. In 1995, former
President Fidel Ramos issued Executive Order No. 282, directing PEZA to assume and
exercise all of EPZA’s powers, functions, and responsibilities. All of EPZA’s properties,
equipment, and assets, among others, were ordered transferred to PEZA.

Years later, petitioner City of Lapu-Lapu demanded from PEZA real property taxes on its
properties located in the Mactan Economic Zone. Petitioner Province of Bataan followed
suit for the province’s Economic Zone. However, defendant PEZA argued it was exempt
from payment of real property taxes.

Issue: Whether or not the properties sought of PEZA were owned by the State, therefore
not liable for real property taxes.

Held: The Court ruled in the affirmative. Properties of public dominion, even if titled in the
name of an instrumentality, that is PEZA, as in this case, remained owned by the Republic
of the Philippines.

Under the Local Government Code, real properties owned by the Republic of the
Philippines are exempt from real property taxes. These properties, moreover, are either
property of public dominion or patrimonial property. Article 420 of the Civil Code
enumerates property of public dominion. Properties of public dominion are outside the
commerce of man. On the other hand, all other properties of the State that are not
intended for public use or are not intended for some public service or for the development
of the national wealth are patrimonial properties. Patrimonial properties are also
properties of the State, but the State may dispose of its patrimonial property similar to
private persons disposing of their property. Patrimonial properties are within the
commerce of man and are susceptible to prescription, unless otherwise provided.
In this case, the properties sought to be taxed were located in publicly owned economic
zones. The Court declared that economic zones, which have been categorized as
reserved land, are property of public dominion. Reserved lands are lands of the public
domain set aside for settlement or public use, and for specific public purposes by virtue
of a presidential proclamation. Reserved lands are inalienable and outside the commerce
of man, and remain property of the Republic until withdrawn from public use either by law
or presidential proclamation, which was not available nor present. As for the Bataan
Economic Zone, the law has long characterized it as a port, a property for public use,
which Article 420 of the Civil Code classifies as property of public dominion.

Republic of the Philippines vs. Luis Miguel O. Aboitiz

G.R. No. 174626, October 23, 2013
Mendoza, J.

Facts: In Aboitiz’ application for registration of the land he purchased from Irenea
Kapuno, he attached the original Tracing Cloth Plan with a blueprint copy, the technical
description of the land, the certificate of the geodetic engineer surveying the land, and the
documents evidencing possession and ownership of the land. The subject land was
classified as alienable and disposable only in 1957.

Issue: Does acquisitive prescription commence from the time the land is merely classified
as alienable and disposable?

Held: No. Acquisitive prescription does commence by the mere classification of the land
as alienable and disposable.

Under Section 14(2) of the Property Registration Decree (P.D. No. 1529), for acquisitive
prescription to commence and operate against the State, the land must not only be
classified as alienable and disposable, but the State must also expressly declare through
either a law enacted by Congress or a proclamation issued by the President that the
subject land is no longer retained for public service or the development of the national
wealth or that the property has been converted into patrimonial.

The earliest that Aboitiz and his predecessor-in-interest can trace back possession and
occupation of the subject land was only in 1963. Evidently, his possession of the subject
property commenced roughly 18 years beyond the June 12, 1945 reckoning date.

Thus, his failure to comply with the requirements for registration of land title under Section
14(1) of the same law, on the allegation that he can trace back around 35 years
possession and occupation, does not necessarily mean that he satisfies the requirements
of possession for 30 years to acquire title to the subject property via prescription under
Section 14(2) of thereof. There must be an express declaration that the subject land is no
longer retained for public service or the development of the national wealth or that the
property has been converted into patrimonial.

Alolino v. Flores
G.R. No. 198774, April 4, 2016
Brion, J.

Facts: Petitioner is the registered owner of two contiguous parcels of land in Taguig.
Alolino initially contructed a bungalow house. He then added a second floor to the
structure and extended his two storey house up to the edge of his property, with terraces
on both floors.

Respondent spouses Flores constructed their house/store on the vacant barrio road
immediately adjoining the rear perimeter wall of Alolino’s house. Since they were
constructing on a municipal road, the respondents could not secure a building permit. The
structure is only about 2-3 inches away from the back of Alolino’s house, covering five
windows and the exit door. The respondents’ construction deprived Alolino of the light
and ventilation he had previously enjoyed and prevented his ingress and egress to the
municipal road through the rear door of his house.

Petitioner demanded that respondents remove their structure. He then complained to the
Building Official of Taguig who issued a Notice of Illegal Construction against the
respondents. After some time, respondents began constructing a 2 nd floor to their
structure without a building permit. This prompted petitioner to file another complaint,
directing respondents to desist from their construction.

Despite receipt of the demand letter for the removal of their illegally constructed structure,
respondents refuse to comply. Petitioner herein filed a complaint with the RTC praying
for the removal of their structure. Respondents denied petitioner’s cause of action. The
respondents also admitted to them that they did not secure a building permit because the
property was constructed on a municipal/barrio road. They claimed, however, that on
2004, the Sanggunian reclassified the property as a residential lot from its prior
classification as a barrio road.

The RTC rendered a judgement ordering respondents to remove their structure. It held
that the respondents’ illegal construction was a private nuisance with respect to Alolino
because it prevented him from using the back portion of his property and obstructed his
free passage to the barrio road. The CA reversed the RTC decision and ruled that Alolino
had not acquired an easement of right-of-way to the barrio Road.

Issue: Whether the barrio road has been converted to patrimonial property
Held: No. The barrio road adjacent to Alolino’s house is property of public dominion
devoted to public use. (Article 424, Civil Code) To convert a barrio road into patrimonial
property, the law requires the LGU to enact an ordinance, approved by at least two- thirds
(2/3) of the Sanggunian members, permanently closing the road.

In this case, the Sanggunian did not enact an ordinance but merely passed a resolution.
The difference between an ordinance and a resolution is settled in jurisprudence: an
ordinance is a law but a resolution is only a declaration of sentiment or opinion of the
legislative body. Properties of the local government that are devoted to public service are
deemed public and are under the absolute control of Congress. Hence, LGUs cannot
control or regulate the use of these properties unless specifically authorized by Congress

As a barrio road, the subject lot’s purpose is to serve the benefit of the collective citizenry.
It is outside the commerce of man and as a consequence: (1) it is not alienable or
disposable;19 (2) it is not subject to registration under Presidential Decree No. 1529 and
cannot be the subject of a Torrens title; (3) it is not susceptible to prescription; (4) it cannot
be leased, sold, or otherwise be the object of a contract; (5) it is not subject to attachment
and execution; and (6) it cannot be burdened by any voluntary easements.

Dumo v. Republic of the Philippines

G.R.No. 218269, June 6, 2018
Caripio, J.

Facts: Petitioner Suprema T. Dumo filed an application for registration of two parcels of
land, covered by Advance Plan of Lot. Nos. 400398 and 400399 with a total area of 1,273
square meters. Dumo alleged that the lots belonged to her mother Bernarda M. Trinidad,
and that she and her siblings inherited them upon their mother’s death. She further
alleged that through a Deed of Partition with Absolute Sale dated February 6, 1987, she
acquired the subject lots from her siblings. Dumo traces her title from her mother ,
Trinidad, who purchased the lots from Florencio Mabalay in August 1951. Mabalay was
Dumo’s maternal grandfather. Mabalay, on the other hand, purchased the properties from
Carlos Calica.

The heirs of Marcelino Espinas opposed Dumo’s application for land registration on the
ground that the properties sought to be registered by Dumo are involved in the accion
reivindicatora case. Thus, the RTC consolidated the land registration case with the
Complaint for Recovery of Ownership, Possession and Damages.
On July 2, 200, the RTC rendered its Joint Decision, finding that the subject property was
owned by the heirs of Espinas. The RTC ordered the dismissal of Dumo’s land registration
application on the ground of registerable title, and ordered Dumo to restore ownership
and possession of the lots to the heirs of Espinas.

The CA rendered its decision in 2014 by affirming the lower court’s dismissal of
application but modified insofar as the Subject Property belonged to the heirs of Espinas.
Moreover, it was found that land belonged to the public domain and the Espinas failed to
establish open, continuous, exclusive, and notorious possession and occupation of the
land under a bona fide claim of ownership since June 12, 1945.

Issue: Whether or not the land in question belongs to the public domain

Held: Yes. Classifying lands as alienable and disposable does not take away from the
fact that these lands still belong to the public domain. These lands belonged to the public
domain before they were classified as alienable and disposable and they still remain to
be lands of the public domain after such classification. In fact, these lands are classified
in Section 3, Article XII of the 1987 Philippine Constitution as "[a]lienable lands of the
public domain." The alienable and disposable character of the land merely gives the State
the authority to alienate and dispose of such land if it deems that the land is no longer
needed for public use, public service or the development of national wealth.

Alienable and disposable lands of the public domain are those that are to be disposed of
to private individuals by sale or application, because their disposition to private individuals
is for the development of the national wealth. Thus, homesteads, which are granted to
individuals from alienable and disposable lands of the public domain, are for the
development of agriculture which would redound to the development of national wealth.
However, until the lands are alienated or disposed of to private individuals, they remain
"alienable lands of the public domain," as expressly classified by the 1987 Philippine
Constitution.

Lands of the public domain become patrimonial property only when they are no longer
intended for public use or public service or the development of national wealth. Arti cles
421 and 422 of the Civil Code expressly provide:

Article 421. All other property of the State, which is not of the character stated in
the preceding article, is patrimonial property

Article 422. Property of public dominion, when no longer intended for public use or
for public service, shall form part of the patrimonial property of the State.
In turn, the intention that the property is no longer needed for public use, public service
or the development of national wealth may only be ascertained through an express
declaration by the State. We have clearly held:

Accordingly, there must be an express declaration by the State that the public
dominion property is no longer intended for public service or the development of
the national wealth or that the property has been converted into patrimonial.
Without such express declaration, the property, even if classified as alienable or
disposable, remains property of the public dominion, pursuant to Article 420(2),
and thus incapable of acquisition by prescription. It is only when such alienable
and disposable lands are expressly declared by the State to be no longer intended
for public service or for the development of the national wealth that the period of
acquisitive prescription can begin to run. Such declaration shall be in the form of a
law duly enacted by Congress or a Presidential Proclamation in cases where the
President is duly authorized by law

The alienable and disposable character of public agricultural land does not convert the
land to patrimonial property. It merely gives the State the authority to alienate or dispose
the agricultural land, in accordance with law. It is only when (1) there is an express
government manifestation that the land is already patrimonial or no longer intended for
public use, public service or the development of national wealth, or (2) land which has
been classified as alienable and disposable land is actually alienated and disposed of by
the State, that such land becomes patrimonial.

Republic of the Philippines v. Sps. Alejandre

G.R. No. 217336, October 17, 2018
Caguioa, J.

Facts: On July 18, 1991, Spouses Ildefonso and Zenaida Alejandre (applicants-spouses)
filed an application for the registration of Lot No. 6487 with an area of 256 square meters
under P.D. No. 1529. The subject property was sold to them by its former owner Angustia
Lizardo Taleon by way of a Deed of Absolute Sale executed on June 20, 1990.

The Republic of the Philippines opposed the application on the grounds that, inter alia,
the subject property applied for is a portion of the public domain and is not subject to
private appropriation. The Republic further asserted that the applicant has the burden of
overcoming the presumption that the land sought to be registered belongs to the public
domain or the presumption of State ownership of the lands of the public domain.

The trial court rendered its Decision dated March 31, 2006 granting the application for
registration of title. This was sustained by the Court of Appeals.
Issue: Whether the appeal has merit

Held: Yes.

Respondents, based on the evidence that they adduced, are apparently claiming
ownership over the land subject of their application for registration by virtue of tradition,
as a consequence of the contract of sale, and by succession insofar as their
predecessors-in-interest are concerned. Both modes are derivative modes of acquiring
ownership. Yet, they failed to prove the nature or classification of the land. The fact that
they acquired the same by sale and their transferor by succession is not incontrovertible
proof that it is of private dominion or ownership. In the absence of such incontrovertible
proof of private ownership, the well entrenched presumption arising from the Regalian
doctrine that the subject land is of public domain or dominion must be overcome.
Respondents failed to do this. The real property tax declarations, the Deed of Absolute
Sale dated June 20, 1990 , and the technical descriptions of the subject property are
insufficient evidence to overcome the presumption that the land subject of the registration
is inalienable land of public domain or dominion. Thus, respondents’ application for land
registration should not have been granted.

Hi-Lon Manifacturing Inc. v. COA

G.R. No. 210669, August 1, 2017
Peralta, J.

Facts: Sometime in 1978, the government, through the then Ministry of Public Works
(now DPWH), converted to a road right-of-way (RROW) a portion of a parcel of land
located in Calamba, Laguna, for the Manila South Expressway Extension Project. The
subject property was registered in the name of Commercial and Industrial Real Estate
Corporation (CIREC). Later on Philippine Polymide Industrial Corporation (PPIC)
acquired the subject property and subsequently mortgaged it with the Development Bank
of the Philippines (DBP), which later on acquired the property in a foreclosure proceeding.
Despite the use of the subject property as RROW, the government neither annotated its
claim or lien on the titles of CIREC, PPIC, and DBP nor initiated expropriation
proceedings. On June 30, 1987, Asset Privatization Trust (APT) disposed of a portion of
the subject property in a public bidding in which Fibertex is the highest bidder. APT
supposedly agreed with fibertex that the land would be registered in the name of TG
Property, Inc, (TGPI) and the improvements to Fibertex. On April 16, 1995, TGIP
executed a Deed of Absolute Sale in favor of HI-LON over the entire property. HI-LON
then registered the Deed with the Registry of Deeds of Calamba, Laguna. After a while,
HI-LON, through its counsel, requested payment for just compensation for the portion of
property converted to a RROW. On December 21, 2001, a Deed of Sale was executed
between HI-LON and the Republic of the Philippines. The Commission on Audit (COA)
instructed its Legal Service Section to create a Special Audit Team from the Fraud Audit
and Investigation Office to investigate and validate HI-LON’s claim to the sale with the
Republic.

Issue: Whether or not HI-LON is entitled to just compensation for the portion of the
property converted to a road right-of-way.

Held: No. The Court ruled that the portion of the subject property is not just an ordinary
asset, but is being used as a RROW for the Manila South Expressway Extension Project,
a road devoted for public use. Under the Philippine Highway Act of 1953, “right-of-way”
is defined as the land secured and reserved to the public for highway purposes, whereas
“highways” includes rights-of-way, bridges, ferries, etc. Art. 420 of the New Civil Code
considers as property of public dominion those intended for public use, such as roads,
canals, ports and bridges constructed by the State, banks, shores, roadsteads, and others
of similar character. Being of similar character as roads for public use, a RROW can be
considered as a property of public dominion, which is outside the commerce of man, and
cannot be leased, donated, sold, or to be object of a contract, except insofar as they may
be the object of repairs or improvements and other incidental matters. As a property of
public dominion akin to a public thoroughfare, a road right-of-way cannot be registered in
the name of private persons under the Land Registration Law and be the subject of a
Torrens Title; and if erroneously included in a Torrens Title, the land involved remai ns as
such a property of public dominion.
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