1. G.R. No.

183416, October 05, 2016

PROVINCIAL ASSESSOR OF AGUSAN DEL

SUR, Petitioner, v. FILIPINAS PALM OIL PLANTATION,
INC., Respondent

Facts:
Petitioner is a government agency in charge with the assessment of lands
under the public domain. Respondent, on the ther hand, is a private
organization engaged in palm oil plantation with a total land area of more
than 7,000 hectares of National Development Company (NDC) lands in
Agusan del Sur. Petitioner assessed Filipinas' properties found within the
plantation area, which Filipinas assailed before the Local Board of
Assessment Appeals (LBAA) on the following grounds:

A. The petitioner erred in imposing real property taxes against the

petitioner for roads, bridges, culverts, pipes and canals as these belonged
to the cooperatives;
B. The petitioner erred when it included haulers and other equipments
which are unmovable as taxable real properties.

The LBAA ruled:

A. Petitioner-Appellee should not be made to pay for the real property
taxes due on the roads starting from January 1, 1991;
B. Road Equipment and haulers are not real properties and, accordingly,
Petitioner-Appellee is not liable for real property tax thereon;

The Provincial Assessor filed a Petition for Review before the Court of
Appeals, which, in turn, sustained the CBAA's Decision. Petitioner then
filed before the Supreme Court a Petition for Review.

Issue:
1. Whether the exemption privilege of NGPI-NGEI from payment of real
property tax extends to respondent Filipinas Palm Oil Plantation Inc. as
lessee of the parcel of land owned by cooperatives; and cralawlawlibrary
2. Whether respondent's road equipment and mini haulers are movable
properties and have not been immobilized by destination for real property
taxation.

Ruling:
The Supreme Court held on the first issue granting with modification as to
the Court of Appeals Decision, but only with respect to the nature of
respondent's road equipment and mini haulers. The roads that respondent
constructed within the leased area should not be assessed with real
property taxes. The roads that respondent constructed within the leased
area should not be assessed with real property taxes.

Under the second issue, the Supreme Court ruled that the road equipment
and mini haulers shall be considered as real property, subject to real
property tax. Petitioner is correct in claiming that the phrase pertaining to
physical facilities for production is comprehensive enough to include the
road equipment and mini haulers as actually, directly, and exclusively
used by respondent to meet the needs of its operations in palm oil
production. The indispensability of the road equipment and mini haulers in
transportation makes it actually, directly, and exclusively used in the
operation of respondent's business.

2 G.R. No. 217336

REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. SPS.
ILDEFONSO ALEJANDRE AND ZENAIDA FERRER ALEJANDRE,
RESPONDENTS.

Facts:
Respondents, on July 18, 1991, filed an application for the registration of
Lot No. 6487 under P.D. No. 1529, described in plan Ap-CAR-000007,
Cad-536, with an area of 256 square meters. They alleged that they are
the owners of the subject property by virtue of a deed of sale or
conveyance; that 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; that the said land is presently occupied by
the applicants-spouses. The trial court decided in favor of the
respondents.

Petitioner disagreeing with the trial court's grant of the application for land
registration, the Republic interposed an appeal to the Court of Appeals
however, the appeal was denied and the CA affirmed the decision of the
Court a quo with the justification that the respondents in their application
for land registration and subsequent pleadings, they come under
paragraph 4 of Section 14, Presidential Decree No. 1529.

Issue:
Whether the Court of Appeals seriously misappreciated the facts as well as
made findings which are inconsistent with, or not supported by, the
evidence on record; and gravely misapplied the applicable laws and
jurisprudence.
Ruling:
The Supreme Court found the petition meritorious.
In the present case, respondents, clearly, come under Paragraph 4 of the
quoted section and not under Paragraph 1 of the same section. It is
undisputed that they acquired the land in question by virtue of a Deed of
Absolute Sale executed on June 20, 1990 from Angustia Alejandre Taleon
who acquired the land from her mother by inheritance. In other words,
the respondent spouses acquired ownership over Lot 6487 through a
contract of sale, which is well within the purview of Paragraph 4 of Section
14 of P.D. No. 1529.

As a consequence, the requirement of open, continuous, exclusive and

notorious possession and/or occupation in the concept of an owner has no
application in the case at bar. Not even the requirement that the land
applied for should have been declared disposable and alienable applies
considering that this is just one of the requisites to be proven when
applicants for land registration fall under Paragraph 1 of Section 14 of P.D.
No. 1529, which is not the case at bar.[16]
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 in so far 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.

3 G.R. No. 218269,

G. SUPREMA T. DUMO, Petitioner, v. REPUBLIC OF THE
PHILIPPINES, Respondent.

Facts:

The disputed property, a parcel of land located in Paringao, La Union, was

puchased by Espinas fro, Carlos Calica through a Deed of Absolute Sale
dated 19 October 1943. Espinas exercised acts of dominion over the
Subject Property by appointing a caretaker to oversee and administer the
property. In 1963, Espinas executed an affidavit stating his claim of
ownership over the Subject Property. Espinas had also been paying realty
taxes on the Subject Property.

Meanwhile, on 6 February 1987, the heirs of Trinidad executed a Deed of

Partition with Absolute Sale over a parcel of land located in Paringao,
Bauang, La Union, included the Subject Property, the heirs of Espinas filed
a Complaint for Recovery of Ownership, Possession and Damages to
protect their interests (Civil Case No. 1301-Bg). The heirs of Espinas also
sought a Temporary Restraining Order to enjoin the Writ of Partial
Execution of the Decision in Civil Case No. 881, a Forcible Entry complaint
filed by the heirs of Trinidad against them.

The Regional Trial Court ruled that the subject property was owned by the
heirs of Espinas which was also affirmed by the Court of Appeals. Both
Courts denied the application for land registration of Dumo.

Issues:

1. The Honorable Court of Appeals committed a reversible error when, in

denying the petition for land registration
2. The Honorable Court of Appeals committed a reversible error when, in
denying the petition for land registration, it failed to consider petitioner’s
exhibit ‘A’ which was formally offered to prove that the subject property
was disposible and alienable to which the respondent made no objection

Ruling:
The Supreme Court held that the Court of Appeals committed no
reversible error in finding that Dumo had no registerable title over the
land she seeks to register. She failed to prove her right under either
Section 14(1) or Section 14(2) of PD No. 1529. She failed to prove that
the land she seeks to register was alienable and disposable land of the
public domain. She failed to prove her and her predecessors-in-interest's
possession and occupation since 12 June 1945 or earlier. Thus, she has no
right under Section 14(1) of PD No. 1529. While she argues that she and
her predecessors-in-interest have been in possession and occupation of
the land for 56 years, she failed to prove that the land has been expressly
declared as patrimonial property. Therefore, she also has no right under
Section 14(2) of PD No. 1529.

4 G.R. No. L-58469 May 16, 1983

MAKATI LEASING and FINANCE CORPORATION, petitioner,

vs.
WEAREVER TEXTILE MILLS, INC., and HONORABLE COURT OF
APPEALS, respondents.

Facts:

Petitioner and the respondent, 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.

Upon private respondent's default, petitioner filed a petition for

extrajudicial foreclosure of the properties mortgage to it. However, the
Deputy Sheriff failed to gain entry into private respondent's premises and
was not able to effect the seizure of the disputed machinery. Due to that,
petitioner filed a complaint for judicial foreclosure with the Court of First
Instance of Rizal and the lower court issued a writ of seizure, the
enforcement of which was however subsequently restrained upon private
respondent's filing of a motion for reconsideration. After several incidents,
the lower court finally issued on February 11, 1981, an order lifting the
restraining order for the enforcement of the writ of seizure and an order
to break open the premises of private respondent to enforce said writ. The
lower court reaffirmed its stand upon private respondent's filing of a
further motion for reconsideration and the sheriff enforcing the seizure
order, repaired to the premises of private respondent and removed the
main drive motor of the subject machinery.

The Court of Appeals, however, set aside the Orders of the lower court
and ordered the return of the drive motor seized by the sheriff pursuant to
said Orders, after ruling that the machinery in suit cannot be the subject
of replevin, much less of a chattel mortgage, because it is a real property
pursuant to Article 415 of the new Civil Code, the same being attached to
the ground by means of bolts and the only way to remove it from
respondent's plant would be to drill out or destroy the concrete floor, the
reason why all that the sheriff could do to enfore the writ was to take the
main drive motor of said machinery. The appellate court rejected
petitioner's argument that private respondent is estopped from claiming
that the machine is real property by constituting a chattel mortgage
thereon.

A motion for reconsideration of this decision of the Court of Appeals

having been denied, petitioner has brought the case to this Court for
review by writ of certiorari. It is contended by private respondent,
however, that the instant petition was rendered moot and academic by
petitioner's act of returning the subject motor drive of respondent's
machinery after the Court of Appeals' decision was promulgated.

Issue:

Whether the Court of Appeals erred in its decision.

Ruling:

The Supreme Court held that the Court of Appeals erred in its decision
and reinstated the lower court’s decision. The appellate court in ruling
questioned machinery is real property and not a personal property
becomes very apparent. Under the Tumalad case, a house of strong
materials 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.

5 G.R. No. L-8133

MANUEL C. MANARANG and LUCIA D. MANARANG, Petitioners-

Appellants, vs. MACARIO M. OFILADA, Sheriff of the City of Manila
and ERNESTO ESTEBAN, Respondents-Appellees.
Facts:

Petitioner obtained a loan of P200 from Ernesto Esteban, and to secure its
payment petitioner executed a chattel mortgage over a house of mixed
materials erected on a lot on Alvarado Street, Manila. Petitioner failed to
pay the loan as agreed upon, respodent Esteban brought an action against
the petitioner in the municipal court of Manila for its recovery, alleging
that the loan was secured by a chattel mortgage on her property. In the
complaint filed, a prayer request is made that the house mortgaged be
sold at public auction to satisfy the debt. The court ruled in favor of the
plaintiff, execution was issued against the same property mortgaged.

Before the property could be sold, petitioner Manarang offered to pay the
sum of P277, which represented the amount of the judgment of P250, the
interest thereon, the costs, and the sheriff’s fees, but the sheriff refused
the tender unless the additional amount of P260 representing the
publication of the notice of sale in two newspapers be paid also.
So petitioner Manarang brought a suit to compel the sheriff to accept the
amount of P277 as full payment of the judgment and to annul the
published notice of sale.

On the foregoing facts, Manarang’s counsel contended in the lower court

that the house in question should be considered as personal property and
the publication of the notice of its sale at public auction in execution
considered unnecessary.

Issue:

Does the fact that the parties entering into a contract regarding a house
gave said property the consideration of personal property in their
contract, bind the sheriff in advertising the property’s sale at public
auction as personal property?

Ruling:

The Supreme Court held that the mere fact that a house was the subject
of a chattel mortgage and was considered as personal property by the
parties does not make said house personal property for purposes of the
notice to be given for its sale at public auction. This ruling is demanded by
the need for a definite, orderly and well- defined regulation for official and
public guidance and which would prevent confusion and
misunderstanding. Further, the High Court declared that the house of
mixed materials levied upon on execution, although subject of a contract
of chattel mortgage between the owner and a third person, is real
property within the purview of Rule 39, section 16, of the Rules of Court
as it has become a permanent fixture on the land, which is real property.

6. G.R. No. L-18456           November 30, 1963

 CONRADO P. NAVARRO, plaintiff-appellee,
vs.
RUFINO G. PINEDA, RAMONA REYES, ET AL., defendants-appellants.

Facts:

Respondents Pineda and his mother, borrowed from Conrado P. Navarro,

the sum of P2,500.00, payable 6 months after said date or on June 14,
1959. To secure the indebtedness, Rufino executed a document captioned
"DEED OF REAL ESTATE and CHATTEL MORTGAGES", whereby Juana
Gonzales, by way of Real Estate Mortgage hypothecated a parcel of land,
belonging to her, registered with the Register of Deeds of Tarlac, under
Transfer Certificate of Title No. 25776, and Rufino G. Pineda, by way of
Chattel Mortgage, mortgaged his two-story residential house, having a
floor area of 912 square meters, erected on a lot belonging to Atty.
Vicente Castro, located at Bo. San Roque, Tarlac, Tarlac; and one motor
truck, registered in his name, under Motor Vehicle Registration Certificate
No. A-171806. Both mortgages were contained in one instrument, which
was registered in both the Office of the Register of Deeds and the Motor
Vehicles Office of Tarlac.

When the mortgage debt became due and payable,respondents failed to

pay and asked for an extension up to June 30, 1960. Came June 30, they
again failed to pay and, for the second time, asked for another extension,
which was given, up to July 30, 1960. In the second extension, defendant
Pineda in a document entitled "Promise", categorically stated that in the
event that they fail to pay on such date, the respondents would no longer
ask for further extension and there would be no need for any formal
demand, and petitioner could proceed to take whatever action he might
desire to enforce his rights, under the said mortgage contract. In spite of
said promise, defendants, failed and refused to pay the obligation.

Petitioner filed a complaint for foreclosure of the mortgage and for

damages, which consisted of liquidated damages in the sum of P500.00
and 12% per annum interest on the principal, effective on the date of
maturity, until fully paid.The Court ruled against the respondents and
ordered them to pay jointly and severally and within ninety (90) days
from the receipt of the copy of this decision to the petitioner the principal
sum of P2,550.00 with 12% compounded interest per annum from June
14, 1960, until said principal sum and interests are fully paid, plus
P500.00 as liquidated damages and the costs of this suit, with the warning
that in default of said payment of the properties mentioned in the deed of
real estate mortgage and chattel mortgage be sold to realize said
mortgage debt, interests, liquidated damages and costs, in accordance
with the pertinent provisions of Act 3135, as amended by Act 4118, and
Art. 14 of the Chattel Mortgage Law, Act 1508.

Issue:
Whether the deed of real estate and chattel mortgages appended to the
complaint is valid, notwithstanding the fact that the house of the
defendant Rufino G. Pineda was made the subject of the chattel
mortgage, for the reason that it is erected on a land that belongs to a
third person.

Ruling:
The doctrine that a house of mixed materials has been considered as a
chattel between them, has been recognized, it has been a constant
criterion nevertheless that, with respect to third persons, who are not
parties to the contract, and specially in execution proceedings, the house
is considered as an immovable property. In the case at bar, the house in
question was treated as personal or movable property, by the parties to
the contract themselves. In the deed of chattel mortgage, appellant
Rufino G. Pineda conveyed by way of "Chattel Mortgage" "my personal
properties", a residential house and a truck. The mortgagor himself
grouped the house with the truck, which is, inherently a movable
property. The house which was not even declared for taxation purposes
was small and made of light construction materials: G.I. sheets
roofing, sawali and wooden walls and wooden posts; built on land
belonging to another.

7. ANTONIO PUNSALAN, JR., petitioner,

vs.
REMEDIOS VDA. DE LACSAMANA and THE HONORABLE JUDGE
RODOLFO A. ORTIZ, respondents.

Facts:

Petitioner was the former registered owner of a parcel of land consisting

of 340 square meters situated in Bamban, Tarlac. In 1963, petitioner
mortgaged said land to respondent PNB (Tarlac Branch) in the amount of
P10,000.00, but for failure to pay said amount, the property was
foreclosed on December 16, 1970. Respondent PNB (Tarlac Branch) was
the highest bidder in said foreclosure proceedings. However, the bank
secured title thereto only on December 14, 1977.

On July 26, 1978, a Deed of Sale was executed between respondent PNB
(Tarlac Branch) and respondent Lacsamana over the property. This
contract was amended on July 31, 1978, particularly to include in the sale,
the building and improvement thereon. By virtue of said instruments,
respondent - Lacsamana secured title over the property in her name (TCT
No. 173744) as well as separate tax declarations for the land and building.

On November 22, 1979, petitioner commenced suit for "Annulment of

Deed of Sale with Damages" against herein respondents PNB and
Lacsamana essentially impugning the validity of the sale of the building as
embodied in the Amended Deed of Sale and prayed that the Deed of Sale
of the building in favor of respondent Lacsamana be declared null and void
and that damages in the total sum of P230,000.00, more or less, be
awarded to him.
On March 14, 1980, respondent PNB filed a Motion to Dismiss on the
ground that venue was improperly laid considering that the building was
real property under article 415 (1) of the New Civil Code and therefore
section 2(a) of Rule 4 should apply. 

On April 25, 1980, respondent Court granted respondent PNB's Motion to

Dismiss. Petitioner then filed a Motion for Reconsideration but the
respondent Court denied reconsideration for lack of merit.

Petitioner then filed a Motion to Set Case for Pre-trial but respondent
Court denied said Motion to Set Case for Pre-trial as the case was already
dismissed in the previous Orders of April 25, 1980 and September 1,
1980.

Issue:

Whether or not respondent Court erred in denying the Motion to Set Case
for Pre-trial with respect to respondent Remedios Vda. de Lacsamana as
the case had been dismissed on the ground of improper venue upon
motion of co-respondent Philippine National Bank (PNB).

Ruling:

The Supreme Court affirmed the respondent Court's Order denying the
setting for pre-trial. The warehouse claimed to be owned by petitioner is
an immovable or real property as provided in article 415(l) of the Civil
Code. Buildings are always immovable under the Code. A building treated
separately from the land on which it stood is immovable property and the
mere fact that the parties to a contract seem to have dealt with it
separate and apart from the land on which it stood in no wise changed its
character as immovable property. The prevalent doctrine is that an action
for the annulment or rescission of a sale of real property does not operate
to efface the fundamental and prime objective and nature of the case,
which is to recover said real property.

8 G.R. No. 164408               March 24, 2014

REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
ZURBARAN REALTY AND DEVELOPMENT
CORPORATION, Respondent.

Facts:

Respondent Zurbaran Realty and Development Corporation filed in the

Regional Trial Court (RTC) in San Pedro, Laguna an application for original
registration covering a 1,520 square meter parcel of land situated in
Barrio Banlic, Municipality of Cabuyao, Province of Laguna, denominated
as Lot 8017-A of Subdivision Plan CSD-04-006985-D, Cad. 455-D,
Cabuyao Cadastre, alleging that it had purchased the land on March 9,
1992 from Jane de Castro Abalos, married to Jose Abalos, for
₱300,000.00; that the land was declared for taxation purposes in the
name of its predecessor-in-interest under Tax Declaration No. 22711; that
there was no mortgage or encumbrance of any kind affecting the land, nor
was there any other person or entity having any interest thereon, legal or
equitable, adverse to that of the applicant; and that the applicant and its
predecessors-in-interest had been in open, continuous and exclusive
possession and occupation of the land in the concept of an owner.

On May 12, 1997, the RTC rendered its decision, holding that the
respondent and its predecessors-in-interest had been in open, public,
peaceful, continuous, exclusive and adverse possession and occupation of
the land under a bona fide claim of ownership even prior to 1960 and,
accordingly, granted the application for registration

Petitioner then appealed at the Court of Appeals but, the CA affirmed the
decision of the RTC, and concluded that the reports made by the
concerned government agencies and the testimonies of those familiar with
the land in question had buttressed the court a quo’s conclusion that the
respondent and its predecessors-in-interest had been in open, public,
peaceful, continuous, exclusive, and adverse possession and occupation of
the land under a bona fide claim of ownership even prior to 1960.

Issue:

Whether the Court of Appeals gravely erred on a question of law when it

affirmed the trial court’s grant on the application for original registration
despite the absence of evidence that respondent and its predecessors-in-
interest have complied with the period of possession and occupation
required by law.

Ruling:

The Supreme Court held that the petition for review is meritorious.
Section 14 of P.D. No. 1529 enumerates those who may file an application
for registration of land based on possession and occupation of a land of
the public domain. The respondent’s application does not enlighten as to
whether it was filed under Section 14(1) or Section 14(2) of P.D. No.
1529. The application alleged that the respondent and its predecessors-in-
interest had been in open, continuous and exclusive possession and
occupation of the property in the concept of an owner, but did not state
when possession and occupation commenced and the duration of such
possession. At any rate, the evidence presented by the respondent and its
averments in the other pleadings reveal that the application for
registration was filed based on Section 14(2), not Section 14(1) of P.D.
No. 1529. The respondent did not make any allegation in its application
that it had been in possession of the property since June 12, 1945, or
earlier, nor did it present any evidence to establish such fact.

Here, there is no evidence showing that the land in question was within an
area expressly declared by law either to be the patrimonial property of the
State, or to be no longer intended for public service or the development of
the national wealth. The Court is left with no alternative but to deny the
respondent's application for registration.

9 G.R. No. 190817

REPUBLIC OF THE PHILIPPINES, Petitioner

vs.
ROVENCY REALTY AND DEVELOPMENT CORPORATION, Respondent

Facts:

Respondent filed before the RTC an Amended Application for Registration

covering a parcel of land identified as Lot No. 3009 situated in Barangay
Balulang, Cagayan de Oro City. Respondent alleged that it is the absolute
owner the subject land having acquired it from its previous owner, P.N.
Roa Enterprises, Inc., by virtue of a notarized deed of absolute sale
executed on March 5, 1997 and that it has registered the subject land for
taxation purposes and paid the realty taxes due therein from its
acquisition, to the filing of the application; that immediately after
acquiring the subject land, it took actual physical possession of the same
and has been continuously occupying the subject land; and that it and its
predecessors-in- interest have been in open, continuous, adverse, and
peaceful possession in concept of owner of the subject land since time
immemorial, or for more than thirty (30) years.

However, an opposition to the application was filed by the Heirs of Paulino

Avancena. They alleged, that the subject land was already claimed and
owned by the late Atty. Paulino Avancena, their father and predecessor-
in-interest, as early as 1926; that Paulino had been in open, continuous,
notorious, adverse, and exclusive possession and occupation of the
subject land.

On August 3, 2001, the petitioner, through the Office of the Solicitor

General (OSG), filed its opposition to the application on the following
grounds: that neither RRDC nor its predecessors-in-interest have been in
open, continuous, exclusive, and notorious possession and occupation of
the land in question since 12 June 1945 or prior thereto; that the subject
land exceeds the twelve (12)-hectare limit for confirmation of imperfect
title set by Section 47 of Commonwealth Act (CA.) No. 141, as amended
by Republic Act (R.A.) No. 6940; and that the subject land forms part of
the public domain belonging to the Republic and, thus, not subject to
private appropriation.

The RTC ruled in favor of the respondent granting its application for
registration of the subject land. Appeal was made by the petitioner but the
Court of Appeals affirmed the decision of the Court a quo.

Issue:

Whether respondent’s evidence is insufficient to prove that it or its

predecessors-in-interest have been in open, continuous, exclusive and
nototrious possession under a bona fide claim of ownership since June 12,
1945 or earlier and the subject property is no longer intended for public
use or for the development of the national wealth.

Ruling:

The Supreme Court ruled that the petition is meritorious. The Court
explained that applicants for original registration of title to land must first
establish compliance with the provisions of either Section 14(1) or
Section 14(2) of P.D. No. 1529. Thus, it is important to ascertain under
what provision of Section 14 the registration is sought. The contention of
the respondent is unavailing. In its application, RRDC alleged that it and
its predecessors-in-interest "had been in open, continuous, adverse, and
peaceful possession in concept of owner of the subject property since
time immemorial or for more than thirty years." This allegation made it
unclear whether registration is sought under Section 14(1) - possession
since 12 June 1945 or earlier; or under Section 14(2) - possession for
more than thirty years. In this case, aside from the deeds of absolute
sale covering the subject land which were executed prior to 12 June
1945, RRDC did not present any evidence which would show that its
predecessors-in-interest actually exercised acts of dominion over the
subject land even before the cut-off period. As such, RRDC failed to
prove that its possession of the land, or at the very least, its individual
predecessors-in-interest's possession over the same was not mere
fiction. Also, the respondent did not present any evidence which would
show that the subject land was expressly declared as no longer intended
for public service or the development of the national wealth, or that the
property has been converted into patrimonial. Hence, it failed to prove
that acquisitive prescription has begun to run against the State, and that
it has acquired title to the subject land by virtue thereof.
 10 [G.R. No. 137705. August 22, 2000]

SERGS PRODUCTS, INC., and SERGIO T. GOQUIOLAY, Petitioners,

vs. PCI LEASING AND FINANCE, INC., Respondent.

Facts:

Respondent filed with the RTC a complaint for a sum of money, with an
application for a writ of replevin docketed as Civil Case No. Q-98-
33500. On March 6, 1998, upon an ex-parte application of PCI Leasing,
respondent judge issued a writ of replevin directing its sheriff to seize and
deliver the machineries and equipment to the respondent after 5 days and
upon the payment of the necessary expenses. The sheriff then
implemented the writ and seized one machinery with the word that he
would return for the other machineries.

On March 25, 1998, petitioners filed a motion for special protective order,
invoking the power of the court to control the conduct of its officers and
amend and control its processes, praying for a directive for the sheriff to
defer enforcement of the writ of replevin.

This motion was opposed by the respondent, on the ground that the
properties were still personal and therefore still subject to seizure and a
writ of replevin.

In their Reply, petitioners asserted that the properties sought to be seized

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

On April 6, 1998, the sheriff again sought to enforce the writ of seizure
and take possession of the remaining properties. He was able to take two
more, but was prevented by the workers from taking the rest. 
This prompted the petitioner to alleviate the case at the Court of Appeals
via certiorari. The appellate court ruled that the subject machines were
personal property, and that they had only been leased, not owned, by
petitioners. It also ruled that the words of the contract are clear and leave
no doubt upon the true intention of the contracting parties.

Issue:

Whether or not the machineries purchased and imported by SERGS

became real property by virtue of immobilization.

Ruling:

The Supreme Court ruled that the petition is not meritorious.

In the present case, the machines that were the subjects of the Writ of
Seizure were placed by petitioners in the factory built on their own land.
Indisputably, they were essential and principal elements of their
chocolate-making industry. Hence, although each of them was movable or
personal property on its own, all of them have become immobilized by
destination because they are essential and principal elements in the
industry. In that sense, petitioners are correct in arguing that the said
machines are real, not personal, property pursuant to Article 415 (5) of
the Civil Code.

However, the Supreme Court disagreed on the submission of the

petitioners that the said machines are not proper subjects of the Writ of
Seizure. The Court has held that contracting parties may validly stipulate
that a real property be considered as personal. After agreeing to such
stipulation, they are consequently estopped from claiming otherwise.
Under the principle of estoppel, a party to a contract is ordinarily
precluded from denying the truth of any material fact found
therein. Clearly then, petitioners are estopped from denying the
characterization of the subject machines as personal property. Under the
circumstances, they are proper subjects of the Writ of Seizure.
11 G.R. No. 179987              

HEIRS OF MARIO MALABANAN, (Represented by Sally A.

Malabanan), Petitioners,
vs.
REPUBLIC OF THE PHILIPPINES, Respondent.

Petitioners alleged that they purchased the subject land from Eduardo
Velazco. In relation to this, petitioners then filed an application for land
registration covering the property in the Regional Trial Court (RTC) in
Tagaytay City, Cavite, claiming that the property formed part of the
alienable and disposable land of the public domain, and that he and 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. The
trial court then rendered judgment Malabanan’s application for land
registration.

The Office of the Solicitor General (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, and
that the RTC erred in finding that he had been in possession of the
property in the manner and for the length of time required by law for
confirmation of imperfect title. The appellate court then reversed the
decision of the lower court and dismissed the application for registration of
Malabanan.

Issue:

Are petitioners entitled to the registration of the subject land in their

names under Section 14(1) or Section 14(2) of the Property Registration
Decree or both?

Ruling:

The Supreme Court held that the petitioners failed to present sufficient
evidence to establish that they and their predecessors-in-interest had
been in possession of the land since June 12, 1945. Without satisfying the
requisite character and period of possession - possession and occupation
that is open, continuous, exclusive, and notorious since June 12, 1945, or
earlier - the land cannot be considered ipso jure converted to private
property even upon the subsequent declaration of it as alienable and
disposable. Prescription never began to run against the State, such that
the land has remained ineligible for registration under Section 14(1) of the
Property Registration Decree. Likewise, the land continues to be ineligible
for land registration under Section 14(2) of the Property Registration
Decree unless Congress enacts a law or the President issues a
proclamation declaring the land as no longer intended for public service or
for the development of the national wealth.
12 G.R. No. L-30173 September 30, 1971

GAVINO A. TUMALAD and GENEROSA R. TUMALAD, plaintiffs-appellees,

vs.
ALBERTA VICENCIO and EMILIANO SIMEON, defendants-appellants.

Alberta Vicencio and Emiliano Simeon received a loan of P4, 800 from Gavino
and Generosa Tumalad. To guaranty said loan, Vicencio executed a chattel
mortgage in favor of Tumalad over their house of strong materials which stood
on a land which was rented from the Madrigal & Company, Inc. When
Vicencio defaulted in paying, the house was extrajudicially foreclosed,
pursuant to their contract. It was sold to Tumalad and they instituted a Civil
case in the Municipal Court of Manila to have Vicencio vacate the house and
pay rent.

The MTC decided in favor of Tumalad ordering Vicencio to vacate the house
and pay rent until they have completely vacated the house. Vicencio is
questioning the legality of the chattel mortgage on the ground that 1) the
signature on it was obtained thru fraud and 2) the mortgage is a house of
strong materials which is an immovable therefore can only be the subject of a
REM. On appeal, the CFI found in favor of Tumalad, and since the Vicencio
failed to deposit the rent ordered, it issued a writ of execution, however the
house was already demolished pursuant to an order of the court in an
ejectment suit against Vicencio for non-payment of rentals. Thus the case at
bar.

ISSUE:

Whether or not the chattel mortgage is void since its subject is an immovable

HELD:

NO.
Although a building is by itself an immovable property, parties to a contract
may treat as personal property that which by nature would be real property
and it would be valid and good only insofar as the contracting parties are
concerned. By principle of estoppel, the owner declaring his house to be a
chattel may no longer subsequently claim otherwise.
When Vicencio executed the Chattel Mortgage, it specifically provides that the
mortgagor cedes, sells and transfers by way of Chattel mortgage. They
intended to treat it as chattel therefore are now estopped from claiming
otherwise. Also the house stood on rented land which was held in previous
jurisprudence to be personalty since it was placed on the land by one who
had only temporary right over the property thus it does not become
immobilized by attachment.

[Vicencio though was not made to pay rent since the action was instituted
during the period of redemption therefore Vicencio still had a right to remain in
possession of the property]

MANILA ELECTRIC COMPANY v. CITY ASSESSOR, GR No. 166102, 2015-08-05

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, particularly,
by: (1) Resolution No. 36 dated May 15, 1922 of the Municipal
Council of Lucena; (2) Resolution No. 108 dated July 1, 1957 of the
Municipal Council of Lucena; (3) Resolution No. 2679 dated June 13,
1972 of the Municipal Board of Lucena City; (4) Certificate of
Franchise dated October 28, 1993 issued by the National
Electrification Commission; and (5) Republic Act No. 9209 approved
on June 9, 2003 by Congress.

On February 20, 1989, 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, which was docketed as LBAA-89-2. MERALCO
claimed 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.

The LBAA rendered a Decision in LBAA-89-2 on July 5, 1989, finding

that under its franchise, MERALCO was required to pay the City
Government of Lucena a tax equal to 5% of its gross earnings, and
“[s]aid tax shall be due and payable quarterly and shall be in lieu of
any and all taxes of any kind, nature, or description levied,
established, or collected . . ., on its poles, wires, insulators,
transformers and structures, installations, conductors, and
accessories, . . ., from which taxes the grantee (MERALCO) is
hereby expressly exempted.” As regards the issue of whether or not
the poles, wires, insulators, transformers, and electric meters of
MERALCO were real properties, the LBAA cited the 1964 case
of Board of Assessment Appeals v. Manila Electric Company (1964
MERALCO case) in which the Court held that: (1) the steel towers fell
within the term “poles” expressly exempted from taxes under the
franchise of MERALCO; and (2) the steel towers were personal
properties under the provisions of the Civil Code and, hence, not
subject to real property tax. The LBAA lastly ordered that Tax
Declaration No. 019-6500 would remain and the poles, wires,
insulators, transformers, and electric meters of MERALCO would be
continuously assessed, but the City Assessor would stamp on the
said Tax Declaration the word “exempt.

ISSUES:

A. WON MERALCO PROPERLY POSTED A BOND.

B. WON MERALCO IS SUBJECT TO REAL PROPERTY TAX.

C. WON THE ASSESSMENT MADE BY THE CITY ASSESSOR IS

NULL AND VOID.

HELD: 

A. YES. Section 252 of the Local Government Code mandates that

“[n]o protest shall be entertained unless the taxpayer first pays the
tax.” It is settled that the requirement of “payment under protest” is a
condition sine qua non before an appeal may be entertained. Section
231 of the same Code also dictates that “[a]ppeal on assessments of
real property . . . shall, in no case, suspend the collection of the
corresponding realty taxes on the property involved as assessed by
the provincial or city assessor, without prejudice to subsequent
adjustment depending upon the final outcome of the appeal.” Clearly,
under the Local Government Code, even when the assessment of
the real property is appealed, the real property tax due on the basis
thereof should be paid to and/or collected by the local government
unit concerned.

In the case at bar, the City Treasurer of Lucena, in his letter dated
October 16, 1997, sought to collect from MERALCO the amount of
P17,925,117.34 as real property taxes on its machineries, plus
penalties, for the period of 1990 to 1997, based on Tax Declaration
Nos. 019-6500 and 019-7394 issued by the City Assessor of Lucena.
MERALCO appealed Tax Declaration Nos. 019-6500 and 019-7394
with the LBAA, but instead of paying the real property taxes and
penalties due, it posted a surety bond in the amount of
P17,925,117.34.

By posting the surety bond, MERALCO may be considered to have

substantially complied with Section 252 of the Local Government
Code for the said bond already guarantees the payment to the Office
of the City Treasurer of Lucena of the total amount of real property
taxes and penalties due on Tax Declaration Nos. 019-6500 and 019-
7394. This is not the first time that the Court allowed a surety bond as
an alternative to cash payment of the real property tax before
protest/appeal as required by Section 252 of the Local Government
Code. In Camp John Hay Development Corporation v. Central Board
of Assessment Appeals, the Court affirmed the ruling of the CBAA
and the Court of Tax Appeals en banc applying the “payment under
protest” requirement in Section 252 of the Local Government
Code and remanding the case to the LBAA for “further proceedings
subject to a full and up-to-date payment, either in cash or surety, of
realty tax on the subject properties . . . .”

Accordingly, the LBAA herein correctly took cognizance of and gave

due course to the appeal of Tax Declaration Nos. 019-6500 and 019-
7394 filed by MERALCO.

B. YES. The last paragraph of Section 234 had unequivocally

withdrawn, upon the effectivity of the Local Government Code,
exemptions from payment of real property taxes granted to natural or
juridical persons, including government-owned or controlled
corporations, except as provided in the same section.
MERALCO, a private corporation engaged in electric distribution, and
its transformers, electric posts, transmission lines, insulators, and
electric meters used commercially do not qualify under any of the
ownership, character, and usage exemptions enumerated in Section
234 of the Local Government Code. It is a basic precept of statutory
construction that the express mention of one person, thing, act, or
consequence excludes all others as expressed in the familiar
maximexpressio unius est exclusio alterius.  Not being among the
recognized exemptions from real property tax in Section 234 of the 
Local Government Code, then the exemption of the transformers,
electric posts, transmission lines, insulators, and electric meters of
MERALCO from real property tax granted under its franchise was
among the exemptions withdrawn upon the effectivity of the Local
Government Code on January 1, 1998.

It is worthy to note that the subsequent franchises for operation

granted to MERALCO, i.e., under the Certificate of Franchise dated
October 28, 1993 issued by the National Electrification Commission
and Republic Act No. 9209 enacted on June 9, 2003 by Congress,
are completely silent on the matter of exemption from real property
tax of MERALCO or any of its properties.

It is settled that tax exemptions must be clear and unequivocal. A

taxpayer claiming a tax exemption must point to a specific provision
of law conferring on the taxpayer, in clear and plain terms, exemption
from a common burden. Any doubt whether a tax exemption exists is
resolved against the taxpayer. MERALCO has failed to present
herein any express grant of exemption from real property tax of its
transformers, electric posts, transmission lines, insulators, and
electric meters that is valid and binding even under the Local
Government Code. c

C. YES. The Court cannot help but attribute the lack of a valid notice
of assessment to the apparent lack of a valid appraisal and
assessment conducted by the City Assessor of Lucena in the first
place. It appears that the City Assessor of Lucena simply lumped
together all the transformers, electric posts, transmission lines,
insulators, and electric meters of MERALCO located in Lucena City
under Tax Declaration Nos. 019-6500 and 019-7394, contrary to the
specificity demanded under Sections 224 and 225 of the Local
Government Code for appraisal and assessment of machinery. The
City Assessor and the City Treasurer of Lucena did not even provide
the most basic information such as the number of transformers,
electric posts, insulators, and electric meters or the length of the
transmission lines appraised and assessed under Tax Declaration
Nos. 019-6500 and 019-7394. There is utter lack of factual basis for
the assessment of the transformers, electric posts, transmission
lines, insulators, and electric meters of MERALCO.The Court of
Appeals laid the blame on MERALCO for the lack of information
regarding its transformers, electric posts, transmission lines,
insulators, and electric meters for appraisal and assessment
purposes because MERALCO failed to file a sworn declaration of
said properties as required by Section 202 of the Local Government
Code. As MERALCO explained, it cannot be expected to file such a
declaration when all the while it believed that said properties were
personal or movable properties not subject to real property tax.