JOSE BURGOS, SR., JOSE BURGOS, JR., BAYANI SORIANO and J. BURGOS MEDIA SERVICES, INC. vs.

THE CHIEF
OF STAFF, ARMED FORCES OF THE PHILIPPINES, THE CHIEF, PHILIPPINE CONSTABULARY, THE CHIEF LEGAL
OFFICER, PRESIDENTIAL SECURITY COMMAND, THE JUDGE ADVOCATE GENERAL, ET AL.,
(G.R. No. L-64261 December 26, 1984)

FACTS OF THE CASE:

Two newspaper outlets, the Metropolitan Mail and the “WEForum”, reported writing and publishing subversive articles
regarding the government. The AFP commenced an action of search warrants against those outlets. The said warrants
contained 2 addresses: No. 19, Road 3, Project 6, Quezon City, and 784 Units C & D, RMS Building, Quezon Avenue, Quezon
City. It warranted also to seize all printing equipment, paraphernalia, paper, ink, photo (equipment, typewriters, cabinets,
tables, communications/recording equipment, tape recorders, dictaphone and the like used and/or connected in the
printing of the "WE FORUM" newspaper, Subversive documents, pamphlets, leaflets, books, and other publication to
promote the objectives and purposes of the subversive organization known as Movement for Free Philippines, Light-a-Fire
Movement and April 6 Movement.

5 months later, the petitioners pray to the Supreme Court a certiorari, mandamus, prohibition and writ of preliminary
mandatory and prohibitory injunction be issued for the return of the seized articles and alleged for using those evidence
against the separate criminal case filed in People vs. Burgos Jr.. The Supreme Court rendered the preliminary injunction as
moot and academic as the respondents manifested that they will not use those seized documents and machines until the
final resolution of the seizure case.

One of the contentions presented by the petitioners was that, the printing machines were real property in nature and
hence, cannot be subjected for search warrants and tantamount to violation to Rule 126, Section 2 of the Rules of Court, to
wit:

Sec. 2. Personal Property to be seized. — A search warrant may be issued for the search and seizure of the
following personal property:

[a] Property subject of the offense;

[b] Property stolen or embezzled and other proceeds or fruits of the offense; and

[c] Property used or intended to be used as the means of committing an offense.

ISSUE:
Whether the machines seized were movable property.

HELD:

Yes, it was an movable property

Under Article 415[5] of the Civil Code of the Philippines, immovable property is that "machinery, receptacles, instruments
or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on
a piece of land and which tend directly to meet the needs of the said industry or works" are considered immovable
property.

In Davao Sawmill Co. v. Castillo, where this legal provision was invoked, this Court ruled 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 do not claim to be the owners of the land and/or building on which the machinery was
placed. This being the case, the machinery in question, while in fact bolted to the ground, remains movable property
susceptible to seizure under a search warrant.

Note: The search warrant was invalidated by the Court due to constitutional prohibition about general warrants.

IN VIEW OF THE FOREGOING, Search Warrants Nos. 20-82[a] and 20-82[b] issued by respondent judge on December 7,
1982 are hereby declared null and void and are accordingly set aside. The prayer for a writ of mandatory injunction for the
return of the seized articles is hereby granted and all articles seized thereunder are hereby ordered released to petitioners.
No costs.
CAPITOL WIRELESS, INC., Petiti v. THE PROVINCIAL TREASURER OF BATANGAS, THE PROVINCIAL ASSESSOR OF
BATANGAS, THE MUNICIPAL TREASURER AND ASSESSOR OF NASUGBU, BATANGAS, Respondents.
(G.R. No. 166102, August 05, 2015)

FACTS OF THE CASE:

Petitioner CapWire, a Philippine corporation in the business of providing international telecommunications services, signed
several agreements with international corporations and even had an agreement with PLDT. Later on, they submitted a
Sworn Statement of True Value of Real Properties at the Provincial Treasurer's Office, Batangas City, Batangas Province, for
the Wet Segment of the system to register for their right in their international submarine cable system. They contended
that as a “wet segment” is laid in international, and not Philippine, waters and claims that as co-owner, it does not own any
particular physical part of the cable system but, consistent with its financial contributions, it owns the right to use a certain
capacity of the said system. Such lines were not also located within the Philippine waters but international waters.

Here the Provincial Treasurer declared that their submarine cable system is a taxable real property. Later on, Capwire
received a warrant of levy and notice of auction sale.

Capwire 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. The trial court even the Court of Appeals dismissed the petition for
non-exhaustion of administrative remedies. They contended that they violated the lifeblood doctrine and didn’t appeal to
the Local Board Assessment Appeals instead before raising questions to the Court.

ISSUE:
Whether the electric line posts were immovable property to subject them for real property tax.

HELD:

Yes, it is an immovable property

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 property
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.

Even objects in or on a body of water may be classified as such, as "waters" is classified as an immovable object under
Article 415(8) of the Code. A classic example is a boathouse which, by its nature, is a vessel and, therefore, a personal
property but, if it is tied to the shore and used as a residence, and since it floats on waters which is immovable, is
considered real property. Besides, the Court has already held that "it is a familiar phenomenon to see things classed as real
property for purposes of taxation which on general principle might be considered personal property.

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.

WHEREFORE, the petition is DENIED. The Court of Appeals' Decision dated May 30, 2007 and Resolution dated October 8,
2007 are AFFIRMED.
FERNANDO AND PAZ G. LADERA, appellee vs. CHARLES N. HODGES, ET. AL. appellant
(G.R. No. 8027-R, September 23, 1952)

FACTS OF THE CASE:

A contract to sell commenced between the parties (house owner Ladera and the lot owner Hodges) on March 18, 1946 in
the 278 sq meter area Iloilo cadastre. They agreed for:
1) Down payment of Php800.00 and Php50.00 monthly with 1% interest monthly payable until payment is full.
2) Failure to pay within the 60 days due, the contract is impliedly rescinded and annulled.
3) In the succeeding unpaid condition, the sums of payment to be made shall be considered as RENT
4) The lot owner had the liberty to dispose of the parcel of land including its improvements to any person in any
manner as if the contract was nonexistent.
5) In case of ejectment proceedings, the contract further provided for Php100.00 attorney’s fees payable to the lot
owner.

Laderas built a house in the lot with an final assessed value of Php4,500.00. Months later, the latter failed to pay. In January
1947, rescinded the contract and filed an ejectment case against spouses Ladera in the Iloilo Municipal Court and ruled
over the contracts made. Ladera ordered by the Court to surrender the possession of the lot with corresponding payments
of Php10.00 monthly. Months later, the court issued a writ of execution whereby all rights, interests, and participation over
the house was levied. The house underwent a public auction and when a certain Magno became the highest bidder, it was
not published in the general circulation and Ladera was not presented because she was in Manila. The next event was that
the lot was sold by Hodges to Atty Villa without records.

Upon return, Ladera redeemed the property to the Sheriff at the cost of Php230.00 but it did not appear that this money
was turned over to Hodges.

Hence this action commenced by the Ladera against the lot owner, the sheriff, and the sale purchasers to set aside the sale
and recover the property. The Hodges and Magno moved to estoppel due to late redemption, Villa for purchaser in good
faith and the sheriff defaulted. The trial court favored the spouses of Ladera.

Hence this appeal by the lot owner Hodges and the sale lot purchaser Atty Villa. They argued that since they owned the lot
and sold it to another person, hence, the said house should be regarded also as movable or personal property.

ISSUE:
Whether the house built on the lot is considered movable or personal property

HELD:

No, the house built on the lot is an immovable property by operation of law.

It is quite clear under Article 334 (now Article 415 of the New Civil Code) of the Old Civil Code that lands, buildings, roads,
and constructions of all kinds adhered to the soil is an immovable property.

Hence, it has no distinction as to the owner of the land and to the owner of the building or house. The only doubt that may
arise is that, in the case of houses sold for immediate demolition.

Spanish civilist Manresa upheld that “ We do not believe that these fit with reference to the Spanish Code, whose precept is
strict” (No creemos que estas caben con referencia al Codigo Español, cuyo precepto es terminante). In this case, the
applicable rule here is “where the law does not distinguish, nor should we distinguish ourselves” (ubi lex non distinguit nec
nos destinguere debemus).

Arguments:

A) 2 types of immovables appeared in this case: immovables by destination and immovables by incorporation.

Destination: Just like our current civil code, Article 415 (4) states that “statues, reliefs, paintings and other objects for use or
ornamentation, placed in a building, or on lands of the owners in such a manner that it reveals the intention of the owner
to attached them permanently to the tenements”. Hence, in order to require those things to be immovable or real
property, it shall be placed by the owner of the owner.

Incorporation: Article 415 (2) states that, “trees, plants, growing fruits permanently attached to the land, or form an
integral part of an immovable”, here, nowhere requires that those things be placed by the owner of the land.

Hence, the criterion is the union of those things with the soil.

B) Principles of Accession: “all that the builder yields to the soil” (omne quod solo inuedificator solo cedit). Buildings
and construction are merely accessories to the land. Hence, the accessories shall partake the nature of the principal
thing, is the land, forming, as they do, but a single object.
A true building is an immovable or real property whether the owner of the land is a usufructuary or lessee erects it.
Moreover, when Ladera built the house in question, she was not a mere lessee but occupied the land under a valid contract
with Hodges to sell it to her. Thus, the object of the levy and the sale was real property. The publication in a newspaper
in a general circulation was made making the execution sale void and conferred no title to the purchaser. Furthermore,
there was a valid exercise of redemption. So, at the time Magno sold the property to Villa, Magno no longer had title
over the property strengthening the fact that since there was no title, the subsequent sale was null and void.
ENRIQUE LOPEZ vs. VICENTE OROSA, JR., and PLAZA THEATRE, INC.
(G.R. Nos. L-10817-18 February 28, 1958) - EN BANC

FACTS OF THE CASE:

Orosa approached the sawmill owner Lopez to encourage him to invest in the theater business. Unwilling, but Lopez
pledged to supply the lumber necessary to support his friend’s aspiration. Lopez further agreed that payment therefore
would be on demand and not cash on delivery basis. Pursuant to said verbal agreement, Lopez delivered the lumber which
was used for the construction of the Plaza Theatre on May 17, 1946, up to December 4 of the same year. But 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.

The Plaza Theater was erected in its place and acquired by the respondent corporation. Orosa promised to pay the
remaining balance to Lopez but to no avail because even the corporation itself mortgaged the Plaza building and land as
counter-security to the loan availed in favor of Luzon Surety Company as counter-security to which unknown to the
petitioner.

Here came the action for recovery sum of money instituted by the petitioner with a prayer that non-compliance therewith,
the subject land and building under one title be under public auction to satisfy the indebtedness or that, 420 shares of stock
be the same held in auction for debt satisfaction. Separate defenses presented. Orosa contended that as the 420 shares of
stock assigned and conveyed by the assignor and accepted by Lopez as direct security for the payment of the amount of
P41,771.35 were personal properties, plaintiff was barred from recovering any deficiency if the proceeds of the sale
thereof at public auction would not be sufficient to cover and satisfy the obligation.

Defendant corporation averred that while it was true that the materials purchased by Orosa were sold by the latter to the
corporation, such transactions were in good faith and for valuable consideration thus when plaintiff failed to claim said
materials within 30 days from the time of removal thereof from Orosa, lumber became a different and distinct specie and
plaintiff lost whatever rights he might have in the same and consequently had no recourse against the Plaza Theatre, Inc.,
that the claim could not have been refectionary credit, for such kind of obligation referred to an indebtedness incurred in
the repair or reconstruction of something already existing and this concept did NOT INCLUDE AN ENTIRELY NEW WORK.

The trial court held that defendants Vicente Orosa, Jr., and the Plaza Theatre, Inc., were jointly liable for the unpaid balance
of the cost of lumber used in the construction of the building and the plaintiff thus acquired the materialman's lien over the
same. 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 COurt 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.

ISSUE:
Whether the theater was movable property.

HELD:

No, it is an immovable property

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 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, 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 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 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.

The materialman's lien could be charged only to the building for which the credit was made or which received the benefit
of refection, the lower court was right in, holding at 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.

MACHINERY & ENGINEERING SUPPLIES, INC. v. THE HONORABLE COURT OF APPEALS, HON. POTENCIANO
PECSON, JUDGE OF THE COURT OF FIRST INSTANCE OF MANILA, IPO LIMESTONE CO., INC., and ANTONIO
VILLARAMA
(G.R. No. L-7057. October 29, 1954) - EN BANC

FACTS OF THE CASE:

Petitioner Machinery filed a replevin against the respondent IPO Limestone for recovery of machineries sold and delivered
to the defendants. Leonardo Contreras, Manager of the respondent Company, and Pedro Torres, in charge thereof, met the
deputy sheriffs, and Contreras handed to them a letter addressed to Atty. Leopoldo C. Palad, ex-officio Provincial Sheriff of
Bulacan, signed by Atty. Adolfo Garcia of the defendants therein, protesting against the seizure of the properties in
question, on the ground that they are not personal properties. Roco’s attention was called to the fact that the equipments
could not possibly be dismantled without causing damages or injuries to the wooden frames attached to them. As Roco
insisted in dismantling the equipments on his own responsibility, alleging that the bond was posted for such eventuality,
the deputy sheriffs directed that some of the supports thereof be cut. Eventually, upon several motions filed by the sheriff.
The trial court ordered to reinstate the condition and return the seized property with the help of petitioner’s labor,
equipments, and materials to effectively comply with the order.

On appeal, the petitioners alleged that the trial court gravely abused its discretion in ordering that the said company’s men
ordered the sheriff to comply with the order. The appellate court denied the appeal and didn’t rule about the merits as it
he Petitioner complains that the respondent Judge had completely disregarded his manifestation that the machineries and
equipments seized were and still are the Petitioner’s property until fully paid for and as such never became immovable. The
question of ownership and the applicability of Art. 415 of the new Civil Code are immaterial in the determination of the
only issue involved in this case. It is a matter of evidence which should be decided in the hearing of the case on the merits.
The question as to whether the machineries or equipments in litigation are immovable or not is likewise immaterial,
because the only issue raised before the trial court was whether the Provincial Sheriff of Bulacan, at the Petitioner’s
instance, was justified in destroying the machineries and in refusing to restore them to their original form.

Hence, this certiorari petition.

ISSUE:
Whether the machineries removed was movable property.

HELD:

No, it is an immovable property

The Sheriff knew or must have known what is inherently right and inherently wrong, more so when, as in this particular
case, the deputy sheriffs were shown a letter of respondent Company’s attorney, that the machineries and equipments
were not personal properties and, therefore, not subject to seizure by the terms of the order. While it may be conceded
that this was a question of law too technical to decide on the spot, it would not have cost the Sheriff much time and
difficulty to bring the letter to the court’s attention and have the equipments and machineries guarded, so as not to
frustrate the order of seizure issued by the trial court. But, acting upon the directives of the president of the Petitioner, to
seize the properties at any cost, the deputy sheriffs lent themselves as instruments to harass and embarras the respondent
Company. The respondent Court, in issuing the order sought to be annulled, had not committed abuse of discretion at all or
acted in an arbitrary or despotic manner, by reason of passion or personal hostility; on the contrary, it issued said order,
guided by the well known principle that if the property has to be returned, it should be returned in as good a condition as
when taken

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.

The machinery and equipment in question appeared 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. Hence, in order to remove said outfit, it became necessary not only to unbolt the
same, but to also cut some of its wooden supports. Said machinery and equipment were "intended by the owner of the
tenement for an industry" carried on said immovable and tended "directly to meet the needs of said industry." For these
reasons, they were already immovable pursuant to paragraph 3 and 5 of Article 415 of Civil Code of the Philippines.

Such assumption of risk becomes more apparent when we consider that, pursuant to Section 5 of Rule 62 of the Rules of
Court, the defendant in an action for replevin is entitled to the return of the property in dispute upon the filing of a
counterbond, as provided therein. In other words, petitioner knew that the restitution of said property to respondent
company might be ordered under said provision of the Rules of Court, and that, consequently, it may become necessary for
petitioner to meet the liabilities incident to such return.
Any authority squarely in point - obviously because real property are 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. Inasmuch as the machinery and equipment involved in this case were duly installed and affixed in
the premises of respondent company when petitioner’s representative caused said property to be dismantled and then
removed, it follows that petitioner must also do everything necessary to the reinstallation of said property in conformity
with its original condition.

Wherefore, the decision of the Court of Appeals is hereby AFFIRMED, with costs against the petitioner. So ordered.
MAKATI LEASING and FINANCE CORPORATION vs. WEAREVER TEXTILE MILLS, INC., and HONORABLE COURT OF
APPEALS
(G.R. No. L-58469 May 16, 1983)

FACTS OF THE CASE:

The respondent textile company made an agreement with corresponding security of chattel mortgage such as raw
materials including the machinery Artos Aero Dryer Stentering Range in order for them to sustain and accommodate the
financial matters by the petitioner Makati Leasing and Finance. Non Complied with the agreement, the petitioner filed a
petition for extrajudicial foreclosure of the properties mortgage to it.

However, the Deputy Sheriff assigned to implement the foreclosure failed to gain entry into the private respondent's
premises, hence, ineffective seizure over the machinery. Petitioner thereafter filed a complaint for judicial foreclosure with
the Court of First Instance of Rizal, Branch VI, docketed as Civil Case No. 36040, the case before the lower court. The action
for replevin was restrained by the respondent’s reconsideration and restraining order but later on lifted and proceeded
with the seizure and break on the premises. The sheriff enforcing the seizure order, repaired to the premises of the private
respondent and removed the main drive motor of the subject machinery.

On appeal, the respondent prayed for the return of the machine as it cannot be subjected to replevin (action in Rule 60 of
rules of Court for recovery of PERSONAL PROPERTY) as it was a real property pursuant to Article 415 (c) of the New Civil
Code 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 which the reason why the sheriff to enforce the writ is to takeaway only the
main drive motor of the machinery instead the machine itself. 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.

Hence, this certiorari by the petitioner claiming that the machine is movable or personal property whereas the respondent
moved the petition as moot and academic as the main motor in the said machine was already returned.

ISSUE:
Whether the machine stated was immovable property not subjected for replevin?

HELD:

No, the machine mentioned is not immovable property and hence, subject for replevin.

The Court cited the Tumalad doctrine, wherein no specific statement referring to the subject house as personal property,
yet by ceding, selling or transferring a property by way of chattel mortgage defendants-appellants could only have meant
to convey the house as chattel, or at least, intended to treat the same as such, so that they should not now be allowed to
make an inconsistent stand by claiming otherwise. Moreover, the subject house stood on a rented lot to which
defendants-appellants merely had a temporary right as lessee, and although this can not in itself alone determine the
status of the property, it does so when combined with other factors to sustain the interpretation that the parties,
particularly the mortgagors, intended to treat the house as personality. Finally, unlike in the Iya cases, Lopez vs. Orosa, Jr.
& Plaza Theatre, Inc. & Leung Yee vs. F.L. Strong Machinery & Williamson, wherein third persons assailed the validity of the
chattel mortgage, it is the defendants-appellants themselves, as debtors-mortgagors, who are attacking the validity of the
chattel mortgage in this case. The doctrine of estoppel therefore applies to the herein defendants-appellants, having
treated the subject house as personality.

In Standard Oil Co. of New York v. Jaramillo, 44 Phil. 630, it is undeniable that the parties to a contract may by agreement
treat as personal property that which by nature would be real property, as long as no interest of third parties would be
prejudiced thereby

The respondent contended that they did represent that machine as personal property nor agreed because they MERELY
REQUIRED AND DICTATED by petitioner to fill and sign a blank form recorded as CHATTEL MORTGAGE.

The Court disagreed as it lacked persuasiveness. The Court found that it was not raised during the proceedings in the trial
nor in the appellate. It further noted that nowhere in the records was the said mortgage nullified. Even in the fact that it
was quite true, it cannot be said that it was void contract ab initio but voidable according to Article 1390 of the New Civil
Code. In petitioner’s argument, they noted that the respondent already benefited from the said contract.

Hence, EQUITY DICTATES THAT ONE SHOULD NOT BENEFIT AT THE EXPENSE OF ANOTHER.

WHEREFORE, the questioned decision and resolution of the Court of Appeals are hereby REVERSED AND SET ASIDE, and
the Orders of the lower court are hereby reinstated, with costs against the private respondent.
MANILA ELECTRIC COMPANY v. THE CITY ASSESSOR AND CITY TREASURER OF LUCENA CITY
(G.R. No. 166102, August 05, 2015)

FACTS OF THE CASE:

A tax assessment reported by the City Assessor against MERALCO, an franchised electric distributor, for (a) transformer and
electric post; (b) transmission line; (c) insulator; and (d) electric meter that contended to be included in the payment of real
property tax. The City sent the tax delinquency document to MERALCO amounting more than Php5,000,000.00. MERALCO
opposed and appealed such to the Local Board of Assessment Appeals (LBAA) and fortunately favored them in the 1964
MERALCO case that these poles were personal properties and exempted from real property tax.

MERALCO’s franchise in dispute:

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 x x x, on its poles, wires, insulators, transformers and structures,
installations, conductors, and accessories, x x x, from which taxes the grantee (MERALCO) is hereby expressly
exempted."

The City appealed to the City Board Assessment Appeals. CBAA affirmed the assailed LBAA judgment. Apparently, the City
Assessor of Lucena no longer appealed the CBAA Decision and it became final and executory.

Another tax assessment event sent by the City Assessor to the MERALCO amounting to more than Php8,000,000.00
already, this document was also submitted to the City treasurer and ordered the petitioner to pay such delinquencies.

On appeal by MERALCO to the LBAA with posting of the bond, the appeal didn’t involve their last decision because this
involves already the tax delinquencies for several years. Hence, this time, LBAA denied the appeal. On appeal to CBAA, the
latter affirmed such and ruled that MERALCO could no longer claim exemption from real property tax on its machineries
with the enactment of Republic Act No. 7160, otherwise known as the Local Government Code of 1991, to wit:

The new law has treated these in an unequivocal manner as machineries in the sense that they are instruments,
mechanical contrivances or apparatus though not attached permanently to the real properties of [MERALCO] are
actually, directly and exclusively used to meet their business of distributing electricity.

Clearly, [Section 234 of the Local Government Code] lists down the instances of exemption in real property taxation
and very apparent is the fact that the enumeration is exclusive in character in view of the wordings in the last
paragraph. Applying the maxim "Expressio Unius est Exclusio Alterius", we can say that "Where the statute
enumerates those who can avail of the exemption, it is construed as excluding all others not mentioned therein".
Therefore, the above-named company [had] lost its previous exemptions under its franchise because of non-
inclusion in the enumeration in Section 234.

ISSUE:
Whether the electric line posts were immovable property to subject them for real property tax.

HELD:

Yes, it is an immovable property

WHEREFORE, premises considered, the Court PARTLY GRANTS the instant Petition and AFFIRMS with MODIFICATION the
Decision dated May 13, 2004 of the Court of Appeals in CA-G.R. SP No. 67027, affirming in toto the Decision dated May 3,
2001 of the Central Board of Assessment Appeals in CBAA Case No. L-20-98. The Court DECLARES that the transformers,
electric posts, transmission lines, insulators, and electric meters of Manila Electric Company are NOT EXEMPTED from real
property tax under the Local Government Code. However, the Court also DECLARES the appraisal and assessment of the
said properties under Tax Declaration Nos. 019-6500 and 019-7394 as NULL and VOID for not complying with the
requirements of the Local Government Code and violating the right to due process of Manila Electric Company, and
ORDERS the CANCELLATION of the collection letter dated October 16, 1997 of the City Treasurer of Lucena and the Notice
of Assessment dated October 20, 1997 of the City Assessor of Lucena, but WITHOUT PREJUDICE to the conduct of a new
appraisal and assessment of the same properties by the City Assessor of Lucena in accord with the provisions of the Local
Government Code and guidelines issued by the Bureau of Local Government Financing.
MINDANAO BUS COMPANY vs. THE CITY ASSESSOR & TREASURER and the BOARD OF TAX APPEALS of Cagayan
de Oro City
(G.R. No. L-17870 September 29, 1962)

FACTS OF THE CASE:

A bus company assessed their machineries by the City Assessor for the purposes of computation of real estate tax such as
welder machines, battery chargers, grinder, hydraulic press among others that are considered immovable taxable
properties. The City reported as, that, it never was or were never used as industrial equipment to produce finished
products for sale, nor to repair machineries, parts and the like offered to the general public indiscriminately for business or
commercial purposes for which petitioner has never engaged in, to date. That these machines were sitting on cement or
wooden platforms. The petitioner opposed the assessment and argued that these machineries are not real property to be
taxable. The CTA sustained the ruling

On appeal, the respondent pointed out the Civil Code that it is a immovable property that “machineries, receptacles,
instruments, and implements intended by the owner to the tenements for the industry and works that may be carried on in
a building or in a piece of land and which tend directly to meet the needs of an industry and works”.

ISSUE:
Whether the machineries mentioned are immovable property which are subjected for real property tax?

HELD:

No, the machines mentioned are not immovable property.

Movable equipment to be immobilized in contemplation of the law must first be "essential and principal elements" of an
industry or works without which such industry or works would be "unable to function or carry on the industrial purpose for
which it was established. Hence, those movable which become immobilized by destination because they are essential and
principal elements in the industry for those which may not be so considered immobilized because they are merely
incidental, not essential and principal.

The Court ruled that they are merely incidentals - acquired as movables and used only for expediency to facilitate and/or
improve its service. Even without such tools and equipment, its business may be carried on, as petitioner has carried on,
without such equipment, before the war. The transportation business could be carried on without the repair or service
shop if its rolling equipment is repaired or serviced in another shop belonging to another.

The equipment in question is destined only to repair or service the transportation business, which is not carried on in a
building or permanently on a piece of land, as demanded by the law. Said equipment may not, therefore, be deemed real
property.

Resuming what we have set forth above, we hold that the equipments in question are not absolutely ESSENTIAL to
the petitioner's transportation business, and petitioner's business is NOT CARRIED ON in a building, tenement or on a
specified land, so said equipment may not be considered real estate within the meaning of Article 415 (e) of the Civil Code.

WHEREFORE, the decision subject of the petition for review is hereby set aside and the equipment in question declared not
subject to assessment as real estate for the purposes of the real estate tax. Without costs.
SANTOS EVANGELISTA vs. ALTO SURETY & INSURANCE CO., INC
(G.R. No. L-11139: April 23, 1958) - EN BANC

FACTS OF THE CASE:

A recovery sum of money instituted by Evangelista against a certain Rivera. The trial court issued a writ of attachment and
notice in the Manila Registry of Deeds against the house leased by Rivera to Alto Surety. An action pursuant to Rule 39
commenced and judgment favored Evangelista bought the house at public auction held in compliance with the writ of
execution issued in said case. The deed of sale issued by the Court was given to Evangelista upon expiration of redemption.

Rivera refused to surrender the house on the ground that the said house leased by him to the respondent Alto. Actually,
months prior to the grant of the deed of sale in favor of Evangelista, a deed of sale was also issued in favor of the Alto upon
writ of execution compliance in the same house in the case of Alto vs. Quiambao for recovery sum of money also. Hence,
Rivera argued that Alto was the true owner of the house.

Here comes the case that Evangelista instituted the present action against respondent and Ricardo Rivera, for the purpose
of establishing his (Evangelista) title (ownership yung tinutukoy, hindi certificate of title) over said house, securing
possession thereof, apart from recovering damages. The CFi favored the petitioner.

On appeal, the appellate Court reversed and ruled that although the writ of attachment in favor of Evangelista had been
filed with the Register of Deeds of Manila prior to the sale in favor of respondent, Evangelista did not acquire thereby a
preferential lien, the attachment having been levied as if the house in question were immovable property, although in the
opinion of the Court of Appeals, it is "ostensibly a personal property.

Rule 59, Section 7 (e): order of attachment shall be issued with…

(e) Debts and credits, and other personal property not capable of manual delivery, by leaving with the person
owing such debts, or having in his possession or under his control, such credits or other personal property, or with,
his agent, a copy of the order, and a notice that the debts owing by him to the defendant, and the credits and other
personal property in his possession, or under his control, belonging to the defendant, are attached in pursuance of
such order.

or attached in accordance with…

(c) of said section 7, as "personal property capable of manual delivery, by taking and safely keeping in his
custody", for it declared that "Evangelists could not have . . . validly purchased Ricardo Rivera's house from the
sheriff as the latter was not in possession thereof at the time he sold it at a public auction

A certiorari was filed by the petitioner.

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

HELD:

Yes, the house should be dealt for PURPOSES of ATTACHMENT as immovable property.

There is no dispute that although the sale to the respondent preceded that made to Evangelista, the latter would have a
better right if the writ of attachment, issued in his favor before the sale to the respondent, had been properly executed or
enforced.

The Court cited that case of Laddera vs. Hodges, to wit: a true building (not merely superimposed on the soil) is immovable
or real property, whether it is erected by the owner of the land or by usufructuary or lessee. It is true also that 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.

In Manarang vs. Ofilada, Sales on execution affect the public and third persons. The regulations governing sales on
execution are for public officials to follow. The form of proceedings prescribed for each kind of property is suited to its
character, not to the character, which the parties have given to it or desire to give it. When the rules speak of personal
property, property which is ordinarily so considered is meant; and when real property is spoken of, it means property which
is generally known as real property. The regulations were never intended to suit the consideration that parties may have
privately given to the property levied upon. We therefore hold that the mere fact that a house was the subject of the
chattel mortgage and was considered as personal property by the parties DOES NOT MAKE SAID HOUSE PERSONAL
PROPERTY FOR PURPOSES OF THE NOTICE to be given for its sale of public auction.

Hence, 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 of the land, which, is real property.
Wherefore, the decision of the Court of Appeals is hereby reversed, and another one shall be entered affirming that of the
Court of First Instance of Manila, with the costs of this instance against respondent, the Alto Surety and Insurance Co., Inc.
It is so ordered.
SERGS PRODUCTS, INC., and SERGIO T. GOQUIOLAY vs. PCI LEASING AND FINANCE, INC
(G.R. No. 137705. August 22, 2000)

FACTS OF THE CASE:

A chocolate making factory corporation entered into a Lease Agreement with the PCI Leasing to finance the said business
industry, to wit:

12.1 The PROPERTY is, and shall at all times be and remain, personal property notwithstanding that the PROPERTY
or any part thereof may now be, or hereafter become, in any manner affixed or attached to or embedded in, or
permanently resting upon, real property or any building thereon, or attached in any manner to what is permanent.

Unfortunately, Sergs suffered business losses and brought down its debt to the respondent financing corporation. Here
comes the ex-parte application for recovery of the sum of money of the respondent with a writ of replevin which directed
the sheriff to seize to deliver the machineries to PCI. One piece of machinery was seized. A special order protection filed by
the petitioner which argued in its reply that 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. The
sheriff continued the seizure.

On appeal, the appellate court held that the subject machines were personal property, and that they had only been leased,
not owned, by petitioners. No ruling as to the merits as the petition for certiorari was filed determining whether there was
a grave abuse of discretion.

The contract is being enforced by one, and its validity is attacked by the other, a matter which the respondent court is in
the best position to determine.

ISSUE:
Whether the machines in contest were immovable property

HELD:

Yes, it was an immovable property

The Court ruled that 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.

But again, the Court has held that contracting parties may validly stipulate that a real property be considered as
personal.18 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.

In the present case, the Lease Agreement clearly provides that the machines in question are to be considered as personal
property. 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.

It should be stressed, however, that our holding -- that the machines should be deemed personal property pursuant to the
Lease Agreement is good only insofar as the contracting parties are concerned. Hence, while the parties are bound by the
Agreement, third persons acting in good faith are not affected by its stipulation characterizing the subject machinery as
personal.

WHEREFORE, the Petition is DENIED and the assailed Decision of the Court of Appeals AFFIRMED. Costs against petitioners.
RUBY L. TSAI, Petitioner, v. HON. COURT OF APPEALS EVER TEXTILE MILLS, INC. and MAMERTO R VILLALUZ,
Respondents.
(G.R. No. L-11139: April 23, 1958) - EN BANC

FACTS OF THE CASE:

Upon the gain of possession through extra-judicial foreclosure proceedings (Act 3135) and Chattel Mortgage proceedings
according to law (Act 1508) commenced by the PBCom against respondent Ever Textile for failure to completely pay the
loan for Php3,000,000.00, the PBCom rented and later on sold the factory, lock, stock and barrel to petitioner Tsai for
P9,000,000.00, including the contested machineries.

EVERTEX filed annulment of the sale, reconveyance, and damages in the Regional Trial Court for an alleged violation of
PBCom for Insolvency Law. Due to this, they argued that the petitioner had no rights over the assets of the insolvent
company. EVERTEX also alleged the illegality of the appropriation of those properties and neither of them belong to the
Notice of Sheriff’s sale, to real and chattel mortgage, and certificate of sale such as Interlock Circular Knitting Machines, Jet
Drying Equipment, Dryer Equipment, Raisin Equipment and Heatset Equipment

The trial court upheld the illegality of the sale at it was not included in the schedule attached to mortgage contracts which
was affirmed with modification by the Court of Appeals.

ISSUE:
Whether the machines in contest were immovable property

HELD:

No, it was an movable property

While it is true that the controverted properties appear to be immobile, a perusal of the contract of Real and Chattel
Mortgage executed by the parties herein gives us a contrary indication. In the case at bar, both the trial and the appellate
courts reached the same finding that the true intention of PBCOM and the owner, EVERTEX, is to treat machinery and
equipment as chattels.

The 1975 mortgage contract, which was actually real and chattel mortgage, militates against appellants’ posture. It should
be noted that the printed form used by appellant bank was mainly for real estate mortgages. But reflective of the true
intention of appellant PBCOM and appellee EVERTEX was the typing in capital letters, immediately following the printed
caption of mortgage, of the phrase "real and chattel." So also, the "machineries and equipment" in the printed form of the
bank had to be inserted in the blank space of the printed contract and connected with the word "building" by typewritten
slash marks. Now, then, if the machineries in question were contemplated to be included in the real estate mortgage, there
would have been no necessity to ink a chattel mortgage specifically mentioning as part III of Schedule A a listing of the
machineries covered thereby. It would have sufficed to list them as immovables in the Deed of Real Estate Mortgage of the
land and building involved.

As regards the 1979 contract, the intention of the parties is clear and beyond question. It refers solely to chattels. The
inventory list of the mortgaged properties is an itemization of sixty-three (63) individually described machineries while the
schedule listed only machines and 2,996,880.50 worth of finished cotton fabrics and natural cotton fabrics.

Assuming that the properties in question are immovable by nature, nothing detracts the parties from treating it as chattels
to secure an obligation under the principle of estoppel. As far back as Navarro v. Pineda, 9 SCRA 631 (1963), an immovable
property may be considered a personal property if there is a stipulation as when it is used as security in the payment of an
obligation where a chattel mortgage is executed over it, as in the case at bar.

Since the disputed machineries were acquired in 1981 and could not have been involved in the 1975 or 1979 chattel
mortgages, it was consequently an error on the part of the Sheriff to include subject machineries with the properties
enumerated in said chattel mortgages.

As the auction sale of the subject properties to PBCom is void, no valid title passed in its favor. Consequently, the sale
thereof to Tsai is also a nullity under the elementary principle of nemo dat quod non habet, one cannot give what one does
not have.

WHEREFORE, the petitions are DENIED. The assailed decision and resolution of the Court of Appeals in CA-G.R. CV No.
32986 are AFFIRMED WITH MODIFICATIONS. Petitioners Philippine Bank of Communications and Ruby L. Tsai are hereby
ordered to pay jointly and severally Ever Textile Mills, Inc. the following: (1) P20,000.00 per month, as compensation for the
use and possession of the properties in question from November 1986 31 until subject personal properties are restored to
respondent corporation; (2) P100,000.00 by way of exemplary damages, and (3) P50,000.00 as attorney’s fees and litigation
expenses. Costs against petitioners.
JULIAN S. YAP v. HON. SANTIAGO O. TAÑADA, etc., and GOULDS PUMPS INTERNATIONAL (PHIL.), INC.
(G.R. No. L-32917. July 18, 1988) - EN BANC

FACTS OF THE CASE:

Goulds Pumps International (Phil.), Inc. filed a complaint against Yap and his wife seeking recovery of P1,459.30
representing the balance of the price and installation cost of a water pump in the latter's premises. Goulds presented
evidence ex parte and judgment by default was rendered by Judge Tañada requiring Yap to pay to Goulds the unpaid
balance of the pump purchased by him and interest of 12% per annum.

Thereafter, the water pump in question was levied by the sheriff and by notice dated November 4, 1969, scheduled the
execution sale thereof. But in view of the pendency of Yap's motion for reconsideration, suspension of the sale was
directed. It appears however that a copy of the order suspending the sale was not transmitted to the sheriff. Hence, the
Deputy Provincial Sheriff went ahead with the scheduled auction sale and sold the property levied on to Goulds as the
highest bidder.

Yap argues that "the sale was made without the notice required by Sec. 18, Rule 39, of the New Rules of Court," i.e., notice
by publication in case of execution sale of real property, the pump and its accessories being immovable because attached
to the ground with character of permanency (Art. 415, Civil Code).

Hence, this appeal by petition for review on certiorari.

ISSUE:
Whether the water pump was movable property.

HELD:

Yes, it is an movable property

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.

About the denial of the petition:

The bona fides of this desire to compromise is however put in doubt by the attendant circumstances. It was manifested in
an eleventh-hour motion for postponement of the pre-trial — which had been scheduled with intransferable character
since it had already been earlier postponed at Yap’s instance; it had never been mentioned at any prior time since
commencement of the litigation; such a possible compromise (at least in general or preliminary terms) was certainly most
appropriate for consideration at the pre-trial; in fact Yap was aware that the matter was indeed a proper subject of a pre-
trial agenda, yet he sought to avoid appearance at said pre-trial which he knew to be intransferable in character. These
considerations and the dilatory tactics thus far attributable to him — seeking postponements of hearings, or failing to
appear therefor despite notice, not only in the Court of First Instance but also in the City Court — proscribe belief in the
sincerity of his avowed desire to negotiate a compromise.

Yap’s failure to appear at the pre-trial without justification and despite notice, which caused the declaration of his default,
was a waiver of his right to controvert the plaintiff’s proofs and of his right to prove the averments of his answer, inclusive
of the counterclaim therein pleaded. Moreover, the conclusion in the judgment of the merit of the plaintiff’s cause of
action was necessarily and at the same time a determination of the absence of merit of the defendant’s claim of
untenability of the complaint and of malicious prosecution.

Yap’s last claim is that in the process of the removal of the pump from his house, Goulds’ men had trampled on the plants
growing there, destroyed the shed over the pump, plugged the exterior casings with rags and cut the electrical and conduit
pipes; that he had thereby suffered actual damages in an amount of not less than P2,000.00, as well as moral damages in
the sum of P10,000.00 resulting from his deprivation of the use of his water supply; but the Court had refused to allow him
to prove these acts and recover the damages rightfully due him. Now, as to the loss of his water supply, since this arose
from acts legitimately done, the seizure on execution of the water pump in enforcement of a final and executory judgment,
Yap most certainly is not entitled to claim moral or any other form of damages therefor.

WHEREFORE, the petition is DENIED and the appeal DISMISSED, and the Orders of September 16, 1970 and November 21,
1970 subject thereof, AFFIRMED in toto. Costs against petitioner.
LUIS MARCOS P. LAUREL vs. HON. ZEUS C. ABROGAR, Presiding Judge of the Regional Trial Court, Makati City,
Branch 150, PEOPLE OF THE PHILIPPINES& PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
(G.R. No. 155076 February 27, 2006)

FACTS OF THE CASE:

An allegation of “network fraud” in conducting alternative calling service instituted by the respondent PLDT against Baynet
Company Limited who sold “Bay Super Orient Card” (a phone card). This card uses International Simple Resale (ISR) routing
and completes international long distance calls using International Private Leased Lines (IPL), cables, antenna or air wave or
frequency, which connect directly to the local or domestic exchange facilities of the “terminating country” (the country
where the call is destined). The IPL is linked to switching equipment which is connected to a PLDT telephone line/number.
In the process, the calls bypass the IGF (International Gateway Facility) found at the terminating country, or in some
instances, even those from the originating country.

It operates actually like when you call your friends outside the Philippines, your voice to the other country by means of
electronic voice signals or impulses which emanate through the lines of PLDT (1.7M yung linyang ikinabit sa buong
Pilipinas), then that voice signals or impulses will enter into International Gateway Facility of our country (somehow like
going to Immigration) which will receive going through IGF of other country then proceed to the lines of their network
provider to connect with your friends internationally.

Here came the case, the PLDT submitted their “theft” case against the Filipino Corporate Secretary of the Baynet Laurel to
the Regional Trial Court wherein they argued that it conducts its ISR activities (selling phone cards) by utilizing an IPL to
course its incoming international long distance calls from Japan, that, Baynet offered the 27-minute international call for
37.03 YEN with 123 subscription to PLDT telephone numbers

Year 2000: 117.683 YEN (average: 2000-2004) = 1 dollar = 41.026 = 0.0775 PESO

The IPL is linked to switching equipment, which is then connected to PLDT telephone lines/numbers and equipment, with
Baynet as subscriber. Through the use of the telephone lines and other auxiliary equipment, Baynet is able to connect an
international long distance call from Japan to any part of the Philippines, and make it appear as a call originating from
Metro Manila. Consequently, the operator of an ISR is able to evade payment of access, termination or bypass charges and
accounting rates, as well as compliance with the regulatory requirements of the NTC. Thus, the ISR operator offers
international telecommunication services at a lower rate, to the detriment and prejudice of legitimate “BUSINESS”
operators like PLDT. The electronic voice signals to pass through the lines of PLDT, and ultimately to the called party’s
number. It averred:
● THAT, such service/facility is akin to electricity which, although an intangible property, may, nevertheless, be
appropriated and be the subject of theft.
● THAT, such service over a period of time for a consideration is the business that PLDT provides to its customers,
which enables the latter to send various messages to installed recipients.
● THAT, the service rendered by PLDT is akin to merchandise which has specific value, and therefore, capable of
appropriation by another, as in this case, through the ISR operations conducted by the movant and his co-accused.
● THAT, “international business calls and revenues constitute personal property” found in Article 308 of the
Revised Penal Code." It may glean like a “jumper” over the facilities of the PLDT.

Upon the determination of judicial probable cause, the respondent judge issued two search warrants at the 7th Floor, SJG
Building, Kalayaan Avenue, Makati City. There were arrests made upon personally found of operating the ISR and seizure
over the equipment of the office.

Laurel filed a "Motion to Quash (with Motion to Defer Arraignment)" alleging that “NO PERSONAL PROPERTY” was stolen
from PLDT, hence, does not constitute theft under Article 308 of the Revised Penal Code.
● NOWHERE in the Revised Penal Code, or any other special penal law for that matter, prohibits ISR operations.
● THAT, telephone calls with the use of PLDT telephone lines, whether domestic or international, belong to the
persons making the call, not to PLDT.
● THAT, the caller merely uses the facilities of PLDT
● THAT, what the latter owns are the telecommunication infrastructures or facilities through which the call is made
● THAT, the PLDT is compensated for the caller’s use of its facilities by way of rental; for an outgoing overseas call,
PLDT charges the caller per minute, based on the duration of the call.

The RTC ruled in favor of the respondents upheld in the jurisprudence that “interest in business” is personal property
capable of appropriation. It further declared that, through their ISR operations, the movant and his co-accused deprived
PLDT of fees for international long distance calls, and that the ISR used by the movant and his co-accused was no different
from the "jumper" used for stealing electricity.

In appeal, Laurel further added that the "business" in all these cases is the commercial activity, while the goods and
merchandise are the products of such activity. Thus, in prosecutions for theft of certain forms of energy, it is the electricity
or gas which is alleged to be stolen and not the "business" of providing electricity or gas. However, since a telephone
company does not produce any energy, goods or merchandise and merely renders a service or, in the words of PLDT, "the
connection and interconnection to their telephone lines/facilities," such service cannot be the subject of theft as defined
in Article 308 of the Revised Penal Code.
Even in the pronouncement of the former Justice Secretary that "The Anti-Telecommunications Fraud of 1997" to deter
cloning of cellular phones and other forms of communications fraud. The said bill " aims to protect in number (ESN) (sic) or
Capcode, mobile identification number (MIN), electronic-international mobile equipment identity (EMEI/IMEI), or subscriber
identity module" and "any attempt to duplicate the data on another cellular phone without the consent of a public
telecommunications entity would be punishable by law." Thus, Laurel concluded, "there is no crime if there is no law
punishing the crime."

The Court of Appeals still ruled in favor of the respondents and argued that while business is generally an activity which is
abstract and intangible in form, it is nevertheless considered "property" under Article 308 of the Revised Penal Code.

Hence, this petition.

ISSUE:
Whether the electronic voice signals transmitted through the lines of the PLDT by means of calling cards issued by the
Baynet Inc were movable property that could be subjected to someone for the crime of theft using ISR that affects the
“business” of the provider?.

HELD:

No, it is an immovable property and cannot be subjected for the crime of theft under the Revised Penal Code

The international telephone calls placed by Bay Super Orient Card holders, the telecommunication services provided by
PLDT and its business of providing said services are not personal properties under Article 308 of the Revised Penal Code.
The construction by the respondents of Article 308 of the said Code to include, within its coverage, the aforesaid
international telephone calls, telecommunication services and business is contrary to the letter and intent of the law.

For one to be guilty of theft, the accused must have an intent to steal (animus furandi) personal property, meaning the
intent to deprive another of his ownership/lawful possession of personal property which intent is apart from and
concurrently with the general criminal intent which is an essential element of a felony of dolo (dolus malus).

An information or complaint for simple theft must allege the following elements: (a) the taking of personal property; (b) the
said property belongs to another; (c) the taking be done with intent to gain; and (d) the taking be accomplished without the
use of violence or intimidation of person/s or force upon things.

The statutory definition of "taking" and movable property indicates that, clearly, not all personal properties may be the
proper subjects of theft. The general rule is that, only movable properties which have physical or material existence and
susceptible of occupation by another are proper objects of theft

Art. 308. Who is liable for theft. — Theft is committed by any person who, with intent to gain but without
violence against or intimidation of persons nor force upon things, shall take personal property of another without
the latter's consent.
Theft is likewise committed by:

1. Any person who, having found lost property, shall fail to deliver the same to the local authorities or to its
owner;
2. Any person who, after having maliciously damaged the property of another, shall remove or make use of
the fruits or object of the damage caused by him; and
3. Any person who shall enter an inclosed estate or a field where trespass is forbidden or which belongs to
another and without the consent of its owner, shall hunt or fish upon the same or shall gather cereals, or
other forest or farm products.

Intangible properties such as rights and ideas are not subject to theft because the same cannot be "taken" from the place it
is found and is occupied or appropriated.

Only movable and bodily things can be the object of theft. The theft of immovable things and incorporeal things (v.
gr., rights, ideas) cannot be part of this crime, since it is not possible to seize them, take them, to achieve their
appropriation. The Code uses the expression "furniture" in the sense of something that is likely to be taken from
the place where it is, such as money, jewelry, clothes, etc., so its concept does not completely coincide with that
formulated by the Civil Code

Electricity, the same as gas, is a valuable commodity, bought and sold like other personal property and is capable of
appropriation by another. It is a valuable article of merchandise, bought and sold like other personal property, susceptible
of being severed from a mass or larger quantity and of being transported from place to place. Electrical energy may,
likewise, be taken and carried away. It is a valuable commodity, bought and sold like other personal property. It may be
transported from place to place. There is nothing in the nature of gas used for illuminating purposes which renders it
incapable of being feloniously taken and carried away.

In defining theft, under Article 308 of the Revised Penal Code, as the taking of personal property without the consent of the
owner thereof, the Philippine legislature could not have contemplated the human voice which is converted into electronic
impulses or electrical current which are transmitted to the party called through the PSTN of respondent PLDT and the ISR of
Baynet Card Ltd. within its coverage. When the Revised Penal Code was approved, on December 8, 1930, international
telephone calls and the transmission and routing of electronic voice signals or impulses emanating from said calls,
through the PSTN, IPL and ISR, were still non-existent. Case law is that, where a legislative history fails to evidence
congressional awareness of the scope of the statute claimed by the respondents, a narrow interpretation of the law is more
consistent with the usual approach to the construction of the statute. Penal responsibility cannot be extended beyond the
fair scope of the statutory mandate.

Respondent PLDT does not acquire possession, much less, ownership of the voices of the telephone callers or of the
electronic voice signals or current emanating from said calls. The human voice and the electronic voice signals or current
caused thereby are intangible and not susceptible of possession, occupation or appropriation by the respondent PLDT or
even the petitioner, for that matter. PLDT merely transmits the electronic voice signals through its facilities and equipment.
Baynet Card Ltd., through its operator, merely intercepts, reroutes the calls and passes them to its toll center. Indeed, the
parties received telephone calls from Japan.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed Orders of the Regional Trial Court and the Decision
of the Court of Appeals are REVERSED and SET ASIDE. The Regional Trial Court is directed to issue an order granting the
motion of the petitioner to quash the Amended Information.