Case Title LADERA vs.

HODGES
G.R. no. G.R. No. 8027-R
Date: 23 September 1952

FACTS:
Paz G. Ladera entered into a contract with C.N. Hodges. Hodges promised to sell a
lot with an area of 278 square meters to Ladera, subject to certain terms and
conditions. The agreement called for a down payment of P 800.00 and
monthly installments of P 5.00 each with interest of 1% per month, until P 2,085 is
paid in full. In case of failure of the purchaser to make a monthly payment within 60
days after it fell due, “this contract may be taken and considered as rescinded and
annulled,” in which case all sums of money paid would be considered rentals and the
vendor shall be at liberty to dispose of the parcel of land with all the improvements
thereon to any other person in a manner as if this contract had never been made.
After the execution of the contract, Ladera built on a lot a house of mixed materials
assessed at P4500.

Unfortunately, Ladera failed to pay the agreed installments, whereupon the appellant
rescinded the contract and filed an action for ejectment. The MTC rendered a decision
upon agreement of the parties- Ladera to vacate and surrender possession of the lot
and pay P10 a month until delivery of the premises. Also, on that day, Ladera paid
Hodges P188.50 which the latter recorded as rental payment. The court issued an alias
writ of execution and pursuant thereto the sheriff levied upon all rights, interests, and
participation over your house standing on the lot. The sheriff posted the notices of the
sale but did not publish the same in a newspaper of general circulation.
An auction sale was then conducted but Ladera was not able to attend as she had
gone to Manila. The house was then sold to one Avelina Magno as the highest bidder.
Meanwhile, Ladera sold the same lot to one Manuel Villa and on the same day
purchased the house from Magno for 200 pesos. This, however, was not recorded.

Ladera returned to Iloilo after the sale and learned of its results. She went to see the
sheriff and upon the latter’s representation that she could redeem the property, she
paid him P230 and the sheriff issued a receipt. It does not appear, however, that this
money was turned over to Hodges. Thereupon, Ladera spouses filed an action against
Hodges, the sheriff, and the judgment sale purchasers, Magno and Villa to set aside
the sale and recover the house.

Judgment was rendered in favor of Ladera, setting aside the sale for non-compliance
with Rule 39,Rules of Court regarding judicial sales of real property. On appeal,
Hodges contends that the house, being built on a lot owned by another, should be
regarded as movable or personal property.
ISSUE:
Whether or not the house being built on land owned by another should be regarded
as movable property.
HELD:
NO.
According to Article 334 of the Civil Code (now 415), Immovable property are the
following: “Lands, building, roads, and constructions of all kinds adhering to the
soil;” Applying the principle Ubi lex non distinguit nec nos distinguere debemu, the law
makes no distinction as to whether the owner of the land is or is not the owner of the
building. In view of the plain terms of the statute, the only possible doubt could arise
in the case of a house sold for demolition.

In the case of immovables by destination, the code requires that they be placed by the
owner of the tenement, in order to acquire the same nature or consideration of real
property. In cases of immovable by incorporation, the code nowhere requires that the
attachment or incorporation be made by the owner of the land. The only criterion is
union or incorporation with the soil.
Ladera did not declare his house to be a chattel mortgage. The object of the levy or
sale was real property. The publication in a newspaper of general circulation was
indispensible. It being admitted that no publication was ever made, the execution sale
was void and conferred no title on the purchaser.

The alleged purchaser at the auction sale, Magno, is a mere employee of the creditor
Hodges and the low bid made by her as well as the fact that she sold the house to
Villa on the same day that Hodges sold him the land, proves that she was merely
acting for and in behalf of Hodges.

It should be noted that in sales of immovables, the lack of title of the vendor taints the
rights of subsequent purchasers. Unlike in sales of chattels and personality, in
transactions covering real property, possession in good faith is not equivalent to title.
Case Title Mindanao Bus Co. v City Assessor and Treasurer
G.R. no. L-17870
Date: September 29, 1962

FACTS:
This is a petition for review of the decision of the CTA holding that petitioner,
Mindanao Bus Co., is liable for the payment of realty tax on its maintenance and repair
equipment. The respondent City Assessor of Cagayan de Oro assessed said equipment
at P4,400.00. Such assessment was appealed to by the petitioner with the Board of Tax
Appeals on the ground that the equipment in question are not realty. Said petition,
however, was denied. Petitioner then appealed with the CTA, who sustained the
respondent’s ruling, and subsequently denied the former’s motion for reconsideration;
hence this petition.
Petitioner contends that the CTA erred in upholding respondent’s contention that the
machineries in question are immovable taxable real properties. Petitioner further adds
that the CTA’s interpretation of Art. 415(5) of the New Civil Code, that movable
equipment are taxable realties by reason of their being intended for use in an industry,
is incorrect.

ISSUE:
WON the machineries in question are taxable, immovable properties
HELD:
NO!

The Court held that for movable equipment to be immobilized in contemplation of the
law, they must 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.” Those equipment which are merely incidental,
or not essential and principal, are movables.

In the case at bar, the tools and equipment are, by their nature, not essential to the
petitioner’s business of transporting passengers and cargoes by motor trucks. Even
without such equipment, its business may be carried on, as the petitioner had before.
Also, the transportation business can be carried on without the repair shop if its rolling
equipment is repaired or serviced in another shop belonging to another.

In addition to the above requirement that the equipment or machinery be essential to

the carrying on of the industry, Art. 415(5) likewise requires that the industry or works
be carried on in a building or on a piece of land. In this case, the equipment are destined
only to repair or service the petitioner’s transportation business, which is not carried
on in a building or permanently on a piece of land, as demanded by the law. As such,
they may not be deemed real property and may not be subject to assessment for real
estate tax.
Case Title Makati Leasing and Finance Corporation vs. Weaverer
Textile Mills, Inc. and Honorable Court of Appeals
G.R. no. L-58469
Date: May 16, 1983

FACTS:
Private respondent Wearever Textile Mills, Inc., discounted and assigned several
receivables with herein petitioner Makati Leasing and Finance Corporation 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.

The private respondent defaulted, and the Deputy Sherrif failed to gain entry into the
private respondent’s premises and was not able to effect seizure of the machinery. On
July 13, 1981, 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, in certiorari and prohibition proceedings subsequently filed by

herein private respondent, set aside the Orders of the lower court and ordered the
return of the drive motor seized by the sheriff pursuant to said Orders, after ruling
that the machinery in suit cannot be the subject of replevin, much less of a chattel
mortgage, because it is a real property pursuant to Article 415 of the new Civil Code,
the same being attached to the ground by means of bolts and the only way to remove
it from respondent's plant would be to drill out or destroy the concrete floor, the
reason why all that the sheriff could do to enfore the writ was to take the main drive
motor of said machinery.
ISSUE:
Whether or not the dryer, as a real property being attached to the ground, can be
subjected to chattel mortgage
HELD:
Yes. The SC relied on its ruling in Tumalad v. Vicencio, that if a house of strong
materials can be the subject of a Chattel Mortgage as long as the parties to the contract
agree and no innocent third party will be prejudiced then more so that a machinery
may treated as a movable since it is movable by nature and becomes immobilized
only by destination. And treating it as a chattel by way of a Chattel Mortgage,
Wearever is estopped from claiming otherwise.
Case Title Santos Evangelista v Alto Surety & Insurance Co., Inc.
G.R. no. L-11139
Date: April 23, 1958

FACTS:
On June 4, 1949, petitioner Santos Evangelista instituted a civil case with the Court of
First Instance of Manila against Ricardo Rivera for the recovery of a sum of money. He
obtained a writ of attachment which was levied upon Rivera’s house built on a land
leased to him, by filing said writ and the corresponding notice of attachment with the
Office of the Register of Deeds of Manila on June 8, 1949. Judgment was rendered in
favor of Evangelista who, on October 8, 1951, bought the house at a public auction, with
the corresponding deed of sale issued to him on October 22, 1952.

Rivera, however, refused to surrender the house on the ground that he had leased the
same from respondent, Alto Surety & Insurance Co., Inc., who, according to Rivera,
was the true owner of the property in question. It appears that on May 10, 1952 a
definite deed of sale of the house had been issued to respondent as the highest bidder
in an auction sale held on September 29, 1950.

Evangelista instituted an action against respondent and Rivera with the Court of First
Instance of Manila, who rendered judgment in favor of herein petitioner. Respondent
then appealed to the CA who in turn reversed the lower court’s decision on the ground
that, although the writ of attachment in favor of petitioner had been filed with the
Register of Deeds prior to the sale in favor of respondent, petitioner did not acquire a
preferential lien since the attachment was levied as if the house was a real property
when it is “ostensibly a personal property.” According to the CA, the order of
attachment should have been served in the manner provided in subsection ( e ) of Sec
7 of Rule 59 of the Rules of Court which provides that the property shall be attached in
the following manner:

(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.
It is, therefore, not disputed that although the sale to the respondent preceded that
made to Evangelista, the latter would still have a better right to the property had the
writ of attachment, issued to him prior to the said sale to respondent, been properly
executed and enforced. The question which remains now is whether Rivera’s house is
personal property or not.
ISSUE:
WON Rivera’s house should be considered, for purposes of attachment, as personal
property
HELD:
NO. The Court ruled that Rivera’s house is not personal property but immovable
property, citing Ladera vs Hodges which states that “a true building (not merely
superimposed on the soil) is immovable or real property, whether it is erected by the
owner of the land or by a usufructuary or lessee.” As such, the applicable provision
would be subsection (a) of section 7, Rule 59 of the Rules of Court, which provides that
the attachment should be made "by filing with the registrar of deeds a copy of the order,
together with a description of the property attached, and a notice that it is attached,
and by leaving a copy of such order, description, and notice with the occupant of the
property, if any there be."

The Court held that while it is true that parties to a deed of chattel mortgage may agree
to consider a house as personal property for purposes of said contract, the same is,
however, valid only insofar as the contracting parties are concerned. It shall find no
application to strangers to the said contract, much less so where there has been no
contract whatsoever, as in the case at bar.

In the case of Manarang vs Ofilada, the Court held that the rules on execution do not
allow, and nor should it be interpreted in such a way as to allow, the special
consideration that parties to a contract may have desired to impart to real estate as
personal property, when they are not ordinarily so. The Court added that sales on
execution affect the public and third persons, and the rules governing such are for
public officials to follow. Said rules were never intended to suit the consideration that
parties may have privately given to the property levied upon. Therefore, the mere fact
that a house was the subject of a chattel mortgage and was considered personal
property by the parties does not make said house personal property for purposes of
the notice to be given for its sale in a public auction.

The above considerations shall equally apply to the case at bar, which involves the
conditions for the levy of attachment, because the latter similarly affects third persons
and the public.
Case Title Ruby L. Tsai vs. Hon. CA, Ever Textile Mills, Inc. et. al.
G.R. no. 120098 and 120109
Date: October 2, 2001

FACTS:
Ever Textile Mills (EVERTEX) acquired two loans from the Philippine Bank of
Communications (PBCom) secured by a deed of Real and Chattel Mortgages and a
Chattel Mortgage respectively. However, due to business reverses, EVERTEX filed an
insolvency proceeding which was granted by the Court of First Instance where all the
assets, collaterals and mortgages of the former were taken in custody by the same
court.

Due to this, PBCom commenced an extrajudicial foreclosure under Act 3135 “An
Act Regulating the Sale of Property under Special Laws Inserted in or Annexed to
Real Estate Mortgages” and Act 1506 “The Chattel Mortgage Law”. After the public
auctions where PBCom emerged as the highest bidder, the bank acquired the
ownership of properties in the mortgages. Subsequently, PBCom leased and sold the
said properties to Ruby L. Tsai.

EVERTEX then filed an annulment of sale, reconveyances and damages stating

that the extrajudicial foreclosure was in violation of Insolvency Law and that since no
right has been transmitted to PBCom, Ruby Tsai also acquired no rights. In addition,
EVERTEX claims that PBCom appropriated their properties which were not included
in the Mortgages nor were it included in the Notice of Sheriff’s Sale.
ISSUE:
1. Whether or not the inclusion of the questioned properties in the foreclosed
properties is proper.
2. Whether or not the sale of these properties to petitioner Ruby L. Tsai is valid.

HELD:
Regional Trial Court was affirmed by the Court of Appeals that the controverted
machines are not included in the Real Estate and Chattel Mortgage, the pure Chattel
Mortgage, Notice of Sale and the Sheriff’s Notice of Sale. Also, the claims of the
petitioners that the said properties are “immovable” because they were heavy, bolted
or cemented in accordance with Art. 415 (3) and (5) of the NCC is devoid of meaning
because what is intended by the parties to the said contract of Real and Chattel
Mortgages is for it to be “movable” otherwise they could have indicated it as “Real
Mortgage” alone.
 Sec. 7 of the Chattel Mortgage Law states that “A chattel mortgage shall be deemed
to cover only the property described therein and not like or substituted property
thereafter acquired by the mortgagor and placed in the same depository as the
property originally mortgaged, anything in the mortgage to the contrary
notwithstanding.". Based on the facts, the controverted machines were acquired by
PBCom only in 1981 and thus could not have been included in 1975 and 1979
mortgages executed between the bank and EVERTEX. Therefore, the inclusion of
questioned properties to the foreclosed ones is invalid.

Lastly, Ruby Tsai could not have acquired the ownership over the property
because PBCom from the beginning did not acquire the same, thus abiding to the
legal precept “One cannot give what one does not have.” Lastly, Ruby Tsai cannot be
considered as a purchaser in good faith because prior to the sale, she knew that the
properties to be sold to her are subject to a controversy between EVERTEX and
PBCom.
Case Title SERG’S PRODUCTS, INC., and SERGIO T. GOQUIOLAY,
petitioners, vs. PCI LEASING AND FINANCE, INC.,
respondent
G.R. no. 137705
Date: August 22, 2000

FACTS:
PCI Leasing and Finance, Inc. (PCI Leasing) filed with the RTC-QC a complaint for a
sum of money with an application for a writ of replevin. Respondent judge issued a
writ of replevin to which the sheriff implemented by seizing one machinery with the
word that he would return for the other machineries. 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 which was opposed by PCI Leasing on the
ground that the properties were still personal and therefore still subject to seizure and
a writ of replevin. Petitioners replied and 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. The sheriff again sought to enforce the writ
of seizure and was able to take two more. The petitioners then appealed to the CA to
which the latter held that the machineries were personal properties. Hence, this
petition.
ISSUE:
Whether or not the machineries are personal and may be the subject of replevin.
HELD:
The SC ruled that the petitioners are estopped from denying the characterization of the
machineries as personal properties by virtue of their Lease Agreement under which
they agreed that the properties be remained personal property notwithstanding that
the property may be affixed or attached on an immovable property. Therefore, the
machineries are personal and may be the subject of replevin.
Case Title Burgos, Sr v Chief of Staff
G.R. no. L-64261
Date: 20/07/2019

FACTS:

Assailed in this petition for certiorari, prohibition and mandamus with preliminary
mandatory and prohibitory injunction is the validity of two[2] search warrants issued
on December 7, 1982 by respondent Judge Ernani Cruz-Pano, Executive Judge of the
then Court of First Instance of Rizal [Quezon City], under which the premises known
as No. 19, Road 3, Project 6, Quezon City, and 784 Units C & D, RMS Building,
Quezon Avenue, Quezon City. One of the grounds relied upon by petitioner is that
the properties seized are properties embedded on an immovable property, thus,
making such properties also immovable. Under Article 415[5] of the Civil Code of the
Philippines, "machinery, receptables, 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. Hence, not susceptible of
being seized under a search warrant.

ISSUE:

Whether or not the properties seized under the search warrants were immovable
properties, hence, not susceptible of being seized under a search warrant.

HELD:

The Court ruled on the negative. 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 machineries were placed. This being the case, the machineries
in question, while in fact bolted to the ground remain movable property susceptible
to seizure under a search warrant.
Case Title Lopez vs. Orosa., Jr. and Plaza Theatre, Inc.
G.R. no. l-10817-18
Date: February 28, 1958

FACTS:

Lopez was engaged in business under the name Lopez-Castelo Sawmill. Orosa,
who lived in the same province as Lopez, one day approached Lopez and invited the
latter to make an investment in the theatre business. His family and close friends
apparently were forming a corporation named Plaza Theatre. Lopez expressed his
unwillingness to invest. Nonetheless, there was an oral agreement between Lopez
and Orosa that Lopez would be supplying the lumber for the construction of the
theatre. The terms were the following: one, Orosa would be personally liable for any
account that the said construction would incur; two,payment would be by demand
and not by cash on delivery.

Pursuant to the agreement, Lopez delivered the lumber for the construction.
Lopez was only paid one-third of the total cost.

Due to the incessant demands of Lopez, the corporation mortgaged its

properties. On an earlier relevant date, the corporation obtained a loan with Luzon
Surety Company as surety and in turn, the corporation executed a mortgage over the
land and building. In the registration of the land under Act 496, such mortgage
wasn’t revealed. Also due to the demands of Lopez, Orosa issued a deed of
assignment over his shares of stock in the corporation.

As there was still an unpaid balance, Lopez filed a case against Orosa and
Plaza theatre. He asked that Orosa and Plaza theatre be held liable solidarily for the
unpaid balance; and in case defendants failed to pay, the land and building should be
sold in public auction with the proceeds to be applied to the balance; or that the
shares of stock be sold in public auction.
ISSUE:
1. Whether material man’s lien for the value of the materials used in the construction
of a building attaches to the building alone and does not extend to the land on which
the building is adhered to.
2. Whether the lower court and the CA erred in not providing that the material man’s
lien is superior to the mortgage executed in favor of the surety company not only on
the building but also on the land.

HELD:
1. YES. 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 (cf.
Leung Yee v. Strong Machinery). In 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.

2. No. A close examination of Article 1923 (5) of the Civil Code reveals that the law
gives preference to unregistered refectionary credits only with respect to the real
estate upon which the refection or work was made.

This being so, the inevitable conclusion must be that the lien so created
attaches merely to the immovable property for the construction or repair of which the
obligation was incurred. In the case at bar, the lien 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. Thus, the material man's lien could be charged only to the
building for which the credit was made or which received the benefit of refection, the
interest of the mortgagee over the land is superior and cannot be made subject to the
said material man's lien.
Case Title Yap vs. Tanada
G.R. no. L-32917
Date: July 18, 1988

FACTS:
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. The Court rendered judgment in favor
of herein respondent after they presented evidence ex-parte due to failure of
petitioner Yap to appear before the Court. Petitioner then appealed to the CFI,
particularly to the sale of Judge Tanada. For again failure to appear for pre-trial, Yap
was declared in default. He filed for a motion for reconsideration which was denied
by Judge Tanada.
On October 15, 1969, Tanada granted Gould’s Motion for Issuance of Writ of
Execution. Yap forthwith filed an Urgent Motion for Reconsideration of the said
Order. In the meantime, the Sheriff levied on the water pump in question and by
notice scheduled the execution sale thereof. But in view of the pendency of Yap’s
motion, suspension of sale was directed by Judge Tanada. It appears, however, that
this was not made known to the Sheriff who continued with the auction sale and sold
the property to the highest bidder, Goulds. Because of such, petitioner filed a Motion
to Set Aside Execution Sale and to Quash Alias Writ of Execution. One of his
arguments was that the sale was made without the notice required by Sec. 18, Rule 29
of the New Rules of Court, “i.e. notice by publication in case of execution of sale of
real property, the pump and its accessories being immovable because attached to the
ground with the character of permanency.”
Such motion was denied by the CFI.

ISSUE:
Whether or not the water pump had become immovable property by its being
installed in Yap’s residence
HELD: NO.
The Civil Code considers as immovable property, among others, anything "attached
to an immovable in a fixed manner, in such a way that it cannot be separated
therefrom without breaking the material or deterioration of the object." The pump
does not fit this description. It could be, and was in fact separated from Yap's
premises without being broken or suffering deterioration. Indeed, the separation or
removal of the pump involved nothing more complicated than the loosening of bolts
or dismantling of other fasteners.
Case Title MACHINERY & ENGINEERING SUPPLIES, INC.
vs.
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. G.R. No. L-7057
Date: 29 October 1954

FACTS:
On 13 March 1953, Machinery & Engineering Supplies, Inc. (the “Petitioner”) filed a
complaint for replevin in the Court of First Instance (“CFI”) of Manila for the
recovery of the machinery and equipment sold and delivered to Ipo Limestone Co.,
Inc and Dr. Antonio Villarama (the “Respondents”) at their factory in Barrio Bigti,
Norzagaray, Bulacan.

Upon application ex-parte of the Petitioner and upon approval of its bond sum of
P15,769.00, herein Respondent Judge issued an order directing the Provincial Sheriff
of Bulacan to seize and take immediate possession of the properties specified in the
said order.

On 19 March 1953, two deputy sheriffs of Bulacan, Ramon S. Roco and a crew of
technician and laborers proceeded to Bigti to carry out the CFI’s order.

Leonardo Contreras, herein Respondent Company’s Manager met the sheriffs and
handed the latter a letter addressed to Atty. Leopoldo C. Paled, ex-officio Provincial
Sheriff of Bulacan, signed by the Respondent Company’s counsel, protesting against
the seizure of the properties on the ground that the same are not personal properties.

Roco and the deputy sheriffs contended that their duty is ministerial and went ahead
to the factory. At the factory, Rocco’s attention was called to the fact that the
equipment could not possibly be dismantled without causing damages or injuries to
the wooden frames attached to them but Roco insisted in dismantling the same on his
own responsibility and alleged that the bond was posted for such eventuality. Thus,
the deputy sheriffs directed that some of the machine’s supports be cut.

On 20 March 1953, the Respondent Company filed an urgent motion, with a counter-
bond in the amount of P15,769 for the return of the properties seized by the sheriffs.
On the same day, the trial court issued an order, directing the Provincial Sheriff of
Bulacan to return the machinery and equipment to the place where they were
installed at the time of seizure.

On 2 March 1953, the deputy sheriffs returned the said properties by depositing them
along the road near the quarry of the Respondent Company, without inventory and
re-installation in its former position and replacing the destroyed posts, which
rendered its use impracticable.

On 23 March 1953, Respondents’ counsel asked the provincial sheriff if the machinery
and equipment dumped on the road would be re-installed to their former position
and condition. The next day, the provincial sheriff filed an urgent motion in court
manifesting the Roco had been asked to furnish the sheriff’s office with the expenses,
laborers, technical men and equipment to carry into effect the courts order, among
other things but that Roco absolutely refused and asking the Court that Respondent
Company be ordered to provide the required aid or relieve the sheriff of the duty of
complying to the said order.

On 30 March 1953, the trial court ordered the provincial sheriff and the Petitioner
Company to reinstate the machinery and equipment removed by them in their
original condition. An urgent motion of the provincial sheriff dated 15 April 1953
requesting for an extension was denied and on 4 May 1953, the trial court ordered the
Petitioner Company to furnish the provincial sheriff with the necessary funds and
technical crew and laborers to reinstate the machinery and equipment.

The case was appealed before the Court of Appeals but the latter dismissed the same
for lack of merit.

Hence this petition filed before the Supreme Court (the “SC”). The Petitioner argued
that the respondent judge had completely disregarded his manifestation that the
machinery and equipment seized were and still are the Petitioner's property until
fully paid for and 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.
ISSUE:
Whether or not the machineries and equipments can be considered as personal
properties subject to replevin.
HELD:
NO.
When the machinery and equipment in question appeared to be attached to the land,
particularly to the concrete foundation of said premises, 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 or that in order to remove said outfit, it became
necessary, not only to unbolt the same, but , also, to cut some of its wooden supports
and when, said machinery and equipment were "intended by the owner of the
tenement for an industry" carried on said immovable and tended, it becomes
immovable property pursuant to paragraphs 3 and 5 of Article 415 of Civil Code of
the Philippines.

The SC held that the special civil action known as replevin, governed by Rule 62 of
Court, is applicable only to "personal property". When the sheriff repaired to the
premises of respondent company, the machinery and equipment in question
appeared to be attached to the land, particularly to the concrete foundation of said
premises, 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,
also, to cut some of its wooden supports. Moreover, said machinery and equipment
were "intended by the owner of the tenement for an industry" carried on said
immovable and tended." For these reasons, they were already immovable property
pursuant to paragraphs 3 and 5 of Article 415 of Civil Code of the Philippines, which
are substantially identical to paragraphs 3 and 5 of Article 334 of the Civil Code of
Spain. As such immovable property, they were not subject to replevin.
 Case Title Manila Electric Company vs. The City Assessor
G.R. no. 166102
Date: August 5, 2015

FACTS:
Nature of case: Petition for review under Rule 45 seeking reversal of CA decision
ruling that MERALCO is liable for real property tax on its transformers, electric posts,
transmission lines, insulators, and electric meters beginning 1992.

Background
MERALCO is a private corporation organized under Philippine laws to operate as a
public utility engaged in electric distribution. It has been successively granted
franchises to operate beginning 1992 until present time.

On 1989, MERALCO received from the City Assessor a copy of tax declaration
covering the ff. electric facilities: transformers and electric posts, transmission lines,
insulators, electric meters. These electric facilities had a market value of P82M and
and assessed value of P65M and were subjected to real property taxes as of 1985

MERLACO appealed and claimed that its capital investment consisted only of its
substation facilities the true and correct value of which was only P9M, and that
MERALCO was exempted from paying real property taxes on said facilities.

Local Board of Assessment Appeals (LBAA) rendered a decision finding that

MERALCO was required to pay a tax equal to 5% of its gross earnings and shall be
due quarterly in lieu of any and all taxes of and kind, nature, or description levied,
established, or collected on electric facilities from which MERALCO is expressly
exempted.

As regards to the issue whether or not the electric facilities can be classified as real
properties, LBAA cited the case of Board of Assessment Appeals v. MERALCO where the
Court held: (1) the steel towers fell within the term “poles” expressly exempted from
taxes under franchise of MERALCO, and (2) the steel towers were personal properties
under the NCC and thus not subject to real property tax.

LBAA order the tax declaration to remain and the electric facilities of MERALCO
would be continuously assessed, but the City Assessor would stamp on the said Tax
Declaration the word “exempt”.

/jkqc
 City Assessor filed an appeal with the CBAA. CBAA affirmed the judgment of LBAA.
City Assessor no longer appealed and the decision became final and excecutory.

Six years later, MERLACO received a letter from City Treasurer stating that the
company was being assessed real property tax delinquency on its machineries
beginning 1990 in the total amount of P17M.

MERALCO appealed before the LBAA to cancel and nullify the assessment and
declare the properties exempt from real property tax.

LBAA declared that Sections 234 and 534(f) of the LGC repealed provisions in the
franchise of MERALCO and PD 551 which pertained to the exemption of MERALCO
from payment of real property tax on its poles, wires, insulators, transformers, and
meters. The LBAA refused to apply res judicata because the earlier decision involved
collection of taxes from 1985 and 1989 while the present case concerned collection of
taxes from 1989 to 1997.

On appeal, CBAA ruled that MERALCO could no longer claim tax exemption from
real property tax on its machineries with the enactment of the LGC. MERLACO filed
for motion for reconsideration which was denied later on.

On appeal to the CA, the Court ruled that there was no basis for real property tax
exemption of MERALCO under the LGC and that the withdrawal of said exemption
did not violate the non-impairment clause of the Constitution.

MERALCO’s argument before the SC:

MERALCO argues that its electric facilities are not subject to real property taxes given
that:
1. The definition of “machinery” under Sec. 199(o)1 of the LGC on which real
property tax is imposed, must still be in contemplation of real or immovable
property under Art. 415, NCC because it is axiomatic that a statute should be
construed to harmonize with other laws on the same subject matter as to form a
complete, coherent, and intelligible system.
2. The Decision dated April 10, 1991 of the CBAA in CBAA Case No. 248, which
affirmed the Decision dated July 5, 1989 of the LBAA in LBAA-89-2, ruling that
the transformers, electric posts, transmission lines, insulators, and electric meters
of MERALCO are movable or personal properties, is conclusive and binding
ISSUE:

/jkqc
 1. WON the transformers, electric posts, transmission lines, insulators, and electric
meters of MERALCO may qualify as “machinery” under the LGC SUBJECT TO
REAL PROPERTY TAX. YES

2. WON the decision of CBAA based on the 1964 case of Board of Assessment Appeals v.
MERALCO is binding. NO
HELD:
1. Yes. The Court highlights that under Section 199(o) of the LGC, machinery, to
be deemed real property subject to real property tax, need no longer be
annexed to the land or building as these “may or may not be attached,
permanently or temporarily to the real property,” and in fact, such machinery
may even be “mobile.”

The same provision though requires that to be machinery subject to real

property tax, the physical facilities for production, installations, and
appurtenant service facilities, those which are mobile, self-powered or self-
propelled, or not permanently attached to the real property (a) must be
actually, directly, and exclusively used to meet the needs of the particular
industry, business, or activity; and (b) by their very nature and purpose, are
designed for, or necessary for manufacturing, mining, logging, commercial,
industrial, or agricultural purposes.

Thus, Article 290(o) of the IRR of the the LGC of 1991 recognizes the following
EXEMPTION:

“Machinery which are of general purpose use including but not limited
to office equipment, typewriters, telephone equipment, breakable or easily
damaged containers (glass or cartons), microcomputers, facsimile
machines, telex machines, cash dispensers, furnitures and fixtures,
freezers, refrigerators, display cases or racks, fruit juice or beverage
automatic dispensing machines which are not directly and exclusively
used to meet the needs of a particular industry, business or activity shall
not be considered within the definition of machinery under this Rule.”

2. The 1964 MERALCO case was decided when The Assessment Law was still in
effect and Section 3(f) of said law still required that the machinery be attached
to the real property. Moreover, as the Court pointed out earlier, the ruling in
the 1964 MERALCO case — that the electric poles (including the steel towers)
of MERALCO are not subject to real property tax — was primarily based on

/jkqc
 the express exemption granted to MERALCO under its previous franchise The
reference in said case to the Civil Code definition of real property was only an
alternative argument 2. The aforequoted conclusions of the Court in the 1964
MERALCO case do not hold true anymore under the Local Government
Code.

MERALCO insists on harmonizing the aforementioned provisions of the Civil

Code and the Local Government Code. The Court disagrees, however, for this
would necessarily mean imposing additional requirements for classifying
machinery as real property for real property tax purposes not provided for, or
even in direct conflict with, the provisions of the Local Government Code. As
between the Civil Code, a general law governing property and property
relations, and the Local Government Code, a special law granting local
government units the power to impose real property tax, then the latter shall
prevail.

1
Section 199. Definitions. - When used in this Title:

(o) "Machinery" embraces machines, equipment, mechanical contrivances, instruments,

appliances or apparatus which may or may not be attached, permanently or
temporarily, to the real property. It includes the physical facilities for production, the
installations and appurtenant service facilities, those which are mobile, self-powered or
self-propelled, and those not permanently attached to the real property which are
actually, directly, and exclusively used to meet the needs of the particular industry,
business or activity and which by their very nature and purpose are designed for, or
necessary to its manufacturing, mining, logging, commercial, industrial or agricultural
purposes;

2
Granting for the purpose of argument that the steel supports or towers in question
are not embraced within the term poles, the logical question posited is whether they
constitute real properties, so that they can be subject to a real property tax. The tax
law does not provide for a definition of real property; but Article 415 of the Civil Code
does, by stating the following are immovable property:

(1) Land, buildings, roads, and constructions of all kinds adhered to the soil;

xxxx

/jkqc
(3) Everything attached to an immovable in a fixed manner, in such a way that it cannot
be separated therefrom without breaking the material or deterioration of the object;

xxxx

(5) Machinery, receptacles, instruments or implements intended by the owner of the

tenement for an industry or works which may be carried in a building or on a piece of
land, and which tends directly to meet the needs of the said industry or works;

xxxx

The steel towers or supports in question, do not come within the objects mentioned in
paragraph 1, because they do not constitute buildings or constructions adhered to the
soil. They are not constructions analogous to buildings nor adhering to the soil. As per
description, given by the lower court, they are removable and merely attached to a
square metal frame by means of bolts, which when unscrewed could easily be
dismantled and moved from place to place. They cannot be included under paragraph
3, as they are not attached to an immovable in a fixed manner, and they can be
separated without breaking the material or causing deterioration upon the object to
which they are attached. Each of these steel towers or supports consists of steel bars or
metal strips, joined together by means of bolts, which can be disassembled by
unscrewing the bolts and reassembled by screwing the same. These steel towers or
supports do not also fall under paragraph 5, for they are not machineries or receptacles,
instruments or implements, and even if they were, they are not intended for industry or
works on the land. Petitioner is not engaged in an industry or works on the land in
which the steel supports or towers are constructed. (Emphases supplied.

/jkqc
Case Title Capitol Wireless, Inc. v Provincial Treasurer of Batangas

G.R. no. G.R. No. 180110

Date: May 30, 2016

FACTS:

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

of providing international telecommunications services. 3 As such provider, Capwire
has signed agreements with other local and foreign telecommunications companies
covering an international network of submarine cable systems such as the Asia Pacific
Cable Network System (APCN) (which connects Australia, Thailand, Malaysia,
Singapore, Hong Kong, Taiwan, Korea, Japan, Indonesia and the Philippines); the
BruneiMalaysia-Philippines Cable Network System (BMP-CNS), the PhilippinesItaly.
Petitioner Capwire claims that it is co-owner only of the so-called "Wet Segment" of
the APCN, while the landing stations or terminals and Segment E of APCN located in
Nasugbu, Batangas are allegedly owned by the Philippine Long Distance Telephone
Corporation (PLDT). Capwire claims that as co-owner, it does not own any particular
physical part of the cable system

However, for loan restructuring purposes, Capwire claims that "it was required to
register the value of its right," hence, it engaged an appraiser to "assess the market
value of the international submarine cable system. Provincial Assessor had
determined that the submarine cable systems described in Capwire's Sworn
Statement of True Value of Real Properties are taxable real property

ISSUE:

Whether or not submarine communications cables be classified as taxable real property by the
local governments?
 HELD:

Yes, Supreme Court ruled that absent any showing from Capwire of any express grant of an
exemption for its lines and cables from real property taxation. 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
37

exempted from real prope1iy tax" and may qualify as "machinery" subject to real property tax
under the Local Government Code. 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
38

Civil Code for the simple reason that such pieces of equipment serve the owner's business or tend.
!
Case!Title! Laurel!v.!Garcia!
G.R.!no.! 92013,!92047!
Date:! July!25,!1990!
!
FACTS:!
These! are! two! petitions! for! prohibition! seeking! to! enjoin! respondents,! their!
representatives!and!agents!from!proceeding!with!the!bidding!for!the!sale!of!the!3,179!
square!meters!of!land!at!306!Roppongi,!5PChome!MinatoPku!Tokyo,!Japan!scheduled!
on!February!21,!1990.!
!
The!subject!property!in!this!case!is!one!of!the!four!(4)!properties!in!Japan!acquired!by!
the!Philippine!government!under!the!Reparations!Agreement!entered!into!with!Japan!
on!May!9,!1956,!the!other!lots!being:!(1)!The!Nampeidai!Property!at!11P24!NampeidaiP
machi,! ShibuyaPku,! Tokyo! which! has! an! area! of! approximately! 2,489.96! square!
meters,! and! is! at! present! the! site! of! the! Philippine! Embassy! Chancery;! (2)! The! Kobe!
Commercial!Property!at!63!NaniwaPcho,!Kobe,!with!an!area!of!around!764.72!square!
meters! and! categorized! as! a! commercial! lot! now! being! used! as! a! warehouse! and!
parking! lot! for! the! consulate! staff;! and! (3)! The! Kobe! Residential! Property! at! 1P980P2!
ObanoyamaPcho,!Shinohara,!NadaPku,!Kobe,!a!residential!lot!which!is!now!vacant.!
!
The! properties! and! the! capital! goods! and! services! procured! from! the! Japanese!
government!for!national!development!projects!are!part!of!the!indemnification!to!the!
Filipino!people!for!their!losses!in!life!and!property!and!their!suffering!during!World!
War! II.! The! Roppongi! property! was! acquired! from! the! Japanese! government! under!
the!Second!Year!Schedule!and!listed!under!the!heading!`Government!Sector`!for!the!
Chancery!of!the!Philippine!Embassy.!As!intended,!it!became!the!site!of!the!Philippine!
Embassy! until! the! latter! was! transferred! to! Nampeidai! on! July! 22,! 1976! when! the!
Roppongi! building! needed! major! repairs.! Due! to! the! failure! of! our! government! to!
provide! necessary! funds,! the! Roppongi! property! has! remained! undeveloped! since!
that!time.!
!
A!proposal!was!presented!to!President!Aquino!by!former!Philippine!Ambassador!to!
Japan,!Carlos!J.!Valdez,!to!make!the!property!the!subject!of!a!lease!agreement!with!a!
Japanese!firm!P!Kajima!Corporation.!However,!this!was!not!acted!favorably!upon!by!
the!government.!Instead,!President!Aquino!issued!EO!No.!296!entitling!nonPFilipino!
citizens! or! entities! to! avail! of! separations’! capital! goods! and! services! in! the! event! of!
sale,! lease! or! dispositions.! Thereafter,! amidst! the! oppositions! by! various! sectors,! the!
Executive! branch! of! the! government! pushed! for! the! sale! of! reparation! properties,!
starting!with!the!Roppongi!lot.!
!
Petitioner! argues! that! under! Philippine! Law,! the! subject! property! is! property! of!
public!dominion.!As!such,!it!is!outside!the!commerce!of!men.!Therefore,!it!cannot!be!
alienated.!
ISSUE:!
Whether! or! not! the! Philippine! government! can! alienate! the! Roppongi! property! and!
others!of!its!kind.!
HELD:!
No.! there! can! be! no! doubt! that! it! is! of! public! dominion! unless! it! is! convincingly!
shown!that!the!property!has!become!patrimonial.!This,!the!respondents!have!failed!to!
do.! As! property! of! public! dominion,! the! Roppongi! lot! is! outside! the! commerce! of!
man.!It!cannot!be!alienated.!Its!ownership!is!a!special!collective!ownership!for!general!
use!and!enjoyment,!an!application!to!the!satisfaction!of!collective!needs,!and!resides!
in!the!social!group.!The!purpose!is!not!to!serve!the!State!as!a!juridical!person,!but!the!
citizens;!it!is!intended!for!the!common!and!public!welfare!and!cannot!be!the!object!of!
appropration.!
!
The!applicable!provisions!of!the!Civil!Code!are:!!
!
ART.!419.!Property!is!either!of!public!dominion!or!of!private!ownership.!
ART.!420.!The!following!things!are!property!of!public!dominion!
(1)! Those! intended! for! public! use,! such! as! roads,! canals,! rivers,! torrents,! ports! and!
bridges! constructed! by! the! State,! banks! shores! roadsteads,! and! others! of! similar!
character;!
(2)!Those!which!belong!to!the!State,!without!being!for!public!use,!and!are!intended!for!
some!public!service!or!for!the!development!of!the!national!wealth.!
ART.!421.!All!other!property!of!the!State,!which!is!not!of!the!character!stated!in!the!
preceding!article,!is!patrimonial!property.!
!
The!Roppongi!property!is!correctly!classified!under!paragraph!2!of!Article!420!of!the!
Civil!Code!as!property!belonging!to!the!State!and!intended!for!some!public!service.!
The!fact!that!the!Roppongi!site!has!not!been!used!for!a!long!time!for!actual!Embassy!
service! does! not! automatically! convert! it! to! patrimonial! property.! Any! such!
conversion! happens! only! if! the! property! is! withdrawn! from! public! use.! A! property!
continues!to!be!part!of!the!public!domain,!not!available!for!private!appropriation!or!
ownership! until! there! is! a! formal! declaration! on! the! part! of! the! government! to!
withdraw!it!from!being!such.!
!
Case Title Rabuco v. Villegas
G.R. no. L-24661, L-24915, L-24916
Date: February 28, 1974

FACTS:
Republic Act 3120 was enacted on June 17, 1961 to convert certain parcels of land (Lot
62 of Block 573 and Lot 21-B of Block 610) in the City of Manila, which are reserved as
communal property, into disposable or alienable lands of the State to be place under
the administration and disposal of the Land Tenure Administration. The occupants of
these lots situated in Malate filed a petition (Cases L-24915 and L-24916) against the
demolition of their houses intended by the Mayor of the City of Manila. Section 2 of
RA3120 provides that “no ejectment proceedings against any tenants or bona fide
occupant shall be instituted and any proceedings against any such tenant or bona fide
occupant shall be dismissed upon motion of the defendant. Provided, That any
demolition order directed against any tenant or bona fide occupant thereof, shall be
dismissed.” On the other hand, the Mayor and the City Engineer of Manila argued
that RA3120 was invalid for being in violation of the Constitutional prohibition
against the deprivation of property without due process of law and without just
compensation.

In the early morning of April 19, 1970, a large fire of undetermined origin gutted the
Malate area including the lot on which petitioners had built their homes and
dwellings. Respondents city officials then took over the lot and kept petitioners from
reconstructing or repairing their burned dwellings. At petitioners' instance, the Court
issued a temporary restraining order enjoining respondents city officials from
performing any act constituting an interference in or disturbance of the petitioners'
possession of the lots.
ISSUE:
Whether or not RA3120 (An act converting certain parcels of land in the City of
Manila which are reserved as communal property into disposable or alienable lands
of the State and providing for their subdivision and sale) is constitutional.
HELD:
The Court upheld the constitutionality of RA3120 on the strength of the established
doctrine that the subdivision of communal land of the State (although titled in the
name of the municipal corporation) and conveyance of the resulting subdivision lots
by sale on installment basis to bona fide occupants by Congressional authorization
and disposition does not constitute infringements of the due process clause or the
eminent domain provisions of the Constitution but operates simply as a manifestation
of the legislature's right of control and power to deal with State property.
Respondents city officials' contention that the Act must be stricken down as
unconstitutional for depriving the city of Manila of the lots in question and providing
for their sale in subdivided small lots to bona fide occupants or tenants without
payment of just compensation is untenable and without basis, since the lots in
question are manifestly owned by the city in its public and governmental capacity
and are therefore public property over which Congress had absolute control as
distinguished from patrimonial property owned by it in its private or proprietary
capacity of which it could not be deprived without due process and without just
compensation.

RA3120 expressly declared that the properties were "reserved as communal property"
and ordered their conversion into "disposable and alienable lands of the State" for sale
in small lots to the bona fide occupants thereof. It is established doctrine that the act
of classifying State property calls for the exercise of wide discretionary legislative
power which will not be interfered with by the courts.

Since the challenge of respondents city officials against the constitutionality of

RA3120 must fail as the City was not deprived thereby of anything it owns by
acquisition with its private or corporate funds either under the due process clause or
under the eminent domain provisions of the Constitution, the provisions of said Act
must be enforced and petitioners are entitled to the injunction as prayed for
implementing the Act's prohibition against their ejectment and demolition of their
houses.
Case Title LEVY D. MACASIANO V. HON. ROBERTO DIOKNO
G.R. no. 97764
Date: August 10, 1992

FACTS:
The Municipality of Paranaque passed an Ordinance No. 86 authorizing the closure of
certain streets for the establishment of a flea market. This was approved by the
municipal council and Metropolitan Manila Authority (MMA) subject to the conditions
that : 1.) Streets are not used by vehicular traffic and majority of the residents do not
oppose the establishment of the flea market/vending areas; 2.) the 2 meter middle road
will be marked as well as the 2 meters on both sides of the road which will be used by
pedestrians; 3.) The time that it will be used should be clearly designated; and 4.) Use
of vending areas is only temporary and shall be closed once the reclaimed areas are
developed. Mayor Ferrer then signed a contract with Palayag, a service cooperative to
operate and manage the flea market.

Petitioner, Brig. Gen. Macasiano ordered the destruction of the stalls and filed a petition
thru the OSG. The OSG contends that the municipal roads are used for public service
and therefore public properties, thus, they cannot be subject to private appropriation
or contract by any person. They also submits that a property already dedicated to a
public use cannot be used for another public purpose absent a grant by the legislature.
Therefore, respondent municipality is bereft of any authority to close the municipal
roads.

Respondent contends that under Sec. 10 of the Local Government Code, local
government units is, under the law, empowered to close its roads, streets or alley
subject to limitations stated therein.

ISSUE:
Whether or not an ordinance or resolution issued by the municipal council of
Paranaque authorizing the lease and use of public streets or thoroughfares as sites for
flea markets is valid.

HELD:
To determine whether the municipal ordinance is valid, the laws in force during the
time the ordinance was enacted, namely LGC and Civil Code, should be examined.
Under Art. 424 of the Civil Code, Property for public use is consists of provincial
roads, city streets, squares, foundation and public works for public services paid for
by said provinces, cities or municipalities. Based on this, the local roads meant to be
used as flea market is a public property for public service. Such properties are under
the absolute control of Congress, hence, local government have no authority to
control or regulate it. Further, Article 424 laid down the basic principle that properties
of public dominion devoted for public use and available to the general public are
outside the commerce of man and cannot be disposed by the LGU to a private person.

A closure should be for the sole purpose of withdrawing the road or other public
property from public use and such property is no longer intended for public use or
service. It is only then that it can be used as a flea market. However, those roads are
still available to the public in general and ordinarily used for traffic which are
considered public property.

More so, respondent municipality did not show any iota of proof that they indeed
complied with the conditions of MMA stated above.

Thus, the petition filed by Brig. Gen. Macasino is Granted.

Case Title Republic versus Court of Appeals
G.R.. No. 100709
Date November 14, 1997

FACTS:
Morato filed a Free Patent Application on a parcel of land with an area of
1,265 square meters situated in Quezon. The same was approved and a certificate
of title was issued also issued to him subject to the provisions of Sections 118, 119,
121, 122, 124 of CA No. 141, as amended. Accordingly, both the free patent and the
title specifically mandate that the land shall not
be alienated nor encumbered within five years from the date of the issuance of the
patent

Due to reports that Morato encumbered the property, the District Land
Officer conducted an investigation. Thereafter, it was established that the subject
land is a portion of the Calauag Bay, five (5) to six (6) feet deep under water during
high tide and two (2) feet deep at low tide, and not suitable to vegetation.
Moreover, a portion of the land was mortgaged by Morato to Nenita Co and
Antonio Quilatan for P10,000.00. The spouses Quilatan constructed a house on the
land. Another portion of the land was leased to Perfecto at P100.00 a month, where
a warehouse was constructed.

Petitioner filed an amended complaint against Morato, spouses Nenita Co

and Antonio Quilatan, and the Register of Deeds of Quezon for the cancellation of
title and reversion of a parcel of land to the public domain, subject of a free patent
in favor of Morato, on the grounds that the land is a foreshore land and was
mortgaged and leased within the five-year prohibitory period.

The lower court dismissed the complaint in ruling that there was no violation
since the land was only leased and not alienated. CA affirmed the decision; hence,
this petition.

ISSUES:
1. WON the patent granted and certificate of title issued to Morato cannot be
cancelled and annulled since the certificate of title becomes indefeasible after
one year from the issuance of the title.
2. WON the questioned land is part of a disposable public land and not a foreshore
land.
 HELD:
1. YES. Quoted below are relevant sections of Commonwealth Act No. 141,
otherwise known as the Public Land Act:

Sec. 118. Except in favor of the Government or any of its branches,

units or institutions, or legally constituted banking
corporations, lands acquired under free patent or homestead provisions
shall not be subject to encumbrance or alienation from the date of the
approval of the application and for a term of five years from and after the
date of issuance of the patent or grant nor shall they become liable to
the satisfaction of any debt contracted prior to the expiration of said
period; but the improvements or crops on the land may be
mortgaged or pledged to qualified persons, associations, or
corporations.

No alienation, transfer, or conveyance of any homestead after five

years and before twenty-five years after issuance of title shall be
valid without the approval of the Secretary of Agriculture and
Natural Resources, which approval shall not be denied except on
constitutional and legal grounds. (As amended by Com. Act No.
456, approved June 8, 1939.)

xxx xxx xxx

Sec. 121. Except with the consent of the grantee and the approval of
the Secretary of Agriculture and Natural Resources, and solely for
educational, religious, or charitable purposes or for a right of way,
no corporation, association, or partnership may acquire or have any
right, title, interest, or property right whatsoever to any land
granted under the free patent, homestead, or individual sale
provisions of this Act or to any permanent improvement on such
land. (As amended by Com. Act No. 615, approved May 5, 1941)

Sec. 122. No land originally acquired in any manner under the

provisions of this Act, nor any permanent improvement on such
land, shall be encumbered, alienation or transferred, except to
persons, corporations, association, or partnerships who may
acquire lands of the public domain under this Act or to corporations
organized in the Philippines authorized therefore by their charters.
 Except in cases of hereditary successions, no land or any portion
thereof originally acquired under the free patent, homestead, or
individual sale provisions of this Act, or any permanent
improvement on such land, shall be transferred or assigned to any
individual, nor shall such land or any permanent improvement
thereon be leased to such individual, when the area of said land,
added to that of this own, shall exceed one hundred and forty-four
hectares. Any transfer, assignment, or lease made in violation hereto shall
be null and void. (As amended by Com Act No. 615, Id.).

xxx xxx xxx

Sec. 124. Any acquisition, conveyance, alienation, transfer, or other

contract made or executed in violation of any of the provisions of
sections one hundred and eighteen, one hundred and twenty, one
hundred and twenty-one, one hundred and twenty-two, and one
hundred and twenty-three of this Act shall be unlawful and null and
void from its execution and shall produce the effect of annulling and
cancelling the grant, title, patent, or permit originally issued, recognized
or confirmed, actually or presumptively, and cause the reversion of the
property and its improvements to the State. (Emphasis supplied)

Encumbrance has been defined as "anything that impairs the use or transfer
of property; anything which constitutes a burden on the title; a burden or charge
upon property; a claim or lien upon property." It may be a "legal claim on an
estate for the discharge of which the estate is liable; and embarrassment of the
estate or property so that it cannot be disposed of without being subject to it; an
estate, interest, or right in lands, diminishing their value to the general owner;
a liability resting upon an estate.”

It is indisputable, however, that Morato cannot fully use or enjoy the land
during the duration of the lease contract. This restriction on the enjoyment of
her property sufficiently meets the definition of an encumbrance under Section
118 of the Public Land Act, because such contract "impairs the use of the
property" by the grantee. In a contract of lease which is consensual, bilateral,
onerous and commutative, the owner temporarily grants the use of his or her
property to another who undertakes to pay rent therefor. During the term of the
lease, the grantee of the patent cannot enjoy the beneficial use of the land leased.
As already observed, the Public Land Act does not permit a grantee of a free
patent from encumbering any portion of such land. Such encumbrance is a
ground for the nullification of the award.

Morato's resort to equity, i.e. that the lease was executed allegedly out of the
goodness of her heart without any intention of violating the law, cannot help
her. Equity, which has been aptly described as "justice outside legality," is
applied only in the absence of, and never against, statutory law or judicial rules
of procedure.

Even if only part of the property has been sold or alienated within the
prohibited period of five years from the issuance of the patent, such alienation
is a sufficient cause for the reversion of the whole estate to the State.

The prohibition against the encumbrance — lease and mortgage included

— of a homestead which, by analogy applies to a free patent, is mandated by
the rationale for the grant, viz.:

It is well-known that the homestead laws were designed to distribute

disposable agricultural lots of the State to land-destitute citizens for their home
and cultivation. Pursuant to such benevolent intention the State prohibits the
sale or incumbrance of the homestead (Section 116) within five years after the
grant of the patent. After that five-year period the law impliedly permits
alienation of the homestead; but in line with the primordial purpose to favor the
homesteader and his family the statute provides that such alienation or
conveyance (Section 117) shall be subject to the right of repurchase by the
homesteader, his widow or heirs within five years. This section 117 is
undoubtedly a complement of section 116. It aims to preserve and keep in the
family of the homesteader that portion of public land which the State had
gratuitously given to him. It would, therefore, be in keeping with this
fundamental idea to hold, as we hold, that the right to repurchase exists not
only when the original homesteader makes the conveyance, but also when it is
made by his widow or heirs. This construction is clearly deducible from the
terms of the statute.

The prohibition against any alienation or encumbrance of the land grant is

a proviso attached to the approval of every application. 23 Prior to the fulfillment
of the requirements of law, Respondent Morato had only an inchoate right to
the property; such property remained part of the public domain and, therefore,
not susceptible to alienation or encumbrance. Conversely, when a "homesteader
has complied with all the terms and conditions which entitled him to a patent
 for [a] particular tract of public land, he acquires a vested interest therein and
has to be regarded an equitable owner thereof." However, for Respondent
Morato's title of ownership over the patented land to be perfected, she should
have complied with the requirements of the law, one of which was to keep the
property for herself and her family within the prescribed period of five (5) years.
Prior to the fulfillment of all requirements of the law, Respondent Morato's title
over the property was incomplete. Accordingly, if the requirements are not
complied with, the State as the grantor could petition for the annulment of the
patent and the cancellation of the title.

Respondent Morato cannot use the doctrine of the indefeasibility of her

Torrens title to bar the state from questioning its transfer or encumbrance. The
certificate of title issued to her clearly stipulated that its award was "subject to
the conditions provided for in Sections 118, 119, 121, 122 and 124 of
Commonwealth Act (CA) No. 141." Because she violated Section 118, the
reversion of the property to the public domain necessarily follows, pursuant to
Section 124.

2. YES. A foreshore land, on the other hand has been defined as that part of
the land which is between high and low water and left dry by the flux and reflux
of the tides. It is the strip of land that lies between the high and low water marks
and that is alternatively wet and dry according to the flow of the tide.

The land owned by Morato may be classified as foreshore land, however,

the petitioner correctly contends that Morato cannot own a foreshore land. The
application for a free patent was made in 1972. From the undisputed factual
findings of the Court of Appeals, however, the land has since become foreshore.
Accordingly, it can no longer be subject of a free patent under the Public Land
Act. Government of the Philippine Islands vs. Cabañgis explained the rationale for
this proscription:

Article 339, subsection 1, of the Civil Code, reads:

Art. 339. Property of public ownership is —

1. That devoted to public use, such as roads, canals, rivers, torrents,

ports and bridges constructed by the State, riverbanks, shores,
roadsteads, and that of a similar character.

xxx xxx xxx

 Article 1, case 3, of the law of Waters of August 3, 1866, provides as
follows:

Art. 1. The following are part of the national domain open to public use.

xxx xxx xxx

3. The Shores. By the shore is understood that space covered and

uncovered by the movement of the tide. Its interior or terrestrial limit is
the line reached by the highest equinoctal tides. Where the tides are not
appreciable, the shore begins on the land side at the line reached by the
sea during ordinary storms or tempests.

In the Enciclopedia Juridica Española, volume XII, page 558, we read the following:

With relative frequency the opposite phenomenon occurs; that is, the
sea advances and private properties are permanently invaded by the
waves, and in this case they become part of the shore or breach. They
then pass to the public domain, and the owner thus dispossessed does
not retain any right to the natural products resulting from their new
nature; it is a de facto case of eminent domain, and not subject to
indemnity.

In comparison, Article 420 of the Civil Code provides:

Art. 420. The following things are property of public dominion:

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

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

When the sea moved towards the estate and the tide invaded it, the
invaded property became foreshore land and passed to the realm of the public
domain. The subject land in this case, being foreshore land, should therefore be
returned to the public domain.
Case THE PROVINCE OF ZAMBOANGA DEL NORTE
Title vs.
CITY OF ZAMBOANGA, SECRETARY OF FINANCE and
COMMISSIONER OF INTERNAL REVENUE
G.R. No. G.R. No. L-24440
Date MARCH 28, 1968

FACTS:
Prior to its incorporation as a chartered city, the Municipality of Zamboanga
used to be the provincial capital of the then Zamboanga Province.

On October 12, 1936, Commonwealth Act 39 was approved converting the

Municipality of Zamboanga into Zamboanga City. Sec. 50 of the Act also provided
that —Buildings and properties which the province shall abandon upon the transfer
of the capital to another place will be acquired and paid for by the City of Zamboanga
at price to be fixed by the Auditor General. The properties and buildings referred to
consisted of 50 lots and some buildingsconstructed thereon, located in the City of Z
amboanga and covered individually by Torrens certificates of title in the name of
Zamboanga Province.

On June 6, 1952, Republic Act 711 was approved dividing the province of Zamboanga
into two (2): Zamboanga del Norte andZamboanga del Sur. Properties and the
obligations of the province of Zamboanga shall be divided equitably between
the Province of Zamboanga del Norte and the Province of Zamboanga del Sur
by the President of the Philippines, upon the recommendation of the Auditor
General. However, on June 17, 1961, Republic Act 3039
was approved amending Sec. 50 of Commonwealth Act 39 by providing that —all
buildings, properties and assets belonging to the former province of Zamboanga and
located within the City of Zamboanga are hereby transferred, free of charge, in favor
of the said City of Zamboanga.

ISSUE:
WON Zamboanga del Norte is deprived of its private properties without due
process and just compensation.
HELD:
The validity of the law ultimately depends on the nature of the 50 lots and buildings
thereon in question. The principle itself is simple:
 If the property is owned by the municipality (meaning municipal
corporation) in its public and governmental capacity, the property is
public and Congress has absolute control over it.

But if the property is owned in its private or proprietary capacity,

then it is patrimonial and Congress has no absolute control. The
municipality cannot be deprived of it without due process and
payment of just compensation.

The capacity in which the property is held is, however, dependent on the use to
which it is intended and devoted.

The Civil Code classification is embodied in its Arts. 423 and 424 which provide:

ART. 423. The property of provinces, cities, and municipalities is divided into
property for public use and patrimonial property.

ART. 424. Property for public use, in the provinces, cities, and
municipalities, consists of the provincial roads, city streets, municipal streets,
the squares, fountains, public waters, promenades, and public works for
public service paid for by said provinces, cities, or municipalities.

All other property possessed by any of them is patrimonial and shall be governed
by this Code, without prejudice to the provisions of special laws.

Republic Act 3039 cannot be applied to deprive Zamboanga del Norte of its share in
the value of the rest of the 26 remaining lots which are patrimonial properties since
they are not being utilized for distinctly, governmental purposes.

The fact that the 26 lots are registered strengthens the proposition that they are truly
private in nature. On the other hand, that the 24 lots used for governmental
purposes are also registered is of no significance since registration
cannot convert public property to private. Applying, Art. 424 of NCC, all the
properties in question, except the two (2) lots used as High School playgrounds,
could be considered as patrimonial properties of the former Zamboanga province.

Even the capital site, the hospital and leprosarium sites, and the school sites will be
considered patrimonial for they are not for public use. They would fall under the
phrase "public works for public service"
Case Title: Chavez vs Public Estates Authority
G.R. No. 133250
Date: July 9, 2002

FACTS:

This is a Petition for Mandamus with prayer of preliminary injunction and a

temporary restraining order. The petition seeks to compel the Public Estates
Authority (PEA) to disclose all facts on PEA’s then on-going renegotiations with
Amari Coastal Bay and Development Corporation (AMARI) to reclaim portions of
Manila Bay. The petitioner further seeks to enjoin PEA from signing a new
agreement with AMARI involving such reclamation.

On November 20, 1973, the government, through the Commissioner of Public

Highways signed a contract with the Construction and Development Corporation of
the Philippines (CDCP) to reclaim certain foreshore and offshore areas in Manila Bay.
The contract also included the construction of Phases I and II of the Manila-Cavite
Coastal Road. CDCP obligated itself to carry out all the works in consideration of
fifty percent of the total reclaimed land.

On February 4, 1977, then President Ferdinand Marcos issued PD No. 1084 creating
PEA. The decree tasked PEA “to reclaim land, including foreshore and submerged
areas,” and “to develop, improve, acquire, lease and sell any and all kinds of lands.”
On the same date, President Marcos issued PD No. 1085 transferring to PEA the
“lands reclaimed in the foreshore and offshore of the Manila Bay” under the Manila-
Cavite Coastal Road and Reclamation Project (MCCRRP).

On December 29, 1981, President Marcos issued a memorandum directing PEA to

amend its contract with CDCP, so that “all future works in MCCRRP shall be funded
and owned by PEA.” Accordingly, PEA and CDCP executed a Memorandum of
Agreement dated December 29, 1981.

On January 19, 1988, then President Corazon Aquino issued Special Patent No. 351,
granting and transferring to PEA “the parcels of land so reclaimed under the
MCCRRP containing a total area of 1,915,894 square meters.” Subsequently, on April
9, 1988, the Register of Deeds of Parañaque issued Transfer Certificates of Title Nos.
7309, 7311, and 7312, in the name of PEA, covering the three reclaimed islands known
as the Freedom Islands located at the southern portion of the Manila-Cavite Coastal
Road, having a total land area of 1,578, 441 square meters or 157.841 hectares.
On April 25, 1995, PEA entered into a Joint Venture Agreement (JVA) with AMARI, a
private corporation, to develop the Freedom Islands. The JVA also required the
reclamation of an additional 250 hectares of submerged areas surrounding these
islands to complete the configuration in the Master Development Plan of the Southern
Reclamation Project-MCCRRP. PEA and AMARI entered into the JVA through
negotiation without public bidding. On April 28, 1995, the Board of Directors of PEA,
in its Resolution No. 1245, confirmed the JVA. On June 8, 1995, then President Fidel
Ramos, through Executive Secretary Ruben Torres, approved the JVA.

On November 29, 1996, then Senate President Ernesto Maceda delivered a privileged
speech and denounced the JVA as the “grandmother of all scams.” As a result, the
Senate Committee on Government Corporations and Public Enterprises, and the
Committee on Accountability of Public Officers and Investigations, conducted a joint
investigation. Among the conclusions of the Senate Committee Report No. 560 are:
(1) the reclaimed lands PEA seeks to transfer to AMARI under the JVA are lands of
public domain which the government has not classified as alienable lands and
therefore PEA cannot alienate these lands; (2) the certificates of title covering the
Freedom Islands are thus void; (3) the JVA itself is illegal.

On December 5, 1997 President Ramos issued Presidential Administrative Order No.

365 creating a Legal Task Force to conduct a study on the legality of the JVA in view
of Senate Committee Report No. 560. The Legal Task Force upheld the legality of the
JVA, contrary to the conclusions reached by the Senate Committees.

On April 3, 1988, Antonio M. Zulueta filed before the Court a Petition for Prohibition
with Application for the Issuance of a Temporary Restraining Order and Preliminary
Injunction docketed as GR No. 132992 seeking to nullify the JVA. The Court
dismissed the petition “for unwarranted disregard of judicial hierarchy, without
prejudice to the refiling of the case in the proper court.”

On April 27, 1988, petitioner Frank Chavez, as a taxpayer, filed the instant Petition for
Mandamus with Prayer for the Issuance of a Writ of Preliminary Injunction and
Temporary Restraining Order. Petitioner contends that the government stands to lose
billions of pesos in the sale by PEA of the reclaimed islands to AMARI. Petitioner
prays that the PEA publicly disclose the terms of any renegotiation of the JVA,
invoking Section 28, Article II, and Section 7, Artilce III of the 1987 Constitution on th
right of the people to information on matters of public concern. Petitioner assails the
sale to AMARI of lands of public domain as a blatant violation of Section 3, Article XII
of the 1987 Constitution prohibiting the sale of alienable lands of public domain to
private corporations. Finally, petitioner asserts that he seeks to enjoin loss of billions
of pesos in properties of the State that are of public domain.

On December 28, 1998, petitioner filed an Omnibus Motion: (a) to require PEA to
submit the terms of the renegotiated PEA-AMARI contract; (b) for issuance of a
temporary restraining order; and (c) to set the case for hearing on oral argument.
Petitioner filed a Reiterative Motion for Issuance of TRO dated May 26, 1999.

ISSUE:
Whether the stipulations in the amended JVA for the transfer to AMARI certain
lands, reclaimed and still to be reclaimed, violate the 1987 Constitution?

RULING:
Since the amended JVA seeks to transfer to AMARI, a private corporation, ownership
of 77.34 hectares of the Freedom Islands, such transfer is void for being contrary to
Section 3, Article XII of the 1987 Constitution which prohibits private corporations
from acquiring any kind of alienable land of the public domain.

The amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares of
still submerged areas of Manila Bay and such transfer is void for being contrary to
Section 2, Art. XII of the Constitution which prohibits the alienation of natural
resources other than agricultural lands of the public domain.

WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari
Coastal Bay Development Corporation are PERMANENTLY ENJOINED from
implementing the Amended Joint Venture Agreement which is hereby declared
NULL and VOID ab initio.
Case Title TEOFILO C. VILLARICO vs. VIVENCIO SARMIENTO,
SPOUSES BESSIE SARMIENTO-DEL MUNDO & BETH
DEL MUNDO, ANDOK’S LITSON CORPORATION and
MARITES’ CARINDERIA
G.R. no. 136438
Date: November 11, 2004

FACTS:
This is a petition for review on certiorari of the CA decision affirming the RTC
decision finding that the respondents have a better right of possession over the strip
of land owned by the government beside the petitioner's property and Ninoy Aquino
Avenue.
Petitioner’s lot is separated from the Ninoy Aquino Avenue (highway) by a strip of
land belonging to the government. As this highway was elevated by four (4) meters
and therefore higher than the adjoining areas, the Department of Public Works and
Highways (DPWH) constructed stairways at several portions of this strip of public
land to enable the people to have access to the highway.
Respondents, had a building constructed on a portion of said government land.
Petitioner filed with the RTC, a complaint for accion publiciana against respondents
and alleged that respondents’ structures on the government land closed his "right of
way" to the Ninoy Aquino Avenue.
Respondents alleged that they have been issued licenses and permits by Parañaque
City to construct their buildings on the area; and that petitioner has no right over the
subject property as it belongs to the government.
ISSUE:
Whether or not the any of the parties have a right of possession over the disputed lot
where the stairways were built as it is a property of public dominion. No.
HELD:
Property of public dominion is outside the commerce of man and hence it: (1) cannot
be alienated or leased or otherwise be the subject matter of contracts; (2) cannot be
acquired by prescription against the State; (3) is not subject to attachment and
execution; and (4) cannot be burdened by any voluntary easement.
Considering that the lot on which the stairways were constructed is a property of
public dominion, it cannot be burdened by a voluntary easement of right of way in
favor of herein petitioner. In fact, its use by the public is by mere tolerance of the
government through the DPWH. Petitioner cannot appropriate it for himself.
Neither petitioner nor respondents have a right of possession over the disputed lot
where the stairways were built as it is a property of public dominion.
Case Title: Heirs of Malabanan v Republic
G.R. no. 179987
Date: September 03, 2013

FACTS:
The property subject of the application for registration is a parcel of land situated in
Barangay Tibig, Silang Cavite. On February 20, 1998, applicant Mario Malabanan,
who had purchased the property from Eduardo Velazco, filed an application for
land registration in the (RTC) in Tagaytay City, Cavite, claiming that the property
formed part of the alienable and disposable land of the public domain. RTC
approved of the title based on CENRO and DENR certification presented by the
petitioners. CA, however reversed the RTC decision upon appeal by the OSG. The
petitioner then filed a petition for review on certiorari in SC assailing the reversal of
decision of RTC by CA asserting the ruling on Republic v CA and Naguit which was
denied by SC because heirs of Malabanan had not provided sufficient evidence to
prove that they were in possession of the land within 30 years. Aggrieved by the
decision, the petitioner filed a motion for reconsideration on the ground that, the
land need not be possessed for 30 years for it is already a private land and 16 years
will suffice to give rise to ownership under the civil code.
ISSUE:
Whether or not the reclassification of the land as alienable and disposable should be
deemed sufficient to convert it to patrimonial land of the state and be opened for
acquisitive prescription under the Civil Code.
HELD:
No. SC explained that, there are two modes of acquiring lands. One would be under
Section 48 (b) of the public land act - when a land was declared by the Congress or
the President of the Philippines as alienable and disposal “public land” of the state,
i.e. agricultural land of the state. Here, the land remains public so the requirements
under section 48 (b) should be conformed with in order to acquire such public
agricultural land. On the other hand, if a public land is classified as no longer
intended for public use or for the development of national wealth by declaration of
Congress or the President, thereby converting such land into patrimonial or private
land of the State, the applicable provision concerning disposition and registration is
no longer Section 48(b) of the Public Land Act but the Civil Code, in conjunction
with Section 14(2) of the Property Registration Decree.35 As such, prescription can
now run against the State.

In this case 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
Case Title Republic vs. Santos, III
G.R. no. 160453
Date: 12 November 2012

FACTS:
Alleging continuous and adverse possession of more than ten years, respondent
Arcadio Ivan A. Santos III (Arcadio Ivan) applied on March 7, 1997 for the
registration of Lot 4998-B (the property) in the Regional Trial Court (RTC) in
Parafiaque City. The property, which had an area of 1,045 square meters, more or less,
was located in Barangay San Dionisio, Paraque City, and was bounded in the
Northeast by Lot 4079 belonging to respondent Arcadio C. Santos, Jr. (Arcadio, Jr.), in
the Southeast by the Paraque River, in the Southwest by an abandoned road, and in
the Northwest by Lot 4998-A also owned by Arcadio Ivan. On May 21, 1998, Arcadio
Ivan amended his application for land registration to include Arcadio, Jr. as his co-
applicant because of the latters co-ownership of the property. He alleged that the
property had been formed through accretion and had been in their joint open,
notorious, public, continuous and adverse possession for more than 30 years

ISSUE:
Whether or not the subject parcel land maybe acquired through the process of
accretion

HELD:
No. Accretion is the process whereby the soil is deposited along the banks of rivers.
The deposit of soil, to be considered accretion, must be: (a) gradual and
imperceptible; (b) made through the effects of the current of the water; and (c) taking
place on land adjacent to the banks of rivers.

The RTC and the CA grossly erred in treating the dried-up river bed as an accretion
that became respondents’ property pursuant to Article 457 of the Civil Code. That
land was definitely not an accretion. The process of drying up of a river to form dry
land involved the recession of the water level from the river banks, and the dried-up
land did not equate to accretion, which was the gradual and imperceptible deposition
of soil on the river banks through the effects of the current. In accretion, the water
level did not recede and was more or less maintained. Hence, respondents as the
riparian owners had no legal right to claim ownership of Lot 4998-B. Considering that
the clear and categorical language of Article 457 of the Civil Code has confined the
provision only to accretion, we should apply the provision as its clear and categorical
language tells us to. Axiomatic it is, indeed, that where the language of the law is
clear and categorical, there is no room for interpretation; there is only room for
application. The first and fundamental duty of courts is then to apply the law.

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

The principle that the riparian owner whose land receives the gradual deposits of soil
does not need to make an express act of possession, and that no acts of possession are
necessary in that instance because it is the law itself that pronounces the alluvium to
belong to the riparian owner from the time that the deposit created by the current of
the water becomes manifest has no applicability herein. This is simply because Lot
4998-B was not formed through accretion. Hence, the ownership of the land adjacent
to the river bank by respondents’ predecessor-in-interest did not translate to
possession of Lot 4998-B that would ripen to acquisitive prescription in relation to Lot
4998-B.

Yet, even conceding, for the sake of argument, that respondents possessed Lot 4998-B
for more than thirty years in the character they claimed, they did not thereby acquire
the land by prescription or by other means without any competent proof that the land
was already declared as alienable and disposable by the Government. Absent that
declaration, the land still belonged to the State as part of its public dominion.

Indeed, under the Regalian doctrine, all lands not otherwise appearing to be clearly
within private ownership are presumed to belong to the State. No public land can be
acquired by private persons without any grant, express or implied, from the
Government. It is indispensable, therefore, that there is a showing of a title from the
State. Occupation of public land in the concept of owner, no matter how long, cannot
ripen into ownership and be registered as a title.

Subject to the exceptions defined in Article 461 of the Civil Code (which declares river
beds that are abandoned through the natural change in the course of the waters as
ipso facto belonging to the owners of the land occupied by the new course, and which
gives to the owners of the adjoining lots the right to acquire only the abandoned river
beds not ipso facto belonging to the owners of the land affected by the natural change
of course of the waters only after paying their value), all river beds remain property
of public dominion and cannot be acquired by acquisitive prescription unless
previously declared by the Government to be alienable and disposable. Considering
that Lot 4998-B was not shown to be already declared to be alienable and disposable,
respondents could not be deemed to have acquired the property through
prescription.
Case Title Navy Officers’ Village Association, Inc. v. Republic of the
Philippines
G.R. no. G.R. No. 17718
Date: August 3, 2015

FACTS:
A Transfer Certificate Title (TCT) issued in Navy Officers’ Village Association,
Inc.(NOVAI)’s name covers a land situated inside the former Fort Andres Bonifacio
Military Reservation in Taguig. This property was previously a part of a larger parcel
of land which TCT’s under the name of the Republic of the Philippines. The then
President Garcia issued a Proclamation No. 423 which reserves for military purposes
certain parcels of the public domain situated in Pasig, Taguig, Paranaque, Rizal and
Pasay City. Thereafter, then President Macapagal issued Proclamation No. 461 which
excluded Fort McKinley a certain portion of land situated in the provinces
abovementioned and declared them as AFP Officers’ Village to be disposed of under
the provisions of certain laws. However, this area was subsequently reserved for
veterans’ rehabilitation, medicare and training center sites. The property was the
subject of deed of sale between the Republic and NOVAI to which the TCT was
registered in favour of the latter. The Republic then sought to cancel NOVAI’s title on
the ground that the property was still part of the military reservation thus inalienable
land of the public domain and cannot be the subject of sale. The RTC ruled that the
property was alienable and disposable in character. The Court of Appeals reversed
RTC’s decision.

ISSUE:
Whether or not the property covered by TCT issued under the name of NOVAI is
inalienable land of public domain and cannot be the subject of sale

HELD:
Yes, the property remains a part of the public domain that could not have been
validly disposed of in NOVAI’s favor. NOVAI failed to discharge its burden of
proving that the property was not intended for public or quasi-public use or purpose.
The classification and disposition of lands of the public domain are governed by
Commonwealth Act (C.A.) No. 141 or the Public Land Act, the country's primary law
on the matter. Under Section 6 of C.A. No. 141, the President of the Republic of the
Philippines, upon the recommendation of the Secretary of Agriculture and Natural
Resources, may, from time to time, classify lands of the public domain into alienable
or disposable, timber and mineral lands, and transfer these lands from one class to
another for purposes of their administration and disposition. In a limited sense,
parcels of land classified as reservations for public or quasi-public uses under Section
9 (d) of C.A. No. 141 are still non-alienable and non-disposable, even though they are,
by the general classification under Section 6, alienable and disposable lands of the
public domain. By specific declaration under Section 88, in relation with Section 8,
these lands classified as reservations are non-alienable and non-disposable.
As provided in Article 420 of Civil Code, “property of the public dominion as those
which are intended for public use or, while not intended for public use, belong to the
State and are intended for some public service”. In this case, the property was
classified as military reservation thus, remained to be property of the public
dominion until withdrawn from the public use for which they have been reserved, by
act of Congress or by proclamation of the President. Since there was no positive act
from the government, the property had to retain its inalienable and non-disposable
character. It cannot therefore, be subject of sale otherwise, the sale is void for being
contrary to law.
Case Title: City of Lapu-Lapu v PEZA
G.R. no: G.R. No 1884203
Date: November 26, 2014

FACTS:
The Philippine Economic Zone Authority was created under RA No. 7916.
The City of Lapu-Lapu demanded payment of real property tax from PEZA for the
properties located in Mactan Econimic Zone. In a demand letter written by the City of
Lapu-Lapu, it reiterated sections 193 and 234 of the Local Government Code which
states that the previously enjoyed exemption from payment of real property tax by all
persons is no longer enforced. Hence the demand of payment of the real property tax
from PEZA.
ISSUE:
WON Real properties under the PEZA’s title are owned by the Republic of The
Philippines.
WON PEZA is exempted from real property taxation.
HELD:
Enumerated under Article 420 of the Civil Code of the Philippines are the property of
public dominion, which are:
1. Those intended for public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads, and others of
similar character.
2. Those which belong to the State, without belonging for public use, and are
intended for some public service or the development of the national wealth.
These properties are outside of the commerce of men. In the case at hand, the
property sought to be taxed by the City of Lapu-Lapu falls under the category of
public dominion since the property is located in publicly owned economic zones.
Under Proclamation No 1811, Series of 1979, the site of Mactan Economic zone was
reserved and set aside for public use and specific public purposes. These properties
remain public property of the state until withdraw by a law or presidential decree.

Therefor, the claim for payment of real property tax by the City of Lapu-Lapu is
without basis since the property is of a public nature. Under the Local Government l
code Section 234(a), real properties owned by the government are exempt from reapl
property taxes.
Case Title REPUBLIC vs. ABOITIZ
G.R. no. 174626
Date: 23 October 2013

FACTS:

On September 11, 1998, respondent Aboitiz filed his Applicationfor Registration of

Land Title of a parcel of land with an area of 1,254 square meters, located in Talamban,
Cebu City, and identified as Lot 11193 of the Cebu Cadastre 12 Extension, before the
RTC. In support of his application, presented documents evidencing possession and
ownership of the land.

To further prove his claim, he presented his witness Sarah Benemerito (his secretary)
who testified that he entrusted to her the subject property and appointed her as its
caretaker; that he purchased the subject property from Irenea Kapuno (Irenea) on
September 5, 1994; that he had been in Department of Environment and Natural
Resources (DENR), Region VII, the subject property had been classified as alienable
and disposable since 1957; hat per certification of the Community Environment and
Natural Resources Office (CENRO), Cebu City, the subject property was not covered
by any subsisting public land application; and that the subject property had been
covered by tax declarations from 1963 to 1994 in Irenea’s name, and from 1994 to
present, in his name.

Another witness for Aboitiz, Luz Kapuno, daughter of Irenea (original owner),
daughter of Irenea, the original owner of the subject property, testified that she was
one of the instrumental witnesses in the deed of sale of the subject property and that
she saw her mother affix her signature on the said document.

RTC- Granted the application for registration of land title. The Republic appealed the
RTC ruling before CA.

CA- Reversed the ruling of the RTC and denied Aboitiz’s application for registration.
The CA ruled that it was only from the date of declaration of such lands as alienable
and disposable that the period for counting the statutory requirement of possession
since June 12, 1945 or earlier would commence. Possession prior to the date of
declaration of the lands alienability was not included. The CA observed that the subject
property was declared as alienable and disposable only in 1957, and so the application
clearly did not meet the requirements of possession needed under the first requisite of
Sec. 14 (1) of Presidential Decree No. 1529 which must be since 12 June 21945 or earlier.
Aboitiz moved for reconsideration and asserted that although the subject land was
classified as alienable and disposable only in 1957, the tax declarations, from 1963 to
1994, for a period of thirty one (31) years, converted the land, by way of acquisitive
prescription, to private property.

CA reversed its own decision and granted Aboitiz’s application for registration. Based
on Sec. 14 (2) of P.D. No. 1529 which states that although the application for registration
of Aboitiz could not be granted pursuant to Section 14(1) of P.D. No. 1529 because the
possession of his predecessor-in-interest commenced in 1963 (beyond June 12, 1945), it
could prosper by virtue of acquisitive prescription under Section 14(2) of P.D. No. 1529
upon the lapse of thirty (30) years. The original owner’s (Irenea’s) possession of the
subject property beginning from 1963 up to 1994, the year Aboitiz purchased the subject
property from Irenea, spanning thirty one (31) years, converted the said property into
private land and, thus, susceptible to registration.

The Republic moved for reconsideration but was denied by the CA.

ISSUE:
Whether Aboitiz is entitled to the registration of land title under Section 14(2) of P.D.
No. 1529.

HELD:
No, Aboitiz cannot apply for land registration under Sec. 14 (2) of P.D. No. 1529.

The court discused the registration requirements and procedures under said provision:

SEC. 14 (2) P.D. NO. 1529:

SECTION 14. Who may apply.—

(2) Those who have acquired ownership of private lands by

prescription under the provisions of existing laws.

In relation to this provision, the court cited the case of Heirs of Mario Malabanan v.
Republic:

“(2) In complying with Section 14(2) of the Property Registration Decree,

consider that under the Civil Code, prescription is recognized as a mode
 of acquiring ownership of patrimonial property. However, public
domain lands become only patrimonial property not only with a
declaration that these are alienable or disposable. There must also be an
express government manifestation that the property is already patrimonial or no
longer retained for public service or the development of national wealth, under
Article 422 of the Civil Code. And only when the property has become
patrimonial can the prescriptive period for the acquisition of property of
the public dominion begin to run.”

(a) Patrimonial property is private property of the government. The

person acquires ownership of patrimonial property by prescription
under the Civil Code is entitled to secure registration thereof under
Section 14(2) of the Property Registration Decree.

(b) There are two kinds of prescription by which patrimonial property

may be acquired, one ordinary and other extraordinary. Under ordinary
acquisitive prescription, a person acquires ownership of a patrimonial
property through possession for at least ten (10) years, in good faith and
with just title. Under extraordinary acquisitive prescription, a person’s
uninterrupted adverse possession of patrimonial property for at least
thirty (30) years, regardless of good faith or just title, ripens into
ownership.

Thus, under Section 14(2) of P.D. No. 1529, for acquisitive prescription to commence
and operate against the State, the classification of land as alienable and disposable
alone is not sufficient. The applicant must be able to show that the State in addition to
the said classification, expressly declared through either a law enacted by Congress
or a proclamation issued by the President that the subject land is no longer retained
for public service or the development of the national wealth or that the property has
been converted into patrimonial. Without an express declaration by the State, the land
remains to be a property of public dominion and, hence, not susceptible to acquisition
by virtue of prescription.

Petition is granted, Abotiz’s application fro land registration is denied.

Case Title Alolino vs Flores
G.R. no. 198774
Date: April 04, 2016

FACTS:
Alolino is the registered owner of two (2) contiguous parcels of land. Alolino initially
constructed a bungalow-type house on the property. In 1980, he added a second floor
to the structure. He also extended his two-storey house up to the edge of his property.
There are terraces on both floors. There are also six (6) windows on the perimeter wall:
three (3) on the ground floor and another three (3) on the second floor.

In 1994, the respondent spouses Fortunato and Anastacia (Marie) Flores constructed
their house/sari sari store on the vacant municipal/barrio road immediately adjoining
the rear perimeter wall of Alolino's house. Since they were constructing on a municipal
road, the respondents could not secure a building permit. The structure is only about
two (2) to three (3) inches away from the back of Alolino's house, covering five
windows and the exit door. The respondents' construction deprived Alolino of the light
and ventilation he had previously enjoyed and prevented his ingress and egress to the
municipal road through the rear door of his house.

Respondent spouses alleged that they had occupied their lot where they constructed
their house in 1955, long before the plaintiff purchased his lot in the 70s. They further
alleged that plaintiff only has himself to blame because he constructed his house up to
the very boundary of his lot without observing the required setback. Finally, they
emphasized that the wall of their house facing Alolino's does not violate the latter's
alleged easement of light and view because it has no window.

ISSUE:
WON the respondent’s property where the spouses built their house/sari-sari store was
validly reclassified from a municipal/barrio road to a residential lot by the Sanggunian?

HELD:
No.

There is no dispute that respondents built their house/sari-sari store on government

property. Properties of LGUs are classified as either property for public use or
patrimonial property. Article 424 of the Civil Code distinguishes between the two
classifications:
 Article 424. Property for public use, in the provinces, cities, and municipalities, consist
of the provincial roads, city streets, municipal streets, the squares, fountains, public
waters, promenades, and public works for public service paid for by said provinces, cities, or
municipalities.
All other property possessed by any of them is patrimonial and shall be governed by this
Code, without prejudice to the provisions of special laws.

From the foregoing, the barrio road adjacent to Alolino’s house is property of public
dominion devoted to public use.

We find no merit in the respondents' contention that the Local Government of Taguig
had already withdrawn the subject barrio road from public use and reclassified it as a
residential lot. In this case, the Sanggunian did not enact an ordinance but merely
passed a resolution. The difference between an ordinance and a resolution is settled in
jurisprudence: an ordinance is a law but a resolution is only a declaration of sentiment
or opinion of the legislative body.

Properties of the local government that are devoted to public service are deemed public
and are under the absolute control of Congress. Hence, LGUs cannot control or regulate
the use of these properties unless specifically authorized by Congress, as is the case
with Section 21 of the LGC. In exercising this authority, the LGU must comply with the
conditions and observe the limitations prescribed by Congress. The Sanggunian's
failure to comply with Section 21 renders ineffective its reclassification of the barrio
road.

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

Petition is granted.
Case Title IN RE: APPLICATION FOR LAND REGISTRATION,
SUPREMA T. DUMO, PETITIONER, V. REPUBLIC OF
THE PHILIPPINES, RESPONDENT
G.R. No. 218269
Date: June 06, 2018

FACTS:
Petitioner Dumo filed an application for registration of two parcels of land,
covered by Advance Plan of Lot Nos. 400398 and 400399 with a total area of 1,273
square meters (LRC Case No. 270-Bg). Dumo alleged that the lots belonged to her
mother, and that she and her siblings inherited them upon their mother's death. She
further alleged that through a Deed of Partition with Absolute Sale dated 6 February
1987, she acquired the subject lots from her siblings. Dumo traces her title from her
mother, who purchased the lots from Florencio Mabalay in August 1951. Mabalay
was Dumo's maternal grandfather. Mabalay, on the other hand, purchased the
properties from Carlos Calica.

The heirs of Marcelino Espinas opposed Dumo's application for land registration
on the ground that the properties sought to be registered by Dumo are involved in
the accion reivindicatoria case. Thus, the RTC consolidated the land registration case
with the Complaint for Recovery of Ownership, Possession and Damages.

On 2 July 2010, the RTC rendered its Joint Decision, finding that the subject
property was owned by the heirs of Espinas. The RTC ordered the dismissal of
Dumo's land registration application on the ground of lack of registerable title, and
ordered Dumo to restore ownership and possession of the lots to the heirs of Espinas.

The CA rendered its Decision dated 28 January 2014, affirming the RTC's decision
dismissing the application for land registration of Dumo, and finding that she failed
to demonstrate that she and her predecessors-in-interest possessed the property in the
manner required by law to merit the grant of her application for land registration.
The CA, however, modified the decision of the RTC insofar as it found that the
Subject Property belonged to the heirs of Espinas. The CA found that since the
property still belonged to the public domain, and the heirs of Espinas were not able to
establish their open, continuous, exclusive and notorious possession and occupation
of the land under a bona fide claim of ownership since 12 June 1945 or earlier, it was
erroneous for the RTC to declare the heirs of Espinas as the owners of the Subject
Property; hence, this petition.
 ISSUES:
1. Whether Dumo is able to prove that the subject property forms part of the
alienable and disposable land of public domain
2. Whether the requirement that documents to prove the status of land shall be
based on the land classification approved by the DENR Secretary is not a mere
superfluity.
HELD:
1. NO. Dumo failed to submit any of the documents required to prove that the land
she seeks to register is alienable and disposable land of the public domain.

The applicant bears the burden of proving the status of the land. In this connection,
the Court held that there are two (2) documents which must be presented: first, a
copy of the original classification approved by the Secretary of the DENR and
certified as a true copy by the legal custodian of the official records, and second, a
certificate of land classification status issued by the CENRO or the PENRO based on
the land classification approved by the DENR Secretary.

In this case, none of the documents submitted by respondent to the trial court
indicated that the subject property was agricultural or part of the alienable and
disposable lands of the public domain. At most, the CENRO Report and Certification
stated that the land was not covered by any kind of public land application. This was
far from an adequate proof of the classification of the land.

Unfortunately for respondent, the evidence submitted clearly falls short of the
requirements for original registration in order to show the alienable character of the
lands subject herein

2. YES. The requirement that documents to prove the status of land shall be based
on the land classification approved by the DENR Secretary is not a mere superfluity.

This requirement stems from the fact that the alienable and disposable
classification of agricultural land may be made by the President or DENR Secretary.
And while the DENR Secretary may perform this act in the regular course of
business, this does not extend to the CENRO or PENRO – the DENR Secretary may
no longer delegate the power to issue such certification as the power to classify lands
of the public domain as alienable and disposable lands is in itself a delegated power
under CA No. 141 and PD No. 705.
Case Title REPUBLIC OF THE PHILIPPINES VS. SPS. ILDEFONSO
ALEJANDRE AND ZENAIDA FERRER ALEJANDRE,
RESPONDENTS.
G.R. no. 217336
Date: October 17, 2018

FACTS:
This is a petition for review on certiorari of the CA decision which sustained the RTC
decision finding that the respondents, in their application for land registration come
under paragraph 4 of Section 14, Presidential Decree No. (PD) 1529[8] - those who
have acquired ownership of lands in any manner provided for by law - because they
acquired the land in question by virtue of a Deed of Absolute Sale.
Said property was previously inherited by the vendor from her late mother Angustia
Alejandre who inherited the same property from Don Santiago Alejandre, the
grandfather of the applicant Dr. Ildefonso Alejandre.
ISSUE:
Whether or not the respondent's application for registration is valid. No.
HELD:
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 applicant
spouses acquired ownership over the lot 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.
Public lands not shown to have been classified, reclassified or released as alienable
agricultural land or alienated to a private person by the State remain part of the
inalienable lands of public domain. Therefore, the onus to overturn, by
incontrovertible evidence, the presumption that the land subject of an application for
registration is alienable and disposable rests with the applicant.
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.
Case Title HI-LON MANUFACTURING, INC vs COA
G.R. no. 210669
Date: August 01, 2017

FACTS:
In 1978, DPWH converted 29,690sqm to a road right-of-way RROW of the 89,070sq.m
parcel of land located in Mayapa Calamba, Laguna, for the South Expressly Extension
Project. Later on, Philippine Polymide Industrial Corporation PPIC acquired the
subject property, which led to the cancellation of TCT-40999 and the issuance of TCT
No. 120988 under its name. PPIC then mortgaged the subject property with the DBP
which later acquired the property. Despite the use of 29,690sqm portion of the property
as RROW, the government neither annoted its claim or lien on the titles of CIREC, PPIC,
and DBP nor initiated expropriation proceedings, much less paid just compensation to
the registered owners. Upon issuance of A.O no14 dated Feb. 3, 1987 entitled approving
the Identification of Transfer of the National Bank, DBP submitted all its acquired
assets, including the subject property to the Asset Privatization Trust APT for disposal,
pursuant to Proclamation No. 50 dated 8 Dec. 1986. On June 30, 1987, APT disposed of
a portion of the subject proeperty in a public bidding. APT certified that FIBERTex was
the highest bidder, upon complete submission of the required documents and proof of
tax payments on Dec 9 1087, The register of Deeds of Calamba, Laguna, cancelled DBP’s
TCT 151837 and issued TCT No. 158786 in the name of TGPI, covering the entire
89,070sqm subject property, including the 29,690sqm RROW. Seven years after TGPI
executed a Deed of Absolute Sale in favor of HI-LON over the entire 89,070sqm subject
property for a consideration of P44535000. Sometime in 1998, Rupert Quijano Attorney
in Fact of HI-LON requested assistance from the Urban Road Project Office,DPWH, for
payment of just compensation for the 29,690sqm portion of the subject property
converted to RROW. The DPWH created an Ad Hoc Committee which valued the
RROW at 2,500/sqm based on the 1999 Bureau of Internal Revenue zonal valuation.

Dec. 21, 2001, Deed of Sale was executed between HI-LON and the Republic of the
Philippines, represented by Lope S. Adriano, by the authority of the DPWH Secretary.
On Jan, 23, 2002 THE Republic made the first payment, through DPWH, to HI-LON in
the amount of 10,461,338.

On post audit, The Supervising Auditor of the DPWH issued Audit observation
Memorandum dated April 2, 2003 which noted that the use of 1999 zonal valuation of
P2,500/sqm as a basis for the the determination of just compensation was unrealistic,
considering that as of said year, the value of the subject property had already been
“glossed over the consequential benefits” it has obtained from the years of having been
used as RROW. The auditor pointed that the just compensation should be based on the
value of said property at the time of ts actual taking in 1978. The Auditor aarived at the
amount of P19,40sqm as reasonable compensation and, thus, recommended the
recovery of excess payments.

In this petition for Cetiorari, HI-LON argues that COA commited grave abuse of
discretion, amounting to lack or excess of jurisdiction when it held that there was no
property owned by the HI-LON that was taken by the government for public use; that
the use of 89070sqm subject parcel land, including the 29690sqm portion used as RROW
by the government, had been the property the Republic of the Philippines; that HI-
LON’s is not entitled to just compensation and that it collaterally attacked HI-LON’s
ownership of the subject land including RROW.

ISSUE:

Whether or not Hi-LON is entitled to just compensation for the 29,690sqm in portion
of the subject property.

Whether of not the COA has jurisdiction over the case.

Whether or not the subject property(29690sqm RROW) is either of public dominion or

of private owenership.
HELD:
No. The Court sustained the decisions of administrative authority (COA).
The COA noted that the transfer of the subject property in favor of the TGPI, the parent
corporation of HI-LON was tainted with anomalies because records show that TGPI
did not participate in the public bidding held on june 30,1987, as only three
participated. Second, the COA pointed out that the Deed of Sale between APT and
Fibertex has disclosure that “That subject of this Deed of Sale, therefore as fully
disclosed in the APT catalogue, is the total useable area of 59,380sq.m excluding the
purpose the 29,690sq.m converted to RROW. The COA added that such exclusion was
corroborated by the abstract of Bids duly signed by the APT Executive Assistant and
Associate Executive Trustee, showing that the land covered by TCT. No T-151387 was
offered to the public bidding for its public useable portion of 5.9hectares only.
Excluding the subject 29,690sq.m converted to RROW. Third, the COA observed that
HI-LON is a mere subsidiary of corporation which cannot acquire better title than its
parent corporation TGPI. The COA stressed that for more than 7 Seven years that the
subject property was under the name of TGPI from its registration on Dec.9, 1987 until
it was transferred to HI-LON on April 16, 1995, TGPI did not attempt APT and TGPI
clearly stated that the 29, 690sqm RROW was excluded from the sale and remains a
government property. Applying the principle of piercing thhe veil of corporate fiction
since TGPI owns 99.9%OF hi-lon , the HI-LON, the COA ruled that HI-LON cannot
claim ignorance that the 29,690sq.m ROOW was excluded from the public auction.

Having determined that HI-LON does not own the disputed RROW, the COA correctly
ruled that HI-LON is not entitled to payment of just compensation and must
accordingly refund the partial payment made by the DPWH in the amount of P10,
461,338. To stress, even if HI-LON is the registered owner of the subject property under
TCT No. 383819 with an areaof 89,079sqm the deed of absolute sale dated October 1987
clearly shows that only 59, 380sqm portion of the subject property, and not 29,690sqm
portion is used as RROW, was soled and conveyed by the government (through APT)
to HI-LON’s immediate predecessor-in-interest, TGPI.

(2nd) It is the policy of the Court to sustain the decisions of administrative authorities,
especially one that was a constitutionally created like herein respondent COA, not only
on the basis of doctrine of separation of powers, but also of their presumed expertise
in the laws they are entrusted to enforce. Considering that findings of administrative
agencies are accorded not only respect but also finality when the decision and order
are not tainted with unfairness or arbitrariness amounting to grave abuse of discretion.
It is only when the COA acted with such abuse of discretion that the Court entertains
a petition for certiorari under Rule 65 of the Rules of Court. No grave abuse of
discretion can be imputed against the COA when it affirmed the Notice of
Disallowance issued by LAO-N in line with its constitutional authority and jurisdiction
over cases involving disallowance of expenditures or uses of government funds and
properties found to be illegal, irregular, unnecessary, excessive, extravagant or
unconscionable.

(3) Being of similar character as roads for public use, a road right-of-way (RROW) can
be considered as a property of public dominion, which is outside the commerce of man,
and cannot be leased, donated, sold, or be the object of a contract, except insofar as they
may be the object of repairs or improvements and other incidental matters. However,
this RROW must be differentiated from the concept of easement of right of way under
Article 649 of the same Code, which merely gives the holder of the easement an
incorporeal interest on the property but grants no title thereto, inasmuch as the owner
of the servient estate retains ownership of the portion on which the easement is
established, and may use the same in such a manner as not to affect the exercise of the
easement. As a property of public dominion akin to a public thoroughfare, a RROW
cannot be registered in the name of private persons under the Land Registration Law
and be the subject of a Torrens Title; and if erroneously included in a Torrens Title, the
land involved remains as such a property of public dominion It is, therefore,
inconceivable that the government, through APT, would even sell in a public bidding
the 29,690 sq. m. portion of the subject property, as long as the RROW remains as
property for public use. Hence, HI-LON's contention that the RROW is included in the
Deed of Absolute Sale dated 29 October 1987, regardless whether the property is a
performing or non-performing asset, has no legal basis.

In light of the forgoing disquisition, HI-LON’s prayer for issuance of Temporary

Restraining Oder and/ or Writ of Injunction must necessarily be denied for lack of clear
and unmistakable right over disputed 29,690sq.m portion of the subject property.