HIPOLITO-AGUILAR, CHRISEL

Property Case Digest

2nd Year - Wesleyan Law School
Ladera vs. Hodges, Vol. 48, No. 12, O.G. 5374
GR No. 8027- R, September. 23, 1952
FACTS:

Hodges and Paz Ladera entered into a contract where C. N Hodges agreed to sell a parcel of
land to Ladera, upon the condition that the contract may be rescinded and annulled in case
Ladera failed to make the monthly payment 60 days after it is due.
After the execution of the contract, Ladera built a house on the lot assessed at 4,500 pesos. He
also paid to Hodges P188.50 which was considered as rental payment. However, Ladera failed to
pay the agreed installments, hence, Hodges rescinded the contract and filed an action for
ejectment.
The MTC ruled in favor of Hodges and issued an alias writ of execution. Pursuant thereto, the
sheriff levied upon all rights, interests and participation over the house.
Notices of sale were posted, however, were not published in a newspaper of general circulation.
The sheriff, upon auction, sold the house to Avelina Magno, who in turn, sold the same house to
Manuela Villa. This transactions, however, is not recorded.
Ladera, in her desire to recovery the propert, went to see the sheriff and in representation that the
same could be returned, she gave the sheriff 230 pesos, which, does not seem to have been
remitted to Hodges.
Thereupon, Ladera filed an action against Hodges, the sheriff, Magno and Villa, to set aside the
sale and and recover the house.
The lower court ruled in favor of Ladera on the ground of non-compliance of Rule 39 of the Rules
of Court. On appeal, Hodges contends that the house, built on a lot owned by another, should be
regarded as movable or personal property. The sale of the land was also made without proper
publication required by law.

ISSUE:

Whether or not the house of Ladera is an immovable property.

RULING:

The court decided that Laderas house is an immovable property, citing the provision of the Civil
Code enumerating the following as personal property: lands, buildings, roads and constructions of
all kinds adhered to the soil.

ANALYSIS:

The law looks at the house as a real property, falling squarely within the definition provided for by
the Civil Code, whether or not the one who built it is the same owner as the lot on which it is built
on. Also, Ladera did not declare his house to be a chattel mortgage. The object of the levy or sale
was real property and its publication in a newspaper of general circulation was indispensible.
Without it, the execution sale was void. Therefore, the sale of the house to Magno, and thereafter
to Villa, was null and void.

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HIPOLITO-AGUILAR, CHRISEL
Property Case Digest
2nd Year - Wesleyan Law School
CONCLUSION:

The law makes no distinction with respect to the ownership of the land on which the house is
built, and one should not lay down distinctions not contemplated by law. A true building is
immovable or real property whether the owner of the land is a usufructuary or lessee erects it.
The undisputed rule is whether it is immovable by destination (place by the owner of the
tenement), an immovable by incorporation or accession. Publication regarding auction of real
property is indispensible and any sale made in violation of said rule renders the sale null and vo

MINDANAO BUS COMPANY, vs. THE CITY ASSESSOR & TREASURER and the BOARD OF
TAXAPPEALS of Cagayan de Oro City
G.R. No. L-17870 September
29, 1962

FACTS:

Mindanao Bus Company is a public utility engaged in transporting passengers and cargoes by
motor trucks in Mindanao; having its main offices in Cagayan de Oro. The company is also owner
to the land where it maintains and operates a garage, a repair shop, blacksmith and carpentry
shops; the machineries are place therein on wooden and cement platforms. City Assessor of
Cagayan de Oro City assessed at P4, 400 the petitioner's above-mentioned equipment.
Petitioners contended that said properties cannot be a subject of Realty Tax for the same are not
realty but movable properties. Respondent, however, maintained that the machines in question
become immovable properties by virtue of their immobilization by destination and therefore
subject to realty tax.
The Court of Tax Appeals ruled in favor of respondent city assessor and having denied the motion
for reconsideration, petitioners brought the case to the Supreme Court.
Petitioners contended that the Court of Tax Appeals erred in affirming the validity of the
assessment and the interpretation of paragraph 5 of Article 415, as well as to appreciate that the
City Assessor's power to assess and levy real estate taxes on machineries is further restricted by
section 31, paragraph (c) of Republic Act No. 521.

ISSUE:
Whether or not the equipment in question are movable or immovable properties.

RULING:
Properties in question are movable.

ANALYSIS:
Article 415 paragraph (5) of the Civil Code, gives character of real property to machinery, receptacle,
instruments or implements intended by the owner of the tenement for an industry or works, which may be

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HIPOLITO-AGUILAR, CHRISEL
Property Case Digest
2nd Year - Wesleyan Law School
carried on in a building or on a piece of land, and which tend to meet directly the needs of said industry or
works. We may here distinguish those movable which become immobilized by destination because they
are essential and principal elements in the industry from those which may not be so considered
immobilized because they are merely incidental, not essential and principal. Similarly, the tools and
equipment in question in this instant case are, by their nature, not essential and principle municipal
elements of petitioner's business of transporting passengers and cargoes by motor trucks. The purpose of
the industry of herein petitioner is to transport passengers and cargo through motor trucks- their
transportation business could be carried on without the repair or service shop if its rolling equipment is
repaired or serviced in another shop belonging to another.
CONCLUSION:
In determining whether or not machines and equipment should be treated as personal or real property, it
is important to look at its purpose in the industry. If they tend to meet directly the needs of said industry or
work, they will fall squarely within the definition provided for immovable property under art 415 (5).
Equipment in question are destined only to repair or service the transportation business, which is not
carried on in a building or permanently on a piece of land, as demanded by the law. Said equipment may
not, therefore, be deemed real property.

MAKATI LEASING and FINANCE CORPORATION vs.WEAREVER TEXTILE MILLS, INC., and
HONORABLE COURT OF APPEALS
G.R. No. L-58469 May 16,
1983
FACTS:

Wearever Textile Mills, in order to obtain financial accommodation from Makati Leasing
Corporation discounted and assigned several receivables with the latter under a
receivable purchase agreement. Makati Leasing, in order to secure collection, executed
a chattel mortgage over certain raw materials and machinery of Wearever Textile. Upon
failure of the latter to pay its loan, Makati Leasing petitioned for extrajudicial foreclosure
of the properties mortgaged to it, with an application for replivin.
Acting on the petitioners action for replevin, the lower court issued a writ of seizure. The
Sheriff was able to seize and remove the drive motor of the subject machinery.
Wearever Textile appealed the decision to the Court of Appeals, in certiorari and
prohibition proceedings. The appellate court set aside the orders of the lower court and
ordered the return of the drive motor seized by the sheriff, after ruling that the machinery
in suit cannot be the subject of replevin 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.
Petitioner appealed this decision to the Supreme Court, contending that the Court of
Appeals erred in ruling that machinery in question is a realty. Private respondent,
however, contended that the instant petition was rendered moot and academic by
petitioner's act of returning the subject motor drive of respondent's machinery after the
Court of Appeals' decision was promulgated. Respondent further averred that estoppel
cannot apply against it because it had never represented nor agreed that the machinery

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HIPOLITO-AGUILAR, CHRISEL
Property Case Digest
2nd Year - Wesleyan Law School
in suit be considered as personal property but was merely required and dictated on by
herein petitioner to sign a printed form of chattel mortgage which was in a blank form at
the time of signing.
ISSUE:
Whether or not the machinery is real or personal property.
RULING:
The machinery is a movable is a personal property.
ANALYSIS:
The crucial question to be resolved in this Petition is whether the machinery in suit is real or personal
property from the point of view of the parties, with petitioner arguing that it is a personality, while the
respondent claiming the contrary. Characterization of the subject machinery as chattel by the private
respondent is indicative of intention and impresses upon the property the character determined by the
parties. In the case of Tumalad vs. Vicencio, the court upheld the intention of the parties to treat a house
as a personal property because it was made the subject of a chattel mortgage. The court has looked into
the intention of the parties and the character the parties intended for the property with respect to their
contract/ agreement. Verily, the parties may validly stipulate that a real property be considered as
personal, but after agreeing to such stipulation, they are consequently estopped from claiming otherwise.
Also, the claim respondent is merely required and dictated on by herein petitioner to sign a printed form of
chattel mortgage which was in a blank form at the time of signing lacks persuasiveness. Also, it will only
render such contract voidable; no efforts to annul the contract were shown to have been made.
CONCLUSION:
An immovable property may be considered personal property if it is made the subject of a chattel
mortgage since it is the intention of the parties that the law adheres to and if such intention is manifested
clearly and obviously in the stipulation of the contracting parties. As long as the parties so agree and no
third person or innocent party is prejudiced thereby, the contact shall remain valid.

SANTOS EVANGELISTA vs ALTO SURETY & INSURANCE CO., INC

G.R. No. L-11139 April 23, 1958

FACTS:

Evangelista filed for an action for collection of sum of money against Rivera. On the same date,
Evangelista obtained a writ of attachment which levied upon a house built by Rivera on a land
leased to the latter.
CFI rendered a judgment in favor of Evangelista, who, in 1951, bought the house at a public
auction. When Evangelista sought to take possession of the house, Rivera refused to surrender
it, upon the ground that he had leased the property from the Alto Surety & Insurance Co., Inc. and

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HIPOLITO-AGUILAR, CHRISEL
Property Case Digest
2nd Year - Wesleyan Law School

the same company has acquired property in an auction held in 1950- prior to Evangelistas
acquisition of the same in 1951.
Evangelista then instituted the present action against respondent and Ricardo Rivera, for the
purpose of establishing his (Evangelista) title over said house, securing possession thereof, apart
from recovering damages.
CFI ruled in favor of Evangelista and ordered Rivera and Alto Surety to return the house to
petitioner. Upon appeal, Court of Appeals reversed the decision in favor of respondents, ruling
that Evangelista did not acquire preferential lien, attachment having been levied as if the house in
question were immovable property, although in the opinion of the Court of Appeals, it is
"ostensibly a personal property.
Evangelista now seeks a review, by certiorari, of this decision of the Court of Appeals. In this
connection, it is not disputed that although the sale to the respondent preceded that made to
Evangelista, the latter would have a better right if the writ of attachment, issued in his favor before
the sale to the respondent, had been properly executed or enforced. This question, in
turn,depends upon whether the house of Ricardo Rivera is real property or not

ISSUE:
Whether a house, constructed by a lessee of a land on which it is built, should be dealt with, for the
purpose of attachment, as personal property or an immovable property.
RULING:
The house is not personal property, much less a debt, credit or other personal property not capable of
manual delivery, but immovable property,

ANALYSIS:
In Laddera vs. Hodges (48 Official Gazette, 5374), "a true building (not merely superimposed on the soil)
is immovable or real property, whether it is erected by the owner of the land or by usufructuary or lessee.
While it is true that the parties to a deed of chattel mortgage may agree to consider a house as personal
property for purposes of said contract, this view is true only in so far as the contracting parties are
concerned. Regulations are never intended to suit the consideration the parties may have privately given
to the property levied upon. Therefore, the mere fact that house was a subject of a chattel mortgage and
was considered as personal property by parties does not make said house personal property for purposes
of the notice to be given for its sale of public auction. The form of proceedings prescribed for each kind of
property is suited to its character, not to the character which the parties have given to it or desire to give it.
It is declared therefore, that a house of mixed materials levied upon on execution, although subject of a
chattel mortgage between the owner and a third party is real within the purview of Rule 39, Sec. 16 of the
Rules of Court as it has become a permanent fixture of the land, which is a real property.
CONCLUSION:
It is true that the parties to a deed of chattel mortgage may agree to consider a real property as personal
property for purposes of said contract. However, this view is good only insofar as the contracting parties
are concerned. It is based, partly, upon the principle of estoppel. Neither this principle, nor said view, is

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HIPOLITO-AGUILAR, CHRISEL
Property Case Digest
2nd Year - Wesleyan Law School
RUBY L. TSAI vs. EVER TEXTILE MILLS, INC.
G.R. No. 120098 October 2, 2001

FACTS:

On November 26, 2975, respondent Ever Textile Mills, Inc. (EVERTEX) obtained a three million
peso (P3,000,000.00) loan from petitioner Philippine Bank of Communications (PBCom). As
security for the loan, EVERTEX executed in favor of PBCom, a deed of Real and Chattel
Mortgage over the lot under TCT No. 372097, where its factory stands, and the chattels located
therein as enumerated in a schedule attached to the mortgage contract.
On April 23, 1979, PBCom granted a second loan of P3,356,000.00 to EVERTEX. The loan was
secured by a Chattel Mortgage over personal properties enumerated in a list attached thereto.
Thereafter, EVERTEXT purchased new equipment, the same units as those listed in the Chattel
Mortgage.
On November 19, 1982, EVERTEX filed insolvency proceedings and was then declared insolvent
by the Court of First Instance. PBCom, on the other hand, commenced extrajudicial foreclosure
proceedings against EVERTEX.
On two public auctions held, PBCom emerged as the highest bidder and a Certificate of Sale was
issued in its favor. It consolidated its ownership over the lot and all the properties in it, and leased
the same to Ruby L. Tsai for P50,000.00 a month.
On May 3, 1988, PBCom sold the factory, lock, stock and barrel to including the contested
machineries to Tsai.
EVERTEX filed a complaint for annulment of sale, reconveyance, and damages with the Regional
Trial Court against PBCom, alleging that the extrajudicial foreclosure of subject mortgage was in
violation of the Insolvency Law, and that the properties in question were not included in the Real
and Chattel Mortgage instituted, nor in the Chattel Mortgage, and neither were they included in
the Notice of Sheriffs Sale; hence, PBCom acquired no rights over the questioned properties,
and its subsequent sale to Tsai is therefore void.
RTC ruled in favor of EVERTEXT and ordered the return of the properties not listed in the auction
sale, and for the petitioners to pay exemplary and actual damages, including attorneys fees.
Tsai and PBCom appealed said decision to the Court of Appeals, which affirmed the decision of
the RTC, except the deletion of exemplary damages and reduction of the actual damages.
Tsai and PBCom appealed to the Supreme Court, contending that the machines are immovable,
as they are heavily bolted or cemented on the real property mortgaged by EVERTEX to PBCom;
that Tsai is a buyer in good faith; and that the sale was valid as the machines in question are
deemed included in the Real and Chattel Mortgage executed in PBcoms favor.

ISSUES:

Whether or not properties in question are real properties.

RULING:

The Supreme Court ruled that machines in question are personal/ movable properties.

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HIPOLITO-AGUILAR, CHRISEL
Property Case Digest
2nd Year - Wesleyan Law School
ANALYSIS:
It is crucial to look at the parties' intent, presence of nuts and bolts do not foreclose the controversy. The
true intention of PBCOM and the owner, EVERTEX, is to treat machinery and equipment as chattels.
Moreover, Tsais contention that she is a buyer in good faith is untenable for despite her knowledge of
respondent's claim over the property, she proceeded to buy the contested units of machinery. Thus, the
RTC did not err in finding that she was not a purchaser in good faith.
Chattel Mortgage Law applies, only the property described in the chattel mortgage and not like or
substituted property thereafter acquired by the mortgagor. Since the disputed machineries were acquired
in 1981 and could not have been involved in the 1975 or 1979 chattel mortgages. As the auction sale of
the subject properties to PBCom is void, no valid title passed in its favor. Consequently, the sale thereof to
Tsai is also a nullity.
CONCLUSION:
Nothing detracts the parties from treating it the property that is immovable by nature as chattels to secure
an obligation under the principle of estoppel. Mere nuts and bolts cannot foreclose the controversy. We
have to look at the parties' intent. As held in Navarro v. Pineda, an immovable may be considered a
personal property if there is a stipulation as when it is used as security in the payment of an obligation
where a chattel mortgage is executed over it, as in the case at bar.
Since property obtained by Tsai is from a party who has no right over the same, the sale is void under the
elementary principle of nemo dat quod non habet, or one cannot give what one does not have.

Sergs Products, Inc. vs. PCI Leasing and Finance, Inc. 338 SCRA 499
G.R. No. 137705, August 22, 2000, 338 SCRA 499
FACTS:

Sergs Products, Inc. (Sergs Products) obtained a loan from PCI Leasing and Finance, Inc. (PCI)
and mortgaged certain machinery used by the company in its chocolate- making industry. Sergs
Products failed to pay its debt, hence PCI filed an action for collection of sum of money with an
application for a writ of replevin.
RTC judgment was rendered in favor of PCI, hence the sheriff subsequently seized one machine
from the factory and opted to come back for the remaining equipment.
Sergs Products filed a motion from special protective order, invoking the power of the court to
control the conduct of its officers. PCI opposed said motion on the ground that properties were
still personal and therefore still subject to seizure and a writ of replevin.
In its reply, Sergs Products asserted that the properties sought to be seized are immovable, as
defined in Article 415 of the Civil Code, and therefore cannot be proper subjects of the Writ of
Seizure.
On April 1996, sheriff was able to seize 2 more machines but was prevented by the workers from
taking the rest.
Serges Products appealed the decision to the Court of appeals via an original action for
certiorari. CA affirmed that the properties were personal and that the words of the contract are
clear and leave no doubt upon the true intention of the contracting parties. Dissatisfied,
petitioners appealed the decision before the Supreme Court.

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HIPOLITO-AGUILAR, CHRISEL
Property Case Digest
2nd Year - Wesleyan Law School

ISSUE:
Whether or not the subject machines were personal property which may be a proper subject of a writ of
replevin.

RULING:
The contracting parties may validly stipulate and agree that a real property be considered as personal.
Petitioners then are estopped from denying the characterization of the subject machines as personal
property. Under the circumstances, they are proper subjects of the Writ of Seizure.

ANALYSIS:
Petitioners are correct in arguing that said machineries are real, not personal property, pursuant to Article
415 (5) of the Civil Code. Machineries in question are found to be principal and essential elements of the
industry, which subsequently immobilized them for the same purpose. Be that as it may, the submission of
the petitioner that the said machines are not proper subjects of Writ of Seizure is untenable. In the
present case, the lease agreement clearly provides that the machines in question are to be considered as
personal properties. Clearly then, petitioners are estopped from denying the characterization of the
subject machines as personal property. Under the circumstances, they are proper subject of the writ of
seizure. It should be stressed, however, that in holding that the machines should be deemed personal
property is good only insofar as the contracting parties are concerned and no third party is acting in good
faith are affected by its stipulation.

CONCLUSION:
In determining the nature of properties in question, it is of utmost importance that the character of the
same, depending on the agreement of the parties, takes prevalence over the physical characteristic of the
object. The law looks at the intent of both parties, as the same is valid as long as no third party is
prejudiced by such stipulation. However, such stipulation is good only insofar as the contracting parties
are concerned. Hence, while the parties are bound by the agreement, third persons acting in good faith
are not affected by its stipulation characterizing the subject machinery personal.

BURGOS, SR. JOSE BURGOS JR., BAYANI SORIANO and J. BURGOS MEDIA SERVICES vs. Chief
of Staff, ARMED FORCES OF THE PHILIPPINES
G.R. No. L-64261 December 26, 1984
FACTS:

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HIPOLITO-AGUILAR, CHRISEL
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2nd Year - Wesleyan Law School

By virtues of 2 search warrants issued on December 7, 1982, offices of Metropolitan Mail and We
Forum newspapers were searched, and the office and printing machines, equipment,
paraphernalia, motor vehicles and other articles used in the printing, publication and distribution
of the said newspapers, as well as numerous papers, documents, books and other written
literature alleged to be in the possession and control of petitioner Jose Burgos, Jr. publishereditor of the "We Forum" newspaper, were seized.
Petitioners impugned the validity of the warrants issued. Further, they contended that real
properties were seized under the disputed warrants, citing provision of Article 415 (5) of the Civil
Code. Finally, petitioners averred that the above mentioned seized documents could not have
provided sufficient basis for the probable cause upon which a warrant validly issue.

ISSUE:

Whether or not there is merit in the petitioners assertion that real property were invalidly seized
under the disputed warrants.
Whether or not the issued warrants are invalid.

RULING:

The properties seized are movable or personal properties.

The search warrants issued are invalid.

ANALYSIS:
Under Article 415(5) of the civil code, machinery, receptacles, instruments or implements intended by the
owner of the tenement for an industry or works which may be carried on in a building or on a piece of land
and which tend directly to meet the needs of the said industry or works are considered immovable
property. 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 temporary right, unless such person acted as the agent of the owner. In the present case, 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 remains movable property
susceptible to seizure under a valid search warrant.
On the other hand, the Supreme Court held that the issued warrants are wanting particularity regarding
the alleged subversive materials published or intending to publish. Mere generalization will not suffice.
Hence the Court held Search Warrants Nos. 20-82 (a) and 20-82 (b) issued by respondent judge null and
void, and ordered the return of all articles seized thereunder.
CONCLUSION:
A 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 temporary right, unless such person acted as the agent of the owner.
A search warrant (and warrant of arrest) must contain a specification, stating the particularity of the places
to be searched, or persons or things to be seized. A general warrant is void for lack of particularity.

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HIPOLITO-AGUILAR, CHRISEL
Property Case Digest
2nd Year - Wesleyan Law School

ENRIQUE LOPEZ vs VICENTE OROSA JR., PLAZA THEATRE, INC.

G.R. Nos. L-10817-18
FACTS:

Vicente Orosa Jr., invited Enrique Lopez to make an investment in the theater business. Lopez
expressed his unwillingness to invest, he agreed though to supply the lumber necessary for the
construction of the proposed theatre. Lopez further agreed that payment therefor would be on
demand and not cash on delivery basis.
Orosa failed to pay the total cost of the materials delivered by Lopez. Orosa and Belarmino
Rustia, corporation president, promised Lopez to obtain a bank loan to satisfy the balance, to
which Lopez agreed. Unknown to Lopez, Orosa and Rustia already secured a loan for P30,000
from the PNB with the Luzon Surety Company as surety, and the corporation in turn executed a
mortgage on the land and building in favor of said company as counter-security. As the land at
that time was not yet brought under the operation of the Torrens System, the mortgage on the
same was registered on 16 November 1946, under Act 3344. Subsequently, when the corporation
applied for the registration of the land under Act 496, such mortgage was not revealed and thus
OCT O-391 was correspondingly issued on October 25, 1947, without any encumbrance
appearing thereon.
Lopez persistent demand caused Vicente Orosa, Jr. to execute, on 17 March 1947, an alleged
deed of assignment of his 420 shares of stock of the Plaza Theater. As the obligation still
remained unsettled, Lopez filed a complaint with the CFI Batangas against Orosa Jr. and Plaza
Theatre, Inc., praying that defendants be sentenced to pay him jointly and severally the sum of
P41,771.35 with legal interest; that in case defendants fail to pay the same, that the building and
the land owned by the corporation be sold at public auction and the proceeds thereof be applied
to said indebtedness. Plaintiff also caused the annotation of a notice of lis pendens on said
properties with the Register of Deeds.
The surety company upon knowledge of lis pendens thereon, filed a petition for review of the
decree of the land registration court in order to annotate the lights and interests of the surety
company over said properties. Lopez opposed by asserting that the amount demanded by him
constituted a preferred lien over the properties of the obligor- both building and lot. The court
ruled that Orosa and the Plaza Theatre, Inc., were jointly liable for the unpaid balance of the cost
of lumber used in the construction of the building and the plaintiff thus acquired the materialmans
lien over the same; the lien being merely confined to the building and did not extend to the land
on which the construction was made.
Lopez appealed to the Supreme Court.

ISSUE:
Whether or not the lien for the value of the materials used in the construction of the building attaches to
said structure alone and does not extend to the land on which the building is adhered to.
RULING:
No. The lien for the value of the materials used in the construction of the building attaches to said
structure alone.

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HIPOLITO-AGUILAR, CHRISEL
Property Case Digest
2nd Year - Wesleyan Law School
ANALYSIS:
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 ( 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.
CONCLUSION:
The materialman's lien could be charged only to the building for which the credit was made or which
received the benefit of refection. The lower court was right in holding that the interest of the mortgagee
over the land is superior and cannot be made subject to the said materialman's lien.

Julian S. Yap vs. Hon. Santiago O. Taada

Pumps International (Phil), Inc.,

and Goulds
G.R. No. L-32917, 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 latters 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 Yap then appealed to the CFI. Again, he failed to appear for pre-trial, instead, he filed
an Ex-Parte Motion for Postponement which was received by the court on the same day. Counsel
for defendants asked for the same to be denied, thus, Yap was declared in default. He filed for a
motion for reconsideration which was denied by Judge Tanada.
On October 15, 1969, Tanada granted Goulds 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 Yaps peding motion for reconsideration, Judge Tanada ordered a suspension of
the sale. However, a copy of this orders was not transmitted to the Sheriff who continued with the
auction sale and sold the property to the highest bidder, Goulds.
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. Yap forthwith filed an appeal before the Supreme Court.

ISSUE:
Whether or not the pump and its accessories are immovable property.
RULING:
No. The water pump and its accessories are NOT immovable properties.
ANALAYSIS:

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HIPOLITO-AGUILAR, CHRISEL
Property Case Digest
2nd Year - Wesleyan Law School
The argument of Yap that the water pump had become immovable property by its being installed in his
residence is untenable. Civil Code (Article 415 [3]) considers immovable property as everything attached
to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without breaking
the material or deteriorating the object. The pump does not fit this description. It could be, and was, in
fact, separated from Yaps premises without being broken of suffering deterioration. Obviously, the
separation or removal of the pump involved nothing more complicated that the loosening of bolts or
dismantling of other fasteners.
CONCLUSION:
Article 415, par. 3 of the Civil Code considers and immovable property as everything attached to an
immovable in a fixed manner, in such a way that it cannot be separated therefrom without breaking the
material or deteriorating the object. The pump separated from Yaps premises without being broken of
suffering deterioration, hence, does not fit with the aforementioned description.

Machinery & Engineering Supplies, Inc. vs. Court of Appeals, et al.

No. L-7057, October 29, 1954.
FACTS:
Machinery & Engineering Supplies, Inc. filed a complaint for replevin in the CFI of Manila against
Ipo Limestone Co., and Dr. Antonio Villarama, for the recovery of the machineries and equipment
sold and delivered to said defendants at their factory in Barrio Bigti, Norzagaray, Bulacan. The
respondent judge issued an order, commanding Provincial Sheriff of Bulacan to seize and take
immediate possession of the properties specified in the order.
Two deputy sheriffs of Bulacan, Ramon S. Roco(president of Machinery), and a crew of technical
men and laborers proceeded to the factory, to carryout the courts order. Leonardo Contreras,
Manager of the respondent Company, and Pedro Torres, in charge thereof, met the deputy
sheriffs, and Contreras handed to them a letter addressed to Atty. Palad (ex-officio Provincial
Sheriff of Bulacan), protesting against the seizure of the properties in question, on the ground that
they are not personal properties.
Later on, they went to the factory. Rocos 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 equipment on his own responsibility, alleging that the
bond was posted for such eventuality, the deputy sheriffs directed that some of the supports
thereof be cut.
The defendant Company filed an urgent motion for the return of the properties seized by the
deputy sheriffs. On the same day, the trial court issued an order, directing the Provincial Sheriff of
Bulacan to return the machineries to the place where they were installed. The deputy sheriffs
returned the properties seized, by depositing them along the road, near the quarry of the
defendant Company, at Bigti, without the benefit of inventory and without re-installing them in
their former position and replacing the destroyed posts, which rendered their use impracticable.
The trial court ordered Roco to furnish the Provincial Sheriff with the necessary funds, technical
men, laborers, equipments and materials. Roco raised the issue to the CA; a writ of preliminary
injunction was issued but the CA subsequently dismissed for lack of merit. A motion for
reconsideration was denied.
ISSUE:
Whether or not the machineries and equipment were personal properties and therefore, could be seized
by replevin.
RULING:

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No. Machineries and equipment in question are immovable properties, hence, could not be seized by
replevin.

ANALYSIS:
The special civil action known as replevin, governed by the Rules 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 directly to meet the needs of the said industry. For these reasons, they were
already immovable property pursuant to paragraphs 3 and 5 of Article 415 of the Civil Code.
Mr. Ramon Roco, insisted on the dismantling of at his own responsibility, stating that, precisely, that is
the reason why plaintiff posted a bond. In this manner, petitioner clearly assumed the corresponding
risks. It is well settled that, when restitution of what has been ordered, the goods in question shall be
returned in substantially the same condition as when taken. It follows that petitioner must also do
everything necessary to the reinstallation of said property in conformity with its original condition
CONCLUSION:
The special civil action of replevin is applicable only to personal property. 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, it had become an immovable property under Art. 415
(3). Immovable/ real property cannot be the subject of a writ of replevin.

Salvador H. Laurel vs. Ramon Garcia, et. Al.

G. R. No. 92013. July 25, 1990
FACTS:
The subject Roppongi property is one of the four properties in Japan acquired by the Philippine
government under the Reparations Agreement entered into with Japan on 9 May 1956, the other
lots being the Nampeidai Property (site of Philippine Embassy Chancery), the Kobe Commercial
Property (Commercial lot used as warehouse and parking lot of consulate staff), and the Kobe
Residential Property (a vacant residential lot).
The properties and the capital goods and services procured from the Japanese government for
national development projects are part of the indemnification to the Filipino people for their losses
in life and property and their suffering during World War II.
The Roponggi property consists of the land and building 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 22 July 1976 when the Roppongi building needed major repairs. Due
to the failure of our government to provide necessary funds, the Roppongi property has remained
undeveloped since that time.
On 11 August 1986, President Aquino created a committee to study the disposition or utilization of
Philippine government properties in Tokyo and Kobe though AO-3, and AO 3-A to 3-D. On 25 July
1987, the President issued EO 296 entitling non-Filipino citizens or entities to avail of reparations

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capital goods and services in the event of sale, lease or disposition. This included the four
properties in Japan including Roppongi.
Two petitions for prohibition were filed seeking to enjoin respondents, their representatives and
agents from proceeding with the bidding.The temporary restraining order of which was granted by
the court on 20 February 1990. In G.R. No. 92047, a writ of mandamus was prayed for to compel
the respondents to fully disclose to the public the basis of their decision to push through with the
sale of the Roppongi property inspite of strong public opposition and to explain the proceedings
which effectively prevent the participation of Filipino citizens and entities in the bidding process.

ISSUES:
Can the Roppongi property and others of its kind be alienated by the Philippine Government?
Does the Chief Executive, her officers and agents, have the authority and jurisdiction, to sell the
Roppongi property?
RULING:
No. Roppongi property cannot be alienated as it is outside the commerce of man.
No. The president, her officers and agents do not posses the authority to alienate Roppongi
property.
ANALYSIS:
The Roppongi property was acquired together with the other properties through reparation agreements.
They were assigned to the government sector and that the Roppongi property was specifically designated
under the agreement to house the Philippine embassy. The fact that the Roppongi site has not been used
for a long time for actual Embassy service doesnt automatically convert it to patrimonial property. 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.
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 payment, in application to the
satisfaction of collective needs, and resides in the social group. The purpose is not to serve the State as
the juridical person but the citizens; it is intended for the common and public welfare and cannot be the
object of appropriation.
CONCLUSION:
Roppongi lot is outside the commerce of man. It cannot be alienated. Executive Order of then President
Aquino did not declare that the properties lost their public character. Also, it not within the power of the
Execute to order the sale of the property for it is only the Congress through a duly enacted statute can
authorize the same.

Benjamin Rabuco, et. al. vs. Hon. Antonio Villegas

G.R. No. L-24661. February 28, 1974
FACTS:
A large fire of undetermined origin gutted the Malate area including the lot on which petitioners
had built their homes and dwellings. Respondents city officials then took over the lot and kept
petitioners from reconstructing or repairing their burned dwellings. At petitioners instance, the
Court issued on June 17, 1970 a temporary restraining order enjoining respondents city officials
from performing any act constituting an interference in or disturbance of herein petitioners

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possession of Lot No. 21-B, Block No. 610, of the Cadastral Survey of the City of Manila as
safeguarded them under the Courts subsisting preliminary injunction of August 17, 1965 pursuant
to RA 3120.
Trial Court, however, sidetracked the issue of RA 3120 validity and certified the case to the CA,
stating that its constitutionality need not be passed because the main issue is the whether or not
the houses were public nuisances, which it resolved in the affirmative, and that the responded city
officials can cause the removal thereof as they were constructed in violation of city ordinances
and constitute public nuisance.
Respondent City mayor and its officials questioned the validity of RA 3120, stating that it is in
violation of the constitutional for it deprived the City of its (questioned) property without just
compensation.
Court of Appeals ruled in favor of Petitioners stating that the lots in question are manifestly owned
by the city in its public and governmental capacity and are therefore public property which the
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. An appeal was brought before the Supreme Court.

ISSUE:
Whether or not Republic Act No. 3120 is constitutional.
RULING:
Yes. The Court herein upholds the constitutionality of Republic Act 3120 on the strength of the established
doctrine that the subdivision of communal land of the State (although titled in the name of the municipal
corporation) and conveyance of the resulting subdivision lots by sale on installment basis to bona fide
occupants by Congressional authorization and disposition does not constitute infringements of the due
process clause or the eminent domain provisions of the Constitution but operates simply as a
manifestation of the legislatures right of control and power to deal with State property.
The Act in question was intended to implement the social justice policy of the Constitution and the
government program of land for the landless and that they were not intended to expropriate the property
involved but merely to confirm its character as communal land of the State and to make it available for
disposition by the National Government. The subdivision of the land and conveyance of the resulting
subdivision lots to the occupants by Congressional authorization does not operate as an exercise of the
power of eminent domain without just compensation in violation of Section 1, subsection (2), Article III of
the Constitution, but simply as a manifestation of its right and power to deal with state property.
COCLUSION:
When a property is owned by a political subdivision in its public and governmental capacity, the Congress
has 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.

Levy D. Macasiano vs. Honorable Roberto C. Diokno

G.R. No. 97764 August 10, 1992
FACTS:
Respondent municipality passed Ordinance No. 86, Series of 1990 which authorized the closure
of J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena Streets located at Baclaran,
Paraaque, Metro Manila and the establishment of a flea market thereon, pursuant to MMC
Ordinance No. 2, Series of 1979, authorizing and regulating the use of certain city and/or

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municipal streets, roads and open spaces within Metropolitan Manila as sites for flea market
and/or vending areas, under certain terms and conditions..
The municipal council of Paraaque issued a resolution authorizing Paraaque Mayor Walfrido N.
Ferrer to enter into contract with any service cooperative for the establishment, operation,
maintenance and management of flea markets and/or vending areas.
On August 8, 1990, respondent municipality and respondent Palanyag, a service cooperative,
entered into an agreement whereby the latter shall operate, maintain and manage the flea market
in the aforementioned streets with the obligation to remit dues to the treasury of the municipal
government of Paraaque. Consequently, market stalls were put up by respondent Palanyag on
the said streets.
On September 13, 1990, petitioner Brig. Gen. Macasiano, PNP Superintendent of the
Metropolitan Traffic Command, ordered the destruction and confiscation of stalls along G.G. Cruz
and J. Gabriel St. in Baclaran. These stalls were later returned to respondent Palanyag.

ISSUE:
Whether or not Municipal Council has the authority to lease and use public streets as sites for flea
markets.
RULING:
The ordinance or resolution authorizing the lease and use of public streets or thoroughfares as sites for a
flea market is invalid. Property for public use, in the provinces, cities and municipalities, consists of the
provincial roads, city 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.
Based on the foregoing, J. Gabriel G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena streets are
local roads used for public service and are therefore considered public properties of respondent
municipality. Properties of the local government which are devoted to public service are deemed public
and are under the absolute control of Congress. Hence, local governments have no authority whatsoever
to control or regulate the use of public properties unless specific authority is vested upon them by
Congress. Further, it is of public notice that the streets along Baclaran area re congested with people,
houses and traffic streets. To allow the proliferation of vendors occupying the streets would not help in
decongestion, instead, according to the Solicitor General, can only cause further pollution, sickness, and
deterioration of health of the residents therein.
Properties of the local government which are devoted for public service are deemed public and are under
the absolute control of Congress. Hence, local government has no authority whatsoever to control or
regulate the use of public properties unless specific authority is vested upon them by Congress.
CONCLUSION:
Properties of the local government which are devoted to public service are deemed public and are under
the absolute control of Congress. Hence, local governments have no authority whatsoever to control or
regulate the use of public properties unless specific authority is vested upon them by Congress.

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Republic of the Philippines vs. Court of Appeals

G.R. No. 100709. November 14, 1997.
FACTS:
Josefina Morato applied for a free patent on a parcel of land situated in Pinagtalleran, Calauag,
Quezon. The patent was approved and the Register of Deeds issued an Original Certificate of
Title in favor of Morato on February 4, 1974. Both the free patent and the title specifically required
that the land shall not be alienated or encumbered within five years from the date of the issuance
of the patent.
Reports came up that Morato encumbered the said land, violating the 5-year prohibition of the
patent, the District Land Officer in Lucena City conducted an investigation. The officer found out
that Morato mortgaged the said property to Nenita Co and Antonio Quilatan on October 24, 1974,
who subsequently built a house on it. Two years later, or on February 2, 1976, part of the property
was also leased by Morato to Perfecto Advincula where a warehouse was thereafter constructed.
Said property was furthermore found to be a portion of the Calauag Bay, five to six feet deep
under water during high tide and two feet deep at low tide, and not suitable to vegetation.
Petitioner then filed a complaint for the cancellation of the title and reversion of the parcel of land
to the public domain 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 ruling that there was no violation of the five-year ban
because the land was merely leased and not alienated. It also found that mortgage to Nenita Co
and Antonio Quilatan covered only the improvement and not the land itself. On appeal, CA
affirmed the lower courts decision. Hence, the Republic of the Philippines filed this petition.
ISSUE:
Whether the questioned land is part of a disposable public land and not foreshore land incapable of
alienation.
RULING:
The petition is meritorious. Land in question is part of a foreshore land.
ANALYSIS:
It was found out by the court that years before the issuance of the free patent to private respondent, the
questioned land was subjected to several natural calamities like earthquakes and typhoons that caused
severe erosion of the land. Having a lumber company, private respondent introduced improvements and
developments to the land. At the time then of the issuance of free patent of land to Morato, it was not
covered by water but due to the gradual sinking of the land caused by natural calamities, the sea
advances had permanently invaded a portion of subject land. During high tide, at least half of the land is 6
feet deep under water and three feet deep during low tide. The Calauag Bay has extended up to a portion
of the land.
According to Supreme Court definition, foreshore land is that parcel of land which is between high and
low water and left dry by the flux and reflux of the tides; it is that 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. Uncontestably
then, the land has become a foreshore land and is now a part of the public domain pursuant to Article 420
of the New Civil Code being part of the shores defined therein. Accordingly, it cannot be disposed of by
the government and appropriated by a private individual, i.e. be a subject of a free patent.
CONCLUSION:
When the sea moved towards the estate and the tide invaded it, the invaded property became foreshore
land and passed the realm of the public domain. The subject land in this case, being a foreshore land,
should therefore be reversed State.

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Province of Zamboanga Del Norte vs. City of Zamboanga

G.R. No. L-2440. March 28, 1964
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 said 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 a price to be fixed by the Auditor General.
The properties and buildings referred to consisted of 50 lots and some buildings constructed
thereon, located in the City of Zamboanga and covered individually by Torrens certificates of title
in the name of Zamboanga Province.
It appears that in 1945, the capital of Zamboanga Province was transferred to Dipolog.
Subsequently, Republic Act 286 was approved creating the municipality of Molave and making it
the capital of Zamboanga Province.
Republic Act 711 was approved dividing the province of Zamboanga into two (2): Zamboanga del
Norte and Zamboanga del Sur.
The Auditor General, apportioned the assets and obligations of the defunct Province of
Zamboanga as follows: 54.39% for Zamboanga del Norte and 45.61% for Zamboanga del Sur.
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.
Consequently, the Secretary of Finance, on July 12, 1961, ordered the Commissioner of Internal
Revenue to stop from effecting further payments to Zamboanga del Norte and to return to
Zamboanga City the sum of P57,373.46 taken from it out of the internal revenue allotment of
Zamboanga del Norte
Plaintiff-appellee Zamboanga del Norte filed a complaint in the Court of First Instance of
Zamboanga del Norte against defendants-appellants Zamboanga City, the Secretary of Finance
and the Commissioner of Internal Revenue. It was prayed that Republic Act 3039 be declared
unconstitutional for depriving plaintiff province of property without due process and just
compensation.
The lower court ruled in favor of Zamboanga del Norte and declared RA 3039 unconstitutional
insofar as it deprives Zamboanga del Norte of its properties, consisting of 50 parcels of land and
improvements thereon.
ISSUE:
Whether all the properties concerned are patrimonial properties.
RULING:
The subject properties are properties for public use.
ANALYSIS:
If the property is owned by the municipality 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.

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Applying the norm obtaining under the principles constituting the law of Municipal Corporations, all those
of the 50 properties in question devoted to public service are deemed public; the rest remain patrimonial.
Under this norm, to be considered public, it is enough that the property be held and, devoted for
governmental purposes like local administration, public education, public health, etc. Regarding the
several buildings existing on the lots above-mentioned, the records do not disclose whether they were
constructed at the expense of the former Province of Zamboanga. Considering however the fact that said
buildings must have been erected even before 1936 when Commonwealth Act 39 was enacted and the
further fact that provinces then had no power to authorize construction of buildings such as those in the
case at bar at their own expense, it can be assumed that said buildings were erected by the National
Government, using national funds. Hence, Congress could very well dispose of said buildings in the same
manner that it did with the lots in question.
RA 3039, however, cannot be applied to deprive Zamboanga del Norte of its share in the value of the rest
of the lots which are patrimonial properties since they are not being utilized for distinctly, governmental
purposes.
CONSLUSION:
In the case of state properties, properties for public service are of public dominion; this is not so in the
case of provinces, cities, etc., said properties for public service are patrimonial since they are not for
public use.

Francisco I. Chavez vs. Public Estate Authority

and Amari Coastal Bay Development Corporation
G.R. No. 133250. May 6, 2003
FACTS:
President Ferdinand E. Marcos issued Presidential Decree No. 1084 creating Public Estates
Authority (PEA). PD No. 1084 tasked PEA to reclaim land, including foreshore and submerged
areas, and to develop, improve, acquire, x x x lease and sell any and all kinds of lands. On the
same date, then President Marcos issued Presidential Decree 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 April 25, 1995, PEA entered into a Joint Venture Agreement with AMARI, a private
corporation, to develop the Freedom Islands.
Petitioner assails the sale to AMARI of lands of the public domain as a blatant violation of Section
3, Article XII of the 1987 Constitution prohibiting the sale of alienable lands of the public domain
to private corporations.
On March 30, 1999, PEA and AMARI signed the Amended Joint Venture Agreement. On May 28,
1999, the Office of the President under the administration of then President Joseph E. Estrada
approved the Amended JVA.
Several motions for reconsideration of the Supreme Courts July 9, 2002 decision which declared
the amended JVA null and void ab initio were filed. The conclusions of said decision were
summarized by the Court as follows: The 157.84 hectares of reclaimed lands comprising the
Freedom Islands, now covered by certificates of title in the name of PEA, are alienable lands of
the public domain. PEA may lease these lands to private corporations but may not sell or transfer
ownership of these lands to private corporations. PEA may only sell these lands to Philippine
citizens, subject to the ownership limitations in the 1987 Constitution and existing laws.
The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of
the public domain until classified as alienable or disposable lands open to disposition and
declared no longer needed for public service. The government can make such classification and

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declaration only after PEA has reclaimed these submerged areas. Only then can these lands
qualify as agricultural lands of the public domain, which are the only natural resources the
government can alienate. In their present state, the 592.15 hectares of submerged areas are
inalienable and outside the commerce of man.
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.
Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares of still
submerged areas of Manila Bay, such transfer is void for being contrary to Section 2, Article XII of
the 1987 Constitution which prohibits the alienation of natural resources other than agricultural
lands of the public domain. PEA may reclaim these submerged areas. Thereafter, the government
can classify the reclaimed lands as alienable or disposable, and further declare them no longer
needed for public service. Still, the transfer of such reclaimed alienable lands of the public domain
to AMARI will be void in view of Section 3, Article XII of the 1987 Constitution which prohibits
private corporations from acquiring any kind of alienable land of the public domain.

Issue:
Whether the transfer of reclaimed alienable lands of the public domain to private corporation (AMARI) is
void.
Held:
Yes. Under the 1987 Constitution, private corporations such as AMARI cannot acquire alienable land of
the public domain.
ANALYSIS:
Under the 1987 Constitution, private corporations such as AMARI cannot acquire alienable land of the
public domain. Reclaimed lands comprising the Freedom Islands, which are covered by certificates of title
in the name of PEA, are alienable lands of the public domain. PEA may lease these lands to private
corporations but may not sell or transfer ownership of these lands to private corporations. PEA may only
sell these lands to Philippine citizens, subject to the ownership limitations in the 1987 Constitution and
existing laws. Thus, the Amended Joint Venture Agreement between AMARI and PEA was null and void.
CONCLUSION
Government lands place under the authority government agency tasked and authorized to dispose of
alienable or disposable lands of the public domain, remain public, not private lands.

TEOFILO C. VILLARICO, petitioner, vs. VIVENCIO SARMIENTO,

SPOUSES BESSIE SARMIENTO-DEL MUNDO & BETH DEL MUNDO,
ANDOKS LITSON CORPORATION and MARITES CARINDERIA
G.R. No. 136438, November 11. 2004
FACTS:
Teofilo C. Villarico, petitioner, is the owner of a lot in La Huerta, Paranque City, Metro Manila
covered by a Transfer Certificate of Title (T.C.T.) Petitioners 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.

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Sometime in 1991, Vivencio Sarmiento, his daughter Bessie Sarmiento and her husband Beth
Del Mundo, respondents herein, had a building constructed on a portion of said government land.
In 1993, by means of a Deed of Exchange of Real Property, petitioner acquired a 74.30 square
meter portion of the same area owned by the government.
In 1995, petitioner filed with the RTC, Branch 259, Paraaque City, a complaint for accion
publiciana against respondents. He alleged that respondents structures on the government land
closed his right of way to the Ninoy Aquino Avenue; and encroached on a portion of his lot
covered by his title. Respondents, in their answer, specifically denied petitioners allegations,
claiming that they have been issued licenses and permits by Paranque City to construct their
buildings on the area; and that petitioner has no right over the subject property as it belongs to
the government.
The RTC rendered a decision, ruling that defendants have better rights of possession over the
subject land, except to that covered by petitioners title. The court ordered defendants to vacate
said portion, and denied the claims of petitioner of damages.
The Court of Appeals affirmed the lower court decision, hence this appeal to the Supreme Court.

ISSUE:
Whether or not the petitioner has better right of possession over the dispute lot.
RULING:
Neither the petitioner nor respondent have a right of possession over the land in question.
ANALYSIS:
It is not disputed that the lot on which petitioners alleged right of way exists belongs to the state or
property of public dominion. Property of public dominion is defined by Article 420 of the Civil Code as
follows:
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
other 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.
Public use is use that is not confined to privileged individuals, but is open to the indefinite public.Records
show that the lot on which the stairways were built is for the use of the people as passageway to the
highway. Consequently, it is a property of public dominion. 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. Articel 530 of the
Civil Code provides that only things and rights which are susceptible of being appropriated may be the
object of possession. Hence, lots classified a public dominion cannot be an object of possession.
COCLUSION:
Only things which are susceptible of appropriation may be the object of possession. Hence, lots classified
as public dominion cannot be an object of possession. No person can therefore claim to have a better
right of possession over a land of public dominion.

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HIPOLITO-AGUILAR, CHRISEL
Property Case Digest
2nd Year - Wesleyan Law School

Republic of the Philippines vs.

Court of Appeals and Republic Real Estate Corporation
G.R. No. 103882. November 25, 1998
Pasay City and Republic Real Estate Corporation vs.
Court of Appeals and Republic of the Philippines
G.R. No. 105276, November 25, 1998
FACTS:
RA 1899 was approved granting authority to all municipalities and chartered cities to undertake
and carry out at their own expense the reclamation of any foreshore lands bordering them, and to
establish, provide, construct, maintain and repair proper and adequate docking and harbor
facilities as such municipalities and chartered cities may determine in consultation with the
Secretary of Finance and the Secretary of Public Works and Communications.
In May 6, 1958, Pasay City Council passes Ordinance No. 121, for the reclamation of foreshore
lands within their jurisdiction and entered into an agreement with Republic Real Estate
Corporation (RREC) for the said project.
Republic of the Philippines filed an Amended Complaint questioning subject Agreement between
Pasay City and RREC on the grounds that the subject-matter of such Agreement is outside the
commerce of man, that its terms and conditions are violative of RA 1899, and that the said
Agreement was executed without any public bidding. Pasay City and RREC countered that the
object in question is within the commerce of man because RA 1899 gives a broader meaning on
the term foreshore land than that in the definition provided by the dictionary.
The Court of First Instance ruled in favor of the Republic the cessation of reclaiming or
committing acts of dispossession over any area within the Manila Bay or the Manila Bay Beach
Resort.
The Regional Trial Court, however, ruled in favor of RREC and Pasay City Council, which was
also sustained upon appeal to the Court of Appeals.
ISSUE:
Whether or not the term foreshore land includes the submerged area, making it within the
commerce of man.
RULING:
No. The respondent court unduly stretched and broadened the meaning of foreshore lands,
beyond the intent of the law,
ANALYSIS:
The Court ruled that it is erroneous and unsustainable to uphold the opinion of the respondent court that
the term foreshore land includes the submerged areas. As previously defined, foreshore lands" refers to:
The strip of land that lies between the high and low water marks and that is alternately wet and dry
according to the flow of the tide; A strip of land margining a body of water (as a lake or stream); the part
of a seashore between the low-water line usually at the seaward margin of a low-tide terrace and the
upper limit of wave wash at high tide usually marked by a beach scarp or berm. (Webster's Third New
International Dictionary)
The duty of the court is to interpret the enabling Act, RA 1899. In so doing, the Court cannot broaden its
meaning; much less widen the coverage thereof. If the intention of Congress were to include submerged
areas, it should have provided expressly. That Congress did not so provide could only signify the
exclusion of submerged areas from the term foreshore lands.

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HIPOLITO-AGUILAR, CHRISEL
Property Case Digest
2nd Year - Wesleyan Law School
It bears stressing that the subject matter of Pasay City Ordinance No. 121, as amended by Ordinance No.
158, and the Agreement under attack, have been found to be outside the intendment and scope of RA
1899, and therefore ultra vires and null and void.
CONCLUSION:
When the law speaks in clear and categorical language, there is no reason for interpretation or
construction, but only for application. One cannot broaden much less widen the coverage thereof.

Francisco I. Chavez vs. National Housing Authority

G.R. No 164527. August 15, 2007
FACTS:
Petitioner Francisco Chavez in his capacity as taxpayer seeks to declare null and void the Joint
Venture Agreement (JVA) between the NHA and R-II Builders Inc (RBI) for being unconstitutional
and invalid, and to enjoin respondents particularly respondent NHA from implementing and/or
enforcing the said project and other agreements related thereto. On March 1, 1988, then
President Corazon C. Aquino issued Memorandum Order No. 161 (MO 161) approving and
directing the implementation of the Comprehensive and Integrated Metropolitan Manila Waste
Management Plan. Specifically, respondent NHA was ordered to conduct feasibility studies and
develop low-cost housing projects at the dumpsite and absorb scavengers in NHA
resettlement/low-cost housing projects.
Pursuant to MO 161-A, NHA prepared the feasibility studies which resulted in the formulation of
the Smokey Mountain Development Plan and Reclamation of the Area Across R-10 or the
Smokey Mountain Development and Reclamation Project (SMDRP). SMDRP aimed to convert
the Smokey Mountain dumpsite into a habitable housing project, inclusive of the reclamation of
the area across R-10, adjacent to the Smokey Mountain as the enabling component of the
project. Once finalized, the Plan was submitted to President Aquino for her approval.
On January 17, 1992, President Aquino proclaimed MO 415, approving and directing the
implementation of the SMDRP through a private sector joint venture. Said MO stipulated that the
land area covered by the Smokey Mountain dumpsite is conveyed to the NHA as well as the area
to be reclaimed across R-10. In the same MO 415, President Aquino created an Executive
Committee (EXECOM) to oversee the implementation of the Plan and an inter-agency technical
committee (TECHCOM) was created composed of the technical representatives of the EXECOM.
Based on the evaluation of the pre-qualification documents, the EXECOM declared the New San
Jose Builders, Inc. and RBI as top two contractors. Thereafter, TECHCOM submitted its
recommendation to the EXECOM to approve the RBI proposal which garnered the highest score.
On October 7, 1992, President Ramos authorized NHA to enter into a JVA with RBI. Afterwards,
President Ramos issued Proclamation No. 465 increasing the proposed area for reclamation
across R-10 from 40 hectares to 79 hectares. On September 1, 1994, pursuant to Proclamation
No. 39, the DENR issued Special Patent No. 3591 conveying in favor of NHA an area of 211,975
square meters covering the Smokey Mountain Dumpsite. The land reclamation was completed in
August 1996. Sometime later in 1996, pursuant likewise to Proclamation No. 39, the DENR
issued Special Patent No. 3598 conveying in favor of NHA an additional 390,000 square meter
area. After some time, the JVA was terminated. RBI demanded the payment of just compensation
for all accomplishments and costs incurred in developing the SMDRP plus a reasonable rate of
return. In a Memorandum of Agreement (MOA) executed by NHA and RBI, both parties agreed to
terminate the JVA and other subsequent agreements, which stipulated, among others, that unpaid
balance may be paid in cash, bonds or through the conveyance of properties or any combination

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HIPOLITO-AGUILAR, CHRISEL
Property Case Digest
2nd Year - Wesleyan Law School
thereof.
ISSUES:
Whether RBI can acquire reclaimed foreshore and submerged land areas because they are
allegedly inalienable lands of the public domain.
Whether RBI can acquire reclaimed lands when there was no declaration that said lands are no
longer needed for public use.
Whether RBI, being a private corporation, is barred from the Constitution to acquire lands of the
public domain.
RULING:
Yes. The reclaimed lands across R-10 were classified alienable and disposable lands of public
domain of the State.
Yes. RBI can acquire reclaimed lands for there were actually proclamations and memorandum
officially declaring the reclaimed lands alienable of disposable.
Yes. RBI although a private corporation, may acquire lands of public domain pursuant to RA 6957
as amended by RA 7718 and Proclamations Nos. 39 and 465.
ANALYSIS:
The reclaimed lands across R-10 were classified alienable and disposable lands of public domain
of the State. First, there were three presidential proclamations classifying the reclaimed lands
across R-10 as alienable or disposable hence open to disposition or concession. These were MO
415 issued by President Aquino, Proclamation No. 39 and Proclamation No. 465 both issued by
President Ramos. Secondly, Special Patents Nos. 3591, 3592, and 3598 issued by the DENR
classified the reclaimed areas as alienable and disposable

MO 415 and Proclamations Nos. 39 and 465 are declarations that proclaimed the nonuse of the
reclaimed areas for public use or service as the Project cannot be successfully implemented
without the withdrawal of said lands from public use or service. Without doubt, the presidential
proclamations on SMDRP together with the issuance of the special patents had effectively
removed the reclaimed lands from public use.

Petitioners contention that RBI, being a private corporation, is expressly prohibited by the 1987
Constitution from acquiring lands of public domain has no legal mooring. This is for the reason
that RA 6957 as amended by RA 7718 explicitly states that a contractor can be paid a portion as
percentage of the reclaimed land subject to the constitutional requirement that only Filipino
citizens or corporations with at least 60%Filipino equity can acquire the same. It cannot be denied
that RBI is a private corporation, where Filipino citizens own at least 60% of the stocks. Thus, the
transfer to RBI is valid and constitutional.
CONCLUSION:
Indispensable is the requirement that there must be a law or presidential proclamation officially classifying
reclaimed lands as alienable or disposable and open to disposition or concession, before the same may
be alienated and disposed.

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HIPOLITO-AGUILAR, CHRISEL
Property Case Digest
2nd Year - Wesleyan Law School

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