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PROPERTY

COMPILATION OF CASE DIGESTS

Faustino Ignacio vs Director of Lands GR No. L-12958 May 30, 1960

Facts:
Ignacio applied for the registration of a parcel of a mangrove land in Rizal. It was stated in the application
that he owned the parcelby right of accretion. The director of land opposed the registration for the reason that the
land to be registered is an area of public domain and that the applicant nor his predecessor-in-interes possessed
sufficient title for the land. The parcel of land appliedwas acquired from the government by the virtue of a free patent
title. However, the land in question was formed by accretion and alluvial deposists caused by the action of the
Manila bay. The petition was denied by the lower court and decided that the land to be registered are part of the
public domain. Faustino, however, contended that the court could have declared the land not to be part of the public
domain.
Issue:
Whether or not the courts have the power to reclassify a land
Ruling:
No, the courts do not have the power to reclassify a land. The courts are primarily called upon to determine
whether a land is to be used for public purpose. However, it is only limited there. A formal declaration of
reclassification of land should come from the government, specifically from the executive department or the
legislature. These bodies should declare that a land in question is no longer needed for public use, some public use
or for the improvement of national wealth.

Ancheta vs. Guersey-Dalaygon, GR No. 139868 June 8, 2006

Facts:
2 American citizens have resided in the Philippines. They have an adopted daughter. The wife died and left
a will where she left her entire estate to her husband. 2 years after the wife's death, the husband married a
Candelaria. 4 years after, Richard died and left a will where he left his entire estate to Candelaria except for some of
his shares in a company which he left to his adopted daughter. Audreys will was admitted to probate in CFI Rizal.
Inventory was taken on their conjugal properties. Ancheta, as the administrator, filed for a partition of the first wife's
estate. The will was also admitted in a court in her native land (Maryland).
Issue: Whether or not the properties in issue should be governed by the law where the property is situated
Ruling:
Yes, properties in issue should be governed by the law where the property is situated. However, since the
first wife is a foreign national, the intrinsic validity of her will is governed by her national law. The national law of the
person who made the will shall regulate whose succession is in consideration whatever the nature of the property
and regardless of the country where the property maybe found (Art 16 CC). The first wife's properties may be found
in the Philipppines, however the successional rights over those properties are governed by the national law of the
testator.
3

City Government of Quezon vs. Judge Ericta GR No. L-34915 June 24, 1983

Facts:
An ordinance was promulgated in Quezon city which approved the the regulation ofestablishment of private
cemeteries in the said city. According to the ordinance, 6% of the total area of the private memorial park shall be set
aside for charity burial of deceased persons who are paupers and have been residents of QC. Himlayang Pilipino, a
private memorial park, contends that the taking or confiscation of property restricts the use of property such that it
cannot be used for any reasonable purpose and deprives the owner of all beneficial use of his property. It also
contends that the taking is not a valid exercise of police power, since the properties taken in the exercise of police
power are destroyed and not for the benefit of the public.
Issue:
Whether or not the ordinance made by Quezon City is a valid taking of private property
Ruling:
No, the ordinance made by Quezon City is not a valid way of taking private property. The ordinace is actually a
taking without compensation of a certain area from a private cemetery to benefit paupers who are charges of the
municipal corporation. Instead of building or maintaing a public cemeteries. State's exercise of the power of
expropriation requires payment of just compensation. Passing the ordinance without benefiting the owner of the
property with just compensation or due process, would amount to unjust taking of a real property. Since the property
that is needed to be taken will be used for the public's benefit, then the power of the state to expropriate will come

forward and not the police power of the state.


4

Spouses Custodio vs. CA, GR No. 116100 February 9, 1996

Facts:
Mabasa owns a parcel of land with a 2 door apartment. The property is surrounded by other immovables. When
Mabasa bought the land, there were tenants who were occupying the property. One of the tenants vacated the land.
Mabasa saw that thhere had been built an adobe fence in the apartment in the first passageway that made it
narrower. The fence was constructed by the Santoses. Morato constructed her fence and extended it to the entire
passageway, therefore, the passageay was enclosed. The case was broguth to the trial court and ordered the
custodios and the Santoses to give Mabasa a permanet ingress and eggress to the punlic street and asked Mabasa
to pay Custodios and Santoses for damages.
Issue:
Whether or not Mabasa has the right to demand for a right of way
Ruling:
Yes, Mabasa has the right to demand for a right of way. A person has a right to the natural use and enjoyment of his
own property, according to his pleasure, for all the purposes to which such property is usually applied. As a general
rule, therefore, there is no cause of action for acts done by one person upon his own property in a lawful and proper
manner, although such acts incidentally cause damage or an unavoidable loss to another, as such damage or loss
is damnum absque injuria. When the owner of property makes use thereof in the general and ordinary manner in
which the property is used, such as fencing or enclosing the same as in this case, nobody can complain of having
been injured, because the inconvenience arising from said use can be considered as a mere consequence of
community life
5 German Management Services vs. CA, GR No. 76217 September 14, 1989
Facts:
Spouses Jose are the owners of a parcel of land in Antipolo. They executed a special power of attorney authorizing
German management Services to develop their property into a residential subdivision. However, the property was
being occupied by private respondents and twenty other persons. They were asked to vacate but refused. PR filed
an action for forcible entry and alleged that they are mountainside farmers of the area and have occupied and tilled
their farmholdings prior to the promulgation of PD 27. They stated that they have been deprived of their property
without due process of law by means of force, violence and intimidation.
Issue:
Whether or not petitioner forcibly entered the property of the PR ( I know this is RPC- but involved and prop)
Ruling:
Yes, the petitioner forcibly entered the property of the PR. In forcible entry, ownership is not an issue. It may
be a fact that the German Management was duly authorised by the owners to develop the subject property, the
actual possessors of the land, the Prs, can commence a forcible entry case against the petitioner. Forcible entry is
merely a quieting process and never determines the actual title to an estate.
6. Lopez vs. Orosa and Plaza Theatre, 103 SCRA 98
FACTS:
Orosa invited Lopez to invest with him in building a theatre. Lopez supplied lumber for the construction of the said
theatre. The materials totaled 62k but Orosa was only able to pay 20k thus leaving a balance of almost 42k. Later
on respondents acquired a bank loan of 30k, with Luzon Surety Company as their surety and the land and building
were mortgaged as counter-security. Petitioner sued to collect the unpaid amount for the materials and was able to
get a judgment against the respondents making them jointly liable to pay the remaining amount. Also, he was able
to obtain a materialmans lien on the building of the theatre. The stocks amounting to 42k shall be sold in public
auction in case the respondents default. Petitioner wasnt happy because he also wanted a lien on the land, urging
that the judgment lien should include it since the building and the land are inseparable.
ISSUE: Whether or not the building and the land are inseparable?
HELD:
No. The contention that the lien embraces both the land and the building or structure adhering thereto is without
merit. 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 (Article 415 of the new Civil Code) could mean only one thing that a building is by itself an immovable
property. Moreover, and in view of the absence of any specific provision of law to the contrary, a building is an
immovable property, irrespective of whether or not said structure and the land on which it is adhered to belong to the
same owner.

7. Associated Insurance and Surety Company vs. Iya, et al, 103 SCRA 972
FACTS:
Spouses Valino were the owners of a house, payable on installments from Philippine Realty Corporation. To be able
to purchase on credit rice from NARIC, they filed a surety bond subscribed by petitioner and therefor, they executed
an alleged chattel mortgage on the house in favor of the surety company. The spouses didnt own yet the land
on which the house was constructed on at the time of the undertaking. After being able to purchase the
land, to be able to secure payment for indebtedness, the spouses executed a real estate mortgage in favor of
Iya.
The spouses were not able to satisfy obligation with NARIC, petitioner was compelled to pay.
The spouses werent able to pay the surety company despite demands and thus, the company foreclosed the
chattel mortgage. It later learned of the real estate mortgage over the house and lot secured by the spouses. This
prompted the company to file an action against the spouses. Also, Iya filed another civil action against the spouses,
asserting that she has a better right over the property. The trial court heard the two cases jointly and it held that the
surety company had a preferred right over the building as since when the chattel mortgage was secured, the
land wasnt owned yet by the spouses making the building then a chattel and not a real property.
ISSUE: Whether or not the building can be considered personal property?
HELD:
No. A building is an immovable property irrespective of where or not said structure and the land on which it is
adhered to belong to the same owner. A building certainly cannot be divested of its character of realty by the fact
that the land on which it is constructed belongs to another. To hold it the other way, the possibility is not remote
that it would result in confusion, for to cloak the building with an uncertain status made dependent on
ownership of the land, would create a situation where a permanent fixture changes its nature or character as
the ownership of the land changes hands. In the case at bar, as personal properties may be the only subjects of a
chattel mortgage, the execution of the chattel mortgage covering said building is null and void.
8. Bicerra vs. Tenezza, 6 SCRA 648
FACTS:
The Bicerras were the owners of a house built on a lot owned by them and situated in the municipality of
Lagangilang. Tenezza forcibly demolished the house, asserting that they are the rightful owners of the land.
Failure
to
restore
the
house
and
to
deliver
the
materials
by
the
defendants,
plaintiffs were forced to file an action against them for damages as well as praying that the court hold them as the
proper owners of the house. The court dismissed the case for lack of jurisdiction.
ISSUES: Whether or not the house demolished is still considered an immovable property?
HELD:
No. A house is classified as immovable property by reason of its adherence to the soil on which it is built. The
classification holds true regardless of the fact that the house may be situated on land belonging to another owner.
But once the house is demolished, it ceases to exist as such and the hence its character as immovable likewise
ceases.
9. Leung Yee vs. F.L. Strong Machinery Co. And Williamson, 37 SCRA 644
FACTS:
Compania Agricola Filipina bought rice-cleaning machinery from the machinery company and this was secured by
a chattel mortgage on the machinery and the building to which it was installed. Upon failure to pay, the chattel
mortgage was foreclosed, the building and machinery sold in public auction and bought by the machinery company.
Then Compania Agricola Filipina executed a deed of sale over the land to which the building stood in favor of the
machinery company. This was done to cure any defects that may arise in the machinery companys ownership of
the building.
On or about the date to which the chattel mortgage was executed, Compania executed a real estate
mortgage over the building in favor of Leung Yee, distinct and separate from the land.
This is to secure payment for its indebtedness for the construction of the building. Upon failure to pay, the mortgage
was foreclosed. The machinery company then filed a case, demanding that it be declared the rightful owner
of the building. The trial court held that it was the machinery company which was the rightful owner as it had

its title before the building was registered prior to the date of registry of Leung Yees certificate.

ISSUE: Whether or not the building in question is an immovable?


HELD:
The building made out of strong materials in which the machinery was installed is real property. The mere fact that
the parties dealt with it as separate and apart from the land (or as personal property) does not change its character
as real property. In this case, it follows that neither the original registry in the chattel mortgage of the building and
the machinery installed therein, nor the annotation in the registry of the sale of the mortgaged property had any legal
effect.
10. Standard Oil Co. of New York vs. Jaramillo, 44 SCRA 630
FACTS:
De la Rosa was the lessee of a piece of land, on which a house she owns was built.
She executed a chattel mortgage in favor of the petitionerpurporting the leasehold interest in the land and the
ownership of house. After such, the petitioner moved for its registration with the Register of Deeds, for the
purpose of having the same recorded in the book of record of chattel mortgages. After said document had been
duly acknowledge and delivered, the petitioner caused the same to be presented to the respondent, Joaquin
Jaramillo, as register of deeds of the City of Manila, for the purpose of having the same recorded in the book of
record of chattel mortgages. Upon examination of the instrument, the respondent was of the opinion that it was not a
chattel mortgage, for the reason that the interest therein mortgaged did not appear to be personal property, within
the meaning of the Chattel Mortgage Law, and registration was refused on this ground only.
ISSUE:

Whether

or

not

respondents

position

is

tenable?

HELD:
No. The respondents duties, as a register of deeds, in respect to the registration of chattel mortgage are of a
purely ministerial character; and no provision of law can be cited which confers upon him any judicial or quasijudicial power to determine the nature of any document of which registration is sought as a chattel mortgage.
Generally, he should accept the qualification of the property adopted by the person who presents the
instrument
for
registration and should place the instrument on record, upon payment of the proper fee, leaving the effects of
registration to be determined by the court if such question should arise for legal determination. The Civil Code
supplies no absolute criterion in discriminating between real property and personal property for purposes of the
application of the Chattel Mortgage Law. The articles state general doctrines, nonetheless, it must not be
forgotten that under given conditions, property may have character different from that imputed to it in the
said articles. It is undeniable that the parties in a contract may by agreement treat as personal property
that which by nature would be real property.

11. Punsalan vs. Lacsamana, 21 SCRA 331


FACTS:
Punsalan was the owner of a piece of land, which he mortgaged in favor of PNB. Due to his failure to pay, the
mortgage was foreclosed and the land was sold in a public auction to which PNB was the highest bidder. On a
relevant date, while Punsalan was still the possessor of the land, it secured a permit for the construction of a
warehouse. A deed of sale was executed between PNB and Punsalan. This contract was amended to include the
warehouse and the improvement thereon. By virtue of these instruments, respondent Lacsamana secured title over
the property in her name.
Petitioner then sought for the annulment of the deed of sale. Among his allegations was that the bank did not own
the building and thus, it should not be included in the said deed.
Petitioners complaint was dismissed for improper venue. The trial court held that the action being filed in actuality
by petitioner is a real action involving his right over a real property.
ISSUE:
W/N the warehouse is an immovable and must be tried in the province where the property lies.
HELD:

Warehouse claimed to be owned by petitioner is an immovable or real property. Buildings are always immovable
under the Code. A building treated separately from the land on which it is stood is immovable property and the mere
fact that the parties to a contract seem to have dealt with it separate and apart from the land on which it stood in no
wise changed its character as immovable property.
12. Prudential Bank vs. Panis 153 SCRA 390
FACTS:
Spouses Magcale secured a loan from Prudential Bank. To secure payment, they executed a real estate mortgage
over a residential building. The mortgage included also the right to occupy the lot and the information about the
sales patent applied for by the spouses for the lot to which the building stood. After securing the first loan, the
spouses secured another from the same bank. To secure payment, another real estate mortgage was executed over
the same properties. The Secretary of Agriculture then issued a Miscellaneous Sales Patent over the land which
was later on mortgaged to the bank. The spouses then failed to pay for the loan and the REM was extrajudicially
foreclosed and sold in public auction despite opposition from the spouses. The respondent court held that the REM
was null and void.
ISSUE:
Whether or not a valid REM mortgage can be constituted on the building erected on the belonging to another.
HELD: A real estate mortgage can be constituted on the building erected on the land belonging to another. The
inclusion of building distinct and separate from the land in the Civil Code can only mean that the building itself is an
immovable property. While it is true that a mortgage of land necessarily includes in the absence of stipulation of the
improvements thereon, buildings, still a building in itself may be mortgaged by itself apart from the land on which it is
built. Such a mortgage would still be considered as a REM for the building would still be considered as immovable
property even if dealt with separately and apart from the land. The original mortgage on the building and right to
occupancy of the land was executed before the issuance of the sales patent and before the government was
divested of title to the land. Under the foregoing, it is evident that the mortgage executed by private respondent on
his own
building was a valid mortgage. As to the second mortgage, it was done after the sales patent was issued and thus
prohibits pertinent provisions of the Public Land Act.
13. Tumalad vs. Vicencio
FACTS: Vicencio and Simeon executed a chattel mortgage in favor of plaintiffs Tumalad over their house, which was
being rented by Madrigal and company. This was executed to guarantee a loan, payable in one year with a 12% per
annum interest. The mortgage was extrajudicially foreclosed upon failure to pay the loan. The house was sold at a
public auction and the plaintiffs were the highest bidder. A corresponding certificate of sale was issued. Thereafter,
the plaintiffs filed an action for ejectment against the defendants, praying that the latter vacate the house as they
were the proper owners.
ISSUE: W/N the chattel mortgage was null and void ab initio because only personal properties can be subject of a
chattel mortgage.
HELD: Certain deviations have been allowed from the general doctrine that buildings are immovable property such
as when through stipulation, parties may agree to treat as personal property those by their nature would be real
property. This is partly based on the principle of estoppel wherein the principle is predicated on statements by the
owner declaring his house as chattel, a conduct that may conceivably stop him from subsequently claiming
otherwise.
In the case at bar, though there be no specific statement referring to the subject house as personal property, yet by
ceding, selling or transferring a property through chattel mortgage could only have meant that defendant conveys
the house as chattel, or at least, intended to treat the same as such, so that they should not now be allowed to
make an inconsistent stand by claiming otherwise.
14. Makati Leasing and Finance Corporation vs Wennever Texttile Mills
FACTS:
To obtain financial accommodations from Makati Leasing, Wearever Textile discounted and assigned several
receivables under a Receivable Purchase Agreement with Makati Leasing. To secure the collection of receivables, it
executed a chattel mortgage over several raw materials and a machinery Artos Aero Dryer Stentering Range
(Dryer). Wearever defaulted thus the properties mortgaged were extrajudicially foreclosed. The sheriff, after the
restraining order was lifted, was able to enter the premises of Wearever and removed the drive motor of the Dryer.
The CA reversed the order of the CFI, ordering the return of the drive motor since it cannot be the subject of a
replevin suit being an immovable bolted to the ground. Thus the case at bar.
ISSUE: Whether the dryer is an immovable property
HELD: NO. 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 3rd party will be prejudiced then
moreso 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.
15. Sergs Products and Gaquiloy vs. PCI Leasing and Finance 338 SCRA 499
FACTS:
PCI filed a case for collection of a sum of money as well as a writ of replevin for the seizure of
machineries, subject of a chattel mortgage executed by petitioner in favor of PCI. Machineries of petitioner
were seized and petitioner filed a motion for special protective order. It asserts that the machineries were real
property and could not be subject of a chattel mortgage.
Issue: Whether or not the machineries become real property by virtue of immobilization.
HELD:
The machineries in question have become immobilized by destination because they are essential and principal
elements in the industry, and thus have become immovable in nature.
Nonetheless, they are still proper subjects for a chattel mortgage. Contracting parties may validly stipulate that a
real property be considered as personal. After agreement, they are consequently estopped from claiming
otherwise.
16. MANARANG AND MANARANG V. OFILADA AND ESTEBAN 99 SCRA 108
FACTS:
Manarang secured a loan from Esteban guaranteed by a chattel mortgage over a house of mixed materials. Due to failure to pay
the chattel mortgage was foreclosed. Before the sale of the property, Manarang tried to pay for the property but the sheriff refused to
accept tender unless there is payment for the publication of the notice of sale in the newspapers. This prompted Manarang to bring this
suit to compel the sheriff to accept payment. He averred that the publication was unnecessary as the houses hold be considered as
personal property per agreement in the chattel mortgage, and the publication for notice of sale is unnecessary
ISSUE:
Whether or not the fact that the parties entering into a contract regarding a house gave said property the
consideration of personal property in their contract.
HELD:
Yes. There is no question that a building of mixed materials may be a subject of chattel mortgage, in which case it is considered
as between the parties as personal property. The mere fact that a house was the subject of chattel mortgage and was considered as
personal property by the parties doesnt make the said house personal property for purposes of the notice to be
given for its sale in public auction. It is real property within the purview of Rule 39, Section 16 of the Rules of Court as it has become a
permanent fixture on the land, which is real property.
17. NAVARRO VS. PINEDA
9 SCRA 631
FACTS:
Pineda and his mother executed real estate and chattel mortgages in favor of Navarro, to secure a loan they
got from the latter. The REM covered a parcel of land owned by the mother while the chattel mortgage covered a
residential house. Due to the failure to pay the loan, they asked for extensions to pay for the loan. On the
second extension, Pineda executed a promise wherein in case of default in payment, he wouldnt ask for any
additional extension and there would be no need for any formal demand. In spite of this, they still failed to
pay. Navarro then filed for the foreclosure of the mortgages. The court
decided in his favor.

ISSUE: Whether or not the deed of real estate mortgage and chattel mortgage appended to the complaint is valid
notwithstanding the fact that the house was made subject of chattel mortgage for the reason that it is erected on a
land that belongs to a third person.

HELD:
Yes. Where a house stands on a rented land belonging to another person, it may be the subject
matter of a chattel mortgage as personal property if so stipulated in the document of mortgage, and in an action by
the mortgagee for the foreclosure, the validity
Of the chattel mortgage cannot be assailed by one of the parties to the contract of mortgage. Furthermore, although
in some instances, a house of mixed materials has been considered as a chattel between the parties and that the
validity of the contract between them, has been recognized, it has been a constant criterion that with
respect to third
Persons, who are not parties to the contract, and especially in execution proceedings, the house is considered as
immovable property.
18. DAVAO SAWMILL V. CASTILLO
G.R.
No.
L-40411

August

7,

1935

FACTS:
Davao Sawmill Co., operated a sawmill. However, the land upon which the business was conducted was leased
from another person. On the land, Davao Sawmill erected a building which housed the machinery it used. Some of
the machines were mounted and placed on foundations of cement.. The contract of lease stated that on the
expiration of the period agreed upon, all the improvements and buildings introduced and erected by Davao sawmill
shall pass to the exclusive ownership of the lessor without any obligation on its part to pay any amount for said
improvements and buildings; which do not include the machineries and accessories in the improvements.
In another action, a writ of execution was issued against the company and the properties in question were levied
upon. The company assailed the said writ contending that the machineries and accessories were personal in nature,
hence, not subject to writ of execution. The trial judge ruled in favour of the company.
ISSUE:

Whether

or

not

the

machineries

and

equipment

were

personal

property

HELD
Yes,
the
subject
properties
are
personal
in
nature.
Art.415 (NCC) provides that real property consists of (5) 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. Machinery is naturally movable.
However, machinery only becomes immovable when placed in a land by the owner of the property or land but not
when so placed by a tenant or any person having only a temporary right, unless such person acted as the agent of
the owner. In the case at bar, the machinery is intended not by the owner of the land but by the saw mill company
for use in connection with its trade
19. TSAI V. CA
Gr. No. 120098, October 2, 2001
FACTS:
Ever Textile Mills, Inc. (EVERTEX) obtained loan from Philippine Bank of Communications (PBCom), secured by a
Real and Chattel Mortgage over the lot where its factory stands, and the chattels located therein as enumerated in a
schedule attached to the mortgage contract. PBCom again granted a second loan to EVERTEX which was secured
by a Chattel Mortgage over personal properties similar to those listed in the first mortgage deed. During the
execution of the second mortgage, EVERTEX purchased various machines and equipment. Upon EVERTEX's
failure to meet its obligation. PBCom, commenced extrajudicial foreclosure of the mortgage. PBCom leased the
entire factory premises to Ruby Tsai and sold to the same the factory, lock, stock and barrel including the contested
machineries.
EVERTEX filed a complaint for annulment of sale, reconveyance, and damages against PBCom, alleging that the
extrajudicial foreclosure of subject mortgage was not valid, and that PBCom, without any legal or factual basis,
appropriated the contested properties which were not included in the Real and Chattel Mortgage of the first
mortgage contract nor in the second contract which is a Chattel Mortgage, and neither were those properties
included in the Notice of Sheriff's Sale.
ISSUE: Whether or not the machineries and equipment were personal properties
HELD:

YES, the machineries and equipment are personal properties. The nature of the disputed machineries, i.e., that they
were heavy, bolted or cemented on the real property mortgaged does not make them ipso facto immovable under
Article 415 (3) and (5) of the New Civil Code. While it is true that the properties appear to be immobile, a perusal of
the contract of Real and Chattel Mortgage executed by the parties herein reveal their intent, that is - to treat
machinery and equipment as chattels. If the machineries in question were contemplated to be included in the real
estate mortgage, there would have been no necessity to ink a chattel mortgage specifically with a listing of the
machineries covered thereby.
Assuming that the properties in question are immovable by nature, nothing detracts the parties from treating it as
chattels to secure an obligation under the principle of estoppel, where 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.

20. MINDANAO BUS CO. V. CITY ASSESSOR DIGEST


G.R. No. L-17870 29 September 1962
FACTS:
Petitioner is a public utility company engaged in the transport of passengers and cargo by motor vehicles. Petitioner
likewise owned a land where it maintains a garage, a repair shop and blacksmith or carpentry shops. The
machineries are placed thereon in wooden and cement platforms. The City Assessor of CDO then assessed a
P4,400 realty tax on said machineries and repair equipment. Petitioner appealed on the ground that the same are
not real properties.
ISSUE: Whether or not the machineries and equipment are considered immobilized and thus subject to a realty tax
HELD:
NO. The Supreme Court held that said machineries and equipment are not subject to the assessment of real estate
tax. Art. 415 of the NCC classifies the following as immovable property xxx (5) 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;
Said equipment are not considered immobilized as they are merely incidental, not essential and principal to the
business of the petitioner. The transportation business could be carried on without repair or service shops of its
rolling equipment as they can be repaired or services in another shop belonging to another
Aside from the element of essentiality the Art.415 (5) also requires that the industry or works be carried on in a
building or on a piece of land. As such, the equipment in question are not deemed real property and not subject to
realty tax, because the transportation business is not carried on in a building or permanently on a piece of land, as
demanded by law.
21. BOARD OF ASSESSMENT APPEALS V. MERALCO
G.R. No. L-15334. January 31, 1964
FACTS:
Meralcos electric power is generated by its hydro-electric plant located at Botocan Falls, Laguna and is transmitted
to the City of Manila by means of electric transmission wires, running from the province of Laguna to the said City.
These electric transmission wires which carry high voltage current, are fastened to insulators attached on steel
towers. Meralco has constructed 40 of these steel towers within Quezon City, on land belonging to it.
The QC City Assessor declared the MERALCO's steel towers subject to real property tax. After the denial of
MERALCO's petition to cancel these declarations, an appeal was taken to the QC Board of Assessment Appeals,
which required respondent to pay real property tax on the said steel towers for the years 1952 to 1956.
MERALCO paid the amount under protest, and filed a petition for review in the Court of Tax Appeals (CTA) which
rendered a decision ordering the cancellation of the said tax declarations and the refunding to MERALCO by the QC
City Treasurer.
ISSUE: Whether or not the steel towers of an electric company constitute real property for the purposes of real
property tax.
HELD:
NO. The steel towers of an electric company do not constitute real property for the purposes of real property tax.
Steel towers are not immovable property under paragraph 1, 3 and 5 of Article 415 (NCC) because they do
not constitute buildings or constructions adhered 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.
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.

22. MANILA ELECTRIC CO. V. CENTRAL BOARD OF ASSESSMENT APPEALS


114 SCRA 273
FACTS:
Petitioner owns two oil storage tanks, made of steel plates wielded and assembled on the spot. Their
bottoms rest on a foundation consisted of compacted earth, sand pad as immediate layer, and asphalt stratum
as top layer. The tanks are within the Caltex refinery compound. They are used for storing fuel oil for Meralco's
power
plants.
The municipal treasurer of Batangas made an assessment for realty tax on the two tanks, based on the report of the
Board of Assessors. Meralco contends that the said oil storage tanks do not fall within any of the kinds of real
property enumerated in article 415 of the Civil Code the tanks are not attached to the land and that they were placed
on
leased
land,
not
on
the
land
owned
by
Meralco.
ISSUE : Whether or not the oil storage tanks constitute real property for the purposes of real property tax
HELD:
YES. While the two storage tanks are not embodied in the land, they may nevertheless be considered as
improvements in the land, enhancing its utility and rendering it useful to the oil industry. It is undeniable that the
two tanks have been installed with some degree of permanence as receptacles for the considerable quantities of oil
needed
by
Meralco
for
its
operations.
For purposes of taxation, the term real property may include things, which should generally be considered as
personal property. It is a familiar phenomenon to see things classified as real property for purposes of
taxation
which
on
general
principle
may
be
considered
as
personal
property.
23. PIANSAY VS. DAVID, 12 SCRA 227
FACTS:
David obtained a loan of P3,000 with 12% interest from Uy Kim. To secure the payment of the same, he executed a
chattel mortgage on a house in Tondo. Upon Davids failure to pay, it was foreclosed and Uy Kim bought the house
at the public auction and thereafter sold the same to Salvador Piansay. Later on, Marcos Mangubat filed a complaint
against David before the CFI Manila for the collection of the loan of P2,000. The complaint was later amended to
implead Uy Kim and Piansay praying that the auction sale and deed of absolute sale executed by Uy Kim in favor of
Piansay be annulled. CFI Manila ordered David to pay and annulled the chattel mortgage. CA affirmed. David was
ordered to pay and the house was levied upon. To prevent the sale at the public auction, Piansay and Uy Kim filed a
petition before the CA but it was denied. Subsequently, the latter instituted an action against David and Mangubat
praying that judgment be rendered declaring Piansay as the true owner and restrain the levy and sale to public
auction. David demanded from Piansay the payment of the rentals for the use and occupation of the house; the
latter claims it is his property. Mangubat, on one hand, moved to dismiss the complaint which was granted. CA
affirmed it by explaining that Uy Kim had no right to foreclose the chattel mortgage because it was in reality a mere
contract of an unsecured loan. Piansay assailed Mangubats right to levy execution upon the house alleging that the
same belongs to him, he having bought it from Uy Kim who acquired it at the auction sale.
ISSUE:
Whether or not the chattel mortgage and sale are valid
HELD:
No. Upon the theory that the chattel mortgage and sale in favor of Uy Kim had been annulled in the original
decision, as affirmed by the CA, the fact is that said order became final and executory upon the denial of the petition
for certiorari and mandamus.
Hence, Uy Kim and Piansay are now barred from asserting that the chattel mortgage and sale are valid. At any rate,
regardless of the validity of a contract constituting a chattel mortgage on a house, as between the parties to said
contract, the same cannot and does not bind third persons, who are not parties to the contract of their privies. As a
consequence, the sale of the house in question in the proceedings for the extrajudicial foreclosure of said chattel
mortgage, is null and void insofar as defendant Mangubat is concerned, and did not confer upon Uy Kim, as buyer
in said sale, any dominical right in and to said house, so that she could not have transmitted to her assignee
Piansay any such right as against Mangubat. In short, they do not have a cause of action against Mangubat and
David
24. SIBAL VS. VALDEZ, 50 PHIL 512
FACTS: As a first cause of action the plaintiff alleged that the defendant Vitaliano Mamawal, deputy sheriff of the
Province of Tarlac, by virtue of a writ of execution issued by the Court of First Instance of Pampanga, attached and
sold to the defendant Emiliano J. Valdez the sugar cane planted by the plaintiff and his tenants on seven parcels of
land. Within one year from the date of the attachment and sale the plaintiff offered to redeem said sugar cane and
tendered to the defendant Valdez the amount sufficient to cover the price paid by the latter, the interest thereon and
any assessments or taxes which he may have paid thereon after the purchase, and the interest corresponding
thereto. But Valdez refused to accept the money and to return the sugar cane to the plaintiff.
As a second cause of action, the plaintiff alleged that the defendant Emiliano J. Valdez was attempting to harvest
the palay planted in four of the seven parcels and that he had harvested and taken possession of the palay in one of

said seven parcels and in another parcel, amounting to 300 cavans; and that all of said palay belonged to the
plaintiff.
After hearing and on 28 April 1926, the judge (Lukban) rendered judgment in favor of the defendant holding that the
sugar cane in question was personal property and, as such, was not subject to redemption; among others. Hence,
the appeal
ISSUE:
Whether the sugar cane in question is personal or real property
HELD:
Manresa, the eminent commentator of the Spanish Civil Code, in discussing section 334 of the Civil Code, in view of
the recent decisions of the supreme Court of Spain, admits that growing crops are sometimes considered and
treated as personal property. Moreover, from an examination of the reports and codes of the State of California and
other states we find that the settle doctrine followed in said states in connection with the attachment of property and
execution of judgment is, that growing crops raised by yearly labor and cultivation are considered personal property.
On the other hand, Act No. 1508, the Chattel Mortgage Law, fully recognized that growing crops are personal
property. Section 2 of said Act provides: "All personal property shall be subject to mortgage, agreeably to the
provisions of this Act, and a mortgage executed in pursuance thereof shall be termed a chattel mortgage." Section 7
in part provides: "If growing crops be mortgaged the mortgage may contain an agreement stipulating that the
mortgagor binds himself properly to tend, care for and protect the crop while growing.
It is clear from the foregoing provisions that Act No. 1508 was enacted on the assumption that "growing crops" are
personal property. This consideration tends to support the conclusion hereinbefore stated, that paragraph 2 of article
334 of the Civil Code has been modified by section 450 of Act No. 190 and by Act No. 1508 in the sense that
"ungathered products" as mentioned in said article of the Civil Code have the nature of personal property. In other
words, the phrase "personal property" should be understood to include "ungathered products."
We may, therefore, conclude that paragraph 2 of article 334 of the Civil Code has been modified by section 450 of
the Code of Civil Procedure and by Act No. 1508, in the sense that, for the purpose of attachment and execution,
and for the purposes of the Chattel Mortgage Law, "ungathered products" have the nature of personal property.
25. RUBISO VS. RIVERA, 37 PHIL 72
FACTS: Bonifacio Gelito sold his share in the pilot boat Valentina, consisting of 2/3 interest therein, to the Chinaman
Sy Qui, the co-owner of the other 1/3 interest in said vessel; wherefore this vendor is no longer entitled to exercise
any action whatever in respect to the boat in question. After the sale of the boat to the defendant Rivera, suit having
been brought in the justice of the peace court against the Chinaman Sy Qui to enforce payment of a certain sum of
money, the latters creditor Fausto Rubiso. Rubiso later acquired said vessel at a public auction sale and for the sum
of P55.45. The certificate of sale and adjudication of the boat in question was issued by the sheriff on behalf of
Fausto Rubiso, in the office of the Collector of Customs, on 27 January 1915 and was also entered in the
commercial registry on 14 March 1915.
On 10 April 1915, the plaintiffs brought suit in the CFI and alleged in the complaint that his clients were the owners
of the pilot boat named Valentina, which had been in bad condition since 1914 and was stranded in Tingloy, Bauan,
Batangas; and that Florentino E. Rivera took charge or possession of said vessel without the knowledge or consent
of the plaintiffs and refused to deliver it to them, under claim that he was the owner thereof. After the hearing of the
case and the introduction of documentary evidence, the judgment of 6 September 1915, was rendered, , in which
the defendant and appellant was ordered to place at the disposal of the Fausto Rubiso the pilot boat in litigation. No
special finding was made for costs. The defendant appealed and moved for a new trial. This motion was denied and
appellant excepted.
The Supreme Court affirmed the judgment, with the costs against the appellant.
ISSUE:
1. Whether or not the requisite of registration in the registry, of the purchase of the vessel, is necessary and
indispensable in order that the purchasers rights may be maintained against a third person
2. Whether or not the boat is a real property
HELD:
1. The legal rule set down in the Mercantile Code subsists, inasmuch as the amendment solely refers to the official
who shall make the entry; but, with respect to the rights of the two purchasers, whichever of them first registered his
acquisition of the vessel is the one entitled to enjoy the protection of the law, which considers him the absolute
owner of the purchased boat, and this latter to be free of all encumbrance and all claims by strangers for, pursuant
to article 582 of the said code, after the bill of the judicial sale at auction has been executed and recorded in the
commercial registry, all the other liabilities of the vessel in favor of the creditors shall be considered
canceled. 1awphil.net
The purchaser at public auction, Fausto Rubiso, who was careful to record his acquisition, opportunely and on a
prior date, has, according to the law, a better right than the defendant Rivera who subsequently recorded his
purchase. The latter is a third person, who was directly affected by the registration which the plaintiff made of his
acquisition.
2. Ships or vessels, whether moved by steam or by sail, partake, to a certain extent, of the nature and conditions of
real property, on account of their value and importance in the world commerce; and for this reason the provisions of

article 573 of the Code of Commerce are nearly identical with those of article 1473 of the Civil Code.
26. PHIL. REFINING CO. VS. JARQUE, 61 PHIL 229
FACTS:
On varying dates the Philippine Refining Co., Inc., and Francisco Jarque executed three mortgages, denominated
as chattel mortgage on the motor vessels Pandan and Zaragoza. The first two mortgages do not have an
appended affidavit of good faith, while the third contains such. The third mortgage was subscribed by Jarque and
MN Brink (in what capacity the latter signed is not disclosed) and was not registered in the customs house until 17
May 1932, or within the period of 30 prior to the commencement of insolvency proceedings against Jarque. A fourth
mortgage was executed by Jarque and Ramon Aboitiz on the motorship Zaragoza and was entered in the chattel
mortgage registry of the register of deeds on 12 May 1932, or again within the 30-day period before the institution of
insolvency proceedings.
A petition was filed with the CFI Cebu on 2 June 1932 in which it was prayed that Francisco Jarque be declared an
insolvent debtor, with the result that an assignment of all the properties of the insolvent debtor, was executed in
favor of Jose Corominas. The petition on the matter of Jarques insolvency was granted. However, the judge
declined to order the foreclosure of the mortgages, but on the contrary sustained the special defenses of fatal
defectiveness of the mortgages.
The Supreme Court affirmed the judgment, with costs against appellant
ISSUE:
1. Whether or not the vessel is a personal property
2. Whether or not an affidavit of good faith is needed to enforce a chattel mortgage on a vessel
HELD:
1. Vessels are considered personal property under the civil law. (Code of Commerce, article 585.) Similarly under
the common law, vessels are personal property. Under the common law, vessels are personal property although
occasionally referred to as a peculiar kind of personal property. Since the term personal property includes vessels,
they are subject to mortgage agreeably to the provisions of the Chattel Mortgage Law. (Act 1508, section 2.) Indeed,
it has heretofore been accepted without discussion that a mortgage on a vessel is in nature a chattel mortgage. The
only difference between a chattel mortgage of a vessel and a chattel mortgage of other personality is that it is not
now necessary for a chattel mortgage of a vessel to be noted in the registry of the register of deeds, but it is
essential that a record of documents affecting the title to a vessel be entered in the record of the Collector of
Customs at the port of entry. Otherwise a mortgage on a vessel is generally like other chattel mortgages as to its
requisites and validity.
2. Section 5 of the Chattel Mortgage Law deemed it a requirement to have an affidavit of good faith appended to the
mortgage and recorded therewith. The absence of the affidavit vitiates a mortgage as against creditors and
subsequent encumbrancers. As a consequence a chattel mortgage of a vessel wherein the affidavit of good faith
required by the Chattel Mortgage Law is lacking, is unenforceable against third persons.
27. US vs. CARLOS 21 PHIL 553
FACTS:

Carlos stole about 2273 kilowatts of electricity worth 909 pesos from Meralco. The court issued a warrant of
arrest. Carlos demurred and refused to enter a plea. He claimed that what he did failed to constitute an offense. His
counsel further asserted that the crime of larceny applied only to tangibles, chattels and objects that can be taken
into possession and spirited away, hence a movable property. Deliberation quickly followed at the court which
subsequently sentenced him to over a year in jail. Mr. Carlos contested saying that electrical energy cannot be
stolen (how can one steal an incorporeal thing?). He filed an appeal on such grounds and the court of first instance
affirmed the decision. The case reached the Supreme Court.

ISSUE:Whether or not the court erred in declaring that electrical energy can be stolen?
RULING:
Yes. Analogically, electricity can be considered as gas which can be stolen. However, the true test of what
constitutes the proper subject of larceny is not whether the subject is corporeal or incorporeal, but whether it is
capable of appropriation by another other than the owner. It is a valuable article of merchandise, a force of nature
brought under the control of science. Mr. Carlos secretly and with intent to deprive the company of its rightful
property, used jumper cables to appropriate the same for his own use. This constitutes larceny.
28. US vs. TAMBUNTING 41 PHIL 364
FACTS:
The Manila Gas Company installed equipment for the transmission of gas in a house at Evangelista. After
the original subscriber left, the apparatus was sealed and the services discontinued. Later Mr. Tambunting moved in.

He was a cheapskate and spliced the tubing to leech free gas for household use. Alas, the crime was discovered by
the gas company. The prosecutor filed charges and hailed Mr. Tambunting to court.
ISSUE: Whether or not gas can be the subject of larceny.
RULING:
Yes. Gas is a substance which lends itself to felonious appropriation. It is a valuable merchandise that can
be bought and sold like other personal property, susceptible of being siphoned from a larger mass and transported
from place to place.

29. INVOLUNTARY INSOLVENCY OF PAUL STROCHECKER vs. RAMIREZ


44 PHIL 933
FACTS:

The half-interest in the business (Antigua Botica Ramirez) was mortgaged with Fidelity & Surety Co. on
March 10, 1919, and registered in due time in the registry of property, while another mortgage was made with
Ildefonso Ramirez on 22 September 1919 and registered also in the registry. Raised in the lower court, the trial court
declared the mortgage of Fidelity & Surety Co. entitled to preference over that of Ildefonso Ramirez and another
mortgage by Concepcion Ayala. Ayala did not appeal, but Ramirez did.
ISSUE:
Whether or not half-interest over a business is a movable property.
RULING:
Yes. Interest in business may be subject of mortgage With regard to the nature of the property mortgaged
which is one-half interest in the business, such interest is a personal property capable of appropriation and not
included in the enumeration of movable properties in Article 414 of the Civil Code, and may be the subject of
mortgage.
30. CHAVEZ vs. PUBLIC ESTATES AUTHORITY
384 SCRA 152
FACTS:
The Public Estates Authority is the central implementing agency tasked to undertake reclamation projects
nationwide. It took over the leasing and selling functions of the DENR insofar as reclaimed or about to be reclaimed
foreshore lands are concerned. PEA sought the transfer to AMARI, a private corporation, of the ownership of 77.34
hectares of the Freedom Islands. PEA also sought to have 290.156 hectares of submerged areas of Manila Bay to
AMARI.
ISSUE:

Whether or not the transfer is valid.

RULING:

No. To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will
sanction a gross violation of the constitutional ban on private corporations from acquiring any kind of alienable land
of the public domain.
31. REPUBLIC V. COURT OF APPEALS
281 SCRA 639
FACTS:
Morato filed for a patent on a parcel of land located in Calauag, Quezon, which was approved,
provided that the land shall not be encumbered or alienated within a period of five years from the date of the
issuance of the patent. Later on, the land was established to be a portion of Calauag Bay, which was five to six feet
deep during high tides and three feet deep on low tides. The water level rose because of the ebb and flow of tides
from the bay and the storms that frequently passed through the area. Furthermore, it was observed by the Director
of Lands from his investigation, that the land of Morato was leased to Advincula and it was also mortgaged to Co.
The government sought for the revocation of the patent issued. The trial court and appellate court decided in favor
of the respondents.
ISSUE:
Whether or not the land granted under patent which was later on leased and mortgaged should be revert
back to the ownership of the State it being a foreshore land.
HELD:
Yes, foreshore lands have been defined to be that part of the land which is between the high and low water
and left dry by the flux and reflux of the tides. This is the strip of land that lies between the high and low watermarks
and that is alternatively wet and dry according to the flow of the tide. Foreshore lands may not anymore be the
subject of issuance of free patents. Under property of public ownership or dominion are foreshore lands, as provided
for in the Civil Code.
It is to be noted that when the sea moved towards the estate and the tide invaded it, the invaded property became
foreshore land and passed to the realm of public domain. In accordance with this land reclassification, the land can
no longer be subject to a pending patent application and must be returned to the State.
32. LANZAR V. DIRECTOR OF LANDS
78 SCRA 130
FACTS:
Lanzar filed for application for registration of title over a parcel of land, to which the Director of Lands
objected to as the land in question, according to him, was part of the foreshore lands. The trial court adjudicated the
land to Lanzar as the said land wasnt necessary for public utility or establishment of special industries.
ISSUE:
Whether or not the trial court erred in its decision.
HELD:
Yes, lands added to the shore by accretion and alluvial deposits caused by the action of the sea, form part of
the public domain; it cannot be appropriated nor can it be acquired by prescription. When they are no longer washed
by the water of the sea and are not necessary for purposes of public utility, or for the establishment of special
industries, or for coastguard services, then the Government shall declare them to be property of the owners of the
estate adjacent thereto and as increment thereof.
33. IGNACIO V. DIRECTOR OF LANDS
108 PHIL 335
FACTS:
Ignacio filed for the registration of title over a mangrove to which he later said that he acquired right to the
mangrove through accretion.
ISSUE:
Whether or not Ignacio has the right to declare that such land can be subject to registration and does not
anymore form part of the public dominion.
HELD:
No, only the executive and possibly the legislative departments have the authority and power to make the
declaration that any land so gained by the sea is not necessary for purposes of public utility, or for the establishment
of special industries or for Coast Guard Service otherwise, the property continues to be property of public
dominion ,further, it cannot be subject to acquisitive prescription notwithstanding the fact that it is not actually
devoted for such use or service. If no such declaration has been made by said departments, the lot in question
forms part of the public domain. Under Art. 4 of the Spanish Law of Waters of Aug. 3, 1866. lands added to the
shores by accretions and alluvial deposits caused by the action of the sea, form part of the public domain. Since
alluvial formation along the seashore is part of the public domain, it is not open to acquisition by adverse possession
by private persons.
34. VILLARICA V. COURT OF APPEALS

309 SCRA 193


FACTS:
Spouses Teofilo and Maxima Villarica, filed an application for confirmation of the title over a parcel of land
which they allege they bought from Teofilos father. Said application was opposed by the Director of Forestry
contending that the said land forms part of the public domain as it is within the unclassified area in Meycauayan and
is not available for private appropriation. The trial court dismissed the case since the property forms part of the
public domain therefore the certificate of title is void.
ISSUE:
Whether or not the land still forms part of the public domain
HELD:
Yes, there has been no showing that a declassification has been made of the land in question as disposable
or alienable. And the record indeed disclosed that applicants have not introduced any evidence which would have
led the court a quo to rule otherwise. Forest lands cannot be owned by private persons. Possession thereof, no
matter how long doesnt ripen to a registrable title. The adverse possession which may be the basis of a grant or title
or confirmation of an imperfect title refers only to alienable or disposable portions of the public domain. Thus, if the
land in question still forms part of the public forest, then possession thereof, however long, cannot convert it into
private property as it is beyond the power and jurisdiction of the cadastral court to register under the Torrens
System.
35. Villanueva v. Castaeda (G.R. No. L-61311. September 21, 1987)
FACTS:
The case involved a strip of land near public market on which stands a conglomeration of vendor stalls known
as talipapa. Said vendors was authorized by Sanggunian resolution to operate. This was protested in a civil case
causing an injunction. Pending case, municipal council adopted a new resolution which declared the subject area
the parking space and as the public plaza of the municipality. The CFI made the injunction permanent. However,
the decision apparently was not enforced because the occupants were never evicted. Stall owners were even made
to enter a lease agreement with the municipal government. After some time, clamor was raised to restore the area
into its public use. The office of the mayor attempted to demolish the stalls. The stall owners filed petition for
prohibition but was denied.
ISSUE:
Whether or not the stall owners may validly invoke the non-impairment clause as against the action to restore the
area for public use.
HELD:
No. Petition must be denied because the non-impairment clause does not apply here.
RATIO:
A public plaza is beyond the commerce of man and so cannot be the subject of lease or any other contractual
undertaking. This is elementary. Applying this well-settled doctrine, the Supreme Court ruled that the petitioners had
no right in the first place to occupy the disputed premises and cannot insist in remaining there now on the strength
of their alleged lease contracts. The problems caused by the usurpation of the place by the petitioners are covered
by the police power as delegated to the municipality under the general welfare clause. In fact, every contract
affecting the public interest suffers a congenital infirmity in that it contains an implied reservation of the police power
as a postulate of the existing legal order. This power can be activated at any time to change the provisions of the
contract, or even abrogate it entirely, for the promotion or protection of the general welfare. Such an act will not
militate against the impairment clause, which is subject to and limited by the paramount police power.
36. DACANAY v. ASISTIO, JR.
FACTS
This is a petition for mandamus to the non-action of the city government of Caloocan in accordance with the
decision of the RTC to evict the occupants of a flea market located in the streets of Caloocan.

January 5, 1979 Metropolitan Manila Commission enacted an ordinance allowing the use of streets for the

purpose of flea markets subject to several conditions.


1987 Mayor Martinez caused the demolition of the flea markets and the stallowners filed a case against such
action.
RTC dismissed the case on the ground that the streets in questions (Heros del '96, Gozon and Gonzales) are of
public dominion, hence outside the commerce of man.
After the decision came out, there was a change in the city administration and current mayor (Asistio) did not pursue
the action of the previous mayor and left the flea markets in the streets as is.
Dacanay, being a resident of Heroes del '96 filed a petition for mandamus to remove the stalls in their street
ISSUE
May public streets be leased or licensed to market stallholders by virtue of a city ordinance or resolution of
Metropolitan Manila Commission?
HELD: NO

1. A public street is property for public use hence outside the commerce of man. Being outside the commerce of
man, it may not be the subject of lease or other contract

2. The vested right of the public to use city streets for the purpose they were intended to serve such as for traveling

3. Any executive order or city resolution cannot change the nature of the public street because it is going to be
contrary to the general law

37. Cebu Oxygen & Acetylene Co., Inc. vs Judge Pascual Bercilles

66 SCRA 481 Political Law Municipal Corporation Patrimonial Property Discretionary Power
In 1968, a terminal portion of a street in Cebu was excluded in the citys development plan hence the council
declared it as abandoned and was subsequently opened for public bidding. Cebu Oxygen & Acetylene Co., Inc. was
the highest bidder at P10,800.00. Cebu Oxygen applied for the lands registration before CFI Cebu but the
provincial fiscal opposed it, so did the court later through Judge Pascual Bercilles, as it was ruled that the road is
part of the public domain hence beyond the commerce of man.
ISSUE: Whether or not Cebu Oxygen can validly own said land.
HELD: Yes. Under Cebus Charter (RA 3857), the city council may close any city road, street or alley, boulevard,
avenue, park or square. Property thus withdrawn from public servitude may be used or conveyed for any purpose
for which other real property belonging to the City may be lawfully used or conveyed. Since that portion of the city
street subject of Cebu Oxygens application for registration of title was withdrawn from public use, it follows that
such withdrawn portion becomes patrimonial property which can be the object of an ordinary contract.
Article 422 of the Civil Code expressly provides that Property of public dominion, when no longer intended for
public use or for public service, shall form part of the patrimonial property of the State.
38. Laurel vs Garcia

GR 92013 July 25, 1990.


Facts:
Petitioners seek to stop the Philippine Government to sell the Roppongi Property, which is located in Japan. It is one
of the properties given by the Japanese Government as reparations for damage done by the latter to the former
during the war.
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.
Respondents aver that Japanese Law, and not Philippine Law, shall apply to the case because the property is located
in Japan. They posit that the principle of lex situs applies.
Issue and Held:
1. WON the subject property cannot be alienated.
The answer is in the affirmative.
Under Philippine Law, 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.
39. Chiao Liong Tan vs CA Nov.19,1993 GR no.106251
Facts:
Petitioner claims that he is the owner of a motor vehicle, relying on the fact that such was registered in his
name.Petitioner's brother private respondent averred that the vehicle was for their family business use for the
delivery of machinery to its customers.Prior to such dispute private respondent asked Petitioner to look for a vehicle
and give the latter P5,000 as down payment,after a month private respondent himself paid the whole price out of a
loan of P140,000 although receipts for down payment as well as the payment of balance of the purchase price was
issued in the name of Petitioner.Allegations of private respondent has been corroborated by witnesses.
Issue:
Whether or not Petitioner is the lawful owner of the vehicle?
Whether or not Petitioner action for Replevin proper?
Ruling:
The NCC recognizes cases of Implied trust other than those enumerated therein.Thus although no specific provision
could be cited to apply to the parties,it is undeniable that an implied trust was created when the Certificate of
Registration of the motor vehicle was placed in the name of petitioner although the price thereof was not paid by him
but by private respondent.The principle that a trustee who puts a Certificate of Registration in his name cannot
repudiate the trust by relying on the registration is one of the well known limitations upon a title. A trust which derives
its strength from the confidence one reposes on another especially between brothers,does not lose that character
simply because of what appears in a legal document.
It is true that the judgment in a replevin suit must only resolve in whom is the right of possession.Primarily, the action
of replevin is possessory in character and determines nothing more than the right of possession.However when the
title to the property is distinctly put in issue by the defendant's plea and by reason of this policy to settle in one
action all the conflicting claims on the property in controversy,the question of ownership may be resolved in the
same proceeding.
40. Felipe Calub vs CA April 27,2000 GR no.115634
Facts:
The Petitioner from DENR apprehended two motor vehicles which was carrying illegally sourced lumber in violation
of the Revised Forestry Code,and thereafter confiscated them.The owners of the subject vehicles filed an action for
replevin to recover such vehicles.They succeed in the trial court averring on the ground that the Petitioner did not
act in accordance with the law.Petitioner appeals on the ground that the replevin in this case is a suit against the
State and therefore invalid.
Issue:

Whether or not Replevin may be instituted for the reconveyance of the vehicles under custodia legis? and whether
such replevin in the case is a suit against the State?
Ruling:
No.Writ of Replevin cannot be issued to recover a property lawfully taken by virtue of legal process and considered
in the custody of law. This suit is not valid because the State may not be sued without its consent or when the public
official acted in bad faith in the discharge of his duties.It has been established that the DENR acted within its
authority as provided by the applicable law.Hence,its action is the action of the State.
41 . Sarmiento vs CA Nov.16,1995 GR no.116192
Facts:
The Private respondent owns a parcel of land adjacent to this lot is one wherein petitioner had a house built
on.Trying to cause relocation of her lot,Private respondent found out that petitioner was encroaching on her
property.When the latter talked to petitioner about constructing a new fence, which will cover her true
property,petitioner refused and threatened private respondent with legal action.For fear of being sued,she sought
judicial relief.Trial court decided in her favor.Petitioner assailed that the issue was on ownership of the portion of
land thus,the action should have been an Accion Reivindicatoria and not forcible entry.
Issue:
Whether or not Accion Reivindicatoria the proper remedy?
Ruling:
Yes.The facts reveal that the action is neither of forcible entry nor of unlawful detainer,but essentially involves a
boundary dispute which must be resolved in an Accion Reivindicatoria on the issue of ownership over the portion of
the land. Forcible entry and unlawful detainer cases are distinct actions.Private respondent cannot belatedly claim
that Petitioner's possession of the controverted portion was by mere tolerance.Complaint did not characterize
Petitioner's alleged entry on the land whether legal or illegal.Complainant admitted also the fact that the fence had
already pre-existed on the lot when she acquired the same.
42. Bongato vs Malvar 387 SCRA 327
Facts:
Private respondent spouses filed a complaint for forcible entry against Petitioner for alledging unlawful entry in a
parcel of land and constructed a house of light materials thereon. Trial court ordered Petitioner to vacate the lot and
issued an order as to determine the location of the houses involved in the civil cases the same with the one in
criminal case for anti-squatting.Judge made a warning that there will be no extension to be granted for the
submission of the survey and failure to do so would prompt the issuance of the writ of execution. Upon failure of
petitioner to submit a survey report,the judge ordered the return of the records of the case to the court of origin for
disposal.
Issue: Whether or not Forcible entry the proper action?
Ruling:
In Forcible entry ,one employs FISTS (fraud,intimidation,strategy,threat,stealth) to deprive another physical
possession of land or building thus,plaintiff must allege and prove prior physical possession of the property in
litigation until deprived thereof by the defendant. Sole question for resolution hinges on the physical or material
possession of the property.Neither a claim of juridical possession nor an averment of ownership by the defendant
can outrightly prevent the court from taking cognizance of the case.Ejectment cases proceed independently of any
claim of ownership and the plaintiff needs merely to prove prior possession on de facto and undue deprivation
thereof.
In the present case,the lower court lacked jurisdiction .First,the house of petitioner was actually situated in the lot
subject of the anti-squatting case and not on the lot of the spouses.Second,house has been in existence prior to the
alleged forcible entry.Third,respondent's had knowledge of the existence of the house long before the alleged date
of entry.
43. Cagayan De Oro Landless Residents vs CA 254 SCRA 220
Facts:
A lot in dispute was formerly classified as timber land until the time it was reclassified by the government as public
land. Petitioner were authorized to survey the land for subdivision into residential lots. Meanwhile, NHA initiated
expropriation proceeding into the lot. Petitioner intervened and said that instead of being paid through money it
preferred acquisition of any housing area of NHA.Upon learning of the annulment of the title over the same land
NHA sought the suspension of expropriation proceeding.Thereafter,SC finally resolved by annulling the title and
declaring the subject lot to be public land.The Bureau was furnished with the decision and according to the
investigation,members of the Petitioner was found settling in the land. A presidential proclamation was then issued
reserving entire subject land for a slum improvement project of the NHA,leading to the rejection of the survey
submitted by the Petitioner and the demolition of settlement constructed by the members of Petitioner,and prompted
the latter to file a case for forcible entry on which trial court decided on its favor.During the pendency of the civil
case, a special patent was issued for the entire subject land.The petitioner sought the execution of the decision
which was countered by a case for quieting of title by NHA.
Issue: Whether or not writ of injunction is proper in this case?
Ruling:
NHA was entitled to the Writ of Injunction because of the pendency of an appeal for forcible entry; the special patent
issued to it by the president over the parcel of land.As an extraordinary remedy,injunction is calculated to preserve
or maintain the status quo of things and is generally availed of to prevent actual or threatened acts until the merits of
the case can be heard.As such injunction is accepted as a strong arm of equity or a transcendent remedy to be
used cautiously,as it effects the respective rights of the parties and only upon full conviction on the part of the court
of its extreme necessity.
44. De la Cruz vs. Court of Appeals, 286 SCRA 230

FACTS:
Petitioner contracted a loan from Villanuevas parents, mortgaging the subject parcel of land as security.
Years after, the parcel of land became the subject for an application for registration by the Ramos brothers. They
insisted that they had a better claim over the land than petitioner. After trial, the case was dismissed as the land has
not been reclassified for other purposes and remained a part of the forest reserve.
Consequently, the
brothers were able to secure reclassification of the land and the same was registered in their name as owners,
and they later sold the land to Villanueva. Thereafter, petitioner came to know of the registration and filed
a complaint, which was dismissed.
HELD:
Petitioner possessed and occupied the land after it had been declared by the government as part of the
forest reserve. In fact, the land remained as part of the forest reserve until such time it was reclassified into
alienable or disposable land at the behest of the Ramoses. A positive act of the government is needed to declassify
land which is classified as forest, and to convert it into alienable and disposable land for other purposes.
Until such lands have been properly declared to be available for other purposes, there is no disposable
land to speak of. Absent the fact of reclassification prior to the possession and cultivation in good faith
by petitioner, the property occupied by him remained classified as forest or timberland, which he could not
have acquired by prescription
45. Philippine Economic Zone Authority vs. Fernandez, 358 SCRA 489
FACTS:
The subject parcel of land was subject of an expropriation proceeding entered into by EPZA and the newly
registered owners of the land. Private respondents sought the nullity of the documents executed as he
alleged
that he was excluded from the extrajudicial partition of the estate, originally owned by their predecessors.
Petitioner sought the dismissal of the complaint as it was allegedly barred by prescription. This was denied by the
trial court and the CA.
HELD:
An action for reconveyance resulting from fraud prescribes 4 years from the discovery of the fraud; such
discovery is deemed to have taken place upon the issuance of the certificate of title over the property. Registration
of real property is considered constructive notice to all persons, and thus, a four-year period shall be counted
therefrom. The action for reconveyance based on fraud has already prescribed.
Even an action for reconveyance based on an implied constructive trust would have already prescribed.
The imprescriptibility of an action for reconveyance based on implied trust applies only when the plaintiff is
in
possession of the property. However, private respondents are not in possession of the disputed property. In
fact, they dont even claim to be in possession of it, even if to so would enable them to justify the
imprescriptibility of their action.
Furthermore, reconveyance is a remedy to those whose property has been wrongfully registered in the name of
another. Such recourse however cannot be availed of once the property has passed to an innocent
purchaser for value. For an action for reconveyance to prosper, the property should not have passed into the
hands of an innocent purchaser for value.
46. IDOLOR V CA (351 SCRA 402)
FACTS:
Teresita Idolor executed in favor of private respondent Gumersindo De Guzman a Deed of Real Estate Mortgage
with right of extra-judicial foreclosure upon failure to redeem the mortgage.
Upon the failure of the petitioner to settle her mortgage, respondents went to the Barangay which resulted into a
Kasunduang Pag-aayos which noted that the petitioner shall pay within 90 days and her failure would warrant
the foreclosure of the property with the right to repurchase within one year without interest.

Petitioner failed to comply with her undertaking; thus respondent Gumersindo De Guzman filed an extra judicial
foreclosure of the real estate mortgage. The property was sold in a public auction to respondent Gumersindo and
the Certificate of Sale was registered.
After more than a year, petitioner filed with the Regional Trial Court of Quezon City, Branch 220, a complaint for

annulment of Sheriffs Certificate of Sale with prayer for the issuance of a temporary restraining order (TRO) and a
writ of preliminary injunction.Trial court subsequently issued the TRO and the writ.
CA anulled the writ
ISSUES:
1. Whether or not the Petitioner has proprietary rights to the writ of preliminary injunction
2. Whether or not the Kasunduan was a form of novation
HELD:
Injunction is a preservative remedy aimed at protecting substantive rights and interests. Before an injunction can be
issued, it is essential that the following requisites be present:
1. there must be a right in esse or the existence of a right to be protected;
2. the act against which the injunction is to be directed is a violation of such right.
Petitioner had one year redemption period from the registration of the sheriffs sale to redeem the property but she
failed to exercise this right. Hence, the right no longer exists.
There was no novation that was brought by the Kasunduan, since it is essentially the same agreement as the first,
only that the conditions were changed a little. Novation requires the extinguishment of the obligation, here the
original obligation was not extinguished.
47. Lucero vs. Luot
GR L-16995
October 28, 1968
Facts:
The movant-appellant (Lucero) and oppositors-appellants (Luot, et al) are parties in a land registration proceedings.
The land registration court awarded the subject property to Lucero and was granted a writ of possession. The
oppositors claim that there were defects in the reconstitution of records and that the motion was not under oath.
However, the court claimed this was untenable. It is the ministerial duty of the court to issue a writ of possession to
whom the subject property was to be awarded, in accordance with Land Registration Act 496, as amended.
ISSUE: Whether or not the writ of posessesion should be awarded to Lucero
HELD: Yes, it should be awarded. It was in accordance with the law."the issuance of a writ of possession is only a
matter of course if nothing in the past has been issued in favor of the registered owner." It is equally true, as likewise
mentioned therein, that there is "no period of prescription as to the issuance of a writ of possession, ..."
There would be an avoidance of the inconvenience and the further delay to which a successful litigant would be
subjected if he were compelled "to commence other actions in other courts for the purpose of securing the fruits of
his victory."
We have heretofore held that a writ of possession may be issued not only against the person who has been
defeated in a registration case but also against anyone adversely occupying the land or any portion thereof during
the land registration proceedings ... The issuance of the decree of registration is part of the registration proceedings.
In fact, it is supposed to end the said proceedings. Consequently, any person unlawfully and adversely occupying
said lot at any time up to the issuance of the final decree, may be subject to judicial ejectment by means of a writ of
possession and it is the duty of the registration court to issue said writ when asked for by the successful claimant.

48. VENCILAO V. VANO


182 SCRA 492
FACTS:
Three consolidated cases are resolved, given that there are same parties and parcels of land in question.

On the first case, it was tackled that the heirs of the late Juan Reyes filed an application for registration of the
subject parcel of land.
A reconveyance case was filed against them by petitioners on the ground that
they are true owners of thereof.
The second case involved the death of the administratix of the estate of the owner of the subject land. After her
death, a TCT was issued in the name of Pedro Luspo, and another was issued in the name of several persons. A
writ of possession was issued by the trial court against the petitioners.
Issue: WON a writ of possession may be issued against unlawful and adverse occupants in the land
HELD:Yes.
Petitioners contend that they were not claimants-oppositors nor defeated oppositors in the said land
registration case, as their names dont appear in the amended application for registration. They have occupied the
subject parcels of land for more than 30 years which began long before the application for registration; and
that even after registration, they continued to possess the land.
In a registration case, the judgment confirming the title of the applicant and ordering its registration in his
name necessarily carried with it the right of ownership. The issuance of the writ of possession is therefore
sanctioned by existing laws in this jurisdiction and by the generally accepted principle upon which the
administration of justice rests. A writ of possession may be issued not only against the person who has been
defeated in a registration case but also against anyone unlawfully and adversely occupying the land or any
portion thereof during the land registration proceedings up to the issuance of the final decree.
49. GERMAN MANAGEMENT AND SERVICES V. COURT OF APPEALS
177 SCRA 495
FACTS:
Spouses Jose issued a power of attorney in favor of petitioner for the development of their parcel of land into
a subdivision. Private respondents were occupying the land and petitioner advised them to vacate but they
refused.
Thereafter, petitioner continued their development and construction. Respondents then filed a
case for forcible entry. The trial court dismissed the complaint and this was reversed by the CA.
Issue: WON the possessors of a land may file a case of forcible entry even against the owner himself
Held:
Notwithstanding petitioners claim that it was duly authorized by the owners to develop the subject property,
private respondents as actual possessors, can commence a forcible entry case against petitioner because
ownership is not in issue. Forcible entry is merely a quieting process, and never determines the actual title to an
estate. Title is not involved.
Although admittedly petitioner may validly claim ownership based on the muniment of title it presented, such
evidence doesnt responsively address the issue of prior actual possession raised in a forcible entry case. It must
be stated that regardless of the actual condition of title to the property, the party in a peaceable quiet possession
shall not be turned out by a strong hand, violence or terror. Thus, a party who can prove prior possession can
recover such possession even against the owner himself. Whatver may be the character of his prior possession, if
he has in favor priority in time, he
has security that entitles him to remain on the property until he has been lawfully ejected by a person having a
better right by accion publiciana or accion reivindicatoria.
50.CAISIP V PEOPLE
36 scra 17
FACTS:
Spouses Gloria Cabalag and Marcelino Guevarra are people who cultivated a parcel of land known as Lot 105-A of

Hacienda Palico situated in sitio Bote-bote, barrio Tampisao, Nasugbu, Batangas. The overseer of the hacienda is
petitioner Felix Casipi and the owner of the same is Roxas y Cia. The latter acquired a court ruling against the
spouses Gloria and Marcelino for forcible entry which orders them to vacate the premises within 20 days. The order
was carried out June 6, 1959 (so they had until June 26 to vacate it.) On June 17, Gloria was seen by Felix Caisip
harvesting their crops in Lot 105-A. The Latter bade her to stop what she was doing and to leave the premises.
When Gloria refused, Caisip called for Sgt. Rjales and Cpl. Villadelrey to help him shoo her away. Gloria stuck to her
attitude and still refused to stop and leave so the two police officers, by means of force, stopped her and dragged
her away (they also tried to threaten her by drawing their guns :). As a result, the clothes of Gloria got torn. One of
Glorias neighbours caught sight of the event and asked the officers to release her. Gloria was later turned over to
the police on duty for interrogation.
A case filed against the petitioners, Caisip and the officers, for Grave Coercion (Petitioners also filed grave coercion
and unjust vexation against Gloria after 8 days maybe just to get back at her- just in case sir asks.) One of their
defenses was ART. 429 (including the doctrine of self help.) The petitioners were found guilty by the lower court thus
this appeal.
ISSUE:
1) Whether or not Art. 429 can be used as a defense?
RULING:
Article 429 is inapplicable to the case at bar. The complainant didnt usurp or invade said lot. She had merely
remained in possession thereof, even though the hacienda owner may have become its co-possessor. Appellants
didnt repel or prevent an actual or threatened unlawful physical invasion or usurpation of the property. They
expelled the complainant from a property on which she and her husband were in possession even before the
action for forcible entry was filed against them.

51. HEIRS OF VENCILAO V. CA


FACTS:
On Feb 12, 1990, the heirs of Vencilao filed a complaint to quiet the title and recover a piece of land against spouses
Gepalgo.
Said heirs asserted that they acquired the land from their father who was in open, peaceful and notorious enjoyment
of the same. They presented tax declarations to prove said ownership
On the other hand, the Gepalgo spouses denied the claim and for proof as registered owners, presented TCT No.
16042 which they acquired on public auction from the PNB.
RTC ruled in favor of Vencilao because the latter had been in possession, cultivation and enjoyment for more than
30 years- long before a title was ever issued to the Gepalgos.
Upon appeal, the CA reversed and awared the property to Gepalgos because the latter were buyers in good faith
and holders in due course. Furthermore, they held a Torrens Title. That was the gold standard of ownership for
registered land.
Naturally, the heirs of Vencilao trooped to the Supreme Court.
ISSUE:
Whether or not the Gepalgos had better right to the land.
HELD:
No.The RTC erroneously found for the petitioners. True, the Vencilaos enjoyed the property for more than 30 years.
However, prescription does not run against registered land. No one may acquire by prescription or adverse

possession land that is titled and registered even if occupation is adverse, open and notorious. A Certificate of Title
is absolute and unbeatable evidence of ownership in favor of the person whose name appears upon it. It binds the
whole world.

52. HEIRS OF JUAN OCLARIT v. CA


FACTS:
Juan Oclarit purchased an unregistered land in Bohol for P100 from Macalos. This particular land did not have
specified boundaries, as it was only indicated that the borders were a brook, lands of Gales, and another of Baja. He
subsequently purchased 5 more unregistered parcels of land from Gales, one of which was an irrigated rice and
coconut lands, which is now the subject of the action.

Balasabas apparently entered the land about 15 years later and replaces the J.O. labels on top of the trees with
F.G. (Felipa Gales, his mother). The heirs of Oclarit then filed an action for the quieting of the title and damages
against Balasabas, averring that Oclarit exercised dominion and ownership openly, peacefully, adversely and
uninterrupted. The deceased even planted coconut trees and other crops on the land, enjoyed their fruits and even
paid realty tax on the land.

RTC initially found for Balasabas after having a Commissioner survey the lands and discovered the discrepancy
between the boundaries indicated in the Deed of Sales and the one written on the tax declarations. The CA,
however, reversed the decision, and ruled that Oclarit is the rightful owner of the land.
ISSUE:
Whether or not the lands claimed by Balasabas are actually foreign and alien to the lands claimed by Oclarit,
making these lands actually his property?
HELD:
While it is true that tax declarations are not strong proof to claim ones property as his, it will stand in court should
these tax declarations be coupled with ones exercise of ownership, such as those proven by Oclarits heirs.

Furthermore, although what defines a piece of land is not the area mentioned in its descriptions, but the boundaries
laid down, in cases such as this one, where the boundaries are unclear, the actual size of the land gains importance.

53. DOMINICA CUTANDA v. HEIRS OF ROBERTO CUTANDA


FACTS:
Roberto Cutanda owned 2 parcels of land in Bohol, and upon his death, his children became owners of said land by
inheritance. They left Bohol and established residence in Leyte. In 1988, they returned to Bohol hoping to work on
the land that was left to them. However, they discovered that these lands were already in the possession of their
relativesheirs of their uncles and aunts.

Petitioners averred that the land in question is actually owned by their late uncle, Anastacio Cutanda, who died
without children, and left the lands to his siblings, one of which was Roberto Cutanda.
Furthermore, they claim rightful ownership of the land as they have been in open, contiguous, adverse, and
uninterrupted possession of these for about 55 years.

The trials court found for the Petitioners. However, the CA reversed the RTCs decision.
ISSUE:
Whether or not the rights of the heirs of Roberto Cutanda have already prescribed, thus, giving rightful ownership to
the Petitioners?
HELD:
The action brought by the respondents to the court was one of accion publiciana to recover the right to possession
and to be declared rightful owners of the land. Since the complaint actually put in issue the ownership of the land, it
should thus be treated properly as an accion reinvindicatoria.

Nevertheless, both have already prescribed as these rights are extinguished if not brought within 10 years from
dispossession. Therefore, the petitioners have indeed acquired possession and ownership of the land in question by
prescription, as the respondents failed to bring this action only 55 years later.

54. SPOUSES LUIS CRUZ V. SPOUSES ALEJANDRO FERNANDO SR.


DECEMBER 9, 2005
FACTS:
Spouses Cruz were the occupants of a front portion of a property. An accion publiciana was filed against
them by spouses Fernando, alleging that they are the rightful owners thereof and asking that the Cruz
spouses vacate the land and pay reasonable rent for the use thereof. The RTC ruled in favor of the spouses
Fernando.
HELD:
The absence of any formal deed of conveyance is a strong indication that the parties didnt intend immediate transfer
of ownership.
Petitioners dont have a superior right of ownership or possession to speak of. Their occupation of the property was
merely through the tolerance of the owners. Evidence on record shows that petitioners and their
predecessors were able to live and build their house on the property through the permission and kindness of
the previous owner. They have no title or at the very least, a contract of lease over the property. Based as it is was
on mere tolerance, petitioners possession could neither ripen into ownership nor operate to bar any action
by respondents to recover absolute possession thereof. A person who occupies the land of another at the latters
forebearance or permission without any contract between them is necessarily bound by an implied promise that
he will vacate upon demand.
55. PEDRO P. PECSON v. COURT OF APPEALS, SPS. NUGUID
FACTS:
Pedro Pecson was the owner of a commercial lot on which he built a 4-door-2-storey apartment building. He failed to
pay realty taxes amounting to P12k so the lot was sold at public auction to Mamerto Nepomuceno who later on sold
it to the Sps. Nuguid.
Pecson challenged the validity of the auction before the RTC but was dismissed but the RTC held that the apartment
bldg was not subject of the litigation. On appeal, the CA appealed in toto the decision of the RTC that the apartment
bldg was not included in the auction sale.
After an entry of judgment was made, the Sps. Nuguid filed a motion with the RTC for a motion for delivery of
possession of the lot and the apartment bldg citing Art. 546 of the CC. The RTC issued an order declaring that the
owner of the lot and apartment bldg were the Sps. Nuguid and to pay the construction cost of the apartment before a

writ of possession would be issued and to pay rent to the spouses. Pecson moved for reconsideration but the Trial
court did not act on it, instead it issued a writ of possession. The CA affirmed in part the decision declaring the cost
of construction can be offset from the amount of rents to be collected and that since Sps. Nuguid opted to
appropriate the improvement, Pecson is entitled to be reimbursed the cost of construction at the time it was built in
1965 which is at P53k and the right the retain the improvement until full indemnity is paid.
Thus the case at bar.
ISSUE:
Whether or not Art. 448 and 546 applies in the case at bar
HELD: YES
> With regard to Art. 448, the provision on indemnity may be applied in analogy. Whoever is the owner of the land
may appropriate whatever has been built, planted or sown after paying indemnity. However, it does not apply when
the owner of the land is also the builder of the works on his own land who later on loses ownership by sale or
donation.
> Art. 546 refers to the necessary and useful expenses which shall be refunded to the possessor in good faith with
right of retention. However, it does not state how to determine the value of the useful improvement. The respondents
[court and private respondents alike] espouses as sufficient reimbursement the cost of construction in 1965,
however, this is contrary to previous rulings which declares that the value to the reimbursed should be the present
market value of said improvements so as not to unjustly enrich either of the parties. [the trial court erred in ordering
Pecson to pay rent since the Sps. Nuguid has yet to pay the indemnity therefore Pecson has the right to retain the
improvements and the income thereof. The case was remanded to the trial court for determination of the current
market value of the apartment bldg and ordered the Sps to pay Pecson otherwise it shall be restored to Pecson until
payment of indemnity.]

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