1

CHAPTER I—INTRODUCTION AND PRELIMINARY CONSIDERATIONS

CASE FACTS/ ISSUE RULING
Importance of classification/ mixed property/ semi-movables
Leung Yee v Strong Machinery - The "Compañia Agricola Filipina" (CAF) bought a - The building of strong materials in which the rice-cleaning machinery was installed by the "Compañia Agricola
rice-cleaning machinery from the defendant Filipina" was real property, and the mere fact that the parties seem to have dealt with it separate and apart
machinery company, and executed a chattel from the land on which it stood in no wise changed its character as real property.
mortgage including the building of strong materials
in which the machinery was installed to secure
payment, without any reference to the land on
which it stood. The Chattel was foreclosed due to
non-payment and the machinery, including the
building, was sold by the sheriff which was bought
by Strong Machinery. The said sale was annotated
in the same registry on December 29, 1913. Later
on, CAF sold the lot where the building stood to
Strong Machinery thru a deed of sale which was
executed in a public document but was not
registered. Strong Machine took possession of the
building and the land. Leung Yee, another creditor
of CAF, bought the same building where the
machines were installed and registered in the land
registry of the Province of Cavite
Antonio Punzalan v Remedios - Antonio Punsalan, Jr., was the former registered - The warehouse claimed to be owned by petitioner is an immovable or real property as provided in article
Lacsamana owner of a parcel of land. In 1963, petitioner 415(l) of the Civil Code. Buildings are always immovable under the Code. A building treated separately from
mortgaged said land to respondent PNB (Tarlac the land on which it stood is immovable property and the mere fact that the parties to a contract seem to have
Branch), but for failure to pay said amount, the dealt with it separate and apart from the land on which it stood in no wise changed its character as immovable
property was foreclosed on December 16, 1970. property
However, the bank secured title thereto only on - While it is true that petitioner does not directly seek the recovery of title or possession of the property in
December 14, 1977. In the meantime, in 1974, question, his action for annulment of sale and his claim for damages are closely intertwined with the issue of
while the properly was still in the alleged ownership of the building which, under the law, is considered immovable property, the recovery of which is
possession of petitioner and with the alleged petitioner's primary objective. The prevalent doctrine is that an action for the annulment or rescission of a sale
acquiescence of respondent PNB (Tarlac Branch), of real property does not operate to efface the fundamental and prime objective and nature of the case, which
and upon securing a permit from the Municipal is to recover said real property. It is a real action.
Mayor, petitioner constructed a warehouse on said
property. Petitioner then leased the warehouse to
one Hermogenes Sibal for a period of 10 years
starting January 1975.
- On July 26, 1978, a Deed of Sale was executed
between respondent PNB (Tarlac Branch) and
respondent Lacsamana over the property.
(petitioner filed “annulment of deed of sale with
damages” against respondents)
Standard Oil Co. v Jaranilo - de Vera was the lessee of a parcel of land situated - The Court explained that "the duties of a register of deeds in respect to the registration of chattel mortgages
in the City of Manila and owner of the house of are of a purely ministerial character, and no provision of law can be cited which confers upon him any judicial
strong materials built thereon, upon which date she or quasi-judicial power to determine the nature of any document of which registration is sought as a chattel
executed a document in the form of a chattel mortgage."
mortgage, purporting to convey to Standard Oil
Company of New York by way of mortgage the lot
and building
- Standard Oil caused the same to be presented to
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,
Jaramillo opined that it was not chattel mortgage,
for the reason that the interest therein mortgaged
did not appear to be personal property

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Davao Sawmill Co. v Castillo
Board of Assessment Appeals
v Manila Electric
Makati Leasing and Finance
Corp v Wearever Textile Mills,
Inc
Mindanao Bus Company v City
Assessor
2
- the land upon which the business of Davao Saw - It said machinery which is movable in its nature only becomes immobilized when placed in a plant by the
Mill Co., Inc., was conducted belonged to another owner of the property or plant, but not when so placed by a tenant, a usufructuary, or any person having only
person. On the land the sawmill company erected a temporary right, unless such person acted as the agent of the owner
a building which housed the machinery used by it.
Some of the implements thus used were clearly
personal property.
- Contract of lease between sawmill and owner of
land: “…That on the expiration of the period agreed
upon, all the improvements and buildings
introduced and erected by the party of the second
part 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 wherein the Davao Light & Power
Co., Inc., was the plaintiff and the Davao, Saw, Mill
Co., Inc., was the defendant, a judgment was
rendered in favor of the plaintiff in that action
against the defendant; a writ of execution issued
thereon, and the properties now in question were
levied upon as personalty by the sheriff.
- MERALCO's electric power is generated by its - It was held that the steel towers or supports in question, do not come within the objects mentioned in
hydro-electric plant and is transmitted to the City of paragraph 1, because they do not constitute buildings or constructions adhered to the soil.
Manila by means of electric transmission wires, - They are not constructions analogous to buildings nor adhering to the soil. As per description, given by the
running from the province of Laguna to the said lower court, they are removable and merely attached to a square metal frame by means of bolts, which when
City. These electric transmission wires which carry unscrewed could easily be dismantled and moved from place to place.
high voltage current, are fastened to insulators - They cannot be included under paragraph 3, as they are not attached to an immovable in a fixed manner, and
attached on steel towers constructed by they can be separated without breaking the material or causing deterioration upon the object to which they
respondent at intervals, from its hydro-electric plant are attached.
in the province of Laguna to the City of Manila. The - the steel towers or supports do not fall under paragraph 5, for they are not machineries or receptacles,
respondent Meralco has constructed 40 of these instruments or implements, and even if they were, they are not intended for industry or works on the land as
steel towers within Quezon City, on land belonging the petitioner is not engaged in an industry or works on the land in which the steel supports or towers are
to it. On November 15, 1955, petitioner City constructed
Assessor of Quezon City declared the steel towers
for real property tax.
- It appears that in order to obtain financial - If a house of strong materials, like what was involved in the Tumalad case, may be considered as personal
accommodations from herein petitioner Makati property for purposes of executing a chattel mortgage thereon as long as the parties to the contract so agree
Leasing and Finance Corporation, the private and no innocent third party will be prejudiced thereby, there is absolutely no reason why a machinery, which
respondent Wearever Textile Mills, Inc., discounted is movable in its nature and becomes immobilized only by destination or purpose, may not be likewise treated
and assigned several receivables with the former as such. This is really because one who has so agreed is estopped from the denying the existence of the
under a Receivable Purchase Agreement. chattel mortgage
- To secure the collection of the receivables - It must be pointed out that the characterization by the private respondent is indicative of the intention and
assigned, private respondent executed a Chattel impresses upon the property the character determined by the parties.
Mortgage over certain raw materials inventory as - Therefore, the questioned machinery should be considered as personal property
well as a machinery
- Upon default, Makati Leasing filed a petition for
judicial foreclosure of the properties mortgaged.
Acting on Makati Leasing’s application for replevin,
the lower court issued a writ of seizure
- Mindanao Bus Company is a public utility engaged - The tools and equipments in question in this instant case are, by their nature, not essential and principle
in transporting passengers and cargoes by motor municipal elements of petitioner's business of transporting passengers and cargoes by motor trucks. They
trucks in Mindanao Island are merely incidentals — acquired as movables and used only for expediency to facilitate and/or improve its
- City Assessor of Cagayan assessed the service.
machineries of the respondent, which are either - The case at bar,the equipments in question are destined only to repair or service the transportation business,
sitting on cement or wooden platforms, as real which is not carried on in a building or permanently on a piece of land, as demanded by the law. Said
properties for P4,400. Petitioner is the owner of the equipments may not, therefore, be deemed real property.
land where it operates and garage for its buses, a
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Caltex Phils Inc v Central Board
of Assessment Appeals and
City Assessor of Pasay
Serg’s Products Inc v PCI
Leasing and Finance, Inc
Tumalad v Vicencio
Ago v CA and Grace Park
Engineering Inc
repair shop; blacksmith and carpentry shops where
the buses are made; body constructed and
repaired for it to be serviceable.
- The machines and equipment consists of
underground tanks, elevated tank, elevated water
tanks, water tanks, gasoline pumps, computing
pumps, water pumps, car washer, car hoists, truck
hoists, air compressors and tireflators
- The said machines and equipment are loaned by
Caltex to gas station operators under an
appropriate lease agreement or receipt. It is
stipulated in the lease contract that the operators,
upon demand, shall return to Caltex the machines
and equipment in good condition as when received,
ordinary wear and tear excepted
- The lessor of the land, where the gas station is
located, does not become the owner of the
machines and equipment installed therein. Caltex
retains the ownership thereof during the term of the
lease. The city assessor of Pasay City
characterized the said items of gas station
equipment and machinery as taxable realty
- Serg's Products, Inc. (SPI) and PCI Leasing &
Finance, Inc. entered into a lease agreement
providing that the machines in question were to be
considered as personal property, although the
same were essential and principal elements in the
chocolate-making business of SPI.
- Lease Agreement: “12.1 The PROPERTY is, and
shall at all times be and remain, personal property
notwithstanding that the PROPERTY or any part
thereof may now be, or hereafter become, in any
manner affixed or attached to or embedded in, or
permanently resting upon, real property or any
building thereon, or attached in any manner to what
is permanent.”
- PCI filed a complaint against SPI for sum of money,
with an application for a writ of replevin. The sheriff
then proceeded to seize the machines in question.
SPI contended that the subject machines used in
their factory were not proper subjects of the writ of
replevin because they were in fact real property
having become immobilized by destination
- defendants-appellants executed a chattel
mortgage in favor of plaintiffs-appellees over their
house of strong materials; mortgage was
registered in the Registry of Deeds of Manila
- Defendants-appellants defaulted in paying, the
mortgage was extrajudicially foreclosed, and on 27
March 1956, the house was sold at public auction
pursuant to the said contract. As highest bidder,
plaintiffs-appellees were issued the corresponding
certificate of sale
- Ago bought sawmill machineries and equipments
from respondent Grace Park Engineering, Inc.,
executing a chattel mortgage over said
machineries and equipments to secure the
payment of a balance remaining unpaid
3
- We hold that the equipments in question are not absolutely essential to the petitioner's transportation
business, and petitioner's business is not carried on in a building, tenement or on a specified land, so said
equipment may not be considered real estate within the meaning of Article 415 (c)
- This issue has to be resolved primarily under the provisions of the Assessment Law and the Real Property
Tax Code
- We hold that the said equipment and machinery, as appurtenances to the gas station building or shed owned
by Caltex (as to which it is subject to realty tax) and which fixtures are necessary to the operation of the gas
station, for without them the gas station would be useless, and which have been attached or affixed
permanently to the gas station site or embedded therein, are taxable improvements and machinery within the
meaning of the Assessment Law and the Real Property Tax Code
- Caltex invokes the rule that machinery which is movable in its nature only becomes immobilized when placed
in a plant by the owner of the property or plant but not when so placed by a tenant, a usufructuary (Davao
Sawmill case) That ruling is an interpretation of paragraph 5 of article 415 of the Civil Code regarding
machinery that becomes real property by destination
- Improvements on land are commonly taxed as realty even though for some purposes they might be
considered personalty. "It is a familiar phenomenon to see things classed as real property for purposes of
taxation which on general principle might be considered personal property
- The Court has held that contracting parties may validly stipulate that a real property be considered as
personal. After agreeing to such stipulation, they are consequently estopped from claiming otherwise. Under
the principle of estoppel, a party to a contract is ordinarily precluded from denying the truth of any material
fact found therein
- It should be stressed, however, that our holding — that the machines should be deemed personal property
pursuant to the Lease Agreement – is good only insofar as the contracting parties are concerned. Hence,
while the parties are bound by the Agreement, third persons acting in good faith are not affected by its
stipulation characterizing the subject machinery as personal. In any event, there is no showing that any
specific third party would be adversely affected.
- "it is undeniable that the parties to a contract may by agreement treat as personal property that which by
,nature would be real property", citing Standard Oil Company of New York vs. Jaramillo.
- Further, the doctrine of estoppel applies in this case as against the defendants in which they are estopped
from taking an inconsistent ground by claiming otherwise. Having previously treated such property as personal
property and that they themselves try to assail the validity as debtor-mortgagor (being privy to the contract)
and not third persons thus, doctrine of estoppel applies
- It was held that the sawmill machineries and equipments are real estate properties. The record shows that
after petitioner had purchased the sawmill machineries and equipments, he assigned the same to the Golden
Pacific Sawmill, Inc. in payment of his subscription to the shares of stock of said corporation. Thereafter, the
sawmill machineries and equipments were installed in a building and permanently attached to the ground. By
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Fungible v Non-Fungible
US v Ignacio Carlos
Luis Marcos Laurel v Ho. - Laurel was charged with Theft under Art. 308 of the
Abrogar
Principles governing property of public dominion
Mun of Cavite v Rojas
- Ago defaulted in his payments and so, in 1958,
respondent Grace Park Engineering, Inc. instituted
extrajudicial foreclosure proceedings on the
mortgage in the Court of First Instance of Agusan
- The herein respondent Provincial Sheriff of
Surigao, acting upon the writ of execution issued
by the lower court, levied upon and ordered the
sale of the sawmill machineries and equipments.
These machineries and equipments had been
taken to and installed in a sawmill building owned
by the Golden Pacific Sawmill, Inc., to whom,
petitioner alleges, he had sold them on February
16, 1959 (a date after the decision of the lower
court but before levy by the Sheriff)
- Ignacio Carlos has been a consumer of electricity
furnished by the Manila Electric Railroal and Light
Company
- Representatives of the company believing that
more light is consumed than what is shown in the
meter installed on the pole outside Carlos’ house to
compare actual consumption and found out that the
latter used a jumper.
- Further, a jumper was found in a drawer of a small
cabinet in the room the of defendant’s house were
a meter was installed. In the absence of any
explanation for Carlos’ possession of said device,
the presumption raised was that Carlos was the
owner of the device whose purpose was to deflect
the current from the meter.
RPC for allegedly taking, stealing, and using
PLDT's international long distance calls by
conducting International Simple Resale (ISR) – “a
method of outing and completing international long-
distance calls using lines, cables, antennae, and/or
air wave frequency which connect directly to the
local/domestic exchange facilities of the country
where the call is destined”. PLDT alleged that this
service was stolen from them using their own
equipment and caused damage to them amounting
to P20,370,651.92
- Averred that international long distance calls etc
are not personal properties under Article 308
- the provincial fiscal of Cavite, representing the
municipality of that name, filed a complaint in the
Court of First Instance of said province alleging that
the plaintiff municipal corporation had exclusive
right, control and administration over the streets,
lanes, plazas, and public places of the municipality
of Cavite; that the defendants, by virtue of a lease
secured from the plaintiff municipality, occupy a
parcel of land 93 square meters in area that forms
part of the public plaza known under the name of
Soledad, the defendants having constructed
thereon a house, said defendants being
furthermore obligated to vacate the leased land
4
reason of such installment in a building, the said sawmill machineries and equipments became real estate
properties
- the Court held that by the installation of the sawmill machineries in the building of the Golden Pacific Sawmill,
Inc., for use in the sawing of logs carried on in said building, the same became a necessary and permanent
part of the building or real estate
- Considering that the machineries and equipments in question, valued at more than P15,000.00, appear to
have been sold without the necessary advertisement of sale by publication in a newspaper, as required in
Sec. 16 of Rule 39 of the Rules of Court, the sale made by the sheriff must be declared null and void
- The true test of what may be stolen is not whether it is corporeal or incorporeal, but whether, being possessed
of value, a person other than the owner, may appropriate the same. Electricity, like gas, is valuable
merchandise, and may thus be stolen.
- Any personal property, tangible or intangible, corporeal or incorporeal, capable of appropriation can be the
object of theft.
- The only requirement for a personal property to be the object of theft under the penal code is that it be capable
of appropriation. It need not be capable of "asportation", which is defined as "carrying away". To appropriate
means to deprive the lawful owner of the thing.
- In the instant case, the act of conducting ISR operations by illegally connecting various equipment or
apparatus to private respondent PLDT's telephone system, through which petitioner is able to resell or re-
route international long distance calls using respondent PLDT's facilities constitutes all three acts of
subtraction
- The business of providing telecommunication or telephone service is likewise personal property. Article 414
of the Civil Code provides that all things which are or may be the object of appropriation are considered either
real property or personal property. Just like interest in business, however, it may be appropriated.
- business should also be classified as personal property. Since it is not included in the exclusive enumeration
of real properties under Article 415, it is therefore personal property.
- article 344 of the Civil Code: "Property for public use in provinces and in towns comprises the provincial and
town roads, the squares, streets, fountains, and public waters, the promenades, and public works of general
service supported by said towns or provinces.
- The said Plaza Soledad being a promenade for public use, the municipal council of Cavite could not in 1907
withdraw or exclude from public use a portion thereof in order to lease it for the sole benefit of the defendant
Hilaria Rojas. In leasing a portion of said plaza or public place to the defendant for private use the
plaintiffmunicipality exceeded its authority in the exercise of its powers by executing a contract over a thing of
which it could not dispose, nor is it empowered so to do
- Exhibit C, whereby the municipality of Cavite leased to Hilaria Rojas a portion of the Plaza Soledad is null and
void and of no force or effect, because it is contrary to the law and the thing leased cannot be the object of a
contract.
- the defendant must restore and deliver possession of the land described in the complaint to themunicipality
of Cavite, which in its turn must restore to the said defendant all the sums it may have received from her
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within sixty days subsequent to plaintiff's demand
to that effect; but more than the sixty days within
which they ought to have vacated it have elapsed
without their having done so to date.
Maneclang v IAC - Maneclang, et. al. filed a complaint for quieting of
title over a certain fishpond, and the annulment of
Resolutions Nos. 38 and 95 of the Municipal
Council of Bugallon Pangasinan. The trial court
dismissed the complaint in a decision dated August
15, 1975 upon a finding that the body of water
traversing the titled properties of petitioners is a
creek constituting a tributary of the Agno River;
therefore public in nature and not subject to private
appropriation.
RP v Democrito Mendoza - Democrito Mendoza, Sr. was issued Ordinary
Fishpond Permit No. F-6029-Y encompassing an
estimated area of 70.07 hectares within Silot Bay.
This new permit covers the combined areas under
Ordinary Nipa-Bacauan Permit No. NB 642 and
Ordinary Fishpond Permit No. F-2166-J, as well as
other areas previously managed by other fishpond
permit grantees which Democrito Mendoza, Sr.
acquired for valuable consideration
- Then President Ferdinand E. Marcos issued a
Memorandum: “all these fishpond areas shall be
released by the Bureau of Forestry to the Bureau
of Lands as A and D but subject to the disposal of
Bureau of Fisheries for fishpond purposes
- Democrito Mendoza, Sr. filed an application for
sales patent 4 to purchase the area covered by
Ordinary Fishpond Permit No. F-6029-Y. 5 The
fishpond permit indicated that the area covered by
said permit was only 70.07 hectares; however,
upon resurvey by the Bureau of Lands, the area
was reported to be measuring 92.3881 hectares.
- Based on these certifications issued upon
Democrito Mendoza, Sr.'s request, it was
ascertained that there was no objection to said
application and that the same did not interfere with
any function or proposed project of the government
- Prior to the formal award of the subject property,
Democrito Mendoza, Sr., however, had caused the
property to be subdivided into Lots 1 and 2 to each
of his family members (Constitutional prohibition)
- Acting Director of the Bureau of Lands Ramon N.
Casanova issued an Order awarding the sales
patents over the disputed property to Democrito
Mendoza, Sr. and his three children Gwendolyn,
Vilma, and Democrito, Jr
- based on the information gathered by the DENR,
showing that there were alleged irregularities in the
issuance of the sales patents awarded to the
Mendozas, the Republic of the Philippines,
represented by the Director of the Land
Management Bureau, filed with the RTC of Cebu,
a complaint for Cancellation of Sales Patents and
5
- A creek, defined as a recess or arm extending from a river and participating in the ebb and flow of the sea, is
a property belonging to the public domain which is not susceptible to private appropriation and acquisitive
prescription, and as a public water, it cannot be registered under the Torrens System in the name of any
individual
- we shall foremost settle the issue of whether or not the government is now precluded from bringing an action
for the annulment of title and reversion of the disputed property to the public domain after the lapse of the
one-year period from registration thereof. We answer in the negative.
- It should be stressed that the function of administering and disposing of lands of the public domain
in the manner prescribed by law is not entrusted to the courts but to executive officials. 26 And as
such, courts should refrain from looking into the underlying reasons or grounds which impelled the
classification and declaration of Silot Bay as timberland and its subsequent release as alienable and
disposable land
- From the facts of the case, it is evident that the Bureau of Forestry released Silot Bay as alienable and
disposable by virtue of the Memorandum issued by then President Marcos on 16 January 1967 which clearly
empowered said bureau to identify and locate the 700,000 hectares of fishpond areas and to release said
areas as alienable and disposable. Hence, the courts, in view of the clear legal directive by which said area
was released as alienable and disposable, will refrain from questioning the wisdom of such classification or
declaration.
- After a careful perusal of the records of the case, We rule that the sales patents handed out to Democrito T.
Mendoza, Sr., Gwendolyn Mendoza, Vilma Mendoza and Democrito Mendoza, Jr., were properly issued.
- it is worth noting that in order to conform to the prohibitions imposed by the 1973 Constitution which limits the
purchase of lands of the public dominion to 24 hectares per individual, Democrito Mendoza, Sr., subdivided
the property in question into four, each comprising an area not more than 24 hectares, and assigned his rights
over three parts to his three children. Accordingly, Democrito Mendoza, Sr. amended his sales patent
application while his three children filed their own applications for their respective parts. The area applied for
in each of the Mendozas' sales patent applications were, by then, well-within the constitutional limitation
- Finally, it should be borne in mind that the contested areas and titles thereto had already passed on to third
parties who acquired the same from the Mendozas in good faith and for value.
- If the titles of innocent buyers were recognized and protected in the afore-mentioned circumstances, even
when the original title to the property was obtained through fraud, then the titles of the purchasers in good
faith and for value of the shpond areas in the present case better deserve our recognition and protection
considering that the sales patents and original certi cates of title of their predecessors-in-interest were found
to be legally and validly issued.
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Ignacio v Director of Lands
Macasiano v Diokno
Cebu Oxygen and Acetylene
Co Inc v Bercilles
Titles against Democrito Mendoza, Sr. and his
three children
- According to the complaint, there was irregularity in
the issuance of the sales patents covering the
subject properties since the area in question forms
part of Silot Bay and used as communal fishing
grounds by the residents of Liloan, Cebu, and
hence, is not alienable and disposable.
- Petitioner filed an application for registration of
adjacent (mangrove) land by claiming ownership
by right of accretion located near the Manila Bay.
- Such application was opposed by the Director of
lands claiming that such lands are part of public
domain. Trial Court decided in favor of the
government holding it as public domain. Hence,
present petition
- Municipality of Parañaque passed Ordinance No.
86, Series of 1990 which authorized the closure of
J. Gabrielle, G.G. Cruz, Bayanihan, Lt. Garcia
Extension and Opena Streets and the
establishment of a flea market thereon. The
ordinance was approved by the municipal council
- Metropolitan Manila Authority approved Ordinance
No. 86, s. 1990 of the municipal council of the
respondent municipality subject to the following
conditions:
(1) that the streets are not used for vehicular traffic
and that the majority of the residents do not oppose
the establishment;
(2) that the 2-meter middle road to be used as flea
market/vending area shall be marked distinctly and
that the 2 meters on both sides of the road shall be
used by pedestrians;
(3) that the time during which the vending area is to
be used shall be clearly designated; and
(4) that the use of the vending areas shall be
temporary and shall be closed once the reclaimed
areas are developed and donated by the Public
Estate Authority.
- Macasiano, PNP Superintendent of the
Metropolitan Traffic Command, ordered the
destruction and confiscation of stalls; stalls were
later returned to respondent Palanyag. Petitioner
then wrote a letter, to respondent Palanyag giving
the latter ten (10) days to discontinue the flea
market; otherwise, the market stalls shall be
dismantled
- In 1968, a terminal portion of a street in Cebu was
excluded in the city’s development plan hence the
council declared it as abandoned and was
subsequently opened for public bidding. Cebu
Oxygen was the highest bidder. Cebu Oxygen
applied for the land’s registration but the provincial
fiscal denied it, so did the court later, alleging that
the road is part of the public domain hence beyond
the commerce of man.
6
- First, right of accretion mentioned in Art. 457 applies only to gradual deposits on the BANKS OF RIVERS and
not in such case where accretion was due to the MANILA BAY thus it is public domain
- SC reiterated that in interpreting Art. 4 of Law of Waters there is a need of a positive declaration on the part
of the government (executive or legislative) that such land is not necessary for public purpose thus subject to
private ownership or to be A and D. Until a positive declaration said land continue to be part of public domain.
- Third, Acquisitive Prescription does not lie since lands of public domain are not subject to ordinary prescription
being outside of commerce of man
- The Solicitor General contends that municipal roads are used for public service and are, therefore, public
properties; that as such, they cannot be subject to private appropriation or private contract by any person,
even by the respondent municipality. Petitioner submits that a property already dedicated to public use cannot
be used for another public purpose and that absent a clear showing that the respondent municipality has been
granted by the legislature a specific authority to convert a property already in public use to another public use
- The property of provinces, cities and municipalities is divided into property for public use and patrimonial
property as provided for in Art. 423 of the Civil Code
- Gacia Extension and Opena streets are local roads used for public service and are therefore considered public
properties of respondent municipality. Properties of the local government which are devoted to public service
are deemed public and are under the absolute control of Congress. Hence, local governments have no
authority whatsoever to control or regulate the use of public properties unless specific authority is vested upon
them by Congress
- Article 424 of the Civil Code lays down the basic principle that properties of public dominion devoted to public
use and made available to the public in general are outside the commerce of man and cannot be disposed of
or leased by the local government unit to private persons
- Aside from the requirement of due process which should be complied with before closing a road,
street or park, the closure should be for the sole purpose of withdrawing the road or other public
property from public use when circumstances show that such property is no longer intended or
necessary for public use or public service. When it is already withdrawn from public use, the property
then becomes patrimonial property of the local government unit concerned as provided for in Article
422 of the Civil Code and as held in the case of Cebu Oxygen, etc. et al. v. Bercilles, et al. It is only
then that the respondent municipality can "use or convey them for any purpose for which other real
property belonging to the local unit concerned might be lawfully used or conveyed" in accordance
with the last sentence of Section 10 of the LGC
- Those roads and streets which are available to the public in general and ordinarily used for vehicular traffic
are still considered public property devoted to public use. In such case, the local government has no power
to use it for another purpose or to dispose of or lease it to private persons
- 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
- Under Cebu’s 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 Oxygen’s 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.
VANILLAELA

Laurel v Garcia - The subject property in this case is one of the four
(4) properties in Japan acquired by the Philippine
government under the Reparations Agreement. As
intended, Roponggi became the site of the
Philippine Embassy until the latter was transferred
to Nampeidai on July 22, 1976 when the Roppongi
building needed major repairs. Due to the failure of
our government to provide necessary funds, the
Roppongi property has remained undeveloped
since that time.
- A proposal was presented to President Corazon C.
Aquino to make the property the subject of a lease
agreement with a Japanese firm — Kajima. At the
end of the lease period, all the three leased
buildings shall be occupied and used by the
Philippine government. No change of ownership or
title shall occur. The Philippine government retains
the title all throughout the lease period and
thereafter. However, the government has not acted
favorably on this proposal
- On July 25, 1987, the President issued Executive
Order No. 296 entitling non-Filipino citizens or
entities to avail of reparations' capital goods and
services in the event of sale, lease or disposition
MIAA v CA - Petitioner Manila International Airport Authority
(MIAA) operates the Ninoy Aquino International
Airport (NAIA) Complex in Parañaque City under
Executive Order No. 903, otherwise known as the
Revised Charter of the Manila International Airport
Authority ("MIAA Charter").
- The MIAA Charter transferred to MIAA
approximately 600 hectares of land, 3 including the
runways and buildings. The MIAA Charter further
provides that no portion of the land transferred to
MIAA shall be disposed of through sale or any other
mode unless specifically approved by the President
- The OGCC opined that the Local Government
Code of 1991 withdrew the exemption from real
estate tax granted to MIAA under Section 21 of the
MIAA Charter. Thus, MIAA negotiated with
respondent City of Parañaque to pay the real estate
tax imposed by the City
- City Treasurer, issued notices of levy and warrants
of levy on the Airport Lands and Buildings. The
Mayor of the City of Parañaque threatened to sell
at public auction the Airport Lands and Buildings
- MIAA admits that the MIAA Charter has placed the
title to the Airport Lands and Buildings in the name
of MIAA. However, MIAA points out that it cannot
claim ownership over these properties since the
real owner of the Airport Lands and Buildings is the
Republic
7
- There can be no doubt that it is of public dominion unless it is convincingly shown that the property has
become patrimonial. As property of public dominion, the Roppongi lot is outside the commerce of man. It
cannot be alienated. Its ownership is a special collective ownership for general use and enjoyment
- The Roppongi property is correctly classified under paragraph 2 of Article 420 of the Civil Code as property
belonging to the State and intended for some public service. The fact that the Roppongi site has not been
used for a long time for actual Embassy service does not automatically convert it to patrimonial property. Any
such conversion happens only if the property is withdrawn from public use (Cebu Oxygen and Acetylene Co.
v. Bercilles, 66 SCRA 481 [1975]). A property continues to be part of the public domain, not available for
private appropriation or ownership "until there is a formal declaration on the part of the government to withdraw
it from being such
- an abandonment of the intention to use the Roppongi property for public service and to make it patrimonial
property under Article 422 of the Civil Code must be definite. Abandonment cannot be inferred from the non-
use alone specially if the non-use was attributable not to the government's own deliberate and indubitable will
but to a lack of financial support to repair and improve the property. Abandonment must be a certain and
positive act based on correct legal premises.
- MIAA is Not a Government-Owned or Controlled Corporation:
MIAA is not organized as a stock or non-stock corporation. MIAA is not a stock corporation because it has no
capital stock divided into shares. MIAA has no stockholders or voting shares. MIAA is a government
instrumentality vested with corporate powers to perform efficiently its governmental functions. MIAA is like
any other government instrumentality, the only difference is that MIAA is vested with corporate powers. There
is also no reason for local governments to tax national government instrumentalities for rendering essential
public services to inhabitants of local governments. There must be express language in the law empowering
local governments to tax national government instrumentalities.
- Airport Lands and Buildings of MIAA are Owned by the Republic:
The Airport Lands and Buildings of MIAA are property of public dominion and therefore owned by the State
or the Republic of the Philippines. The term "ports" includes seaports and airports. The MIAA Airport Lands
and Buildings constitute a "port" constructed by the State. Under Article 420 of the Civil Code, the MIAA Airport
Lands and Buildings are properties of public dominion and thus owned by the State or the Republic of the
Philippines. The operation by the government of a tollway does not change the character of the road as one
for public use
- Airport Lands and Buildings are Outside the Commerce of Man:
The Airport Lands and Buildings of MIAA are devoted to public use and thus are properties of public dominion.
As properties of public dominion, the Airport Lands and Buildings are outside the commerce of man… cannot
be the subject of an auction sale. Properties of public dominion, being for public use, are not subject to levy,
encumbrance or disposition through public or private sale. Any encumbrance, levy on execution or auction
sale of any property of public dominion is void for being contrary to public policy
- MIAA is a Mere Trustee of the Republic:
MIAA is merely holding title to the Airport Lands and Buildings in trust for the Republic. In MIAA's case, its
status as a mere trustee of the Airport Lands and Buildings is clearer because even its executive head cannot
sign the deed of conveyance on behalf of the Republic. Only the President of the Republic can sign such deed
of conveyance. The Republic remains the beneficial owner of the Airport Lands and Buildings. MIAA itself is
owned solely by the Republic.
- Real Property Owned by the Republic is Not Taxable:
SEC. 234.Exemptions from Real Property Tax—Real property owned by the Republic of the Philippines or
any of its political subdivisions except when the beneficial use thereof has been granted, for consideration or
otherwise, to a taxable person. Section 133(o) of the same Code, which prohibits local governments from
imposing "[t]axes, fees or charges of any kind on the National Government, its agencies and instrumentalities.
The exception to the exemption in Section 234(a) is the only instance when the national government, its
agencies and instrumentalities are subject to any kind of tax by local governments. The exception to the
VANILLAELA

Phil Ports Authority v City of - The City of Iloilo filed an action for recovery of sum
Iloilo of money against PPA, seeking to collect real
property taxes as well as business taxes; alleged
that the PPA is engaged in the business of arrastre
services, stevedoring services, leasing of real
estate, and a registered owner of a wharehouse
which is used in the operation of its business. From
these, PPA was alleged to be obligated to pay
business taxes and real property taxes
Phil Fisheries Development - Upon the completion of the Iloilo Fishing Port
Authority v CA Complex (IFPC), the Ministry of Public Works and
Highways turned over IFPC to the Authority, which
places fishing port complexes and related facilities
under the governance and operation of the
Authority. Notwithstanding said turn over, title to
the land and buildings of the IFPC remained with
the Republic.
- The Authority thereafter leased portions of IFPC to
private firms and individuals engaged in fishing
related businesses
- the City of Iloilo assessed the entire IFPC for real
property taxes.
- -
RP (rep by Phil Reclamation - The Public Estates Authority (PEA) is a
Authority) v City of Paranaque government corporation created by virtue of P.D.
No. 1084
8
exemption applies only to real estate tax and not to any other tax. The justification for the exception to the
exemption is that the real property, although owned by the Republic, is not devoted to public use or public
service but devoted to the private gain of a taxable person
- noted that the PPA failed to raise the issue of ownership during the pre-trial. In the case at bar, the fact that
the issue of ownership is outside of what has been delimited during the pre-trial further justifies the
disallowance of PPA’s new theory. Hence, PPA may not be permitted to change its theory on appeal
- It must be emphasized that the enumeration of properties of public dominion under Article 420 of the New
Civil Code specifically states “ports” constructed by the State. Thus, in order to consider the port in this case
as falling under the said classification, the fact that the port was constructed by the State must first be
established by sufficient evidence. Here, there was no proof adduced to establish that the port was
constructed by the State, hence, the court cannot just automatically conclude that the property is of public
dominion
- what is being taxed in the present case is PPA’s warehouse, which, although located within the port is distinct
from the port itself. Considering the warehouse’s separable nature as an improvement upon the port, and the
fact that it is not open for use by everyone and freely accessible to the public, it is not part of the port as stated
in Article 420 of the Civil Code.
- that it leases out to private persons for convenience and not necessarily as part of its governmental function
of administering port operations is an admission that the act was a corporate power, which, is actually
expressly stated as so in its charter. Any income or profit generated by an entity, even of a corporation
organized without any intention of realizing profit in the conduct of its activities, is subject to tax; What matters
is the established fact that it leased out it’s building to private entities from which it regularly earned substantial
income.
- Authority is not a GOCC but an instrumentality of the national government which is generally exempt from
payment of real property tax. However, said exemption does not apply to the portions of the IFPC which the
Authority leased to private entities. With respect to these properties, the Authority is liable to pay real property
tax. Nonetheless, the IFPC, being a property of public dominion cannot be sold at public auction to satisfy the
tax delinquency.
- Thus, for an entity to be considered as a GOCC, it must either be organized as a stock or non-stock
corporation.
- Two requisites must concur before one may be classified as a stock corporation, namely: (1) that it has capital
stock divided into shares, and (2) that it is authorized to distribute dividends and allotments of surplus and
profits to its stockholders. If only one requisite is present, it cannot be properly classified as a stock
corporation.
- As for non-stock corporations, they must have members and must not distribute any part of their income to
said members.
The Authority is actually a national government instrumentality which is defined as an agency of the national
government, not integrated within the department framework, vested with special functions or jurisdiction by
law, endowed with some if not all corporate powers, administering special funds, and enjoying operational
autonomy, usually through a charter.
- When the law vests in a government instrumentality corporate powers, the instrumentality does not become
a corporation. Unless the government instrumentality is organized as a stock or non-stock corporation, it
remains a government instrumentality exercising not only governmental but also corporate powers.
- Court ruled that when an instrumentality of the national government grants to a taxable person the beneficial
use of a real property owned by the Republic, said instrumentality becomes liable to pay real property tax.
- Authority should be classified as an instrumentality of the national government which is liable to pay taxes
only with respect to the portions of the property, the beneficial use of which were vested in private entities
- Thus, the real property tax assessments issued by the City of Iloilo should be upheld only with respect to the
portions leased to private persons. In case the Authority fails to pay the real property taxes due thereon, said
portions cannot be sold at public auction to satisfy the tax delinquency.
- The Iloilo fishing port which was constructed by the State for public use and/or public service falls within the
term "port" in the aforecited provision. Being a property of public dominion the same cannot be subject to
execution or foreclosure sale. In like manner, the reclaimed land on which the IFPC is built cannot be the
object of a private or public sale without Congressional authorization. Considering that the Authority is a
national government instrumentality, any doubt on whether the entire IFPC may be levied upon to satisfy the
tax delinquency should be resolved against the City of Iloilo.
- PRA is a government instrumentality vested with corporate powers and performing an essential public service
pursuant to Section 2(10) of the Introductory Provisions of the Administrative Code. Although it has a capital
VANILLAELA

- PEA was designated as the agency primarily
responsible for integrating, directing and
coordinating all reclamation projects for and on
behalf of the National Government
- President Gloria Macapagal-Arroyo issued E.O.
No. 380 transforming PEA into PRA
- Parañaque City Treasurer Liberato M. Carabeo
issued Warrants of Levy on PRA’s reclaimed
properties based on the assessment for delinquent
real property taxes
Jean Tan v RP - petitioners filed an application for land registration
- The petitioners alleged that they acquired the
subject property from Gregonio Gatdula pursuant
to a Deed of Absolute Sale and they and their
predecessors-in-interest have been in open,
continuous and exclusive possession of the subject
property in the concept of an owner for more than
30 years.
- The CA gave due course to the appeal filed by the
Republic of the Philippines. By way of the assailed
Decision, the CA ruled that the petitioners failed to
prove that they and their predecessors-in-interest
have been in possession of the subject property for
the requisite period of 30 years.
- Petitioners claimed that testimonies sufficed to
demonstrate their acquisition of the property by
prescription
9
stock divided into shares, it is not authorized to distribute dividends and allotment of surplus and profits to its
stockholders.
- when the law makes a government instrumentality operationally autonomous, the instrumentality remains part
of the National Government machinery although not integrated with the department framework.
- it remains a government instrumentality exercising not only governmental but also corporate powers.
- PRA is not a GOCC because it is neither a stock nor a non-stock corporation. It cannot be considered as a
stock corporation because although it has a capital stock divided into no par value shares as provided in
Section 7 of P.D. No. 1084, it is not authorized to distribute dividends, surplus allotments or profits to
stockholders.
- PRA cannot be considered a non-stock corporation either because it does not have members. A non- stock
corporation must have members. Moreover, it was not organized for any of the purposes mentioned in Section
88 of the Corporation Code.
- Congress has no power to create government- owned or controlled corporations with special charters unless
they are made to comply with the two conditions of common good and economic viability. The test of economic
viability applies only to government-owned or controlled corporations that perform economic or commercial
activities and need to compete in the market place.
- In contrast, government instrumentalities vested with corporate powers and performing governmental or public
functions need not meet the test of economic viability. These instrumentalities need not be economically viable
since the government may even subsidize their entire operations
- the test of economic viability does not apply to government entities vested with corporate powers and
performing essential public services. The State is obligated to render essential public services regardless of
the economic viability of providing such service. The non-economic viability of rendering such essential public
service does not excuse the State from withholding such essential services from the public.
- It is clear from Section 234 that real property owned by the Republic of the Philippines (the Republic) is exempt
from real property tax unless the beneficial use thereof has been granted to a taxable person. There is no
showing on record either that PRA leased the subject reclaimed properties to a private taxable entity.
- Republic grants the beneficial use of its real property to an agency or instrumentality of the national
government. This happens when the title of the real property is transferred to an agency or instrumentality
even as the Republic remains the owner of the real property. Such arrangement does not result in the loss of
the tax exemption, unless "the beneficial use thereof has been granted, for consideration or otherwise, to a
taxable person.
- The mere reclamation of these areas by PEA does not convert these inalienable natural resources of the
State into alienable or disposable lands of the public domain. There must be a law or presidential proclamation
officially classifying these reclaimed lands as alienable or disposable and open to disposition or concession.
Moreover, these reclaimed lands cannot be classified as alienable or disposable if the law has reserved them
for some public or quasi-public use.
- As the Court has repeatedly ruled, properties of public dominion are not subject to execution or foreclosure
sale.Thus, the assessment, levy and foreclosure made on the subject reclaimed lands by respondent, as well
as the issuances of certificates of title in favor of respondent, are without basis
- Commonwealth Act No. 141, otherwise known as the Public Land Act governs the classification and
disposition of lands forming part of the public domain.
- Section 11 thereof provides that one of the modes of disposing public lands suitable for agricultural purposes
is by confirmation of imperfect or incomplete titles.
- Section 48 thereof enumerates those who are considered to have acquired an imperfect or incomplete title
over the alienable and disposable public land
- (P.D. No. 1529) Property Registration Decree, is a codification of all the laws relative to the registration of
property and Section 14 thereof specifies those who are qualified to register their incomplete title over an
alienable and disposable public land under the Torrens system.
- Section 14, PD 1529. Who may apply. (1) possessions and occupation of A&D lands of the public domain
under a bona fide claim of ownership since June 12, 1945 or earlier; (2) acquired ownership of private lands
by prescription under the provision of existing lands; (3) acquired ownership of private lands to abandoned
river beds by right of accession or accretion under existing laws; and (4) those who acquired ownership of
land in any other manner provided by law
- Heirs of Malabanan v. Republic of the Philippines, and Republic of the Philippines v. East Silverlane Realty
Development Corporation,Section 14(1) covers alienable and disposable lands while Section 14(2) covers
private property.
- Thus, for ones possession and occupation of an alienable and disposable public land to give rise to an
imperfect title, the same should have commenced on June 12, 1945 or earlier.
VANILLAELA

Ideals Inc v Psalm - PSALM is a government-owned and controlled
corporation created by virtue of "Electric Power
Industry Reform Act of 2001" (EPIRA). The EPIRA
provided a framework for the restructuring of the
electric power industry, including the privatization
of the assets of the National Power Corporation
(NPC); Said law mandated PSALM to manage the
orderly sale, disposition, and privatization of NPC
generation assets, real estate and other disposable
assets, and Independent Power Producer (IPP)
contracts with the objective of liquidating all NPC
financial obligations and stranded contract costs in
an optimal manner
- The Angat Dam (which is part of the Non-Power
Components) is a multi-purpose hydro facility
which currently supplies water for domestic use,
irrigation and power generation.
- The Winning Bidder/Buyer shall be requested to
enter into an operations and maintenance
agreement with PSALM for the Non-Power
Components; The Buyer, as Operator, shall be
required to operate and maintain the Non-Power
Components at its own cost and expense.
- Petitioner: award of contract to K-Water which is a
foreign corporation, petitioners contend that
PSALM clearly violated the constitutional
provisions on the appropriation and utilization of
water as a natural resource, as implemented by the
10
- On the other, for one to claim that his possession and occupation of private property has ripened to imperfect
title, the same should have been for the prescriptive period provided under the Civil Code (private property is
understood as patrimonial property)
- possession and occupation of an alienable and disposable public land for the periods provided under the Civil
Code will not convert it to patrimonial or private property. There must be an express declaration that the
property is no longer intended for public service or the development of national wealth. In the absence thereof,
the property remains to be alienable and disposable and may not be acquired by prescription under Section
14(2) of P.D. No. 1529.
- For as long as the property belongs to the State, although already classified as alienable or
disposable, it remains property of the public dominion if when it is intended for some public service
or for the development of the national wealth. Accordingly, there must be an express declaration by
the State that the public dominion property is no longer intended for public service or the development
of the national wealth or that the property has been converted into patrimonial. Without such express
declaration, the property, even if classified as alienable or disposable, remains property of the public
dominion, pursuant to Article 420(2), and thus incapable of acquisition by prescription. It is only when
such alienable and disposable lands are expressly declared by the State to be no longer intended for
public service or for the development of the national wealth that the period of acquisitive prescription
can begin to run. Such declaration shall be in the form of a law duly enacted by Congress or a
Presidential Proclamation in cases where the President is duly authorized by law.
- In other words, for one to invoke the provisions of Section 14(2) and set up acquisitive prescription against
the State, it is primordial that the status of the property as patrimonial be first established.
- In any event, in the absence of other competent evidence, tax declarations do not conclusively establish either
possession or declarants right to registration of title. A claim of ownership will not proper on the basis of tax
declarations if unaccompanied by proof of actual possession
- Such witnesses did not state what specific acts of ownership or dominion were performed by the petitioners
and predecessors-in-interest and simply made that general assertion that the latter possessed and occupied
the subject property for more than thirty (30) years, which, by all means, is a mere conclusion of law
- Furthermore, the petitioners application was filed after only (1) year from the time the subject property may
be considered patrimonial (July 13, 2000—which means that the counting of the thirty (30)-year prescriptive
period for purposes of acquiring ownership of a public land under Section 14(2) can only start from such date
- PSALM came into existence for the principal purpose of managing the orderly sale, privatization and
disposition of generation assets, real estate and other disposable assets of the NPC including IPP Contracts.
Accordingly, PSALM was authorized to take title to and possession of, those assets transferred to it. EPIRA
mandated that all such assets shall be sold through public bidding with the exception of Agus and Pulangui
complexes in Mindanao
- Had the legislature intended that PSALM should likewise be allowed discretion in case of NPC generation
assets other than those mentioned in Sec. 47, it could have explicitly provided for the same.
- The State’s policy on the management of water resources is implemented through the regulation of water
rights. Presidential Decree No. 1067, otherwise known as "The Water Code of the Philippines" is the basic
law governing the ownership, appropriation utilization, exploitation, development, conservation and protection
of water resources and rights to land related thereto.
- Appropriation of water, as used in this Code, is the acquisition of rights over the use of waters or the taking or
diverting of waters from a natural source in the manner and for any purpose allowed by law.
- Water right is the privilege granted by the government to appropriate and use water.
- It is clear that the law limits the grant of water rights only to Filipino citizens and juridical entities duly qualified
by law to exploit and develop water resources, including private corporations with sixty percent of their capital
owned by Filipinos. In the case of Angat River, the NWRB has issued separate water permits to MWSS, NPC
and NIA.
- K-Water as the eventual owner of the AHEPP, of the Non-Power Components meaning the Angat Dam,
including the water sourced from the Angat Reservoir.
- It is the position of PSALM that as the new owner only of the hydroelectric power plant, K-Water will
be a mere operator of the Angat Dam. In the power generation activity, K-Water will have to utilize the
waters already extracted from the river and impounded on the dam. This process of generating electric
power from the dam water entering the power plant thus does not constitute appropriation within the
meaning of natural resource utilization in the Constitution and the Water Code
- while the Water Code imposes a nationality requirement for the grant of water permits, the same refers to the
privilege "to appropriate and use water." This should be interpreted to mean the extraction of water from its
VANILLAELA

Water Code of the Philippines limiting water rights
to Filipino citizens and corporations which are at
least 60% Filipino-owned.
Woodridge School Inc v Arb - Woodridge is the usufructuary of a parcel of land
Construction Inc covered by (TCT) in the name of spouses Ernesto
T. Matugas and Filomena U. Matugas. Its co-
petitioner, Miguela Jimenez Javier, is the
registered owner of the adjacent lot
- ARB is the owner and developer of Soldiers Hills
Subdivision; Phase I of the subdivision was already
accessible from the Marcos Alvarez Avenue. To
provide the same accessibility to the residents of
Phase II of the subdivision, ARB constructed the
disputed road to link the two phases.
- petitioners properties sit right in the middle of
several estates:
- petitioners offered to pay ARB P50,000 as
indemnity for the use of the road. Adamant, ARB
refused the offer and fenced the perimeter of the
road fronting the properties of petitioners. By doing
so, ARB effectively cut off petitioners access to and
from the public highway.
- RTC: government automatically becomes the
owner of the subdivisions roads the moment the
subdivision plan is approved. From that time on, the
roads are withdrawn from the commerce of men
even [if] the titles are still registered in the name of
the subdivision owners and the roads are not yet
donated to the government.
- The appellate court went on to rule that a
compulsory right of way exists in favor of petitioners
as [t]here is no other existing adequate outlet to
and from [petitioners] properties to the Marcos
11
natural source (Art. 9, P.D. No. 1067). Once removed therefrom, they cease to be a part of the natural
resources of the country and are the subject of ordinary commerce and may be acquired by foreigners
- nationality requirement imposed by the Water Code refers to the privilege "to appropriate and use water."
This, we have consistently interpreted to mean the extraction of water directly from its natural source. Once
removed from its natural source the water ceases to be a part of the natural resources of the country and may
be subject of ordinary commerce and may even be acquired by foreigners.
- we reiterate our earlier view that a foreign entity may legally process or treat water after its removal from a
natural source by a qualified person, natural or juridical.
- This Department has declared that the nationality requirement imposed by the Water Code refers to the
privilege "to appropriate and use water" and has interpreted this phrase to mean the extraction of water directly
from its natural source
- The water that is used by the power plant could not enter the intake gate without the dam, which is a man-
made structure. Such being the case, the source of the water that enters the power plant is of artificial
character rather than natural.
- This Department is consistent in ruling, that once water is removed from its natural source, it ceases
to be a part of the natural resources of the country and may be the subject of ordinary commerce and
may even be acquired by foreigners.
- It is also significant to note that NPC, a government-owned and controlled corporation, has the effective control
over all elements of the extraction process,
- the utilization thereof can be opened even to foreign nationals, after the same have been extracted from the
source by qualified persons or entities. The rationale is because, since they no longer form part of the natural
resources of the country, they become subject to ordinary commerce.
- Under the Water Code concept of appropriation, a foreign company may not be said to be
"appropriating" our natural resources if it utilizes the waters collected in the dam and converts the
same into electricity through artificial devices. Since the NPC remains in control of the operation of
the dam by virtue of water rights granted to it; no legal impediment to foreign-owned companies
undertaking the generation of electric power using waters already appropriated by NPC
- road lots in a private subdivision are private property, hence, the local government should first acquire them
by donation, purchase, or expropriation, if they are to be utilized as a public road; Otherwise, they remain to
be private properties of the owner- developer.
- Contrary to the position of petitioners, the use of the subdivision roads by the general public does not strip it
of its private character. The road is not converted into public property by mere tolerance of the subdivision
owner of the publics passage through it.
- To repeat, the local government should first acquire them by donation, purchase, or expropriation, if they are
to be utilized as a public road.
- transfer of ownership from the subdivision owner- developer to the local government is not automatic but
requires a positive act from the owner-developer before the city or municipality can acquire dominion over the
subdivision roads. Therefore, until and unless the roads are donated, ownership remains with the owner-
developer.
- Since no donation has been made in favor of any local government and the title to the road lot is still registered
in the name of ARB, the disputed property remains private.
- circumstances clearly make out a case of legal easement of right of way. It is an easement which has been
imposed by law and not by the parties and it has for (its) object either public use or the interest of private
persons.
- indemnity shall consist of the value of the land occupied and the amount of the damage caused to the servient
estate.
VANILLAELA

Alvarez Avenue other than the subject existing
road lot
Navigable Stream
Mateo v Moreno - in 1959 a number of residents of Guiguinto,
Bulacan, sent a letter- complaint to the Highway
District Engineer of that province asking that the
Sapang Cabay, a public navigable stream, which
had been blocked by means of dikes and dams and
converted into fishponds, be ordered reopened and
restored to its original condition.
- Sapang Cabay was a public navigable stream and
ordering Cenon Mateo, the herein petitioner-
appellant, who had in the meantime acquired the
property inside which the said creek is situated, to
remove the dikes and dams therein constructed
within thirty days from notice; otherwise they would
be removed at his expense.
Foreshore lands/ Submerged Lands
Gov v Cabangis - Lots 36, 39 and 40, were formerly a part of a large
parcel of land belonging to the predecessor of the
herein claimants and appellees.
- From the year 1896 said land began to wear away,
due to the action of the waves of Manila Bay, until
the year 1901 when the said lots became
completely submerged in water in ordinary tides,
and remained in such a state until 1912 when the
Government undertook the dredging of Vitas
Estuary in order to facilitate navigation depositing
all the sand and silt taken from the bed of the
estuary on the low lands which were completely
covered with water, surrounding that belonging to
the Philippine Manufacturing Company, thereby
slowly and gradually forming the lots, the subject
matter of this proceeding
- Up to the month of February, 1927 nobody had
declared lot 39 for the purposes of taxation, and it
was only in the year 1926 that Dr. Pedro Gil, in
behalf of the claimants and appellees, declared lot
No. 40 for such purpose.
RP v CA and Morato - Morato filed a Free Patent Application on a parcel
of land; Both the free patent and the title specifically
mandate that the land shall not be alienated nor
encumbered within five (5) years from the date of
the issuance of the patent
- Then a portion of the land was mortgaged by
respondent Morato to respondents Nenita Co and
Antonio Quilatan for P10,000.00. Another portion of
the land was leased to Perfecto Advincula
- Thereafter, it was established that the subject land
is a portion of the Calauag Bay, five (5) to six (6)
feet deep under water during high tide and two (2)
feet deep at low tide, and not suitable to vegetation
- cancellation of title and reversion of a parcel of land
to the public domain, subject of a free patent on the
grounds that the land is a foreshore land and was
mortgaged and leased within the five-year
prohibitory period
12
- That case held, furthermore, that the absence of any mention of a navigable stream within a property covered
by a certificate of title does not preclude a subsequent investigation and determination of its existence nor
make it private property of the title holder;
- ownership of a navigable stream or of the bed thereof is not subject to acquisitive prescription.
- Ocular inspection of the entire length of the creek up to Guiguinto, shows that portions of the creek are closed
by dikes
- as a result of the closing of said creek for fishpond purposes, it deprived the public the use of the same for
fishing, gathering fruits and fuel, and that surrounding areas are overflooded during heavy rain as water from
creek could not be drained to the river
- in 1954 the Secretary of Public Works and Communications rendered a decision ordering Encarnacion
Jacobo, who was then the owner from whom the petitioner-appellant subsequently bought the property, to
remove the dikes she had constructed.
- It is true that Encarnacion Jacobo was able to get her free patent application approved in 1953 and to secure
the corresponding certificate of title, but said title did not change the public character of the Sapang Cabay
- land belonging to the predecessors of the herein claimants-appellees began to wear way in 1896, owing to
the gradual erosion caused by the ebb and flow of the tide, until the year 1901, when the waters of Manila
Bay completely submerged a portion of it, included within lots 36, 39 and 40 here in question, remaining thus
under water until reclaimed as a result of certain work done by the Government in 1912.
- The claimants-appellees could have protected their land by building a retaining wall, with the consent of
competent authority; failure to do so until 1901, when a portion of the same became completely covered by
said waters, remaining thus submerged until 1912, constitutes abandonment
- “rise of the waters was due to the large quantity of sand taken from the sea…because of this act, entirely
independent of the will of the owner of said land, the latter could not lose the ownership thereof, and the mere
fact that the waters of the sea covered it as a result of said act, is not sufficient to convert it into public land”
- 1896, the waves of Manila Bay had been gradually and constantly washing away the sand that formed
the lots here in question, until 1901, when the sea water completely covered them, and thus they
remained until the year 1912. In the latter year they were reclaimed from the sea by filling in with sand
and silt extracted from the bed of Vitas Estuary when the Government dredged said estuary in order
to facilitate navigation. Neither the herein claimants-appellees nor their predecessors did anything to
prevent their destruction
- lots in question having disappeared on account of the gradual erosion due to the ebb and flow of the
tide, and having remained in such a state until they were reclaimed from the sea by the filling in done
by the government, they are public land
- original certificate of title issued on the strength of a homestead patent partakes of the nature of a certificate
of title issued in a judicial proceeding, as long as the land disposed of is really part of the disposable land of
the public domain, and becomes indefeasible and incontrovertible upon the expiration of one year from the
date of promulgation of the order of the Director of Lands for the issuance of the patent.
- Indefeasibility of the title, however, may not bar the State, thru the Solicitor General, from filing an action for
reversion
- lands acquired under free patent or homestead provisions shall not be subject to encumbrance or alienation
from the date of the approval of the application and for a term of five years from and after the date of issuance
of the patent or grant nor shall they become liable to the satisfaction of any debt contracted prior to the
expiration of said period; but the improvements or crops on the land may be mortgaged or pledged to qualified
persons, associations, or corporations.
- The foregoing legal provisions clearly proscribe the encumbrance of a parcel of land acquired under a free
patent or homestead within five years from the grant of such patent. Furthermore, such encumbrance results
in the cancellation of the grant and the reversion of the land to the public domain. Encumbrance has been
defined as [a]nything that impairs the use or transfer of property; anything which constitutes a burden on the
title; a burden or charge upon property; a claim or lien upon property
- Section 118 of Commonwealth Act 141 and in conformity with the policy of the law, any transfer or alienation
of a free patent or homestead within five years from the issuance of the patent is proscribed. Such transfer
nullifies said alienation and constitutes a cause for the reversion of the property to the State.
VANILLAELA

Chavez v PEA
Chavez v NHA
Mangrove
Yngson v Secretary - subject matter of the case at bar are the same
mangrove swamps
- view of the potentialities and possibilities of said
area for fishpond purposes, several persons filed
their applications with the Bureau of Fisheries, to
utilize the same for said purposes.
- Applications for fishpond: Ligasan—1946;
Doromal—1947; Yngson—1952; Gonzales—1953;
Lopez—1953;
- When the applications were filed by the aforesaid
parties in the instant case, said area was not yet
available for fishpond purposes and the same was
only released for said purpose on January 14, 1954
- Director of the Bureau of Fisheries who issued an
order on April 10, 1954 awarding the whole area in
favor of the petitioner-appellant and rejecting the
claims of the respondents-appellees
- Secretary of the Department of Agriculture and
Natural Resources set aside the order of the
Director of the Bureau of Fisheries and caused the
division of the area in question into three portions
giving each party an area of one-third (1/3) of the
whole area
- Not satisfied with one-third of the 66 hectares, Mr.
Yngson filed a petition for certiorari
Doctrine of Equitable Estoppel (Against Government)
Estate of Yujuico v RP - Land in question was originally owned by a certain
Fermina Castro which she sought to register on
1973 which was opposed by the OSG but was then
dismissed and as such attaining finality (Dir. Of
lands did not appeal) then an OCT was
subsequently issued in Castro’s favor.
- The said land was then sold to Jesus Yujuico which
then was subdivided into two, one for him and the
other portion sold to a certain Carpio
- Sometime in 1997, Pub. Estates Authority (PEA)
was established for reclamation purposes and then
was tasked to create the Manila Coastal Road.
Both Y and C discovered that in the plan, it
13
- Respondent Morato had only an inchoate right to the property; such property remained part of the public
domain and, therefore, not susceptible to alienation or encumbrance.
- The certificate of title issued to her clearly stipulated that its award was subject to the conditions provided for
in Sections 118, 119, 121, 122 and 124 of Commonwealth Act (CA) No. 141. Because she violated Section
118, the reversion of the property to the public domain necessarily follows, pursuant to Section 124
- While at the time of the grant of free patent to respondent Morato, the land was not reached by the water,
however, due to gradual sinking of the land caused by natural calamities, the sea advances had permanently
invaded a portion of subject land.
- The application for a free patent was made in 1972. From the undisputed factual findings of the Court of
Appeals, however, the land has since become foreshore. Accordingly, it can no longer be subject of a free
patent under the Public Land Act.
- When the sea moved towards the estate and the tide invaded it, the invaded property became foreshore land
and passed to the realm of the public domain. In fact, the Court in Government vs. Cabangis annulled the
registration of land subject of cadastral proceedings when the parcel subsequently became foreshore land.
CHECK SEPARATE NOTES
- The mangrove swampland was released and made available for fishpond purposes only on January 14, 1954.
It is clear, therefore, that all five applications were filed prematurely.
- Sec 14, Priority Right of Application (d) A holder of fishpond application which has been rejected or cancelled
by the Director of Fisheries by reason of the fact that the area covered thereby has been certified by the
Director of Forestry as not available for fishpond purposes, SHALL NOT LOSE his right as a PRIOR
APPLICANT therefore, if LATER ON, the area applied for is certified by the Director of Forestry as available
for fishpond purposes, provided that not more than one (1) year has expired since the rejection or cancellation
of his application,
- The Bureau of Fisheries has no jurisdiction to administer and dispose of swamplands or mangrove lands
forming part of the public domain while such lands are still classified as forest land or timberland and not
released for fishery
- All the applications being premature, not one of the applicants can claim to have a preferential right over
another. The priority given in paragraph "d" of Section 14 is only for those applications filed so close in time
to the actual opening of the swampland for disposition and utilization, within a period of one year, as to be
given some kind of administrative preferential treatment
- The private respondents, who filed their applications within the one-year period, do not object to sharing the
area with the petitioner-appellant, in spite of the fact that the latter has apparently the least right to the fishpond
leases
- As a matter of fact, the respondent Secretary's order states that all three applications must be considered as
having been filed at the same time on the day the area was released to the Bureau of Fisheries and to share
the lease of the 66 hectares among the three of them equally.
- An action for reversion seeks to restore public land fraudulently awarded and disposed of to private individuals
or corporations to the mass of public domain. This remedy is provided under Commonwealth Act (CA) No.
141; recognized the power of the state to recover lands of public domain
- lapse of almost three decades in filing the instant case, the inexplicable lack of action of the Republic and the
injury this would cause constrain us to rule for petitioners. While it may be true that estoppel does not operate
against the state or its agents, deviations have been allowed.
- Nevertheless, the government must not be allowed to deal dishonorably or capriciously with its
citizens, and must not play an ignoble part or do a shabby thing; and subject to limitations x x x, the
doctrine of equitable estoppel may be invoked against public authorities as well as against private
individuals.
- Equitable estoppel may be invoked against public authorities when as in this case, the lot was already
alienated to innocent buyers for value and the government did not undertake any act to contest the title for an
unreasonable length of time
VANILLAELA

Land Bank of the Phils v RP
overlapped their land and a portion of their lands
were sold by PEA to Manila Bay Dev Corp (MDBC).
- Y and C filed a petition for quieting title with
damages but in 1998, parties entered into a
Compromise Agreement approved by the RTC. A
deed of exchange of property transpired where a
1.4 has of PEA land will be conveyed to Y and C in
exchange for a combined property of 1.7 has.
- In 2001, however, the OSG filed a petition for
annulment and cancellation was filed claiming that
the land surveyed for Fermina Castro in 1973 was
part of the Manila Bay thus claiming further that
Castro had no registrable rights on said land
because it forms part of public dominion. RTC held
that action was barred by res judicata however, it
was overturned by the CA claiming that res judicata
does not apply to lands of Public Domain.
- Bugayong was issued OCT No. P-2823, which
emanated from Sales Patent No. 4576 issued on
September 22, 1969
- Consequently, OCT No. P-2823 was cancelled and
new Transfer Certificates of Title (TCTs) replaced
14
- In Republic v. Court of Appeals, where the title of an innocent purchaser for value who relied on the clean
certificates of the title was sought to be cancelled and the excess land to be reverted to the Government, we
ruled that [i]t is only fair and reasonable to apply the equitable principle of estoppel by laches against
the government to avoid an injustice to innocent purchasers for value
- “First, the real purpose of the Torrens system is to quiet title to land to put a stop forever to any question as
to the legality of the title, except claims that were noted in the certificate at the time of the registration or that
may arise subsequent thereto. Second, as we discussed earlier, estoppel by laches now bars petitioner from
questioning private respondents titles to the subdivision lots.”
- we held that even if the original grantee of a patent and title has obtained the same through fraud, reversion
will no longer prosper as the land had become private land and the fraudulent acquisition cannot affect the
titles of innocent purchasers for value.
- Considering that innocent purchaser for value Yujuico bought the lot in 1974, and more than 27 years had
elapsed before the action for reversion was filed, then said action is now barred by laches.
- While the general rule is that an action to recover lands of public domain is imprescriptible, said right can be
barred by laches or estoppel. Section 32 of PD 1592 recognized the rights of an innocent purchaser for value
over and above the interests of the government
- OCT No. 10215 does not show any annotation, lien, or encumbrance on its face.Relying on the clean title,
Yujuico bought the same in good faith and for value from her
- He thus had the protection of the Torrens System that every subsequent purchaser of registered land taking
a certificate of title for value and in good faith shall hold the same free from all encumbrances except those
noted on the certificate and any of the x x x encumbrances which may be subsisting. The same legal shield
redounds to his successors-in-interest, the Yujuicos and Carpio, more particularly the latter since Carpio
bought the lot from Jesus Y. Yujuico for value and in good faith.
- Likewise protected are the rights of innocent mortgagees for value, the PISO, Citibank, N.A., PDC, RCBC,
PCIB, and DBP. Even if the mortgagors title was proved fraudulent and the title declared null and void, such
declaration cannot nullify the mortgage rights of a mortgagee in good faith
- All told, a reversion suit will no longer be allowed at this stage.
- Laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which by
exercising due diligence could or should have been done earlier. It is negligence or omission to assert a right
within a reasonable time, warranting a presumption that the party entitled thereto has either abandoned or
declined to assert it
- When respondent government filed the reversion case in 2001, 27 years had already elapsed from the time
the late Jesus Yujuico purchased the land from the original owner Castro
- Republic had one (1) year from said date or up to May 28, 1975 to file a petition for the reopening and review
of Decree on the ground of actual fraud under section 32 of PD 1592. Again, respondent Republic did not
avail of such remedy.
- when Jesus Yujuico filed a complaint for Removal of Cloud and Annulment of Title with Damages against
PEA, respondent could have persevered to question and nullify Castros title. Instead, PEA undertook a
compromise agreement. PEA in effect admitted that the disputed land was owned by the predecessors- in-
interest of petitioners and their title legal and valid; and impliedly waived its right to contest the validity of said
title;
- respondent Republic even filed the petition for relief from judgment beyond the time frames allowed by the
rules, a fact even acknowledged by this Court in Public Estates Authority.
- Lastly, respondent only filed the reversion suit on June 8, 2001 after the passage of 27 years from the date
the decree of registration was issued to Fermina Castro
- Even granting arguendo that respondent Republic is not precluded by laches from challenging the title of
petitioners in the case at bar, still we find that the instant action for reversion is already barred by res judicata—
Compromise Agreement
- Evidence gathered from the ocular inspection is considered direct and firsthand information entitled to great
weight and credit while the Mataverde and Villapando reports are evidence weak in probative value, being
merely based on theoretical projections in the cadastral map or table surveys. Said projections must be
confirmed by the actual inspection and verification survey by the land inspectors and geodetic engineers of
the Bureau of Lands (ocular inspection found the land to be solid and dry land)
- mortgagor, Lourdes Farms, Inc. from which LBP supposedly obtained its alleged interest has never been the
owner of the mortgaged land. Acquisition of the subject land by Lourdes Farms, Inc. is legally impossible as
the land was released as alienable and disposable only on March 25, 1981. Even at present, no one could
have possessed the same under a claim of ownership for the period of thirty (30) years required under Section
VANILLAELA

Prescription as a mode to acquire ownership over public agricultural lands
Heirs of Malabanan v RP
it, all in the name of Bugayong. All four lots were
then sold by Bugayong to different persons.
- The validity of OCT No. P-2823, as well as its
derivative TCTs, remained undisturbed until some
residents of the land it covered filed a formal
petition before the Bureau of Lands on July 15,
1981. It was found out that: (1) at the time Sales
Patent No. 4576 was issued to Bugayong, the land
it covered was still within the forest zone; it was
released as alienable and disposable land only on
March 25, 1981, (2) the land was marshy and
covered by sea water during high tide; and (3)
Bugayong was never in actual possession of the
land.
- Considering such findings, the Bureau of Lands
resolved that the sales patent in favor of Bugayong
was improperly and illegally issued and that the
Director of Lands had no jurisdiction to dispose of
the subject land.
- Republic of the Philippines represented by the
Director of Lands, instituted a complaint for the
cancellation of title/patent and reversion of the land
- Mario Malabanan filed an application for land
registration covering a parcel of land.
- Malabanan claimed that he had purchased the
property from Eduardo Velazco, and that he and his
predecessors-in-interest had been in open,
notorious, and continuous adverse and peaceful
possession of the land for more than thirty (30)
years. Velazco testified that the property was
originally belonged to a twenty-two hectare
property owned by his great-grandfather, Lino
Velazco.
- Among the evidence presented by Malabanan
during trial was a Certification dated June 11, 2001,
issued by the Community Environment & Natural
Resources Office, Department of Environment and
Natural Resources (CENRO-DENR), which stated
that the subject property was “verified to be within
the Alienable or Disposable land per Land
Classification Map No. 3013 established under
Project No. 20-A and approved as such under FAO
4-1656 on March 15, 1982.”
- On 3 December 2002, the RTC approved the
application for registration. The Republic
interposed an appeal to the Court of Appeals,
arguing that Malabanan had failed to prove that the
property belonged to the alienable and disposable
land of the public domain, and that the RTC had
erred in finding that he had been in possession of
the property in the manner and for the length of
time required by law for confirmation of imperfect
title.
15
48(b) of Commonwealth Act No. 141, as amended (Since Lourdes Farms, Inc. is not the owner of the land, it
does not have the capacity to mortgage it to LBP)
- mortgagees of non-disposable lands, titles to which were erroneously issued, acquire no protection under the
Land Registration Law.
- title must also be cancelled as it was derived from OCT No. P-2823 which was not validly issued to Bugayong.
Forest lands cannot be owned by private persons. It is not registerable whether the title is a Spanish title or a
Torrens title.
- It is well settled that a certificate of title is void when it covers property of public domain classified as forest or
timber or mineral land. Any title issued covering non-disposable lots even in the hands of an alleged innocent
purchaser for value shall be cancelled
- subject property registered in his name when it was forest land. Indeed, even if the subject property had been
eventually segregated from the forest zone, neither petitioner nor its predecessors-in- interest could have
possessed the same under claim of ownership for the requisite period of thirty (30) years because it was
released as alienable and disposable only on March 25, 1981.
- Prescription does not lie against the State for reversion of property which is part of the public forest or of a
forest reservation registered in favor of any party. Public land registered under the Land Registration Act may
be recovered by the State at any time
- In connection with Section 14(1) of the Property Registration Decree, Section 48(b) of the Public Land Act
recognizes and confirms that “those who by themselves or through their predecessors in interest have been
in open, continuous, exclusive, and notorious possession and occupation of alienable and disposable lands
of the public domain, under a bona fide claim of acquisition of ownership, since June 12, 1945” have acquired
ownership of, and registrable title to, such lands based on the length and quality of their possession.
(a) Since Section 48(b) merely requires possession since 12 June 1945 and does not
require that the lands should have been alienable and disposable during the entire period of possession,
the possessor is entitled to secure judicial confirmation of his title thereto as soon as it is declared
alienable and disposable, subject to the timeframe imposed by Section 47 of the Public Land Act.
(b) The right to register granted under Section 48(b) of the Public Land Act is further
confirmed by Section 14(1) of the Property Registration Decree.
- prescription is recognized as a mode of acquiring ownership of patrimonial property. However, public domain
lands become only patrimonial property not only with a declaration that these are alienable or disposable.
There must also be an express government manifestation that the property is already patrimonial or no longer
retained for public service or the development of national wealth, under Article 422 of the Civil Code. And only
when the property has become patrimonial can the prescriptive period for the acquisition of property of the
public dominion begin to run.
(a) Patrimonial property is private property of the government. The person acquires
ownership of patrimonial property by prescription under the Civil Code is entitled to secure registration
thereof under Section 14(2) of the Property Registration Decree.
(b) There are two kinds of prescription by which patrimonial property may be acquired, one
ordinary and other extraordinary. Under ordinary acquisitive prescription, a person acquires ownership
of a patrimonial property through possession for at least ten (10) years, in good faith and with just title.
Under extraordinary acquisitive prescription, a person’s uninterrupted adverse possession of patrimonial
property for at least thirty (30) years, regardless of good faith or just title, ripens into ownership.
- It is clear that the evidence of petitioners is insufficient to establish that Malabanan has acquired ownership
over the subject property under Section 48(b) of the Public Land Act. There is no substantive evidence to
establish that Malabanan or petitioners as his predecessors-in-interest have been in possession of the
property since 12 June 1945 or earlier. The earliest that petitioners can date back their possession, according
to their own evidence—the Tax Declarations they presented in particular—is to the year 1948. Thus, they
cannot avail themselves of registration under Section 14(1) of the Property Registration Decree
- Neither can petitioners properly invoke Section 14(2) as basis for registration. While the subject property was
declared as alienable or disposable in 1982, there is no competent evidence that is no longer intended for
public use service or for the development of the national evidence, conformably with Article 422 of the Civil
VANILLAELA

Judicial confirmation of title (over lands of public domain) requires that there be prior classification of land as “alienable and disposable”
DENR et al v Mayor Yap
RP v Emmanuel Cortez
16
Code. The classification of the subject property as alienable and disposable land of the public domain does
not change its status as property of the public dominion under Article 420(2) of the Civil Code. Thus, it is
insusceptible to acquisition by prescription
- On 1978, then President Marcos issued Proc. No. - Regalian Doctrine and power of the executive to reclassify lands of the public domain
1801 declaring Boracay Island, among other - A positive act declaring land as alienable and disposable is required. In keeping with the presumption of
islands, caves and peninsulas in the Philippines, as State ownership, the Court has time and again emphasized that there must be a positive act of the
tourist zones and marine reserves under the government, such as an official proclamation, declassifying inalienable public land into disposable land for
administration of the Philippine Tourism Authority agricultural or other purposes
(PTA). - Since 1919, courts were no longer free to determine the classification of lands from the facts of each case,
- President Marcos later approved the issuance of except those that have already became private lands. Act No. 2874, promulgated in 1919 and reproduced in
PTA Circular 3-82 dated September 3, 1982, to Section 6 of CA No. 141, gave the Executive Department, through the President, the exclusive prerogative
implement Proclamation No. 1801. Claiming that to classify or reclassify public lands into alienable or disposable, mineral or forest. Since then, courts no longer
Proclamation No. 1801 and PTA Circular No 3-82 had the authority, whether express or implied, to determine the classification of lands of the public domain
precluded them from filing an application for judicial - Except for lands already covered by existing titles, Boracay was an unclassified land of the public
confirmation of imperfect title or survey of land for domain prior to Proclamation No. 1064. Such unclassified lands are considered public forest under
titling purposes, respondents-claimants Mayor . PD No. 705 (categorized all unclassified lands of the public domain as public forest)
Yap, Jr., and others filed a petition for declaratory - The classification is descriptive of its legal nature or status and does not have to be descriptive of
relief with the RTC in Kalibo, Aklan. what the land actually looks like. Unless and until the land classified as forest is released in an official
- The OSG countered that Boracay Island was an proclamation to that effect so that it may form part of the disposable agricultural lands of the public domain,
unclassified land of the public domain. It formed the rules on confirmation of imperfect title do not apply.
part of the mass of lands classified as “public - Private claimants cannot rely on Proclamation No. 1801 as basis for judicial confirmation of imperfect
forest,” which was not available for disposition title. The proclamation did not convert Boracay into an agricultural land
pursuant to Section 3(a) of the Revised Forestry - It was Proclamation No. 1064 of 2006 which positively declared part of Boracay as alienable and
Code, as amended. The OSG maintained that opened the same to private ownership. Classification of public lands is the exclusive prerogative of the
respondents-claimants’ reliance on PD No. 1801 Executive Department, through the Office of the President. Courts have no authority to do so. Absent such
and PTA Circular No. 3-82 was misplaced. Their classification, the land remains unclassified until released and rendered open to disposition.
right to judicial confirmation of title was governed - Private claimants are not entitled to apply for judicial confirmation of imperfect title under CA No. 141.
by Public Land Act and Revised Forestry Code, as Neither do they have vested rights over the occupied lands under the said law. There are two
amended. Since Boracay Island had not been requisites for judicial confirmation of imperfect or incomplete title under CA No. 141, namely: (1) open,
classified as alienable and disposable, whatever continuous, exclusive, and notorious possession and occupation of the subject land by himself or
possession they had cannot ripen into ownership. through his predecessors-in- interest under a bona fide claim of ownership since time immemorial or
- On May 22, 2006, during the pendency the petition from June 12, 1945; and (2) the classification of the land as alienable and disposable land of the public
in the trial court, President Gloria Macapagal- domain (The island remained an unclassified land of the public domain and, applying the Regalian
Arroyo issued Proclamation No. 1064 classifying doctrine, is considered State property)
Boracay Island partly reserved forest land - Where the land is not alienable and disposable, possession of the land, no matter how long, cannot confer
(protection purposes) and partly agricultural land ownership or possessory rights
(alienable and disposable). - They can take steps to preserve or protect their possession. For another, they may look into other modes of
applying for original registration of title,
- Cortez filed with the RTC an application for judicial - To prove that the land subject of an application for registration is alienable, an applicant must
confirmation of title over a parcel of land establish the existence of a positive act of the government such as a presidential proclamation or an
- Cortez claimed that the subject parcel of land is a executive order, an administrative action, investigation reports of Bureau of Lands investigators, and
portion of Lot No. 2697, which was declared for a legislative act or statute.
taxation purposes in the name of his mother. He - while the Advance Plan bearing the notation was certified by the Lands Management Services of the
alleged that Lot No. 2697 was inherited by his DENR, the certification refers only to the technical correctness of the survey plotted in the said plan
mother from her parents in 1946; after his parents and has nothing to do whatsoever with the nature and character of the property surveyed.
died, he and his siblings executed an Extra-Judicial - Cortez also failed to prove possession: prescription would only begin to run from the time that the State
Settlement of Estate over the properties of their officially declares that the public dominion property is no longer intended for public use, public service, or for
deceased parents and one of the properties the development of national wealth
allocated to him was the subject property. He - For as long as the property belongs to the State, although already classified as alienable or
alleged that the subject property had been in the disposable, it remains property of the public dominion if when it is "intended for some public service
possession of his family since time immemorial; or for the development of the national wealth."
that the subject parcel of land is not part of the - Accordingly, there must be an express declaration by the State that the public dominion property is
reservation of the (DENR) and is, in fact, classified no longer intended for public service or the development of the national wealth or that the property
as alienable and disposable has been converted into patrimonial. Without such express declaration, the property, even if classified
- RP opposed: failure of Cortez to prove possession as alienable or disposable, remains property of the public dominion, pursuant to Article 420(2), and
- Cortez only presented a survey by Geodetic thus incapable of acquisition by prescription. It is only when such alienable and disposable lands are
Engineer stating that “this survey is inside land expressly declared by the State to be no longer intended for public service or for the development of
VANILLAELA

RP v De Guzman vda De Joson
Property of Provinces, Cities and Municipalities
Vda De Tan Toco v Mun - widow of Tan Toco had sued the municipal council
Council of Iloilo
Pasay City Government v CFI
classified as alienable and disposable by the
Bureau of Forest Development”
- respondent filed her application for land
registration; land subject of the application was a
riceland
- riceland had been originally owned and possessed
by one Mamerto Dionisio since 1907;
- that on May 13, 1926, Dionisio, by way of a deed of
sale, had sold the land to Romualda Jacinto;
- that upon the death of Romualda Jacinto, her sister
Maria Jacinto (mother of the respondent) had
inherited the land;
- that upon the death of Maria Jacinto in 1963, the
respondent had herself inherited the land, owning
and possessing it openly, publicly, uninterruptedly,
adversely against the whole world, and in the
concept of owner since then; that the land had been
declared in her name for taxation purposes; and
that the taxes due thereon had been paid,
- land was within the unclassified region; that areas
within the unclassified region were denominated as
forest lands and thus fell under the exclusive
jurisdiction, control and authority of the Bureau of
Forest Development
of Iloilo for the amount of P42,966.40, being the
purchase price of two strips of land, one on Calle J.
M. Basa consisting of 592 square meters, and the
other on Calle Aldiguer consisting of 59 square
meters, which the municipality of Iloilo had
appropriated for widening said street.
- The Court of First Instance of Iloilo sentenced the
said municipality to pay the plaintiff the amount so
claimed, plus the interest, and the said judgment
was on appeal affirmed by this court.
- On account of lack of funds the municipality of Iloilo
was unable to pay the said judgment, wherefore
plaintiff had a writ of execution issue against the
property of the said municipality, by virtue of which
the sheriff attached two auto trucks used for street
sprinkling, one police patrol automobile, the police
stations on Mabini street, and in Molo and
Mandurriao and the concrete structures, with the
corresponding lots, used as markets by Iloilo, Molo,
and Mandurriao
- respondent-appellee V.D. Isip, Sons & Associates
represented by Vicente David Isip entered into a
contract with the City of Pasay represented by the
then Mayor Pablo Cuneta. The contract entitled
"Contract and Agreement" was for the construction
of a new Pasay City Hall
- The appellants paid only the total amount of
P1,100,000.00 to the respondent-appellee leaving
an amount of P613,096.00 immediately due from
the petitioner-appellants to the respondent-
17
the national wealth that the period of acquisitive prescription can begin to run. Such declaration shall
be in the form of a law duly enacted by Congress or a Presidential Proclamation
- Section 14(1) deals with possession and occupation in the concept of an owner while Section 14(2) involves
prescription as a mode of acquiring ownership.
- Therefore, since the effectivity of PD 1073 on 25 January 1977, it must now be shown that possession and
occupation of the piece of land by the applicant, by himself or through his predecessors-in-interest, started on
12 June 1945 or earlier. This provision is in total conformity with Section 14(1) of PD 1529.
- The respondent unquestionably complied with the second requisite by virtue of her having been in open,
continuous, exclusive and notorious possession and occupation of the land since June 12, 1945, or earlier.
Nonetheless, what is left wanting is the fact that the respondent did not discharge her burden to prove the
classification of the land as demanded by the first requisite.
- realizing her failure to prove the alienable and disposable classification of the land, the petitioner attached as
Annex A the certification issued by DENR-CENRO: “THIS IS TO CERTIFY that the parcel of land described
on lot 2633 located at San Isidro, Paombong, Bulacan as shown in the sketch plan surveyed by Geodetic
Engineer Carlos G. Reyes falls within the Alienable or Disposable Land Project”
- survey conducted by a geodetic engineer that included a certification on the classification of the land as
alienable and disposable was not sufficient to overcome the presumption that the land still formed part of the
inalienable public domain,
- Verily, a mere surveyor has no authority to reclassify lands of the public domain; land of the public domain, to
be the subject of appropriation, must be declared alienable and disposable either by the President or the
Secretary of the DENR
- application for original registration must be accompanied by (1) a CENRO or PENRO Certification;
and (2) a copy of the original classification approved by the DENR Secretary and certified as a true
copy by the legal custodian of the official records.
- The period of possession prior to the reclassification of the land as alienable and disposable land of the public
domain is not considered in reckoning the prescriptive period in favor of the possessor
- article 343 of the Civil Code divides the property of provinces and towns (municipalities) into property for public
use and patrimonial property
- The principle is that the property for public use of the State is not within the commerce of man and,
consequently, is inalienable and not subject to prescription. Likewise, property for public of the municipality is
not within the commerce of man so long as it is used by the public and, consequently, said property is also
inalienable.
- where a municipal corporation or country owns in its proprietary, as distinguished from its public or
governmental capacity, property not useful or used for a public purpose but for quasi private
purposes, the general rule is that such property may be seized and sold under execution against the
corporation, precisely as similar property of individuals is seized and sold. But the property held for
public purposes is not subject to execution merely because it is temporarily used for private
purposes, although if the public use is wholly abandoned it becomes subject to execution
- movable and immovable property of a municipality, necessary for governmental purpose, may not be attached
and sold for the payment of a judgment against the municipality. The supreme reason for this rule is the
character of the public use to which such kind of property is devoted.
- Upon the issuance of the writ of execution, the petitioner-appellants moved for its quashal alleging among
other things the exemption of the government from execution. This move on the part of the petitioner-appellant
is at first glance laudable for "all government funds deposited with the Philippine National Bank by any agency
or instrumentality of the government, whether by way of general or special deposit, remain government funds
and may not be subject to garnishment or levy. But, inasmuch as an ordinance has already been enacted
expressly appropriating the amount of P613,096.00 of payment to the respondent-appellee, then the
herein case is covered by the exception to the general nile stated in the case of Republic vs. Palacio
- Judgments against a State in cases where it has consented to be sued, generally operate merely to liquidate
and establish plaintiff's claim in the absence of express provision; otherwise they cannot be enforced by
processes of the law; and it is for the legislature to provide for the payment in such manner as it sees fit
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appellee. Notwithstanding demands for payment

thereof, the petitioner-appellants failed to remit the
aforesaid amount
- the Municipal Board of Pasay enacted Ordinance
No. 1012 which approved the Compromise
Agreement and also authorized and empowered
the incumbent City Mayor Jovito Claudio to
represent the appellant Pasay City Government
- at the instance of the appellee, the respondent
Court granted an order of execution pursuant to
which a writ of execution dated June 25, 1969 was
issued. On July 9, 1969, an application for and
notice of garnishment were made and effected
upon the funds of appellant Pasay City
Government with the Philippine National Bank
Espiritu v Mun Council of - The town plaza of Pozzorubio was subjected to - Town Plazas are properties of public dominion, to be devoted to public use and to be made available to the
Pozurrubio lease by the municipal council to market vendors public in general. They are outside the commerce of man and cannot be disposed of or even leased by the
who created small make-shift stalls and some even municipality to private parties.
small residences on said land. This was evidenced - While in case of war or during an emergency, town plazas may be occupied temporarily by private individuals,
by the collection of the municipal treasurer of P.25/ as was done and as was tolerated by the Municipality of Pozorrubio, when the emergency has ceased, said
per sq. meter. It was questioned by some civic temporary occupation or use must also cease, and the town officials should see to it that the town plazas
organizations which then called the attention of the should ever be kept open to the public and free from encumbrances or illegal private constructions.
Provincial Board and the Secretary of Interior which
declared such action as illegal. Thus, said Council
passed Reso. No. 209 (S. 1951) which asked for
the removal of said stalls within 60 days. Some of
the Stall owners opposed such resolution and filed
a prohibition in CFI Pangasinan
Province of Zamboanga Del - Prior to its incorporation as a chartered city, the - If the property is owned by the municipality in its public and governmental capacity, the property is public and
Norte v City of Zamboanga Municipality of Zamboanga used to be the Congress has absolute control over it. But if the property is owned in its private or proprietary capacity, then
provincial capital of the then Zamboanga Province. it is patrimonial and Congress has no absolute control; the municipality cannot be deprived of it without due
- On October 12, 1936, Commonwealth Act 39 was process and payment of just compensation. The capacity in which the property is held is, however, dependent
approved converting the Municipality of on the use to which it is intended and devoted
Zamboanga into Zamboanga City. Sec. 50 of the - the Court upheld the validity of Republic Act 3039 insofar as it affects the lots used as capitol site, school sites
Act also provided that buildings and properties and its grounds, hospital and leprosarium sites and the high school playground sites, or a total of 24 lots,
which the province shall abandon, upon the since these were held by the former Zamboanga province in its governmental capacity and therefore are
transfer of the capital to another place, will be subject to the absolute control of Congress. However, Republic Act 3039 cannot be applied to deprive
acquired and paid for by the City of Zamboanga at Zamboanga del Norte of its share in the value of the rest of the 26 remaining lots which are patrimonial
a price to be fixed by the Auditor General. properties since they are not being utilized for distinctly governmental purposes
- The properties and buildings referred to consisted
of 50 lots and some buildings constructed thereon,
located in the City of Zamboanga and covered
individually by Torrens certificates of title in the
name of Zamboanga Province. Based on the
records, such properties were being utilized as
capitol site, school site, hospital site, leprosarium,
highschool playground and hydroelectric site,
among others.
- Republic Act 711 was approved dividing the
province of Zamboanga into two (2): Zamboanga
del Norte and Zamboanga del Sur. As to how the
assets and obligations of the old province were to
be divided between the two new ones, Sec. 6 of the
law provided that the funds, assets and other
properties and the obligations of the province of
Zamboanga shall be divided equitably between the
Province of Zamboanga del Norte and the Province
of Zamboanga del Sur

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 19

- The Secretary of Finance then authorized the

Commissioner of Internal Revenue (CIR) to deduct
from the regular internal revenue allotment for the
City of Zamboanga for several fiscal quarters
totaling P57,373.46, which was credited to the
province of Zamboanga del Norte, in partial
payment of the P704,220,05 due it. However, on
June 17, 1961, Republic Act 3039 was approved
amending Sec. 50 of Commonwealth Act 39 by
providing that all buildings, properties and assets
belonging to the former province of Zamboanga
and located within the City of Zamboanga are
hereby transferred, free of charge, in favor of the
said City of Zamboanga.
Salas v Jarencio - February 24, 1919—the 4th Branch of the Court of - The rule is that when it comes to property of the municipality which it did not acquire in itsprivate or corporate
First Instance of Manila, acting as a land capacity with its own funds, the legislature can transfer itsadministration and disposition to an agency of the
registration court, rendered judgment in declaring National Government to be disposed of according to its discretion.
the City of Manila the owner in fee simple of a - The possession of a municipality, excepting those acquired with its own funds in its private or corporate
parcel of land known as LotNo. 1 capacity, such property is held in trust for the State for the benefit of its inhabitants, whether it be for
- August 21, 1920 –Title No. 4329 issued on in favor governmental or proprietary purposes.
of the City of Manila after the land in question was - The City of Manila, although declared by the Cadastral Court as owner in fee simple, has not shown by any
registered in the City's favor. The Torrens Title shred of evidence in what manner it acquired said land as its private or patrimonial property. The presumption
expressly states that the City of Manila was the is that such land came from the State upon the creation of the municipality. That it has in its name a registered
owner in 'fee simple' of the said land title is not questioned, but this title should be deemed to be held in trust for the State as the land covered
- September 20, 1960—the Municipal Board, thereby was part of the territory of the City of Manila granted by the sovereign upon its creation Therefore, the
presided by then Vice-Mayor Antonio Villegas, land in question pertains to the State and the City of Manila merely acted as trustee for the benefit of the
requested "His Excellency the President of the people therein for whom the State can legislate in the exercise of its legitimate powers.
Philippines to consider the feasibility of declaring
the city property as patrimonial property of the City
of Manila for the purpose of reselling these lots to
the actual occupants thereof
- The said resolution of the Municipal Board of the
City of Manila was officiallytransmitted to the
President of the Philippines the following day, to
which a copy wasfurnished to the Senate and
House of Representatives of the Congress of the
Philippines.
- June 20, 1964—RA 4118 was passed by the
Senate and approved by the President pursuant to
the request. Such bill was enacted for social justice
purposes, that they be sold to their currently
landless occupants.
- But due to reasons which do not appear in the
record, the City of Manila made a complete turn-
about, for on December 20, 1966, Antonio J.
Villegas, in his capacity asthe City Mayor of Manila
and the City of Manila as a duly organized
publiccorporation, brought an action for injunction
and/or prohibition with preliminaryinjunction to
restrain, prohibit and enjoin the herein appellants,
particularly the Governor of the Land Authority and
the Register of Deeds of Manila, from further
implementing Republic Act No. 4118, and praying
for the declaration of Republic Act No. 4118 as
unconstitutional.
Manila Lodge No 761 v CA - Act No. 1360 authorizing the city of Manila to - Firstly, if the reclaimed area was granted to the City of Manila as its patrimonial property, the City
reclaim a portion of Manila Bay. It was to form part could, by virtue of its ownership, dispose of the whole reclaimed area without need of authorization
of Luneta extension. to do so from the lawmaking body

VANILLAELA
 20

- It was stipulated that the reclaimed area “shall be - If the reclaimed area were patrimonial property of the City, the latter could dispose of it without need
the property of the City of Manila” and that “the city of the authorization provided by the statute, and the authorization to set aside . . . lease . . . or sell . . .
of Manila is hereby authorized to set aside a tract given by the statute would indeed be superfluous. Hence without the authorization expressly given by Act
not to exceed 500 ft. x 600 ft. for a hotel site for No. 1360, the City of Manila could not lease or sell even the northern portion; much less could it dispose of
lease with a term not to exceed 99 years. the whole reclaimed area. Consequently, the reclaimed area was granted to the City of Manila, not as its
- Act No. 1657 was enacted to amend Act No. 1360 patrimonial property
which authorize the city of Manila either to lease or - Secondly, the reclaimed area is an "extension to the Luneta in the City of Manila." 40 If the reclaimed area is
to sell the portion set aside as a hotel site. an extension of the Luneta, then it is of the same nature or character as the old Luneta. It is not disputed that
- The reclaimed area, 25 hectares, was registered the old Luneta is a public park or plaza and it is so considered by Section 859 of the Revised Ordinances of
and on January 20, 1911 OCT No. 1909 was the City of Manila. 42 Hence the "extension to the Luneta" must be also a public park or plaza and for public
issued in the name of the city of Manila. use
- The City of Manila conveyed 5,543.07sq.m. of - Thirdly, the reclaimed area was formerly a part of the Manila Bay. A bay is nothing more than an inlet of the
reclaimed area to Manila Lodge No. 761 which was sea. These are also property of public ownership devoted to public use, according to Article 339 of the Civil
then sold to Tarlac Development Corporation Code of Spain.When the shore or part of the bay is reclaimed, it does not lose its character of being property
together with all the improvements for public use.
- Act 1360, as amended, authorized the lease or sale of the northern portion of the reclaimed area as a hotel
site. The subject property is not that northern portion authorized to be leased or sold; the subject property is
the southern portion. Hence, applying the rule of expresio unius est exlusio alterius, the City of Manila was
not authorized to sell the subject property
Government Funds, garnishment of
Commissioner of Public - Government of the Philippines filed a complaint for - As early as 1919, the Court has pointed out that although the Government, as plaintiff in expropriation
Highways et al v Lourdes San eminent domain in the Court of First Instance of proceedings, submits itself to the jurisdiction of the Court and thereby waives its immunity from suit, the
Diego Rizal 1 for the expropriation of a parcel of land judgment that is thus rendered requiring its payment of the award determined as just compensation for the
belonging to N. T. Hashim, with an area of 14,934 condemned property as a condition precedent to the transfer to the title thereto in its favor, cannot be realized
square meters, needed to construct a public road upon execution. The Court there added that it is incumbent upon the legislature to appropriate any additional
- the Government took possession of the property amount, over and above the provisional deposit, that may be necessary to pay the award determined in the
upon deposit with the City Treasurer of the sum of judgment, since the Government cannot keep the land and dishonor the judgment. The universal rule that
P23,413.64 fixed by the Court therein as the where the State gives its consent to be sued by private parties either by general or special law, it may
provisional value of all the lots needed to construct limit claimant's action "only up to the completion of proceedings anterior to the stage of execution"
the road, including Hashim's property. The records and that the power of the Courts ends when the judgment is rendered, since government funds and
of the expropriation case were destroyed and lost properties may not be seized under writs of execution or garnishment to satisfy such judgments, is
during the second world war, and neither party took based on obvious considerations of public policy.
any step thereafter to reconstitute the proceedings - Disbursements of public funds must be covered by the corresponding appropriation as required by law. The
- respondent judge, as prayed for, rendered functions and public services rendered by the State cannot be allowed to be paralyzed or disrupted by the
judgment approving the Compromise Agreement diversion of public funds from their legitimate and specific objects, as appropriated by law
and ordering petitioners, as defendants therein, to
pay respondent estate as plaintiff therein, the total
sum of P209,076.00 for the expropriated lot.
- respondent Garcia, as special sheriff, forthwith
served a Notice of Garnishment, together with the
writ of execution notifying said bank that levy was
thereby made upon funds of petitioners Bureau of
Public Highways and the Auditor General on
deposit, with the bank to cover the judgment of
P209,076.00 in favor of respondent estate, and
requesting the bank to reply to the garnishment
within five days
- respondent estate further filed with the lower Court
an ex-parte motion for the issuance of an order
ordering respondent bank to release and deliver to
the special sheriff, respondent Garcia, the
garnished amount of P209,076.00 deposited under
the account of petitioner Bureau, which motion was
granted by respondent judge in an order of October
18, 1968
- respondent Coruña, allegedly taking advantage of
his position, authorized the issuance of a cashier's
check of the bank in the amount of P209,076.00,

VANILLAELA
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taken out of the funds of petitioner Bureau

deposited in current account with the bank and paid
the same to respondent estate, without notice to
said petitioner
Funds of “Government-owned” Corporations
Professional Video Inc v Tesda - TESDA procured the services of PROVI for the - Funds of public corporations which can sue and be sued are not exempt from garnishment. PVTA is also a
creation of polyvinyl (PVC) Identification Cards public corporation with the same attributes, a similar outcome is attributed. The government has entered with
which TESDA issues to trainees who passed its them into a commercial business hence it has abandoned its sovereign capacity and has stepped down to
certification process. the level of a corporation. Therefore, it is subject to rules governing ordinary corporations and in effect can be
- TESDA failed to pay an outstanding balance of sued. Therefore, the petition of PNB La Union is denied
P35M which led PROVI to file a complaint with RTC
for sum of money with damages against TESDA
which also prayed for a Writ of
Attachment/garnishment against TESDA.
- RTC granted the PROVI’s Writ against the
properties of TESDA amounting to P35M. The CA
reversed the RTC which stated that TESDA’s funds
are public in nature thus exempt from garnishment
and second, purchase of PVC Cards was a
necessary incident of its gov’t function

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