ladera v hodges

1. Hodges entered into a contract promising to sell a lot to Ladera under certain terms
and conditions. One of which is that the contract may be rescinded and annulled in
case Ladera failed to make the monthly payment 60 days after it is due.
2. After the execution of the contract, Ladera built a house on the lot assessed at
4,500 pesos. However, Ladera failed to pay the agreed installments so Hodges
rescinded the contract and filed an action for ejectment.
3. The MTC ruled in favor of Hodges and issued an alias writ of execution. Pursuant
thereto, the sheriff levied upon all rights, interests and participation over the house.
Notices of sale were posted, however, were not published in a newspaper of
general circulation.
4. An auction sale was then conducted but Ladera was not able to attend as she had
gone to Manila. The house was then sold to one Avelina Magno as the highest
bidder. Meanwhile, Ladera sold the same lot to one Manuel Villa and on the same
day purchased the house from Magno for 200 pesos. This, however, was not
recorded.
5. Ladera then returned to Iloilo and learned what happened. She went to see the
sheriff and represented that the property can still be redeemed and so she gave him
230 pesos. It does not appear, however, that it was turned over to Hodges.
Thereupon, Ladera filed an action against Hodges, the sheriff, Magno and Villa to
set aside the sale and recover the house.
6. The lower court ruled in favor of Ladera on the ground of non-compliance based on
Rule 39 of the Rules of Court. On appeal, Hodges contends that the house, built on
a lot owned by another, should be regarded as movable or personal property. The
sale of the land was also made without proper publication required by law.
ISSUE: Was the house movable or immovable?

RULING: Immovable.

1. As enumerated in the Civil Code, immovable property includes lands, buildings,

roads and constructions of all kinds adhered to the soil. The law does not make any
distinction whether or not the owner of the lot was the one who built the
construction.
2. Also, Ladera did not declare his house to be a chattel mortgage. The object of the
levy or sale was real property and its publication in a newspaper of general
circulation was indespensible. Without it, the execution sale was void.
3. In addition, Magno, the alleged purchaser at the auction sale, was a mere employee
of Hodges and the low bid made by her as well as the fact that she sold the house
to Villa on the same day Hodges sold him the land, proves that she was merely
acting for and in behalf of Hodges.
4. In the sale of immovables, the lack of title of the vendor taints the rights of the
subsequent purchasers. Possession in good faith is not equivalent to title.
5. The principles of accession regard buildings and constructions as mere accessories
to the land on which it is built, it is logical that said accessories should partake the
nature of the principal thing.
Mindanao bus co v city asssesor
Facts:
The City Assessor of Cagayan De Oro City assessed a realty tax on several equipment
and machineries of Mindanao Bus Co., a public utility solely engaged in transporting
passengers and cargoes by motor trucks.. The machineries sought to be assessed by
the respondent as real properties are sitting on cement or wooden platforms.
The petitioner appealed the assessment to the Board of Tax Appeals on the ground that
the same are not realty. The Board of Tax Appeals sustained the assessment of the city
assessor.

Additional note (for recit purposes):

– The machineries sought to be assessed by the respondent as real properties are the
following:
o Hobart Electric Welder Machine;
o Storm Boring machine;
o Lathe machine with motor;
o Black and Decker Grinder;
o PEMCO Hydraulic Press;
o Battery charger (Tungar charge machine); and
o D-Engine Waukesha-M-Fuel.
– These machineries have never been or were never used as industrial equipment to
produce finished products for sale, nor to repair machineries, parts and the like offered
to the general public indiscriminately for business or commercial purposes for which
petitioner has never engaged in, to date.”
Issue:
Whether the equipment and machineries in question, are considered immovable
properties, and therefore, subject to realty tax.
Held:
No. The equipment and machineries in question, are movable properties, and therefore,
not subject to realty tax.
Movable equipment to be immobilized in contemplation of the law must first be
“essential and principal elements” of an industry or works without which such industry or
works would be “unable to function or carry on the industrial purpose for which it was
established.”

The tools and equipment in question in this instant case are, by their nature, not
essential and principal elements of petitioner’s business of transporting passengers and
cargoes by motor trucks. They are merely incidentals — acquired as movables and
used only for expediency to facilitate and/or improve its service. Even without such tools
and equipment, its business may be carried on, as petitioner has carried on, without
such equipment, before the war. The transportation business could be carried on
without the repair or service shops if its rolling equipment is repaired or serviced in
another shop belonging to another.

Aside from the element of essentiality, Article 415 (5) of the New Civil Code also
requires that the industry or works be carried on in a building or on a piece of land.

But in the case at bar the equipment in question are destined only to repair or service
the transportation business, which is not carried on in a building or permanently on a
piece of land, as demanded by the law. Said equipment may not, therefore, be deemed
real property.
Makati leasing v wearever
Facts:
Wearever Textile Mills, Inc. executed a chattel mortgage contract in favor of Makati
Leasing and Finance Corporation covering certain raw materials and 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. Pursuant thereto, the sheriff enforcing the seizure order and removed
the main motor of the subject machinery. In a petition for certiorari and prohibition, the
Court of Appeals ordered the return of the machinery on the ground that the same
cannot be the subject of replevin because it is a real property pursuant to Article 415 of
the new Civil Code, the same being attached to the ground by means of bolts and the
only way to remove it from Wearever textile’s plant would be to drill out or destroy the
concrete floor. When the motion for reconsideration of Makati Leasing was denied by
the Court of Appeals, Makati Leasing elevated the matter to the Supreme Court.

Issue:
Whether or not the machinery in suit is real or personal property from the point of view
of the parties.

Held:

 It is personal property because it was agreed upon by the parties at the onset,
through chattel mortgage.

The said machinery is a personal property. Like what was involved in

the Tumalad case, if ahouse of strong materials, may be considered as personal
property for purposes of executing a chattel mortgage thereon, as long as the parties to
the contract so agree and no innocent third party will be prejudiced thereby, there is
absolutely no reason why a machinery, which is movable in its nature and becomes
immobilized only by destination or purpose, may not be likewise treated as such. This is
really because one who has so agreed is estopped from the denying the existence of
the chattel mortgage. The decision of the Court of Appeals was set aside and the order
of the lower court was reinstated.
santos evangelista v alto

Facts:
In 1949, Santos Evangelista instituted Civil Case No. 8235 of the CFI Manila (Santos Evangelista vs.
Ricardo Rivera) for a sum of money. On the same date, he obtained a writ of attachment, which was
levied upon a house, built by Rivera on a land situated in Manila and leased to him, by filing copy of said
writ and the corresponding notice of attachment with the Office of the Register of Deeds of Manila. In
due course, judgment was rendered in favor of Evangelista, who bought the house at public auction held
in compliance with the writ of execution issued in said case on 8 October 1951. The corresponding
definite deed of sale was issued to him on 22 October 1952, upon expiration of the period of
redemption. When Evangelista sought to take possession of the house, Rivera refused to surrender it,
upon the ground that he had leased the property from the Alto Surety & Insurance Co., Inc. and that the
latter is now the true owner of said property. It appears that on 10 May 1952, a definite deed of sale of
the same house had been issued to Alto Surety, as the highest bidder at an auction sale held, on 29
September 1950, in compliance with a writ of execution issued in Civil Case 6268 of the same court (Alto
Surety & Insurance vs. Maximo Quiambao, Rosario Guevara and Ricardo Rivera)" in which judgment for
the sum of money, had been rendered in favor of Alto Surety. Hence, on 13 June 1953, Evangelista
instituted an action against Alto Surety and Ricardo Rivera, for the purpose of establishing his title over
said house, and securing possession thereof, apart from recovering damages. After due trial, the CFI
Manila rendered judgment for Evangelista, sentencing Rivera and Alto Surety to deliver the house in
question to Evangelista and to pay him, jointly and severally, P40.00 a month from October 1952, until
said delivery. The decision was however reversed by the Court of Appeals, which absolved Alto Surety
from the complaint on account that although the writ of attachment in favor of Evangelista had been
filed with the Register of Deeds of Manila prior to the sale in favor of Alto Surety, Evangelista did not
acquire thereby a preferential lien, the attachment having been levied as if the house in question were
immovable property.

Issue:

Whether or not a house constructed by the lessee of the land on which it is built, should be dealt with,
for purpose of attachment, as immovable property?

Held:

The court ruled that the house is not personal property, much less a debt, credit or other personal
property not capable of manual delivery, but immovable property. As held in Laddera vs. Hodges (48 OG
5374), "a true building is immovable or real property, whether it is erected by the owner of the land or
by a usufructuary or lessee.” The opinion that the house of Rivera should have been attached, as
"personal property capable of manual delivery, by taking and safely keeping in his custody", for it
declared that "Evangelista could not have validly purchased Ricardo Rivera's house from the sheriff as
the latter was not in possession thereof at the time he sold it at a public auction” is untenable. Parties to
a deed of chattel mortgage may agree to consider a house as personal property for purposes of said
contract. However, this view is good only insofar as the contracting parties are concerned. It is based,
partly, upon the principle of estoppel. Neither this principle, nor said view, is applicable to strangers to
said contract. The rules on execution do not allow, and should not be interpreted as to allow, the special
consideration that parties to a contract may have desired to impart to real estate as personal property,
when they are not ordinarily so. Sales on execution affect the public and third persons. The regulation
governing sales on execution are for public officials to follow. The form of proceedings prescribed for
each kind of property is suited to its character, not to the character which the parties have given to it or
desire to give it. The regulations were never intended to suit the consideration that parties, may have
privately given to the property levied upon. The court therefore affirms the decision of the CA with cost
against Alto Surety.
TSAI V.CAGr. No. 120098, October 2, 2001FACTS:

Ever Textile Mills, Inc. (EVERTEX) obtained loan from Philippine Bank of Communications(PBCom),
secured by a Real and Chattel Mortgage over the lot where its factory stands, and the chattels located
therein as enumerated in a schedule attached to the mortgage contract. PBCom again granted
a second loan to EVERTEX which was secured by a Chattel Mortgage over personal properties
similar to those listed in the first mortgage deed. During the execution of the second mortgage,
EVERTEX purchased various machines and equipment. Upon EVERTEX's failure to meet its
obligation. PBCom, commenced extrajudicial foreclosure of the mortgage. PBCom leased the
entire factory premises to Ruby Tsai and sold to the same the factory, lock, stock and barrel including
the contested machineries. EVERTEX filed a complaint for annulment of sale, re conveyance, and
damages against PBCom, alleging that the extrajudicial foreclosure of subject mortgage was not valid,
and that PBCom, without any legal or factual basis, appropriated the contested properties which were
not included in the Real and Chattel Mortgage of the first mortgage contract nor in the second contract
which is a Chattel Mortgage, and neither were those properties included in the Notice of Sheriff's Sale.
ISSUE:
Whether or not the machineries and equipment were personal properties
HELD:
YES, the machineries and equipment are personal properties. The nature of the disputed
machineries, i.e., that they were heavy, bolted or cemented on the real property mortgaged does not
make them ipso facto immovable under Article 415 (3) and (5) of the New Civil Code. While it is true
that the properties appear to be immobile, a perusal of the contract of Real and Chattel Mortgage
executed by the parties herein reveal their intent, that is - to treat machinery and equipment as
chattels. If the machineries in question were contemplated to be included in the real estate mortgage,
there would have been no necessity to ink a chattel mortgage specifically with a listing of the
machineries covered thereby. Assuming that the properties in question are immovable by
nature, nothing detracts the parties from treating it as chattels to secure an obligation under the
principle of estoppel, where an immovable may be considered a personal property if there is a
stipulation as when it is used as security in the payment of an obligation where a chattel
mortgage is executed over it

While it is true that the controverted properties appear to be immobile, a

perusal of the contract of REM and CM executed by the parties gives a contrary
indication. In the case at bar, both the trial and appellate courts
show that the intention was to treat the machineries as movables or
personal property.
serg’s product v pci leasing
FACTS:

 PCI Leasing and Finance filed a complaint for sum of money, with an application for a writ of
replevin.
 Judge issued a writ of replevin directing its sheriff to seize and deliver the machineries and
equipment to PCI Leasing after 5 days and upon the payment of the necessary expenses.
 The sheriff proceeded to petitioner's factory, seized one machinery, with word that he would
return for other machineries.
 Petitioner (Serg’s Products) filed a motion for special protective order to defer enforcement of the
writ of replevin.
 PCI Leasing opposed the motion on the ground that the properties were still personal and
therefore can still be subjected to seizure and writ of replevin.
 Petitioner asserted that properties sought to be seized were immovable as defined in Article 415
of the Civil Code.
 Sheriff was still able to take possession of two more machineries
In its decision on the original action for certiorari filed by the Petitioner, the appellate court, Citing the
Agreement of the parties, held that the subject machines were personal property, and that they had only
been leased, not owned, by petitioners; and ruled that the "words of the contract are clear and leave no
doubt upon the true intention of the contracting parties."

ISSUE: Whether or not the machineries became real property by virtue of immobilization.

Ruling:
Petitioners contend that the subject machines used in their factory were not proper subjects of the Writ
issued by the RTC, because they were in fact real property.

Writ of Replevin: Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery
of personal property only.

Article 415 (5) of the Civil Code provides that machinery, receptacles, instruments or implements intended
by the owner of the tenement for an industry or works which may be carried on in a building or on a piece
of land, and which tend directly to meet the needs of the said industry or works

In the present case, the machines that were the subjects of the Writ of Seizure were placed by petitioners
in the factory built on their own land.They were essential and principal elements of their chocolate-making
industry.Hence, although each of them was movable or personal property on its own, all of them have
become “immobilized by destination because they are essential and principal elements in the industry.”

However, 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.
Section 12.1 of the Agreement between the parties provides “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.”

The machines are personal property and they are proper subjects of the Writ of Replevin
jose burgos v chief of staff
Facts:

Two warrants were issued against petitioners for the search on the premises of “Metropolitan Mail”
and “We Forum” newspapers and the seizure of items alleged to have been used in subversive
activities. Petitioners prayed that a writ of preliminary mandatory and prohibitory injunction be issued
for the return of the seized articles, and that respondents be enjoined from using the articles thus
seized as evidence against petitioner.

Petitioners questioned the warrants for the lack of probable cause and that the two warrants issued
indicated only one and the same address. In addition, the items seized subject to the warrant were
real properties.

Issue: Whether or not the two warrants were valid to justify seizure of the items.

Held:

The defect in the indication of the same address in the two warrants was held by the court as a
typographical error and immaterial in view of the correct determination of the place sought to be
searched set forth in the application. The purpose and intent to search two distinct premises was
evident in the issuance of the two warrant.

As to the issue that the items seized were real properties, the court applied the principle in the case
of Davao Sawmill Co. v. Castillo, ruling “that machinery which is movable by nature becomes
immobilized when placed by the owner of the tenement, property or plant, but not so when placed by
a tenant, usufructuary, or any other person having only a temporary right, unless such person acted
as the agent of the owner.” In the case at bar, petitioners did not claim to be the owners of the land
and/or building on which the machineries were placed. This being the case, the machineries in
question, while in fact bolted to the ground remain movable property susceptible to seizure under a
search warrant.

However, the Court declared the two warrants null and void.

Probable cause for a search is defined as such facts and circumstances which would lead a
reasonably discreet and prudent man to believe that an offense has been committed and that the
objects sought in connection with the offense are in the place sought to be searched. The Court
ruled that the affidavits submitted for the application of the warrant did not satisfy the requirement of
probable cause, the statements of the witnesses having been mere generalizations.

Furthermore, jurisprudence tells of the prohibition on the issuance of general warrants.

lopez v orosa
Facts:
Orosa, a resident of the same province as Lopez, invited the latter to make an investment in the theatre
business. Lopez declined to invest but agreed to supply the lumber necessary for the construction of the
proposed theatre. They had an oral agreement that Orosa would be personally liable for any account that
the said construction might incur and that payment would be on demand and not cash on delivery basis.

Lopez delivered the which was used for construction amounting to P62,255.85. He was paid only
P20,848.50, leaving a balance of P41,771.35.

The land on which the building was erected previously owned by Orosa, was later on acquired by the
corporation.

. As Lopez was pressing Orosa for payment, the latter and president of the corporation promised to obtain
a bank loan by mortgaging the properties of the Plaza Theatre., out of which the unpaid balance would be
satisfied. But unknown to Lopez, the corporation already obtained a loan with Luzon Surety Company as
surety, and the corporation in turn executed a mortgage on the land and building in favor of the said
company as counter-security

Due to the persistent demands of Lopez, Orosa executed a “deed of assignment” over his shares of stock
in the corporation.

As it remained unsettled, Lopez filed a case against Orosa and Plaza theatre praying that they be
sentenced to pay him jointly and severally of the unpaid balance; and in case defendants fail to pay, the
land and building owned by the corporation be sold in public auction with the proceeds be applied to the
balance; or the shares of stock be sold in public auction.
The lower court held that defendants were jointly liable for the unpaid balance and Lopez thus acquired
the material man’s lien over the construction. The lien was merely confined to the building and did not
extend to the on which the construction was made.
Lopez tried to secure a modification of the decision, but was denied.
Issue:
Whether a materialmen’s lien for the value of materials used in the construction of building
attaches to said structure alone, and does not extend to the land on which building is adhered
to.

Held:
Yes. Such lien attaches to structure alone, and does not extend to the land where the building
is.In view of employment of the phrase, “real estate or immovable property”, and in as much as
said provision does not contain any specification delimiting the lien to the building, said article
must be construed as to embrace both the land and building or the structure adhering
thereto. SC cannot subscribe to this view, for while it is true that real estate connotes land and
building constructed thereon, it is obvious that the inclusion of the building, separate and distinct
from the land, in the enumeration of what may constitute real properties could mean only one
thing – that the building is by itself an immovable property. Moreover, in view of the absence of
any specific provision of law to the contrary, a building is an immovable property, irrespective of
whether or not said structure and the land on which it is adhered to belong to the same owner.

A close examination of the provision of the Civil Code reveals that the law gives preference to
unregistered refectionary credits only with respect to the real estate upon the refection or work
was made. The conclusion is that it must be that the lien so created attaches merely to the
immovable property for the construction or repair of which the obligation was
incurred. Therefore, the lien in favor of appellant for the unpaid value of the lumber used in
construction of the building attaches only to said structure and to no other property of the
obligors.
GR. No. L- 32917, July 18, 1988 Julian Yap vs. Hon. Santiago O. Tañada, etc. and Goulds Pumps
Int’l Phil., Inc.

Case: This is a collection suit instituted by Goulds Pumps against Spouses Yap.
Facts: Yap bought from Goulds Pumps a water pump. The water pump was the installed in his premises.
Upon failure to pay the installment, Goulds instituted the case.
RTC: Judge Tañada rendered judgment in favor of Goulds. A writ of execution was released and the
same pump was levied by the sheriff. Yap appealed the judgment to SC.
Issue: Whether of not the pump is immovable as contested by petitioner Yap such that the judgment of
Judge Tañada be invalidated for not following the procedure in levying a real property.
SC: The water pump installed in movable property. The Civil Code considers as immovable property,
among others, anything "attached to an immovable in a fixed manner, in such a way that it cannot be
separated therefrom without breaking the material or deterioration of the object. The pump does not fit
this description. It could be, and was in fact separated from Yap's premises without being broken or
suffering deterioration. Obviously the separation or removal of the pump involved nothing more
complicated than the loosening of bolts or dismantling of other fasteners. DENIED.

Machinery & Engineering Supplies, Inc. v. Court of Appeals

Doctrine: Said machinery and equipment were "intended by the owner of the tenement
for an industry" carried on said immovable and tended "directly to meet the needs of
said industry." For these reasons, they were already immovable pursuant to paragraph
3 and 5 of Article 415 of Civil Code. --Facts: Petitioner filed a complaint for replevin in
the CFI of Manila against Ipo Limestone Co., Inc. and Dr. Antonio Villarama for the
recovery of the machineries and equipments sold and delivered to defendants at their
factory in Bigti, Norzagaray, Bulacan. Respondent judge issued order for Provincial
Sheriff to seize and take immediate possession of the properties. But the equipment
could not possibly be dismantled without causing damage to the wooden frames
attached to them. As Roco, pet's president, insisted in dismantling it on his own
responsibility, alleging that bond was posted for such, the deputy sheriffs directed that
some of the supports thereof be cut. Defendant filed counter-bond. Trial court ordered
return and reinstallation of machineries. Petitioner deposited them along the road, near
the quarry of the defendant without reinstallation rendering them useless. Petitioner
complains that the respondent Judge had disregarded his manifestation that
equipments seized are the Petitioner's property until fully paid for and as such never
became immovable and ordinarily replevin may be brought to recover any specific
personal property unlawfully taken or detained from the owner thereof, provided such
property is capable of identification and delivery; but replevin will not lie for the recovery
of real property or incorporeal personal property.

Issue: W/N the equipment can be seized by the sheriff

Ruling: When the sheriff repaired to the premises of respondent, Ipo Limestone Co.,
Inc., the machinery and equipment in question appeared to be attached to the land,
particularly to the concrete foundation of said premises, in a fixed manner, in such a
way that the former could not be separated from the latter "without breaking the material
or deterioration of the object." Hence, in order to remove said outfit, it became
necessary, not only to unbolt the same, but, also, to cut some of its wooden supports.
Moreover, said machinery and equipment were "intended by the owner of the tenement
for an industry" carried on said immovable and tended "directly to meet the needs of the
said industry." For these reasons, they were already immovable property pursuant to
paragraphs 3 and 5 of Article 415 of Civil Code of the Philippines, which are
substantially identical to paragraphs 3 and 5 of Article 334 of the Civil Code of Spain. As
such immovable property, they were not subject to replevin.
Meralco v. City Assessor GR No. 166102

Before the Court is a Petition for Review on Certiorari seeking the reversal of the
Decision1 dated May 13, 2004 and Resolution dated November 18, 2004 of the Court of
Appeals in CA-G.R. SP No. 67027. The appellate court affirmed the Decision3 dated
May 3, 2001 of the Central Board of Assessment Appeals (CBAA) in CBAA Case No. L-
20-98, which, in turn, affirmed with modification the Decision4 dated June 17, 19985 of
the Local Board of Assessment Appeals (LBAA) of Lucena City, Quezon Province, as
regards Tax Declaration Nos. 019-6500 and 019-7394, ruling that MERALCO is liable
for real property tax on its transformers, electric posts (or poles), transmission lines,
insulators, and electric meters, beginning 1992.

MERALCO failed to persuade the Court of Appeals that the transformers, transmission
lines, insulators, and electric meters mounted on the electric posts of MERALCO were
not real properties. The appellate court invoked the definition of "machinery" under
Section 199(o) of the Local Government Code and then wrote that:

We firmly believe and so hold that the wires, insulators, transformers and electric
meters mounted on the poles of [MERALCO] may nevertheless be considered as
improvements on the land, enhancing its utility and rendering it useful in
distributing electricity. The said properties are actually, directly and exclusively
used to meet the needs of [MERALCO] in the distribution of electricity.

In addition, "improvements on land are commonly taxed as realty even though for
some purposes they might be considered personalty. It is a familiar personalty
phenomenon to see things classed as real property for purposes of taxation
which on general principle might be considered personal property."

Issue: Whether or not the transformers, electric posts (or poles), transmission lines,
insulators, and electric meters are real properties.

Held: While the Local Government Code still does not provide for a specific definition of
"real property," Sections 199(o) and 232 of the said Code, respectively, gives an
extensive definition of what constitutes "machinery" and unequivocally subjects such
machinery to real property tax. The Court reiterates that the machinery subject to real
property tax under the Local Government Code "may or may not be attached,
permanently or temporarily to the real property;" and the physical facilities for
production, installations, and appurtenant service facilities, those which are mobile, self-
powered or self-propelled, or are not permanently attached must (a) be actually,
directly, and exclusively used to meet the needs of the particular industry, business, or
activity; and (2) by their very nature and purpose, be designed for, or necessary for
manufacturing, mining, logging, commercial, industrial, or agricultural purposes.

Article 415, paragraph (1) of the Civil Code declares as immovables or real properties
"[l]and, buildings, roads and constructions of all kinds adhered to the soil." The land,
buildings, and roads are immovables by nature "which cannot be moved from place to
place," whereas the constructions adhered to the soil are immovables by incorporation
"which are essentially movables, but are attached to an immovable in such manner as
to be an integral part thereof."57 Article 415, paragraph (3) of the Civil Code, referring to
"[ejverything attached to an immovable in a fixed manner, in such a way that it cannot
be separated therefrom without breaking the material or deterioration of the object," are
likewise immovables by incorporation. In contrast, the Local Government Code
considers as real property machinery which "may or may not be attached, permanently
or temporarily to the real property," and even those which are "mobile."

Article 415, paragraph (5) of the Civil Code considers as immovables or real properties
"[machinery, receptacles, instruments or implements intended by the owner of the
tenement for an industry or works which may be carried on in a building or on a piece of
land, and which tend directly to meet the needs of the said industry or works." The Civil
Code, however, does not define "machinery."

The properties under Article 415, paragraph (5) of the Civil Code are immovables by
destination, or "those which are essentially movables, but by the purpose for which they
have been placed in an immovable, partake of the nature of the latter because of the
added utility derived therefrom."58 These properties, including machinery, become
immobilized if the following requisites concur: (a) they are placed in the tenement by the
owner of such tenement; (b) they are destined for use in the industry or work in the
tenement; and (c) they tend to directly meet the needs of said industry or works.59 The
first two requisites are not found anywhere in the Local Government Code.

Furthermore, in Caltex (Philippines), Inc. v. Central Board of Assessment Appeals,62

the Court acknowledged that "[i]t is a familiar phenomenon to see things classed as real
property for purposes of taxation which on general principle might be considered
personal property[.]" Therefore, for determining whether machinery is real property
subject to real property tax, the definition and requirements under the Local
Government Code are controlling.

Capitol Wireless Inc. vs. Provincial Treasurer of Batangas G.R. no. 180110

Facts: Petitioner Capitol Wireless Inc. (Capwire) is a Philippine corporation in the business of providing
international telecommunications services.3 As such provider, Capwire has signed agreements with other
local and foreign telecommunications companies covering an international network of submarine cable
systems uch as the Asia Pacific Cable Network System (APCN).

Petitioner Capwire claims that it is co-owner only of the so-called "Wet Segment" of the APCN, while the
landing stations or terminals and Segment E of APCN located in Nasugbu, Batangas are allegedly owned
by the Philippine Long Distance Telephone Corporation (PLDT).6 Moreover, it alleges that the Wet
Segment is laid in international, and not Philippine, waters.7

Capwire claims that as co-owner, it does not own any particular physical part of the cable system but,
consistent with its financial contributions, it owns the right to use a certain capacity of the said system.8
This property right is allegedly reported in its financial books as "Indefeasible Rights in Cable Systems."9

However, for loan restructuring purposes, Capwire claims that "it was required to register the value of its
right," hence, it engaged an appraiser to "assess the market value of the international submarine cable
system and the cost to Capwire."

As a result, the respondent Provincial Assessor of Batangas (Provincial Assessor) issued the following
Assessments of Real Property (ARP) against Capwire. n essence, the Provincial Assessor had
determined that the submarine cable systems described in Capwire's Sworn Statement of True Value of
Real Properties are taxable real property, a determination that was contested by Capwire in an exchange
of letters between the company and the public respondent

Issue: whether submarine wires or cables used for communications may be taxed like other real estate.
Held: Yes. Submarine or undersea communications cables are akin to electric transmission lines which
this Court has recently declared in Manila Electric Company v. City Assessor and City Treasurer of
Lucena City,37 as "no longer exempted from real property tax" and may qualify as "machinery" subject to
real property tax under the Local Government Code. To the extent that the equipment's location is
determinable to be within the taxing authority's jurisdiction, the Court sees no reason to distinguish
between submarine cables used for communications and aerial or underground wires or lines used for
electric transmission, so that both pieces of property do not merit a different treatment in the aspect of
real property taxation. Both electric lines and communications cables, in the strictest sense, are not
directly adhered to the soil but pass through posts, relays or landing stations, but both may be classified
under the term "machinery" as real property under Article 415(5)38 of the Civil Code for the simple reason
that such pieces of equipment serve the owner's business or tend to meet the needs of his industry or
works that are on real estate. Even objects in or on a body of water may be classified as such, as
"waters" is classified as an immovable under Article 415(8)39 of the Code. A classic example is a
boathouse which, by its nature, is a vessel and, therefore, a personal property but, if it is tied to the shore
and used as a residence, and since it floats on waters which is immovable, is considered real property.40
Besides, the Court has already held that "it is a familiar phenomenon to see things classed as real
property for purposes of taxation which on general principle might be considered personal property."41

Thus, absent any showing from Capwire of any express grant of an exemption for its lines and cables
from real property taxation, then this interpretation applies and Capwire's submarine cable may be held
subject to real property tax.
LAUREL V GARCIA

Petitioners seek to stop the Philippine Government to sell the Roppongi

Property, which is located in Japan. It is one of the properties given by the
Japanese Government as reparations for damage done by the latter to the
former during the war.

Petitioner argues that under Philippine Law, the subject property is property
of public dominion. As such, it is outside the commerce of men. Therefore, it
cannot be alienated.

Respondents aver that Japanese Law, and not Philippine Law, shall apply to
the case because the property is located in Japan. They posit that the principle
of lex situs applies.

Issues and Held:

1. WON the subject property cannot be alienated.

The answer is in the affirmative.

Under Philippine Law, there can be no doubt that it is of public dominion

unless it is convincingly shown that the property has become patrimonial.
This, the respondents have failed to do. As property of public dominion, the
Roppongi lot is outside the commerce of man. It cannot be alienated.

It is not for the President to convey valuable real property of the government on his or her own
sole will. Any such conveyance must be authorized and approved by a law enacted by the
Congress.

The fact that the Roppongi site has not been used for a long time for actual
Embassy service doesn’t automatically convert it to patrimonial property. Any such conversion
happens only if the property is withdrawn from public use. A property continues to be part of the public
domain, not available for
private appropriation or ownership until there is a formal declaration on the part of the government to
withdraw it from being such.

Rabuco vs Villegas 55 SCRA 656

Facts

The constitutionality of RA No. 3120 was assailed by the city officials of the City of Manila
contending that the conversion of the lots in Malate area into disposable and alienable lands of the
state and placing its administration and disposal to the LTA to be subdivided into lots and selling it to
bona fide occupants thereof in installments constitutes a deprivation of the City of Manila of its
property by providing for its sale without the payment of just compensation.

Issue

Whether or not the properties in dispute may be disposed without paying just compensation to the
City of Manila?

Held

The court held that the assailed RA 3120 is constitutional. The lots in question are owned by the City
of Manila in its public and governmental capacity and are therefore public property over which
Congress has absolute control as distinguished from patrimonial property owned by it which cannot
be deprived from the City without just compensation and without due process. RA 3120 expressly
provides that the properties are reserved for the purpose of communal property and ordered its
conversion into disposable and alienable lands of the state to be sold to its bona fide occupants. It
has been an established doctrine that the state reserves its rights to classify its property under its
legislative prerogative and the court cannot interfere on such power of the state.
 Macasiano v. Diokno

Facts:

On 13 June 1990, the Municipality of Paranaque passed Ordinance 86, s. 1990 which authorized the
closure of J. Gabrielle, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena Streets located at
Baclaran, Parañaque, Metro Manila and the establishment of a flea market thereon. The said ordinance
was approved by the municipal council pursuant to MCC Ordinance 2, s. 1979, authorizing and regulating
the use of certain city and/or municipal streets, roads and open spaces within Metropolitan Manila as
sites for flea market and/or vending areas, under certain terms and conditions. On 20 July 1990, the
Metropolitan Manila Authority approved Ordinance 86, s. 1990 of the municipal council subject to
conditions. On 20 June 1990, the municipal council issued a resolution authorizing the Parañaque Mayor
to enter into contract with any service cooperative for the establishment, operation, maintenance and
management of flea markets and/or vending areas. On 8 August 1990, the municipality and Palanyag, a
service cooperative, entered into an agreement whereby the latter shall operate, maintain and manage
the flea market with the obligation to remit dues to the treasury of the municipal government of
Parañaque. Consequently, market stalls were put up by Palanyag on the said streets. On 13 September
1990 Brig. Gen. Macasiano, PNP Superintendent of the Metropolitan Traffic Command, ordered the
destruction and confiscation of stalls along G.G. Cruz and J. Gabrielle St. in Baclaran. These stalls were
later returned to Palanyag. On 16 October 1990, Macasiano wrote a letter to Palanyag giving the latter 10
days to discontinue the flea market; otherwise, the market stalls shall be dismantled.

On 23 October 1990, the municipality and Palanyag filed with the trial court a joint petition for prohibition
and mandamus with damages and prayer for preliminary injunction. On 17 December 1990, the trial court
issued an order upholding the validity of Ordinance 86 s. 1990 of the Municipality of Parañaque and
enjoining Macasiano from enforcing his letter-order against Palanyag. Hence, a petition for certiorari
under Rule 65 was filed by Macasiano thru the OSG.

Issue:

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

Held:

The property of provinces, cities and municipalities is divided into property for public use and patrimonial
property (Art. 423, Civil Code). As to property for public use, Article 424 of Civil Code provides that
"property for public use, in the provinces, cities and municipalities, consists of the provincial roads, city
streets, the squares, fountains, public waters, promenades, and public works for public service paid for by
said provinces, cities or municipalities. All other property possessed by any of them is patrimonial and
shall be governed by this Code, without prejudice to the provisions of special laws." In the present case,
thus, J. Gabrielle G.G. Cruz, Bayanihan, Lt. Gacia Extension and Opena streets are local roads used for
public service and are therefore considered public properties of the 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 government have no authority whatsoever to control or regulate the use of public
properties unless specific authority is vested upon them by Congress.
REPUBLIC V. CA

FACTS:

Respondent Morato filed a free patent application on a parcel of land, which was
approved and issued an original certificate of title. Both the free patent and title
specifically mandate that the land shall not be alienated nor encumbered within 5 years
from the date of the issuance of the patent. The District Land Officer, acting upon
reports that Morato had encumbered the land and upon finding that the subject land is
submerged in water during high tide and low tide, filed a complaint for cancellation of
the title and reversion of the parcel of land to the public domain. RTC dismissed the
complaint. CA affirmed.

ISSUE:

1. Whether or not respondent violated the free patent condition prohibiting encumbering
the land within the 5-year period?

2. Whether or not the land is of public domain?

HELD

1. Yes. Public Land Act Sec. 18 provides that…lands acquired under free patent or
homestead provisions shall not be subject to encumbrance or alienation from the date
of approval of the application and for a term of 5 years from and after the date of
issuance of the patent or grant…The contracts of lease and mortgage executed by
Morato constitute an encumbrance as contemplated by section 18 of the Public Land
Act because such contracts impair the use of the property.

2. Yes. Based from the facts, the land is clearly foreshore as it is subject to the ebb and
flow of the tide. 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 Government v. Cabangis, the Court annulled the registration of land subject of
cadastral proceedings when the parcel subsequently became foreshore land. In another
case, the Court voided the registration decree of a trial court and held that said court
had no jurisdiction to award foreshore land to any private person or entity. The subject
land in this case, being foreshore land should therefor be returned to the public domain.
zamboanga del norte v city of zamboanga
Facts:
After the incorporation of the Municipality of Zamboanga as a chartered city, petitioner
province contends that facilities belonging to the latter and located within the City of
Zamboanga will be acquired and paid for by the said city.

(Such properties include lots of capitol site, schools, hospitals, leprosarium,

high school playgrounds, burleighs, and hydro-electric sites.)
However, respondent city avers that pursuant to RA No. 3039 providing for the transfer
free of charge of all buildings, properties and assets belonging to the former province of
Zamboanga and located within the City of Zamboanga to the said City.

Issue:
Whether RA 3039 is unconstitutional on the grounds that it deprives Zamboanga del
Norte of its private properties.

Held:
No. RA 3039 is valid. The properties petitioned by Zamboanga del Norte is a public
property.

The validity of the law ultimately depends on the nature of the 50 lots and buildings
thereon in question. For, the matter involved here is the extent of legislative control over
the properties of a municipal corporation, of which a province is one. The principle itself
is simple: If the property is owned by the municipality (meaning municipal corporation) in
its public and governmental capacity, the property is public and Congress has absolute
control over it. But if the property is owned in its private or proprietary capacity, then it is
patrimonial and Congress has no absolute control. The municipality cannot be deprived
of it without due process and payment of just compensation.

The capacity in which the property is held is, however, dependent on the use to which it
is intended and devoted. Now, which of two norms, i.e., that of the Civil Code or that
obtaining under the law of Municipal Corporations, must be used in classifying the
properties in question?

Civil Code
The Civil provide: ART. 423. The property of provinces, cities, and municipalities is
divided into property for public use and patrimonial property; ART. 424. Property for
public use, in the provinces, cities, and municipalities, consists of the provincial roads,
city streets, municipal streets, the squares, fountains, public waters, promenades, and
public works for public service paid for by said provinces, cities, or municipalities. All
other property possessed by any of them is patrimonial and shall be governed by this
Code, without prejudice to the provisions of special laws.

Applying the above cited norm, all the properties in question, except the two (2) lots
used as High School playgrounds, could be considered as patrimonial properties of the
former Zamboanga province. Even the capital site, the hospital and leprosarium sites,
and the school sites will be considered patrimonial for they are not for public use. They
would fall under the phrase “public works for public service” for it has been held that
under the ejusdem generis rule, such public works must be for free and indiscriminate
use by anyone, just like the preceding enumerated properties in the first paragraph of
Art 424. The playgrounds, however, would fit into this category.
 Law of Municipal Corporations
On the other hand, applying the norm obtaining under the principles constituting the law
of Municipal Corporations, all those of the 50 properties in question which are devoted
to public service are deemed public; the rest remain patrimonial. Under this norm, to be
considered public, it is enough that the property be held and, devoted for governmental
purposes like local administration, public education, public health, etc.

Final Ruling
The controversy here is more along the domains of the Law of Municipal Corporations
— State vs. Province — than along that of Civil Law. If municipal property held and
devoted to public service is in the same category as ordinary private property, then that
would mean they can be levied upon and attached; they can even be acquired thru
adverse possession — all these to the detriment of the local community. It is wrong to
consider those properties as ordinary private property.

Lastly, the classification of properties other than those for public use in the
municipalities as patrimonial under Art. 424 of the Civil Code — is “… without prejudice
to the provisions of special laws.” For purpose of this article, the principles, obtaining
under the Law of Municipal Corporations can be considered as “special laws”. Hence,
the classification of municipal property devoted for distinctly governmental purposes as
public should prevail over the Civil Code classification in this particular case.

CHAVEZ V. PUBLIC ESTATE AUTHORITY

FACTS:

From the time of Marcos until Estrada, portions of Manila Bay were being reclaimed. A
law was passed creating the Public Estate Authority which was granted with the power
to transfer reclaimed lands. Now in this case, PEA entered into a Joint Venture
Agreement with AMARI, a private corporation. Under the Joint Venture Agreement
between AMARI and PEA, several hectares of reclaimed lands comprising the Freedom
Islands and several portions of submerged areas of Manila Bay were going to be
transferred to AMARI .

ISSUE:

Whether or not the stipulations in the Amended JVA for the transfer to AMARI of lands,
reclaimed or to be reclaimed, violate the Constitution

RULING: YES!

Under the Public Land Act (CA 141, as amended), reclaimed lands are classified as
alienable and disposable lands of the public domain Section 3 of the Constitution:
Alienable lands of the public domain shall be limited to agricultural lands. Private
corporations or associations may not hold such alienable lands of the public domain
except by lease The 157.84 hectares of reclaimed lands comprising the Freedom
Islands, now covered by certificates of title in the name of PEA, are alienable lands of
the public domain. PEA may lease these lands to private corporations but may not sell
or transfer ownership of these lands to private corporations. PEA may only sell these
lands to Philippine
citizens, subject to the ownership limitations in the 1987 Constitution and existing laws.
Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987
Constitution. Under Article 1409 of the Civil Code, contracts whose “object or purpose is
contrary to law,” or whose “object is outside the commerce of men,” are “inexistent and
void from the beginning.” The Court must perform its duty to defend and uphold the
Constitution, and therefore declares the Amended JVA null and void ab initio

Villarico v. Sarmiento, 442 SCRA 110, 115 2004

FACTS:

Spouses Villarico sought for the confirmation of title over a parcel of land to which they allege that they
absolutely own the land. This was opposed to by a person who posed himself also to be the rightful
owner of the land, as well as by the Director of Forestry who said that the subject land is part of
forest land and may not be appropriated. Trial and appellate court dismissed application of
petitioners.

ISSUE:

Whether or not the plaintiff-appellant has acquired a right of way over the land of the government which is
between his property and the ninoy aquino avenue.

RULING:

There has been no showing that a declassification has been made of the
land in question as disposable or alienable. And the record indeed
disclosed that applicants have not introduced any evidence which would have led the court a quo to
rule otherwise.

Forest lands cannot be owned by private persons. Possession thereof, no

matter how long doesn’t ripen to a registrable title. The adverse possession which may be the
basis of a grant or title or confirmation of an imperfect title refers only to alienable or disposable portions
of the public domain.

HEIRS OF MALABANAN V REPUBLIC

FACTS:

Mario Malabanan filed an application for land registration covering the property he
purchased from Eduardo Velazco, claiming that the property formed part of the
alienable and disposable land of the public domain, and that he and his predecessors-
in-interest had been in open, continuous, uninterrupted, public and adverse possession
and occupation of the land for more than 30 years, thereby entitling him to the judicial
confirmation of his title.The application was granted by the RTC. However, the OSG for
the Republic appealed the judgment to the CA, which reversed the RTC Judgment.Due
to Malabanan’s intervening demise during the appeal in the CA, his heirs elevated the
said decision to this Court through a petition for review on certiorari.The petition was
denied.Petitioners and the Republic filed Motions for Reconsideration.

ISSUE:

1. What are the classifications of public lands?

 1. Whether or not petitioners were able to prove that the property was an alienable
and disposable land of the public domain.

1.Classifications of land according to ownership.

Land, which is an immovable property, may be classified as either of public dominion or

of private ownership. Land is considered of public dominion if it either:(a) is intended for
public use; or (b) belongs to the State, without being for public use, and is intended for
some public service or for the development of the national wealth.

Land belonging to the State that is not of such character, or although of such character
but no longer intended for public use or for public service forms part of the patrimonial
property of the State. Land that is other than part of the patrimonial property of the
State, provinces, cities and municipalities is of private ownership if it belongs to a
private individual.

Pursuant to the Regalian Doctrine (Jura Regalia), a legal concept first introduced into
the country from the West by Spain through the Laws of the Indies and the Royal
Cedulas, all lands of the public domain belong to the State. This means that the State is
the source of any asserted right to ownership of land, and is charged with the
conservation of such patrimony.All lands not appearing to be clearly under private
ownership are presumed to belong to the State. Also, public lands remain part of the
inalienable land of the public domain unless the State is shown to have reclassified or
alienated them to private persons.

A positive act of the Government is necessary to enable such reclassification, and the
exclusive prerogative to classify public lands under existing laws is vested in the
Executive Department, not in the courts. If, however, public land will be classified as
neither agricultural, forest or timber, mineral or national park, or when public land is no
longer intended for public service or for the development of the national wealth, thereby
effectively removing the land from the ambit of public dominion, a declaration of such
conversion must be made in the form of a law duly enacted by Congress or by a
Presidential proclamation in cases where the President is duly authorized by law to that
effect. Thus, until the Executive Department exercises its prerogative to classify or
reclassify lands, or until Congress or the President declares that the State no longer
intends the land to be used for public service or for the development of national wealth,
the Regalian Doctrine is applicable.

2.Petitioners failed to present sufficient evidence to establish that they and their
predecessors-in-interest had been in possession of the land since June 12, 1945.
Without satisfying the requisite character and period of possession – possession and
occupation that is open, continuous, exclusive, and notorious since June 12, 1945, or
earlier – the land cannot be considered ipso jure converted to private property even
upon the subsequent declaration of it as alienable and disposable. Prescription never
began to run against the State, such that the land has remained ineligible for
registration under Section 14(1) of the Property Registration Decree. Likewise, the land
continues to be ineligible for land registration under Section 14(2) of the Property
Registration Decree unless Congress enacts a law or the President issues a
proclamation declaring the land as no longer intended for public service or for the
development of the national wealth.
REPUBLIC V SANTOS

DOCTRINE “The drying up of the river is not accretion. Hence, the dried-up river bed
belongs to the State as property of public dominion, not to the riparian owner, unless a
law vests the ownership in some other person”

Facts:

1. On May 21, 1998, Arcadio Ivan Santos III filed for an application for land
registration on the ground of prescription. He alleged that the property had been
formed through accretion as the land is limited in the southeast by the Paranaque
river.
2. The City opposed such registration on the ground that it was only an orchard that
had dried up and had not resulted from accretion.

RTC Affirmed
CA Affirmed

Issue: Whether or not the dried up orchard belongs to the respondent by virtue of Art.
457, NCC

Held: No. Art. 457 states that “To the owners of the lands adjoining the bank of
rivers belong the accretion which they gradually receive from the effects of the
current of the waters.”

Accretion is to be construed as:

Accretion is the process whereby the soil is deposited along the banks of rivers. The
deposit of soil, to be considered accretion, must be:

(a) gradual and imperceptible;

(b) made through the effects of the current of the water; and

(c) taking place on land adjacent to the banks of rivers

Drying up of the bed is not a process of deposition, given that area of 1,045 square
meters could not have accumulated by a gradual and imperceptible process in the span
of about 20 to 30 years.Petition granted.

Navy Officers’ Village Association, Inc. v. Republic of the Philippines

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

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

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

CITY OF LAPU LAPU V PEZA

Facts:

1. In 1995, the PEZA was created by virtue of Republic Act No. 7916 or “the
Special Economic Zone Act of 1995” to operate, administer, manage, and
develop economic zones in the country. The PEZA was granted the power
to register, regulate, and supervise the enterprises located in the economic
zones. By virtue of the law, the export processing zone in Mariveles,
Bataan became the Bataan Economic Zone and the Mactan Export
Processing Zone the Mactan Economic Zone.
2. The City contends that due to the enactment of the LGC, specifically
withdrawing all tax exemptions and with the PEZA law of 1995 which did
not have any provisions on tax exemptions, it maintains that PEZA is liable
for real property tax.

Issue: Whether or not PEZA should be exempted from real property taxation.
Held: Yes. Under Section 234(a) of the Local Government Code, real properties
owned by the Republic of the Philippines are exempt from real property
taxes. Properties owned by the state are either property of public dominion or
patrimonial property as per Art. 420.

Citing Manila International Airport Authority: 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. Essential
public services will stop if properties of public dominion are subject to
encumbrances, foreclosures and auction sale.

In this case, the properties sought to be taxed are located in publicly owned
economic zones. These economic zones are property of public dominion – sites
which were reserved by President Marcos under Proclamation No. 1811, Series of
1979 (Mactan).

REPUBLIC V ABOITIZ

Facts:

1. On September 11, 1998, respondent Aboitiz filed his Application for Registration
of Land Title of a parcel of land with an area of 1,254 square meters, located in
Talamban, Cebu City.
2. That as per record of the Department of Environment and Natural Resources
(DENR), Region VII, the subject property had been classified as alienable and
disposable since 1957; that per certification of the Community Environment and
Natural Resources Office (CENRO), Cebu City, the subject property was not
covered by any subsisting public land application; and that the subject property
had been covered by tax declarations from 1963 to 1994 in Irenea’s name, and
from 1994 to present, in his name.
3. The Republic assails the CA’s decision on granting the said application.

Issue: Whether or not said property may be registered for having satisfied Sec. 14 (2) of
PD 1529

Held: No. In complying with Section 14(2) of the Property Registration Decree, consider
that under the Civil Code, prescription is recognized as a mode of acquiring ownership
of patrimonial property.

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

ALOLINA V FLORES

Facts:

1. In 1994, the respondent spouses Fortunato and Anastacia (Marie) Flores

constructed their house/sari sari store on the vacant municipal/barrio road
immediately adjoining the rear perimeter wall of Alolino’s house. Since they were
 constructing on a municipal road, the respondents could not secure a building
permit. The structure is only about two (2) to three (3) inches away from the back
of Alolino’s house, covering five windows and the exit door. The respondents’
construction deprived Alolino of the light and ventilation he had previously
enjoyed and prevented his ingress and egress to the municipal road through the
rear door of his house.
2. The respondents contend that the said barrio road which they built on was
already converted to patrimonial property of the state and hence they had validly
built their store.

Issue: Whether or not respondent’s contention is correct.

Held: No. To convert a barrio road into patrimonial property, the law requires the LGU to
enact an ordinance, approved by at least two-thirds (2/3) of the Sanggunian members,
permanently closing the road. In this case, the Sanggunian did not enact an ordinance
but merely passed a resolution. Properties of the local government that are devoted to
public service are deemed public and are under the absolute control of Congress.
Hence, LGUs cannot control or regulate the use of these properties unless specifically
authorized by Congress, as is the case with Section 21 of the LGC. In exercising this
authority, the LGU must comply with the conditions and observe the limitations
prescribed by Congress.

As a barrio road, the subject lot’s purpose is to serve the benefit of the collective
citizenry. It is outside the commerce of man and as a consequence:

(1) it is not alienable or disposable;

(2) it is not subject to registration under Presidential Decree No. 1529 and cannot be the
subject of a Torrens title;

(3) it is not susceptible to prescription;

(4) it cannot be leased, sold, or otherwise be the object of a contract;

(5) it is not subject to attachment and execution; and

(6) it cannot be burdened by any voluntary easements.

As it remained a road, it is within the purview of Sec. 28 of Urban Development and

Housing Act and hence can be demolished.

SUPREMA T. DUMO, Petitioner, v. REPUBLIC OF THE PHILIPPINES, Respondent

G.R. No. 218269, June 06, 2018

Facts:

Petitioner Suprema T. Dumo filed an application for registration of two parcels of land,
covered by Advance Plan of Lot Nos. 400398 and 400399 with a total area of 1,273
square meters (LRC Case No. 270-Bg). Dumo alleged that the lots belonged to her
mother Bernarda M. Trinidad, and that she and her siblings inherited them upon their
mother's death. She further alleged that through a Deed of Partition with Absolute Sale
dated 6 February 1987, she acquired the subject lots from her siblings. Dumo traces her
title from her mother, Trinidad, who purchased the lots from Florencio Mabalay in
August 1951. Mabalay was Dumo's maternal grandfather. Mabalay, on the other hand,
purchased the properties from Carlos Calica.

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

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

The CA rendered its Decision dated 28 January 2014, affirming the RTC's decision
dismissing the application for land registration of Dumo, and finding that she failed to
demonstrate that she and her predecessors-in¬ interest possessed the property in the
manner required by law to merit the grant of her application for land registration. The
CA, however, modified the decision of the RTC insofar as it found that the Subject
Property belonged to the heirs of Espinas. The CA found that since the property still
belonged to the public domain, and the heirs of Espinas were not able to establish their
open, continuous, exclusive and notorious possession and occupation of the land under
a bona fide claim of ownership since 12 June 1945 or earlier, it was erroneous for the
RTC to declare the heirs of Espinas as the owners of the Subject Property; hence, this
petition.
Issues:

1. Whether Dumo is able to prove that the subject property forms part of the
alienable and disposable land of public domain
2. Whether the requirement that documents to prove the status of land shall be
based on the land classification approved by the DENR Secretary is not a mere
superfluity.

Ruling:

1. NO, Dumo failed to submit any of the documents required to prove that the land
she seeks to register is alienable and disposable land of the public domain.

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

In this case, none of the documents submitted by respondent to the trial court
indicated that the subject property was agricultural or part of the alienable and
disposable lands of the public domain. At most, the CENRO Report and
Certification stated that the land was not covered by any kind of public land
application. This was far from an adequate proof of the classification of the land.
 Unfortunately for respondent, the evidence submitted clearly falls short of the
requirements for original registration in order to show the alienable character of
the lands subject herein

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

This requirement stems from the fact that the alienable and disposable
classification of agricultural land may be made by the President or DENR
Secretary. And while the DENR Secretary may perform this act in the regular
course of business, this does not extend to the CENRO or PENRO – the DENR
Secretary may no longer delegate the power to issue such certification as the
power to classify lands of the public domain as alienable and disposable lands is
in itself a delegated power under CA No. 141 and PD No. 705.

HI-LON MANUFACTURING, INC vs. COMMISSION ON AUDIT

G.R. No. 210669
August 1, 2017

FACTS: Sometime in 1978, the government, through the then Ministry of Public Works and Highways (now DPWH),
converted to a road right-of-way (RROW) a 29,690 sq. m. portion of the 89,070 sq. m. parcel of land located in
Mayapa, Calamba, Laguna, for the Manila South Expressway Extension Project. The subject property was registered
in the name of Commercial and Industrial Real Estate Corporation ( CIREC) under Transfer Certificate of Title (TCT)
No. T-40999. Later on, Philippine Polymide Industrial Corporation (PPIC) acquired the subject property, which led to
the cancellation of TCT No. T-40999 and the issuance ofTCT No. T..:120988 under its name. PPIC then mortgaged
the subject property with the De~elopment Bank of the Philippines (DBP), a government financing institution, which
later acquired the property in a foreclosure proceeding on September 6, 1985. TCT No. T-120988, under PPIC's
name, was then cancelled, and TCT No. T-151837 was issued in favor ofDBP. Despite the use of the 29,690 sq. m.
portion of the property as RROW, the government neither annotated its claim or lien on the titles of CIREC, PPIC and
DBP nor initiated expropriation proceedings, much less paid just compensation to the registered owners.

ISSUE: Whether or not HI-LON is entitled to just compensation for the 29,690 sq. m. portion of the subject property?

HELD: NO. Having determined that HI-LON or its predecessor-in-interest TGPI does not own the RROW in question,
as it has been the property of the Republic of the Philippines since its acquisition by the DBP up to the present, the
COA concluded that the proper valuation of the claim for just compensation is irrelevant as HI-LON is not entitled
thereto in the first place.

Concededly, the 29,690 sq. m. portion of the subject property is not just an ordinary asset, but is being used as a
RROW for the Manila South Expressway Extension Project, a road devoted for a public use since it was taken in
1978. Under the Philippine Highway Act of 1953, "right-of-way" is defined as the land secured and reserved to the
public for highway purposes, whereas "highway" includes rights-of-way, bridges, ferries, drainage structures, signs,
guard rails, and protective structures in connection with highways. Article 420 of the New Civil Code considers as
property of public dominion those intended for public use, such as roads, canals, torrents, ports and bridges
constructed by the state, banks, shores, roadsteads, and others of similar character.

Being of similar character as roads for public use, a road right-of-way (RROW) can be considered as a property of
public dominion, which is outside the commerce of man, and cannot be leased, donated, sold, or be the object of a
contract, except insofar as they may be the object of repairs or improvements and other incidental matters. However,
this RROW must be differentiated from the concept of easement of right of way under Article 649 of the same Code,
which merely gives the holder of the easement an incorporeal interest on the property but grants no title thereto, 20
inasmuch as the owner of the servient estate retains ownership of the portion on which the easement is established,
and may use the same in such a manner as not to affect the exercise of the easement.