EN BANC

[G.R. No. 42334. October 31, 1936.]

NORTH NEGROS SUGAR CO., INC., plaintiff-appellant, vs. SERAFIN HIDALGO, defendant-appellee.

Hilado & Hilado for appellant.

Simeon Bitanga for appellee.

Ross, Lawrence, Selph & Carrascoso and DeWitt, Perkins & Ponce Enrile as amici curiae.

SYLLABUS

1. INJUNCTION; REMEDY SOUGHT AS PRINCIPAL RELIEF; REQUISITES. — The plaintiff prays in its complaint against the
defendant that an injunction be issued, restraining the defendant from entering or passing through the properties of the plaintiff, specially
through the "mill site" of plaintiff's sugar central. The injunction applied for, constitutes, unlike the auxiliary and subordinate remedy that it
ordinarily is, the principal remedy itself. The relief should only be granted, therefore, after it has been established not only that the right sought
to be protected exists, but also that the acts against which the injunction is to be directed are violative of said right.
2. ID.; ID.; ID. — "The existence of a right violated is a prerequisite to the granting of an injunction. . . . A permanent injunction
should not be awarded except in a clear case and to prevent irreparable injury." (32 C.J., 34-36.) "A court of chancery will not entertain a bill
to enforce a mere valueless abstract right, and the court will, on its own motion, raise the point for its own protection." (Dunnom vs. Thomsen,
58 Ill. App., 390.) None of these requisites is present in the instant case. There has been a failure to establish either the existence of a clear
and positive right of the plaintiff specially calling for judicial protection through an extraordinary writ of the kind applied for, or that the defendant
has committed or attempts to commit any act which has endangered or tends to endanger the existence of said right, or has injured or
threatens to injure the same.
3. ID.; ID.; PRIVATE ROAD OPEN TO PUBLIC USE. — When a private road has been thrown open to public use, no action for
trespass is maintainable against any person who desires to make use thereof; consequently, an injunction suit likewise does not lie. "Private
roads, except where laid out under constitutional provisions authorizing the condemnation of private property for a private use, are public
roads in the sense that they are open to all who see fit to use them, and it is immaterial that the road is subject to gates and bars, or that it is
merely a cul de sac. Being thus considered as a public road, it necessarily follows that the owner of the land through which the road is laid
out cannot maintain an action of trespass against any person using it." (50 C.J., pp. 397, 398.) ". . . Where it is clear that the complainant
does not have the right that he claims, he is not entitled to an injunction, either temporary or perpetual, to prevent a violation of such supposed
right. . . . An injunction will not issue to protect a right not in esse and which may never arise or to restrain an act which does not give rise to
a cause of action, . . .." (32 C.J., pp. 34, 35.)
4. ID.; ID.; ID. — Plaintiff states in the sixth paragraph of its amended complaint: "6. That, in addition, the plaintiff, in the exercise
of its property rights, does not want to allow the entry of the defendant in any part of its estate above-mentioned in order to avert any friction
or ill-feeling against him." The plaintiff, in petitioning the courts for an injunction to avert "friction or ill- feeling" against the defendant, invoking
its sacred property rights, attempts to intrust to them a mission at once beyond those conferred upon them by the Constitution and the laws,
and unbecoming of their dignity and decorum.
5. ID.; ID.; FAILURE TO ESTABLISH DAMAGE AGAINST WHICH THE INJUNCTION IS INVOKED. — Plaintiff has not
established the existence, real or probable, of the alleged damage against which the injunction is invoked. Plaintiff's admission in its brief (p.
15) that it has not been established that the defendant has brought tuba to the "mill site," or has sold it within its property, is fatal to the present
action charging the defendant with said acts.
6. ID.; ID.; PRINCIPLE OF EQUITY. — The well-known principle of equity that "he also comes to equity must come with clean
hands" bars the granting of the remedy applied for by the plaintiff. Plaintiff, in order to obtain a preliminary injunction, trifled with the good faith
of the lower court by knowingly making untrue allegations on matters important and essential to its cause of action. Consequently, it did not
come to court with clean hands. "Coming into equity with clean hands. — The maxim that he who comes into equity must come with clean
hand is, of course, applicable in suits to obtain relief by injunction. Injunction will be denied even though complainant shows that he has a
right and would otherwise be entitled to the remedy in case it appears that he himself acted dishonestly, fraudulently or illegally in respect to
the matter in which redress is sought, or where he has encouraged, invited or contributed to the injury sought to be enjoined. However, the
general principle that he who comes into equity must come with clean hands applies only to plaintiff's conduct in relation to the very matter in
litigation. The want of equity that will bar a right to equitable relief for coming into court with unclean hands must be so directly connected with
the matter in litigation that it has affected the equitable relations of the parties arising out of the transaction in question." (32 C.J., pp. 67, 68.)
7. ID.; ID.; JUDICIAL DISCRETION. — The exercise of discretion by trial courts in matters injunctive should not be interfered with
by appellate courts except in cases of manifest abuse. ". . . The court which is to exercise the discretion is the trial court and not the appellate
court. The action of the court may be reviewed on appeal or error in case of a clear abuse of discretion, but not otherwise, and ordinarily
mandamus will not lie to control such discretion." (32 C.J., sec. 11, p. 33.) True, the rule has particular application to preliminary injunctions,
but the rule should not be otherwise with respect to permanent injunctions especially where, as in this case, set the same aside in its final
decision on a careful review of the evidence.
8. ID.; ID.; VOLUNTARY EASEMENT. — This is a case of an easement of way voluntarily constituted in favor of a community.
(Civil Code, arts. 531 and 594.) There is nothing in the constitution of this easement in violation of law or public order, except perhaps that
the right to open roads and charge passage fees therefor is the State's by right of sovereignty and may not be taken over by a private individual
without the requisite permit. This, however, would effect the right of the plaintiff to charge tolls, but not that of the defendant or of any other
person to make use of the easement.
9. ID.; ID.; ID. — Voluntary easements under article 594 are not contractual in nature; they constitute the act of the owner. If he
exacts any condition, like the payment of a certain indemnity for the use of the easement, any person who is willing to pay it may make use
of the easement. If the contention be made that a contract is necessary, it may be stated that a contract exists from the time all those who
desire to make use of the easement are disposed to pay the required indemnity.
10. ID.; ID.; ID. — The plaintiff contends that the easement of way is intermittent in nature and can only be acquired by virtue of a
title under article 539. The defendant, however, does not lay claim to it by prescription. The title in this case consists in the fact that the plaintiff
has offered the use of this road to the general public upon payment of a certain sum as passage fee in the case of motor vehicles.
11. ID.; ID.; ID.; CASES DISTINGUISHED. — The cases of Roman Catholic Archbishop of Manila vs. Roxas (22 Phil., 450), and
Cuaycong vs. Benedicto (37 Phil., 781), are not controlling, as there the attempt was to establish that the right to an easement of way had
been acquired by prescription. Here defendant's contention is, that while the road in question remains open to the public, he has a right to its
use upon paying the passage fees required by the plaintiff. Indeed the latter may close it at its pleasure, as no period had been fixed when
the easement was voluntarily constituted, but while the road is thrown open, the plaintiff may not capriciously exclude the defendant from its
use.
12. ID.; ID.; ID.; PUBLIC INTEREST. — Having been devoted by the plaintiff to the use of the public in general, upon paying the
passage fees required in the case of motor vehicles, the road in question is charged with a public interest, and while so devoted, the plaintiff
may not establish discriminatory exceptions against any private person. "When private property is affected with a public interest, it ceases to
be juris privati only; as if a man set out a street in new building on his own land, it is now no longer bare private interest, but is affected by a
public interest." (Lord Chief Justice Hale in his treatise "De Portibus Maris," quoted with approval in Munn vs. Illinois, 94 U.S., 113 [1876], and
in Nebbia vs. New York, 291 U.S., 502 [1934].)
13. ID.; ID.; ID.; PUBLIC UTILITY. — The circumstance that the road in question does not properly fall within the definition of a
public utility provided in Act No. 3108, does not divest it of this character: " . . . whether or not a given business, industry, or service is a public
utility does not depend upon legislative definition, but upon the nature of the business or service rendered, and an attempt to declare a
company or enterprise to be a public utility, where it is inherently not such, is, by virtue of the guaranties of the federal constitution, void
whether it interferes with private rights of property or contract. So a legislature cannot by mere flat or regulatory order convert a private
business or enterprise into a public utility, and the question whether or not a particular company or service is a public utility is a judicial one,
and must be determined as such by a court of competent jurisdiction; . . .." (51 C.J., sec. 3, p. 5.)
14. ID.; ID.; ID. — The road in question being a public utility, or, to be more exact, a private property affected with a public interest,
it is not lawful to make arbitrary exceptions with respect to its use and enjoyment. "Duty to Serve Without Discrimination. — A public utility is
obliged by the nature of its business to furnish its service or commodity to the general public, or that part of the public which it has undertaken
to serve, without arbitrary discrimination, and it must, to the extent of its capacity, serve all who apply, on equal terms and without distinction,
so far as they are in the same class and similarly situated. Accordingly, a utility must act toward all members of the public impartially, and
treat all alike; and it cannot arbitrarily select the persons for whom it will perform its service or furnish its commodity, nor refuse to one a favor
or privilege it has extended to another, since the term 'public utility' precludes the idea of service which is private in its nature and is not to be
obtained by the public. Such duties arise from the public nature of a utility, and statutes providing affirmatively therefor are merely declaratory
of the common law." (51 C.J., sec. 16, p.7.)
15. ID.; ID.; ID. — The circumstance that the plaintiff is not the holder of a franchise or of a certificate of public convenience, or
that it is a company devoted principally to the manufacture of sugar and not to the business of public service, or that the State has not as yet
assumed control or jurisdiction over the operation of the road in question by the plaintiff, does not preclude the idea that the said road is a
public utility.
16. ID.; ID.; ID. — "When private property is devoted to public use in the business of a public utility, certain reciprocal rights and
duties are raised by implication of law between the utility and the public it undertakes to serve, and no contract between them is necessary to
give rise thereto. . . ." (51 C.J., sec. 12, p. 6.)

DECISION

RECTO, J p:

On October 12, 1933, the plaintiff filed before the Court of First Instance of Occidental Negros a complaint praying, upon the
allegations contained therein, that an injunction be issued, restraining the defendant from entering or passing through the properties of the
plaintiff, specially through the "mill site" of plaintiffs sugar central.
It appears that the plaintiff is the owner of a site in which is located its sugar central, with its factory building and residence for its
employees and laborers, known as the "mill site." It also owns the adjoining sugar plantation known as Hacienda "Begoña." Across its
properties the plaintiff constructed a road connecting the "mill site" with the provincial highway. Through this road plaintiff allowed and still
allows vehicles to pass upon payment of a tool charge of P0.15 for each truck or automobile. Pedestrians are allowed free passage through
it.
Immediately adjoining the above-mentioned "mill site" of the plaintiff is the hacienda of Luciano Aguirre, known as Hacienda
"Sañgay," where the defendant has a billiard hall and a tuba saloon. Like other people in the about the place, defendant used to pass
through the said road of the plaintiff, because it was his only means of access to the Hacienda "Sañgay" where he runs his billiard hall
and tuba saloon. Later on, by order of the plaintiff, every time that the defendant passed driving his automobile with a cargo of tuba plaintiff's
gatekeeper would stop him and prevent him from passing through said road. Defendant in such cases merely deviated from said road and
continued on his way to the Hacienda "Sañgay" across the fields of Hacienda "Begoña," likewise belonging to the plaintiff.
The alleged conveyance of tuba to plaintiff's "mill site" or the sale thereof within its property has not been established by the
evidence adduced in this case. This the plaintiff admits in its brief (p. 15). Neither is there any evidence to show that the defendant actually
created disturbance in plaintiff's properties, including its "mill site." Other pertinent facts will be stated in appropriate places in this decision.
A. First of all it may be stated that in the case at bar the injunction applied for, constitutes, unlike the auxiliary and subordinate
remedy that it ordinarily is, the principal remedy itself. The relief should only be granted, therefore, after it has been established not only that
the right sought to be protected exists, but also that the acts against which the injunction is to be directed are violative of said right.
"SEC. 164. Circumstances under which a preliminary injunction may be granted. A preliminary injunction may
be granted when it is established, in the manner hereinafter provided, to the satisfaction of the judge granting it:
"1. That the plaintiff is entitled to the relief demanded and such relief, or any part thereof, consists in restraining
the commission or continuance of the acts complained of either for a limited period or perpetually;
"2. That the commission or continuance of some act complained of during the litigation would probably work
injustice to the plaintiff;
"3. That the defendant is doing, or threatens, or is about to do, or is procuring or suffering to be done, some
act probably in violation of the plaintiff's rights, respecting the subject of the action, and tending to render the judgment
ineffectual." (Code of Civil Procedure.)
"In order that, at the final trial of a case, an injunction may issue perpetually prohibiting the repetition or
continuation of an act complained of, it is indispensable that it shall have been proven at trial that he who seeks such a
remedy is entitled to ask for it; if he is not, his request must be denied." (Tumacder vs. Nueva, 16 Phil., 513.)
 "The extraordinary remedy of injunction will not be granted to prevent or remove a nuisance unless there is a
strong case of pressing necessity, and not because of a trifling discomfort." (De Ayala vs. Barretto, 33 Phil., 538.)
"The existence of a right violated is a prerequisite to the granting of an injunction. . . . A permanent injunction
should not be awarded except in a clear case and to prevent irreparable injury." (32 C.J., 34-36.)
"A court of chancery will not entertain a bill to enforce a mere valueless abstract right, and the court will, on
its own motion, raise the point for its own protection." (Dunnom vs. Thomsen, 58 Ill. App., 390.)
None of these requisites is present in the instant case. There has been a failure to establish either the existence of a clear and
positive right of the plaintiff specially calling for judicial protection through an extraordinary writ of the kind applied for, or that the defendant
has committed or attempts to commit any act which has endangered or tends to endanger the existence of said right, or has injured or
threatens to injure the same.
In obtaining ex-parte a preliminary injunction in the lower court, the plaintiff made under oath in its complaint the following
allegations, which later turned out to be untrue, or, at least, beyond the capacity of plaintiff to prove:
"3. That on sundry occasions heretofore, the defendant used to go to the said 'mill site' of the plaintiff, passing
over the latter's private roads, and there caused trouble among the peaceful people of the place.
"4. That the plaintiff, through its representatives, has prohibited the defendant from entering its private
property, but this notwithstanding, the defendant still persists in repeating his incursions into the said private roads and
'mill site' of the plaintiff, disturbing public order and molesting plaintiff's employees and their families."
The court, in its order granting the preliminary injunction, said:
"Considering the said complaint and the sworn statement of its correctness filed by plaintiff's attorneys 1 and
it appearing satisfactorily that the issuance of a preliminary injunction is in order because of the sufficiency of the grounds
alleged, upon the filing of a bond, it is hereby, etc. . . .."
After obtaining the preliminary injunction, the plaintiff amended its complaint by eliminating therefrom those very allegations
upon which the court granted the temporary remedy, namely, the acts imputed to the defendant "of causing trouble among the peaceful
people of plaintiff's 'mill site,' and of disturbing public order and molesting plaintiff's employees and their families within the private roads and
the 'mill site' of the plaintiff." The plaintiff doubtless overlooked the fact that the allegation it availed of to obtain a preliminary injunction was
necessary to secure one of a permanent character. In its new complaint, its only grievance is that the defendant insists in passing through
its property to take tuba to the Hacienda "Sañgay" (which does not belong to the plaintiff but to Luciano Aguirre, and where the defendant
has established a legitimate business). The amended complaint no longer alleges that the defendant went to the "mill site" and to the
private roads of the plaintiff "to cause trouble, disturb public order and molest plaintiff's employees and their families.".
It develops, however, that neither the original complaint nor the one amended states how and why the mere passage of the
defendant over plaintiff's estate to convey tuba to the Hacienda "Sañgay" has caused damages to plaintiff's property rights, requiring the
unusual intervention and prohibition thereof of the courts through injunctive relief. The plaintiff failed not only to make any allegation to this
effect, but also to state that the road on its property where the defendant used to pass on his way to the Hacienda "Sañgay" was open to
the public in general, and that the plaintiff, exercising without any permit a power exclusively lodged in the state by reason of its sovereign
capacity, required the payment of passage fees for the use of said road.
Now, there being no contention here that the defendant, in passing over plaintiff's estate to take tuba to the Hacienda "Sañgay,"
occasioned damages to such estate, or that he sold tuba within the confines thereof, what could have been the basis of plaintiff's right for
which the special protection of the court is invoked, and of the illegal act laid at defendant's door? Defendant's passage over plaintiff's
property does not, of itself, constitute an unlawful act inasmuch as the plaintiff, of its own accord, opened the same to the public conditioned
only upon the payment of transit fees by motor vehicles. Neither does the mere transportation of tuba over plaintiff's estate amount to a
violation of the latter's property rights, unless the goods' destination be at any point within the confines thereof, or unless the said goods be
sold in transit to the laborers and employees of the plaintiff, which, as plaintiff itself admits in its brief (p. 15), has not been shown.
The deduction from plaintiff's evidence is, that the real damage which it seeks to avoid does not consist in defendant's
taking tuba with him while traversing the former's property, as there is no causal relation between the act and any resultant damage, but in
the fact that tuba is disposed of at the Hacienda "Sañgay" to which plaintiff's laborers have access. What should, therefore, be enjoined, if it
were legally possible, is defendant's sale of tuba at the Hacienda "Sañgay," and not its conveyance across plaintiff's estate. But if, as
plaintiff concedes (brief, p. 16), the former cannot be legally enjoined, least of all can the latter be restrained as long as the public in genera;
is free to go about the said property and it has not been shown that the defendant, in passing through it, has occasioned damage thereto or
has committed any act infringing plaintiff's property rights or has refused to pay the required road toll.
Defendant's sale of tuba at the Hacienda "Sañgay" is nothing more than the exercise of a legitimate business, and no real
damage to third persons can arise from it as a natural and logical consequence. The bare possibility that plaintiff's laborers, due to the
contiguity of the Hacienda "Sañgay" to its property, might come to defendant's store to imbibe tuba to drunkenness, does not warrant the
conclusion that the defendant, in thus running the business, impinges upon plaintiff's property rights and should thereby be judicially
enjoined. The damage which plaintiff seeks to enjoin by this action does not consist, an has been demonstrated, in defendant's maintaining
a tuba store at the Hacienda "Sañgay," or in defendant's crossing its property while taking tuba to the Hacienda "Sañgay," but in its laborers
finding their way to the said hacienda in order to buy tuba and become drunk. In other words, the act sought to be restrained as injurious or
prejudicial to plaintiff's interests, is that committed, not by the defendant, but by plaintiff's own laborers. Rightly and logically, the injunction
should be directed against said laborers to the end that they should abstain from going to the Hacienda "Sañgay" in order to buy tuba and
become drunk. As it would seem unusual for the plaintiff to do this, it should at least exercise stricter vigilance and impose rigorous
discipline on its laborers by, for instance, punishing drunkenness with expulsion. Plaintiff's remedy lies in its own hands and should not be
looked for in the courts at the sacrifice of other interests no less sacred and legitimate than the plaintiff's.
Where one has a right to do a thing equity has no power to restrain him from doing it. (Dammann vs. Hydraulic Clutch Co., 187
Pac., 1069.) Acts under the authority of the law will not be enjoined (Bonaparte vs. Camden, etc. Railroad Co., 3 Fed. Cas. No. 1617,
Baldw., 205). Lawful exercises of rights incidentally injuring others may not be enjoined by injunction. (14 R. C. L., 369.) "It is . . . an
established principle that one may not be enjoined from doing lawful acts to protect and enforce his rights of property or of person, . . .." (14
R.C.L., pp. 365, 366.).
It is said that the plaintiff seeks to enjoin the defendant, not from selling tuba at his store in the Hacienda "Sañgay," but from
passing through its property to introduce tuba to said hacienda (plaintiff's brief, p. 16). The legal rule, however, is that what the law does not
authorize to be done directly, cannot be done indirectly. If the plaintiff cannot judicially enjoin the defendant from selling tuba at the
Hacienda "Sañgay," neither can it obtain said injunction to prevent him from passing over its property to transport tuba to that place as long
as the defendant is ready to pay the transit fees required by the plaintiff and does not sell the said goods inside the said property.
Suppose that the defendant, instead of being a tuba vendor, is a social propagandist whose preachings, while not subversive of
the established legal order, are not acceptable to some capitalistic organizations, say the plaintiff. Suppose that the defendant, armed with
the corresponding official permit, should desire to go to the Hacienda "Sañgay" through plaintiff's estate for the purpose of explaining to the
laborers the advantage of the latter organizing themselves into unions, or joining existing ones, to better defend their interests. Plaintiff
learns in time of the plan and determines to frustrate it in the belief that it would be prejudicial to its interests for the laborers to be
"unionized," while it is for its good that the laborers be contracted under the so-called "open shop" system. Unable to stop the holding of the
meeting because the same is not to take place on its property, may the plaintiff secure an injunction from the courts to prevent the
defendant to pass through the said property in order to reach the place of the meeting, by alleging that the defendant entertains theories of
social reform which might poison the minds of the laborers at the expense of the plaintiff's interests? May the latter, under the same
hypothesis, maintain that defendant's act in passing through its property, which is open to public use, constitute trespass or usurpation
restrainable by injunction? If the answer to these questions is, as it must be, in the negative, the present case is not susceptible of a
different solution. The only difference between the two cases is that in the one supposed the dreaded damage to plaintiff's interests is of
more moment and or more lasting effect than that in the case at bar.
When a private road has been thrown open to public use, no action for trespass is maintainable against any person who desires
to make use thereof; consequently, an injunction suit likewise does not lie.
"Private roads, except where laid out under constitutional provisions authorizing the condemnation of private
property for a private use, are public roads in the sense that they are open to all who see fit to use them, and it is
immaterial that the road is subject to gates and bars, or that it is merely a cul de sac. Being this considered as a public
road, it necessarily follows that the owner of the land through which the road is laid out cannot maintain an action of
trespass against any person using it; . . ." (50 C.J., pp. 397, 398.).
". . . Where it is clear that the complainant does not have the right that he claims, he is not entitled to an
injunction, either temporary or perpetual, to prevent a violation of such supposed right. . . . An injunction will not issue to
protect a right not in esse and which may never arise or to restrain an act which does not give rise to a cause of action, .
. .." (32 C.J., pp. 34, 35.)
B. In its brief, plaintiff states:
"In transporting the tuba which he sells in his saloon in Hacienda 'Sañgay' the defendant used to pass thru
the private road of the plaintiff which connects its sugar central with the provincial road. On this private road the plaintiff
has put up a gate under the charge of a keeper, and every time that the defendant passed with a cargo of tuba the
gatekeeper would stop him and remind him that tuba was not permitted entry into the private properties of the company,
but instead of heeding this prohibition the defendant would simply deviate from the road and continue on his way to
hacienda 'Sañgay' by way of the fields of Hacienda 'Begoña,' which is also the private property of the plaintiff."
It is deductible from the above statement that, whenever the gatekeeper of the plaintiff prevented the defendant from passing
thru its so-called "private road," on his way from the provincial road to the Hacienda, "Sañgay," the defendant deviated from said road and
carried the tuba across the lands of the Hacienda "Begoña" is the same one frequented by carabaos (s.t., 32, 36). Plaintiff intends not only
to prohibit the defendant from using the road in question, but also from crossing the lands of the Hacienda "Begoña," also belonging to the
plaintiff, where carabaos are allowed to roam. An act so shocking to the conscience, one is reminded, could only have been perpetrated
during the feudal period when human rights were unmercifully sacrificed to property rights. If an injunction should lie in the instant case, it
should be in favor of the defendant and against the plaintiff, to enjoin the latter from obstructing the former to pass over the road in question
to convey tuba to the Hacienda "Sañgay." It is indeed strange that it is the plaintiff and not the defendant that should have applied for the
remedy.
" . . . An injunction will not be granted when good conscience does not require it, where it will operate
oppressively or contrary to justice, where it is not reasonable and equitable under the circumstances of the case, or where
it will tend to promote, rather than to prevent, fraud and injustice. . . ." (32 C.J., p. 33.) ". . . a court of equity may interfere
by injunction to restrain a party from enforcing a legal right against all equity and conscience. . . ." (14 R.C. L., pp. 365,
366, par. 66.) ". . . The comparative convenience or inconvenience of the parties from granting or withholding the
injunction sought should be considered, and none should be granted if it would operate oppressively or inequitably, or
contrary to the real justice of the case. This doctrine is well established. . . ." (14 R.C.L., pp. 357, 358, par. 60.)
"The power of the courts to issue injunctions should be exercised with great caution and only where the
reason and necessity therefor are clearly established; and while this rule has been applied more frequently in the case
of preliminary and mandatory injunctions, it applies to injunctions of all classes, and to restraining orders. . . ." (32 C.J.,
pp. 33, 34.)
"The writ of injunction will not be awarded in doubtful or new cases not coming within well-established
principles of equity." (Bonaparte vs. Camden, etc. Railroad Co., 3 Fed. Cas. No. 1617; Hardesty vs. Taft, 87 Am. Dec.,
584.)
C. Plaintiff's action is frivolous and baseless.
Plaintiff states in the sixth paragraph of its amended complaint:
"6. That, in addition, the plaintiff, in the exercise of its property rights, does not want to allow the entry of the
defendant in any part of its estate above mentioned in order to avert any friction or ill-feeling against him."
The plaintiff, in petitioning the courts for an injunction to avert "friction or ill-feeling" against the defendant, invoking its sacred
property rights, attempts to intrust to them a mission at once beyond those conferred upon them by the Constitution and the laws, and
unbecoming of their dignity and decorum.
D. Plaintiff has not established the existence, real or probable, of the alleged damage against which the injunction is invoked.
As has been seen, the allegations of the amended complaint do not justify the granting of an injunction. The said allegations
only state, as the basis of plaintiff's action, that the defendant insists in passing or "making incursions" on plaintiff's property to take tuba to
the Hacienda "Sañgay," and that the plaintiff wants to avoid "friction and ill-feeling against him." Such allegations do not imply the existence,
or probable existence, of any real damage to plaintiff's rights which should be enjoined, and do not, therefore, constitute a legal cause of
action. On the other hand, what the plaintiff attempted to establish by its evidence differs from the allegations of its amended complaint.
What said evidence really discloses is not, that the plaintiff had forbidden the defendant to convey tuba to the Hacienda "Sañgay" through
plaintiff's estate, but to introduce tuba into the central or to place tuba on its lands, or, according to Exhibit A, to trespass illegally on
plaintiff's estate. The testimony of the gatekeeper Santiago Plagata and the accountant Ankerson is as follows:
"Q. Why did you detain him?
A. Because the Central forbids the bringing of tuba to the Central.
"Q. Why does the Central prohibit the entry of tuba?
A. The Central prohibits the entry of tuba there because the laborers, generally, buy tuba, drink it and become drunk, and
are unable to work, and sometimes they fight because they are drunk." (S.t., p.5.).
"Q. Why did you kick them?
A. Because the North Negros Sugar Co. prohibits the placing of tuba on those lands." (S.t., pp. 38, 39.)
Exhibit A, the alleged letter addressed by the plaintiff to the defendant, recites:
 "Mr. SERAFIN HIDALGO, Driver of Auto, License No. 1085-1935.
"Present
"SIR: Effective this date, you are hereby forbidden to trespass upon any of the Company's properties under
penalties of law prescribed for trespass.
"NORTH NEGROS SUGAR CO., INC.
"By: (Sgd.) Y.E. GREENFIELD
"Manager"
It will be noted that according to this letter, the defendant was enjoined by the plaintiff from passing thru its properties, whether
he carried tuba or not.
Plaintiff's admission in its brief (p. 15) that it has not been established that the defendant has brought tuba to the "mill site," or
has sold it within its property, is fatal to the present action charging the defendant with said acts.
E. The well-known principle of equity that "he who comes to equity must come with clean hands" bars the granting of the remedy
applied for by the plaintiff.
It has been already stated that the plaintiff, to obtain a preliminary injunction in this case, alleged under oath in its original
complaint facts which it knew to be false, or, at least, unprobable, because it did not only eliminate them from the amended complaint which
it filed after the issuance of the preliminary injunction, but it failed to substantiate them at the trial. We refer to the following allegations: "that
the defendant used to go to the 'mill site' of the plaintiff passing through plaintiff's private roads and there cause trouble among the peaceful
people of the place," and "that notwithstanding the prohibition of the plaintiff, the defendant insists in repeating his incursions into the said
private roads and 'mill site' of the plaintiff, disturbing public order and molesting plaintiff's employees and their families.".
If said allegations were true, it is evident that plaintiff was entitled to a preliminary injunction at the commencement of the trial,
and to a permanent injunction after the decision was rendered. But such is not the case, as the subsequent theory of the plaintiff,
announced in its amended complaint, is not that the defendant "made incursions into the 'mill site' and private roads of the plaintiff, causing
trouble, disturbing public order, and molesting plaintiff's employees and their families," but only that the defendant, to take tuba to the
Hacienda "Sañgay," belonging to Luciano Aguirre, insisted in passing through plaintiff's estate. From all this it follows that the plaintiff in
order to obtain a preliminary injunction, trifled with the good faith of the lower court by knowingly making untrue allegations on matters
important and essential to its cause of action. Consequently, it did not come to court with clean hands.
"Coming into Equity with Clean Hands. — The maxim that he who comes into equity must come with clean
hands is, of course, applicable in suits to obtain relief by injunction. Injunction will be denied even though complainant
shows that he has a right and would otherwise be entitled to the remedy in case it appears that he himself acted
dishonestly, fraudulently or illegally in respect to the matter in which redress is sought, or where he has encouraged,
invited or contributed to the injury sought to be enjoined. However, the general principle that he who comes into equity
must come with clean hands applies only to plaintiff's conduct in relation to the very matter in litigation. The want of equity
that will bar a right to equitable relief for coming into court with unclean hands must be so directly connected with the
matter in litigation that it has affected the equitable relations of the parties arising out of the transaction in question." (32
C.J., pp. 67, 68.)
At this point, attention should be directed to other facts of the case indicative of the censurable attitude which the plaintiff has
taken in connection therewith. On one occasion, the defendant drove his automobile along the road in question, accompanied by Antonio
Dequiña, headed for the Hacienda "Sañgay." As they had tuba with them, on reaching the gate they were halted by the gatekeeper. The
defendant and his companion got off the car and unloaded the tuba in order to follow the passageway across the lands of the Hacienda
"Begoña," through which plaintiff's carabaos passed, until they could reach "Sañgay." Thereupon, one Ankerson, accountant and auditor of
the plaintiff, arrived and no sooner had he laid eyes on the tuba containers than he indignantly kicked them and uttered a blasphemy to
both, spilling the contents thereof. The defendant protested and asked Ankerson to indemnify him for the value of the tuba which had been
wasted, to which Ankerson replied that he would make good what should be paid, and he then and there wrote and handed over a note to
the defendant for presentation to plaintiff's cashier. The defendant presented the note, but this claim was not paid, and instead he was
prosecuted for trespass in the justice of the peace court of Manapla under article 281 of the Revised Penal Code. So absurd and malicious
was the charge that the court, in acquitting the defendant, entered the following order (Exhibit 3):
"A peaceful citizen who passed through a private road open to the public does not commit the crime of
trespass. Although the prohibition to the accused to be in a private property should be manifest, if the latter is not fenced
or uninhabited, the mere fact that the accused is found on the place in question, for a lawful purpose, does not constitute
the crime of trespass defined and punished under article 281 of the Revised Penal Code."
The plaintiff did not stop at this; it filed the present action for injunction which, as has been seen, is nothing more than the
culmination of a series of affronts which the plaintiff has perpetrated, privately and through the courts, against the defendant.
F. The exercise of discretion by trial courts in matters injunctive should not be interfered with by appellate courts except in cases
of manifest abuse.
". . . The court which is to exercise the discretion is the trial court and not the appellate court. The action of
the court may be reviewed on appeal or error in case of a clear abuse of discretion, but not otherwise, and ordinarily
mandamus will not lie to control such discretion." (32 C.J., sec. 11, p. 33.)
True, the rule has particular application to preliminary injunctions, but the rule should not be otherwise with respect to permanent
injunctions especially where, as in this case, the trial court, after granting the preliminary injunction, set the same aside in its final decision
on a careful review of the evidence.
II
It is undisputed that the road in question was constructed by the plaintiff on its own land, and that it connects the central or the
"mill site" with the provincial road. We have also the admission that the plaintiff made this road accessible to the general public, regardless
of class of group of persons or entities. Its use has been extended to employees and laborers of the plaintiff; and so also to all those who
have a mind to pass through it, except that, in cases of motor vehicles, a passage fee of P0.15 each should be paid. There is no contention
here that the defendant had refused to pay said tolls whenever he wanted to drive his car along the road in question.
We, therefore, have the case of an easement of way voluntarily constituted in favor of a community. Civil Code, article 531 and
594 read:
"ART. 531. Easement may also be established for the benefit of one or more persons or a community to
whom the encumbered estate does not belong."
xxx xxx xxx
 "ART. 594. The owner of an estate may burden it with such easements as he may deem fit, and in such
manner and form as he may consider desirable, provided he does not violate the law or public order."
There is nothing in the constitution of this easement in violation of law or public order, except perhaps that the right to open
roads and charge passage fees therefor is the State's by right of sovereignty and may not be taken over by a private individual without the
requisite permit. This, however, would effect the right of the plaintiff to charge tools, but not that of the defendant or of any other person to
make use of the easement.
As may be seen from the language of article 594, in cases of voluntary easements, the owner is given ample liberty to establish
them: "as he may deem fit, and in such manner and form as he may consider desirable." The plaintiff "considered it desirable" to open this
road to the public in general, without imposing any condition save the payment of a fifteen-centavo toll by motor vehicles, and it may not
now go back on this and deny the existence of an easement. Voluntary easements under article 594 are not contractual in nature; they
constitute the act of the owner. If he exacts any condition, like the payment of a certain indemnity for the use of the easement, any person
who is willing to pay it may make use of the easement. If the contention be made that a contract is necessary, it may be stated that a
contract exists from the time all those who desire to make use of the easement are disposed to pay the required indemnity.
The plaintiff contends that the easement of way is intermittent in nature and can only be acquired by virtue of a title under article
539. The defendant, however, does not lay claim to it by prescription. The title in this case consists in the fact that the plaintiff has offered
the use of this road to the general public upon payment of a certain sum as passage fee in the case of motor vehicles.
The cases of Roman Catholic Archbishop of Manila vs. Roxas (22 Phil., 450), and Cuaycong vs. Benedicto (37 Phil., 781), are
not controlling, as there the attempt was to establish that the right to an easement of way had been acquired by prescription. Here
defendant's contention is, that while the road in question remains open to the public, he has a right to its use upon paying the passage fees
required by the plaintiff. Indeed the latter may close it at its pleasure, as no period has been fixed when the easement was voluntarily
constituted, but while the road is thrown open, the plaintiff may not capriciously exclude the defendant from its use.
Furthermore, plaintiff's evidence disclosed the existence of a forcible right of way in favor of the owner and occupants of the
Hacienda "Sañgay" under the Civil Code, article 564, because, according to said evidence, those living in the Hacienda "Sañgay" have no
access to the provincial road except thru the road in question. Santiago Plagata, principal witness of the plaintiff, testified thus: "Emerging
from the provincial road, the defendant has necessarily to pass through this private road where the gate of which I am the keeper is
situated, and them he gets to the Central." (S.t., p.5.)
"Q. To go to the Hacienda 'Sañgay,' is there any need to cross the 'mill site' of the Central?
A. Yes, sir.
"Q. And the property of the Central is passed in going to the Hacienda 'Sañgay'?
A. Yes, sir.
"Q. Is there any other road"
A. I am not sure whether there is another road.
"Q. For how long have you been a watchman there?
A. Nine years to date.
"Q. And during that period of nine years, can you not state if there is any road which gives access to the Hacienda
'Sañgay'? Or the Central has necessarily to be passed?
A. I cannot say because I do not go to those places."
"COURT:
"Q. But all the others, except the defendant, who go to the Hacienda 'Sañgay' necessarily pass thru the Central?
A. They pass thru that road of the Central." (S.t., pp. 16, 17.)
The evidence for the defendant confirms this:
"Q. To go there, thru what road did you have to pass?
A. Thru the road of the Central.
"Q. And by this road of the Central you mean the Central 'North Negros Sugar Co., Inc.'?
A. Yes, sir.
"Q. By this road of the Central which you mentioned, you mean the road where there is a gate, beginning from the Central
until the provincial road, where the gate is for the purpose of preventing passage?
A. Yes, sir, the very one.
"Q. And because of that gate, the Central collects certain toll?
A. Yes, sir." (S.t., pp. 20, 21.)
III
Having been devoted by the plaintiff to the use of the public in general, upon paying the passage fees required in the case of
motor vehicles, the road in question is charged with a public interest, and while so devoted, the plaintiff may not establish discriminatory
exceptions against any private person.
"When private property is affected with a public interest, it ceases to be juris privati only; as if a man set out
a street in new building on his own land, it is now no longer bare private interest, but is affected by a public interest."
(Lord Chief Justice Hale in his treatise "De Portibus Maris," quoted with approval in Munn vs. Illinois, 94 U.S., 113 [1876],
and in Nebbia vs. New York, 291 U.S., 502 [1934].)
The above language was used in the seventeenth century, when exceptions to the individualistic regime of ownership were
scarcely recognized, and when the ideas on its social function may be said to be in their infancy.
"Property does become clothed with a public interest when used in a manner to make it of public
consequence, and affect the community at large. When, therefore, one devotes his property to a use in which the public
has an interest, he, in effect, grants to the public an interest in that use, and must submit to the controlled by the public
for the common good, to the extent of the interest he has thus created. He may withdraw his grant by discontinuing the
use; but, so long as he maintains the use, he must submit to the control." (Munn vs. Illinois, 94 U.S., 113; 24 Law. ed.,
77.)
 "Under our form of government the use of property and the making of contracts are normally matters of private
and not of public concern. The general rule is that both shall be free of governmental interference. But neither property
rights nor contract rights are absolute; for government cannot exist if the citizen may at will use his property to the
detriment of his fellows, or exercise his freedom of contract to work them harm. Equally fundamental with the private right
is that of the public to regulate it in the common interest. . . . The court has repeatedly sustained curtailment of enjoyment
of private property, in the public interest. The owner's rights may be subordinated to the needs of other private owners
whose pursuits are vital to the paramount interests of the community." (Nebbia vs. New York, 291 U.S., 502, 521, 525;
78 Law. ed., 940, 948.)
"Whenever any business or enterprise becomes so closely and intimately related to the public, or to any
substantial part of a community, as to make the welfare of the public, or a substantial part thereof, dependent upon the
proper conduct of such business, it becomes the subject for the exercise of the regulatory power of the state." (Clarksburg
Light & Heat Co. vs. Public Service Commission, P. U.R. 1920A, 639; 84 W. Va., 638; 100 S.E., 551.)
". . . If the service is dedicated to the public or some portion thereof, or to persons within a given area, then
any member of the public or of the given area, then any member of the public or of the given class, or any person within
the given area, may demand such service without discrimination, and the public, or so much of it as has occasion to be
served, is entitled to the service of the utility as a matter of right, and not of grace. . . . A corporation becomes a public
service corporation, and therefore subject to regulation as a public utility, only when and to the extent that the business
of such corporation becomes devoted to a public use. . . ." (Stoehr vs. Natatorium Co., 200 Pac. [Idaho], 132, quoted in
18 A.L.R., 766.)
"Tested by the rule laid down in Munn vs. Illinois, it may be conceded that the state has the power to make
reasonable regulation of the charges for services rendered by the stock-yards company. Its stock yards are situated in
one of the gateways of commerce, and so located that they furnish important facilities to all seeking transportation of
cattle. While not a common carrier, nor engaged in any distinctively public employment, it is doing a work in which the
public has an interest, and therefore must be considered as subject to governmental regulation." (Cotting vs. Godard,
183 U.S., 79; 46 Law. ed., 92.)
"Businesses which, though not public at their inception, may be fairly said to have risen to be such, and have
become subject in consequence to some government regulation. They have come to hold such a peculiar relation to the
public that this is superimposed upon them. In the language of the cases, the owner, by devoting his business to the
public use, in effect, grants the public an interest in that use, and subjects himself to public regulation to the extent of that
interest, although the property continues to belong to its private owner, and to be entitled to protection accordingly.
(Munn vs. Illinois, supra; Spring Valley Waterworks vs. Schottler, 110 U.S., 347; 28 L. ed., 173; 4 Sup. Ct. Rep., 48;
People vs. Budd, 117 N.Y., 1, 27; 5 L. R.A., 559; 15 Am. St. Rep., 460; 22 N.E., 670; s.c. 143 U.S., 517; 36 L.ed., 247; 4
Inters. Com. Rep., 45; 12 Sup. Ct. Rep., 468; Brass vs. North Dakota, 153 U.S., 391; 38 L. ed., 757; 4 Inters. Com. Rep.,
670; 14 Sup. Ct. Rep., 857; Noble State Bank vs. Haskell, 219 U.S., 104; 55 L. ed., 112; 32 L.R.A. [N.S.], 1062; 31 Sup.
Ct. Rep., 186; Ann. Cas., 1912A, 487; German Alliance Ins. Co. vs. Lewis, 233 U.S., 389; 58 L. ed., 1011; L.R.A. 1915C,
1189; 34 Sup. Ct. Rep., 612; VanDyke vs. Geary, 244 U.S., 39, 47; 61 L. ed., 973, 981; 37 Sup. Ct. Rep., 483;
Block vs. Hirsh, 256 U.S., 135; 65 L. ed., 865; 16 A.L.R., 165; 41 Sup. Ct. Rep., 458.)" Wolff Packing Co. vs. Court of
Industrial Relations, 262 U.S., 522; 27 A.L.R., 1280, 1286.)
Under the facts of the instant case, the road in question is of the nature of the so-called "turnpike road" or "toll-road." The
following authorities are, therefore, in point:
"'Toll' is the price of the privilege to travel over that particular highway, and it is a quid pro quo. It rests on the
principle that he who receives the toll does or has done something as an equivalent to him who pays it. Every traveler
has the right to use the turnpike as any other highway, but he must pay the toll." (City of St. Louis vs. Creen, 7 Mo. App.,
468, 476.)
"A toll road is a public highway, differing from ordinary public highways chiefly in this: that the cost of its
construction in the first instance is borne by individuals, or by a corporation, having authority from the state to built it, and,
further, in the right of the public to use the road after its completion, subject only to the payment of toll." (Virginia Cañon
Toll Road Co. vs. People, 45 Pac., 396, 399; 22 Colo., 429; 37 L.R.A., 711.)
"Toll roads are in a limited sense public roads, and are highways for travel, but we do not regard them as
public roads in a just sense, since there is in them a private proprietary right. . . . The private right which turnpike
companies possess in their roads deprives these ways in many essential particulars of the character of public roads. It
seems to us that, strictly speaking, toll roads owned by private corporation, constructed and maintained for the purpose
of private gain, are not public roads, although the people have a right to freely travel them upon the payment of the toll
prescribed by law. They are, of course, public, in a limited sense, but not in such a sense as are the public ways under
full control of the state, for public ways, in the strict sense, are completely under legislative control. (Elliott, Roads & S.,
p. 5.)" (Board of Shelby County Com'rs vs. Castetter, 33 N.E., 986, 987; 7 Ind. App., 309.)
It has been suggested during the consideration of the case at bar that the only transportation companies with motor vehicles
who can have an interest in passing over the said road are those which carry laborers of the central and passengers who transact business
with the plaintiff, and not all public service motor vehicles with certificates of public convenience, and that the only persons who may have
an interest in passing over the said road are the laborers of the plaintiff and persons who do business with it and the occupants of the 21
houses situated in the Hacienda "Sañgay," and not everyone for personal convenience. But even if this were true, the plaintiff having
subjected the road in question to public use, conditioned only upon the payment of a fifteen-centavo passage fees by motor vehicles, such
circumstance would not affect the case at all, because what stamps a public character on a private property, like the road in question, is not
the number of persons who may have an interest in its use, but the fact that all those who may desire to use it may do so upon payment of
the required indemnity.
". . . The public or private character of the enterprise does not depend, however, upon the number of persons
by whom it is used, but upon whether or not it is open to the use and service of all members of the public who may require
it, to the extent of its capacity; and the fact that only a limited number of persons may have occasion to use it does not
make of it a private undertaking if the public generally has a right to such use. . . ." (51 C.J., sec. 2, p. 5.).
"The test is, not simply how many do actually use them, but how many may have a free and unrestricted right
in common to use them. If it is free and common to all citizens, then no matter whether it is or is not of great length, or
whether it leads to or from a city, village or hamlet, or whether it is much or little used, it is a 'public road.'"
(Heninger vs. Peery, 47 S. E., 1013, 1014; 102 Va., 896, quoting Elliott, Roads & S., secs. 11, 192.)
The circumstance that the road in question does not properly fall within the definition of a public utility provided in Act No. 3108,
does not divest it of this character:
". . . Whether or not a given business, industry, or service is a public utility does not depend upon legislative
definition, but upon the nature of the business or service rendered, and an attempt to declare a company or enterprise to
be a public utility, where it is inherently not such, is, by virtue of the guaranties of the federal constitution, void wherever
 it interferes with private rights of property or contract. So a legislature cannot by mere fiat or regulatory order convert a
private business or enterprise into a public utility, and the question utility is a judicial one, and must be determined as
such by a court of competent jurisdiction;. . .." (51 C.J., sec. 3, p. 5.)
The road in question being a public utility, or, to be more exact, a private property affected with a public interest, it is not lawful to
make arbitrary exceptions with respect to its use and enjoyment.
"Duty to Serve Without Discrimination. — A public utility is obligated by the nature of its business to furnish
its service or commodity to the general public, or that part of the public which it has undertaken to serve, without arbitrary
discrimination, and it must, to the extent of its capacity, serve all who apply, on equal terms and without distinction, so far
as they are in the same class and similarly situated. Accordingly, a utility must act toward all member of the public
impartially, and treat all alike; and it cannot arbitrarily select the persons for whom it will perform its service or furnish its
commodity, nor refuse to one a favor or privilege it has extended to another, since the term 'public utility' precludes the
idea of service which is private in its nature and is not to be obtained by the public. Such duties arise from the public
nature of a utility, and statutes providing affirmatively therefor are merely declaratory of the common law." (51 C.J., sec.
16, p. 7.)
The circumstance that the plaintiff is not the holder of a franchise or of a certificate of public convenience, or that it is a company
devoted principally to the manufacture of sugar and not to the business of public service, or that the state has not as yet assumed control or
jurisdiction over the operation of the road in question by the plaintiff, does not preclude the idea that the said road is a public utility.
"The touchstone of public interest in any business, its practices and charges, clearly is not the enjoyment of
any franchise from the state. (Munn vs. Illinois [94 U.S., 113; 24 L. ed., 77, supra].)" (Nebbia vs. New York, supra.)
"The fact that a corporation may not have been given power to engage in the business of a public utility is not
conclusive that it is not in fact acting as a public utility and to be treated as such." (51 C.J., p. 5.)
"The question whether or not it is such does not necessarily depend upon whether it has submitted or refused
to submit to the regulatory jurisdiction of the state, nor upon whether or not the state has as yet assumed control and
jurisdiction, or has failed or refused so to do." (51 C.J., p. 6.)
"The fact that a corporation does other business in addition to rendering a public service does not prevent it
from being a public utility, and subject to regulation as such, as to its public business." (51 C.J., p. 6.)
"The term 'public utility' sometimes is used to mean the physical property or plant being used in the service
of the public." (51 C.J., p. 6.)
"There are . . . decisions in which the incidental service has been held to be of such a nature that it was
subject to public regulation and control. (Re Commonwealth Min. & Mill. Co. [1915; Ariz.], P.U.R., 1915B, 536; Nevada,
C. & O. Teleg. & Teleph. Co. vs. Red River Lumber Co. [1920; Cal.], P.U.R., 1920E, 625; Sandpoint Water & Light
Co. vs. Humberd Lumber Co. [1918; Idaho], P.U.R., 1918B, 535; Public Service Commission vs. Valley Mercantile Co.
[1921; Mont.],P.U.R., 1921D, 803; Public Service Commission vs. J.J. Rogers Co. [1918], 184 App. Div., 705; P.U.R.,
1919A, 876; 172 N.Y. Supp., 498; Wingrove vs. Public Service Commission [1914], 74 W. Va., 190; L.R.A., 1918A, 210;
81 S.E., 734; Chambers vs. Spruce Lighting Co. [1918], 81 W. Va., 714; 95 S. E. 192. See also Hoff vs. Montgomery
[1916; Cal.], P.U.R., 1916D, 880; Re Producers Warehouse [1919; Cal.], P.U.R., 1920A, 919; Ticer vs. Philips [1920;
Cal.], P.U.R., 1920E, 582; Re Ontario Invest. Co. [1921; Cal.], P.U.R., 1922A, 181; Bassett vs. Francestown Water Co.
[1916; N.H.], P.U.R., 1916B, 815, Re Northern New York Power Co. [1915; N. Y., 2d Dist.], P.U.R., 1915B, 70.)"
(Annotation in 18 A.L.R., 766, 767.)
The point is made that, there being no contract between the plaintiff and the public interested in the use of the road in question,
it should be understood that such use has been by the mere tolerance of the plaintiff, and that said property has not been constituted into a
public utility. The contention is devoid of merit.
"When private property is devoted to public use in the business of a public utility, certain reciprocal rights and
duties are raised by implication of law between the utility and the public it undertakes to serve, and no contract between
them is necessary to give rise thereto. . . ." (51 C.J., sec. 12, p. 6.).
Wherefore the judgment appealed from is affirmed, with costs to the plaintiff.
Abad Santos, J., concurs.

SECOND DIVISION

[G.R. No. 189755. July 4, 2012.]

EMETERIA LIWAG, petitioner, vs. HAPPY GLEN LOOP HOMEOWNERS ASSOCIATION, INC., respondent.

DECISION

SERENO, J p:

This Rule 45 Petition assails the Decision 1 and Resolution 2 of the Court of Appeals (CA) in CA-G.R. SP No. 100454. The CA affirmed
with modification the Decision 3 and Order 4 of the Office of the President (O.P.) in OP Case No. 05-G-224, which had set aside the Decision 5 of
the Board of Commissioners of the Housing and Land Use Regulatory Board (HLURB) in HLURB Case No. REM-A-041210-0261 and affirmed the
Decision 6 of the Housing and Land Use Arbiter in HLURB Case No. REM-030904-12609.

The controversy stems from a water facility in Happy Glen Loop Subdivision (the Subdivision), which is situated in Deparo, Caloocan
City.
 Sometime in 1978, F.G.R. Sales, the original developer of Happy Glen Loop, obtained a loan from Ernesto Marcelo (Marcelo), the owner
of T.P. Marcelo Realty Corporation. To settle its debt after failing to pay its obligation, F.G.R. Sales assigned to Marcelo all its rights over several
parcels of land in the Subdivision, as well as receivables from the lots already sold. 7

As the successor-in-interest of the original developer, Marcelo represented to subdivision lot buyers, the National Housing Authority
(NHA) and the Human Settlement Regulatory Commission (HSRC) that a water facility was available in the Subdivision. 8

For almost 30 years, the residents of the Subdivision relied on this facility as their only source of water. 9 This fact was acknowledged
by Marcelo and Hermogenes Liwag (Hermogenes), petitioner's late husband who was then the president of respondent Happy Glen Loop
Homeowners Association (Association). 10 TIaCAc

Sometime in September 1995, Marcelo sold Lot 11, Block No. 5 to Hermogenes. As a result, Transfer Certificate of Title (TCT) No. C-
350099 was issued to him. When Hermogenes died in 2003, petitioner Emeteria P. Liwag subsequently wrote a letter to respondent Association,
demanding the removal of the overhead water tank from the subject parcel of land. 11

Refusing to comply with petitioner's demand, respondent Association filed before the HLURB an action for specific performance;
confirmation, maintenance and donation of water facilities; annulment of sale; and cancellation of TCT No. 350099 against T.P. Marcelo Realty
Corporation (the owner and developer of the Subdivision), petitioner Emeteria, and the other surviving heirs of Hermogenes.

After the parties submitted their respective position papers, Housing and Land Use Arbiter Joselito Melchor (Arbiter Melchor) ruled in
favor of the Association. He invalidated the transfer of the parcel of land in favor of Hermogenes in a Decision dated 5 October 2004, the dispositive
portion of which reads: 12

WHEREFORE, premises considered, judgment is hereby rendered as follows:

1. Confirming the existence of an easement for water system/facility or open space on Lot 11, Block 5 of TCT No. C-
350099 wherein the deep well and overhead tank are situated,

2. Making the Temporary Restraining Order dated 01 April 2004 permanent so as to allow the continuous use and
maintenance of the said water facility, i.e., deep well and over head water tank, on the subject lot, by the
complainant's members and residents of the subject project, and restraining all the respondents from
committing the acts complained of and as described in the complaint,

3. Declaring as void ab initio the deed of sale dated 26 February 2001, involving Lot 11, Block 5 in favor of spouses
Liwag, and TCT No. C-350099 in the name of same respondents without prejudice to complainant's right to
institute a criminal action in coordination with the prosecuting arms of the government against respondents
Marcelo and Liwag, and furthermore, with recourse by Liwag against T.P. and/or Marcelo to ask for
replacement for controverted lot with a new one within the subject project; and

4. Ordering respondents, jointly and severally, to pay complainant the amount of P10,000.00 as attorney's fees and the
amount of P20,000.00 as damages in favor of the complainant's members.

SO ORDERED.

On appeal before the HLURB Board of Commissioners, the Board found that Lot 11, Block 5 was not an open space. Moreover, it ruled
that Marcelo had complied with the requirements of Presidential Decree No. (P.D.) 1216 with the donation of 9,047 square meters of open space
and road lots. It further stated that there was no proof that Marcelo or the original subdivision owner or developer had at any time represented that
Lot 11, Block 5 was an open space. It therefore concluded that the use of the lot as site of the water tank was merely tolerated. 13 SCEHaD

Respondent Association interposed an appeal to the OP, which set aside the Decision of the HLURB Board of Commissioners and
affirmed that of the Housing and Land Use Arbiter. 14

The OP ruled that Lot 11, Block 5 was an open space, because it was the site of the water installation of the Subdivision, per Marcelo's
official representation on file with the HLURB National Capital Region Field Office. The OP further ruled that the open space required under P.D.
957 excluded road lots; and, thus, the Subdivision's open space was still short of that required by law. Finally, it ruled that petitioner Liwag was
aware of the representations made by Marcelo and his predecessors-in-interest, because he had acknowledged the existence of a water installation
system as per his Affidavit of 10 August 1982. 15

Petitioner Liwag unsuccessfully moved for reconsideration, 16 then filed a Rule 43 Petition for Review before the CA. 17

The CA affirmed that the HLURB possessed jurisdiction to invalidate the sale of the subject parcel of land to Hermogenes and to
invalidate the issuance of TCT No. C-350099 pursuant thereto. 18 The appellate court agreed with the OP that an easement for water facility existed
on the subject parcel of land and formed part of the open space required to be reserved by the subdivision developer under P.D. 957. 19 However,
it ruled that Arbiter Melchor should not have recommended the filing of a criminal action against petitioner, as she was not involved in the
development of the Subdivision or the sale of its lots to buyers. 20 The CA likewise deleted the award of attorney's fees and damages in favor of
respondent. 21

Aggrieved, petitioner filed the instant Petition before this Court.

The Court's Ruling

We affirm the ruling of the appellate court.

I
The HLURB has exclusive jurisdiction
over the case at bar
The jurisdiction of the HLURB is outlined in P.D. 1344, "Empowering the National Housing Authority to Issue Writ of Execution in the
Enforcement of its Decision under Presidential Decree No. 957," viz.:

Sec. 1. In the exercise of its functions to regulate real estate trade and business and in addition to its powers
provided for in Presidential Decree No. 957, the National Housing Authority shall have the exclusive jurisdiction to hear
and decide cases of the following nature.

A. Unsound real estate business practices;

B. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project
owner, developer, dealer, broker or salesman; and
 C. Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lots or
condominium units against the owner, developer, broker or salesman.

When respondent Association filed its Complaint before the HLURB, it alleged that Marcelo's sale of Lot 11, Block 5 to Hermogenes
was done in violation of P.D. 957 in the following manner:

12. Through fraudulent acts and connivance of [T.P. and Ernesto Marcelo] and the late Liwag and without the
knowledge and consent of the complainants all in violation of P.D. 957 and its implementing regulations, respondents
T.P. and Ernesto Marcelo transferred the same lot where the deep well is located which is covered by TCT No. C-41785
in favor of spouses Hermogenes Liwag and Emeteria Liwag to the great damage and prejudice of complainants . . .
. 22 (Emphasis in the original) SaCIAE

We find that this statement sufficiently alleges that the subdivision owner and developer fraudulently sold to Hermogenes the lot where
the water facility was located. Subdivisions are mandated to maintain and provide adequate water facilities for their communities. 23 Without a
provision for an alternative water source, the subdivision developer's alleged sale of the lot where the community's sole water source was located
constituted a violation of this obligation. Thus, this allegation makes out a case for an unsound real estate business practice of the subdivision
owner and developer. Clearly, the case at bar falls within the exclusive jurisdiction of the HLURB.

It is worthy to note that the HLURB has exclusive jurisdiction over complaints arising from contracts between the subdivision developer
and the lot buyer, or those aimed at compelling the subdivision developer to comply with its contractual and statutory obligations to make the
Subdivision a better place to live in. 24 This interpretation is in line with one of P.D. 957's "Whereas clauses," which provides:

WHEREAS, numerous reports reveal that many real estate subdivision owners, developers, operators, and/or
sellers have reneged on their representations and obligations to provide and maintain properly subdivision roads,
drainage, sewerage, water systems, lighting systems, and other similar basic requirements, thus endangering the health
and safety of home and lot buyers. . . . .

P.D. 957 was promulgated to closely regulate real estate subdivision and condominium businesses. 25 Its provisions were intended to
encompass all questions regarding subdivisions and condominiums. 26 The decree aimed to provide for an appropriate government agency, the
HLURB, to which aggrieved parties in transactions involving subdivisions and condominiums may take recourse. 27

II
An easement for water facility exists on Lot 11, Block 5
of Happy Glen Loop Subdivision
Easements or servitudes are encumbrances imposed upon an immovable for the benefit of another immovable belonging to a different
owner, 28 for the benefit of a community, 29 or for the benefit of one or more persons to whom the encumbered estate does not belong. 30

The law provides that easements may be continuous or discontinuous and apparent or non-apparent. The pertinent provisions of
the Civil Code are quoted below: IHCacT

Art. 615. Easements may be continuous or discontinuous, apparent or non-apparent.

Continuous easements are those the use of which is or may be incessant, without the intervention of any act
of man.

Discontinuous easements are those which are used at intervals and depend upon the acts of man.

Apparent easements are those which are made known and are continually kept in view by external signs that
reveal the use and enjoyment of the same.

Non-apparent easements are those which show no external indication of their existence.

In this case, the water facility is an encumbrance on Lot 11, Block 5 of the Subdivision for the benefit of the community. It is continuous
and apparent, because it is used incessantly without human intervention, and because it is continually kept in view by the overhead water tank,
which reveals its use to the public.

Contrary to petitioner's contention that the existence of the water tank on Lot 11, Block 5 is merely tolerated, we find that the easement
of water facility has been voluntarily established either by Marcelo, the Subdivision owner and developer; or by F.G.R. Sales, his predecessor-in-
interest and the original developer of the Subdivision. For more than 30 years, the facility was continuously used as the residents' sole source of
water. 31 The Civil Code provides that continuous and apparent easements are acquired either by virtue of a title or by prescription of 10 years. 32 It
is therefore clear that an easement of water facility has already been acquired through prescription. CcTHaD

III
Lot 11, Block 5 of Happy Glen Loop Subdivision forms part
of its open space
The term "open space" is defined in P.D. 1216 as "an area reserved exclusively for parks, playgrounds, recreational uses, schools,
roads, places of worship, hospitals, health centers, barangay centers and other similar facilities and amenities. 33

The decree makes no specific mention of areas reserved for water facilities. Therefore, we resort to statutory construction to determine
whether these areas fall under "other similar facilities and amenities."

The basic statutory construction principle of ejusdem generis states that where a general word or phrase follows an enumeration of
particular and specific words of the same class, the general word or phrase is to be construed to include — or to be restricted to — things akin to
or resembling, or of the same kind or class as, those specifically mentioned. 34

Applying this principle to the afore-quoted Section 1 of P.D. 1216, we find that the enumeration refers to areas reserved for the common
welfare of the community. Thus, the phrase "other similar facilities and amenities" should be interpreted in like manner.

Here, the water facility was undoubtedly established for the benefit of the community. Water is a basic need in human
settlements, 35 without which the community would not survive. We therefore rule that, based on the principle of ejusdem generis and taking into
consideration the intention of the law to create and maintain a healthy environment in human settlements, 36 the location of the water facility in the
Subdivision must form part of the area reserved for open space.

IV
 The subject parcel of land is beyond the commerce of man
and its sale is prohibited under the law
The law expressly provides that open spaces in subdivisions are reserved for public use and are beyond the commerce of man. 37 As
such, these open spaces are not susceptible of private ownership and appropriation. We therefore rule that the sale of the subject parcel of land by
the subdivision owner or developer to petitioner's late husband was contrary to law. Hence, we find no reversible error in the appellate court's
Decision upholding the HLURB Arbiter's annulment of the Deed of Sale.

Petitioner attempts to argue in favor of the validity of the sale of the subject parcel of land by invoking the principle of indefeasibility of
title and by arguing that this action constitutes a collateral attack against her title, an act proscribed by the Property Registration Decree.

Petitioner is mistaken on both counts.

First, the rule that a collateral attack against a Torrens title is prohibited by law 38 finds no application to this case.

There is an attack on the title when the object of an action is to nullify a Torrens title, thus challenging the judgment or proceeding
pursuant to which the title was decreed. 39 In the present case, this action is not an attack against the validity of the Torrens title, because it does
not question the judgment or proceeding that led to the issuance of the title. Rather, this action questions the validity of the transfer of land from
Marcelo to petitioner's husband. As there is no attack — direct or collateral — against the title, petitioner's argument holds no water.

Second, the principle of indefeasibility of title is not absolute, and there are well-defined exceptions to this rule. 40 In Aqualab
Philippines, Inc. v. Heirs of Pagobo, 41 we ruled that this defense does not extend to a transferee who takes the title with knowledge of a defect in
that of the transferee's predecessor-in-interest.

In this case, Spouses Liwag were aware of the existence of the easement of water facility when Marcelo sold Lot 11, Block 5 to them.
Hermogenes even executed an Affidavit dated 10 August 1982 attesting to the sufficiency of the water supply coming from an electrically operated
water pump in the Subdivision. 42 It is undisputed that the water facility in question was their only water source during that time. As residents of the
Subdivision, they had even benefited for almost 30 years from its existence. Therefore, petitioner cannot be shielded by the principle of indefeasibility
and conclusiveness of title, as she was not an innocent purchaser in good faith and for value.

From the discussion above, we therefore conclude that the appellate court committed no reversible error in the assailed Decision and
accordingly affirm it in toto.

WHEREFORE, premises considered, the instant Petition for Review is DENIED, and the assailed Decision and Resolution of the Court
of Appeals in CA-G.R. SP No. 100454 are hereby AFFIRMED. cASTED

SO ORDERED.

Carpio, Brion, Perez and Reyes, JJ., concur.

||| (Liwag v. Happy Glen Loop Homeowners Association, Inc., G.R. No. 189755, [July 4, 2012], 690 PHIL 321-335)
||| (North Negros Sugar Co., Inc. v. Hidalgo, G.R. No. 42334, [October 31, 1936], 63 PHIL 664-711)

EN BANC

[G.R. No. L-14116. June 30, 1960.]

LAUREANA A. CID, petitioner, vs. IRENE P. JAVIER, MANUEL P. JAVIER, JOSEFINA P. JAVIER, FERNANDO P.
JAVIER, JOSE P. JAVIER, GUILLERMO P. JAVIER, ISIDORA P. JAVIER, BENJAMIN P. JAVIER, and LEONOR
CRISOLOGO, respondents.

Antonio V. Raquiza for petitioner.

Cesar D. Javier for respondents.

SYLLABUS

1. EASEMENTS; ACQUISITION OF NEGATIVE EASEMENT BY PRESCRIPTION; MEANING OF "FORMAL ACT" IN ARTICLE

538, SPANISH CIVIL CODE. — The "formal act" required in Article 538 of the Spanish civil code, by which the owner of the dominant estate,
in order to effectively establish a negative easement, should forbid the owner of the servient estate to perform any act which would be lawful
without the easement, refers to an instrument acknowledged before a notary public. That this is the intendment of the law although not
expressed in exact language is the reason for the clarification made in Article 621 of the new Civil code, which specifically requires the
prohibition to be in "an instrument acknowledged before a notary public."
2. ID.; ID.; EFFECT OF FAILURE TO HAVE THE EASEMENT ANNOTATED ON THE CERTIFICATE OF TITLE. — Granting that
in the instant case an easement of light and view was acquired by prescription, it was cut off or extinguished by the registration of the servient
estate under the Torrens System without the easement being annotated on the corresponding certificate of title, pursuant to Section 39 of the
Land Registration Act.

DECISION
BARRERA, J p:

The legal issue presented in this petition to review by certiorari a decision of the Court of Appeals, is whether the respondents
Irene P. Javier, et al., owners of a building standing on their lot with windows overlooking the adjacent lot, had acquired by prescription an
enforceable easement of light and view arising from a verbal prohibition to obstruct such view and light, alleged to have been made upon
petitioner's predecessor-in-interest as owner of the adjoining lot, both of which lots being covered by Torrens titles. Both the trial court and
the Court of Appeals are of the view and so declared that respondents Javier et al., did acquire such easement and gave judgment
accordingly. Hence, petitioner has come to us seeking review, alleging that both courts are in error.
The windows in question are admittedly in respondents' own building erected on their own lot. The easement, if there is any, is
therefore a negative one. 1 The alleged prohibition having been avowedly made in 1913 or 1914, before the present Civil Code took effect,
the applicable legal provision is Article 538 of the Spanish Civil Code which provides:
"ART. 538. In order to acquire by prescription the easements referred to in the next preceding article, the time
of the possession shall be computed, . . . in negative easements, from the day on which the owner of the dominant estate
has, by a formal act, forbidden the owner of the servient estate to perform any act which would be lawful without the
easement." (Emphasis supplied.)
As may be seen, the only question hinges on the interpretation of the phrase "a formal act". The lower court and the Court of
Appeals considered any prohibition made by the owner of the dominant estate, be it oral or written, sufficient compliance with the law. The
Court of Appeals declared:
"In the light of the foregoing decisions, (Cortes vs. Yu Tibo, 2 Phil., 26 and the decisions of the Supreme Court
of Spain therein cited), we agree with the trial court that the 'formal act' of prohibition contemplated by Art. 538 of the old
Civil Code may be either a written or verbal act. The decisions of the Supreme Court of Spain above-quoted do not at all
mention written but merely some act of prohibition . . ."
We are inclined to take the contrary view. The law is explicit. It requires not any form of prohibition, but exacts, in a parenthetical
expression, for emphasis, the doing not only of a specific, particular act, but a formal act. The following definitions are pertinent:
"Formal — or pertaining to form, characterized by one due form or order, done in due form or with a solemnity
regular; relating to matters of form." (C. J. S. vol. 37, p. 115.)
"Act — In civil law, a writing which states in legal form that a thing has been done, said or agreed." (1 Bouvier's
Law Dictionary, p. 150, citing Marlin Report.)
From these definitions, it would appear that the phrase "formal act" would require not merely any writing, but one executed in due form
and/or with solemnity. That this is the intendment of the law although not expressed in exact language is the reason for
the clarification 2 made in Article 621 of the new Civil Code which specifically requires the prohibition to be in "an instrument acknowledged
before a notary public". This is as it should be. Easements are in the nature of an encumbrance on the servient estate. They constitute a
limitation of the dominical right of the owner of the subjected property. Hence, they can be acquired only by title and by prescription, in the
case of positive easement, only as a result of some sort of invasion, apparent and continuous, of the servient estate. By the same token,
negative easements can not be acquired by less formal means. Hence, the requirement that the prohibition (the equivalent of the act of
invasion) should be by "a formal act", "an instrument acknowledged before a notary public."
The Court of Appeals found as undisputed the fact "that plaintiffs' lot (dominant) as well as defendant's lot (servient) are covered
by Original Certificates of Title Nos. 7225 and 7545, respectively", both issued by the Register of Deeds of Ilocos Norte, in pursuance of the
decrees of registration issued on December 27, 1937, in Cadastral Case No. 51, G.L.R.O. Cadastral Record No. 1212 of Laoag, Ilocos
Norte. Certified copies of these certificates of title are found as Annexes "A" and "B", pages 77 to 80 inclusive of the Record on Appeal. In
both of them, it does not appear any annotation in respect to the easement supposedly acquired by prescription which, counting the twenty
(20) years from 1913 or 1914, would have already ripened by 1937, date of the decrees of registration. Consequently, even
conceding arguendo that such an easement has been acquired, it had been cut off or extinguished by the registration of the servient estate
under the Torrens System without the easement being annotated on the corresponding certificate of title, pursuant to Section 39 of the Land
Registration Act. 3
Wherefore, the decision of the Court of Appeals appealed from is hereby reversed; the injunction issued herein dissolved; and
the case remanded to the court of origin for adjudication of the damages, if any, occasioned by the issuance of the injunction. Without
pronouncement as to costs. So ordered.
Paras, C.J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L. and Gutierrez David, JJ., concur.

RESOLUTION

January 20, 1961

BARRERA, J p:

The Decision in this case, promulgated on June 30, 1960, provided, among others, for the lifting of the preliminary injunction
issued by the lower court directed against petitioner's construction of a building allegedly being made in violation of Municipal Ordinance No.
3, series of 1909 of the municipality of Laoag, and in disregard of respondents' right to light and view.
In their motion for reconsideration timely presented, respondents claim that the findings of the lower court, affirmed by the Court
of Appeals, that the building under construction violated the aforementioned ordinance (from which no appeal was interposed) having
become final, justify the issuance of and making permanent the injunction already issued.
There is no question that respondents' house, as well as that of petitioner, are within their respective properties; that
respondents' wall stands only 50 centimeters from the boundary of the 2 lots, whereas, the wall of the petitioner's building was constructed
1 meter from the boundary or 1 meter and 50 centimeters from the wall of the house of respondents. As a result, the lower court found that
the eaves of the two houses overlap each other by 24 centimeters. This, the Court of Appeals declared to be violative of Ordinance No. 3,
series of 1903, amending Sections 1, 5, 6, and 13 of the Municipal Ordinance of June 3, 1903, which requires a distance of 2 meters,
measured from eaves to eaves of adjoining buildings of strong materials.
It must be noted, however, that the Ordinance in question was adopted since 1909 and was, therefore, already in force at the
time the house of respondents was reconstructed in 1946 after the building originally erected thereon was burned in 1942. If respondents
constructed their house at least one meter from the boundary line, as petitioner has constructed hers, there would be no overlapping of the
eaves and there would not be any violation of the ordinance. As things now stand, in view of such construction by the respondents, the
overlapping of the eaves and the consequential violation of the ordinance can not entirely be attributed to petitioner, as to require her alone
to make the adjustments necessary for the observance of the 2-meter eaves-to-eaves distance from her neighbors. If any compliance with
 the ordinance would be exacted, the adjustment should be made not only by petitioner, but also by the respondents. There is, therefore, no
reason for the continuation of the injunction.
In view of the foregoing, and as the other grounds respondents' motion for reconsideration had been already duly considered in
the Decision, the said motion is hereby denied, for lack of merit. So ordered.
Paras, C.J., Bengzon, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Gutierrez David, Paredes and Dizon, JJ., concur.
||| (Cid v. Javier, G.R. No. L-14116, [June 30, 1960], 108 PHIL 850-855)

FIRST DIVISION

[G.R. No. 9989. March 13, 1918.]

EDUARDO CUAYCONG ET AL., plaintiff-appellee, vs. RAMONA BENEDICTO ET AL., defendants-appellants.

Ruperto Montinola and Aurelio Montinola for appellants.

No appearance for appellees.

SYLLABUS

1. ROADS AND STREETS; EASEMENTS; REGISTRATION OF LAND; TORRENTS TITLE. — Unless is made to appear upon
the certificate of title that the boundaries of any given highway, way, or private way upon the land have been determined, the right to such
highway, way, or private way is unaffected by the registration of the title.
2. REALTY; ENCUMBRANCES; PRESUMPTIONS. — Real property is presumed to be free from liens and encumbrances.
3. ROADS AND STREETS; UPKEEP BY GOVERNMENT; PRESUMPTION. — Where it appears that a road has been kept in
repair by private enterprise and that the Government has not contributed to the cost of its construction or maintenance, such road will be
presumed to be private.
4. ID; PRESUMPTION; USER; TOLERANCE; PUBLIC USE. — The mere fact that a tract of land has been used for a long time
as a road will not warrant the presumption that it has been dedicated to the public.
5. REALITY; PRESCRIPTION; POSSESSION; TOLERANCE . — Possession, to constitute the foundation of a perspective right,
must be possession under claim of title. Acts of a possessory character performed by one who holds by the mere tolerance of the owner
cannot be made the basis of the perspective acquisition of rights.
6. IMMEMORIAL POSSESSION; EVIDENCE. — Under the Spanish law the proof of immemorial possession required something
more than the memory of living witnesses.
7. EASEMENTS OF WAY; USER; TOLERANCE; PRESCRIPTION. — The permissive use by an adjacent proprietor of a road or
path over the land of another no matter how long continued, will not create an easement of way prescription.

DECISION

FISHER, J p:

The issues in this case relate to the right of plaintiff to make use of two roads existing on the Hacienda Torena, a tract of land in
the municipality of Victorias, Negros Occidental, the property of the defendants, Blasa Benedicto and Ramona Benedicto. One of these
roads is referred to in the proceedings as the Nanca-Victorias road and the other as the Dacuman-Toreno road. The court of First Instance
held that those of the plaintiffs who claimed to be entitled to make use of the Dacuman-Toreno road had failed to establish the asserted
right, and dismissed the action as to them. From this decision they appealed to this court but, their brief not having been filed within the time
prescribed by the rules, their appeal was dismissed, on motion of defendants, by resolution dated February 14, 1916. Consequently, the
issues presented on this appeal are limited to those which relate to the rights of the parties with respect to the Nanca-Victorias road, and the
determination of the correctness of the decision of the court concerning that part of the controversy submitted to its decision.
The allegations in the complaint with respect to the Nanca-Victorias road are that the appellees, Eduardo Cuaycong, Lino
Cuaycong, and Eulalio Dolor, are the owners of a group of hacienda situated between the southern boundary of the Hacienda Toreno and
the barrio of Nanca, of the municipality of Saravia, and that the appellees Silverio Ginoo, Gervasio Ascalon, and Juan Ledesma, are the
lessees of part of said hacienda; that for more than twenty years the appellees and their predecessors in interest have made use of the
Nanca-Victorias road, which crosses the Hacienda Toreno, openly, publicly, and continuously, with the knowledge of the owners of the said
hacienda, for the purpose of conveying the products of their hacienda to the town of Victorias and to the landing place there situated, and
for the purpose of transporting supplies from those points to their haciendas, making use of the said road by means of carts, carabaos, and
other usual means of transportation; that there is no outlet to a public road from the hacienda occupied by these plaintiffs, the only road and
way by which the products of the plaintiffs' property can be taken to the town of Victorias and to the landing place there being across the
Hacienda Toreno by the road marked on the plan attached to the complaint; that on the fifteenth day of November, 1912, the defendants
closed the road in question at the point at which it crosses the Hacienda Toreno, and refused to permit plaintiffs to continue using it; that
plaintiffs were about to commence to grind their crop of sugar cane, and that, if prevented from transporting their sugar across the Hacienda
Toreno to their point of embarcation, would suffer damages difficult to estimate. Upon these averments of fact plaintiffs prayed for a
judgment that they are entitled to use the road in question as they have been using in the past, and that a perpetual injunction be issued
against plaintiffs restraining them from impeding such use. Upon the filing of the complaint, plaintiffs moved the court to issue a preliminary
injunction restraining defendants from interfering with the use of the road during the pendency of the suit, which motion was granted by the
court.
Defendants in their answer put in issue all the special averments of the complaint, as above set forth, and by way of
counterclaim and special defense, averred that the road crossing the Hacienda Toreno, over which plaintiffs claim the right of passage, is
the private property of defendants; and, further, that they have not refused plaintiffs permission to pass over this road but have required
them to pay toll for the privilege of doing so. Defendants also claimed damages for the use of the road by plaintiffs during the pendency of
the suit, alleging that the preliminary injunction had been improvidently issued upon false statements contained in the verified complaint filed
by plaintiffs.
The case was tried in July, 1913. The court on December 8, 1913, rendered judgment, dismissing the complaint with respect to
the plaintiffs Felix Suarez, Probo Jereza, Enrique Azcona, and Melecio Pido, these being the plaintiffs who claimed the right to use the
Dacuman-Toreno road. With respect to the Nanca-Victorias road, the court held that it was a public highway over which the public had
acquired a right of use of immemorial prescription, and ordered the issuance of a perpetual injunction against plaintiffs, restraining them
from interfering in any manner with the use of the said road.
The conclusion of the court with respect to the facts affecting the Nanca-Victorias road are as follows:
"Turning to a consideration of the evidence relative to the Nanca-Victorias road we find incontestable proof
that it has been in existence for at least forty years. That the hacenderos located in the southwestern section of Victorias
and the public generally passed over it freely and that it was used for all purposes of transportation of farm produce,
animals, etc. and by pedestrians as well as carromatas and other conveyances without break or interruption until two or
three years ago when the defendants announced that the road was private and that those who wished to pass over it
with sugar carts would be obliged to pay as toll of ten centavos-all-other vehicles, it appears, were permitted to pass free
of charge. This arrangement seems to have existed during the years of 1911 and 1912 and part of 1913, the money being
collected apparently from some hacenderos and not from others. There is some reason to believe from the evidence
presented by defendants themselves that the practice of making these payments to hacienda 'Toreno' originated in an
attempt to raise a fund for the repair of the road. There is no evidence that any other hacenderos between Nanca and
Victorias or any other person made any attempt to close the road or to collect toll. On the contrary the road appears to
have been repaired by the hacederos when it needed repairing and everyone used it on equal terms until the defendants
in 1910 or 1911 interposed the objection that the road in dispute was private. This we think is a fair deduction from the
evidence and although it is asserted that toll was collected at an earlier date by the late Leon Montinola, brother of the
defendant Ruperto Montinola, there is no tangible evidence that this was so and all the circumstances are strongly
indicative of the fact that toll has been paid only during the years of 1911, 1912, and part of 1913."
The request presented by the assignment of error are in effect:
(a) Is the Nanca-Victorias road at the point at which it traverses the Hacienda Toreno a public highway or not?
(b) If it be held that the road in question is not a public highway, have plaintiff proven their acquisition of an easement of way
over the Hacienda Toreno at the point traversed by the road in question?
The trial judge, in holding that the road in question is public, bases his conclusion upon the fact, which he deems to have been
proven, that the road has been in existence "from time immemorial," and had been "continuously used as a public road . . . and open to
public as such for thirty or forty years . . . until . . . the defendants undertook to claim it as private and to collect toll for the passage of carts."
(Bill of Exceptions, p. 56.) There is no doubt that for he past thirty or forty years a road has existed between the former site of the town of
Victorias and the barrio of Nanca, of the municipality of Saravia, and that road crosses defendants' hacienda. It is also true that during this
period the plaintiffs and their predecessors in the ownership of the hacienda now held by them have made use of this road for the purpose
of going and coming from their haciendas to the town of Victorias; but the question is whether this use was limited to the plaintiffs, and their
tenants and employees, or whether it was, as held by the lower court, a use enjoyed by the public in general. Plaintiffs produced only two
witnesses, Segundo de Leon (stet. notes, pp. 21-22) and Eduardo Cuaycong, (stet. notes, pp. 27-33) to testify as regards the use of the
Nanca-Victorias road. Several other witnesses testified on behalf of plaintiffs, but their testimony relates to the Dacuman-Toreno road,
which is not involved in this appeal. We have carefully read the testimony of the witnesses Leon and Cuaycong, given upon their direct and
cross examination, but we have been unable to find that either of them has testified that the road in question was ever used by the public in
general. These witnesses testified with regard to the use of the road by the present and former owners and occupants of the estates of
Bacayan, Esperanza, Alacaigan, Pusot, and Dolores for the transportation of the products of these estates to the town of Victorias, and of
supplies and agricultural implements from Victorias to the haciendas, but neither of them testified expressly that any other use had been
made of said road. Nevertheless, it may be reasonably inferred from the testimony of these witnesses that all persons having occasion to
travel between Victorias and the haciendas of Bacayan, Esperanza, Alacaigan, Pusot, and Dolores, whether or not they were owners,
tenants, or employees of said estates, made use of the road now in dispute, crossing the Hacienda Toreno, and to this limited extent it may
be said that the public made use of the road, but there is nothing in the evidence to indicate that the so-called public use extended beyond
this.
Apart from the fact that there is no direct evidence to support the finding of the court concerning the general public use of the
road in dispute, the record contains data strongly tending to show that when the complaint was filed plaintiffs did content that the road was a
public highway, but merely contended that they had acquired by prescription an easement of way across the Hacienda Toreno. For
example, the action is entitled an "action concerning a right of way." (Bill of Exceptions, pp. 64 and 65.) It is not averred in the complaint
averred in the complaint that the road in question was used by the public. On the contrary, it is averred that it was used by the plaintiffs and
their predecessors. The averment in paragraph 8 of the complaint that the plaintiff have no other "outlet to a public road" than that which
they have been accustomed to use by going to the town of Victorias also shows that when they commenced this action they had in mind the
provisions of articles 564, et seq. of the Civil Code, which relate to the method of establishing the compulsory easement of way. The owners
of an existing easement, as well as those whose properties are adjacent with a public road, have no occasion to invoke these provisions of
the Code, which relate to the creation of new rights, and not the enforcement of rights already in existence.
It is true that in the opening statement made to the court, counsel for plaintiffs, who was not the same attorney by whom the
complaint was signed, stated that plaintiffs contend that the road in question is public, but as no evidence was introduced tending to
establish this contention concerning the Nanca-Victorias road, counsel for defendants had no occasion to object upon the ground that such
testimony was not relevant to the averments of the complaint. No evidence was taken to indicate that at any time since the road in question
has been in existence any part of the expense of its upkeep has been defrayed by the general government, the province, or the
municipality. The trial judge said upon this subject:
"It is also true whatever repairs were made on the road were made irregularly. The municipality of Victorias
had no funds to devote to the construction and repair of road, and the upkeep of the road depending entirely therefore
on the initiative of the persons who used it, was attended to only at such times as repairs were absolutely necessary."
(Bill of Exceptions, p. 49.)
The court also held that appears from the government grant issued in 1885 to the original owner of the hacienda adjacent to the
Hacienda Toreno on its western boundary, that the Nanca-Victorias road at that time separated that estate from the Jalbuena Hacienda,
and that these facts constitute "circumstantial evidence that the document to which the court refers, and we agree that the road in question
existed in 1885; but we do not believe that the document in question proves that the said road was a public highway.
 Another circumstance established by the evidence, and which is of some importance in the determination of this issue, is that
although the defendants closed the Nanca-Victorias road in the month of February, 1911, and since that time have collected toll from
persons passing over it with carts loaded with sugar, including those belonging to several of the plaintiffs, nothing was done by them to
prevent the continuation of this commenced. It is natural to assume that if plaintiffs and considered that the road in question was public, they
would have protested immediately against the action of the defendants, and would have either commenced a civil action, as they
subsequently did, or would have brought about a prosecution under section 16 of Act No. 1511.
Upon the evidence taken and admission contained in the pleadings and those made during the course of the trial we consider
that the following findings are warranted:
1. The town of Victorias has always been the shipping point of the products of the Hacienda Toreno, and of the haciendas of
appellees, as we place from which supplies were brought to those properties.
2. For thirty or forty years before the commencement of the suit a wagon road, herein called the Nanca-Victorias road, has been
in existence, connecting the haciendas of appellees with the town of Victorias, and this road traverses the property of defendants. Since the
removal of the town of Victorias to a new site the Nanca-Victorias road has been used by appellees in travelling between their properties
and the provincial road which crosses the Hacienda Toreno from east to west.
3. No public funds have at any time been expanded on the construction or upkeep of the Nanca-Victorias road, but from time to
time work has been done on it by the laborers employed by the present and former owners of the Hacienda Toreno and the haciendas
owned by the appellees and their predecessors in title.
4. The Nanca-Victorias wagon road, including that part of it which crosses the Hacienda Toreno, has for thirty-five or forty years
been used by the appellees and their predecessors in title for the transportation, by the usual means, of the products of their estates to their
shipping points in or near the town of Victorias, and the transportation to their estates of all supplies required by them, and has been used
by all persons having occasion to travel to and from all or any of the estates now owned by the appellees.
5. The use of the Nanca-Victorias road in the manner and by the persons above mentioned was permitted without objection by
the owners of the Hacienda Toreno until the year 1911, when they closed it, and began charging a toll of 5 centavos for each cart which
passed over the road, including carts belonging to the appellants, until restrained from continuing to do so by the preliminary injunction
granted in this case.
6. The Nanca-Victorias road constitutes the only outlet from the estates of appellants to the nearest public road which is the
provincial road which crosses the Hacienda Toreno from east to west.
Upon these facts the questions of law to be decided are:
(a) Is the Nanca-Victorias road a public highway?
(b) If the Nanca-Victorias road, or that part of it which crosses the Hacienda Toreno, is not a public highway, is it subject to a
private easement of way in favor of the appellees?
The defendants are the owners of the Hacienda Toreno under a Torrens title issued in accordance with the Land Registration
Act, conferring to them its absolute ownership, subject only to the limitations of paragraph four of section 39 of said Act. It is admitted that
there is no annotation on the certificate of title regarding the road here in question, either as a "public road" or a a "private way established
by law" and, therefore, the questions presented by this appeal are to be determined precisely as they would be had the Hacienda Toreno
not been brought under the operation of the Land Registration Act. The plaintiffs being the owners of the property in question, the
presumption of law is that it is free from any lien or encumbrance whatever, and the burden therefore rests upon plaintiffs to establish the
contrary. As this court said in the case of Fabie vs. Lichauco and the children of Francisco L. Roxas (11 Phil. Rep., 14):
"It is a settled doctrine of law that a property is assumed to be free from all encumbrance unless the
contrary is proved."
There is admittedly no evidence to show that the land occupied by the road here in question was at any time conveyed to the
general government or any of its political subdivisions by the presents or any of the former owners of the Hacienda Toreno. There is no
evidence, even remotely, tending to show that the road existed prior to the time when the property now known as the Hacienda Toreno
passed from the State into private ownership. The record fails to disclose any evidence whatever tending to show that the Government has
at any time asserted any right or title in or to the land occupied by the road, or that it has incurred any expense whatever in its upkeep or
construction. The Civil Code defines as public roads those which are constructed by the State (art. 339), and a provincial and town roads
those " the expense of which is borne by such towns or provinces." (Civil Code, art. 344.) While it is not contended that this definition is
exclusive, it does show that during the Spanish regime, under normal conditions, roads which were public were maintained at the public
expense, and that the fact that at no time was any expense incurred by the Government with respect to the road here in question tends
strongly to support the contention of the defendants that it is private way.
During the Spanish regime the law required each able bodied citizen not within one of the exempted classes to work a certain
number of days in each year, his labor to be devoted to "services of general utility" to the municipality of his residence. (Royal Decree of
July 11, 1883, Art. 5.) Under this Decree and the Regulations for its enforcement (Berriz, vol. 11, 258) the greater part of the work on the
public roads of the Islands was accomplished. Had the road here in question been a public way, it is reasonable to assume that
the polistas of the town of Victorias would have been employed in maintaining it. It is most significant that no mention is made in the
testimony of the plaintiffs' witnesses of any work of this character having been done on the road at any time, particularly in view of the fact
that their attention was drawn to this point. (Stet. notes, pp. 8, 10, 11, 12, 13, and 14.)
The evidence shows that the repairs were made by the owners of the estates benefited by the road, and by their laborers, as a
purely voluntary act for their own convenience and interest. There being no evidence of a direct grant to the government of the land
occupied by the road in question or that any Government funds or labor were expended upon it, the question presents itself whether the use
to which the road has been put was such as to justify the conclusion of the lower court that it has become public property. There being no
evidence that the original use of the road by plaintiffs' predecessors was based upon any express grant of the fee to the road or of an
easement of way, or that it began under the assertion of a right on their part, the presumption must be that the origin of the use was the
mere tolerance or license of the owners of the estates affected.
This being so, has that merely permissive use been converted into a title vested in the public at large, or in the plaintiffs by
reason of their ownership of the land beneficially affected by the use?
Had it been shown that the road had been maintained at the public expense, with the acquiescence of the owners of the estates
crossed by it, this would indicate such adverse possession by the government as in course of time would ripen into title or warrant the
presumption of a grant or of a dedication. But in this case there is no such evidence, and the claims of plaintiffs, whether regarded as
members of the public asserting a right to use the road as such, or as persons claiming a private easement of way over the land of another
must be regarded as resting upon the mere fact of user.
If the owner of a tract of land, to accommodate his neighbors or the public in general, permits them to across his property, it is
reasonable to suppose that it is not his intention, in so doing, to divest himself of the ownership of the land so used, or to establish an
easement upon it, and that the persons to whom such permission, tacit or express, is granted, do not regard their privilege of use as being
based upon anything more than the mere tolerance of the owner. Clearly, such permissive use is in its inception based upon an essentially
revocable license. If the use continues for a long period of time, no change being made in the relations of the parties by any express or
implied agreement, does the owner of the property affected lose his right of revocation? Or, putting the same question in another form, does
the mere permissive use ripen into title by prescription?
It is a fundamental principle of the law in this jurisdiction concerning the possession of real property that such possession is not
affected by acts of a possessory character which are "merely tolerated" by the possessor, or which are due to his license (Civil Code, arts.
444 and 1942). This principle is applicable not only with respect to the prescription of the dominium as a whole, but, to the prescription of
right in rem. In the case of Cortes vs. Palanca Yu-Tibo (2 Phil. Rep., 24, 38), the Court said:
"The provision of article 1942 of the Civil Code to the effect that acts which are merely tolerated produce no
effect with respect to possession is applicable as much to the prescription of real rights as to the prescription of the fee,
it being a glaring and self-evident error to affirm the contrary, as does the appellant in his motion papers. Possession is
the fundamental basis of the prescription. Without it no kind of prescription is possible, not even the extraordinary.
Consequently, if acts of mere tolerance produce no effect respect to possession, at that article provides, in conformity
with article 444 of the same Code, it is evident that they can produce no effect with respect to prescription, whether the
prescriptive acquisition be of a fee or of real rights, for the same reason holds in one and the other case; that is, that there
has been no true possession in the legal sense of the word." (See also Ayala de Roxas vs. Maglonso, 8 Phil. Rep., 745;
Municipality of Caceres vs. Director of Lands and Roman Catholic Bishop of Nueva Caceres, 24 Phil. Rep., 485.)
Possession, under the Civil Code, to constitute the foundation of a prescriptive right, must be possession under claim of title (en
concepto de dueño), to use the common law equivalent of the term, it must be adverse. Acts of possessory character performed by one
who holds by mere tolerance of the owner are clearly not en concepto de dueño, and such possessory acts, no matter how long so
continued, do not start the running of the period of prescription.
A similar question was presented in the case of the Roman Catholic Archbishop of Manila vs. Roxas (22 Phil. Rep., 450), in
which case it appeared that Roxas, the owner of the Hacienda de San Pedro Macati, claimed a right of way across the property of the
church to Calle Tejeron, a public street of the town of San Pedro Macati. The proof showed that the road in question had been used by the
tenants of the Hacienda de San Pedro Macati for the passage of carts in coming and leaving the hacienda "from time immemorial," and
further that the road had been used for time out of mind, not only by the tenants of the hacienda but by many other people in going and
coming from a church half-way between the boundary line of the hacienda and Calle Tejeron. The court held that the facts did not give rise
to a perspective right of easement in favor of the owner of the hacienda, upon the ground that such use "is to be regarded as permissive
and under an implied license, and not adverse. Such a use is not inconsistent with the only use which the proprietor thought fit to make of
the land, and until the appellee thinks proper to enclose it, such use is not adverse and will not preclude it from enclosing the land when
other views of its interest render it proper to do so. And though an adjacent proprietor may make such use of the open land more frequently
than another, yet the same rule will apply unless there be some decisive act indicating a separate and exclusive use under a claim of
right. A different doctrine would have a tendency to destroy all neighborhood accommodations in the way of travel; for if it were once
understood that a man, by allowing his neighbor to pass through his farm without objection over the pass-away which he used himself,
would thereby, after the lapse of time, confer a right on such neighbor to require the pass-way to be kept open for his benefit and
enjoyment, a prohibition against all such travel would immediately ensue."
The decisions of the supreme court of Louisiana, a State whose jurisdiction is based, as is our own, upon the Roman Law, and
whose Civil Code is taken, as is our own, very largely from the Code of Napoleon, are particularly persuasive in matters of this character. In
the case of Torres vs. Fargoust (37 La. Ann., 497), cited by appellants in their brief, in which the issues were very similar to those of the
present case, the court held that —
"The mere fact that for thirty or forty years the public was permitted to pass over this ground would not of itself
constitute the place a locus publicus . . . dedication must be shown by evidence so conclusive as to exclude all idea of
private ownership; . . . such dedication can not be inferred from mere user alone; . . . no one is presumed to give away
his property. The burden is on him who avers a divestiture of ownership to prove it clearly.'
We are, therefore, of the opinion, and so hold, that upon the facts established by the evidence it does not appear that the road in
question is a public road or way. We are also of the opinion that plaintiff have failed to show that they have acquired by prescription a
private right of passage over the lands of defendants. The supreme court of Spain has decided that under the law in force before the
enactment of decided that under the law in force before the enactment of the Civil Code, the easement of way was discontinuous, and that
while such an easement might be acquired by prescription, it must be used in good faith, in the belief of the existence of the right, and such
user must have been continuous from time immemorial. (Judgment of December 15, 1882.) In the appealed decision the court below says
that the plaintiff and their predecessors made use of the road in question "from time immemorial," but there is no evidence whatever in the
record to support this finding, although it is true that the evidence shows the existence of the road and its use by the plaintiffs and their
predecessors for thirty-five or forty years. Speaking of the evidence required under the present Code of Civil Procedure to show immemorial
use of an easement, this court said in the case of Ayala de Roxas vs. Case (8 Phil. Rep., 197, 198):
"The third Partida in title 31, law 15 . . . says that discontinuous servitudes . . . must be proved by usage or a
term so long that men can not remember its commencement. . . . In many judgments the supreme court of Spain has
refused to accept proof of any definite number of years as a satisfaction of this requirement of the law . . . We are of the
opinion that in order to establish a right of prescription [title of prescription based upon use from time immemorial]
something more is required than the memory of living witnesses. Whether this something should be the declaration of
persons long dead, repeated by those who testify, as exacted by the Spanish law, or should be the common reputation
of ownership recognized by the Code of Procedure, it is unnecessary for us to decide. On either theory the appellant has
filed in this proof . . . "
The same thing may be said in this case. Witnesses has testified that they have known the road for a certain period of years,
beginning at a time prior to the enactment of the Civil Code, but no evidence has been made to prove immemorial use by either of the
means of proof mentioned in this decision cited, nor is immemorial user averred in the complaint as the basis of the right. It is evident,
therefore, that no vested right by user from immemorial had been acquired by plaintiffs at the time the Civil Code took effect. Under that
Code (art. 539) no discontinuous easement could be acquired by prescription in any event. Assuming, without deciding, that this rule has
been changed by the provisions of the present Code of Civil Procedure relating to prescription, and that since its enactment discontinuous
easement may be acquired by prescription, it is clear that this would not avail plaintiffs. The Code of Civil Procedure went into effect on
October 1, 1901. The term of prescription for the acquisition of rights in real estate is fixed by the Code (sec. 41) at ten years. The evidence
shows that in February, 1911, before the expiration of the term of ten years since the time the Code of Civil Procedure took effect, the
defendants interrupted the use of the road by plaintiffs by constructing and maintaining a toll gate on it and collecting toll from persons
making use of it with carts and continued preliminary injunction by the trial court in December, 1912. Our conclusion is, therefore, that
plaintiffs have not acquired by prescription a right to an easement of way over the defendants' property; that their use of the Nanca-Victorias
road across the Hacienda Toreno was due merely to the tacit license and tolerance of the defendants and their predecessors in title; that
the license was essentially revocable; and that, therefore, the defendants were within their rights when they closed the road in 1911.
While in the allegation from plaintiffs' complaint it might be inferred that it was their purpose to seek to impose upon defendants
the easement to which arts. 564 et seq. of the Civil Code relate, that purpose was evidently abandoned, and the case was tried upon a
wholly different theory. Proof was offered to show that the right of passage across defendants' land is necessary to enable plaintiffs to get
their products to market, but there was no offer on their part to pay defendants the indemnity required by section 564.
 For the reasons stated the judgment of the court below is reversed, the injunction issued against defendants is dissolved, and
the action is dismissed. No costs will be allowed on this appeal. So ordered.
Arellano, C.J., Torres, Araullo, Street, Malcolm, and Avanceña, JJ., concur.
||| (Cuaycong v. Benedicto, G.R. No. 9989, [March 13, 1918], 37 PHIL 781-797)

EN BANC

[G.R. No. L-10610. May 26, 1958.]

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant, vs. ERNESTO SILVELA, defendant-appellee.

Solicitor General Ambrosio Padilla and Solicitor Pacífico P. de Castro for appellant.

Benjamin M. Moreno for appellee.

SYLLABUS

1. LIBEL; IMPERSONAL IMPUTATIONS; PROOF BY EVIDENCE ALIUNDE. — The obnoxious writing need not mention the
libeled party by name, the prosecution being permitted to prove by evidence that a vague or general imputation of dishonorable conduct
referred to the complaint or complainants.
2. ID.; PUBLICATION; SENDING OF "UNSEALED LETTER". — If sending a libelous letter "not shown to be sealed" (U.S. vs.
Griño, 36 Phil., 738) is publication, sending of an "unsealed letter" should a fortiori be held to be publication.
3. ID.; ID.; WHEN DEFAMATORY MATTER CANNOT INJURE A MAN'S REPUTATION — Where the defamatory matter is not
seen or heard by anyone except the defamer and the defamed, damages to character reputation can not be recovered in a civil action,
since a man's reputation is the estimate in which others hold him, and not what he himself thinks.

DECISION

BENGZON, J p:

Ernesto A. Silvela was arrested in Iloilo upon a sworn complaint of Rosalia Bermejo Palauar, which had been preliminarily
investigated by the City Fiscal thereof.
Said complaint alleged that the accused,
". . . signed, sent and addressed two unsealed letters to the undersigned containing a certain false,
malicious and defamatory libel tending to injure and impeach the honesty, virtue, honor, reputation and integrity of the
undersigned, by then and there willfully, maliciously and criminally branding, calling and imputing to the undersigned
among others as "Pompom, Naga Business, Naga Prostitute, Prostitute, . . . which appear in two letters sent and
addressed by the accused to the undersigned on September 21, 1955 and September 25, 1955 which defamatory and
libelous letters are hereunder quoted verbatim as follows:
"MY DEAR MISS ROSALIA PALAUAR:
Allow me to take the cudgel in responding your well-written and threatening letter because I am an integral
member of the family of the man you alleged to have smeared your profession and your degree of Master of Arts, major
in English. . . . How proud you are to announce to everybody that you have said degree and yet how ignorant you are
even of the simple term "libel". Libel, for your information, is a written or printed defamation or slander. What a paradox!
You don't know the very word, libel, and yet you have the nerve to frighten my brother-in-law of its consequences — of
the great fine and the long imprisonment! You should have had consulted a lawyer before writing that ignominious letter
of yours; he could have had informed you that the most appropriate case you can bring to court if there is any truth to
your allegation is "oral defamation." . . .. I intended to return to my job this Sunday but I am postponing said trip in order
to hear for myself the case I encourage you to bring to court at your earliest convenience. However, before bringing it to
court, may I advise you to change the word naga-business to naga prostitute; otherwise you will become a laughing
stock in court. You know, the most appropriate English term for "pom-pom" is prostitute. . . .."
"DEAR MISS ROSALIA B. PALAUAR:
I am afraid, Madam, your mind is exceedingly polluted with your guilt or you simply cannot understand
English sentences. I was only advising you to change the word, "naga business" to "naga-prostitute" since the
equivalent English word for "pompom" is prostitute but in your last letter, according to you, I called you "pompom" or
"naga- business." How irrelevant you are.
You further told me to rectify the term, prostitute. Well, I am really sorry. I cannot acquiesce to your kind
request. I have been trained in my profession to be exact to the smallest fraction; hence, I always call a spade, a
spade, and a shovel, a shovel. Besides, I cannot pick a more refined term for your implied idea of a "pompom." At any
rate, I mean every word I say and I'm conscious of its consequences."
Before his arraignment, Silvela moved to quash, contending that the facts charged did not constitute an offense. Over the
fiscal's opposition, the judge dismissed the case explaining that "upon reading carefully the two letters quoted in the complaint, it does not
appear that defamatory words have been directed against the complainant."
 We read the letters differently. As admitted by the defendant, he first answered a letter of complainant to his brother-in-law
wherein she had apparently threatened to sue the latter for having called her "naga-business" or "pompom." Now, in this first letter,
defendant practically says, "my brother-in-law should have called you 'prostitute' the most appropriate English term."
The second letter responded to complainant's reply to the first. In this reply, complainant requested defendant to rectify the term
"prostitute" which he had applied to her. Yet defendant answered:
"I cannot acquiesce to your kind request. I have been trained in my profession to be exact to the smallest
fraction; I always call a spade a spade, and a shovel, a shovel. . . . I mean every word I say and I'm conscious of its
consequences." (Emphasis Ours.)
It is clear in our opinion that defendant as much as said, "If I called you 'prostitute' I decline to retract. I say what I mean, and I
mean what I say." Defendant refused to withdraw the dagger: instead, he plunged it deeper, to the hilt.
Of course, it is unnecessary to add that calling a young lady pursuing graduate courses a "prostitute" is libelous.
His Honor apparently viewed the imputations in the letter as purely impersonal, not applying to the complainant herself. As we
have already stated, the offensive imputations obviously referred to the addressee of the letter, who was therein called a prostitute.
Nevertheless, it may be added that the obnoxious writing need not mention the libeled party by name (Causin vs. Jakosalem, 5
Phil., 155) the prosecution being permitted to prove by evidence that a vague or general imputation of dishonorable conduct referred to the
complainant or complainants. In one of the most famous libel cases, an editorial about "Birds of Prey," criticising "man, who besides being
eagles, having the characteristics of the vulture, the owl and the vampire, etc. etc.," was held to be libelous notwithstanding its having failed
to identify the aggrieved parties; because proof aliunde showed that it referred to them. (Worcester vs. Ocampo, 22 Phil., 42.)
In this instance, the fiscal asserted that he could and would prove at the trial, that the offensive words referred to the
complainant, as the complaint averred.
What evidence could the Fiscal adduce to prove the connecting link? Probably the complainant's letters to defendant and to his
brother-in-law, the terms of which as we surmised, will undoubtedly reveal the connection — if still needed — between the insulting words
and the person to whom they alluded.
Furthermore, the motion to quash must be deemed to have admitted the allegations of the complaint, one of which states that
defendant wilfully, maliciously called the complainant, or imputed to her, the words "pompom," "naga-business," "naga-prostitute," and
"prostitute."
During our deliberations, the question of "publication" cropped up. Although it was not raised by the defendant, it was a proper
subject of inquiry, since publication constitutes one of the essential elements of the crime of libel.
We were quoted Lopez vs. Delgado, 8 Phil., 26, wherein the malicious defamation having been inclosed in a sealed envelope
and sent by special messenger to the plaintiff by the defendant, it was held that no libel had been committed, since the letter was not
published; but we noticed that whereas there the envelope was "sealed," here it was "unsealed."
And later we found U.S. vs. Griño, 36 Phil., 738, wherein the accused signed and sent to the offended party a letter (not shown
to be sealed) charging the latter with having illicit relations with her (accused's) husband. She was held guilty of having "published" the
libelous writing.
Now, if sending a letter "not shown to be sealed" is publication, sending of an "unsealed letter" as in this case, should a
fortiori be held to be publication. The Griño case accords with American jurisprudence:
"As a general rule, in the absence of a statute to the contrary, a communication of the defamatory matter to
the person defamed is a sufficient publication to constitute a criminal offense." (53 Corpus Juris Secundum, Libel and
Slander, sec. 284.)
"While publication within the rules relating to civil liability implies communication of the libel or slander
complained of to a person other than the victim, its meaning is considerably broader in criminal prosecutions; the
authorities appear to agree that in such cases, impartation of the defamation to anyone at all — even to the person
defamed — constitutes such a publication as will support an indictment, specially when done with an intent to provoke a
breach of the peace. Thus, it has several times been held that publication may be effected within the meaning of the
law by enclosing libelous matter in sealed envelope and mailing or delivering it to the person therein denounced." (33
American Jurisprudence, pp. 293-294) Italics Ours.
This is not to declare the Lopez case modified or superseded by the Griño decision. The former involved a civil litigation for
damages, as to which the prevailing view seems to be: "If the defamatory matter is not seen or heard by anyone except the defamer and the
defamed, damages to character reputation can not result since a man's reputation is the estimate in which others hold him, and not what he
himself thinks." (Many cases cited in annotation at p. 239 of 24 American Law Reports Annotated.)
Wherefore, having found the letters to contain libelous matter which in the eyes of the law had been published, we must reverse,
and hereby reverse, the appealed decision. The record will be remanded to the court below for further proceedings. With costs against
appellee.

Montemayor, Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L. and Endencia, JJ., concur.
||| (People v. Silvela, G.R. No. L-10610, [May 26, 1958], 103 PHIL 773-790)

THIRD DIVISION

[G.R. No. 165952. July 28, 2008.]

ANECO REALTY AND DEVELOPMENT CORPORATION, petitioner, vs. LANDEX DEVELOPMENT

CORPORATION, respondent.

DECISION
REYES, R.T., J p:

THIS is a simple case of a neighbor seeking to restrain the landowner from fencing his own property. The right to fence flows from
the right of ownership. Absent a clear legal and enforceable right, We will not unduly restrain the landowner from exercising an inherent
proprietary right. cTDIaC

Before Us is a petition for review on certiorari of the Decision 1 of the Court of Appeals (CA) affirming the Order 2 of the Regional
Trial Court (RTC) dismissing the complaint for injunction filed by petitioner Aneco Realty and Development Corporation (Aneco) against
respondent Landex Development Corporation (Landex).

Facts
Fernandez Hermanos Development, Inc. (FHDI) is the original owner of a tract of land in San Francisco Del Monte, Quezon City.
FHDI subdivided the land into thirty-nine (39) lots. 3 It later sold twenty-two (22) lots to petitioner Aneco and the remaining seventeen (17)
lots to respondent Landex. 4

The dispute arose when Landex started the construction of a concrete wall on one of its lots. To restrain construction of the wall,
Aneco filed a complaint for injunction 5 with the RTC in Quezon City. Aneco later filed two (2) supplemental complaints seeking to demolish
the newly-built wall and to hold Landex liable for two million pesos in damages. 6 DASEac

Landex filed its Answer 7 alleging, among others, that Aneco was not deprived access to its lots due to the construction of the
concrete wall. Landex claimed that Aneco has its own entrance to its property along Miller Street, Resthaven Street, and San Francisco del
Monte Street. The Resthaven access, however, was rendered inaccessible when Aneco constructed a building on said street. Landex also
claimed that FHDI sold ordinary lots, not subdivision lots, to Aneco based on the express stipulation in the deed of sale that FHDI was not
interested in pursuing its own subdivision project.

RTC Disposition

On June 19, 1996, the RTC rendered a Decision 8 granting the complaint for injunction, disposing as follows:

Wherefore, premises considered, and in the light aforecited decision of the Supreme Court judgment is
hereby rendered in favor of the plaintiff and the defendant is hereby ordered: aACEID

1. To stop the completion of the concrete wall and excavation of the road lot in question and if the same is
already completed, to remove the same and to return the lot to its original situation;

2. To pay actual and compensatory damage to the plaintiff in the total amount of P50,000.00;

3. To pay attorney's fees in the amount of P20,000.00;

4. To pay the cost.

SO ORDERED. 9

Landex moved for reconsideration. 10 Records reveal that Landex failed to include a notice of hearing in its motion for
reconsideration as required under Section 5, Rule 15 of the 1997 Rules of Civil Procedure. Realizing the defect, Landex later filed a
motion 11 setting a hearing for its motion for reconsideration. Aneco countered with a motion for execution 12 claiming that the RTC decision
is already final and executory. HDcaAI

Acting on the motion of Landex, the RTC set a hearing on the motion for reconsideration on August 28, 1996. Aneco failed to
attend the slated hearing. The RTC gave Aneco additional time to file a comment on the motion for reconsideration. 13

On March 13, 1997, the RTC issued an order 14 denying the motion for execution of Aneco.

On March 31, 1997, the RTC issued an order granting the motion for reconsideration of Landex and dismissing the complaint of
Aneco. In granting reconsideration, the RTC stated:

In previously ruling for the plaintiff, this Court anchored its decision on the ruling of the Supreme Court in
the case of "White Plains Association vs. Legaspi, 193 SCRA 765", wherein the issue involved was the ownership of
a road lot, in an existing, fully developed and authorized subdivision, which after a second look, is apparently
inapplicable to the instant case at bar, simply because the property in question never did exist as a subdivision. Since,
the property in question never did exist as a subdivision, the limitations imposed by Section 1 of Republic Act No. 440,
that no portion of a subdivision road lot shall be closed without the approval of the Court is clearly in appropriate to the
case at bar. AcHSEa

The records show that the plaintiff's property has access to a public road as it has its own ingress and
egress along Miller St.; That plaintiff's property is not isolated as it is bounded by Miller St. and Resthaven St. in San
Francisco del Monte, Quezon City; that plaintiff could easily make an access to a public road within the bounds and
limits of its own property; and that the defendant has not yet been indemnified whatsoever for the use of his property,
as mandated by the Bill of rights. The foregoing circumstances, negates the alleged plaintiffs right of way. 15

Aneco appealed to the CA. 16

CA Disposition

On March 31, 2003, the CA rendered a Decision 17 affirming the RTC order, disposing as follows:

WHEREFORE, in consideration of the foregoing, the instant appeal is perforcedismissed. Accordingly, the
order dated 31 March 1996 is hereby affirmed. ECISAD

SO ORDERED. 18

In affirming the RTC dismissal of the complaint for injunction, the CA held that Aneco knew at the time of the sale that the lots sold
by FHDI were not subdivision units based on the express stipulation in the deed of sale that FHDI, the seller, was no longer interested in
pursuing its subdivision project, thus: CSEHIa

The subject property ceased to be a road lot when its former owner (Fernandez Hermanos, Inc.) sold it to
appellant Aneco not as subdivision lots and without the intention of pursuing the subdivision project. The law in point
is Article 624 of the New Civil Code, which provides:

Art. 624. The existence of an apparent sign of easement between two estates, established or
maintained by the owner of both, shall be considered, should either of them be alienated, as a title in order
 that the easement may continue actively and passively, unless, at the time the ownership of the two estates
is divided, the contrary should be provided in the title of conveyance of either of them, or the sign aforesaid
should be removed before the execution of the deed. This provision shall also apply in case of the division of
a thing owned in common by two or more persons. TEAICc

Viewed from the aforesaid law, there is no question that the law allows the continued use of an apparent
easement should the owner alienate the property to different persons. It is noteworthy to emphasize that the lot in
question was provided by the previous owner (Fernandez Hermanos, Inc.) as a road lot because of its intention to
convert it into a subdivision project. The previous owner even applied for a development permit over the subject
property. However, when the twenty-two (22) lots were sold to appellant Aneco, it was very clear from the seller's deed
of sale that the lots sold ceased to be subdivision lots. The seller even warranted that it shall undertake to extend all
the necessary assistance for the consolidation of the subdivided lots, including the execution of the requisite
manifestation before the appropriate government agencies that the seller is no longer interested in pursuing the
subdivision project. In fine, appellant Aneco knew from the very start that at the time of the sale, the 22 lots sold to it
were not intended as subdivision units, although the titles to the different lots have yet to be consolidated.
Consequently, the easement that used to exist on the subject lot ceased when appellant Aneco and the former owner
agreed that the lots would be consolidated and would no longer be intended as a subdivision project. IAaCST

Appellant Aneco insists that it has the intention of continuing the subdivision project earlier commenced by
the former owner. It also holds on to the previous development permit granted to Fernandez Hermanos, Inc. The
insistence is futile. Appellant Aneco did not acquire any right from the said previous owner since the latter itself
expressly stated in their agreement that it has no more intention of continuing the subdivision project. If appellant
desires to convert its property into a subdivision project, it has to apply in its own name, and must have its own
provisions for a road lot. 19

Anent the issue of compulsory easement of right of way, the CA held that Aneco failed to prove the essential requisites to avail of
such right, thus:

An easement involves an abnormal restriction on the property of the servient owner and is regarded as a
charge or encumbrance on the servient owner and is regarded as a charge or encumbrance on the servient estate
(Cristobal v. CA, 291 SCRA 122). The essential requisites to be entitled to a compulsory easement of way are: 1) that
the dominant estate is surrounded by other immovables and has no adequate outlet to a public highway; 2) that proper
indemnity has been paid; 3) that the isolation was not due to acts of the proprietor of the dominant estate; 4) that the
right of way claimed is at a point least prejudicial to the servient estate and in so far as consistent with this rule, where
the distance from the dominant estate to a public highway may be the shortest (Cristobal v. Court of Appeals, 291
SCRA 122). ADSTCa

An in depth examination of the evidence adduced and offered by appellant Aneco, showed that it had failed
to prove the existence of the aforementioned requisites, as the burden thereof lies upon the appellant Aneco. 20

Aneco moved for reconsideration but its motion was denied. 21 Hence, the present petition or appeal by certiorari under Rule 45.

Issues

Petitioner Aneco assigns quadruple errors to the CA in the following tenor:

A.

THE COURT OF APPEALS GRAVELY ERRED IN DISMISSING PETITIONER'S APPEAL AND SUSTAINING THE
TRIAL COURT'S ORDER DATED 31 MARCH 1997 GRANTING RESPONDENT'S MOTION FOR
RECONSIDERATION WHICH IS FATALLY DEFECTIVE FOR LACK OF NOTICE OF HEARING. SITCcE

B.

THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE TRIAL COURT'S ORDER WHICH GAVE FULL
WEIGHT AND CREDIT TO THE MISLEADING AND ERRONEOUS CERTIFICATION ISSUED BY GILDA E. ESTILO
WHICH SHE LATER EXPRESSLY AND CATEGORICALLY RECANTED BY WAY OF HER AFFIDAVIT.

C.

THE COURT OF APPEALS GRAVELY ERRED IN APPLYING THE LIBERAL CONSTRUCTION OF THE RULES IN
ORDER TO SUSTAIN THE TRIAL COURT'S ORDER DATED 31 MARCH 1997.

D.

THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE TRIAL COURT'S ORDER THAT MADE NO
PRONOUNCEMENTS AS TO COSTS, AND IN DISREGARDING THE MERIT OF THE PETITIONER'S CAUSE OF
ACTION. 22

Our Ruling

The petition is without merit.

Essentially, two (2) issues are raised in this petition. The first is the procedural issue of whether or not the RTC and the CA erred
in liberally applying the rule on notice of hearing under Section 5, Rule 15 of the 1997 Rules of Civil Procedure. The second is the substantive
issue of whether or not Aneco may enjoin Landex from constructing a concrete wall on its own property. acCTIS

We shall discuss the twin issues sequentially.

Strict vs. Liberal Construction of

Procedural Rules; Defective motion
was cured when Aneco was given an
opportunity to comment on the
motion for reconsideration.

Section 5, Rule 15 of the 1997 Rules of Civil Procedure 23 requires a notice of hearing for a contested motion filed in court.
Records disclose that the motion for reconsideration filed by Landex of the RTC decision did not contain a notice of hearing. There is no
dispute that the motion for reconsideration is defective. The RTC and the CA ignored the procedural defect and ruled on the substantive
issues raised by Landex in its motion for reconsideration. The issue before Us is whether or not the RTC and the CA correctly exercised its
discretion in ignoring the procedural defect. Simply put, the issue is whether or not the requirement of notice of hearing should be strictly or
liberally applied under the circumstances. AHTICD

Aneco bats for strict construction. It cites a litany of cases which held that notice of hearing is mandatory. A motion without the
required notice of hearing is a mere scrap of paper. It does not toll the running of the period to file an appeal or a motion for reconsideration.
It is argued that the original RTC decision is already final and executory because of the defective motion. 24

Landex counters for liberal construction. It similarly cites a catena of cases which held that procedural rules may be relaxed in the
interest of substantial justice. Landex asserts that the procedural defect was cured when it filed a motion setting a hearing for its motion for
reconsideration. It is claimed that Aneco was properly informed of the pending motion for reconsideration and it was not deprived of an
opportunity to be heard. 25

It is true that appeals are mere statutory privileges which should be exercised only in the manner required by law. Procedural rules
serve a vital function in our judicial system. They promote the orderly resolution of cases. Without procedure, there will be chaos. It thus
behooves upon a litigant to follow basic procedural rules. Dire consequences may flow from procedural lapses. aEAIDH

Nonetheless, it is also true that procedural rules are mere tools designed to facilitate the attainment of justice. Their strict and rigid
application should be relaxed when they hinder rather than promote substantial justice. Public policy dictates that court cases should, as much
as possible, be resolved on the merits not on mere technicalities. Substantive justice trumps procedural rules. In Barnes v. Padilla, 26 this
Court held:

Let it be emphasized that the rules of procedure should be viewed as mere tools designed to facilitate the
attainment of justice. Their strict and rigid application, which would result in technicalities that tend to frustrate rather
than promote substantial justice, must always be eschewed. Even the Rules of Court reflect this principle. The power
to suspend or even disregard rules can be so pervasive and compelling as to alter even that which this Court itself has
already declared to be final . . . . cSEaTH

The emerging trend in the rulings of this Court is to afford every party litigant the amplest opportunity for
the proper and just determination of his cause, free from the constraints of technicalities. Time and again, this Court
has consistently held that rules must not be applied rigidly so as not to override substantial justice. 27

Here, We find that the RTC and the CA soundly exercised their discretion in opting for a liberal rather than a strict application of
the rules on notice of hearing. It must be stressed that there are no vested right to technicalities. It is within the court's sound discretion to
relax procedural rules in order to fully adjudicate the merits of a case. This Court will not interfere with the exercise of that discretion absent
grave abuse or palpable error. Section 6, Rule 1 of the 1997 Rules of Civil Procedure even mandates a liberal construction of the rules to
promote their objectives of securing a just, speedy, and inexpensive disposition of every action and proceeding. IAEcCT

To be sure, the requirement of a notice of hearing in every contested motion is part of due process of law. The notice alerts the
opposing party of a pending motion in court and gives him an opportunity to oppose it. What the rule forbids is not the mere absence of a
notice of hearing in a contested motion but the unfair surprise caused by the lack of notice. It is the dire consequences which flow from the
procedural error which is proscribed. If the opposing party is given a sufficient opportunity to oppose a defective motion, the procedural lapse
is deemed cured and the intent of the rule is substantially complied. In E & L Mercantile, Inc. v. Intermediate Appellate Court, 28 this Court
held:

Procedural due process is not based solely on a mechanistic and literal application of a rule such that any
deviation is inexorably fatal. Rules of procedure, and this includes the three (3) days notice requirement, are liberally
construed in order to promote their object and to assist the parties in obtaining just, speedy, and inexpensive
determination of every action and proceeding (Section 2, Rule 1, Rules of Court). In Case and Nantz v. Jugo (77 Phil.
517), this Court made it clear that lapses in the literal observance of a rule of procedure may be overlooked when they
have not prejudiced the adverse party and have not deprived the court of its authority. HEDaTA

A party cannot ignore a more than sufficient opportunity to exercise its right to be heard and once the court
performs its duty and the outcome happens to be against that negligent party, suddenly interpose a procedural violation
already cured, insisting that everybody should again go back to square one. Dilatory tactics cannot be the guiding
principle.

The rule in De Borja v. Tan (93 Phil. 167), that "what the law prohibits is not the absence of previous notice,
but the absolute absence thereof and lack of opportunity to be heard", is the applicable doctrine. (See also Aguilar v.
Tan, 31 SCRA 205; Omico v. Vallejos, 63 SCRA 285; Sumadchat v. Court of Appeals, 111 SCRA 488.) . . . 29

We also find that the procedural lapse committed by Landex was sufficiently cured when it filed another motion setting a hearing
for its defective motion for reconsideration. Records reveal that the RTC set a hearing for the motion for reconsideration but Aneco's counsel
failed to appear. The RTC then gave Aneco additional time to file comment on the motion for reconsideration. 30

Aneco was afforded procedural due process when it was given an opportunity to oppose the motion for reconsideration. It cannot
argue unfair surprise because it was afforded ample time to file a comment, as it did comment, on the motion for reconsideration. There being
no substantial injury or unfair prejudice, the RTC and the CA correctly ignored the procedural defect. TCacIE

The RTC and the CA did not err in

dismissing the complaint for
injunction; factual findings and
conclusions of law of the RTC and
the CA are afforded great weight and
respect.

Anent the substantive issue, We agree with the RTC and the CA that the complaint for injunction against Landex should be
dismissed for lack of merit. What is involved here is an undue interference on the property rights of a landowner to build a concrete wall on
his own property. It is a simple case of a neighbor, petitioner Aneco, seeking to restrain a landowner, respondent Landex, from fencing his
own land. ECaSIT

Article 430 of the Civil Code gives every owner the right to enclose or fence his land or tenement by means of walls, ditches,
hedges or any other means. The right to fence flows from the right of ownership. As owner of the land, Landex may fence his property subject
only to the limitations and restrictions provided by law. Absent a clear legal and enforceable right, as here, We will not interfere with the
exercise of an essential attribute of ownership.

Well-settled is the rule that factual findings and conclusions of law of the trial court when affirmed by the CA are accorded great
weight and respect. Here, We find no cogent reason to deviate from the factual findings and conclusion of law of the trial court and the
appellate court. We have meticulously reviewed the records and agree that Aneco failed to prove any clear legal right to prevent, much less
restrain, Landex from fencing its own property. TaCIDS
 Aneco cannot rely on the road lot under the old subdivision project of FHDI because it knew at the time of the sale that it was
buying ordinary lots, not subdivision lots, from FHDI. This is clear from the deed of sale between FHDI and Aneco where FHDI manifested
that it was no longer interested in pursuing its own subdivision project. If Aneco wants to transform its own lots into a subdivision project, it
must make its own provision for road lots. It certainly cannot piggy back on the road lot of the defunct subdivision project of FHDI to the
detriment of the new owner Landex. The RTC and the CA correctly dismissed the complaint for injunction of Aneco for lack of merit.

WHEREFORE, the petition is DENIED and the appealed Decision AFFIRMED. IEAacT

SO ORDERED.

Ynares-Santiago, Austria-Martinez, Chico-Nazario and Nachura, JJ., concur.

||| (Aneco Realty and Development Corp. v. Landex Development Corp., G.R. No. 165952, [July 28, 2008], 582 PHIL 183-196)

THIRD DIVISION

[G.R. No. 147957. July 22, 2009.]

PRIVATIZATION AND MANAGEMENT OFFICE, petitioner, vs. LEGASPI TOWERS 300, INC., respondent.

DECISION

PERALTA, J. p:

This is a petition for review on certiorari seeking to annul and set aside the Decision 1 dated February 16, 2001, of the Court of
Appeals (CA) in CA-G.R. CV No. 48984, affirming the Decision of the Regional Trial Court (RTC).

The factual and procedural antecedents are as follows:

Caruff Development Corporation owned several parcels of land along the stretch of Roxas Boulevard, Manila. Among them were
contiguous lots covered by Transfer Certificate of Title (TCT) Nos. 120311, 120312, 120313, and 127649 (now TCT No. 200760).

Sometime in December 1975, Caruff obtained a loan from the Philippine National Bank (PNB) to finance the construction of a 21-
storey condominium along Roxas Boulevard. 2 The loan accommodation was secured by a real estate mortgage over three (3) parcels of
land covered by TCT Nos. 120311, 120312, and 120313, 3 where Caruff planned to erect the condominium.

In 1979, Caruff started constructing a multi-storey building on the mortgaged parcels of land. Along with the other appurtenances
of the building constructed by Caruff, it built a powerhouse (generating set) and two sump pumps in the adjacent lot covered by TCT No.
127649 (now TCT No. 200760).

After the completion of the condominium project, it was constituted pursuant to the Condominium Act (Republic Act No. 4726), as
the Legaspi Towers 300, Inc.

However, for Caruff's failure to pay its loan with PNB, the latter foreclosed the mortgage and acquired some of the properties of
Caruff at the sheriff's auction sale held on January 30, 1985. 4

Thereafter, Proclamation No. 50 5 was issued. It was aimed to promote privatization "for the prompt disposition of the large number
of non-performing assets of the government financial institutions, and certain government-owned and controlled corporations, which have
been found unnecessary or inappropriate for the government sector to maintain." It also provided for the creation of the Asset Privatization
Trust (APT).

By virtue of Administrative Order No. 14 and the Deed of Transfer executed by PNB, the National Government, thru the APT,
became the assignee and transferee of all its rights and titles to and interests in its receivables with Caruff, including the properties it acquired
from the foreclosure of Caruff's mortgage.

Meanwhile, Caruff filed a case against PNB before the RTC of Manila, Branch 2, whereby Caruff sought the nullification of PNB's
foreclosure of its properties. 6 The case was docketed as Civil Case No. 85-29512.

A Compromise Agreement 7 dated August 31, 1988 was later entered into by Caruff, PNB, and the National Government thru
APT. The parties agreed, among other things, that Caruff would transfer and convey in favor of the National Government, thru the APT, the
lot covered by TCT No. 127649 (now TCT No. 200760), where it built the generating set and sump pumps.

On September 9, 1988, the RTC rendered a Decision approving the Compromise Agreement executed and submitted by the
parties. The dispositive portion of said Decision reads:

. . . and finding the foregoing compromise agreement to be well-taken, the Court hereby approves the same
and renders judgment in accordance with the terms and conditions set forth [sic] therein and enjoins the parties to comply
strictly therewith.

SO ORDERED. 8

Thus, by virtue of the Decision, the subject property was among those properties that were conveyed by Caruff to PNB and the
National Government thru APT.

On July 5, 1989, respondent filed a case for Declaration of the existence of an easement before the RTC of Manila, docketed as
Spec. Proc. No. 89-49563. Respondent alleged that the act of Caruff of constructing the powerhouse and sump pumps on its property
constituted a voluntary easement in favor of the respondent. It prayed, among other things, that judgment be rendered declaring the existence
of an easement over the portion of the property covered by TCT No. 127649 (now TCT No. 200760) that was being occupied by the
powerhouse and the sump pumps in its favor, and that the Register of Deeds of Manila annotate the easement at the back of said certificate
of title. 9
 In its Answer with Counterclaim and Cross-claim, 10 APT alleged that respondent had no cause of action against it, because it
was but a mere transferee of the land. It acquired absolute ownership thereof by virtue of the Compromise Agreement in Civil Case No. 85-
2952, free from any liens and/or encumbrances. It was not a privy to any transaction or agreement entered into by and between Caruff,
respondent, and the bank. It further alleged that the continued use of the subject property by respondent and the condominium owners without
its consent was an encroachment upon its rights as absolute owner and for which it should be properly compensated. CTacSE

On January 12, 1995, after trial on the merits, the RTC rendered a Decision 11 declaring the existence of an easement over the
portion of the land covered by TCT No. 127649 (TCT No. 200760), the decretal portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the petitioner and against the respondents hereby
declaring the existence of an easement over the portion of land covered by TCT No. 200760 (previously No. 127649)
occupied at present [by the] powerhouse and sump pumps nos. 1 and 2 only, of Legaspi Towers 300, in favor of Legaspi
Towers 300, Incorporated. The Register of Deeds of Manila is, likewise, hereby directed to annotate this easement at the
back of the said certificate of title. The counterclaim and cross-claim are dismissed accordingly.

SO ORDERED.

Aggrieved, APT sought recourse before the CA in CA-G.R. CV No. 48984.

Subsequently, the term of existence of APT expired and, pursuant to Section 2, Article III of Executive Order No. 323, the powers,
functions, duties and responsibilities of APT, as well as all the properties, real or personal assets, equipments and records held by it and its
obligations and liabilities that were incurred, was transferred to petitioner Privatization and Management Office (PMO). Thus, the PMO
substituted APT in its appeal.

On February 16, 2001, finding no reversible error on the part of the RTC, the CA rendered a Decision 12 affirming the decision
appealed from. PMO filed a Motion for Reconsideration, but it was denied in the Resolution 13 dated May 3, 2001.

Hence, the present petition assigning the following errors:

THE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE COURT A QUO
IN FINDING THAT [THE] PRESENCE OF THE GENERATOR SET (GENERATING SET) AND SUMP PUMPS
CONSTITUES AN EASEMENT.

II

THE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE COURT A QUO
IN DECLARING THE EXISTENCE OF AN EASEMENT OVER THE PORTION OF LAND COVERED BY TCT NO.
[200760] OCCUPIED BY THE GENERATOR SET AND SUMP PUMPS NOS. 1 AND 2, PURSUANT TO ARTICLE 688
OF THE CIVIL CODE.

III

THE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE COURT A QUO
IN NOT REQUIRING THE RESPONDENT-PETITIONER TO PAY ANY COMPENSATION TO PETITIONER, THE
OWNER OF THE LAND, FOR THE USE OF ITS PROPERTY. 14

Petitioner argues that the presence of the generator set and sump pumps does not constitute an easement. They are mere
improvements and/or appurtenances complementing the condominium complex, which has not attained the character of immovability. They
were placed on the subject property as accessories or improvements for the general use and comfort of the occupants of the condominium
complex.

Petitioner maintains that, as the generator set and sump pumps are improvements of the condominium, the same should have
been removed after Caruff undertook to deliver the subject property free from any liens and encumbrances by virtue of the Decision of the
RTC in Civil Case No. 85-29512 approving the parties' Compromise Agreement. It adds that, in alienating the property in favor of APT/PMO,
Caruff could not have intended to include as encumbrance the voluntary easement.

Petitioner posits that respondent failed to present any evidence to prove the existence of the necessary requisites for the
establishment of an easement. There is no concrete evidence to show that Caruff had a clear and unequivocal intention to establish the
placing of the generator set and sump pumps on the subject property as an easement in favor of respondent.

Lastly, petitioner contends that respondent is a "squatter" for having encroached on the former's property without its consent and
without paying any rent or indemnity. Petitioner submits that respondent's presence on the subject property is an encroachment on ownership
and, thus, cannot be properly considered an easement. It adds that an easement merely produces a limitation on ownership, but the general
right of ownership of the servient tenement must not be impaired so as to amount to a taking of property. When the benefit being imposed is
so great as to impair usefulness of the servient estate, it would amount to a cancellation of the rights of the latter.

Petitioner insists that, for having unjustly enriched itself at the expense of the National Government and for encroaching on the
latter's rights as the absolute owner, respondent should rightfully compensate the National Government for the use of the subject property
which dates back to August 28, 1989 up to the present.

For its part, respondent argues that it was the intention of Caruff to have a voluntary easement in the subject property and for it to
remain as such even after the property was subsequently assigned to APT. It was Caruff who constructed the generating set and sump pumps
on its adjacent property for the use and benefit of the condominium adjoining it. Also, the manner in which the sump pumps were installed is
permanent in nature, since their removal and transfer to another location would render the same worthless and would cut off the supply of
electricity and water to the condominium and its owners.

Respondent maintains that petitioner cannot assume that Caruff intended to renounce the voluntary easement over the subject
property by virtue of the Compromise Agreement, since such defense can only be presented by Caruff and not the petitioner. It added that
petitioner had actual notice of the presence of the generating set and sump pumps when they were negotiating with Caruff regarding the
compromise agreement and at the time the subject property was transferred to petitioner. Also, petitioner cannot claim the payment of rent,
considering that there was no written demand for respondent to pay rent or indemnity.

Respondent submits that the mandate of petitioner to privatize or dispose of the non-performing assets transferred to it does not
conflict with the issue of the declaration of the easement over the subject property, considering that petitioner is not prevented from privatizing
the same despite the presence of the voluntary easement.

The petition is meritorious.

 An easement or servitude is "a real right constituted on another's property, corporeal and immovable, by virtue of which the owner
of the same has to abstain from doing or to allow somebody else to do something on his property for the benefit of another thing or
person." 15 The statutory basis of this right is Article 613 of the Civil Code, which provides:

Art. 613. An easement or servitude is an encumbrance imposed upon an immovable for the benefit of another
immovable belonging to a different owner.

The immovable in favor of which the easement is established is called the dominant estate; that which is
subject thereto, the servient estate.

There are two sources of easements: by law or by the will of the owners. Article 619 of the Civil Code states:

Art. 619. Easements are established either by law or by the will of the owners. The former are called legal
and the latter voluntary easements.

In the present case, neither type of easement was constituted over the subject property.

In its allegations, respondent claims that Caruff constituted a voluntary easement when it constructed the generating set and sump
pumps over the disputed portion of the subject property for its benefit. However, it should be noted that when the appurtenances were
constructed on the subject property, the lands where the condominium was being erected and the subject property where the generating set
and sump pumps were constructed belonged to Caruff. Therefore, Article 613 of the Civil Code does not apply, since no true easement was
constituted or existed, because both properties were owned by Caruff.

Also, Article 624 of the Civil Code is controlling, as it contemplates a situation where there exists an apparent sign of easement
between two estates established or maintained by the owner of both. The law provides:

Art. 624. The existence of an apparent sign of easement between two estates, established or maintained by
the owner of both, shall be considered, should either of them be alienated, as a title in order that the easement may
continue actively and passively, unless, at the time the ownership of the two estates is divided, the contrary should be
provided in the title of conveyance of either of them, or the sign aforesaid should be removed before the execution of the
deed. This provision shall also apply in case of the division of a thing owned in common by two or more persons. 16

From the foregoing, it can be inferred that when the owner of two properties alienates one of them and an apparent sign of
easement exists between the two estates, entitlement to it continues, unless there is a contrary agreement, or the indication that the easement
exists is removed before the execution of the deed.

In relation thereto, the Compromise Agreement, as approved by the court, clearly states, among other things, that:

xxx xxx xxx

2.0 That in consideration of the covenants hereunder stipulated, plaintiff [Caruff] Development Corporation
(CDC), hereby terminates the instant case against defendants Philippine National Bank (PNB) and the National
Government/APT, and hereby:

2.1 Assigns, transfers and conveys in favor of defendant National government thru APT, CDC's rights, title
and interest in the Maytubig property, situated at the back of the Legaspi Towers 300 Condominium, consisting of seven
(7) contiguous lots with an aggregate area of 1,504.90 square meters, covered by the following Transfer Certificate of
Title, viz.: TCT No. 23663 — Pasay City Registry; TCT No. 142497 — Metro Manila 1 Registry; TCT No. 142141 — Metro
Manila 1 Registry; TCT No. 127649 — Metro Manila 1 Registry; . . . ; all titles, free from any and all liens and
encumbrances, to be delivered, and the necessary papers and documents to be turned over/executed to effect transfer
in favor of the National Government/APT, upon approval of this Compromise Agreement;

xxx xxx xxx. 17

Thus, when the subject property was assigned to the National Government thru the APT, no easement arose or was voluntarily
created from the transfer of ownership, considering that the parties, more particularly, Caruff, pledged that it was assigning, transferring, and
conveying the subject property in favor of the National Government thru the APT "free from any and all liens and encumbrances."

Compromise agreements are contracts, whereby the parties undertake reciprocal obligations to resolve their differences, thus,
avoiding litigation, or put an end to one already commenced. 18 As a contract, when the terms of the agreement are clear and explicit that
they do not justify an attempt to read into it any alleged intention of the parties; the terms are to be understood literally, just as they appear on
the face of the contract. 19 Considering that Caruff never intended to transfer the subject property to PMO, burdened by the generating set
and sump pumps, respondent should remove them from the subject property.

As regards PMO's claim for rent, respondent has been enjoying the use of the subject property for free from the time the rights
over the property were transferred and conveyed by Caruff to the National Government.

We have held that "[t]here is unjust enrichment when a person unjustly retains a benefit to the loss of another, or when a person
retains money or property of another against the fundamental principles of justice, equity and good conscience." Article 22 of the Civil Code
provides that "[e]very person who, through an act or performance by another, or any other means, acquires or comes into possession of
something at the expense of the latter, without just or legal ground, shall return the same to him." The principle of unjust enrichment under
Article 22 of the Civil Code requires two conditions: (1) that a person is benefited without a valid basis or justification, and (2) that such benefit
is derived at another's expense or damage. 20

In the present case, there is no dispute as to who owns the subject property and as to the fact that the National Government has
been deprived of the use thereof for almost two decades. Thus, it is but just and proper that respondent should pay reasonable rent for the
portion of the subject property occupied by the generating set and sump pumps, from the time respondent deprived the lawful owner of the
use thereof up to the present. To rule otherwise would be unjust enrichment on the part of respondent at the expense of the Government.

From the records, APT/PMO submitted, as part of its evidence, a letter 21 dated June 18, 1992, wherein it fixed the monthly rental
fee per square meter of the entire property at P56.25, or P1.81 per square meter per day. Hence, respondent should pay the National
Government reasonable rent in the amount of P56.25 per square meter per month, to be reckoned from August 28, 1989 up to the time when
the generating set and sump pumps are completely removed therefrom.

WHEREFORE, premises considered, the Decision of the Regional Trial Court in Spec. Proc. No. 89-49563 dated January 12,
1995, and the Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 48984 dated February 16, 2001 and May 3, 2001,
respectively, are REVERSED and SET ASIDE.
 Legaspi Towers 300, Inc. is DIRECTED to REMOVE the generating set and sump pumps 1 and 2 from the property covered by
TCT No. 200760 and to PAY reasonable rent at the rate of P56.25 per square meter/per month from August 28, 1989 until the same are
completely removed.

SO ORDERED.

Ynares-Santiago, Chico-Nazario, Velasco, Jr. and Nachura, JJ., concur.

||| (Privatization and Management Office v. Legaspi Towers 300, Inc., G.R. No. 147957, [July 22, 2009], 611 PHIL 16-29)

THIRD DIVISION

[G.R. No. 150936. August 18, 2004.]

NATIONAL POWER CORPORATION, petitioner, vs. MANUBAY AGRO-INDUSTRIAL DEVELOPMENT

CORPORATION, respondent.

DECISION

PANGANIBAN, J p:

How much just compensation should be paid for an easement of a right of way over a parcel of land that will be traversed by high-
powered transmission lines? Should such compensation be a simple easement fee or the full value of the property? This is the question to be
answered in this case.

The Case
Before us is a Petition for Review 1 under Rule 45 of the Rules of Court, seeking to reverse and set aside the November 23, 2001
Decision 2 of the Court of Appeals (CA) in CA-GR CV No. 60515. The CA affirmed the June 24, 1998 Decision 3 of the Regional Trial Court 4 (RTC)
of Naga City (Branch 26), directing the National Power Corporation (NPC) to pay the value of the land expropriated from respondent for the use
thereof in NPC’s Leyte-Luzon HVDC Power Transmission Project.

The Facts
The CA summarized the antecedents of the case as follows:

“In 1996, [Petitioner] NATIONAL POWER CORPORATION, a government-owned and controlled corporation
created for the purpose of undertaking the development and generation of hydroelectric power, commenced its 350 KV
Leyte-Luzon HVDC Power Transmission Project. The project aims to transmit the excess electrical generating capacity
coming from Leyte Geothermal Plant to Luzon and various load centers in its vision to interconnect the entire country into
a single power grid. Apparently, the project is for a public purpose.

“In order to carry out this project, it is imperative for the [petitioner’s] transmission lines to cross over certain
lands owned by private individuals and entities. One of these lands, [where] only a portion will be traversed by the
transmission lines, is owned by [respondent] MANUBAY AGRO-INDUSTRIAL DEVELOPMENT
CORPORATION. CAIHTE

“Hence, on 03 December 1996, [petitioner] filed a complaint for expropriation before the Regional Trial Court
of Naga City against [respondent] in order to acquire an easement of right of way over the land which the latter owns.
The said land is situated at Km. 8, Barangay Pacol, Naga City, Camarines Sur and described with more particularity, as
follows:

TCT/OCT NO. TOTAL AREA AFFECTED AREA CLASS.

IN SQ.M. IN SQ. M. OF LAND

17795 490,232 21,386.16 Agri.

17797 40,848 1,358.17 Agri.

17798 5,279 217.38 Agri.

————

TOTAL 22,961.71

“On 02 January 1997, [respondent] filed its answer. Thereafter, the court a quo issued an order dated 20
January 1997 authorizing the immediate issuance of a writ of possession and directing Ex-Officio Provincial Sheriff to
immediately place [petitioner] in possession of the subject land.

“Subsequently, the court a quo directed the issuance of a writ of condemnation in favor of [petitioner] through
an order dated 14 February 1997. Likewise, for the purpose of determining the fair and just compensation due to
[respondent], the court appointed three commissioners composed of one representative of the petitioner, one for the
respondent and the other from the court, namely: OIC-Branch Clerk of Court Minda B. Teoxon as Chairperson and
 Philippine National Bank-Naga City Loan Appraiser Mr. Isidro Virgilio Bulao, Jr. and City Assessor Ramon R. Albeus as
members.

“On 03 and 06 March 1997, respectively, Commissioners Ramon Albeus and Isidro Bulao, Jr. took their oath
of office before OIC Branch Clerk of Court and Chairperson Minda B. Teoxon.

“Accordingly, the commissioners submitted their individual appraisal/valuation reports. The commissioner for
the [petitioner], Commissioner Albeus, finding the subject land irregular and sloppy, classified the same as low density
residential zone and recommended the price of P115.00 per square meter. On the other hand, Commissioner Bulao,
commissioner for the [respondent], recommended the price of P550.00 per square meter. The court’s Commissioner and
Chairperson of the Board Minda Teoxon, on the other hand, found Commissioner Albeus’ appraisal low as compared to
the BIR Zonal Valuation and opted to adopt the price recommended by Commissioner Bulao. On the assumption that the
subject land will be developed into a first class subdivision, she recommended the amount of P550.00 per square meter
as just compensation for the subject property, or the total amount of P12,628,940.50 for the entire area affected.” 5

Taking into consideration the condition, the surroundings and the potentials of respondent’s expropriated property, the RTC approved
Chairperson Minda B. Teoxon’s recommended amount of P550 per square meter as just compensation for the property. The trial court opined that
the installation thereon of the 350 KV Leyte-Luzon HVDC Power Transmission Project would impose a limitation on the use of the land for an
indefinite period of time, thereby justifying the payment of the full value of the property.

Further, the RTC held that it was not bound by the provision cited by petitioner — Section 3-A 6 of Republic Act 6395 7 , as amended
by Presidential Decree 938. This law prescribes as just compensation for the acquired easement of a right of way over an expropriated property an
easement fee in an amount not exceeding 10 percent of the market value of such property. The trial court relied on the earlier pronouncements of
this Court that the determination of just compensation in eminent domain cases is a judicial function. Thus, valuations made by the executive branch
or the legislature are at best initial or preliminary only.

Ruling of the Court of Appeals

Affirming the RTC, the CA held that RA 6395, as amended by PD No. 938, did not preclude expropriation. Section 3-A thereof allowed
the power company to acquire not just an easement of a right of way, but even the land itself. Such easement was deemed by the appellate court
to be a “taking” under the power of eminent domain. aScIAC

The CA observed that, given their nature, high-powered electric lines traversing respondent’s property would necessarily diminish — if
not damage entirely — the value and the use of the affected property; as well as endanger lives and limbs because of the high-tension current
conveyed through the lines. Respondent was therefore deemed entitled to a just compensation, which should be neither more nor less than the
monetary equivalent of the property taken. Accordingly, the appellate found the award of P550 per square meter to be proper and reasonable.

Hence, this Petition. 8

Issues
In its Memorandum, petitioner submits this lone issue for our consideration:

“Whether or not the Honorable Court of Appeals gravely erred in affirming the Decision dated June 24, 1998
of the Regional Trial Court, Branch 26, Naga City considering that its Decision dated November 23, 2001 is not in accord
with law and the applicable decisions of this Honorable Court.” 9

The Court’s Ruling

The Petition is devoid of merit.

Sole Issue:
Just Compensation
Petitioner contends that the valuation of the expropriated property — fixed by the trial court and affirmed by the CA — was too high a
price for the acquisition of an easement of a mere aerial right of way, because respondent would continue to own and use the subject land anyway.
Petitioner argues that in a strict sense, there is no “taking” of property, but merely an imposition of an encumbrance or a personal easement/servitude
under Article 614 10 of the Civil Code. Such encumbrance will not result in ousting or depriving respondent of the beneficial enjoyment of the
property. And even if there was a “taking,” petitioner points out that the loss is limited only to a portion of the aerial domain above the property of
respondent. Hence, the latter should be compensated only for what it would actually lose.

We are not persuaded.

Petitioner averred in its Complaint in Civil Case No. RTC 96-3675 that it had sought to acquire an easement of a right of way over
portions of respondent’s land — a total area of 22,961.71 square meters. 11 In its prayer, however, it also sought authority to enter the property
and demolish all improvements existing thereon, in order to commence and undertake the construction of its Power Transmission Project.

In other words, the expropriation was not to be limited to an easement of a right of way. In its Answer, respondent alleged that it had
already authorized petitioner to take possession of the affected portions of the property and to install electric towers thereon. 12 The latter did not
controvert this material allegation.

Granting arguendo that what petitioner acquired over respondent’s property was purely an easement of a right of way, still, we cannot
sustain its view that it should pay only an easement fee, and not the full value of the property. The acquisition of such an easement falls within the
purview of the power of eminent domain. This conclusion finds support in similar cases in which the Supreme Court sustained the award of just
compensation for private property condemned for public use. 13 Republic v. PLDT 14 held thus:

“. . . Normally, of course, the power of eminent domain results in the taking or appropriation of title to, and
possession of, the expropriated property; but no cogent reason appears why the said power may not be availed of to
impose only a burden upon the owner of condemned property, without loss of title and possession. It is unquestionable
that real property may, through expropriation, be subjected to an easement of right of way.” 15

True, an easement of a right of way transmits no rights except the easement itself, and respondent retains full ownership of the property.
The acquisition of such easement is, nevertheless, not gratis. As correctly observed by the CA, considering the nature and the effect of the
installation power lines, the limitations on the use of the land for an indefinite period would deprive respondent of normal use of the property. For
this reason, the latter is entitled to payment of a just compensation, which must be neither more nor less than the monetary equivalent of the land. 16
 Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. The measure is not
the taker’s gain, but the owner’s loss. The word “just” is used to intensify the meaning of the word “compensation” and to convey thereby the idea
that the equivalent to be rendered for the property to be taken shall be real, substantial, full and ample. 17

In eminent domain or expropriation proceedings, the just compensation to which the owner of a condemned property is entitled is
generally the market value. Market value is “that sum of money which a person desirous but not compelled to buy, and an owner willing but not
compelled to sell, would agree on as a price to be given and received therefor.” 18 Such amount is not limited to the assessed value of the property
or to the schedule of market values determined by the provincial or city appraisal committee. However, these values may serve as factors to be
considered in the judicial valuation of the property. 19

The parcels of land sought to be expropriated are undeniably undeveloped, raw agricultural land. But a dominant portion thereof has
been reclassified by the Sangguniang Panlungsod ng Naga — per Zoning Ordinance No. 94-076 dated August 10, 1994 — as residential, per the
August 8, 1996 certification of Zoning Administrator Juan O. Villegas Jr. 20 The property is also covered by Naga City Mayor Jesse M. Robredo’s
favorable endorsement of the issuance of a certification for land use conversion by the Department of Agrarian Reform (DAR) on the ground that
the locality where the property was located had become highly urbanized and would have greater economic value for residential or commercial
use. 21

The nature and character of the land at the time of its taking is the principal criterion for determining how much just compensation should
be given to the landowner. 22 All the facts as to the condition of the property and its surroundings, as well as its improvements and capabilities,
should be considered. 23

In fixing the valuation at P550 per square meter, the trial court had considered the Report of the commissioners and the proofs submitted
by the parties. These documents included the following: (1) the established fact that the property of respondent was located along the Naga-Carolina
provincial road; (2) the fact that it was about 500 meters from the Kayumanggi Resort and 8 kilometers from the Naga City Central Business District;
and a half kilometer from the main entrance of the fully developed Naga City Sports Complex — used as the site of the Palarong Pambansa — and
the San Francisco Village Subdivision, a first class subdivision where lots were priced at P2,500 per square meter; (3) the fair market value of P650
per square meter proffered by respondent, citing its recently concluded sale of a portion of the same property to Metro Naga Water District at a
fixed price of P800 per square meter; (4) the BIR zonal valuation of residential lots in Barangay Pacol, Naga City, fixed at a price of P220 per square
meter as of 1997; and (5) the fact that the price of P430 per square meter had been determined by the RTC of Naga City (Branch 21) 24 as just
compensation for the Mercados’ adjoining property, which had been expropriated by NPC for the same power transmission project. SECAHa

The chairperson of the Board of Commissioners, in adopting the recommendation of Commissioner Bulaos, made a careful study of the
property. Factors considered in arriving at a reasonable estimate of just compensation for respondent were the location; the most profitable likely
use of the remaining area; and the size, shape, accessibility as well as listings of other properties within the vicinity. Averments pertaining to these
factors were supported by documentary evidence.

On the other hand, the commissioner for petitioner — City Assessor Albeus — recommended a price of P115 per square meter in his
Report dated June 30, 1997. No documentary evidence, however, was attached to substantiate the opinions of the banks and the realtors, indicated
in the commissioner’s Report and computation of the market value of the property.

The price of P550 per square meter appears to be the closest approximation of the market value of the lots in the adjoining, fully
developed San Francisco Village Subdivision. Considering that the parcels of land in question are still undeveloped raw land, it appears to the Court
that the just compensation of P550 per square meter is justified.

Inasmuch as the determination of just compensation in eminent domain cases is a judicial function, 25 and the trial court apparently did
not act capriciously or arbitrarily in setting the price at P550 per square meter — an award affirmed by the CA — we see no reason to disturb the
factual findings as to the valuation of the property. Both the Report of Commissioner Bulao and the commissioners’ majority Report were based on
uncontroverted facts supported by documentary evidence and confirmed by their ocular inspection of the property. As can be gleaned from the
records, they did not abuse their authority in evaluating the evidence submitted to them; neither did they misappreciate the clear preponderance of
evidence. The amount fixed and agreed to by the trial court and respondent appellate court has not been grossly exorbitant or otherwise
unjustified. 26

Majority Report of
Commissioners Sufficient
Deserving scant consideration is petitioner’s contention that the Report adopted by the RTC and affirmed by the CA was not the same
one submitted by the board of commissioners, but was only that of its chairperson. As correctly pointed out by the trial court, the commissioner’s
Report was actually a decision of the majority of the board. Note that after reviewing the Reports of the other commissioners, Chairperson Teoxon
opted to adopt the recommendation of Commissioner Bulao. There has been no claim that fraud or prejudice tainted the majority Report. In fact, on
December 19, 1997, the trial court admitted the commissioner’s Report without objection from any of the parties. 27

Under Section 8 of Rule 67 of the Rules of Court, the court may “accept the report and render judgment in accordance therewith; or for
cause shown, it may recommit the same to the commissioners for further report of facts, or it may set aside the report and appoint new
commissioners, or it may accept the report in part and reject it in part; . . .” In other words, the reports of commissioners are merely advisory and
recommendatory in character, as far as the courts are concerned. 28

Thus, it hardly matters whether the commissioners have unanimously agreed on their recommended valuation of the property. It has
been held that the report of only two commissioners may suffice, even if the third commissioner dissents. 29 As a court is not bound by
commissioners’ reports it may make such order or render such judgment as shall secure for the plaintiff the property essential to the exercise of the
latter’s right of condemnation; and for the defendant, just compensation for the property expropriated. For that matter, the court may even substitute
its own estimate of the value as gathered from the evidence on record. 30

WHEREFORE, the Petition is DENIED, and the assailed Decision AFFIRMED. No pronouncement as to costs.

SO ORDERED.

Corona and Carpio Morales, JJ ., concur.

Sandoval-Gutierrez, J ., is on leave.

||| (National Power Corp. v. Manubay Agro-Industrial Development Corp., G.R. No. 150936, [August 18, 2004], 480 PHIL 470-483)

EN BANC
 [G.R. No. L-18841. January 27, 1969.]

REPUBLIC OF THE PHILIPPINES, plaintiff-appellant, vs. PHILIPPINE LONG DISTANCE TELEPHONE

COMPANY, defendant-appellant.

Solicitor General Arturo A. Alafriz, Assistant Solicitor General Antonio A. Torres and Solicitor Camilo D. Quiason for plaintiff-
appellant.

Ponce Enrile, Siguion Reyna, Montecillo & Belo for defendant-appellant.

SYLLABUS

1. CONSTITUTIONAL LAW; EMINENT DOMAIN; EXPROPRIATION OF PUBLIC SERVICE UTILITIES; PAYMENT OF JUST
COMPENSATION LIKE EXPROPRIATION OF REAL PROPERTY. — Where the Republic may not compel the PLDT to celebrate a contract
with it, the Republic may, in the exercise of the sovereign power of eminent domain, require the telephone company to permit interconnection
of the government telephone system and that of the PLDT, as the needs of the government service may require, subject to the payment of
just compensation to be determined by the court. Normally, of course, the power of eminent domain results in the taking or appropriation of
title to, and possession of, the expropriated property; but no cogent reason appears why the said power may not be availed of to impose only
a burden upon the owner of condemned property, without loss of title and possession. It is unquestionable that the real property may, through
expropriation, be subjected to an easement of right of way. The use of the PLDT's lines and services to allow interservice connection between
both telephone systems is not much different. In either case private property is subjected to a burden for public use and benefit. If, under
Section 6, Article XIII, of the Constitution, the State may, in the interest of national welfare, transfer utilities to public ownership upon payment
of just compensation, there is no reason why the State may not require a public utility to render services in the general interest, provided just
compensation is paid therefor.

2. ID.; ID.; ID.; DISMISSAL OF PETITION BY COURT A QUO NOT PROPER IN INSTANT CASE. — The Republic's cause of
action to compel the PLDT to execute a contract with the former, through the Bureau, for the use of the facilities of defendant's telephone
system throughout the Philippines under such terms and conditions as the court might consider reasonable, is predicated upon the radio
telephonic isolation of Bureau's facilities from the outside World if the severance of the interconnection were to be carried out by the PLDT,
thereby preventing the Bureau of Telecommunications from properly discharging its functions, to the prejudice of the general public. Save for
the prayer to compel the PLDT to enter into a contract (and the prayer is no essential part of the pleading), the averments make out a case
for compulsory rendering of inter-connecting services by the telephone company upon such terms and conditions as the court may determine
to be just. And since the lower court found that both parties "are practically at one that defendant (PLDT) is entitled to reasonable compensation
from plaintiff for the reasonable use of the former's telephone facilities" the lower court should have proceeded to treat the case as one of
condemnation of such services independently of contract and proceeded to determine the just and reasonable compensation for the same,
instead of dismissing the petition.

3. ID.; ID.; ID.; CFI AND NOT THE PSC HAS AUTHORITY TO EXERCISE JURISDICTION IN EXPROPRIATION OF PUBLIC
UTILITIES. — The plea that the court of first instance had no jurisdiction to entertain the petition and that the proper forum for the action was
the Public Service Commission, under the law, the Public Service Commission has no authority to pass upon actions for the taking of private
property under the sovereign right of eminent domain. Furthermore, while the defendant telephone company is a public utility corporation
whose franchise, equipment and other properties are under the jurisdiction, supervision and control of the Public Service Commission, yet the
plaintiff's telecommunications network is a public service owned by the Republic and operated by an instrumentality of the National
Government, hence, exempt under Section 14 of the Public Service Act, from such jurisdiction, supervision and control. The Bureau of
Telecommunications was created in pursuance of a state policy reorganizing the government offices and the determination of state policy is
not vested in the Commission.

4. REMEDIAL LAW; ESTOPPEL; GOVERNMENT NOT ESTOPPED BY THE MISTAKE OF ITS AGENTS. — Section 79,
subsection (b), of Executive Order No. 94, Series of 1947 does not limit the Bureau of Telecommunications to non-commercial activities or
prevents it from serving the general public. It may be that in its original prospectuses the Bureau officials had stated that the service would be
limited to government offices; but such limitations could not block future expansion of the system, as authorized by the terms of the Executive
Order, nor could the officials of the Bureau bind the Government not to engage in services that are authorized by law. It is a well-known rule
that erroneous application and enforcement of the law by public officers do not block subsequent correct application of the statute and that
the Government is never estopped by mistake or error on the part of its agents.

5. CIVIL LAW; CONTRACTS; FREEDOM TO STIPULATE TERMS AND CONDITIONS; PARTIES CAN NOT BE COERCED. —
Parties can not be coerced to enter into a contract where no agreement is had between them as to the principal terms and conditions of the
contract. Freedom to stipulate such terms and condition is of the essence of our contractual system, and by express provision of the statute,
a contract may be annulled if tainted by violence, intimidation or undue influence (Articles 1306, 1336, 1337, Civil Code of the Philippines).

6. ID.; ID.; FRAUDULENT CONTRACT OR UNFAIR COMPETITION NOT PRESENT IN CASE AT BAR. — The theses that the
Bureau's commercial services constituted unfair competition, and that the Bureau was guilty of fraud and abuse under its contract, are
untenable: (1) the competition is merely hypothetical, the demand for telephone service being very much more than the supposed competitors
can supply, (2) the PLDT franchise is non-exclusive, that it is well-known that defendant PLDT is unable to adequately cope with the current
demands for telephone service and that its right to just compensation for the services rendered to the Government telephone system and its
users is herein recognized and preserved, and (3) when the Bureau of Telecommunications subscribed to the trunk lines, defendant knew or
should have known that their use by the subscriber was more or less public and all embracing in nature and the acceptance by the defendant
of the payment of rentals, despite its knowledge that the plaintiff had extended the use of the trunk lines to commercial purposes, implies
assent by the defendant to such extended use. To uphold the PLDT's contention is to subordinate the needs of the general public to the right
of the PLDT to derive profit from the future expansion of its services under its non-exclusive franchise.

DECISION

REYES, J.B.L., J p:
 Direct appeals, upon a joint record on appeal, by both the plaintiff and the defendant from the dismissal, after hearing, by the
Court of First Instance of Manila, in its Civil Case No. 35805, of their respective complaint and counterclaims, but making permanent a
preliminary mandatory injunction therefore issued against the defendant on the inter-connection of telephone facilities owned and operated
by said parties.

The plaintiff, Republic of the Philippines, is a political entity exercising governmental powers through its branches and
instrumentalities, one of which is the Bureau of Telecommunications. That office was created on 1 July 1947, under Executive Order No. 94,
with the following powers and duties, in addition to certain powers and duties formerly vested in the Director of Posts:

"SEC. 79. The Bureau of Telecommunications shall exercise the following powers and duties:

"(a) To operate and maintain existing wire-telegraph and radio- telegraph offices, stations, and
facilities, and those to be established to restore the pre-war telecommunication service under the Bureau of
Posts, as well as such additional offices or stations as may hereafter be established to provide
telecommunication service in places requiring such service;

"(b) To investigate, consolidate, negotiate for, operate and maintain wire-telephone or radio
telephone communication service throughout the Philippines by utilizing such existing facilities in cities,
towns, and provinces as may be found feasible and under such terms and conditions or arrangements with
the present owners or operators thereof as may be agreed upon to the satisfaction of all concerned;

"(c) To prescribe, subject to approval by the Department Head, equitable rates of charges for
messages handled by the system and/or for timecalls and other services that may be rendered by said
system;

"(d) To establish and maintain coastal stations to serve ships at sea or aircrafts and, when
public interest so requires, to engage in the international telecommunication service in agreement with other
countries desiring to establish such service with the Republic of the Philippines; and

"(e) To abide by all existing rules and regulations prescribed by the International
Telecommunication Convention relative to the accounting, disposition and exchange of messages handled
in the international service, and those that may hereafter be promulgated by said convention and adhered to
by the Government of the Republic of the Philippines." 1

The defendant, Philippine Long Distance Telephone Company (PLDT for short), is a public service corporation holding a legislative
franchise, Act 3426, as amended by Commonwealth Act 407, to install, operate and maintain a telephone system throughout the Philippines
and to carry on the business of electrical transmission of messages within the Philippines and between the Philippines and the telephone
systems of other countries. 2 The RCA Communications, Inc., (which is not a party to the present case, but has contractual relations with
the parties) is an American corporation authorized to transact business in the Philippines and is the grantee, by assignment, of a legislative
franchise to operate a domestic station for the reception and transmission of long distance wireless messages (Act 2178) and to operate
broadcasting and radio-telephone and radio-telegraphic communications services (Act 3180) 3

Sometime in 1933, the defendant, PLDT, and the RCA Communications, Inc., entered into an agreement whereby telephone
messages, coming from the United States and received by RCA's domestic station, could automatically be transferred to the lines of PLDT;
and vice-versa, for calls collected by the PLDT for transmission from the Philippines to the United States. The contracting parties agreed to
divide the tolls, as follows: 25% to PLDT and 75% to RCA. The sharing was amended in 1941 to 30% for PLDT and 70% for RCA, and again
amended in 1947 to a 50-50 basis. The arrangement was later extended to radio-telephone messages to and from European and Asiatic
countries. Their contract contained a stipulation that either party could terminate it on a 24-month notice to the other. 4 On 2 February
1956, PLDT gave notice to RCA to terminate their contract on 2 February 1956. 5

Soon after its creation in 1947, the Bureau of Telecommunications set up its own Government Telephone System by utilizing its
own appropriation and equipment and by renting trunk lines of the PLDT to enable government offices to call private parties. 6 Its application
for the use of these trunk lines was in the usual form of applications for telephone service, containing a statement, above the signature of the
applicant, that the latter will abide by the rules and regulations of the PLDT which are on file with the Public Service Commission. 7 One of
the many rules prohibits the public use of the service furnished the telephone subscriber for his private use. 8 The Bureau has extended its
services to the general public since 1948, 9 using the same trunk lines owned by, and rented from, the PLDT, and prescribing its (the Bureau's)
own schedule of rates. 10 Through these trunk lines, a Government Telephone System (GTS) subscriber could make a call to
a PLDT subscriber in the same way that the latter could make a call to the former.

On 5 March 1958, the plaintiff, through the Director of Telecommunications, entered into an agreement with RCA Communications,
Inc., for a joint overseas telephone service whereby the Bureau would convey radio-telephone overseas calls received by RCA's station to
and from local residents. 11 Actually, they inaugurated this joint operation on 2 February 1958, under a "provisional" agreement. 12

On 7 April 1958, the defendant, Philippine Long Distance Telephone Company, complained to the Bureau of Telecommunications
that said bureau was violating the conditions under which their Private Branch Exchange (PBX) is interconnected with the PLDT's facilities,
referring to the rented trunk lines, for the Bureau had used the trunk lines not only for the use of government offices but even to serve private
persons or the general public, in competition with the business of the PLDT; and gave notice that if said violations were not stopped by
midnight of 12 April 1958, the PLDT would sever the telephone connections. 13 When the PLDT received no reply, it disconnected the trunk
lines being rented by the Bureau at midnight on 12 April 1958. 14 The result was the isolation of the Philippines, on telephone services, from
the rest of the world, except the United States. 15

At that time, the Bureau was maintaining 5,000 telephones and had 5,000 pending applications for telephone
connection. 16 The PLDT was also maintaining 60,000 telephones and had also 20,000 pending applications. 17 Through the years, neither
of them has been able to fill up the demand for telephone service.

The Bureau of Telecommunications had proposed to the PLDT on 8 January 1958 that both enter into an interconnecting
agreement, with the government paying (on a call basis) for all calls passing through the interconnecting facilities from the Government
Telephone System to the PLDT. 18 The PLDT replied that it was willing to enter into an agreement on overseas telephone service to Europe
and Asian countries provided that the Bureau would submit to the jurisdiction and regulations of the Public Service Commission and in
consideration of 37 1/2% of the gross revenues. 19 In its memorandum in lieu of oral argument in this Court dated 9 February 1964, on page
8, the defendant reduced its offer to 33 1/3% (1/3) as its share in the overseas telephone service. The proposals were not accepted by either
party.

On 12 April 1958, plaintiff Republic commenced suit against the defendant, Philippine Long Distance Telephone Company, in the
Court of First Instance of Manila (Civil Case No. 35805), praying in its complaint for judgment commanding the PLDT to execute a contract
with plaintiff, through the Bureau, for the use of the facilities of defendant's telephone system throughout the Philippines under such terms
and conditions as the court might consider reasonable, and for a writ of preliminary injunction against the defendant company to restrain the
severance of the existing telephone connections and/or restore those severed.
 Acting on the application of the plaintiff, and on the ground that the severance of telephone connections by the defendant company
would isolate the Philippines from other countries, the court a quo, on 14 April 1958, issued an order for the defendant:

"(1) to forthwith reconnect and restore the seventy-eight (78) trunk lines that it has disconnected between the
facilities of the Government Telephone System, including its overseas telephone services, and the facilities of defendant;
(2) to refrain from carrying into effect its threat to sever the existing telephone communication between the Bureau of
Telecommunications and defendant, and not to make connection over its telephone system of telephone calls coming to
the Philippines from foreign countries through the said Bureau's telephone facilities and the radio facilities Of RCA
Communications, Inc.; and (3) to accept and connect through its telephone system all such telephone calls coming to the
Philippines from foreign countries — until further order of this Court."

On 28 April 1958, the defendant company filed its answer, with counterclaims.

It denied any obligation on its part to execute a contract of services with the Bureau of Telecommunications; contested the
jurisdiction of the Court of First Instance to compel it to enter into interconnecting agreements, and averred that it was justified to disconnect
the trunk lines heretofore leased to the Bureau of Telecommunications under the existing agreement because its facilities were being used in
fraud of its rights. The PLDT further claimed that the Bureau was engaging in commercial telephone operations in excess of authority, in
competition with, and to the prejudice of, the PLDT, using defendant's own telephone poles, without proper accounting of revenues.

After trial, the lower court rendered judgment that it could not compel the PLDT to enter into an agreement with the Bureau because
the parties were not in agreement; that under Executive Order 94, establishing the Bureau of Telecommunications, said Bureau was not
limited to servicing government offices alone, nor was there any in the contract of lease of the trunk lines, since the PLDT knew, or ought to
have known, at the time that their use by the Bureau was to be public throughout the Islands, hence the Bureau was neither guilty of fraud,
abuse, or misuse of the poles of the PLDT; and, in view of serious public prejudice that would result from the disconnection of the trunk lines,
declared the preliminary injunction permanent, although it dismissed both the complaint and the counterclaims.

Both parties appealed.

Taking up first the appeal of the Republic, the latter complains of the action of the trial court in dismissing the part of its complaint
seeking to compel the defendant to enter into an interconnecting contract with it, because the parties could not agree on the terms and
conditions of the interconnection, and of its refusal to fix the terms and conditions therefor.

We agree with the court below that parties can not be coerced to enter into a contract where no agreement is had between them
as to the principal terms and conditions of the contract. Freedom to stipulate such terms and conditions is of the essence of our contractual
system, and by express provision of the statute, a contract may be annulled if tainted by violence, intimidation or undue influence (Articles
1306, 1336, 1337, Civil Code of the Philippines). But the court a quo has apparently overlooked that while the Republic may not compel
the PLDT to celebrate a contract with it, the Republic may, in the exercise of the sovereign power of eminent domain, require the telephone
company to permit interconnection of the government telephone system and that of the PLDT, as the needs of the government service may
require, subject to the payment of just compensation to be determined by the court. Normally, of course, the power of eminent domain results
in the taking or appropriation of title to, and possession of, the expropriated property; but no cogent reason appears why the said power may
not be availed of to impose only a burden upon the owner of condemned property, without loss of title and possession. It is unquestionable
that real property may, through expropriation, be subjected to an easement of right of way. The use of the PLDT's lines and services to allow
interservice connection between both telephone systems is not much different. In either case private property is subjected to a burden for
public use and benefit. If under Section 6, Article XIII, of the Constitution, the State may, in the interest of national welfare, transfer utilities to
public ownership upon payment of just compensation, there is no reason why the State may not require a public utility to render services in
the general interest, provided just compensation is paid therefor. Ultimately, the beneficiary of the interconnecting service would be the users
of both telephone systems, so that the condemnation would be for public use.

The Bureau of Telecommunications, under Section 78(b) of Executive Order No. 94, may operate and maintain wire telephone or
radio telephone communications throughout the Philippines by utilizing existing facilities in cities, towns, and provinces under such terms and
conditions or arrangement with present owners or operators as may be agreed upon to the satisfaction of all concerned; but there is nothing
in this Section that would exclude resort to condemnation proceedings where unreasonable or unjust terms and conditions are exacted, to
the extent of crippling or seriously hampering the operations of said Bureau.

A perusal of the complaint shows that the Republic's cause of action is predicated upon the radio telephonic isolation of the
Bureau's facilities from the outside world if the severance of interconnection were to be carried out by the PLDT, thereby preventing the
Bureau of Telecommunications from properly discharging its functions, to the prejudice of the general public. Save for the prayer to compel
the PLDT to enter into a contract (and the prayer is no essential part of the pleading), the averments make out a case for compulsory rendering
of inter-connecting services by the telephone company upon such terms and conditions as the court may determine to be just. And since the
lower court found that both parties "are practically at one that defendant (PLDT) is entitled to reasonable compensation from plaintiff for the
reasonable use of the former's telephone facilities" (Decision, Record on Appeal, page 224), the lower court should have proceeded to treat
the case as one of condemnation of such services independently of contract and proceeded to determine the just and reasonable
compensation for the same, instead of dismissing the petition.

This view we have taken of the true nature of the Republic's petition necessarily results in overruling the plea of defendant-
appellant PLDT that the court of first instance had no jurisdiction to entertain the petition and that the proper forum for the action was the
Public Service Commission. That body, under the law, has no authority to pass upon actions for the taking of private property under the
sovereign right of eminent domain. Furthermore, while the defendant telephone company is a public utility corporation whose franchise,
equipment and other properties are under the jurisdiction, supervision and control of the Public Service Commission (Sec. 13, Public Service
Act), yet the plaintiff's telecommunications network is a public service owned by the Republic and operated by an instrumentality of the
National Government, hence exempt, under Section 14 of the Public Service Act, from such jurisdiction, supervision and control. The Bureau
of Telecommunications was created in pursuance of a state policy reorganizing the government offices —

"to meet the exigencies attendant upon the establishment of the free and independent Government of
the Republic of the Philippines, and for the purpose of promoting simplicity, economy and efficiency in its operation"
(Section 1, Republic Act No. 51)

and the determination of state policy is not vested in the Commission (Utilities Com. vs. Bartonville Bus Line, 290 Ill. 574; 124 N.E. 373)

Defendant PLDT, as appellant, contends that the court below was in error in not holding that the Bureau of Telecommunications
was not empowered to engage in commercial telephone business, and in ruling that said defendant was not justified in disconnecting the
telephone trunk lines it had previously leased to the Bureau. We find that the court a quo ruled correctly in rejecting both assertions.

Executive Order No. 94, Series of 1947, reorganizing the Bureau of Telecommunications, expressly empowered the latter in its
Section 79, subsection (b), to "negotiate for, operate and maintain wire telephone or radio telephone communication service throughout the
Philippines," and, in subsection (c), "to prescribe subject to approval by the Department Head, equitable rates of charges for messages
handled by the system and/or for time calls and other services that may be rendered by the system." Nothing in these provisions limits the
Bureau to non-commercial activities or prevents it from serving the general public. It may be that in its original prospectuses the Bureau
officials had stated that the service would be limited to government offices: but such limitations could not block future expansion of the system,
 as authorized by the terms of the Executive Order, nor could the officials of the Bureau bind the Government not to engage in services that
are authorized by law. It is a well-known rule that erroneous application and enforcement of the law by public officers do not block subsequent
correct application of the statute (PLDT vs. Collector of Internal Revenue, 90 Phil. 676), and that the Government is never estopped by mistake
or error on the part of its agents (Pineda vs. Court of First Instance of Tayabas, 52 Phil. 803, 807; Benguet Consolidated Mining Co. vs.
Pineda, 98 Phil. 711, 724)

The theses that the Bureau's commercial services constituted unfair competition, and that the Bureau was guilty of fraud and
abuse under its contract, are, likewise, untenable.

First, the competition is merely hypothetical, the demand for telephone service being very much more than the supposed
competitors can supply. As previously noted, the PLDT had 20,000 pending applications at the time, and the Bureau had another 5,000. The
telephone company's inability to meet the demands for service are notorious even now. Second, the charter of the defendant expressly
provides:

"Sec. 14. The rights herein granted shall not be exclusive, and the rights and power to grant to any
corporation, association or person other than the grantee franchise for the telephone or electrical transmission of
messages or signals shall not be impaired or affected by the granting of this franchise: —" (Act 3436)

And third, as the trial court correctly stated, "when the Bureau of Telecommunications subscribed to the trunk lines, defendant knew or
should have known that their use by the subscriber was more or less public and all embracing in nature, that is, throughout the Philippines,
if not abroad" (Decision, Record on Appeal, page 216)

The acceptance by the defendant of the payment of rentals, despite its knowledge that the plaintiff had extended the use of the
trunk lines to commercial purposes, continuously since 1948, implies assent by the defendant to such extended use. Since this relationship
has been maintained for a long time and the public has patronized both telephone systems, and their interconnection is to the public
convenience, it is too late for the defendant to claim misuse of its facilities, and it is not now at liberty to unilaterally sever the physical
connection of the trunk lines.

". . ., but there is high authority for the position that, when such physical connection has been voluntarily
made, under a fair and workable arrangement and guaranteed by contract and the continuous line has come to be
patronized and established as a great public convenience, such connection shall not in breach of the agreement be
severed by one of the parties. In that case, the public is held to have such an interest in the arrangement that its rights
must receive due consideration. This position finds approval in State ex rel. vs. Cadwaller, 172 Ind. 619, 636, 87 N.E.
650, and is stated in the elaborate and learned opinion of Chief Justice Myers as follows: `Such physical connection
cannot be required as of right, but if such connection is voluntarily made by contract, as is here alleged to be the case,
so that the public acquires an interest in its continuance, the act of the parties in making such connection is equivalent to
a declaration of a purpose to waive the primary right of independence, and it imposes upon the property such a public
status that it may not be disregarded' — citing Mohan v. Mich. Tel. Co., 132 Mich, 242, 93 N.W. 629, and the reasons
upon which it is in part made to rest are referred to in the same opinion, as follows: `Where private property is by the
consent of the owner invested with a public interest or privilege for the benefit of the public, the owner can no longer deal
with it as private property only, but must hold it subject to the rights of the public in the exercise of that public interest or
privilege conferred for their benefit.' Allnut v. Inglis (1810) 12 East, 527. The doctrine of this early case is the
acknowledged law." (Clinton-Dunn Tel. Co. v. Carolina Tel. & Tel. Co., 74 S.E. 636, 638)

It is clear that the main reason for the objection of the PLDT lies in the fact that said appellant did not expect that the Bureau's
telephone system would expand with such rapidity as it has done; but this expansion is no ground for the discontinuance of the service agreed
upon.

The last issue urged by the PLDT as appellant is its right to compensation for the use of its poles for bearing telephone wires of
the Bureau of Telecommunications. Admitting that Section 19 of the PLDT charter reserves to the Government —

"the privilege without compensation of using the poles of the grantee to attach one ten-pin cross-arm, and to
install, maintain and operate wires of its telegraph system thereon: Provided, however, That the Bureau of Posts shall
have the right to place additional cross-arms and wires on the poles of the grantee by paying a compensation, the rate
of which is to be agreed upon by the Director of Posts and the grantee; —"

the defendant counterclaimed for P8,772.00 for the use of its poles by the plaintiff, contending that what was allowed free use, under the
aforequoted provision, was one ten-pin cross-arm attachment and only for plaintiff's telegraph system, not for its telephone system; that said
Section could not refer to the plaintiff's telephone system, because it did not have such telephone system when defendant acquired its
franchise. The implication of the argument is that plaintiff has to pay for the use of defendant's poles if such use is for plaintiff's telephone
system and has to pay also if it attaches more than one (1) ten-pin cross-arm for telegraphic purposes.
As there is no proof that the telephone wires strain the poles of the PLDT more than the telegraph wires, nor that they cause more
damage than the wires of the telegraph system, or that the Government has attached to the poles more than one ten-pin in cross-arm as
permitted by the PLDT charter, we see no point in this assignment of error. So long as the burden to be borne by the PLDT poles is not
increased, we see no reason why the reservation in favor of the telegraph wires of the government should not be extended to its telephone
line, any time that the government decided to engage also in this kind of communication.

In the ultimate analysis, the true objection of the PLDT to continue the link between its network and that of the Government is that
the latter competes "politically" (sic) with its own telephone services. Considering, however, that the PLDT franchise is non- exclusive; that it
is well-known that defendant PLDT is unable to adequately cope with the current demands for telephone service, as shown by the number of
pending applications therefor; and that the PLDT's right to just compensation for the services rendered to the Government telephone system
and its users is herein recognized and preserved, the objections of defendant-appellant are without merit. To uphold the PLDT's contention
is to subordinate the needs of the general public to the right of the PLDT to derive profit from the future expansion of its services under its
non-exclusive franchise.

WHEREFORE, the decision of the Court of First Instance, now under appeal, is affirmed, except in so far as it dismisses the
petition of the Republic of the Philippines to compel the Philippine Long Distance Telephone Company to continue servicing the Government
telephone system upon such terms, and for a compensation, that the trial court may determine to be just, including the period elapsed from
the filing of the original complaint or petition. And for this purpose, the records are ordered returned to the court of origin for further hearings
and other proceedings not inconsistent with this opinion. No costs.

Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Ruiz Castro, Fernando, Capistrano, Teehankee and Barredo, JJ., concur.

||| (Republic v. Philippine Long Distance Telephone Co., G.R. No. L-18841, [January 27, 1969], 136 PHIL 20-36)
 EN BANC

[G.R. No. L-14324. April 12, 1961.]

IN RE: PETITION FOR THE CANCELLATION OF AN ENCUMBRANCE. WILLIAM LI YAO, petitioner-appellee,vs.

NARCISA B. DE LEON, LUIS DE LEON, EULALIA DE LEON, ENCARNACION DE LEON, MANUEL DE LEON and
AMADA DE LEON, oppositors-appellants.

Jalandoni, Bengzon, Dasig & Villegas for petitioner-appellee.

Nicanor S. Sison for oppositors-appellants.

SYLLABUS

1. MUNICIPAL CORPORATION; CONSTRUCTION OF PRIVATE ALLEYS; PARTIES TO PROCEEDINGS FOR

CANCELLATION OF ENCUMBRANCE. — The demand by this City of Manila that a private alley be opened on the lot in question as a
condition precedent for the construction of a building in the interior of the said lot, was evidently made for the benefit of the occupants of the
said building, not those of the adjoining lots. Whatever benefits the latter may have derived from the private alley was purely incidental to
those established in the interest of the occupants of the lot. The occupants of the adjoining lots were not parties to the proceedings for
cancellation of the encumbrance. Consequently, they have no legal interest in and to said encumbrance enforceable under section 112 Act
No. 596, and no right to object to the exercise of jurisdiction by the lower court under said provision. Since the City of Manila agrees to the
cancellation of the encumbrance constituted by the undertaking and of the annotation thereof, there is a unanimity among the parties to said
undertaking.

2. OWNERSHIP; ACQUISITIVE PRESCRIPTION; ADVERSE POSSESSION IMPLIED. — Acquisition by prescription implies

possession or enjoyment, which is inconsistent with the voluntary nature of the undertaking involved in the case at bar.

DECISION

CONCEPCION, J p:

Appeal from an order of the Court of First Instance of Manila, directing the cancellation of the "annotation of encumbrance", under
entry No. 5420, 5421 and 5422/T-13432, on Transfer Certificate of Title No. 46619 of the Office of the Register of Deeds of Manila.

This certificate of title covers a parcel of land known as Lot No. 3, Block No. 2130, of the Cadastral Survey of Manila, which is
slightly trapezoidal in form and adjoins, on the South, Raon Street, with much more depth than frontage thereon. It is bounded, on the East,
by two lots: on the Southern portion, by Lot No. 5 (which likewise adjoins Raon Street), and on the Northern portion, by Lot No. 4-B, both of
Block No. 2130. This Lot No. 4-B belongs to appellants herein, Narcisa B. de Leon, Luis de Leon, Eulalia de Leon, Encarnacion de Leon,
Manuel de Leon and Amada de Leon, and is bounded on the North by Lot 6-B of the same Block 2130, which is, in turn, bounded on the East
by part of Lot 19, as well as by Lots 21 and 23, and part of Lot 25 of the same Block. These Lots 19, 21, 23 and 25 are bounded, on the East,
by Rizal Avenue, and like Lots 4-B and 6-B, they all belong to appellants herein.

It appears that said Lots 3, 4-B, 6-B, 19, 21, 23 and 25, used to belong to Mariano Cu Unjieng and Cu Unjieng e Hijos, who, before
the year 1930, had leased said Lot No. 3, now owned by petitioner William Li Yao, and Smith Bell & Co., Ltd., which had applied for a permit
to make thereon certain constructions, one of which was, seemingly, in the inner portion of Lot No. 3 and did not abut on Raon Street. As a
condition for the issuance of the permit, the City Engineer of Manila demanded that a private alley, two (2) meters in width, be opened on the
eastern part of Lot No. 3, to connect said construction, in the northern portion of said lot, with Raon Street, pursuant to section 103 of the
Revised City Ordinances, reading:

"When the application, plans, and specifications conform to the requirements of this title and of title thirteen
hereof, the city engineer shall issue a permit for the erection of the building and shall approve in writing such plans and
specifications, one copy of which shall be returned to the owner or his agent and one copy shall be retained by the city
engineer: Provided, That the building shall abut or face upon a public street or alley or on a private street or alley which
has been officially approved; and Provided further, That any private street or alley opened in an interior lot for the
purposes of this section, once officially approved, shall be open to the general public, and with its approved width
preserved, shall be maintained and kept in good repair by the grantee of the permit, his heirs, executors, and assigns,
and shall never be closed by any person so long as there is a building or other structure abutting or facing upon such
private street or alley."

In compliance with this demand, the Cu Unjiengs executed on July 25, 1931 a public instrument undertaking to open and maintain
said private alley. The instrument was, in September 1931, registered in the office of the Register of Deeds of Manila under entry No. 5420,
5421 and 5422/T-13432 and annotated on Transfer Certificates of Title Nos. 13432, 26017, 26019, 26020 and 26877 of said office. Said
entry, as set forth in Transfer Certificate of Title No. 70981, issued in lieu of Transfer Certificate of Title No. 26017, is of the following tenor:

"Mariano Cu Unjieng, por si y como apoderado de la entidad `Cu Unjieng e Hijos en complimiento con las
disposiciones de los articulos 103 y 460 de las Ordenanzas Revisadas de la Ciudad de Manila, se obliga, sus
herederos, ejecutores, administradores y cesionarios a abrir y mantener un callejon privado de dos metros
officialmente aprobado por el Ingeniero de la Ciudad, dentro de la parcela de terreno descrita en el presente
certificado, de las descritas en los certificados de Titulos. Nos. 26019 y 26877, Libros T-63 y T-66 del Registro y de la
Primera Parcela de Terrenos descrita en el Certificado de Titulo No. 26020 y 13432 T-63 del Registro, el cual callejon,
se describe en cuanto a su situacion, linderos y estension superficial como sigue. A PARCEL OF LAND (As shown on
plan 11-227, Office of the City Engineer), situated in the District of Sta. Cruz. Bounded on the North by properties of
Eustaquia Macalanda and Mariano Cu Unjieng; on the East by properties of Mariano Cu Unjieng and Jose Avila and
Rizal Avenue; on the South by property of Mariano Cu Unjieng and Calle Raon; and on the West by properties of
 Mariano Cu Unjieng and Eustaquia Macalanda; containing an area of Two Hundred Five Square Meters and eighty
square decimeters (205.80) more or less.' Son condiciones del contrato las siguientes, que el edificio colindara o dara
frente con el citado callejon; que dicho callejon estara en buena condicion y debidamento provista con canales en
ambos lados del mismo, como requieren las regulaciones sanitarias; estara abierto al publico y su anchura
aprobada de DOS METROS sera mantenida y guardada en buen estado de reparacion por el concesionario, sus
herederos, ejecutores y cesionarios y no se cerrara nunca por cualquiera persona mientras haya edificio o
construccion, que colinda, de frente o tenga acceso a dicho callejon privado. (Docs. Nos. 61 y 92 pages 16 y 22, Lib. 1,
Reg. del Notario Pub. de Manila, Joee C. Zulueta, y Doc. No. 617, pag. 32 Lib. V. Reg. del Not. Publ. de Manila,
Nemesio Zamora, Fecha de la inscripcion Sept. 8, 1931 at 3:13 p.m. The foregoing annotation has been copied from
TCT No. 70981/T-242."

Transfer Certificate of Title No. 13432, then covering Lot No. 3, was cancelled upon acquisition thereof by petitioner William Li Yao,
to whom Transfer Certificate of Title No. 46619 was issued in lieu thereof. Meanwhile, the aforementioned contract of lease in favor of Smith
Bell & Co. had expired and its annotation in the corresponding certificate of title was ordered cancelled on April 8, 1952. The annotations of
encumbrance on the certificates of title covering Lots 4-A and 6-A of Block No. 2130 were also cancelled, by order of the Court of First
Instance of Manila, of the same date. Similarly, the building or buildings of Smith Bell & Co., Ltd., which gave occasion for the undertaking
and annotation involved in this case, were destroyed during the liberation of Manila. Upon the other hand, the aforesaid Lots 4-B, 6-B, 19, 21,
23 and 25 of Block 2130 were acquired by appellants herein.

On July 16, 1957, Li Yao, as present owner of Lot No. 3, filed, in this cadastral record, a petition praying, under the provisions of
section 112 of Act No. 496, that the annotation of the aforementioned entry on Transfer Certificate of Title No. 46619 be cancelled, because
the building to which said entry referred no longer exists, and the legal necessity for the private alley mentioned therein has ceased and
terminated.

Appellants herein opposed the petition upon the ground that they have on Lot 6-B a building which is used and operated as a first
class theater, known as Dalisay Theater; that the air-conditioning equipment to aircondition the Dalisay Theater is housed in a building erected
on Lot 4-B, which adjoins the northern portion of the aforementioned alley, and is accessible only through Raon Street, passing through said
alley; that petitioner Li Yao has in the northern portion of Lot No. 3, a building that has no frontage on Raon Street, but abuts on said alley;
that the occupants of said building have no access to Raon Street, except through such alley, the closure of which would make said building
a veritable fire trap; that the existence and continuance of said alley is indispensable to the safety of the employees and patrons of the Dalisay
Theater; that, in fact, the Chief of the Fire Department of Manila has advised the management of the Dalisay Theater that said alley is
obstructed by piles of lumber, to the prejudice of the patrons of said theater, who would find it very difficult to evacuate the same in case of
fire or other emergency, and requested that said alley be cleared of all obstructions within a given period, under threat of recommending the
closure of the Dalisay Theater, as fire and life hazards; that one of the conditions of the undertaking to which the entry in question refers is
that said alley would be maintained and kept in good condition and would not be closed, as long as there is a building or construction fronting
or abutting said alley; and that petitioner Li Yao, through his tenants occupying the buildings erected on Lot No. 3, had made and placed
obstructions along said alley, thereby diminishing its usefulness, in violation of the terms and conditions of the aforementioned undertaking.
Appellants prayed, therefore, that Li Yao's petition be denied, and that he "be ordered to clean the said alley of any and all obstruction, and
to maintain the same clean, and in sanitary condition free of filth and dirt."

Replying to this opposition, Li Yao, alleged, inter alia, that the building now existing on the Northern portion of Lot No. 3 is part
and parcel of the building on its Southern portion, abutting on Raon Street, and that said petitioner has a pending application for the
construction, on said lot, of a new building of strong materials, which would not necessitate the use of any private alley.

By an order, dated August 6, 1957, the Court of First Instance of Manila overruled appellants' opposition and granted Li Yao's
petition. A reconsideration of said order having been denied, the matter is now before us on record on appeal filed by appellants, who claim
that:

1. "The lower court erred in ordering the cancellation of the encumbrance in question notwithstanding that it
had no jurisdiction to do so as a Land Registration Court.

2. "The lower court erred in not holding a trial on the merits, supposing without admitting that it had
jurisdiction over the case.

3. "The lower court erred in finding that the alley in question was intended only for the benefit of Smith Bell
& Co., Ltd. although there was no evidence on that point.

4. "The lower court erred in giving weight to the opinion of the City Engineer of Manila, that said
encumbrance may now be cancelled, and in disregarding the view of the Fire Department of Manila that the alley
should be maintained or continue to exist.

5. "The lower court erred in holding that the said encumbrance should be cancelled because the oppositors
have a direct exit on Rizal Avenue.

6. "The lower court erred in not holding that the alley in question is a voluntary legal easement imposed by
the former owner of the land and as an easement in favor of the community, which the public has acquired by
prescription.

7. "The lower court erred in not holding that the encumbrance in question can only be cancelled by means
of a municipal ordinance or by the legal modes of extinguishing easements."

1. Lack of "unanimity among the parties" is alleged in support of appellants' objection to the jurisdiction of the lower court, under
section 112 of Act No. 496, and of their claim that the issue between them should be settled in an ordinary action. This pretense is untenable.
The encumbrance in question was created by an undertaking executed by the Cu Unjiengs, whose tenant wanted to construct on Lot No. 3 a
building which otherwise would have been inaccessible from any public or private street or alley. The only "parties" to said undertaking were
the Cu Unjiengs and the city of Manila, on whose demand the undertaking was executed. The City of Manila through its City Engineer, who
had actually made said demand, now agrees to the cancellation of the encumbrance constituted by said undertaking and of the annotation
thereof, in the following language:

"The within copy of petition of William Li Yao seeking cancellation of the encumbrance relating to the
opening of the private alley under Section 103 of the Revised Ordinances, appearing on the back of Transfer Certificate
of Title No. 46619, was in connection with the construction of a strong material building sometime during pre-war which
necessitated that the building should abut or face on said private alley. The building in question which was erected on
said Lot 3, Block 2130 and for which the private alley was opened to serve as exit for said building is no longer existing
as the same was destroyed or burned during the liberation. In fact, William Li Yao has now applied for building permit to
construct a new strong material building on said lot which will not necessitate the use of any private alley.
 "In view of the foregoing, and inasmuch as one of the conditions imposed in said application for private alley
is that the same shall not be closed so long as there is a building abutting or facing the said alley and inasmuch as the
said building was already destroyed, hence, there is no more use for said alley, this Office would interpose no objection
to the within application of Mr. William Li Yao for the cancellation of the encumbrance appearing on back of Transfer
Certificate of Title No. 26619." (1st Indorsement, dated July 19, 1957, of City Engineer Alejo Aquino; Annex B of Reply
to Opposition filed by Narcisa B. de Leon, et al.,)

Having been made as a condition precedent for the construction of a building in the interior of Lot No. 3, said demand was evidently
made for the benefit of the occupants of said building, not those of Lots 4-B or 6-B, now belonging to appellants. Whatever benefits the latter
may have derived from the private alley in question was purely incidental to those established in the interest of the occupants of Lot No. 3.
Despite the fact that their title was derived from the Cu Unjiengs, appellants were not parties to the undertaking aforementioned. This becomes
apparent when we consider that the Cu Unjiengs subscribed it only as owners of Lot No. 3, and that they would have had to execute it even
if Lots 4-B, 6-B, 19, 21, 23 and 25 had not been theirs at that time. Consequently, appellants have no legal interest in and to said encumbrance
enforceable under section 112 of Act No. 496, and no right to object to the exercise of the jurisdiction of the lower court under said provision.
In short, there is a unanimity among the parties to said undertaking.

The cases relied upon by the appellants are not in point. Lagula vs. Casimiro, L-7852 (December 17, 1955) involved an issue
between co-owners regarding the manner in which their common property would be partitioned. In Tangunan vs. Republic (50 Off. Gaz., 115)
the co-owners of a land sought cancellation, upon the ground of prescription, of an old annotation of a writ of execution in favor of the
Government and against one of said co-owners. The Government, which by virtue of said annotation, had a right in rem, contested this claim.
Casillan vs. Espartero (50 Off. Gaz. 4183) referred to a land the title to which was, due to an alleged clerical mistake in the corresponding
decree, issued to the wrong party. It was held that the latter could not, on motion filed under section 112 of Act No. 496, be ordered to reconvey
the land to the party allegedly aggrieved there. Similarly, in Director of Lands vs. Register of Deeds of Rizal, (49 Off. Gaz., 935), a decree
was erroneously issued in the name of the municipality of Malabon, although the decision had been rendered in favor of the Philippine
Government. The court had no jurisdiction, we held, to compel the municipality of Malabon, under said section 112, to surrender its certificate
of title, in order that another one, in the name of the Philippine Government, could be issued. In Enriquez vs. De Atienza (53 Off. Gaz., 7231),
we declared that said provision may not be availed of to determine whether the title to a registered land should be cancelled, over the objection
of the registered owner, because someone else claims to be its true owner. In all these cases, the parties objecting to the application of said
section 112 were either registered owners or co-owners or had a right in rem duly registered and annotated on the title to the property in
question. Appellants herein have no such right.

It is obviously improper to require the petitioner to sue appellants herein, simply because they object to the petition. If appellants
feel that the alley should not be closed, and that the petitioner should "be ordered to clean the said alley of any and all obstruction, and to
maintain the same clean and in sanitary condition, free from filth and dirt" — as prayed in their opposition — they may file therefor an ordinary
action, for it is the relief they seek that can not be granted under said section 112 of Act No. 496.

2. Contrary to appellants' contention, no evidence was necessary before the issuance of the order appealed from, the fact therein
relied upon being uncontroverted. Appellants merely contest the conclusions drawn therefrom.

3. The alley in question was opened and maintained in compliance with the provisions of section 103 of the Revised City
Ordinances, which deals with the issuance of building construction permits by the City Engineer. Pursuant thereto, no such permit shall be
granted unless the building concerned abuts or faces "upon a public street or alley or on a private street or alley which has been officially
approved". Consequently, such private street or alley as may have been opened and maintained as a condition for the authority to construct
said building is intended only for its benefit.

4. The communication of the fire department relied upon by appellants merely indicates the necessity for them, if they wish to
continue operating the Dalisay Theater, to have a corridor that would give their patrons and employees an exit to Raon Street. Such
communication does not conflict with the stand of the City Engineer to the effect that petitioner Li Yao is no longer bound to maintain the alley
in question.

5. The fifth assignment of error need not be passed upon, in view of what has been said about the propriety of a separate action
by the appellants, if they wish to compel petitioner herein to maintain the alley in question.

6. The sixth assignment of error involves a contradiction. Acquisition by prescription implies adverse possession or enjoyment,
which is inconsistent with the voluntary nature of the undertaking involved in this case. Moreover, as above stated, the private alley in question
was opened to give access, from Raon Street, to the interior portion of Lot No. 3, not to any other property.

7. The last assignment of error is devoid of merit. No legal provision or authority has been cited in support of the alleged need of
a municipal ordinance to extinguish the obligation to maintain the alley in question. Moreover, the same was opened upon demand of the City
of Manila, as a condition for the construction of a given building. This has already been destroyed and the City of Manila has agreed to the
cancellation of the encumbrance. Hence, there is no reason for the continuance of its annotation.

WHEREFORE, without prejudice to such separate action as appellants herein may deem fit to bring, the order appealed from is
hereby affirmed, with costs against said appellants. It is so ordered.

||| (In re: Li Yao v. De Leon, G.R. No. L-14324, [April 12, 1961], 111 PHIL 582-592)

EN BANC

[G.R. No. L-22733. September 25, 1968.]

SALVADOR BENEDICTO (deceased) ROBERTO S. BENEDICTO, petitioner, vs. COURT OF APPEALS and
VICENTE A. HERAS, respondents.

San Juan, Africa and Benedicto for petitioner.

Luis A. Dayot for respondents.

SYLLABUS
 1. CIVIL LAW; EASEMENTS; RIGHT OF WAY; EXTINGUISHMENT; NONUSER. — In the absence of indubitable
proof of nonuser of the easement of passageway and where, as in the case at bar, the passageway was walled in by a fence only in 1946 but
the action was filed in 1955, granting that Article 631 of the Civil Code is applicable, the prescriptive period of ten years provided for therein,
has not yet elapsed.

2. ID.: ID.; PERPETUAL EASEMENT; EXTINGUISHMENT. — Where as in this case, the easement is perpetual in character,
since there is nothing in the record that would point to a mutual agreement between any of the predecessors-in-interest of the petitioner and
any of the predecessors-in-interest of the respondent nor between the petitioner and the respondent themselves with respect to the
discontinuance or obliteration of the easement annotated on the titles, the continued existence of the easement must be upheld and
respected.

3. ID.; ID.; EASEMENT BY NECESSITY; PERMANENCY. — Even assuming that with the demolition of the house on
respondent's property, the necessity for the passageway ceased, still, the fact that an easement by grant may also have qualified as
an easement of necessity does not detract from its permanency as a property right, which survives the termination of the necessity.

DECISION

CASTRO, J p:

This case which originated in the Court of First Instance of Manila was an action by the respondent Vicente A. Heras to recover a
portion of land enclosed and walled by the petitioner Salvador Benedicto, and to demand the reopening of an easement of way between his
real property and that of the petitioner.

The facts, in the language of the stipulation of the parties, are:

"1. The adjoining properties of the plaintiff [Heras] and the defendant [Benedicto] formerly belonged to one
owner, MIRIAM R. HEDRICK, consisting of Lots Nos. 8, 9, 10, 22, 23, and 24 of Survey Plan RS-219, G.L.R.O. Record
No. 662, as surveyed for Henry M. Jones, et al. on June 26, 1912 by C.R. Maris, Bureau of Lands Surveyor and approved
by the Director of Lands on July 20, 1912, containing an area of 1307.3 sq. mts. covered by T.C.T. No. 3623 of the
Registry of Deeds of the City of Manila, whose technical description as set forth in said T.C.T. No. 3623 is hereto attached
as Annex 'A'.

"2. On September 29, 1917, the said MIRIAM R. HEDRICK sold a portion of the above described property,
particularly Lots Nos. 8, 9, 22 and 23 to CLARO M. RECTO, and retained for herself Lots Nos. 10 and 24. A copy of the
Escritura de Compra-Venta in favor of Claro M. Recto is attached hereto and made a part hereof as Annex `B'.

"3. At the time of the sale, the following buildings were located on the respective properties of Claro M. Recto
and Miriam R. Hedrick as described in the Escritura de Compra-Venta (Annex 'B'), to wit:

"'SEGUNDO. Que sobre las parcelas 2a (Lote No. 9) y 3a (Lote No. 10) se hallan levantados
dos edificios (Chalets) de igual estructura, extencion, configuracion y volumen, construidos ambos de
concreto y otras materiales fuertes, y sobre las parcelas 5a (Lote No. 23) y 6a (Lote No. 24), las respectivas
dependencias de dichos edificios.'

"For the purpose of showing the respective locations of said buildings, a photostatic copy of Sheet No.
2 of the Cadastral Plan of the Manila Cadastral Survey, Case No. 59, is hereto attached and made part hereof as Annex
`C'. This Cadastral Plan (Annex 'C') was made on August 25, 1921 (subsequent to the sale of the property to Claro M.
Recto and subsequent to the issuance of the separate title T.C.T. No. 7755 to Claro M. Recto, which is mentioned in
paragraph 5 of this Stipulation).

"4. The sale to CLARO M. RECTO as evidenced by the Escritura de Compra-Venta (Annex `B') was subject,
among others, to the following conditions:

"'SEXTO. Que entre la porcion vendida a Claro M. Recto y la que queda en poder de Miriam R.
Hedrick, hay un paso para vehiculos, de unos tres a cuatro metros de anchura proximamente constituido
por mitad o iguales partes sobre cada una de dichas porciones, y ambas partes de esta escritura se obligan
cada una a respetar el derecho de la otra a usar de toda la extencion de dicho paso para todo el tiempo y
todas las necesidades de cada una de las dos propriedades, la vendida por la presente a Claro M. Recto y
la que queda en poder de Miriam R. Hedrick, siendo obligatorio este pacto para todos los que con
posterioridad adquirieran pro cualquier titulo las fincas mencionadas.'

"'SEPTIMO. Que en vista de la forma irregular del inmueble descrito en el Certificado de Titulo
aludido en el parrafo PRIMERO de esta escritura, ambas partes convienen en practicar una nueva
medicion de dicho inmueble con el fin de que la linea divisoria entre la porcion vendida por la presente a
Claro M. Recto y la que queda en el dominio de Miriam R. Hedrick caiga en medio del paso descrito y
aludido en el parrafo anterior, y dicha linea sera perpendicular a la calle San Marcelino.'

"This agreement of the parties, MIRIAM R. HEDRICK and CLARO M. RECTO, is annotated on the respective
titles of the plaintiff and the defendant, copies of which annotations are hereto attached and made parts hereof as Annex
'D' (Annotation on Plaintiff's title, T.C.T. No. 62769) and Annex `E' (Annotation on defendant's title, T.C.T. No. 45990).

"5. By virtue of said Escritura de Compra-Venta (Annex `B') but before the new survey mentioned in `parrafo
septimo' thereof was undertaken, CLARO M. RECTO obtained a separate title, T.C.T. No. 7755 issued on October 2,
1917, a copy of the technical description of which is hereto attached and made part hereof as Annex 'F'.

"6. In order to carry out said 'parrafo septimo' of the Escritura de Compra-Venta (Annex `B') regarding the
new survey of the properties to fix the dividing line between the properties of CLARO M. RECTO and MIRIAM R.
HEDRICK, the said Claro M. Recto filed a Motion dated July 19, 1920, a copy of which motion is hereto attached and
made a part hereof as Annex 'G'. In a letter dated December 21, 1920, a copy of which is hereto attached and made part
hereof as Annex 'H', CLARO M. RECTO wrote to a certain MARCIAL ZAMORA of the General Land Registration Office
asking for the issuance of a new title in his favor in accordance with the new plan submitted by him (Annex 'J' of this
 Stipulation). The said Motion of July 19, 1920 was amended on September 30, 1921, as per copy of the Amended Motion
hereto attached and made part hereof as Annex 'I', in the Court of Land Registration of Manila, Record No. 662, for the
issuance of a new title for his property based on the new survey, the amendment consisting of the addition of a paragraph
which reads as follows:

"'Que el compareciente no reclama las porciones Lote 9b y Lote 23b del referido plano S.W.O.
3753, sino solamente las porciones Lotes A, B, C, y D.'

The said Motion and Amended Motion were accompanied with Exhibit 'A' (of said motions), a copy of the Escritura de
Compra-Venta, which is Annex 'B' of this Stipulation; Exhibit 'B' (of said motions), the re-survey plan above-mentioned
and approved by the Director of Lands, a certified copy of which re-survey plan is hereto attached and made part
hereof as Annex 'J'; and Exhibit 'G' (of said motions), the technical descriptions of the lots covered in the above said re-
survey plan (Annex 'J' of this Stipulation), a certified copy of which is hereto attached and made part hereof as Annex
'K'. On October 20, 1921, said Claro M. Recto received a letter from the General Land Registration Office, a certified
copy of which is hereto attached and made part hereof as Annex 'L'. Before said Motion and Amended Motion were
acted upon, Claro M. Recto filed a Motion to Withdraw the Motions of July 19, 1920 and September 30, 1921, dated
January 30, 1922, on the ground that it appeared 'from the report submitted to this Court by the Chief Surveyor of the
General Land Registration Office that the plan S.W.O. 3753 attached to the motions of the undersigned of July 19,
1920, and September 30, 1921, does not agree with the terms of the instrument of date of September 21, 1917, and
that Transfer Certificate of Title No. 7755 in the name of the undersigned is in accord with the terms of said instrument.'
A copy of the Report of the Chief Surveyor of the General Land Registration Office referred to in said motion to
withdraw and a copy of the said motion to withdraw are hereto attached and made parts hereof as Annexes 'M' and 'N'.
The Court issued an Order dated January 31, 1922, a copy of which is hereto attached and made part hereof as Annex
O', granting the withdrawal of the motions dated July 19, 1920 and September 30, 1921.
"7. The property purchased by CLARO M. RECTO from MIRIAM R. HEDRICK became the subject of a
series of transfers, to wit:

"a. Sold by CLARO M. RECTO to EMMANUEL CONTY, T.C.T. No. 7755 was cancelled by
T.C.T. No. 31834 dated September 1, 1928.

"b. Sold by EMMANUEL CONTY to SALVADOR BENEDICTO (the herein defendant). T.C.T.
No. 31334 was cancelled by T.C.T. No. 45990 dated December 1, 1934. A copy of the technical description
appearing on said T.C.T. No. 45990, which is the present transfer certificate of title of the defendant, is
hereto attached and made part hereof as Annex 'P', and the Survey Plan thereof as plotted by the G.L.R.O.
in accordance with the technical description (Annex `P') is hereto attached and made part hereof as Annex
'Q'.

"8. MIRIAM R. HEDRICK, as owner of the remaining lots Nos. 10 and 24 of Survey Plan No. RS-219,
subsequently obtained a new and separate title, T.C.T. No. 22760 dated September 20, 1924, whose technical
description is based on the Cadastral Survey made from January 20 to July 12, 1919, wherein both Lots Nos. 10 and
24 of Survey Plan RS-219 were consolidated and designated as Lot No. 12 of Block No. 372 of the Cadastral
Survey of Manila. The technical description and area of said Lot No. 12 based on the Cadastral Survey are different from
the technical description and area of Lots Nos. 10 and 24 of Survey Plan RS-219, and likewise, Lots Nos. 8, 9, 22, and
23 of Survey Plan RS-219 were consolidated and designated as Lot No. 11 of Block No. 372 of the Cadastral
Survey of Manila with a different area and technical description.

"9. The property of MIRIAM R. HEDRICK covered by T.C.T. No. 22760, as above-stated, became the
subject of a series of transfers, to wit:

"a. Sold by MIRIAM R. HEDRICK to CHOW KWO HSIEN. T.C.T. No. 22760 was cancelled by
T.C.T. No. 22766 dated September 23, 1924.

"b. Sold by CHOW KWO HSIEN to GENERAL SECURITY AND INVESTMENT CO. T.C.T. No.
22766 was cancelled by T.C.T. No. 49798 dated August 26, 1936.

"c. Sold by GENERAL SECURITY AND INVESTMENT CO. to VICENTE A. HERAS (the herein
plaintiff). T.C.T. No. 49798 was cancelled by T.C.T. No. 62769 dated September 19, 1941. A copy of the
technical description appearing on said T.C.T. No. 62769 which is the present title of the plaintiff, is hereto
attached and made part hereof as Annex `R', and the Relocation Plan thereof, S.W.O. 39343, approved by
the Assistant Director of Lands on April 19, 1955, is hereto attached and made part hereof as Annex 'S'.

"10. Sometime in 1941, the plaintiff [Heras] demolished the entire building situated on his property."

The trial court found that after selling Lots 8, 9, 22 and 23 (with an area of 766.90 square meters), Miriam R. Hedrick obtained a
separate title for the remaining Lots 10 and 24. The total area of these two lots was 540.4 square meters only [together with those sold to
Claro M. Recto the two lots formed one parcel with an area of 1,307.3 square meters covered by TCT 3623], but in the new title (TCT 22760)
issued to Hedrick, their total area was made to appear to be 681.30 square meters. The increase in area was due to the fact that the technical
description used in the new title was based on a cadastral survey. Since the respondent Heras, as successor-in-interest of Miriam R. Hedrick,
owned no more than 540.4 square meter, the court held that no portion of his property had been encroached upon by the petitioner Benedicto.

The trial court likewise found that the easement of way was found entirely within the property of Benedicto, contrary to the
stipulation in the deed of sale between Miriam R. Hedrick and Claro M. Recto that it should be between their properties, with each contributing
an equal portion of his property. According to the court, this was the reason why Recto, Benedicto's predecessor-in-interest, who had earlier
asked for a resurvey in accordance with the deed of sale, subsequently withdrew his motion, after finding that the passageway was located
entirely within his property.

Accordingly, the court directed both parties to contribute equally to the maintenance of a three to four-meter-wide passageway
between their properties, with the property line running at the middle of the passageway. It rejected Benedicto's claim that the easement had
been extinguished by nonuser and by the cessation of the necessity for a passageway.

Both parties appealed to the Court of Appeals. Salvador Benedicto, who in the meantime died, was substituted by the judicial
administrator of his estate, Roberto S. Benedicto. On February 29, 1964 the Court of Appeals rendered a decision affirming in toto the
decision of the trial court, and on April 3, 1964 it denied the motions for reconsideration filed by the parties.

The petitioner Benedicto seeks a review of the decision of the Court of Appeals. 1 According to him, the easement was originally
constituted because the buildings then erected on the respective properties of Miriam R. Hedrick and Claro M. Recto so adjoined each other
that the only way the back portions of the properties could be reached by their owners from San Marcelino street was through the passageway.
 He claims that when the respondent Heras had his building demolished in 1941 the property gained direct access to San Marcelino street
with the result that since then there has been no need for the passageway. The petitioner argues further that it could be assumed that since
1941 the passageway ceased to be used "for certainly [the respondent] could not be expected to be making `detours' to reach San Marcelino
Street when the very frontage of his property was now open in its entirety to San Marcelino Street."

Article 631 of the Civil Code provides in part:

"Art. 631. Easements are extinguished:

xxx xxx xxx

"(2) By nonuser for ten years; with respect to discontinuous easements, this period shall be computed from
the day on which they ceased to be used; and, with respect to continuous easements, from the day on which
an act contrary to the same took place;

"(3) When either or both of the estates fall into such condition that the easement cannot be used; but it shall
revive if the subsequent condition of the estates or either of them should again permit its use; unless when the use
become possible, sufficient time for prescription has elapsed, in accordance with the provisions of the preceding number;
. . ."

This provision was taken from article 546 of the Civil Code of 1889, with the modification that the period of nonuser was reduced from 20 to
10 years.

The petitioner argues at length that this case is governed by the present Code, and that since 14 years had elapsed from the time
the building on Heras' property was demolished in 1941 to 1955 when this action was begun (during which period he assumes that the
passageway ceased to be used because Heras' property had direct access to the street), the easement must be deemed to have been
extinguished.

For the purposes of this decision we do not find it necessary to determine whether the appropriate period of nonuser in this case
is 20 or 10 years. For one thing, there is no indubitable proof of nonuser. The petitioner merely assumes that the passageway in question had
not been in use since 1941 because the property of Heras has since gained direct access to San Marcelino street with the demolition of his
house. For another, even if we assume that the period of prescription based on nonuser is 10 years, the very testimony of the
petitioner Benedicto shows that it was only in 1946 that he had the passageway walled in by constructing a fence, and since the present
action was filed in 1955, granting that article 631 of the Civil Code is applicable, the prescriptive period has not yet elapsed.

Nor can presumptive renunciation by Heras of the use of the said passageway be inferred. It would appear from the record that
Heras started the construction of an apartment building on his parcel of land after the demolition of his house in 1941, and that although
interrupted by World War II, construction was continued in 1955. Since it is patent from the stipulation of facts that the easement in question
is mainly a vehicular passageway, the obvious need for such passageway to the rear portion of the projected apartment building negates any
presumptive renunciation on the part of Heras.

Moreover, the easement in this case is perpetual in character ("para to do el tiempo y todas las necesidades de cada una de las
dos propriedades, la vendida por la presente a Claro M. Recto y la que queda en poder de Miriam R. Hedrick, siendo obligatorio este pacto
para todos los que con posterioridad adquirieran por cualquier titulo las fincas mencionadas") and was annotated on all the transfer
certificates of title issued in the series of transfers from Miriam R. Hedrick through to the respondent Heras, and in the transfer
certificates of title issued in the series of transfers Claro M. Recto through to the petitioner Benedicto. Since there is nothing in the record that
would point to a mutual agreement between any of the predecessors-in-interest of the petitioner and any of the predecessors-in-interest of the
respondent nor between the petitioner and the respondent themselves with respect to the discontinuance or
obliteration of the easement annotated on the titles, the continued existence of the easement must be upheld and respected.

The fact that the easement here is one of necessity does not detract from the conclusion we have reached. For even assuming
that with the demolition of the house on Heras' property the necessity for the passageway ceased (a point traversed by Heras who claims that
he demolished his house precisely in order to build an apartment building in its place), still, as was held in one case, 2 "the fact that
an easement [by grant] may have also qualified as an easement of necessity does not detract from its permanency as a property right, which
survives the termination of the necessity." Indeed, when the easement in this case was established, the parties unequivocally made provisions
for its observance by all who in the future might succeed them in dominion, and this is the reason the permanent
character of the easement was annotated on each and all of the transfer certificates of title.

ACCORDINGLY, the decision appealed from is affirmed, at petitioner's cost.

Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Sanchez, Angeles and Fernando, JJ., concur.

Dizon, J., took no part.

||| (Benedicto v. Court of Appeals, G.R. No. L-22733, [September 25, 1968], 134 PHIL 122-131)

SECOND DIVISION

[G.R. No. 160656. June 15, 2007.]

REPUBLIC OF THE PHILIPPINES (Department of Public Works and Highways), petitioner, vs. ISMAEL
ANDAYA, respondent.

DECISION

QUISUMBING, J p:
 This is a petition for review of the Decision 1 dated October 30, 2003 of the Court of Appeals in CA-G.R. CV No. 65066 affirming with
modification the Decision 2 of the Regional Trial Court of Butuan City, Branch 33 in Civil Case No. 4378, for enforcement of easement of right-of-
way (or eminent domain).

Respondent Ismael Andaya is the registered owner of two parcels of land in Bading, Butuan City. His ownership is evidenced by Transfer
Certificates of Title Nos. RT-10225 and RT-10646. These properties are subject to a 60-meter wide perpetual easement for public highways,
irrigation ditches, aqueducts, and other similar works of the government or public enterprise, at no cost to the government, except only the value of
the improvements existing thereon that may be affected.

Petitioner Republic of the Philippines (Republic) negotiated with Andaya to enforce the 60-meter easement of right-of-way. The
easement was for concrete levees and floodwalls for Phase 1, Stage 1 of the Lower Agusan Development Project. The parties, however, failed to
reach an agreement.

On December 13, 1995, the Republic instituted an action before the Regional Trial Court of Butuan City to enforce the easement of
right-of-way or eminent domain. The trial court issued a writ of possession on April 26, 1996. 3 It also constituted a Board of Commissioners (Board)
to determine the just compensation. Eventually, the trial court issued an Order of Expropriation upon payment of just compensation. 4 Later, the
Board reported that there was a discrepancy in the description of the property sought to be expropriated. The Republic thus amended its complaint,
reducing the 60-meter easement to 10 meters, or an equivalent of 701 square meters. cDAITS

On December 10, 1998, the Board reported that the project would affect a total of 10,380 square meters of Andaya's properties, 4,443
square meters of which will be for the 60-meter easement. The Board also reported that the easement would diminish the value of the remaining
5,937 square meters. As a result, it recommended the payment of consequential damages amounting to P2,820,430 for the remaining area. 5

Andaya objected to the report because although the Republic reduced the easement to 10 meters or an equivalent of 701 square
meters, the Board still granted it 4,443 square meters. He contended that the consequential damages should be based on the remaining area of
9,679 square meters. Thus, the just compensation should be P11,373,405. The Republic did not file any comment, opposition, nor objection.

After considering the Board's report, the trial court decreed on April 29, 1999, as follows: aSATHE

WHEREFORE, in the light of the foregoing, the Court decides as follows:

a) That the plaintiff is legally entitled to its inherent right of expropriation to, viz.: 1) the lot now known as lot
3291-B-1-A, portion of lot 3291-B-1, (LRC) Psd-255693, covered by TCT No. RT-10225, with an
area of 288 sq. m.; and 2) the lot now known as lot 3293-F-5-B-1, portion of lot 3293-F-5-B (LRC)
Psd-230236, covered by TCT No. RT-10646, with an area of 413 sq. m., both of the Butuan City
Registry of Deeds, it being shown that it is for public use and purpose — free of charge by reason
of the statutory lien of easement of right-of-way imposed on defendant's titles;

b) That however, the plaintiff is obligated to pay defendant the sum of TWO MILLION EIGHT HUNDRED
TWENTY THOUSAND FOUR HUNDRED THIRTY (P2,820,430.00) PESOS as fair and
reasonable severance damages;

c) To pay members of the Board of Commissioners, thus: for the chairman — TWENTY THOUSAND
(P20,000.00) PESOS and the two (2) members at FIFTEEN THOUSAND (P15,000.00) PESOS
each;

d) To pay defendant's counsel FIFTY THOUSAND (P50,000.00) PESOS as Attorney's fees; and finally,

e) That the Registry of Deeds of Butuan City is also directed to effect the issuance of Transfer Certificate of
Titles for the aforementioned two (2) lots in the name of the Republic of the Philippines, following
the technical description as appearing in pages 6, 7, and 8 of the Commissioner's Report.

NO COSTS.

IT IS SO ORDERED. 6

Both parties appealed to the Court of Appeals. The Republic contested the awards of severance damages and attorney's fees while
Andaya demanded just compensation for his entire property minus the easement. Andaya alleged that the easement would prevent ingress and
egress to his property and turn it into a catch basin for the floodwaters coming from the Agusan River. As a result, his entire property would be
rendered unusable and uninhabitable. He thus demanded P11,373,405 as just compensation based on the total compensable area of 9,679 square
meters.

The Court of Appeals modified the trial court's decision by imposing a 6% interest on the consequential damages from the date of the
writ of possession or the actual taking, and by deleting the attorney's fees.

Hence, the instant petition. Simply put, the sole issue for resolution may be stated thus: Is the Republic liable for just compensation if in
enforcing the legal easement of right-of-way on a property, the remaining area would be rendered unusable and uninhabitable?

It is undisputed that there is a legal easement of right-of-way in favor of the Republic. Andaya's transfer certificates of title 7 contained
the reservation that the lands covered thereby are subject to the provisions of the Land Registration Act 8 and the Public Land Act. 9 Section
112 10 of the Public Land Act provides that lands granted by patent shall be subject to a right-of-way not exceeding 60 meters in width for public
highways, irrigation ditches, aqueducts, and other similar works of the government or any public enterprise, free of charge, except only for the value
of the improvements existing thereon that may be affected. In view of this, the Court of Appeals declared that all the Republic needs to do is to
enforce such right without having to initiate expropriation proceedings and without having to pay any just compensation. 11 Hence, the Republic
may appropriate the 701 square meters necessary for the construction of the floodwalls without paying for it. ADSTCa

We are, however, unable to sustain the Republic's argument that it is not liable to pay consequential damages if in enforcing the legal
easement on Andaya's property, the remaining area would be rendered unusable and uninhabitable. "Taking," in the exercise of the power of
eminent domain, occurs not only when the government actually deprives or dispossesses the property owner of his property or of its ordinary use,
but also when there is a practical destruction or material impairment of the value of his property. 12 Using this standard, there was undoubtedly a
taking of the remaining area of Andaya's property. True, no burden was imposed thereon and Andaya still retained title and possession of the
property. But, as correctly observed by the Board and affirmed by the courts a quo, the nature and the effect of the floodwalls would deprive Andaya
of the normal use of the remaining areas. It would prevent ingress and egress to the property and turn it into a catch basin for the floodwaters
coming from the Agusan River.

For this reason, in our view, Andaya is entitled to payment of just compensation, which must be neither more nor less than the monetary
equivalent of the land. 13 One of the basic principles enshrined in our Constitution is that no person shall be deprived of his private property without
due process of law; and in expropriation cases, an essential element of due process is that there must be just compensation whenever private
property is taken for public use. Noteworthy, Section 9, Article III of our Constitution mandates that private property shall not be taken for public use
without just compensation. 14

Finally, we affirm the findings of the Court of Appeals and the trial court that just compensation should be paid only for 5,937 square
meters of the total area of 10,380 square meters. Admittedly, the Republic needs only a 10-meter easement or an equivalent of 701 square meters.
Yet, it is also settled that it is legally entitled to a 60-meter wide easement or an equivalent of 4,443 square meters. Clearly, although the Republic
will use only 701 square meters, it should not be liable for the 3,742 square meters, which constitute the difference between this area of 701 square
meters and the 4,443 square meters to which it is fully entitled to use as easement, free of charge except for damages to affected existing
improvements, if any, under Section 112 of the Public Land Act. acCETD

In effect, without such damages alleged and proved, the Republic is liable for just compensation of only the remaining areas consisting
of 5,937 square meters, with interest thereon at the legal rate of 6% per annum from the date of the writ of possession or the actual taking until full
payment is made. For the purpose of determining the final just compensation, the case is remanded to the trial court. Said court is ordered to make
the determination of just compensation payable to respondent Andaya with deliberate dispatch.

WHEREFORE, the Decision of the Court of Appeals dated October 30, 2003 in CA-G.R. CV No. 65066, modifying the Decision of the
Regional Trial Court of Butuan City, Branch 33 in Civil Case No. 4378, is AFFIRMED with MODIFICATION as herein set forth.

The case is hereby REMANDED to the Regional Trial Court of Butuan City, Branch 33 for the determination of the final just compensation
of the compensable area consisting of 5,937 square meters, with interest thereon at the legal rate of 6% per annum from the date of the writ of
possession or actual taking until fully paid.

No pronouncement as to costs.

SO ORDERED.

Carpio, Tinga and Velasco, Jr., JJ., concur.

Carpio-Morales, J., is on official leave.

||| (Republic v. Andaya, G.R. No. 160656, [June 15, 2007], 552 PHIL 40-47)

FIRST DIVISION

[G.R. No. 157882. March 30, 2006.]

DIDIPIO EARTH-SAVERS' MULTI-PURPOSE ASSOCIATION, INCORPORATED (DESAMA), MANUEL BUTIC,

CESAR MARIANO, LAURO ABANCE, BEN TAYABAN, ANTONIO DINGCOG, TEDDY B. KIMAYONG, ALONZO
ANANAYO, ANTONIO MALANUYA, JOSE BAHAG, ANDRES INLAB, RUFINO LICYAYO, ALFREDO CULHI,
CATALILNA INABYUHAN, GUAY DUMMANG, GINA PULIDO, EDWIN ANSIBEY, CORAZON SICUAN, LOPEZ
DUMULAG, FREDDIE AYDINON, VILMA JOSE, FLORENTINA MADDAWAT, LINDA DINGCOG, ELMER SICUAN,
GARY ANSIBEY, JIMMY MADDAWAT, JIMMY GUAY, ALFREDO CUT-ING, ANGELINA UDAN, OSCAR INLAB,
JUANITA CUT-ING, ALBERT PINKIHAN, CECILIA TAYABAN, CRISTA BINWAK, PEDRO DUGAY, SR., EDUARDO
ANANAYO, ROBIN INLAB, JR., LORENZO PULIDO, TOMAS BINWAG, EVELYN BUYA, JAIME DINGCOG,
DINAOAN CUT-ING, PEDRO DONATO, MYRNA GUAY, FLORA ANSIBEY, GRACE DINAMLING, EDUARDO
MENCIAS, ROSENDA JACOB, SIONITA DINGCOG, GLORIA JACOB, MAXIMA GUAY, RODRIGO PAGGADUT,
MARINA ANSIBEY, TOLENTINO INLAB, RUBEN DULNUAN, GERONIMO LICYAYO, LEONCIO CUMTI, MARY
DULNUAN, FELISA BALANBAN, MYRNA DUYAN, MARY MALANUYA, PRUDENCIO ANSIBEY, GUILLERMO
GUAY, MARGARITA CULHI, ALADIN ANSIBEY, PABLO DUYAN, PEDRO PUGUON, JULIAN INLAB, JOSEPH
NACULON, ROGER BAJITA, DINAON GUAY, JAIME ANANAYO, MARY ANSIBEY, LINA ANANAYO, MAURA
DUYAPAT, ARTEMEO ANANAYO, MARY BABLING, NORA ANSIBEY, DAVID DULNUAN, AVELINO PUGUON,
LUCAS GUMAWI, LUISA ABBAC, CATHRIN GUWAY, CLARITA TAYABAN, FLORA JAVERA, RANDY SICOAN,
FELIZA PUTAKI, CORAZON P. DULNUAN, NENA D. BULLONG, ERMELYN GUWAY, GILBERT BUTALE, JOSEPH
B. BULLONG, FRANCISCO PATNAAN, JR., SHERWIN DUGAY, TIRSO GULLINGAY, BENEDICT T. NABALLIN,
RAMON PUN-ADWAN, ALFONSO DULNUAN, CARMEN D. BUTALE, LOLITA ANSIBEY, ABRAHAM DULNUAN,
ARLYNDA BUTALE, MODESTO A. ANSIBEY, EDUARDO LUGAY, ANTONIO HUMIWAT, ALFREDO PUMIHIC, MIKE
TINO, TONY CABARROGUIS, BASILIO TAMLIWOK, JR., NESTOR TANGID, ALEJO TUGUINAY, BENITO
LORENZO, RUDY BAHIWAG, ANALIZA BUTALE, NALLEM LUBYOC, JOSEPH DUHAYON, RAFAEL CAMPOL,
MANUEL PUMALO, DELFIN AGALOOS, PABLO CAYANGA, PERFECTO SISON, ELIAS NATAMA, LITO PUMALO,
SEVERINA DUGAY, GABRIEL PAKAYAO, JEOFFREY SINDAP, FELIX TICUAN, MARIANO S. MADDELA, MENZI
TICAWA, DOMINGA DUGAY, JOE BOLINEY, JASON ASANG, TOMMY ATENYAYO, ALEJO AGMALIW, DIZON
AGMALIW, EDDIE ATOS, FELIMON BLANCO, DARRIL DIGOY, LUCAS BUAY, ARTEMIO BRAZIL, NICANOR MODI,
LUIS REDULFIN, NESTOR JUSTINO, JAIME CUMILA, BENEDICT GUINID, EDITHA ANIN, INOH-YABAN BANDAO,
LUIS BAYWONG, FELIPE DUHALNGON, PETER BENNEL, JOSEPH T. BUNGGALAN, JIMMY B. KIMAYONG,
HENRY PUGUON, PEDRO BUHONG, BUGAN NADIAHAN, SR., MARIA EDEN ORLINO, SPC, PERLA VISSORO,
and BISHOP RAMON VILLENA, petitioners, vs. ELISEA GOZUN, in her capacity as SECRETARY of the
DEPARTMENT OF ENVIRONMENT and NATURAL RESOURCES (DENR), HORACIO RAMOS, in his capacity as
Director of the Mines and Geosciences Bureau (MGB-DENR), ALBERTO ROMULO, in his capacity as the
Executive Secretary of the Office of the President, RICHARD N. FERRER, in his capacity as Acting
Undersecretary of the Office of the President, IAN HEATH SANDERCOCK, in his capacity as President of
CLIMAX-ARIMCO MINING CORPORATION, respondents.

DECISION

CHICO-NAZARIO, J p:
 This petition for prohibition and mandamus under Rule 65 of the Rules of Court assails the constitutionality of Republic Act No.
7942 otherwise known as the Philippine Mining Act of 1995, together with the Implementing Rules and Regulations issued pursuant thereto,
Department of Environment and Natural Resources (DENR) Administrative Order No. 96-40, s. 1996 (DAO 96-40) and of the Financial and
Technical Assistance Agreement (FTAA) entered into on 20 June 1994 by the Republic of the Philippines and Arimco Mining Corporation
(AMC), a corporation established under the laws of Australia and owned by its nationals.

On 25 July 1987, then President Corazon C. Aquino promulgated Executive Order No. 279 which authorized the DENR Secretary
to accept, consider and evaluate proposals from foreign-owned corporations or foreign investors for contracts of agreements involving either
technical or financial assistance for large-scale exploration, development, and utilization of minerals, which, upon appropriate recommendation
of the Secretary, the President may execute with the foreign proponent.

On 3 March 1995, then President Fidel V. Ramos signed into law Rep. Act No. 7942 entitled, "An Act Instituting A New System of
Mineral Resources Exploration, Development, Utilization and Conservation," otherwise known as the Philippine Mining Act of 1995.

On 15 August 1995, then DENR Secretary Victor O. Ramos issued DENR Administrative Order (DAO) No. 23, Series of 1995,
containing the implementing guidelines of Rep. Act No. 7942. This was soon superseded by DAO No. 96-40, s. 1996, which took effect on 23
January 1997 after due publication.

Previously, however, or specifically on 20 June 1994, President Ramos executed an FTAA with AMC over a total land area of
37,000 hectares covering the provinces of Nueva Vizcaya and Quirino. Included in this area is Barangay Dipidio, Kasibu, Nueva Vizcaya.

Subsequently, AMC consolidated with Climax Mining Limited to form a single company that now goes under the new name of
Climax-Arimco Mining Corporation (CAMC), the controlling 99% of stockholders of which are Australian nationals.

On 7 September 2001, counsels for petitioners filed a demand letter addressed to then DENR Secretary Heherson Alvarez, for
the cancellation of the CAMC FTAA for the primary reason that Rep. Act No. 7942 and its Implementing Rules and Regulations DAO 96-
40 are unconstitutional. The Office of the Executive Secretary was also furnished a copy of the said letter. There being no response to both
letters, another letter of the same content dated 17 June 2002 was sent to President Gloria Macapagal Arroyo. This letter was indorsed to the
DENR Secretary and eventually referred to the Panel of Arbitrators of the Mines and Geosciences Bureau (MGB), Regional Office No. 02,
Tuguegarao, Cagayan, for further action. IEHScT

On 12 November 2002, counsels for petitioners received a letter from the Panel of Arbitrators of the MGB requiring the petitioners
to comply with the Rules of the Panel of Arbitrators before the letter may be acted upon.

Yet again, counsels for petitioners sent President Arroyo another demand letter dated 8 November 2002. Said letter was again
forwarded to the DENR Secretary who referred the same to the MGB, Quezon City.

In a letter dated 19 February 2003, the MGB rejected the demand of counsels for petitioners for the cancellation of the CAMC
FTAA.

Petitioners thus filed the present petition for prohibition and mandamus, with a prayer for a temporary restraining order. They pray
that the Court issue an order:

1. enjoining public respondents from acting on any application for FTAA;

2. declaring unconstitutional the Philippine Mining Act of 1995 and its Implementing Rules and Regulations;

3. canceling the FTAA issued to CAMC.

In their memorandum petitioners pose the following issues:

WHETHER OR NOT REPUBLIC ACT NO. 7942 AND THE CAMC FTAA ARE VOID BECAUSE THEY ALLOW THE
UNJUST AND UNLAWFUL TAKING OF PROPERTY WITHOUT PAYMENT OF JUST COMPENSATION, IN VIOLATION
OF SECTION 9, ARTICLE III OF THE CONSTITUTION.

II

WHETHER OR NOT THE MINING ACT AND ITS IMPLEMENTING RULES AND REGULATIONS ARE VOID AND
UNCONSTITUTIONAL FOR SANCTIONING AN UNCONSTITUTIONAL ADMINISTRATIVE PROCESS OF
DETERMINING JUST COMPENSATION.

III

WHETHER OR NOT THE STATE, THROUGH REPUBLIC ACT NO. 7942 AND THE CAMC FTAA, ABDICATED ITS
PRIMARY RESPONSIBILITY TO THE FULL CONTROL AND SUPERVISION OVER NATURAL RESOURCES.

IV

WHETHER OR NOT THE RESPONDENTS' INTERPRETATION OF THE ROLE OF WHOLLY FOREIGN AND
FOREIGN-OWNED CORPORATIONS IN THEIR INVOLVEMENT IN MINING ENTERPRISES, VIOLATES
PARAGRAPH 4, SECTION 2, ARTICLE XII OF THE CONSTITUTION.

WHETHER OR NOT THE 1987 CONSTITUTION PROHIBITS SERVICE CONTRACTS. 1

Before going to the substantive issues, the procedural question raised by public respondents shall first be dealt with. Public
respondents are of the view that petitioners' eminent domain claim is not ripe for adjudication as they fail to allege that CAMC has actually
taken their properties nor do they allege that their property rights have been endangered or are in danger on account of CAMC's FTAA. In
effect, public respondents insist that the issue of eminent domain is not a justiciable controversy which this Court can take cognizance
of. EHIcaT

A justiciable controversy is defined as a definite and concrete dispute touching on the legal relations of parties having adverse
legal interests which may be resolved by a court of law through the application of a law. 2 Thus, courts have no judicial power to review cases
involving political questions and as a rule, will desist from taking cognizance of speculative or hypothetical cases, advisory opinions and cases
that have become moot. 3 The Constitution is quite explicit on this matter. 4 It provides that judicial power includes the duty of the courts of
justice to settle actual controversies involving rights which are legally demandable and enforceable. Pursuant to this constitutional mandate,
courts, through the power of judicial review, are to entertain only real disputes between conflicting parties through the application of law. For
the courts to exercise the power of judicial review, the following must be extant (1) there must be an actual case calling for the exercise of
judicial power; (2) the question must be ripe for adjudication; and (3) the person challenging must have the "standing." 5

An actual case or controversy involves a conflict of legal rights, an assertion of opposite legal claims, susceptible of judicial
resolution as distinguished from a hypothetical or abstract difference or dispute. 6 There must be a contrariety of legal rights that can be
interpreted and enforced on the basis of existing law and jurisprudence.

Closely related to the second requisite is that the question must be ripe for adjudication. A question is considered ripe for
adjudication when the act being challenged has had a direct adverse effect on the individual challenging it. 7

The third requisite is legal standing or locus standi. It is defined as a personal or substantial interest in the case such that the party
has sustained or will sustain direct injury as a result of the governmental act that is being challenged, alleging more than a generalized
grievance. 8 The gist of the question of standing is whether a party alleges "such personal stake in the outcome of the controversy as to
assure that concrete adverseness which sharpens the presentation of issues upon which the court depends for illumination of difficult
constitutional questions." 9 Unless a person is injuriously affected in any of his constitutional rights by the operation of statute or ordinance,
he has no standing. 10

In the instant case, there exists a live controversy involving a clash of legal rights as Rep. Act No. 7942 has been enacted, DAO
96-40 has been approved and an FTAAs have been entered into. The FTAA holders have already been operating in various provinces of the
country. Among them is CAMC which operates in the provinces of Nueva Vizcaya and Quirino where numerous individuals including the
petitioners are imperiled of being ousted from their landholdings in view of the CAMC FTAA. In light of this, the court cannot await the adverse
consequences of the law in order to consider the controversy actual and ripe for judicial intervention. 11 Actual eviction of the land owners
and occupants need not happen for this Court to intervene. As held in Pimentel, Jr. v. Hon. Aguirre 12 :

By the mere enactment of the questioned law or the approval of the challenged act, the dispute is said to have ripened
into a judicial controversy even without any other overt act. Indeed, even a singular violation of the Constitution and/or
the law is enough to awaken judicial duty. 13

Petitioners embrace various segments of the society. These include Didipio Earth-Savers' Multi-Purpose Association, Inc., an
organization of farmers and indigenous peoples organized under Philippine laws, representing a community actually affected by the mining
activities of CAMC, as well as other residents of areas affected by the mining activities of CAMC. These petitioners have the standing to raise
the constitutionality of the questioned FTAA as they allege a personal and substantial injury. 14 They assert that they are affected by the
mining activities of CAMC. Likewise, they are under imminent threat of being displaced from their landholdings as a result of the
implementation of the questioned FTAA. They thus meet the appropriate case requirement as they assert an interest adverse to that of
respondents who, on the other hand, claim the validity of the assailed statute and the FTAA of CAMC.

Besides, the transcendental importance of the issues raised and the magnitude of the public interest involved will have a bearing
on the country's economy which is to a greater extent dependent upon the mining industry. Also affected by the resolution of this case are the
proprietary rights of numerous residents in the mining contract areas as well as the social existence of indigenous peoples which are
threatened. Based on these considerations, this Court deems it proper to take cognizance of the instant petition.

Having resolved the procedural question, the constitutionality of the law under attack must be addressed squarely.

First Substantive Issue: Validity of Section 76 of Rep. Act No. 7942 and DAO 96-40

In seeking to nullify Rep. Act No. 7942 and its implementing rules DAO 96-40 as unconstitutional, petitioners set their sight on
Section 76 of Rep. Act No. 7942 and Section 107 of DAO 96-40 which they claim allow the unlawful and unjust "taking" of private property for
private purpose in contradiction with Section 9, Article III of the 1987 Constitution mandating that private property shall not be taken except
for public use and the corresponding payment of just compensation. They assert that public respondent DENR, through the Mining Act and
its Implementing Rules and Regulations, cannot, on its own, permit entry into a private property and allow taking of land without payment of
just compensation.

Interpreting Section 76 of Rep. Act No. 7942 and Section 107 of DAO 96-40, juxtaposed with the concept of taking of property for
purposes of eminent domain in the case of Republic v. Vda. de Castellvi, 15 petitioners assert that there is indeed a "taking" upon entry into
private lands and concession areas. ADETca

Republic v. Vda. de Castellvi defines "taking" under the concept of eminent domain as entering upon private property for more
than a momentary period, and, under the warrant or color of legal authority, devoting it to a public use, or otherwise informally appropriating
or injuriously affecting it in such a way as to substantially oust the owner and deprive him of all beneficial enjoyment thereof.

From the criteria set forth in the cited case, petitioners claim that the entry into a private property by CAMC, pursuant to its FTAA,
is for more than a momentary period, i.e., for 25 years, and renewable for another 25 years; that the entry into the property is under the
warrant or color of legal authority pursuant to the FTAA executed between the government and CAMC; and that the entry substantially ousts
the owner or possessor and deprives him of all beneficial enjoyment of the property. These facts, according to the petitioners, amount to
taking. As such, petitioners question the exercise of the power of eminent domain as unwarranted because respondents failed to prove that
the entry into private property is devoted for public use.

Petitioners also stress that even without the doctrine in the Castellvi case, the nature of the mining activity, the extent of the land
area covered by the CAMC FTAA and the various rights granted to the proponent or the FTAA holder, such as (a) the right of possession of
the Exploration Contract Area, with full right of ingress and egress and the right to occupy the same; (b) the right not to be prevented from
entry into private lands by surface owners and/or occupants thereof when prospecting, exploring and exploiting for minerals therein; (c) the
right to enjoy easement rights, the use of timber, water and other natural resources in the Exploration Contract Area; (d) the right of possession
of the Mining Area, with full right of ingress and egress and the right to occupy the same; and (e) the right to enjoy easement rights, water
and other natural resources in the Mining Area, result in a taking of private property.

Petitioners quickly add that even assuming arguendo that there is no absolute, physical taking, at the very least, Section 76
establishes a legal easement upon the surface owners, occupants and concessionaires of a mining contract area sufficient to deprive them
of enjoyment and use of the property and that such burden imposed by the legal easement falls within the purview of eminent domain.

To further bolster their claim that the legal easement established is equivalent to taking, petitioners cite the case of National Power
Corporation v. Gutierrez 16 holding that the easement of right-of-way imposed against the use of the land for an indefinite period is a taking
under the power of eminent domain.

Traversing petitioners' assertion, public respondents argue that Section 76 is not a taking provision but a valid exercise of the
police power and by virtue of which, the state may prescribe regulations to promote the health, morals, peace, education, good order, safety
and general welfare of the people. This government regulation involves the adjustment of rights for the public good and that this adjustment
curtails some potential for the use or economic exploitation of private property. Public respondents concluded that "to require compensation
in all such circumstances would compel the government to regulate by purchase."
 Public respondents are inclined to believe that by entering private lands and concession areas, FTAA holders do not oust the
owners thereof nor deprive them of all beneficial enjoyment of their properties as the said entry merely establishes a legal easement upon
surface owners, occupants and concessionaires of a mining contract area.

Taking in Eminent Domain Distinguished from Regulation in Police Power

The power of eminent domain is the inherent right of the state (and of those entities to which the power has been lawfully
delegated) to condemn private property to public use upon payment of just compensation. 17 On the other hand, police power is the power
of the state to promote public welfare by restraining and regulating the use of liberty and property. 18 Although both police power and the
power of eminent domain have the general welfare for their object, and recent trends show a mingling 19 of the two with the latter being used
as an implement of the former, there are still traditional distinctions between the two.

Property condemned under police power is usually noxious or intended for a noxious purpose; hence, no compensation shall be
paid. 20 Likewise, in the exercise of police power, property rights of private individuals are subjected to restraints and burdens in order to
secure the general comfort, health, and prosperity of the state. Thus, an ordinance prohibiting theaters from selling tickets in excess of their
seating capacity (which would result in the diminution of profits of the theater-owners) was upheld valid as this would promote the comfort,
convenience and safety of the customers. 21 In U.S. v. Toribio, 22 the court upheld the provisions of Act No. 1147, a statute regulating the
slaughter of carabao for the purpose of conserving an adequate supply of draft animals, as a valid exercise of police power, notwithstanding
the property rights impairment that the ordinance imposed on cattle owners. A zoning ordinance prohibiting the operation of a lumber yard
within certain areas was assailed as unconstitutional in that it was an invasion of the property rights of the lumber yard owners in People v.
de Guzman. 23 The Court nonetheless ruled that the regulation was a valid exercise of police power. A similar ruling was arrived at in Seng
Kee S Co. v. Earnshaw and Piatt 24 where an ordinance divided the City of Manila into industrial and residential areas. DaCTcA

A thorough scrutiny of the extant jurisprudence leads to a cogent deduction that where a property interest is merely restricted
because the continued use thereof would be injurious to public welfare, or where property is destroyed because its continued existence would
be injurious to public interest, there is no compensable taking. 25 However, when a property interest is appropriated and applied to some
public purpose, there is compensable taking. 26

According to noted constitutionalist, Fr. Joaquin Bernas, SJ, in the exercise of its police power regulation, the state restricts the
use of private property, but none of the property interests in the bundle of rights which constitute ownership is appropriated for use by or for
the benefit of the public. 27 Use of the property by the owner was limited, but no aspect of the property is used by or for the public. 28 The
deprivation of use can in fact be total and it will not constitute compensable taking if nobody else acquires use of the property or any interest
therein. 29

If, however, in the regulation of the use of the property, somebody else acquires the use or interest thereof, such restriction
constitutes compensable taking. Thus, in City Government of Quezon City v. Ericta, 30 it was argued by the local government that an
ordinance requiring private cemeteries to reserve 6% of their total areas for the burial of paupers was a valid exercise of the police power
under the general welfare clause. This court did not agree in the contention, ruling that property taken under the police power is sought to be
destroyed and not, as in this case, to be devoted to a public use. It further declared that the ordinance in question was actually a taking of
private property without just compensation of a certain area from a private cemetery to benefit paupers who are charges of the local
government. Being an exercise of eminent domain without provision for the payment of just compensation, the same was rendered invalid as
it violated the principles governing eminent domain.

In People v. Fajardo, 31 the municipal mayor refused Fajardo permission to build a house on his own land on the ground that the
proposed structure would destroy the view or beauty of the public plaza. The ordinance relied upon by the mayor prohibited the construction
of any building that would destroy the view of the plaza from the highway. The court ruled that the municipal ordinance under the guise of
police power permanently divest owners of the beneficial use of their property for the benefit of the public; hence, considered as a taking
under the power of eminent domain that could not be countenanced without payment of just compensation to the affected owners. In this
case, what the municipality wanted was to impose an easement on the property in order to preserve the view or beauty of the public plaza,
which was a form of utilization of Fajardo's property for public benefit. 32

While the power of eminent domain often results in the appropriation of title to or possession of property, it need not always be
the case. Taking may include trespass without actual eviction of the owner, material impairment of the value of the property or prevention of
the ordinary uses for which the property was intended such as the establishment of an easement. 33 In Ayala de Roxas v. City of Manila, 34 it
was held that the imposition of burden over a private property through easement was considered taking; hence, payment of just compensation
is required. The Court declared:

And, considering that the easement intended to be established, whatever may be the object thereof, is not
merely a real right that will encumber the property, but is one tending to prevent the exclusive use of one portion of the
same, by expropriating it for public use which, be it what it may, can not be accomplished unless the owner of the property
condemned or seized be previously and duly indemnified, it is proper to protect the appellant by means of the remedy
employed in such cases, as it is only adequate remedy when no other legal action can be resorted to, against an intent
which is nothing short of an arbitrary restriction imposed by the city by virtue of the coercive power with which the same
is invested. IDcAHT

And in the case of National Power Corporation v. Gutierrez, 35 despite the NPC's protestation that the owners were not totally
deprived of the use of the land and could still plant the same crops as long as they did not come into contact with the wires, the Court
nevertheless held that the easement of right-of-way was a taking under the power of eminent domain. The Court said:

In the case at bar, the easement of right-of-way is definitely a taking under the power of eminent domain.
Considering the nature and effect of the installation of 230 KV Mexico-Limay transmission lines, the limitation imposed
by NPC against the use of the land for an indefinite period deprives private respondents of its ordinary use.

A case exemplifying an instance of compensable taking which does not entail transfer of title is Republic v. Philippine Long
Distance Telephone Co. 36 Here, the Bureau of Telecommunications, a government instrumentality, had contracted with the PLDT for the
interconnection between the Government Telephone System and that of the PLDT, so that the former could make use of the lines and facilities
of the PLDT. In its desire to expand services to government offices, the Bureau of Telecommunications demanded to expand its use of the
PLDT lines. Disagreement ensued on the terms of the contract for the use of the PLDT facilities. The Court ruminated:

Normally, of course, the power of eminent domain results in the taking or appropriation of title to, and
possession of, the expropriated property; but no cogent reason appears why said power may not be availed of to impose
only a burden upon the owner of the condemned property, without loss of title and possession. It is unquestionable that
real property may, through expropriation, be subjected to an easement right of way. 37

In Republic v. Castellvi, 38 this Court had the occasion to spell out the requisites of taking in eminent domain, to wit:

(1) the expropriator must enter a private property;

(2) the entry must be for more than a momentary period.

 (3) the entry must be under warrant or color of legal authority;

(4) the property must be devoted to public use or otherwise informally appropriated or injuriously affected;

(5) the utilization of the property for public use must be in such a way as to oust the owner and deprive him of beneficial
enjoyment of the property.

As shown by the foregoing jurisprudence, a regulation which substantially deprives the owner of his proprietary rights and restricts
the beneficial use and enjoyment for public use amounts to compensable taking. In the case under consideration, the entry referred to in
Section 76 and the easement rights under Section 75 of Rep. Act No. 7942 as well as the various rights to CAMC under its FTAA are no
different from the deprivation of proprietary rights in the cases discussed which this Court considered as taking. Section 75 of the law in
question reads:

Easement Rights. — When mining areas are so situated that for purposes of more convenient mining
operations it is necessary to build, construct or install on the mining areas or lands owned, occupied or leased by other
persons, such infrastructure as roads, railroads, mills, waste dump sites, tailing ponds, warehouses, staging or storage
areas and port facilities, tramways, runways, airports, electric transmission, telephone or telegraph lines, dams and their
normal flood and catchment areas, sites for water wells, ditches, canals, new river beds, pipelines, flumes, cuts, shafts,
tunnels, or mills, the contractor, upon payment of just compensation, shall be entitled to enter and occupy said mining
areas or lands. AcHaTE

Section 76 provides:

Entry into private lands and concession areas — Subject to prior notification, holders of mining rights shall
not be prevented from entry into private lands and concession areas by surface owners, occupants, or concessionaires
when conducting mining operations therein.

The CAMC FTAA grants in favor of CAMC the right of possession of the Exploration Contract Area, the full right of ingress and
egress and the right to occupy the same. It also bestows CAMC the right not to be prevented from entry into private lands by surface owners
or occupants thereof when prospecting, exploring and exploiting minerals therein.

The entry referred to in Section 76 is not just a simple right-of-way which is ordinarily allowed under the provisions of the Civil
Code.Here, the holders of mining rights enter private lands for purposes of conducting mining activities such as exploration, extraction and
processing of minerals. Mining right holders build mine infrastructure, dig mine shafts and connecting tunnels, prepare tailing ponds, storage
areas and vehicle depots, install their machinery, equipment and sewer systems. On top of this, under Section 75, easement rights are
accorded to them where they may build warehouses, port facilities, electric transmission, railroads and other infrastructures necessary for
mining operations. All these will definitely oust the owners or occupants of the affected areas the beneficial ownership of their lands. Without
a doubt, taking occurs once mining operations commence.

Section 76 of Rep. Act No. 7942 is a Taking Provision

Moreover, it would not be amiss to revisit the history of mining laws of this country which would help us understand Section 76
of Rep. Act No. 7942.

This provision is first found in Section 27 of Commonwealth Act No. 137 which took effect on 7 November 1936, viz:

Before entering private lands the prospector shall first apply in writing for written permission of the private
owner, claimant, or holder thereof, and in case of refusal by such private owner, claimant, or holder to grant such
permission, or in case of disagreement as to the amount of compensation to be paid for such privilege of prospecting
therein, the amount of such compensation shall be fixed by agreement among the prospector, the Director of the Bureau
of Mines and the surface owner, and in case of their failure to unanimously agree as to the amount of compensation, all
questions at issue shall be determined by the Court of First Instance.

Similarly, the pertinent provision of Presidential Decree No. 463, otherwise known as "The Mineral Resources Development
Decree of 1974," provides:

SECTION 12. Entry to Public and Private Lands. — A person who desires to conduct prospecting or other
mining operations within public lands covered by concessions or rights other than mining shall first obtain the written
permission of the government official concerned before entering such lands. In the case of private lands, the written
permission of the owner or possessor of the land must be obtained before entering such lands. In either case, if said
permission is denied, the Director, at the request of the interested person may intercede with the owner or possessor of
the land. If the intercession fails, the interested person may bring suit in the Court of First Instance of the province where
the land is situated. If the court finds the request justified, it shall issue an order granting the permission after fixing the
amount of compensation and/or rental due the owner or possessor: Provided, That pending final adjudication of such
amount, the court shall upon recommendation of the Director permit the interested person to enter, prospect and/or
undertake other mining operations on the disputed land upon posting by such interested person of a bond with the court
which the latter shall consider adequate to answer for any damage to the owner or possessor of the land resulting from
such entry, prospecting or any other mining operations.

Hampered by the difficulties and delays in securing surface rights for the entry into private lands for purposes of mining
operations, Presidential Decree No. 512 dated 19 July 1974 was passed into law in order to achieve full and accelerated mineral resources
development. Thus, Presidential Decree No. 512 provides for a new system of surface rights acquisition by mining prospectors and claimants.
Whereas in Commonwealth Act No. 137 and Presidential Decree No. 463 eminent domain may only be exercised in order that the mining
claimants can build, construct or install roads, railroads, mills, warehouses and other facilities, this time, the power of eminent domain may
now be invoked by mining operators for the entry, acquisition and use of private lands, viz:

SECTION 1. Mineral prospecting, location, exploration, development and exploitation is hereby declared of
public use and benefit, and for which the power of eminent domain may be invoked and exercised for the entry, acquisition
and use of private lands. . . . .

The evolution of mining laws gives positive indication that mining operators who are qualified to own lands were granted the
authority to exercise eminent domain for the entry, acquisition, and use of private lands in areas open for mining operations. This grant of
authority extant in Section 1 of Presidential Decree No. 512 is not expressly repealed by Section 76 of Rep. Act No. 7942; and neither are the
former statutes impliedly repealed by the former. These two provisions can stand together even if Section 76 of Rep. Act No. 7942 does not
spell out the grant of the privilege to exercise eminent domain which was present in the old law. DAHSaT

It is an established rule in statutory construction that in order that one law may operate to repeal another law, the two laws must
be inconsistent. 39 The former must be so repugnant as to be irreconciliable with the latter act. Simply because a latter enactment may relate
to the same subject matter as that of an earlier statute is not of itself sufficient to cause an implied repeal of the latter, since the new law may
be cumulative or a continuation of the old one. As has been the ruled, repeals by implication are not favored, and will not be decreed unless
it is manifest that the legislature so intended. 40 As laws are presumed to be passed with deliberation and with full knowledge of all existing
ones on the subject, it is but reasonable to conclude that in passing a statute it was not intended to interfere with or abrogate any former law
relating to the same matter, unless the repugnancy between the two is not only irreconcilable, but also clear and convincing, and flowing
necessarily from the language used, unless the later act fully embraces the subject matter of the earlier, or unless the reason for the earlier
act is beyond peradventure removed. 41 Hence, every effort must be used to make all acts stand and if, by any reasonable construction, they
can be reconciled, the latter act will not operate as a repeal of the earlier.

Considering that Section 1 of Presidential Decree No. 512 granted the qualified mining operators the authority to exercise eminent
domain and since this grant of authority is deemed incorporated in Section 76 of Rep. Act No. 7942, the inescapable conclusion is that the
latter provision is a taking provision.

While this Court declares that the assailed provision is a taking provision, this does not mean that it is unconstitutional on the
ground that it allows taking of private property without the determination of public use and the payment of just compensation.

The taking to be valid must be for public use. 42 Public use as a requirement for the valid exercise of the power of eminent domain
is now synonymous with public interest, public benefit, public welfare and public convenience. 43 It includes the broader notion of indirect
public benefit or advantage. Public use as traditionally understood as "actual use by the public" has already been abandoned. 44

Mining industry plays a pivotal role in the economic development of the country and is a vital tool in the government's thrust of
accelerated recovery. 45 The importance of the mining industry for national development is expressed in Presidential Decree No. 463:

WHEREAS, mineral production is a major support of the national economy, and therefore the intensified
discovery, exploration, development and wise utilization of the country's mineral resources are urgently needed for
national development.

Irrefragably, mining is an industry which is of public benefit.

That public use is negated by the fact that the state would be taking private properties for the benefit of private mining firms or
mining contractors is not at all true. In Heirs of Juancho Ardona v. Reyes, 46 petitioners therein contended that the promotion of tourism is
not for public use because private concessionaires would be allowed to maintain various facilities such as restaurants, hotels, stores, etc.,
inside the tourist area. The Court thus contemplated:

The rule in Berman v. Parker [348 U.S. 25; 99 L. ed. 27] of deference to legislative policy even if such policy
might mean taking from one private person and conferring on another private person applies as well in the Philippines.

". . . Once the object is within the authority of Congress, the means by which it will be attained is also for
Congress to determine. Here one of the means chosen is the use of private enterprise for redevelopment of
the area. Appellants argue that this makes the project a taking from one businessman for the benefit of
another businessman. But the means of executing the project are for Congress and Congress alone to
determine, once the public purpose has been established. . . ." 47

Petitioners further maintain that the state's discretion to decide when to take private property is reduced contractually by Section
13.5 of the CAMC FTAA, which reads:

If the CONTRACTOR so requests at its option, the GOVERNMENT shall use its offices and legal powers to
assist in the acquisition at reasonable cost of any surface areas or rights required by the CONTRACTOR at the
CONTRACTOR's cost to carry out the Mineral Exploration and the Mining Operations herein. AHEDaI

All obligations, payments and expenses arising from, or incident to, such agreements or acquisition of right
shall be for the account of the CONTRACTOR and shall be recoverable as Operating Expense.

According to petitioners, the government is reduced to a sub-contractor upon the request of the private respondent, and on account
of the foregoing provision, the contractor can compel the government to exercise its power of eminent domain thereby derogating the latter's
power to expropriate property.

The provision of the FTAA in question lays down the ways and means by which the foreign-owned contractor, disqualified to own
land, identifies to the government the specific surface areas within the FTAA contract area to be acquired for the mine infrastructure. 48 The
government then acquires ownership of the surface land areas on behalf of the contractor, through a voluntary transaction in order to enable
the latter to proceed to fully implement the FTAA. Eminent domain is not yet called for at this stage since there are still various avenues by
which surface rights can be acquired other than expropriation. The FTAA provision under attack merely facilitates the implementation of the
FTAA given to CAMC and shields it from violating the Anti-Dummy Law. Hence, when confronted with the same question in La Bugal-B'Laan
Tribal Association, Inc. v. Ramos, 49 the Court answered:

Clearly, petitioners have needlessly jumped to unwarranted conclusions, without being aware of the rationale
for the said provision. That provision does not call for the exercise of the power of eminent domain — and determination
of just compensation is not an issue — as much as it calls for a qualified party to acquire the surface rights on behalf of
a foreign-owned contractor.

Rather than having the foreign contractor act through a dummy corporation, having the State do the
purchasing is a better alternative. This will at least cause the government to be aware of such transaction/s and foster
transparency in the contractor's dealings with the local property owners. The government, then, will not act as a
subcontractor of the contractor; rather, it will facilitate the transaction and enable the parties to avoid a technical violation
of the Anti-Dummy Law.

There is also no basis for the claim that the Mining Law and its implementing rules and regulations do not provide for just
compensation in expropriating private properties. Section 76 of Rep. Act No. 7942 and Section 107 of DAO 96-40 provide for the payment of
just compensation:

Section 76. . . . Provided, that any damage to the property of the surface owner, occupant, or concessionaire
as a consequence of such operations shall be properly compensated as may be provided for in the implementing rules
and regulations.

Section 107. Compensation of the Surface Owner and Occupant. — Any damage done to the property of the
surface owners, occupant, or concessionaire thereof as a consequence of the mining operations or as a result of the
construction or installation of the infrastructure mentioned in 104 above shall be properly and justly compensated.

Such compensation shall be based on the agreement entered into between the holder of mining rights and
the surface owner, occupant or concessionaire thereof, where appropriate, in accordance with P.D. No. 512. (Emphasis
supplied.)
 Second Substantive Issue: Power of Courts to Determine Just Compensation

Closely-knit to the issue of taking is the determination of just compensation. It is contended that Rep. Act No. 7942 and Section
107 of DAO 96-40 encroach on the power of the trial courts to determine just compensation in eminent domain cases inasmuch as the same
determination of proper compensation are cognizable only by the Panel of Arbitrators.

The question on the judicial determination of just compensation has been settled in the case of Export Processing Zone Authority
v. Dulay 50 wherein the court declared that the determination of just compensation in eminent domain cases is a judicial function. Even as
the executive department or the legislature may make the initial determinations, the same cannot prevail over the court's findings. HSaCcE

Implementing Section 76 of Rep. Act No. 7942, Section 105 of DAO 96-40 states that holder(s) of mining right(s) shall not be
prevented from entry into its/their contract/mining areas for the purpose of exploration, development, and/or utilization. That in cases where
surface owners of the lands, occupants or concessionaires refuse to allow the permit holder or contractor entry, the latter shall bring the matter
before the Panel of Arbitrators for proper disposition. Section 106 states that voluntary agreements between the two parties permitting the
mining right holders to enter and use the surface owners' lands shall be registered with the Regional Office of the MGB. In connection with
Section 106, Section 107 provides that the compensation for the damage done to the surface owner, occupant or concessionaire as a
consequence of mining operations or as a result of the construction or installation of the infrastructure shall be properly and justly compensated
and that such compensation shall be based on the agreement between the holder of mining rights and surface owner, occupant or
concessionaire, or where appropriate, in accordance with Presidential Decree No. 512. In cases where there is disagreement to the
compensation or where there is no agreement, the matter shall be brought before the Panel of Arbitrators. Section 206 of the implementing
rules and regulations provides an aggrieved party the remedy to appeal the decision of the Panel of Arbitrators to the Mines Adjudication
Board, and the latter's decision may be reviewed by the Supreme Court by filing a petition for review on certiorari. 51

An examination of the foregoing provisions gives no indication that the courts are excluded from taking cognizance of expropriation
cases under the mining law. The disagreement referred to in Section 107 does not involve the exercise of eminent domain, rather it
contemplates of a situation wherein the permit holders are allowed by the surface owners entry into the latters' lands and disagreement
ensues as regarding the proper compensation for the allowed entry and use of the private lands. Noticeably, the provision points to a voluntary
sale or transaction, but not to an involuntary sale.

The legislature, in enacting the mining act, is presumed to have deliberated with full knowledge of all existing laws and
jurisprudence on the subject. Thus, it is but reasonable to conclude that in passing such statute it was in accord with the existing laws and
jurisprudence on the jurisdiction of courts in the determination of just compensation and that it was not intended to interfere with or abrogate
any former law relating to the same matter. Indeed, there is nothing in the provisions of the assailed law and its implementing rules and
regulations that exclude the courts from their jurisdiction to determine just compensation in expropriation proceedings involving mining
operations. Although Section 105 confers upon the Panel of Arbitrators the authority to decide cases where surface owners, occupants,
concessionaires refuse permit holders entry, thus, necessitating involuntary taking, this does not mean that the determination of the just
compensation by the Panel of Arbitrators or the Mines Adjudication Board is final and conclusive. The determination is only preliminary unless
accepted by all parties concerned. There is nothing wrong with the grant of primary jurisdiction by the Panel of Arbitrators or the Mines
Adjudication Board to determine in a preliminary matter the reasonable compensation due the affected landowners or occupants. 52 The
original and exclusive jurisdiction of the courts to decide determination of just compensation remains intact despite the preliminary
determination made by the administrative agency. As held in Philippine Veterans Bank v. Court of Appeals 53 :

The jurisdiction of the Regional Trial Courts is not any less "original and exclusive" because the question is
first passed upon by the DAR, as the judicial proceedings are not a continuation of the administrative determination.

Third Substantive Issue: Sufficient Control by the State Over Mining Operations

Anent the third issue, petitioners charge that Rep. Act No. 7942, as well as its Implementing Rules and Regulations, makes it
possible for FTAA contracts to cede over to a fully foreign-owned corporation full control and management of mining enterprises, with the
result that the State is allegedly reduced to a passive regulator dependent on submitted plans and reports, with weak review and audit powers.
The State is not acting as the supposed owner of the natural resources for and on behalf of the Filipino people; it practically has little effective
say in the decisions made by the enterprise. In effect, petitioners asserted that the law, the implementing regulations, and the CAMC FTAA
cede beneficial ownership of the mineral resources to the foreign contractor. TIEHSA

It must be noted that this argument was already raised in La Bugal-B'Laan Tribal Association, Inc. v. Ramos, 54 where the Court
answered in the following manner:

RA 7942 provides for the state's control and supervision over mining operations. The following provisions
thereof establish the mechanism of inspection and visitorial rights over mining operations and institute reportorial
requirements in this manner:

1. Sec. 8 which provides for the DENR's power of over-all supervision and periodic review for "the
conservation, management, development and proper use of the State's mineral resources";

2. Sec. 9 which authorizes the Mines and Geosciences Bureau (MGB) under the DENR to exercise "direct
charge in the administration and disposition of mineral resources", and empowers the MGB to
"monitor the compliance by the contractor of the terms and conditions of the mineral agreements",
"confiscate surety and performance bonds", and deputize whenever necessary any member or
unit of the Phil. National Police, barangay, duly registered non-governmental organization (NGO)
or any qualified person to police mining activities;

3. Sec. 66 which vests in the Regional Director "exclusive jurisdiction over safety inspections of all
installations, whether surface or underground", utilized in mining operations.

4. Sec. 35, which incorporates into all FTAAs the following terms, conditions and warranties:

"(g) Mining operations shall be conducted in accordance with the provisions of the Act and its
IRR.

"(h) Work programs and minimum expenditures commitments.

xxx xxx xxx

"(k) Requiring proponent to effectively use appropriate anti-pollution technology and facilities to
protect the environment and restore or rehabilitate mined-out areas.

"(l) The contractors shall furnish the Government records of geologic, accounting and other
relevant data for its mining operation, and that books of accounts and records shall
be open for inspection by the government. . . . .
 "(m) Requiring the proponent to dispose of the minerals at the highest price and more
advantageous terms and conditions.

xxx xxx xxx

"(o) Such other terms and conditions consistent with the Constitution and with this Act as the
Secretary may deem to be for the best interest of the State and the welfare of the
Filipino people."

The foregoing provisions of Section 35 of RA 7942 are also reflected and implemented in Section 56 (g), (h),
(l), (m) and (n) of the Implementing Rules, DAO 96-40.

Moreover, RA 7942 and DAO 96-40 also provide various stipulations confirming the government's control
over mining enterprises:

The contractor is to relinquish to the government those portions of the contract area not needed for mining
operations and not covered by any declaration of mining feasibility (Section 35-e, RA 7942; Section
60, DAO 96-40). SHDAEC

The contractor must comply with the provisions pertaining to mine safety, health and environmental
protection (Chapter XI, RA 7942; Chapters XV and XVI, DAO 96-40).

For violation of any of its terms and conditions, government may cancel an FTAA. (Chapter XVII, RA 7942;
Chapter XXIV, DAO 96-40).

An FTAA contractor is obliged to open its books of accounts and records for inspection by the government
(Section 56-m, DAO 96-40).

An FTAA contractor has to dispose of the minerals and by-products at the highest market price and register
with the MGB a copy of the sales agreement (Section 56-n, DAO 96-40).

MGB is mandated to monitor the contractor's compliance with the terms and conditions of the FTAA; and to
deputize, when necessary, any member or unit of the Philippine National Police, the barangay or a DENR-
accredited nongovernmental organization to police mining activities (Section 7-d and -f, DAO 96-40).

An FTAA cannot be transferred or assigned without prior approval by the President (Section 40, RA 7942;
Section 66, DAO 96-40).

A mining project under an FTAA cannot proceed to the construction/development/utilization stage, unless its
Declaration of Mining Project Feasibility has been approved by government (Section 24, RA 7942).

The Declaration of Mining Project Feasibility filed by the contractor cannot be approved without submission
of the following documents:

1. Approved mining project feasibility study (Section 53-d, DAO 96-40)

2. Approved three-year work program (Section 53-a-4, DAO 96-40)

3. Environmental compliance certificate (Section 70, RA 7942)

4. Approved environmental protection and enhancement program (Section 69, RA 7942)

5. Approval by the Sangguniang Panlalawigan/Bayan/Barangay (Section 70, RA 7942; Section

27, RA 7160)

6. Free and prior informed consent by the indigenous peoples concerned, including payment of
royalties through a Memorandum of Agreement (Section 16, RA 7942; Section
59, RA 8371)

The FTAA contractor is obliged to assist in the development of its mining community, promotion of the
general welfare of its inhabitants, and development of science and mining technology (Section 57, RA
7942).

The FTAA contractor is obliged to submit reports (on quarterly, semi-annual or annual basis as the case
may be; per Section 270, DAO 96-40), pertaining to the following:

1. Exploration

2. Drilling

3. Mineral resources and reserves

4. Energy consumption

5. Production DEHaAS

6. Sales and marketing

7. Employment

8. Payment of taxes, royalties, fees and other Government Shares

9. Mine safety, health and environment

10. Land use

11. Social development

12. Explosives consumption

 An FTAA pertaining to areas within government reservations cannot be granted without a written clearance
from the government agencies concerned (Section 19, RA 7942; Section 54, DAO 96-40).

An FTAA contractor is required to post a financial guarantee bond in favor of the government in an amount
equivalent to its expenditures obligations for any particular year. This requirement is apart from the
representations and warranties of the contractor that it has access to all the financing, managerial and
technical expertise and technology necessary to carry out the objectives of the FTAA (Section 35-b, -e, and
-f, RA 7942).

Other reports to be submitted by the contractor, as required under DAO 96-40, are as follows: an
environmental report on the rehabilitation of the mined-out area and/or mine waste/tailing covered area, and
anti-pollution measures undertaken (Section 35-a-2); annual reports of the mining operations and records of
geologic accounting (Section 56-m); annual progress reports and final report of exploration activities
(Section 56-2).

Other programs required to be submitted by the contractor, pursuant to DAO 96-40, are the following: a
safety and health program (Section 144); an environmental work program (Section 168); an annual
environmental protection and enhancement program (Section 171).

The foregoing gamut of requirements, regulations, restrictions and limitations imposed upon the FTAA
contractor by the statute and regulations easily overturns petitioners' contention. The setup under RA 7942 and DAO 96-
40 hardly relegates the State to the role of a "passive regulator" dependent on submitted plans and reports. On the
contrary, the government agencies concerned are empowered to approve or disapprove — hence, to influence, direct
and change — the various work programs and the corresponding minimum expenditure commitments for each of the
exploration, development and utilization phases of the mining enterprise.

Once these plans and reports are approved, the contractor is bound to comply with its commitments therein.
Figures for mineral production and sales are regularly monitored and subjected to government review, in order to ensure
that the products and by-products are disposed of at the best prices possible; even copies of sales agreements have to
be submitted to and registered with MGB. And the contractor is mandated to open its books of accounts and records for
scrutiny, so as to enable the State to determine if the government share has been fully paid.

The State may likewise compel the contractor's compliance with mandatory requirements on mine safety,
health and environmental protection, and the use of anti-pollution technology and facilities. Moreover, the contractor is
also obligated to assist in the development of the mining community and to pay royalties to the indigenous peoples
concerned. IaEASH

Cancellation of the FTAA may be the penalty for violation of any of its terms and conditions and/or
noncompliance with statutes or regulations. This general, all-around, multipurpose sanction is no trifling matter, especially
to a contractor who may have yet to recover the tens or hundreds of millions of dollars sunk into a mining project.

Overall, considering the provisions of the statute and the regulations just discussed, we believe that the State
definitely possesses the means by which it can have the ultimate word in the operation of the enterprise, set directions
and objectives, and detect deviations and noncompliance by the contractor; likewise, it has the capability to enforce
compliance and to impose sanctions, should the occasion therefor arise.

In other words, the FTAA contractor is not free to do whatever it pleases and get away with it; on the contrary,
it will have to follow the government line if it wants to stay in the enterprise. Ineluctably then, RA 7942 and DAO 96-
40 vest in the government more than a sufficient degree of control and supervision over the conduct of mining operations.

Fourth Substantive Issue: The Proper Interpretation of the Constitutional Phrase "Agreements Involving Either Technical
or Financial Assistance

In interpreting the first and fourth paragraphs of Section 2, Article XII of the Constitution, petitioners set forth the argument that
foreign corporations are barred from making decisions on the conduct of operations and the management of the mining project. The first
paragraph of Section 2, Article XII reads:

. . . The exploration, development, and utilization of natural resources shall be under the full control and
supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture,
or production sharing agreements with Filipino citizens, or corporations or associations at least sixty percentum of whose
capital is owned by such citizens. Such agreements may be for a period not exceeding twenty five years, renewable for
not more than twenty five years, and under such terms and conditions as may be provided by law . . . .

The fourth paragraph of Section 2, Article XII provides:

The President may enter into agreements with foreign-owned corporations involving either technical or
financial assistance for large scale exploration, development, and utilization of minerals, petroleum, and other mineral
oils according to the general terms and conditions provided by law, based on real contributions to the economic growth
and general welfare of the country . . . .

Petitioners maintain that the first paragraph bars aliens and foreign-owned corporations from entering into any direct arrangement
with the government including those which involve co-production, joint venture or production sharing agreements. They likewise insist that the
fourth paragraph allows foreign-owned corporations to participate in the large-scale exploration, development and utilization of natural
resources, but such participation, however, is merely limited to an agreement for either financial or technical assistance only.

Again, this issue has already been succinctly passed upon by this Court in La Bugal-B'Laan Tribal Association, Inc. v.
Ramos. 55 In discrediting such argument, the Court ratiocinated:

Petitioners claim that the phrase "agreements . . . involving either technical or financial assistance" simply
means technical assistance or financial assistance agreements, nothing more and nothing else. They insist that there is
no ambiguity in the phrase, and that a plain reading of paragraph 4 quoted above leads to the inescapable conclusion
that what a foreign-owned corporation may enter into with the government is merely an agreement
for either financial or technical assistance only, for the large-scale exploration, development and utilization of minerals,
petroleum and other mineral oils; such a limitation, they argue, excludes foreign management and operation of a mining
enterprise.

This restrictive interpretation, petitioners believe, is in line with the general policy enunciated by
the Constitution reserving to Filipino citizens and corporations the use and enjoyment of the country's natural resources.
 They maintain that this Court's Decision of January 27, 2004 correctly declared the WMCP FTAA, along with pertinent
provisions of RA 7942, void for allowing a foreign contractor to have direct and exclusive management of a mining
enterprise. Allowing such a privilege not only runs counter to the "full control and supervision" that the State is
constitutionally mandated to exercise over the exploration, development and utilization of the country's natural resources;
doing so also vests in the foreign company "beneficial ownership" of our mineral resources. It will be recalled that the
Decision of January 27, 2004 zeroed in on "management or other forms of assistance" or other activities associated with
the "service contracts" of the martial law regime, since "the management or operation of mining activities by foreign
contractors, which is the primary feature of service contracts, was precisely the evil that the drafters of the 1987
Constitution sought to eradicate."

xxx xxx xxx

We do not see how applying a strictly literal or verba legis interpretation of paragraph 4 could inexorably lead
to the conclusions arrived at in the ponencia. First, the drafters' choice of words — their use of the phrase agreements .
. . involving either technical or financial assistance — does not indicate the intent to exclude other modes of assistance.
The drafters opted to use involving when they could have simply said agreements for financial or technical
assistance, if that was their intention to begin with. In this case, the limitation would be very clear and no further debate
would ensue. cCTAIE

In contrast, the use of the word "involving" signifies the possibility of the inclusion of other forms of
assistance or activities having to do with, otherwise related to or compatible with financial or technical assistance. The
word "involving" as used in this context has three connotations that can be differentiated thus: one, the sense of
"concerning," "having to do with," or "affecting"; two, "entailing," "requiring," "implying" or "necessitating"; and three,
"including," "containing" or "comprising."

Plainly, none of the three connotations convey a sense of exclusivity. Moreover, the word "involving," when
understood in the sense of "including," as in including technical or financial assistance, necessarily implies that there
are activities other than those that are being included. In other words, if an agreement includes technical or financial
assistance, there is apart from such assistance — something else already in, and covered or may be covered by, the
said agreement.

In short, it allows for the possibility that matters, other than those explicitly mentioned, could be made part of
the agreement. Thus, we are now led to the conclusion that the use of the word "involving" implies that these agreements
with foreign corporations are not limited to mere financial or technical assistance. The difference in sense becomes very
apparent when we juxtapose "agreements for technical or financial assistance" against "agreements including technical
or financial assistance." This much is unalterably clear in a verba legis approach.

Second, if the real intention of the drafters was to confine foreign corporations to financial or technical
assistance and nothing more, their language would have certainly been so unmistakably restrictive and stringent as to
leave no doubt in anyone's mind about their true intent. For example, they would have used the sentence foreign
corporations are absolutely prohibited from involvement in the management or operation of mining or similar ventures or
words of similar import. A search for such stringent wording yields negative results. Thus, we come to the inevitable
conclusion that there was a conscious and deliberate decision to avoid the use of restrictive wording that
bespeaks an intent not to use the expression "agreements . . . involving either technical or financial assistance"
in an exclusionary and limiting manner.

Fifth Substantive Issue: Service Contracts Not Deconstitutionalized

Lastly, petitioners stress that the service contract regime under the 1973 Constitution is expressly prohibited under the 1987
Constitution as the term service contracts found in the former was deleted in the latter to avoid the circumvention of constitutional prohibitions
that were prevalent in the 1987 Constitution. According to them, the framers of the 1987 Constitution only intended for foreign-owned
corporations to provide either technical assistance or financial assistance. Upon perusal of the CAMC FTAA, petitioners are of the opinion
that the same is a replica of the service contract agreements that the present constitution allegedly prohibit.

Again, this contention is not well-taken. The mere fact that the term service contracts found in the 1973 Constitution was not
carried over to the present constitution, sans any categorical statement banning service contracts in mining activities, does not mean that
service contracts as understood in the 1973 Constitution was eradicated in the 1987 Constitution. 56 The 1987 Constitution allows the
continued use of service contracts with foreign corporations as contractors who would invest in and operate and manage extractive
enterprises, subject to the full control and supervision of the State; this time, however, safety measures were put in place to prevent abuses
of the past regime. 57 We ruled, thus:

To our mind, however, such intent cannot be definitively and conclusively established from the mere failure
to carry the same expression or term over to the new Constitution, absent a more specific, explicit and unequivocal
statement to that effect. What petitioners seek (a complete ban on foreign participation in the management of mining
operations, as previously allowed by the earlier Constitutions) is nothing short of bringing about a momentous sea change
in the economic and developmental policies; and the fundamentally capitalist, free-enterprise philosophy of our
government. We cannot imagine such a radical shift being undertaken by our government, to the great prejudice of the
mining sector in particular and our economy in general, merely on the basis of the omission of the terms service
contract from or the failure to carry them over to the new Constitution. There has to be a much more definite and even
unarguable basis for such a drastic reversal of policies.

xxx xxx xxx

The foregoing are mere fragments of the framers' lengthy discussions of the provision dealing
with agreements . . . involving either technical or financial assistance, which ultimately became paragraph 4 of Section 2
of Article XII of the Constitution. Beyond any doubt, the members of the ConCom were actually debating about the martial-
law-era service contracts for which they were crafting appropriate safeguards. HAaECD

In the voting that led to the approval of Article XII by the ConCom, the explanations given by Commissioners
Gascon, Garcia and Tadeo indicated that they had voted to reject this provision on account of their objections to the
"constitutionalization" of the "service contract" concept.

Mr. Gascon said, "I felt that if we would constitutionalize any provision on service contracts, this should
always be with the concurrence of Congress and not guided only by a general law to be promulgated by Congress." Mr.
Garcia explained, "Service contracts are given constitutional legitimization in Sec. 3, even when they have been proven
to be inimical to the interests of the nation, providing, as they do, the legal loophole for the exploitation of our natural
resources for the benefit of foreign interests." Likewise, Mr. Tadeo cited inter alia the fact that service contracts continued
to subsist, enabling foreign interests to benefit from our natural resources. It was hardly likely that these gentlemen
 would have objected so strenuously, had the provision called for mere technical or financial assistance and
nothing more.

The deliberations of the ConCom and some commissioners' explanation of their votes leave no room for doubt
that the service contract concept precisely underpinned the commissioners' understanding of the "agreements involving
either technical or financial assistance."

xxx xxx xxx

From the foregoing, we are impelled to conclude that the phrase agreements involving either technical or financial
assistance, referred to in paragraph 4, are in fact service contracts. But unlike those of the 1973 variety, the new ones
are between foreign corporations acting as contractors on the one hand; and on the other, the government as principal
or "owner" of the works. In the new service contracts, the foreign contractors provide capital, technology and technical
know-how, and managerial expertise in the creation and operation of large-scale mining/extractive enterprises; and the
government, through its agencies (DENR, MGB), actively exercises control and supervision over the entire operation.

xxx xxx xxx

It is therefore reasonable and unavoidable to make the following conclusion, based on the above arguments.
As written by the framers and ratified and adopted by the people, the Constitution allows the continued use of service
contracts with foreign corporations — as contractors who would invest in and operate and manage extractive enterprises,
subject to the full control and supervision of the State — sans the abuses of the past regime. The purpose is clear: to
develop and utilize our mineral, petroleum and other resources on a large scale for the immediate and tangible benefit of
the Filipino people. 58

WHEREFORE, the instant petition for prohibition and mandamus is hereby DISMISSED. Section 76 of Republic Act No. 7942 and
Section 107 of DAO 96-40; Republic Act No. 7942 and its Implementing Rules and Regulations contained in DAO 96-40 — insofar as they
relate to financial and technical assistance agreements referred to in paragraph 4 of Section 2 of Article XII of the Constitution are NOT
UNCONSTITUTIONAL. DcTAIH

SO ORDERED.

Panganiban, C.J., Ynares-Santiago, Austria-Martinez and Callejo, Sr., JJ., concur.

||| (Didipio Earth-Savers' Multi-Purpose Association, Inc. v. Gozun, G.R. No. 157882, [March 30, 2006], 520 PHIL 457-502)

THIRD DIVISION

[G.R. No. 183297. December 23, 2009.]

NATIONAL POWER CORPORATION, petitioner, vs. OMAR G. MARUHOM, ELIAS G. MARUHOM, BUCAY G.
MARUHOM, MAMOD G. MARUHOM, FAROUK G. MARUHOM, HIDJARA G. MARUHOM, ROCANIA G. MARUHOM,
POTRISAM G. MARUHOM, LUMBA G. MARUHOM, SINAB G. MARUHOM, ACMAD G. MARUHOM, SOLAYMAN G.
MARUHOM, MOHAMAD M. IBRAHIM, CAIRORONESA M. IBRAHIM, and LUCMAN IBRAHIM, represented by his
heirs ADORA B. IBRAHIM, NASSER B. IBRAHIM, JAMALODIN B. IBRAHIM, RAJID NABBEL B. IBRAHIM, AMEER
B. IBRAHIM and SARAH AIZAH B. IBRAHIM, * respondents.

DECISION

NACHURA, J p:

Petitioner National Power Corporation (NPC) filed this Petition for Review on Certiorari, seeking to nullify the May 30, 2008
Decision 1 of the Court of Appeals (CA) in CA-G.R. SP No. 02065-MIN, affirming the Order dated November 13, 2007 issued by Hon. Amer
R. Ibrahim, which granted respondents' motion for issuance of a writ of execution.

The antecedents.

Lucman G. Ibrahim and his co-heirs Omar G. Maruhom, Elias G. Maruhom, Bucay G. Maruhom, Mamod G. Maruhom, Farouk G.
Maruhom, Hidjara G. Maruhom, Rocania G. Maruhom, Potrisam G. Maruhom, Lumba G. Maruhom, Sinab G. Maruhom, Acmad G. Maruhom,
Solayman G. Maruhom, Mohamad M. Ibrahim and Cairoronesa M. Ibrahim (respondents) are owners of a 70,000-square meter lot in Saduc,
Marawi City. Sometime in 1978, NPC, without respondents' knowledge and consent, took possession of the subterranean area of the land
and constructed therein underground tunnels. The tunnels were used by NPC in siphoning the water of Lake Lanao and in the operation of
NPC's Agus II, III, IV, V, VI, and VII projects located in Saguiran, Lanao del Sur; Nangca and Balo-i in Lanao del Norte; and Ditucalan and
Fuentes in Iligan City. Respondents only discovered the existence of the tunnels sometime in July 1992. Thus, on October 7, 1992,
respondents demanded that NPC pay damages and vacate the subterranean portion of the land, but the demand was not heeded.

Hence, on November 23, 1994, respondents instituted an action for recovery of possession of land and damages against NPC
with the Regional Trial Court (RTC) of Lanao del Sur, docketed as Civil Case No. 1298-94.

After trial, the RTC rendered a decision, 2 the decretal portion of which reads: SEHaTC

WHEREFORE, judgment is hereby rendered:

1. Denying [respondents'] prayer for [NPC] to dismantle the underground tunnels constructed beneath the
lands of [respondents] in Lots 1, 2, and 3 of Survey Plan FP (VII-5) 2278;
 2. Ordering [NPC] to pay to [respondents] the fair market value of said 70,000 square meters of land covering
Lots 1, 2, and 3 as described in Survey Plan FP (VII-5) 2278 less the area of 21,995 square meters at P1,000.00 per
square meter or a total of P48,005,000.00 for the remaining unpaid portion of 48,005 square meters; with 6% interest per
annum from the filing of this case until paid;

3. Ordering [NPC] to pay [respondents] a reasonable monthly rental of P0.68 per square meter of the total
area of 48,005 square meters effective from its occupancy of the foregoing area in 1978 or a total of P7,050,974.40.

4. Ordering [NPC] to pay [respondents] the sum of P200,000.00 as moral damages; and

5. Ordering [NPC] to pay the further sum of P200,000.00 as attorney's fees and the costs.

SO ORDERED. 3

Respondents then filed an Urgent Motion for Execution of Judgment Pending Appeal. On the other hand, NPC filed a Notice of
Appeal. Thereafter, it filed a vigorous opposition to the motion for execution of judgment pending appeal with a motion for reconsideration of
the RTC decision.

On August 26, 1996, NPC withdrew its Notice of Appeal to give way to the hearing of its motion for reconsideration. On August
28, 1996, the RTC issued an Order granting execution pending appeal and denying NPC's motion for reconsideration. The Decision of the
RTC was executed pending appeal and the funds of NPC were garnished by respondents.

On October 4, 1996, Lucman Ibrahim and respondents Omar G. Maruhom, Elias G. Maruhom, Bucay G. Maruhom, Mamod G.
Maruhom, Farouk G. Maruhom, Hidjara G. Maruhom, Potrisam G. Maruhom and Lumba G. Maruhom filed a Petition for Relief from
Judgment, 4 asserting as follows:

1. They did not file a motion to reconsider or appeal the decision within the reglementary period of fifteen (15)
days from receipt of judgment because they believed in good faith that the decision was for damages and rentals and
attorney's fees only as prayed for in the complaint;

2. It was only on August 26, 1996 that they learned that the amounts awarded to the respondents represented
not only rentals, damages and attorney's fees but the greatest portion of which was payment of just compensation which,
in effect, would make the petitioner NPC the owner of the parcels of land involved in the case; CDScaT

3. When they learned of the nature of the judgment, the period of appeal had already expired;

4. They were prevented by fraud, mistake, accident, or excusable negligence from taking legal steps to protect
and preserve their rights over their parcels of land insofar as the part of the decision decreeing just compensation for
respondents' properties;

5. They would never have agreed to the alienation of their property in favor of anybody, considering the fact
that the parcels of land involved in this case were among the valuable properties they inherited from their dear father and
they would rather see their land crumble to dust than sell it to anybody. 5

After due proceedings, the RTC granted the petition and rendered a modified judgment dated September 8, 1997, thus:

WHEREFORE, a modified judgment is hereby rendered:

1. Reducing the judgment award of [respondents] for the fair market value of P48,005,000.00 by
[P]9,526,000.00 or for a difference [of] P38,479,000.00 and by the further sum of P33,603,500.00
subject of the execution pending appeal leaving a difference of [P]4,878,500.00 which may be the
subject of execution upon the finality of this modified judgment with 6% interest per annum from
the filing of the case until paid.

2. Awarding the sum of P1,476,911.00 to herein [respondents] Omar G. Maruhom, Elias G. Maruhom, Bucay
G. Maruhom, Mahmod G. Maruhom, Farouk G. Maruhom, Hidjara G. Maruhom, Portrisam G.
Maruhom and Lumba G. Maruhom as reasonable rental deductible from the awarded sum of
P7,050,974.40 pertaining to [respondents].

3. Ordering [NPC] embodied in the August 7, 1996 decision to pay [respondents] the sum of P200,000.00 as
moral damages; and further sum of P200,000.00 as attorney's fees and costs.

SO ORDERED. 6

Lucman Ibrahim and NPC then filed their separate appeals with the CA, docketed as CA-G.R. CV No. 57792. On June 8, 2005,
the CA rendered a Decision, 7 setting aside the modified judgment and reinstating the original Decision, amending it further by deleting the
award of moral damages and reducing the amount of rentals and attorney's fees, thus:

WHEREFORE, premises considered, herein Appeals are hereby partially GRANTED, the Modified Judgment
is ordered SET ASIDE and rendered of no force and effect and the original Decision of the court a quo dated 7 August
1996 is hereby RESTORED with the MODIFICATION that the award of moral damages is DELETED and the amounts
of rentals and attorney's fees are REDUCED to P6,887,757.40 and P50,000.00, respectively. CETDHA

In this connection, the Clerk of Court of RTC Lanao del Sur is hereby directed to reassess and determine the
additional filing fee that should be paid by Plaintiff-Appellant IBRAHIM taking into consideration the total amount of
damages sought in the complaint vis-Ã -vis the actual amount of damages awarded by this Court. Such additional filing
fee shall constitute as a lien on the judgment.

SO ORDERED 8

The above decision was affirmed by this Court on June 29, 2007 in G.R. No. 168732, viz.:
WHEREFORE, the petition is DENIED and the Decision of the Court of Appeals in C.A.-G.R. CV No. 57792
dated June 8, 2005 is AFFIRMED.

No costs.

SO ORDERED. 9
NPC moved for reconsideration of the Decision, but this Court denied it on August 29, 2007.

To satisfy the judgment, respondents filed with the RTC a motion for execution of its August 7, 1996 decision, as modified by the
CA. On November 13, 2007, the RTC granted the motion, and issued the corresponding writ of execution. Subsequently, a notice of
garnishment was issued upon NPC's depositary bank.

NPC then filed a Petition for Certiorari (with Urgent Prayer for the Immediate Issuance of a Temporary Restraining Order and/or
Writ of Preliminary Injunction) with the CA, docketed as CA-G.R. SP No. 02065-MIN. It argued that the RTC gravely abused its discretion
when it granted the motion for execution without ordering respondents to transfer their title in favor of NPC. By allowing the payment of just
compensation for a parcel of land without the concomitant right of NPC to get title thereto, the RTC clearly varied the terms of the judgment
in G.R. No. 168732, justifying the issuance of a writ of certiorari. NPC also prayed for the issuance of a temporary restraining order (TRO) to
enjoin the implementation of the writ of execution and notice of garnishment. On November 29, 2007, the CA granted NPC's prayer and
issued a TRO, enjoining the implementation of the writ of execution and the notice of garnishment.

On May 30, 2008, the CA rendered the now assailed Decision, 10 dismissing NPC's petition for certiorari. Rejecting NPC's
argument, the CA declared that this Court's Decision in G.R. No. 168732 intended NPC to pay the full value of the property as compensation
without ordering the transfer of respondents' title to the land. According to the CA, in a plethora of cases involving lands traversed by NPC's
transmission lines, it had been consistently ruled that an easement is compensable by the full value of the property despite the fact that NPC
was only after a right-of-way easement, if by such easement it perpetually or indefinitely deprives the land owner of his proprietary rights by
imposing restrictions on the use of the property. The CA, therefore, ordered NPC to pay its admitted obligation to respondents amounting to
P36,219,887.20. 11 TEAICc

NPC is now before us faulting the CA for dismissing the former's petition for certiorari. It also prayed for a TRO to enjoin
respondents and all persons acting under their authority from implementing the May 30, 2008 Decision of the CA. In its July 9, 2008
Resolution, 12 this Court granted NPC's prayer, and issued a TRO enjoining the execution of the assailed CA Decision.

In the main, NPC insists that the payment of just compensation for the land carries with it the correlative right to obtain title or
ownership of the land taken. It stresses that this Court's Decision in G.R. No. 168732 is replete with pronouncements that the just
compensation awarded to respondents corresponds to compensation for the entire land and not just for an easement or a burden on the
property, thereby necessitating a transfer of title and ownership to NPC upon satisfaction of judgment. NPC added that by granting
respondents' motion for execution, and consequently issuing the writ of execution and notice of garnishment, the RTC and the CA allowed
respondents to retain title to the property even after the payment of full compensation. This, according to NPC, was a clear case of unjust
enrichment.

The petition lacks merit.

It is a fundamental legal axiom that a writ of execution must conform strictly to the dispositive portion of the decision sought to be
executed. A writ of execution may not vary from, or go beyond, the terms of the judgment it seeks to enforce. When a writ of execution does
not conform strictly to a decision's dispositive portion, it is null and void. 13

Admittedly, the tenor of the dispositive portion of the August 7, 1996 RTC decision, as modified by the CA and affirmed by this
Court, did not order the transfer of ownership upon payment of the adjudged compensation. Neither did such condition appear in the text of
the RTC decision, and of this Court's Decision in G.R. No. 168732.

As aptly pointed out by the CA in its assailed Decision:

[NPC], by its selective quotations from the Decision in G.R. No. 168732, would have Us suppose that the
High Court, in decreeing that [NPC] pay the full value of the property as just compensation, implied that [NPC] was entitled
to the entire land, including the surface area and not just the subterranean portion. No such inference can be drawn from
[the] reading of the entirety of the High Court's Decision. On the contrary, a perusal of the subject Decision yields to this
Court the unmistakable sense that the High Court intended [NPC] to pay the full value of the subject property as just
compensation without ordering the transfer o[f] respondents' title to the land. This is patent from the following language
of the High Court as quoted by [NPC] itself:

In disregarding this procedure and failing to recognize respondents' ownership of the sub-terrain
portion, petitioner took a risk and exposed itself to greater liability with the passage of time. It must be
emphasized that the acquisition of the easement is not without expense. The underground tunnels impose
limitations on respondents' use of the property for an indefinite period and deprive them of its ordinary use.
Based upon the foregoing, respondents are clearly entitled to the payment of just
compensation. Notwithstanding the fact that [NPC] only occupies the sub-terrain portion, it is liable to pay not
merely an easement but rather the full compensation for land. This is so because in this case, the nature of
the easement practically deprives the owners of its normal beneficial use. Respondents, as the owners of the
property thus expropriated, are entitled to a just compensation which should be neither more nor less,
whenever it is possible to make the assessment, than the money equivalent of said property. 14 DcCHTa

Clearly, the writ of execution issued by the RTC and affirmed by the CA does not vary, but is, in fact, consistent with the final decision in this
case. The assailed writ is, therefore, valid.

Indeed, expropriation is not limited to the acquisition of real property with a corresponding transfer of title or possession. The right-
of-way easement resulting in a restriction or limitation on property rights over the land traversed by transmission lines also falls within the
ambit of the term expropriation. 15

As we explained in Camarines Norte Electric Cooperative, Inc. v. Court of Appeals: 16

The acquisition of an easement of a right-of-way falls within the purview of the power of eminent domain.
Such conclusion finds support in easements of right-of-way where the Supreme Court sustained the award of just
compensation for private property condemned for public use. The Supreme Court, in Republic v. PLDT thus held that:

"Normally, of course, the power of eminent domain results in the taking or appropriation of title to, and
possession of, the expropriated property; but no cogent reason appears why said power may not be availed of to impose
only a burden upon the owner of condemned property, without loss of title and possession. It is unquestionable that real
property may, through expropriation, be subjected to an easement of right-of-way."

However, a simple right-of-way easement transmits no rights, except the easement. Vines Realty retains full
ownership and it is not totally deprived of the use of the land. It can continue doing what it wants to do with the land,
except those that would result in contact with the wires.

The acquisition of this easement, nevertheless, is not gratis. Considering the nature and effect of the
installation power lines, the limitations on the use of the land for an indefinite period deprives private respondents of its
 ordinary use. For these reasons, Vines Realty is entitled to payment of just compensation, which must be neither more
nor less than the money equivalent of the property. 17

It is, therefore, clear that NPC's acquisition of an easement of right-of-way on the lands of respondents amounted to expropriation of the
portions of the latter's property for which they are entitled to a reasonable and just compensation.
The term just compensation had been defined as the full and fair equivalent of the property taken from its owner by the
expropriator. The measure is not the taker's gain, but the owner's loss. The word just is used to intensify the meaning of the
word compensation and to convey thereby the idea that the equivalent to be rendered for the property to be taken shall be real, substantial,
full, and ample. 18 DTAIaH

In Camarines Norte Electric Cooperative, Inc. v. Court of Appeals 19 and National Power Corporation v. Manubay Agro-Industrial
Development Corporation, 20 this Court sustained the award of just compensation equivalent to the fair and full value of the property even if
petitioners only sought the continuation of the exercise of their right-of-way easement and not the ownership over the land. There is simply
no basis for NPC to claim that the payment of fair market value without the concomitant transfer of title constitutes an unjust enrichment.

In fine, the issuance by the RTC of a writ of execution and the notice of garnishment to satisfy the judgment in favor of respondents
could not be considered grave abuse of discretion. The term grave abuse of discretion, in its juridical sense, connotes capricious, despotic,
oppressive, or whimsical exercise of judgment as is equivalent to lack of jurisdiction. The abuse must be of such degree as to amount to an
evasion of positive duty or a virtual refusal to perform a duty enjoined by law, as where the power is exercised in an arbitrary and capricious
manner by reason of passion and hostility. The word capricious, usually used in tandem with the term arbitrary, conveys the notion of willful
and unreasoning action. Thus, when seeking the corrective hand of certiorari, a clear showing of caprice and arbitrariness in the exercise of
discretion is imperative. 21 In this case, NPC utterly failed to demonstrate caprice or arbitrariness on the part of the RTC in granting
respondents' motion for execution. Accordingly, the CA committed no reversible error in dismissing NPC's petition for certiorari.

It is almost trite to say that execution is the fruit and the end of the suit and is the life of the law. A judgment, if left unexecuted,
would be nothing but an empty victory for the prevailing party. Litigation must end sometime and somewhere. An effective and efficient
administration of justice requires that once a judgment has become final, the winning party be not deprived of the fruits of the verdict. Courts
must, therefore, guard against any scheme calculated to bring about that result. Constituted as they are to put an end to controversies, courts
should frown upon any attempt to prolong them. 22 We, therefore, write finis to this litigation.

WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals in CA-G.R. SP No. 02065-MIN
is AFFIRMED. The temporary restraining order issued by this Court on July 9, 2008 is LIFTED.

SO ORDERED.

Corona, Velasco, Jr., Peralta and Del Castillo, ** JJ., concur.

||| (National Power Corp. v. Maruhom, G.R. No. 183297, [December 23, 2009], 623 PHIL 844-857)

EN BANC

[G.R. No. 4223. August 19, 1908.]

NICOLAS LUNOD, ET AL., plaintiffs-appellees, vs. HIGINO MENESES, defendant-appellant.

T. Icasiano for appellant.

R. Salinas for appellees.

SYLLABUS

1. REALTY; EASEMENT OF NATURAL. DRAINAGE. — Where a statutory easement exists between adjoining estates, the
owner of the lower lands must not construct any work that may impair or obstruct an easement which consists in receiving the waters which
naturally, and without the intervention of man, descend from the more elevated lands, neither shall the owner of the latter construct any
work that may increase the easement. (Arts. 552 and 563 of the Civil Code, and Law of Waters of August 3, 1866.)
2. ID.; RIGHTS OF OWNER SUBJECT TO EXISTING SERVITUDES. — Every owner may enclose his property by means of
walls, dikes, fences, or any other device, but his right is limited by the easement with which his estate is charged.

DECISION

TORRES, J p:

On the 14th of March, 1904, Nicolas Lunod, Juan de la Vega, Evaristo Rodriguez, Fernando Marcelo, Esteban Villena, Benito
Litao, Ventura Hernandez, and Casimiro Pantanilla, residents of the town of Bulacan, province of the same name, filed a written complaint
against Eligino Meneses, alleging that they each owned and possessed farm lands situated in the places known as Maytunas and Balot,
near a small lake named Calalaran; that the defendant is the owner of a fish-pond and a strip of land situated in Paraanan, adjoining the
said lake on one side, and the River Taliptip on the other that from time immemorial, and consequently for more than twenty years before
1901, there existed and still exists in favor of the rice fields of the plaintiffs a statutory easement permitting the flow of water over the said
land in Paraanan, which easement the said plaintiffs enjoyed until the year 1901 and consisted in that the water collected upon their lands
and in the Calalaran Lake could flow through Paraanan into the Taliptip River. From that year however, the defendant, without any right or
reason, converted the land in Paraanan into a fish pond and by means of a dam and a bamboo net, prevented the free passage of the water
through said place into the Taliptip River; that in consequence the lands of the plaintiff became flooded and damaged by the stagnant
waters, there being no outlet except through the land in Paraanan; that their plantations were destroyed, causing them loss and damage to
the extent of about P1,000, which loss and damage will continue if the obstructions to the flow of the water are allowed to remain,
preventing its passage through said land and injuring the rice plantations of the plaintiffs. They therefore asked that judgment be entered
against the defendant, declaring that the said tract of land in Paraanan is subject to a statutory easement permitting the flow of water from
the property of the plaintiffs, and that, without prejudice to the issuing of a preliminary injunction, the defendant be ordered to remove and
destroy the obstructions that impede the passage of the waters through Paraanan, and that in future, and for ever, he abstain from closing
in any manner the aforesaid tract of land; that, upon judgment being entered, the said injunction be declared to be final and that the
defendant be sentenced to pay to the plaintiffs an indemnity of P1,000, and the costs in the proceedings; that they be granted any other and
further equitable or proper remedy in accordance with the facts alleged and proven.
In view of the demurrer interposed by the plaintiffs to the answer of the defendant, the latter, on the 29th of August, 1904, filed
an amended answer, denying each and every one of the allegations of the complaint, and alleged that no statutory easement existed nor
could exist in favor of the lands described in the complaint, permitting the waters to flow over the fish pond that he, together with his
brothers, owned in the sitio of Bambang, the area and boundaries of which were stated by him, and which he and his brothers had inherited
from their deceased mother, Apolinaria de Leon; that the same had been surveyed by a land surveyor in September, 1881; he also denied
that he had occupied or converted any land in the barrio of Bambang into a fish pond; therefore, he asked the court to enter judgment in his
favor, and to sentence the plaintiffs to pay the costs and corresponding damages.
Upon the evidence adduced by both parties to the suit, the court, on the 13th of March, 1907, entered judgment declaring that
the plaintiffs were entitled to a decision in their favor, and sentenced the defendant to remove the dam placed to the east of the Paraanan
passage on the side of the Taliptip River opposite the old dam in the barrio of Bambang, as well as to remove and destroy the obstacles to
the free passage of the waters through the strip of land in Paraanan; to abstain in future, and forever, from obstructing or closing in any
manner the course of the waters through the said strip of land. The request that the defendant be sentenced to pay an indemnity was
denied, and no ruling was made as to costs.
The defendant excepted to the above judgment and furthermore asked for a new trial which was denied and also excepted to,
and, upon approval of the bill of exceptions, the question was submitted to this court.
Notwithstanding the defendant's denial in his amended answer, it appears to have been clearly proven in this case that the
lands owned by the plaintiffs in the aforesaid barrio, as well as the small adjoining lake, named Calalaran, are located in places relatively
higher than the sitio called Paraanan where the land and fish pond of the defendant are situated, and which border on the Taliptip River;
that during the rainy season the rain water which falls on the land of the plaintiffs, and which flows toward the small Calalaran Lake at flood
time, has no outlet to the Taliptip River other than through the low land of Paraanan; that on the border line between Calalaran and
Paraanan there has existed from time immemorial a dam, constructed by the community for the purpose of preventing the salt waters from
the Taliptip River, at high tide, from flooding the land in Calalaran, passing through the lowlands of Paraanan: but, when rainfall was
abundant, one of the residents was designated in his turn by the lieutenant or justice of the barrio to open the sluice gate in order to let out
the water that flooded the rice fields, through the land of Paraanan to the above-mentioned river; that since 1901, the defendant constructed
another dam along the boundary of his fish pond in Paraanan, thereby impeding the outlet of the waters that flood the fields at Calalaran, to
the serious detriment of the growing crops.
According to article 530 of the Civil Code, an easement is a charge imposed upon one estate for the benefit of another estate
belonging to a different owner, and the realty in favor of which the easement is established is called the dominant estate, and the one
charged with it the servient estate.
The lands of Paraanan being the lower are subject to the easement of receiving and giving passage to the waters proceeding
from the higher lands and the lake of Calalaran; this easement was not constituted by agreement between the interested parties; it is of a
statutory nature, and the law has imposed it for the common public utility in view of the difference in the altitude of the lands in the barrio of
Bambang.
Article 552 of the Civil Code provides:
"Lower estates must receive the waters which naturally and without the intervention of man descend from
the higher estates, as well as the stone or earth which they carry with them.
"Neither may the owner of the lower estate construct works preventing this easement, nor the one of the
higher estate works increasing the burden."
Article 563 of the said code reads also:
"The establishment, extent, form, and conditions of the easements of waters to which this section refers
shall be governed by the special law relating thereto in everything not provided for in this code."
The special law cited is the Law of Waters of August 3, 1866, article 111 of which, treating of natural easements relating to
waters, provides:
"Lands situated at a lower level are subject to receive the waters that flow naturally, without the work of
man, from the higher lands together with the stone or earth which they carry with them."
Hence, the owner of the lower lands can not erect works that will impede or prevent such an easement or charge, constituted
and imposed by the law upon his estate for the benefit of the higher lands belonging to different owners; neither can the latter do anything to
increase or extend the easement.
According to the provisions of law above referred to, the defendant, Meneses, had no right to construct the works, nor the dam
which blocks the passage, through his lands and the outlet to the Taliptip River, of the waters which flood the higher lands of the plaintiffs;
and having done so, to the detriment of the easement charged on his estate, he has violated the law which protects and guarantees the
respective rights and regulates the duties of the owners of the fields in Calalaran and Paraanan.
It is true that article 388 of said code authorizes every owner to enclose his estate by means of walls, ditches, fences or any
other device, but his right is limited by the easement imposed upon his estate.
The defendant Meneses might have constructed the works necessary to make and maintain a fish pond within his own land, but
he was always under the strict and necessary obligation to respect the statutory easement of waters charged upon his property, and had no
right to close the passage and outlet of the waters flowing from the lands of the plaintiffs and the lake of Calalaran into the Taliptip River. He
could not lawfully injure the owners of the dominant estates by obstructing the outlet to the Taliptip River of the waters flooding the upper
lands belonging to the plaintiffs.
 It is perhaps useful and advantageous to the plaintiffs and other owners of high lands in Calalaran, in addition to the old dike
between the lake of said place and the low lands in Paraanan, to have another made by the defendant at the border of Paraanan adjoining
the said river, for the purpose of preventing the salt waters of the Taliptip River flooding, at high tide, not only the lowlands in Paraanan but
also the higher ones of Calalaran and its lake, since the plaintiffs can not prevent the defendant from protecting his lands against the influx
of salt water; but the defendant could never be permitted to obstruct the flow of the waters through his lands to the Taliptip River during the
heavy rains, when the high lands in Calalaran and the lake in said place are flooded, thereby impairing the right of the owners of the
dominant estates.
For the above reasons, and accepting the findings of the court below in the judgment appealed from in so far as they agree with
the terms of this decision, we must and do hereby declare that the defendant, Higino Meneses, as owner of the servient estate, is obliged to
give passage to and allow the flow of the waters descending from the Calalaran Lake and from the land of the plaintiffs through his lands in
Paraanan for their discharge into the Taliptip River; and he is hereby ordered to remove any obstacle that may obstruct the free passage of
the waters whenever there may be either a small or large volume of running water through his lands in the sitio of Paraanan for their
discharge into the Taliptip River; and in future to abstain from impeding, in any manner, the flow of the waters coming from the higher lands.
The judgment appealed from is affirmed, in so far as it agrees with this decision, and reversed in other respects, with the costs of this
instance against the appellant. So ordered.
Carson, Willard and Tracey, JJ., concur.
||| (Lunod v. Meneses, G.R. No. 4223, [August 19, 1908], 11 PHIL 128-133)

SECOND DIVISION

[G.R. No. 163118. April 27, 2007.]

DORIS CHIONGBIAN-OLIVA, petitioner, vs. REPUBLIC OF THE PHILIPPINES, THE DEPARTMENT OF

ENVIRONMENT AND NATURAL RESOURCES AND THE REGISTER OF DEEDS OF CEBU CITY, respondents.

DECISION

QUISUMBING, J p:

This petition for certiorari assails (1) the Decision 1 dated August 7, 2003 of the Court of Appeals in CA-G.R. CV. No. 74409, reversing
the Decision 2 dated December 13, 2001 of the Regional Trial Court of Cebu City, Branch 12 in SP. Proc. No. 10746-CEB, and (2) the
Resolution 3 dated March 17, 2004, denying the motion for reconsideration.

The following facts are undisputed.

Petitioner Doris Chiongbian-Oliva is the registered owner of a parcel of land in Talamban, Cebu City, as evidenced by Transfer Certificate
of Title (TCT) No. 5455. 4 This title originated from Original Certificate of Title (OCT) No. 1066 from a free patent granted on September 11, 1969
under Commonwealth Act No. 141, 5 as amended. The free patent, OCT No. 1066, and TCT No. 5455 contained the condition that a forty-meter
legal easement from the bank of any river or stream shall be preserved as permanent timberland. 6

On October 1, 2001, petitioner filed a petition for reduction of legal easement docketed as SP. Proc. No. 10746-CEB before the Regional
Trial Court of Cebu City, Branch 12. Petitioner alleged that the property is residential as shown by the tax declaration 7 and the Certification 8 of
the Office of the City Assessor. Thus, the applicable legal easement is only three meters pursuant to Department of Environment and Natural
Resources (DENR) Administrative Order No. 99-21, 9 and not forty meters, which applies to timberlands and forest lands. Petitioner also alleged
that enforcing the forty-meter legal easement would virtually deprive her of the use and enjoyment of the property since it consists only of 1,000
square meters.

The DENR countered that the property is inalienable. It also claimed that the applicant agreed on the forty-meter legal easement when
the free patent was applied for.

The trial court ruled in favor of petitioner. It said that there is no longer any reason for the forty-meter legal easement because the
property had been transformed into residential land and the area where it is located has been reclassified as urban. Applying DENR A.O. No. 99-
21, the applicable legal easement is only three meters. The decision's decretal portion states:

WHEREFORE, premises considered, it is hereby ordered that the legal encumbrance of forty (40) meters for
river bank protection annotated on Petitioner's Transfer Certificate of Title No. 5455 be reduced to the applicable legal
easement of three (3) meters in accordance with law.

Accordingly, the Register of Deeds of Cebu City is hereby directed to cancel the above legal encumbrance of
forty (40) meters annotated on Petitioner's Transfer Certificate of Title No. 5455 and in lieu thereof, annotate the
applicable legal encumbrance of three (3) meters for river bank protection.

SO ORDERED. 10

On appeal, the Court of Appeals reversed the trial court's decision. It upheld the DENR's claim that the property was inalienable.
Accordingly, a positive act of the government was necessary to declassify it from forest land to alienable land. Declaration of the property as
residential in the tax declaration and reclassification of the area where it is located as urban were insufficient bases to reclassify the property.
The fallo of the appellate court's decision reads:

WHEREFORE, premises considered, the Decision dated December 13, 2001, of the Regional Trial Court,
7th Judicial Region, Branch 12, Cebu City, in SP. PROC. NO. 10746-CEB, is hereby REVERSED and SET ASIDE. No
pronouncement as to costs.

SO ORDERED. 11
 The appellate court later denied petitioner's motion for reconsideration.

Petitioner now raises the following issues:

I.

WHETHER OR NOT PETITIONER'S LOT COVERED BY THE LEGAL ENCUMBRANCE IS A PUBLIC LAND/LAND OF
THE PUBLIC DOMAIN (AND THUS, CANNOT BE RECLASSIFIED EXCEPT BY THE EXECUTIVE DEPARTMENT) OF
THE GOVERNMENT, OR A PRIVATE LAND.

II.

WHETHER OR NOT THE TRIAL COURT IS CORRECT IN TAKING JUDICIAL NOTICE OF THE FACT THAT
PETITIONER'S LOT COVERED BY TCT NO. 5455 IS SITUATED IN AN URBAN AREA AND NOT IN A FOREST AREA,
AND IN THUS CONCLUDING THAT THE LEGAL EASEMENT APPLICABLE FOR RIVER BANK PROTECTION IS
THREE (3) METERS AND NOT FORTY (40) METERS.

III.

WHETHER OR NOT SECTION 90(i) OF C.A. NO. 141 WHICH PROVIDES FOR A UNIFORM EASEMENT OF FORTY
(40) METERS FROM THE BANK ON EACH SIDE OF ANY RIVER, AND WHICH PRESERVES THE SAID 40-METER
PORTION AS PERMANENT TIMBERLAND REGARDLESS OF WHETHER IT IS SITUATED IN A FOREST AREA OR
AN URBAN AREA, IS STILL APPLICABLE TO LOTS SITUATED IN AN URBAN AREA IN THE LIGHT OF THE
PROVISIONS OF SUBSEQUENT LEGISLATION, SPECIFICALLY SECTION 51 OF P.D. NO. 1067. 12

Simply stated, the issues are: (1) Is the property public or private land? and (2) Is the applicable legal easement forty or three meters?

On the first issue, C.A. No. 141, as amended, provides that lands of the public domain may be classified by the President, upon the
recommendation of the Secretary of Environment and Natural Resources, into: (1) alienable or disposable; (2) timber; and (3) mineral
lands. 13 However, only alienable or disposable lands may be disposed of through any of the forms of concession enumerated in the law. 14 A free
patent is one of such concessions 15 and once it is registered and the corresponding certificate of title issued, the land covered by them ceases to
be part of the public domain and becomes private property. 16

Verily, by the issuance of a free patent on September 11, 1969, and the subsequent issuance of OCT No. 1066 and TCT No. 5455, the
property in this case had become private land. It is inconsistent for an alienable land of the public domain to be covered by a free patent and at the
same time retain its character as public land.

On the second issue, Section 90 (i) of C.A. No. 141 requires that a forty-meter legal easement from the bank of any river or stream shall
be preserved as permanent timberland. More specifically, it provides:

(i) That the applicant agrees that a strip forty meters wide starting from the bank on each side of any river
or stream that may be found on the land applied for, shall be demarcated and preserved as permanent timberland to
be planted exclusively to trees of known economic value, and that he shall not make any clearing thereon or utilize the
same for ordinary farming purposes even after patent shall have been issued to him or a contract of lease shall have
been executed in his favor. (Emphasis supplied.)

To implement this, the DENR promulgated A.O. No. 99-21 which provides the guidelines in the processing, verification, and approval of
isolated and cadastral surveys. Pertinent to this case are the following provisions:

2.1 Original Surveys:

2.1.a Public Lands:

All alienable and disposable (A and D) lands of the public domain shall be surveyed pursuant to
Section 1 Par. (1) of R.A. 1273 [C.A. No. 141, Section 90(i)] whereby a strip of forty (40) meters
wide starting from the banks on each side of any river or stream that may be found on the land
shall be demarcated and preserved as permanent timberland.

Likewise, to be demarcated are public lands along the banks of rivers and streams and the shores
of the seas and lakes throughout their entire length and within a zone of three (3) meters in urban
areas, twenty (20) meters in agricultural areas and forty (40) meters in forest area, along their
margins which are subject to the easement for public use in the interest of recreation, navigation,
floatage, fishing and salvage.

xxx xxx xxx

2.3 Survey of Titled Lands:

2.3.1 Administratively Titled Lands:

The provisions of item 2.1.a and 2.1.b shall be observed as the above. However, when these
lands are to be subdivided, consolidated or consolidated-subdivided, the strip of three (3) meters
which falls within urban areas shall be demarcated and marked on the plan for easement and
bank protection.

The purpose of these strips of land shall be noted in the technical description and
annotated in the title.

xxx xxx xxx

Running in parallel vein is the Water Code of the Philippines 17 which provides:

Art. 51. The banks of rivers and streams and the shores of the seas and lakes throughout their entire length
and within a zone of three (3) meters in urban areas, twenty (20) meters in agricultural areas and forty (40) meters in
forest areas, along their margins, are subject to the easement of public use in the interest of recreation, navigation,
floatage, fishing and salvage. No person shall be allowed to stay in this zone longer than what is necessary for recreation,
navigation, floatage, fishing or salvage or to build structures of any kind.
 Since the property in this case was originally alienable land of the public domain, the application for free patent contained the condition
that a forty-meter legal easement from the banks on each side of any river or stream found on the land shall be demarcated and preserved as
permanent timberland. However, after the property was administratively titled, it underwent several surveys for purposes of subdivision,
consolidation, or consolidation-subdivision as evidenced by TCT No. 5455. This title provides that it is a transfer from TCT Nos. 3975 and
4360 18 and describes the property as Lot 2 of the consolidation-subdivision plan Pcs-07-002121, being a portion of Lot 6 and 7 Pcs-07-
000974. 19 Thus, presently only three meters is required to be demarcated and preserved as permanent timberland.

In this case, the trial court properly took judicial notice that Talamban, Cebu City is an urban area. Judicial notice is the cognizance of
certain facts which judges may properly take and act on without proof because they already know them. 20 A municipal jurisdiction, whether
designated as chartered city or provincial capital, is considered as urban in its entirety if it has a population density of at least 1,000 persons per
square kilometer. 21 The City of Cebu was created on October 20, 1934 under Commonwealth Act No. 58. 22 It is a highly urbanized city classified
as entirely urban. 23 Thus, all its barangays, including Talamban, are considered urban.

Conformably with the foregoing considerations, the reduction of the legal easement of forty meters on petitioner's property covered by
TCT No. 5455 to three meters now is in order.

WHEREFORE, the instant petition is GRANTED. The assailed Decision dated August 7, 2003 and Resolution dated March 17, 2004 of
the Court of Appeals in CA-G.R. CV. No. 74409 are REVERSED, and the Decision dated December 13, 2001 of the Regional Trial Court of Cebu
City, Branch 12 in SP. Proc. No. 10746-CEB is REINSTATED.

SO ORDERED.

Carpio, Carpio-Morales, Tinga and Velasco, Jr., JJ., concur.

||| (Chiongbian-Oliva v. Republic, G.R. No. 163118, [April 27, 2007], 550 PHIL 693-702)

FIRST DIVISION

[G.R. No. L-3144. November 19, 1907.]

CARMEN AYALA DE ROXAS and PEDRO P. ROXAS, plaintiffs, vs. THE CITY OF MANILA and ROBERT G.
DIECK, as city engineer, defendants.

Del-Pan, Ortigas and Fisher, for plaintiffs.

Modesto Reyes, for defendants.

SYLLABUS

1. EASEMENT OVER A ZONE FOR PUBLIC USE. — The easement over a zone for public use authorized by article 73 of the
Law of Waters of 1866 is defined in articles 160 to 164, inclusive, of said law; the general interest on behalf on which the easement is borne
is prescribed, for navigation, by articles 160 and 161; for flotation, by article 162; for salvage, by article 163; and for fishing, by article 164.
Under every one of said articles the owner of the property bordering on the stream has to bear the easement upon prior indemnity thereof.
2. ID.; RIGHT OF OWNER OF THE SERVIENT PROPERTY. — Said zone for public use, the same as a towpath, is solely
available for the purposes of navigation, flotation, fishing, and salvage, being closed to access for any other use. Therefore, it is erroneous
to pretent that the right of the owner of a property bordering on the stream is reduced to the level of a public right, on the contrary, he should
only be called upon to beard those burdens which are in the general interest, but not without prior indemnity.
3. ID.; CANALS. — If the stream in question is a canal, though a navigable one, and held so to be by competent authority, and if
under the name of a public wharf, which is the largest in area, it is desired to establish a towpath, which is the smallest, it must be
remembered that the law does not grant it along navigable canals (art. 157), and at all events the establishment thereof must be preceded
by the corresponding indemnity (arts. 154 and 157).
4. ID.; ESTABLISHMENT OF NEW EASEMENTS. — According to the principles of administrative law regulating proper
jurisdiction in matters of easement, as provided by the Civil Code and by the Law of Waters, new easements upon private property, but
simply to the preservation of old one, when a recent and easily proven usurpation exists. Ayuntamientos had not authority to impose new
easements upon private property; therefore the order issued for such purpose new easements upon private property; therefore the order
issued for such purpose can not be held to have been given in the exercise of lawful authority. (Decisions of January 23 and July 28, 1866.)
5. ID.; REMEDY AGAINST THE UNLAWFUL IMPOSITION OF A SERVITUDE UPON PRIVATE PROPERTY. — If, according to
article 349 of the Civil Code, no one shall be deprived of his property, except by competent authority and with sufficient reasons of public
utility, always after property indemnity, and if this requisite has not been fulfilled, the courts must protect and eventually replace the injured
party in possession; if, under section 5 of the act Congress of July 1, 1902, nor legislation may be enacted in the Philippine Islands which
shall deprive any person of life, liberty, or property without due process of law, matters within the exclusive jurisdiction of the judiciary
according to the sublicense or the enactment of an ordinance, by either of which acts a person is deprived of his property or rights without
prior indemnity, is not due process of law.
6. ID.; MANDAMUS. — When a corporation, board, or person unlawfully excludes another from the use and enjoyment of a right
to which he is entitled, and attempts to suppress, without due process of law, real rights inherent to the right of ownership, the remedy
provided by section 222 of the Code of Procedure in Civil Actions should be applied.

DECISION
ARELLANO, C.J p:

The defendants' demurred to the amended complaint having been overruled, an answer was presented, and the trial of the case
proceeded with.
Briefly, the subject of this action may be stated as follows:
1. That on the 15th of January, 1906, the plaintiff, as owner of the property situated on the Escolta, district of Binondo, city of
Manila, the eastern boundary of which adjoins the canal of San Jacinto or Sibacon to the extent of 23.50 meters, the total area of the
ground being 658.19 square meters, applied to the city engineer, Robert G. Dieck, the defendant herein, for a license to construct a terrace
over "the strip of land 3 meters in width between the main wall of her house and the edge of the said canal of Sibacon or San Jacinto, which
strip of land belongs exclusively to her"; but the defendant refused to grant the license or authorize the plaintiff to build the terrace.
2. That a similar petition was addressed to the Municipal Board of the city of Manila on the 30th of said month and year, and it
also was denied.
3. That, as the plaintiff has been informed, the sole reason wherefore the license was denied is because "the said defendants
pretend to compel the plaintiff to leave vacant and without any construction whatever thereon the said strip of 3 meters in width which is a
portion of the ground belonging to her, in order to use the same as the wharf or public way so that the plaintiff will only be able to use the
said strip in the same manner and for the same purposes as the public in general, thus losing the enjoyment, use, and exclusive possession
of the said strip of the property which the plaintiff and the former owners thereof have enjoyed quietly and peacefully during more than
seventy years."
4. That the strip in question was occupied by a two-storey building constructed more than seventy years ago.
It appears from the evidence:
First. That the plaintiff's ownership of the whole ground and of the strip in question is beyond all doubt, both by reason of her title
thereto and the entry thereof in the registry of property, and by the acknowledgment thereof made by the city itself when obtaining by means
of condemnation proceedings a portion of the same property adjoining the public road.
Second. That as a matter of fact, the license which the plaintiff, using her right of ownership, requested for the construction of a
terrace on the strip of 3 meters adjoining the canal of San Jacinto or Sibacon, was denied; both parties agreeing that the denial was due to
the intent to reserve the said strip for the establishment of a public easement, although the opposing witnesses did not agree as to the
special easement intended to be established.
Third. That it was agreed between both parties that the strip above referred to had not been expropriated in whole or in part by
the municipality of Manila, and that neither had the latter offered any compensation for the same to the owner thereof.
Fourth. That according to Engineer Dieck, a defendant, the purpose of the city was to use the said strip of 3 meters as a place
for discharging and landing goods, and as a place of shelter for shipwrecked persons and for fishermen, and to devote it also, together with
other strips along the canal, by the gradual acquisition of land, to a towpath for craft passing through the canal; that a building line has been
established by the Municipal Board along the Sibacon Creek leaving a strip of 3 meters within which, according to ordinances, no
constructions would be permitted; that such is the purpose and the intent on which the existing ordinances are based. But John Tuther, the
secretary of the Municipal Board, declares that, when Ordinance No. 78 was under discussion, he does not recall having heard any of the
members of the board make reference to a towpath nor did he ever hear anything said with reference to the purpose to which the strip of 3
meters mentioned in Ordinance No. 78 was to be devoted, though he believes that, by thus leaving a strip of 3 meters, it would be easier to
prevent collisions; that it would facilitate navigation, and that it had never been the intention of the Board to indemnify the owners of such
strips of 3 meters by reason of the use which parties landing thereon may make of the same.
Fifth. That, as stated in the brief of the defendants, "the intention of the Municipal Board, when denying the permit asked for by
the plaintiff, has never been to establish any way whatever along the Sibacon Creek so that said plaintiff could, if she chose to, close her
property with walls or the like perpendicularly to said creek, that is, over the two lines perpendicular to said creek, provided she does not
close or build over the 3-meter space running along the creek," which space is subject, as stated in the evidence submitted by the
defendants, to the "easement of public use for the general interest of navigation, flotation, fishing, and salvage," citing the Law of Waters
and the Civil Code.
Sixth. And that the result is, according to No. 19 of the statement of facts of the complaint, "that the plaintiff shall only be able to
use said strip in the same manner and for the same purposes as the general public, thus losing the enjoyment, use, and exclusive
possession of said strip of the ground which the plaintiff and the former owners of the same have enjoyed as such owners quietly and
peacefully during more than seventy years."
What the defendants have therefore done is to prevent the plaintiffs from continuing to enjoy, use, and freely dispose of such
strip of their ground, as they had been doing up to the time when they applied for a license to construct a terrace over said strip, and the
defendants prevented it with the intention of establishing a public easement provided for in an ordinance of their own which they consider is
pursuant to the provisions of the Law of Waters and of the Civil Code in force.
In the decision entered by this court on the 5th of May, 1906, regarding the demurrer, the following was set forth:
"The easement of a zone for public use, authorized by article 73 of the Law of Waters of 1866, is developed
in articles 160 and 161, inclusive, of said law; the general interest on behalf of which the easement is supported is
determined, for navigation, by articles 160 and 161; for flotation, by article 162; for salvage, by article 163; and for
fishing, by article 164; in all of them the owner of the riverside property supports the easement 'upon being previously
indemnified for loss and damage.' (Folio 41.)

"Said zone for public use, the same as a towpath, is solely available for the purposes of navigation,
flotation, fishing, and salvage, being closed to any other use which be attempted; therefore, it is erroneous to pretend
that the right of the owner of the property bordering upon the stream can be reduced to the level of the public right; on
the contrary he should only be called upon to bear those burdens which are in the general interest, but not without prior,
or subsequently indemnity." (Folio 43.)
If as affirmed in statement No. 4, and accepted by the defendants, the Sibacon Creek is a canal — let us grant that it is
navigable, because it has been held by competent authority — and that under the name of a public wharf, which is the largest in area, it is
desired to establish a towpath, which is the smallest, it must be remembered that the law does not grant it along navigable canals (art. 157),
and, at all events, the establishment thereof must be preceded by the corresponding indemnity. (Arts. 154 and 157.)
The matter at issue herein being the enforcement of the Law of Waters and of the Civil Code, it is not out of place nor untimely,
even now, to point out the administrative law which ought to have been applied had this act of the city of Manila been carried out by the
late ayuntamiento during the former sovereignty; an administrative law which, owing to its having been so often repeated, is now raised to
the rank of an incontrovertible principle of law on the matter.
 "The powers of the administration do not extend to the establishment of new easements upon private
property but simply to preserve old ones, whenever a recent and easily proven usurpation exists." (Decision of January
23, 1866.)
"Ayuntamientos are not authorized to impose an easement upon private property; therefore, any order thus
given can not be held to have been issued in the exercise of their lawful powers." (Decision of July 28, 1866.)
"Administrative action for the recovery of a public easement which has been usurped by a constructive work
of private ownership can only be taken when such usurpation is of recent date and easily proven.
"When real rights are concerned an ayuntamiento may prosecute such actions as it may consider itself
entitled to, for the possession or ownership in accordance with law." (Decision of October 26, 1866.)
This doctrine will be found far more vigorous at present upon reference to the principles of the law now in force.
According to article 349 of the Civil Code, no one shall be deprived of his property, except by competent authority and with
sufficient cause of public utility, always after proper indemnity; if this requisite has not been fulfilled the courts must protect, and eventually
restore possession to the injured party.
Under section 5 of the act of Congress of July 1, 1902, no legislation shall be enacted in the Philippine Islands which shall
deprive any person of life, liberty, or property without due process of law; and the due process of law in order to deprive a person of his
property is, according to the Code of Civil Procedure, reserved to the judicial authority. The refusal to grant a license or the enactment of an
ordinance whereby a person may be deprived of property or rights, or an attempt thereat is made, without previously indemnifying him
therefor, is not, nor can it be, due process of law.
And, considering that the easement intended to be established, whatever may be the object thereof, is not merely a real right
that will encumber the property, but is one tending to prevent the exclusive use of one portion of the same, by expropriating it for a public
use which, be it what it may, can not be accomplished unless the owner of the property condemned or seized be previously and duly
indemnified, it is proper to protect the appellant by means of the remedy employed in such cases, as it is the only adequate remedy when
no other legal action can be resorted to, against an intent which is nothing short of an arbitrary restriction imposed by the city by virtue of the
coercive power with which the same is invested. The question involved here is not the actual establishment of an easement which might be
objected to by an action in court, but a mere act of obstruction, a refusal which is beyond the powers of the city of Manila, because it is not
simply a measure in connection with building regulations, but is an attempt to suppress, without due process of law, real rights which are
attached to the right of ownership.
"When . . . any corporation, board, or person unlawfully neglects the performance of an act which the law
specially enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes the plaintiff from the use and
enjoyment of a right or office to which he is entitled and from which he is unlawfully precluded by such inferior tribunal,
corporation, board, or person, and the court, on trial, finds the allegations of the complaint to be true, it may, if there is
no other plain, speedy, and adequate remedy in the ordinary courts of law, render a judgment granting a peremptory
order against the defendant, commanding him, immediately after the receipt of such order, or at some other specified
time, to do the act required to be done to protect the rights of the plaintiff." (Code of Civil Procedure, sec 222.)
Therefore, we hereby command the defendants, the city of Manila, and Robert G. Dieck, as city engineer, or whomsoever may
now be acting as such, to immediately issue a license in favor of the plaintiff herein, Doña Carmen Ayala de Roxas, to construct the terrace
as aforesaid in accordance with the plan and specification as per Exhibit A, the said defendants to pay the costs of these proceedings. So
ordered.
Torres, Johnson, Carson, Willard, and Tracey, JJ., concur.
||| (Ayala de Roxas v. City of Manila, G.R. No. L-3144, [November 19, 1907], 9 PHIL 215-222)

THIRD DIVISION

[G.R. No. 194336. March 11, 2013.]

PILAR DEVELOPMENT CORPORATION, petitioner, vs. RAMON DUMADAG, EMMA BACABAC, RONALDO
NAVARRO, JIMMY PAGDALIAN, PAY DELOS SANTOS, ARMANDO TRILLOS, FELICISIMO TRILLOS, ARCANGEL
FLORES, EDDIE MARTIN, PRESILLA LAYOG, CONRADO CAGUYONG, GINA GONZALES, ARLENE PEDROSA,
JOCELYN ABELINO, ROQUE VILLARAZA, ROLANDO VILLARAZA, CAMILO GENOVE, NILDA ROAYANA, SUSAN
ROAYANA, JUANCHO PANGANIBAN, BONG DE GUZMAN, ARNOLD ENVERSO, DONNA DELA RAZA, EMELYN
HAGNAYA, FREDDIE DE LEON, RONILLO DE LEON, MARIO MARTINEZ, and PRECY LOPEZ, respondents.

DECISION

PERALTA, J p:

Challenged in this petition for review on certiorari under Rule 45 of the Rules of Civil Procedure are the March 5, 2010
Decision 1 and October 29, 2010 Resolution 2 of the Court of Appeals (CA) in CA-G.R. CV No. 90254, which affirmed the May 30, 2007
Decision 3 of the Las Piñas Regional Trial Court, Branch 197 (trial court) dismissing the complaint filed by petitioner.

On July 1, 2002, petitioner filed a Complaint 4 for accion publiciana with damages against respondents for allegedly building their
shanties, without its knowledge and consent, in its 5,613-square-meter property located at Daisy Road, Phase V, Pilar Village Subdivision,
Almanza, Las Piñas City. It claims that said parcel of land, which is duly registered in its name under Transfer Certificate of Title No. 481436
of the Register of Deeds for the Province of Rizal, was designated as an open space of Pilar Village Subdivision intended for village
recreational facilities and amenities for subdivision residents. 5 In their Answer with Counterclaim, 6 respondents denied the material
allegations of the Complaint and briefly asserted that it is the local government, not petitioner, which has jurisdiction and authority over them.

Trial ensued. Both parties presented their respective witnesses and the trial court additionally conducted an ocular inspection of
the subject property.
 On May 30, 2007, the trial court dismissed petitioner's complaint, finding that the land being occupied by respondents are situated
on the sloping area going down and leading towards the Mahabang Ilog Creek, and within the three-meter legal easement; thus, considered
as public property and part of public dominion under Article 502 7 of the New Civil Code (Code), which could not be owned by petitioner. The
court held: DacASC

. . . The land title of [petitioner] only proves that it is the owner in fee simple of the respective real properties described
therein, free from all liens and encumbrances, except such as may be expressly noted thereon or otherwise reserved
by law . . . . And in the present case, what is expressly reserved is what is written in TCT No. T-481436, to wit "that
the 3.00 meter strip of the lot described herein along the Mahabang Ilog Creek is reserved for public easement
purposes. (From OCT 1873/A-50) and to the limitations imposed by Republic Act No. 440. . . ." 8

The trial court opined that respondents have a better right to possess the occupied lot, since they are in an area reserved for
public easement purposes and that only the local government of Las Piñas City could institute an action for recovery of possession or
ownership.

Petitioner filed a motion for reconsideration, but the same was denied by the trial court in its Order dated August 21,
2007. 9 Consequently, petitioner elevated the matter to the Court of Appeals which, on March 5, 2010, sustained the dismissal of the case.

Referring to Section 2 10 of Administrative Order (A.O.) No. 99-21 of the Department of Environment and Natural Resources
(DENR), the appellate court ruled that the 3-meter area being disputed is located along the creek which, in turn, is a form of a stream;
therefore, belonging to the public dominion. It said that petitioner could not close its eyes or ignore the fact, which is glaring in its own title,
that the 3-meter strip was indeed reserved for public easement. By relying on the TCT, it is then estopped from claiming ownership and
enforcing its supposed right. Unlike the trial court, however, the CA noted that the proper party entitled to seek recovery of possession of the
contested portion is not the City of Las Piñas, but the Republic of the Philippines, through the Office of the Solicitor General (OSG), pursuant
to Section 101 11 of Commonwealth Act (C.A.) No. 141 (otherwise known as The Public Land Act).

The motion for reconsideration filed by petitioner was denied by the CA per Resolution dated October 29, 2010, hence, this
petition.

Anchoring its pleadings on Article 630 12 of the Code, petitioner argues that although the portion of the subject property occupied
by respondents is within the 3-meter strip reserved for public easement, it still retains ownership thereof since the strip does not form part of
the public dominion. As the owner of the subject parcel of land, it is entitled to its lawful possession, hence, the proper party to file an action
for recovery of possession against respondents conformably with Articles 428 13 and 539 14 of the Code. cAaETS

We deny.

An easement or servitude is a real right on another's property, corporeal and immovable, whereby the owner of the latter must
refrain from doing or allowing somebody else to do or something to be done on his or her property, for the benefit of another person or
tenement; it is jus in re aliena, inseparable from the estate to which it actively or passively belongs, indivisible, perpetual, and a continuing
property right, unless extinguished by causes provided by law. 15 The Code defines easement as an encumbrance imposed upon an
immovable for the benefit of another immovable belonging to a different owner or for the benefit of a community, or of one or more persons
to whom the encumbered estate does not belong. 16 There are two kinds of easement according to source: by law or by will of the owners —
the former are called legal and the latter voluntary easement. 17 A legal easement or compulsory easement, or an easement by necessity
constituted by law has for its object either public use or the interest of private persons. 18

While Article 630 of the Code provides for the general rule that "[t]he owner of the servient estate retains the 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," Article
635 thereof is specific in saying that "[a]ll matters concerning easements established for public or communal use shall be governed
by the special laws and regulations relating thereto, and, in the absence thereof, by the provisions of this Title [Title VII on Easements or
Servitudes]."

In the case at bar, the applicability of DENR A.O. No. 99-21 dated June 11, 1999, which superseded DENR A.O. No. 97-
05 19 dated March 6, 1997 and prescribed the revised guidelines in the implementation of the pertinent provisions of Republic Act (R.A.) No.
1273 and Presidential Decree (P.D.) Nos. 705 and 1067, cannot be doubted. Inter alia, it was issued to further the government's program of
biodiversity preservation. Aside from Section 2.1 above-quoted, Section 2.3 of which further mandates:

2.3 Survey of Titled Lands:

2.3.1 Administratively Titled Lands:

The provisions of item 2.1.a and 2.1.b shall be observed as the above.
However, when these lands are to be subdivided, consolidated or consolidated-
subdivided, the strip of three (3) meters which falls within urban areas shall be
demarcated and marked on the plan for easement and bank protection. TEDHaA

The purpose of these strips of land shall be noted in the technical

description and annotated in the title.

xxx xxx xxx

2.3.3 Complex Subdivision or Consolidation Subdivision Surveys for Housing/Residential, Commercial or

Industrial Purposes:

When titled lands are subdivided or consolidated-subdivided into lots

for residential, commercial or industrial purposes the segregation of the three (3)
meter wide strip along the banks of rivers or streams shall be observed and be
made part of the open space requirement pursuant to P.D. 1216.

The strip shall be preserved and shall not be subject to subsequent

subdivision. (Underscoring supplied)

Certainly, in the case of residential subdivisions, the allocation of the 3-meter strip along the banks of a stream, like the Mahabang
Ilog Creek in this case, is required and shall be considered as forming part of the open space requirement pursuant to P.D. 1216 dated
October 14, 1977. 20 Said law is explicit: open spaces are "for public use and are, therefore, beyond the commerce of men" and that "[the]
areas reserved for parks, playgrounds and recreational use shall be non-alienable public lands, and non-buildable."

Running in same vein is P.D. 1067 or The Water Code of the Philippines 21 which provides:

Art. 51. The banks of rivers and streams and the shores of the seas and lakes throughout their entire length
and within a zone of three (3) meters in urban areas, twenty (20) meters in agricultural areas and forty (40) meters in
 forest areas, along their margins, are subject to the easement of public use in the interest of recreation, navigation,
floatage, fishing and salvage. No person shall be allowed to stay in this zone longer than what is necessary for recreation,
navigation, floatage, fishing or salvage or to build structures of any kind. (Underscoring supplied) ISDHEa

Thus, the above proves that petitioner's right of ownership and possession has been limited by law with respect to the 3-meter
strip/zone along the banks of Mahabang Ilog Creek. Despite this, the Court cannot agree with the trial court's opinion, as to which the CA did
not pass upon, that respondents have a better right to possess the subject portion of the land because they are occupying an area reserved
for public easement purposes. Similar to petitioner, respondents have no right or title over it precisely because it is public land. Likewise, we
repeatedly held that squatters have no possessory rights over the land intruded upon. 22 The length of time that they may have physically
occupied the land is immaterial; they are deemed to have entered the same in bad faith, such that the nature of their possession is presumed
to have retained the same character throughout their occupancy. 23

As to the issue of who is the proper party entitled to institute a case with respect to the 3-meter strip/zone, We find and so hold
that both the Republic of the Philippines, through the OSG and the local government of Las Piñas City, may file an action depending on the
purpose sought to be achieved. The former shall be responsible in cause of action for reversion under C.A. 141, while the latter may also
bring an action to enforce the relevant provisions of Republic Act No. 7279 (otherwise known as the Urban Development and Housing Act of
1992). 24 Under R.A. 7279, which was enacted to uplift the living conditions in the poorer sections of the communities in urban areas and
was envisioned to be the antidote to the pernicious problem of squatting in the metropolis, 25 all local government units (LGUs) are mandated
to evict and demolish persons or entities occupying danger areas such as esteros, railroad tracks, garbage dumps, riverbanks, shorelines,
waterways, and other public places such as sidewalks, roads, parks, and playgrounds. 26 Moreover, under pain of administrative and criminal
liability in case of non-compliance, 27 it obliges LGUs to strictly observe the following:

Section 29. Resettlement. — Within two (2) years from the effectivity of this Act, the local government units,
in coordination with the National Housing Authority, shall implement the relocation and resettlement of persons living in
danger areas such as esteros, railroad tracks, garbage dumps, riverbanks, shorelines, waterways, and in other public
places such as sidewalks, roads, parks and playgrounds. The local government unit, in coordination with the National
Housing Authority, shall provide relocation or resettlement sites with basic services and facilities and access to
employment and livelihood opportunities sufficient to meet the basic needs of the affected families.

Section 30. Prohibition Against New Illegal Structures. — It shall be unlawful for any person to construct any
structure in areas mentioned in the preceding section.

After the effectivity of this Act, the barangay, municipal or city government units shall prevent the construction
of any kind or illegal dwelling units or structures within their respective localities. The head of any local government unit
concerned who allows, abets or otherwise tolerates the construction of any structure in violation of this section shall be
liable to administrative sanctions under existing laws and to penal sanctions provided for in this Act. SIcCTD

Yet all is not lost for petitioner. It may properly file an action for mandamus to compel the local government of Las Piñas City to
enforce with reasonable dispatch the eviction, demolition, and relocation of respondents and any other persons similarly situated in order to
give flesh to one of the avowed policies of R.A. 7279, which is to reduce urban dysfunctions, particularly those that adversely affect public
health, safety, and ecology. 28 Indeed, as one of the basic human needs, housing is a matter of state concern as it directly and significantly
affects the general welfare. 29

WHEREFORE, the petition is DENIED. The March 5, 2010 Decision and October 29, 2010 Resolution of the Court of Appeals in
CA-G.R. CV No. 90254, which affirmed the May 30, 2007 Decision of the Las Piñas RTC, Branch 197, dismissing petitioner's complaint, is
hereby AFFIRMED.

SO ORDERED.

Velasco, Jr., Abad, Mendoza and Leonen, JJ., concur.

||| (Pilar Development Corp. v. Dumadag, G.R. No. 194336, [March 11, 2013], 706 PHIL 93-105)