. Standard Oil Co. of New York v.

Jaramillo 44 Phil 630, 1923

Facts:

Gervasia de la Rosa, Vda. de Vera, the lessee of a parcel of land situated in the
City of Manila and owner of the house of strong materials built thereon, executed a
document in the form of a chattel mortgage, purporting to convey to the petitioner
Standard Oil by way of mortgage both the leasehold interest in said lot and the building
which stands thereon.

After said document had been duly acknowledged and delivered, the petitioner caused
the same to be presented to the respondent, Joaquin Jaramillo, as register of deeds of
the City of Manila, for the purpose of having the same recorded in the book of record of
chattel mortgages. Respondent examined the instrument and opined that it was not a
chattel mortgage, for the reason that the interest therein mortgaged did not appear to be
personal property, within the meaning of the Chattel Mortgage Law, and registration
was refused on this ground, hence, a petition for mandamus was filed Jaramillo..

Issue:

Whether or not the register of deeds was correct in not registering the mortgage
on the ground that it is not covered by the chattel mortgage law

Ruling:

The position taken by the respondent is untenable. It is his duty to accept the
proper fee and place the instrument on record. The duties of a register of deeds in
respect to the registration of chattel mortgage are of a purely ministerial character; and
no provision of law can be cited which confers upon him any judicial or quasi-judicial
power to determine the nature of any document of which registration is sought as a
chattel mortgage.

2. Davao Sawmill v. Castillo 61 Phil 709, 1935

Facts:

Plaintiff operated a sawmill. The land upon which the business was conducted
was leased from another person. On the land, the sawmill company erected a building
which housed the machinery used by it. Some of the machines were mounted and
placed on foundations of cement. In the contract of lease, plaintiff agreed to turn over
free of charge all improvements and buildings erected by it on the premises with the
exception of machineries, which shall remain with plaintiff upon expiration of the lease
agreement. In an action brought by the defendant, judgment was rendered against
plaintiff. A writ of execution was issued and the machineries placed on the sawmill were
levied upon as personality. Plaintiff claimed that they are real property. The trial judge
found that those properties were personal in nature.

Issue: What is the nature of the properties?

Ruling:

Machinery which is movable in its nature only becomes immobilized when placed
in a plant by the owner of the property or plant, but not when so placed by a tenant, a
usufructuary, or any person having only a temporary right, unless such person acted as
the agent of the owner.

3. Berkenkotter v. Cu Unjieng 61 Phil 663, 1935

Facts:

The Mabalacat Sugar Co., Inc., owner of the sugar central situated in Mabalacat,
Pampanga, obtained from the defendants, Cu Unjieng e Hijos, a loan secured by a first
mortgage constituted on two parcels and land "with all its buildings, improvements,
sugar-cane mill, steel railway, telephone line, apparatus, utensils and whatever forms
part or is necessary complement of said sugar-cane mill, steel railway, telephone line,
now existing or that may in the future exist is said lots."

Shortly thereafter, the company obtained a loan from plaintiff to finance additional
machinery meant to increase production. The machinery was offered as security.
Appellant Berkenkotter claimed that the additional machinery was not permanent.

Issue: WON the machinery is real property

Ruling:

If the installation of the machinery and equipment in question in the central of the
Mabalacat Sugar Co., Inc., in lieu of the other of less capacity existing therein, for its
sugar industry, converted them into real property by reason of their purpose, it cannot
be said that their incorporation therewith was not permanent in character because, as
essential and principal elements of a sugar central, without them the sugar central
would be unable to function or carry on the industrial purpose for which it was
established. Inasmuch as the central is permanent in character, the necessary
machinery and equipment installed for carrying on the sugar industry for which it has
been established must necessarily be permanent.

4. Gr no. L-17870 September 29, 1962 Mindanao Bus Commpany, Petitioner

Vs. The City Assesor and Treasurer and the Board of Tax Appeals of Cagayan De
Oro, Respondents
Facts
The City Assessor of cagayan De Oro City assessed a reality tax on several
equipment and machineries of mindanao bus company, a public utility solely engaged in
transporting passengers and cargoes by motor trucks. The machineries sought to be
assessed by the respondent as real properties are sitting on cement or wooden
platforms.
The petitioner appealed the assessment to the board of tax appeals on the
ground that the same are not realty. The board of tax appeals sustained the
assessment of the city assessor.
The machineries sought to be assessed by the respondent as real properties are
Hobart Electric machine, storm boring machine, lathe machine with motor, black and
decker grinder, Pemco Hydraulic Press, Battery charger and D engine waukesha-m-fuel
These machineries have never been or were never used as industrial equipment
to produce finished products for sale, nor to repair machineries, parts and the like
offered to the general public indiscriminatively for business or commercial purposes for
which petitioner has never engaged in to date.
Issue
Whether the equipment and machineries in question, are considered immovable
properties, and therefore, subject to reality tax.
Ruling
No, the equipment and machineries in question, are movable properties and
therefore, not subject to realty tax.
Movable equipment to be immobilized in contemplation of the law must first be
‘’essential and principal elements’’ of an industry or works without which such industry
or works would be ‘’unable to function or carry on the industrial purpose for which it was
established’’.
The tools and equipment in question in this instant case are, by their nature, not
essential and principal elements of petitioners business of transporting passengers and
cargoes by motor, trucks. They are merely incidentals acquired as movables and used
only for expediency to facilitate or improve its service. Even without such tools and
equipment, its business may be carried on as petitioner has carried on without such
equipment, before the war. The transportation business could be carried on without the
repair or service shops if its rolling equipment is repaired or serviced in another shop if
its rolling equipment is repaired or serviced in another shop belonging to another.
Aside from the elements of essentiality, Article 415(5) of the new civil code
also requires that the industry or works be carried on in a building or on a piece
of land.
5. G.R. No. L-58469 May 16, 1983 MAKATI LEASING and FINANCE
CORPORATION, petitioner, vs. WEAREVER TEXTILE MILLS, INC., and
HONORABLE COURT OF APPEALS, respondents.
Facts
Makati leasing and finance corporation, the private respondent wearever textile
mills Inc. Discounted and assigned several receivables with the former under a
receivable purchase agreement. To secure the collection of the receivables assigned,
private respondent executed a chattel mortgage over certain raw materials inventory as
well as a machinery described as an artos aero dryer stentering range. Upon private
respondents fault, petitioner filed a petition for extrajudicial foreclosure of the properties
mortgage to it. However, the deputy sheriff assigned to implement the foreclosure failed
to gain entry into private respondent’s premises and was not able to effect the seizure of
the afore described machinery.
Acting on leasing’s application for replevin, the lower court issued a writ of
seizure, the enforcement of which was however subsequently restrained upon
wearever’s filling of a motion for reconsideration. After several incidents, the lower court
finally issued an order lifting the restraining order for the enforcement of the writ of
seizure and an order to break open the premises of wearever to enforce said writ.
Wearever Textile Mills contends that estoppel cannot apply against it because it had
never represented nor agreed that the machinery in suit be considered as personal
property but was merely required and dictated on by herein petitioner to sign a printed
form of chattel mortgage which was in blank form at the time of signing. This contention
lacks persuasiveness.
Issue: Whether or not the subject machinery is a real property or a personal property to
subject it to chattel mortgage.
Ruling.
The subject machinery is a Personal property, where a chattel mortgage is
constituted on machinery attached to the ground the machinery is to be considered as a
personal property and the chattel mortgage constituted thereon is not null and void
regardless of who owns the land.
However, such fact alone does not render a contract void ab initio, but can only
be a ground for rendering said contract voidable or annullable pursuant to article 1390
of the new civil code, by a proper actin in court.
It must be pointed out that the characteristics of the subject machinery as chattel by the
respondent is indicative of intention and impresses upon the property the character
determined by the parties. It is undeniable that the parties to a contract may by
agreement treat as personal property that which by nature would be real property, as
long as no interest of third parties would be prejudiced thereby. This is really because
one who has so agreed is estoppel from dnying the existence of the chattel mortgage.

6. G.R. No. L-16218 November 29, 1962 ANTONIA BICERRA, DOMINGO BICERRA,
BERNARDO BICERRA, CAYETANO BICERRA, LINDA BICERRA, PIO BICERRA
and EUFRICINA BICERRA, plaintiffs-appellants, vs. TOMASA TENEZA and
BENJAMIN BARBOSA, defendants-appellees.
Facts.
The bicceras are supposedly the owners of the house worth P200, built on a lot owned
y them in lagangilang abra, which the tenezas forcibly demolished in January 1957,
claiming to be the owners thereof. The materials of the house were placed in the
costudy of the barrio lieutenant. The bicceras filed a complaint claiming actual damages
of P200, moral and consequential damages amounting to P600, and the cost.
The CFI Abra dismissed the complaint claiming that the action was within the exclusive
original jurisdiction of the justice of peace court of lagangilang abra.
Issue. Whether or not the action involves title to real property
Ruling:
Yes, the house is immovable property even if situated on land belonging to a
different owner, except when demolished.
A house is classified as immovable property by reason of its adherence to the soil on
which it is built. This classification holds true regardless of the fact that the house may
be situated on land belonging to a different owner. But once the house is demolished,
as in the case, it cease to exist as such and hence its character as an immovable
likewise cease.
7. SERG’S PRODUCTS, INC., and SERGIO T. GOQUIOLAY,  v. PCI LEASING AND
FINANCE, INC., 
FACTS:
PCI Leasing filed a complaint for a sum of money with an application for a writ of
replevin. Writ of Replevin was granted directing its sheriff to seize and deliver the
machineries and equipment to PCI Leasing after 5 days and upon the payment of the
necessary expenses. Serg's Products Inc. filed a motion for special protective order but
the motion was opposed by PCI Leasing, on the ground that the properties were still
personal and therefore still subject to seizure and a writ of replevin. Serg's Products Inc.
asserted that the properties sought to be seized were immovables. They argued that to
give effect to the agreement would be prejudicial to innocent third parties. Appellate
court held that the subject machines were personal property, and that they had only
been leased, not owned, by petitioners.
ISSUE: Whether or not the machineries purchased and imported by SERG’S became
real property by virtue of immobilization.
RULING:
Court held that the machines were placed by petitioners in the factory built on
their own land. Indisputably, they were essential and principal elements of their
chocolate-making industry. Although each of them was movable or personal property on
its own, all of them have become "immobilized by destination" because they are
essential and principal elements in the industry. Court agreed with petitioners that said
machines are real, not personal pursuant to Article 415 (5) of the Civil Code. However,
the Court held that contracting parties may validly stipulate that a real property be
considered as personal. After agreeing to such stipulation, they are consequently
estopped from claiming otherwise. In this case, the Lease Agreement clearly provides
that the machines in question are to be considered as personal property. Hence, the
petitioners are estopped from denying the characterization of the subject machines as
personal property. Under the circumstances, they are proper subjects of the Writ of
Seizure. In treating the machines as personal property pursuant to the Lease
Agreement is good only insofar as the contracting parties are concerned. Third persons
acting in good faith are not affected by its stipulation characterizing the subject
machinery as personal.
8. Tumalad vs Vicencio 41 SCRA 143
FACTS:
On 1955 Vicencio and Simeon, defendants-appellants, executed a chattel
mortgage in favor of the Tumalads, plaintiff appellees over their house of strong
materials over a lot in Quiapo, which were being rented from Madrigal & Company, Inc.
The mortgage was executed to guarantee a loan of P4,800.00 received from the
Tumalads, payable within one year at 12% per annum. The mode of payment was
P150.00 monthly, It was also agreed that default in the payment of any of the
amortizations would cause the remaining unpaid balance to become immediately due
and payable, the Chattel Mortgage enforceable, and the Sheriff of Manila authorized to
sell the Mortgagor’s property after necessary publication. When Vicencio and Simeon
defaulted in paying, the mortgage was extrajudicially foreclosed, and on 1956, the
house was sold at public auction pursuant to the said contract. As highest bidder, the
Tumalads were issued the corresponding certificate of sale. Then Tumalads
commenced case in the municipal court of Manila, praying that the house be vacated
and its possession surrendered to them, and for Vicencio and Simeon to pay rent of
P200.00 monthly up to the time the possession is surrendered. The municipal court
rendered its decision in favor of the Tumalads. Defendant-appellants impugned the
legality of the chattel mortgage claiming that they are still the owner of the house but
waived their rights to introduce evidence. Nearly a year after the foreclosure sale the
mortgaged house had been demolished on 1957 by virtue of a decision obtained by the
lessor of the land on which the house stood for non-payment of rentals.
ISSUE/S:
1. Whether or not the subject matter of the mortgage which is a house of strong
material can be subject of real estate mortgage or a chattel mortgage.
2. Whether or not the defendants are legally bound to pay rentals to the plaintiffs
during the period of 1 year provided by law for the redemption of the extrajudicially
foreclosed house.
RULING:
The inclusion of the building separate and distinct from the land in the
enumeration of what may constitute real property, that the building is by itself an
immovable property. However, deviations have been allowed for various reasons
specially if it is stipulated in the subject of contract. In the case at bar, although there is
no specific statement referring to the subject house as a personal property, yet by
ceding, selling or transferring a property by way of chattel mortgage, defendants-
appellants could only have meant to convey the house as a chattel. Hence if a house
belonging to a person stands on a rented land belonging to another person, it may be
mortgaged as a personal property as so stipulated in the document of mortgage.
It should be noted that the principle is predicated on statements by the owner
declaring his house to be chattel. Party in a chattel mortgage cannot question the
validity of the chattel mortgage entered into. The doctrine of estoppels therefore applies
to the defendant appellants. Since the defendant-appellants were occupying the house
at the time the auction of sale, they are entitled to remain in possession during the
period of redemption or within one year from the date of auction sale and to collect the
rents or profits during the said period. And since the plaintiff-appellees right to possess
was not yet born at the filing of the complaint, there could be no violation or breach
thereof. The Supreme Court reversed the decision appealed from and entered another
dismissing the complaint, with costs against plaintiffs’ appellees.
9. Tsai v. Court of Appeals 366 SCRA 324
FACTS:
Ever Textile Mills, Inc. obtained two loans from Philippine Bank of
Communications (PBCom), secured by a deed of Real and Chattel Mortgage over the
lot where its factory stands. Upon EVERTEX’s failure to meet its obligation to PBCom,
PBCom commenced extrajudicial foreclosure proceedings vs. EVERTEX under Act
3135 and Act 1506 or “The Chattel Mortgage Law”. PBCom consolidated its ownership
over the lot and all the properties in it. It leased and eventually sold the entire factory
premises to Ruby Tsai, including the contested machineries.
 EVERTEX filed a complaint for annulment of sale, reconveyance, and damages
against PBCom, alleging inter alia that the extrajudicial foreclosure of subject mortgage
was not valid and that PBCom, without any legal or factual basis, appropriated the
contested properties which were not included in the Real and Chattel Mortgage of the
first mortgage contract nor in the second contract which is a Chattel Mortgage, and
neither were those properties included in the Notice of Sheriff’s Sale.
ISSUE/S:
W/N the contested properties are personal or movable properties

RULING :
Mere nuts and bolts do not foreclose the controversy. We have to look at the
parties’ intent. The nature of the disputed machineries, that they were heavy, bolted or
cemented on the real property mortgaged does not make them ipso facto immovable
under Article 415 (3) and (5) of the New Civil Code. While it is true that the properties
appear to be immobile, a perusal of the contract of Real and Chattel Mortgage executed
by the parties reveal their intent, that is – to treat machinery and equipment as chattels.

10.Board of Assessment Appeals V. Meralco 10 SCRA 63 GR. NO. L-15334

January 31, 1964
FACTS:
On 1902, the Philippine Commission enacted Act 484 which authorized the
Municipal Board of Manila to grant a franchise to construct, maintain and operate an
electric street railway and electric light, heat, and power system in Manila and its
suburbs to whoever makes the most favorable bid. Charles M. Swift was awarded the
said franchise in 1903. The terms and conditions which were embodied in Ordinance 44
were approved on 1903. Meralco became the transferee and owner of the franchise.
Meralco’s electric power is generated by its hydro-electric plant located at Botocan
Falls, Laguna and is transmitted to the City of Manila by means of electric transmission
wires. These electric transmission wires which carry high voltage current, are fastened
to insulators attached to steel towers. Meralco has constructed 40 of these steel towers
within Quezon City, on land belonging to it.
On 1955, the City Assesor of Quezon City declared the steel towers for real
property tax under Tax Declaration. After denying Meralco’s petition to cancel these
declarations, an appeal was taken by Meralco to the Board of Assessment Appeals of
Quezon City which required Meralco to pay real property tax on the said steel towers for
the years 1952 to 1956. Meralco paid the amount under protest and filed a petition for
review in the court of Tax Appeals which rendered a decision on 1958, ordering the
cancellation of the said tax declarations and for the City Treasurer of Quezon City to
give a refund back to Meralco. The motion for reconsideration having been denied, on
1959, the petition for review was filed.
ISSUE: Whether or not the steel towers of an electric company constitute real property
for the purposes of real property tax
RULING:
Steel towers are not immovable property under paragraph 1,3, and 5 of article 415. The
steel towers or supports do not come within the objects mentioned in paragraph 1
because they do not constitute buildings or construction adhered to the soil. As per
description, given by the lower court, they are removable and merely attached to a
square metal frame by means of bolts, which when unscrewed, could easily be
dismantled and moved from place to place. They cannot be included under paragraph
3, as they are not attached to an immovable. In a fixed manner, they can be separated
without breaking the material or causing deterioration upon the object to which they are
attached.
11. Benguet Corp. Vs. Central Board of Assessment Appeals GR no. 106041
January 29, 1994
Facts:
A realty tax assessment has been imposed on the petitioners' tailings dam and
the land thereunder by the Provincial Assessor of Zambales claiming that the said
properties are taxale improvements.
Petitioner, on the other hand, argued that the tailings dam cannot be said and
classified as an improvement upon the land within the meaning of the Real
Property Tax Code and thus is not subject to realty tax. It claimed that the tailings
dam has no value separate from and independent of the mine and is actually an
integral part of the latter. It is submerged underwater wastes from the mine and
serves only as a pollution control device which is a requirement imposed by law
for mine business. It also claimed that the dam will eventually benefit the local
community as an irrigation facility after its mining operation.
Issue:
Whether the tailings dam is an improvement upon the land which is real property and is
therefore subject to realty tax.
Ruling:
Yes, the real property tax does not carry a definition of real property and simply
says that the realty tax is imposed on real property such as lands, buildings, machinery
and other improvements affixed or attached to real property. In the absence of such a
definition, we apply Article 415 of the Civil code. The pertinent portions applicable in this
case are found in Article 415 paragraphs (1) and (3)
 The tailings dam in this case is an improvement upon the mine. The Real
Property Tax Code defines improvement as a valuable addition made to property or
amelioration in its condition, amounting to more than mere repairs or replacement of
waste, costing labor or capital and intended to enhance its value, beauty, or utility or to
adopt it for new or future purposes
A structure constitutes an improvement so as to partake of the status of realty
would depend upon the degree of permanence intended in its construction and use. The
expression “permanent” as applied to improvement does not imply that the improvement
must be used perpetually but only until the purpose to which the principal realty is
devoted has been accomplished. It is sufficient that the improvement is intended to
remain as long as the land to which is it annexed is still used for the said purpose.
12. MARCELO R. SORIANO, vs. SPOUSES RICARDO and ROSALINA GALIT G.R.
No. 156295. September 23, 2003 YNARES-SANTIAGO, J.:

FACTS:

Ricardo Galit contracted a loan from Marcelo Soriano evidenced by four

promissory notes and was secured by a real estate mortgage over a parcel of land
covered by Original Certificate of Title No. 569. Failing to pay his obligation, Soriano
filed a complaint for sum of money against Galit. When Spouses Galit failed to file their
answer, the trial court, upon motion of Marcelo Soriano, declared the spouses in default,
proceeded to receive evidence for petitioner Soriano ex parte and eventually rendered a
decision in favor of Soriano. Accordingly, the trial court issued a writ of execution in due
course, by virtue of which, Deputy Sheriff Renato E. Robles levied on the following real
properties of the Galit spouses which includes among others a parcel of land covered
by Original Certificate of Title No. T-569, STORE/HOUSE CONSTRUCTED on Lot No.
1103 made of strong materials and a BODEGA constructed on Lot 1103. Ten months
from the time the Certificate of Sale on Execution was registered with the Registry of
Deeds, Soriano moved for the issuance of a writ of possession to which the RTC
granted. The writ of possession included among other Original Certificate of Title No.
40785 with an area of 134 square meters known as Lot No. 1103 of the Cadastral
Survey of Orani. Respondents filed a petition assailing the inclusion of the parcel of land
covered by Transfer Certificate of Title No. T-40785 among the list of real properties in
the writ of possession. They argued that said property was not among those sold on
execution as reflected in the Certificate of Sale on Execution of Real Property. The
Court of Appeals ruled in favour of the respondent, thus this case.

ISSUE: Is the land on which the buildings (store/house and bodega) levied upon in the
writ of execution necessarily included in the writ of possession

RULING:

NO. The foregoing provision of the Civil Code enumerates land and buildings
separately. This can only mean that a building is, by itself, considered immovable. Thus,
it has been held that. . . while it is true that a mortgage of land necessarily includes, in
the absence of stipulation of the improvements thereon, buildings, still a building by
itself may be mortgaged apart from the land on which it has been built. Such mortgage
would be still a real estate mortgage for the building would still be considered
immovable property even if dealt with separately and apart from the land. In this case,
considering that what was sold by virtue of the writ of execution issued by the trial court
was merely the storehouse and bodega constructed on the parcel of land covered by
Transfer Certificate of Title No. T-40785, which by themselves are real properties of
respondents spouses, the same should be regarded as separate and distinct from the
conveyance of the lot on which they stand.

13. Sibal v. Valdez G.R. No. L-27532

DOCTRINE: For the purpose of attachment and execution, and for the purposes
of the Chattel Mortgage Law, "ungathered products" have the nature of personal
property.

FACTS:
As a first cause of action the plaintiff alleged that the defendant Vitaliano
Mamawal, deputy sheriff of the Province of Tarlac, by virtue of a writ of execution issued
by the Court of First Instance of Pampanga, attached and sold to the defendant
Emiliano J. Valdez the sugar cane planted by the plaintiff and his tenants on seven
parcels of land. That within one year from the date of the attachment and sale the
plaintiff offered to redeem said sugar cane and tendered to the defendant Valdez the
amount sufficient to cover the price paid by the latter, the interest thereon and any
assessments or taxes which he may have paid thereon after the purchase, and the
interest corresponding thereto and that Valdez refused to accept the money and to
return the sugar cane to the plaintiff. One of the defenses of the defendant Emiliano J.
Valdez is that the sugar cane in question had the nature of personal property and was
not, therefore, subject to redemption. The trial court hold that the sugar cane in question
was personal property and, as such, was not subject to redemption.

ISSUE: Whether the sugar cane in question is personal or real property under civil
code? Under chattel mortgage law?

Ruling:
The court ruled that It is contended that sugar cane comes under the
classification of real property as "ungathered products" in paragraph 2 of article 334 of
the Civil Code. Said paragraph 2 of article 334 enumerates as real property the
following: Trees, plants, and ungathered products, while they are annexed to the land or
form an integral part of any immovable property." We may, therefore, conclude that
paragraph 2 of article 334 of the Civil Code has been modified by section 450 of the
Code of Civil Procedure and by Act No. 1508, in the sense that, for the purpose of
attachment and execution, and for the purposes of the Chattel Mortgage Law,
"ungathered products" have the nature of personal property. The lower court,
therefore, committed no error in holding that the sugar cane in question was personal
property and, as such, was not subject to redemption.

14. PUNSALAN, JR. V. VDA. DE LACSAMANA G.R. No. L-55729 March 28, 1983
FACTS:
Punsalan was the owner of a piece of land, which he mortgaged in favor of PNB.
Due to his failure to pay, the mortgage was foreclosed and the land was sold in a public
auction to which PNB was the highest bidder. On a relevant date, while Punsalan was
still the possessor of the land, it secured a permit for the construction of a warehouse. A
deed of sale was executed between PNB and Punsalan. This contract was amended to
include the warehouse and the improvement thereon. By virtue of these instruments,
respondent Lacsamana secured title over the property in her name. Petitioner then
sought for the annulment of the deed of sale. Among his allegations was that the bank
did not own the building and thus, it should not be included in the said deed. Petitioner’s
complaint was dismissed for improper venue. The trial court held that the action being
filed in actuality by petitioner is a real action involving his right over a real property.
ISSUE: W/N the trial court erred in dismissing the case on the ground of improper
venue. W/N the warehouse is an immovable and must be tried in the province where
the property lies.
Ruling:
Warehouse claimed to be owned by petitioner is an immovable or real property.
Buildings are always immovable under the Code. A building treated separately from the
land on which it is stood is immovable property and the mere fact that the parties to a
contract seem to have dealt with it separate and apart from the land on which it stood in
no wise changed its character as immovable property.
15. G.R. No. 168557 February 16, 2007 FELS ENERGY, INC., Petitioner, Vs. The
Province of Batangas

Facts:

On January 18, 1993, NPC entered into a lease contract with Polar Energy, Inc.
over 3x30 MW diesel engine power barges moored at Balayan Bay in Calaca,
Batangas.
Subsequently, Polar Energy, Inc. assigned its rights under the Agreements to FELS.
On August 7, 1995, FELS received an assessment of real property taxes on the power
barges from Provincial Assessor Lauro C. Andaya of Batangas City.
FELS referred the matter to NPC, reminding it of its obligation under the Agreement to
pay all real estate taxes.
This prompted NPC to file a petition with the Local Board Assessment Appeals for the
setting aside of the assessment and the declaration of the barges as non-taxable items;
it also prayed that should LBAA find the barges to be taxable, the Provincial Assessor
be directed to make the necessary corrections.
In its Answer to the petition, the Provincial Assessor averred that the barges were real
property for purposes of taxation under Section 199(c) of Republic Act No. 7160.
Before the case was decided by the LBAA, NPC filed a Manifestation, informing the
LBAA that the Department of Finance DOF had rendered an opinion dated May 20,
1996, where it is clearly stated that power barges are not real property subject to real
property assessment.

Issue: Whether or not the power barges, which are floating and movable, are
personal properties and therefore, not subject to real property tax.

Ruling:

No. In Consolidated Edison Company of New York, Inc., et al. v. The City of New
York, et al., a power company brought an action to review property tax assessment. On
the city’s motion to dismiss, the Supreme Court of New York held that the barges on
which were mounted gas turbine power plants designated to generate electrical
power, the fuel oil barges which supplied fuel oil to the power plant barges, and
the accessory equipment mounted on the barges were subject to real property
taxation.

Moreover, Article 415 (9) of the New Civil Code provides that “docks and structures
which, though floating, are intended by their nature and object to remain at a
fixed place on a river, lake, or coast” are considered immovable property. Thus,
power barges are categorized as immovable property by destination, being in the nature
of machinery and other implements intended by the owner for an industry or work which
may be carried on in a building or on a piece of land and which tend directly to meet the
needs of said industry work.

16. Provincial Assessor of Agusan del Sur v. Filipinas Palm Oil Plantation G.R.
No. 183416 October 5, 2016

FACTS:
The exemption from real property taxes given to cooperatives applies regardless
of whether or not the land owned is leased. This exemption benefits the cooperative's
lessee. The characterization of machinery as real property is governed by the Local
Government Code and not the Civil Code. (Filipinas) is a private organization engaged
in palm oil plantation with a total land area of more than 7,000 hectares of National
Development Company (NDC) lands in Agusan del Sur. Harvested fruits from oil palm
trees are converted into oil through Filipinas' milling plant in the middle of the plantation
area. Within the plantation, there are also three (3) plantation roads and a number of
residential homes constructed by Filipinas for its employees. NDC lands were
transferred to Comprehensive Agrarian Reform Law beneficiaries who formed
themselves as the merged NDC-Guthrie Plantations, Inc. - NDC-Guthrie Estates, Inc.
(NGPI-NGEI) Cooperatives. Filipinas entered into a lease contract agreement with
NGPI-NGEI. (Provincial Assessor) assessed Filipinas' properties found within the
plantation area

ISSUE: Whether Filipinas Palm Oil Plantation Inc. roads equipment and mini haulers
are movable properties and have not been immobilized by destination for real property
taxation.

RULING:
The roads that respondent constructed within the leased area should not be
assessed with real property taxes. The roads that respondent constructed became
permanent improvements on the land owned by the NGPI-NGEI by right of accession
under the Civil Code, thus: Article 440. The ownership of property gives the right by
accession to everything which is produced thereby, or which is incorporated or attached
thereto, either naturally or artificially. Article445. Whatever is built, planted or sown
on the land of another and the improvements or repairs made thereon, belong to
the owner of the land[.] Despite the land being leased by respondent when the roads
were constructed, the ownership of the improvement still belongs to NGPI-NGEI. As
provided under Article 440 and 445 of the Civil Code, the land is owned by the
cooperatives at the time respondent built the roads. Hence, whatever is incorporated in
the land, either naturally or artificially, belongs to the NGPI-NGEI as the landowner.
Although the roads were primarily built for respondent's benefit, the roads were also
being used by the members of NGPI and the public. Furthermore, the roads inured to
the benefit of NGPI-NGEI as owners of the land not only by right of accession but
through the express provision in the lease agreement. The road equipment and mini
haulers shall be considered as real property, subject to real property tax. Respondent is
engaged in palm oil plantation. Thus, it harvests fruits from palm trees for oil conversion
through its milling plant. By the nature of respondent's business, transportation is
indispensable for its operations Section 199(o) of the Local Government Code defines
"machinery" as real property subject to real property tax, (road equipment and mini
haulers are classified as machinery)
The properties under Article 415, paragraph (5) of the Civil Code are
immovables by destination, or "those which are essentially movables, but by the
purpose for which they have been placed in an immovable, partake of the of the
latter because of the added utility derived therefrom." These properties, including
machinery, become immobilized If the following requisites concur (a) they are
placed in the tenement by the owner of such tenement; (b) they are destined for
use in the industry or work in the tenement; and (c) they tend to directly meet the
needs of said industry or works. The first two requisites are not found anywhere in
the Local Government Code. As between the Civil Code, a general law governing
property and property relations, and the Local Government Code, a special law
granting local government units the power to impose real property tax, then the
latter shall prevail Therefore, for determining whether machinery is real property
subject to real property tax, the ·definition and requirements under the Local
Government Code are controlling.

17. Municipality of Cavite vs Rojas G.R. No. L-9069 March 31, 1915
THE MUNICIPALITY OF CAVITE, plaintiff-appellant, vs. HILARIA ROJAS and her
husband TIUNG SIUKO, alias SIWA, defendants-appellees.

FACTS:

A parcel of land forming a part of the public plaza was leased to the defendants
on which their house has been constructed and had been occupying the same. The
plaintiff ordered the defendants to vacate the said land as it formed integral part of the
public plaza. The defendants refused to vacate the said land because they had
acquired the right of possession to it and further alleged that the lease agreement
provided that they can only be ordered to vacate the said property if the municipality
needed it for decoration or public use. The trial court held that the municipality had no
legal claim to the property. This case was appealed through bill of exceptions.
ISSUE: Whether or not the lease agreement between the parties was valid.
Ruling:
The defendant has no right to continue to occupy the land for it is an integral part
of the plaza which is for public use and is reserved for the common benefit. Property for
public use in provinces and in towns comprises the provincial and town roads, the
squares, streets, fountains, and public waters, the promenades, and public works of
general service supported by said towns or provinces. The said Plaza being a
promenade for public use, the municipal council of Cavite could not in 1907 withdraw or
exclude from public use a portion thereof in order to lease it for the sole benefit of the
defendant Hilaria Rojas. The plaintiff municipality exceeded its authority in the exercise
of its powers by executing a contract over a thing of which it could not dispose, nor is it
empowered so to do. The Civil Code, articles 1271, prescribes that everything which is
not outside the commerce of man may be the object of a contract, and plazas and
streets are outside of this commerce. Therefore, it must be concluded that the said
lease is null and void.

18. Heirs of Malabanan vs Republic G.R. No. 179987 September 3, 2013 HEIRS OF
MARIO MALABANAN, (Represented by Sally A. Malabanan),
Petitioners, vs. REPUBLIC OF THE PHILIPPINES, Respondent.

FACTS:

On February 20, 1998, Mario Malabanan filed an application for original

registration of title covering a parcel of land in Silang, Cavite which he purchased from
Eduardo Velazco and that he and his predecessors in interest had been in open,
notorious, exclusive and continuous possession of the said land for more than 30 years.
Velazco, the vendor, alleges that this land was originally owned by his great-
grandfather which passed down to his four sons. By 1966, one of the sons became the
administrator of the properties which the son of the latter succeeded his parents. One of
the properties therein was the one sold by the Velazco. They also presented evidence
on the classification of land to be alienable and disposable by the DENR on March 15,
1982. The RTC ruled in favor with them, but the CA reversed citing the case of
Republic v Hebierto.

ISSUE: Whether or not the registration of the property should be allowed.

Ruling:
No. The Court holds that the correct interpretation for Section 14 (1) of PD 1529
is Naguit, not Herbierto, the latter being only an orbiter dicta to a case where the MTC
did not acquire jurisdiction to settle the original registration. Thus: The requirement of
bona fide ownership since June 12, 1945 is satisfied when at the time of the
application, the land is already classified as alienable and disposable.
The Court rules that the interpretation for Sec 14 (2) of PD 1529 requires a mix
of interpretation of Art. 1113, Art. 1137, and Art. 420-422 of the New Civil Code. It is
well settled, per Art. 1113, that only objects within the commerce of men and the
patrimonial property of the State can be subject to acquisitive or extraordinary
acquisitive prescription. It is also clear that in Arts. 420-422, the property of public
dominion when no longer in use, is converted into patrimonial property, if and only if, as
held in Ignacio vs. Director of Lands, there is a positive act of the executive or
legislative declaring lands to be such. Hence, combining both rulings, it is clear that
only when there is a positive act, regardless if the land was classified as alienable and
disposable, that the land sought to be registered, can be acquired through prescription.
Applying to the case at bar: Sec. 14 (1) of PD 1529 is unsatisfied as the earliest tax
declarations presented was 1948. No other substantive evidence was presented. Sec.
14 (2) of PD 1529 is also unsatisfied as the subject property was declared as alienable
or disposable in 1982, there is no competent evidence that is no longer intended for
public use service or for the development of the national evidence, conformably with
Article 422 of the Civil Code. The classification of the subject property as alienable and
disposable land of the public domain does not change its status as property of the
public dominion under Article 420(2) of the Civil Code. Thus, it is insusceptible to
acquisition by prescription.

19. Chavez vs PEA G.R. No. 133250 July 9, 2002 FRANCISCO I.CHAVEZ,
petitioner, vs. PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY
DEVELOPMENT CORPORATION, respondents.

FACTS:

President Marcos through a presidential decree created PEA, which was tasked
with the development, improvement, and acquisition, lease, and sale of all kinds of
lands. The then president also transferred to PEA the foreshore and offshore lands of
Manila Bay under the Manila-Cavite Coastal Road and Reclamation Project.
Thereafter, PEA was granted patent to the reclaimed areas of land and then,
years later, PEA entered into a JVA with AMARI for the development of the Freedom
Islands. These two entered into a joint venture in the absence of any public bidding.
Later, a privilege speech was given by Senator President Maceda
denouncing the JVA as the grandmother of all scams. An investigation was conducted
and it was concluded that the lands that PEA was conveying to AMARI were lands of
the public domain; the certificates of title over the Freedom Islands were void; and
the JVA itself was illegal. This prompted Ramos to form an investigatory committee on
the legality of the JVA. Petitioner now comes and contends that the government
stands to lose billions by the conveyance or sale of the reclaimed areas to
AMARI. He also asked for the full disclosure of the renegotiations happening between
the parties.

ISSUE: W/N stipulations in the amended JVA for the transfer to AMARI of the
lands, reclaimed or to be reclaimed, violate the Constitution.

Ruling:

The ownership of lands reclaimed from foreshore and submerged areas is

rooted in the Regalian doctrine, which holds that the State owns all lands and waters of
the public domain. The 1987 Constitution recognizes the Regalian doctrine. It declares
that all natural resources are owned by the State and except for alienable
agricultural lands of the public domain, natural resources cannot be alienated.
The Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of
the 750 hectare reclamation project have been reclaimed, and the rest of the area is
still submerged areas forming part of Manila Bay. Further, it is provided that AMARI
will reimburse the actual costs in reclaiming the areas of land and it will shoulder the
other reclamation costs to be incurred. The foreshore and submerged areas of Manila
Bay are part of the lands of the public domain, waters and other natural resources and
consequently owned by the State. As such, foreshore and submerged areas shall
not be alienable unless they are classified as agricultural lands of the
public domain. The mere reclamation of these areas by the PEA doesn’t convert
these inalienable natural resources of the State into alienable and disposable
lands of the public domain. There must be a law or presidential proclamation
officially classifying these reclaimed lands as alienable and disposable if
the law has reserved them for some public or quasi-public use.

#20 On Reconsideration: Chavez v. Public Estates Authority G.R. No. 133250 May
6, 2003

G.R. No. 133250; May 6, 2003

FRANCISCO I. CHAVEZ, petitioner,
vs.
PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY DEVELOPMENT
CORPORATION, respondents.

CARPIO, J.:
 Patrimonial property can be sold to private parties provided there is a law
authorizing such act. Well-settled is the doctrine that public land granted to an end-user
government agency for a specific public use may subsequently be withdrawn by
Congress from public use and declared patrimonial property to be sold to private
parties.

FACTS:

The government signed a contract with the Construction and Development Corporation
of the Philippines to reclaim certain foreshore and offshore areas of Manila Bay including a
construction of Phases I and II of the Manila-Cavite Coastal Road. Then President Marcos
tasked the Public Estates Authority to reclaim land, including foreshore and submerged areas,"
and "to develop, improve, acquire, lease and sell any and all kinds of lands." The subsequent
issuance of Presidential Decree No. 1085 transferring to PEA the "lands reclaimed in the
foreshore and offshore of the Manila Bay" under the Manila-Cavite Coastal Road and
Reclamation Project. PEA entered into a Joint Venture Agreement with AMARI, a private
corporation. Under the Joint Venture Agreement between AMARI and PEA, several hectares
of reclaimed lands comprising the Freedom Islands and several portions of submerged areas
of Manila Bay were going to be transferred to AMARI .

ISSUE:

Whether or not the transfer of lands, reclaimed or to be reclaimed, violates the

Constitution.

RULING:

Yes, The prevailing doctrine before, during and after the signing of the Amended JVA is
that private corporations cannot hold, except by lease, alienable lands of the public domain.
This is one of the two main reasons why the Decision annulled the Amended JVA . The other
main reason is that submerged areas of Manila Bay, being part of the sea, are
inalienable and beyond the commerce of man, a doctrine that has remained immutable
since the Spanish Law on Waters of 1886. Clearly, the Decision merely reiterates, and does
not overrule, any existing judicial doctrine.

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

Francisco Chavez vs Public Estates Authority (July 2002)

FACTS:
The Public Estates Authority (PEA) is the central implementing agency tasked to undertake reclamation
projects nationwide. It took over the leasing and selling functions of the DENR (Department of
Environmental and Natural Resources) insofar as reclaimed or about to be reclaimed foreshore lands are
concerned.
PEA sought the transfer to the Amari Coastal Bay and Development Corporation, a private corporation, of
the ownership of 77.34 hectares of the Freedom Islands. PEA also sought to have 290.156 hectares of
submerged areas of Manila Bay to Amari.
ISSUE: Whether or not the transfer is valid.
HELD: No. To allow vast areas of reclaimed lands of the public domain to be transferred to Amari  as
private lands will sanction a gross violation of the constitutional ban on private corporations from acquiring
any kind of alienable land of the public domain.
The Supreme Court affirmed that the 157.84 hectares of reclaimed lands comprising the Freedom
Islands, now covered by certificates of title in the name of PEA, are alienable lands of the public domain.
The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of the public
domain. The transfer (as embodied in a joint venture agreement) to AMARI, a private corporation,
ownership of 77.34 hectares of the Freedom Islands, is void for being contrary to Section 3, Article XII of
the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the
public domain. Furthermore, since the Amended JVA also seeks to transfer to Amari  ownership of
290.156 hectares of still submerged areas of Manila Bay, such transfer is void for being contrary to
Section 2, Article XII of the 1987 Constitution which prohibits the alienation of natural resources other
than agricultural lands of the public domain.

Francisco I. Chavez vs. Public Estate Authority and Amari Coastal Bay Development Corporation
G.R. No. 133250. May 6, 2003

Carpio, J.

Doctrine: In the hands of the government agency tasked and authorized to dispose of alienable or
disposable lands of the public domain, these lands are still public, not private lands.

Issue : Whether or not the July 9, 2002 ruling of the Supreme Court should be reversed.

Held: No. Amari cannot claim good faith because even before Amari signed the Amended JVA on March
30, 1999, petitioner had already filed the instant case on April 27, 1998 questioning precisely the
qualification of Amari to acquire the Freedom Islands. Even before the filing of this petition, two Senate
Committees had already approved on September 16, 1997 Senate Committee Report No. 560 which
concluded that the Freedom Islands are inalienable lands of the public domain. Thus, Amari signed the
Amended JVA knowing and assuming all the attendant risks, including the annulment of the Amended
JVA. Amari has also not paid to PEA the full reimbursement cost incurred by PEA in reclaiming the
Freedom Islands. Moreover, Amari does not claim to have even initiated the reclamation of the 592.15
hectares of submerged areas covered in the Amended JVA, or to have started to construct any
permanent infrastructure on the Freedom Islands. In short, Amari does not claim to have introduced any
physical improvement or development on the reclamation project that is the subject of the Amended
JVA.PEA cannot claim that it is “similarly situated” as the Bases Conversion Development Authority
(BCDA) which under R.A. No. 7227 is tasked to sell portions of the Metro Manila military camps and other
military reservations is incorrect. PEA took the place of DENR as the government agency charged with
leasing or selling reclaimed lands of the public domain. The reclaimed lands being leased or sold by PEA
are not private lands, in the same manner that DENR, when it disposes of other alienable lands, does not
dispose of private lands but alienable lands of the public domain. Only when qualified private parties
acquire these lands will the lands become private lands. In the hands of the government agency tasked
and authorized to dispose of alienable or disposable lands of the public domain, these lands are still
public, not private lands. To allow vast areas of reclaimed lands of the public domain to be transferred to
PEA as private lands will sanction a gross violation of the constitutional ban on private corporations from
acquiring any kind of alienable land of the public domain. PEA will simply turn around and transfer several
hundreds of hectares of these reclaimed and still to be reclaimed lands to a single private corporation in
only one transaction. This scheme will effectively nullify the constitutional ban in Section 3, Article XII of
the1987 Constitution.

#21 Usero v. CA G.R. No. 152115 Jan 26, 2005 G.R. NO. 152115; January 26, 2005]
NIMFA USERO, Petitioner, v. COURT OF APPEALS and SPS. HERMINIGILDO & CECILIA
POLINAR, respondents.
x----------------------------------------------------x
G.R. NO. 155055 : January 26, 2005
LUTGARDA R. SAMELA, petitioner,
vs.
COURT OF APPEALS and SPS. HERMINIGILDO & CECILIA POLINAR, respondents.

CORONA, J.:

FACTS:

Petitioners Lutgarda R. Samela and Nimfa Usero are the owners of lots near the lots of
petitioners Samela and Usero. A low-level strip of land, with a stagnant body of water filled with
floating water lilies was situated between the lots. Apparently, every time a storm or heavy
rains occur, the water in said strip of land rises and the strong current passing through it
causes considerable damage to the house of respondent Polinars. Frustrated by their
predicament, private respondent spouses erected a concrete wall on the bank and rip-rapped
the soil on the portion of the strip of land. Claiming ownership of the subject strip of land,
petitioners Samela and Usero demanded that the spouses Apolinar stop their construction but
the spouses paid no heed, believing the strip to be part of a creek. Nevertheless, Polinars
offered to pay for the land being claimed by petitioners but the parties failed to settle their
differences. Petitioners filed separate complaints for forcible entry against the Polinars. The
MTC ordered the defendants to vacate and remove at their expense the improvements made
on the subject lot. On appeal, the RTC reversed the decision of the trial court and dismissed
the complaint. The CA denied the petitions for review on certiorari filed by petitioners

ISSUE:

Whether or not the disputed strip of land is the private property of petitioners.
RULING:

No, Article 420 of the Civil Code enumerates the things considered as property of
public dominion such as those intended for public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and
others of similar character.

The phrase "others of similar character" includes a creek which is a recess or an

arm of a river. It is property belonging to the public domain which is not susceptible to
private ownership. Being public water, a creek cannot be registered under the Torrens
System in the name of any individual.
The subject strip of land is a creek as evidenced by: (1) a barangay certification that a creek
exists in the disputed strip of land; (2) a certification from the Second Manila Engineering
District, NCR-DPWH, that the western portion of Pilar Village where the subject strip of land is
located is bounded by a tributary of Talon Creek and (3) photographs showing the abundance
of water lilies in the subject strip of land. The fact that water lilies thrive in that strip of land can
only mean that there is a permanent stream of water or creek there.
Thus, the consolidated petitions were denied. denied.

#22 Manila International Airport Authority v. CA 495 SCRA 591

G.R. No. 155650; July 20, 2006

MANILA INTERNATIONAL AIRPORT AUTHORITY, petitioner,
vs.
COURT OF APPEALS, CITY OF PARAÑAQUE, CITY MAYOR OF PARAÑAQUE,
SANGGUNIANG PANGLUNGSOD NG PARAÑAQUE, CITY ASSESSOR OF PARAÑAQUE,
and CITY TREASURER OF PARAÑAQUE, respondents.

FACTS:

Petitioner Manila International Airport Authority operates the Ninoy Aquino International
Airport (NAIA) Complex. As operator of the international airport, MIAA administers the land,
improvements and equipment within the NAIA Complex. The MIAA Charter transferred to
MIAA approximately 600 hectares of land, including the runways and buildings; and further
provides that no portion of the land transferred to MIAA shall be disposed of through sale or
any other mode unless specifically approved by the President of the Philippines. The Officers
of Paranaque City sent notices to MIAA due to real estate tax delinquency. However, MIAA
failed to settle the entire amount so the officers of Paranaque city levied and subjected to
auction the land and buildings of MIAA. MIAA sought for a Temporary Restraining Order from
the CA but was dismissed. MIAA then sought for the TRO with the Supreme Court a day
before the public auction, MIAA was granted with the TRO but unfortunately the TRO was
received by the Paranaque City officers 3 hours after the public auction. MIAA claims that
although the charter provides that the title of the land and building are with MIAA still the
ownership is with the Republic of the Philippines. MIAA also contends that the subject land and
buildings are of public dominion therefore cannot be subjected to levy and auction sale. On the
other hand, the officers of Paranaque City claim that MIAA is a government owned and
controlled corporation therefore not exempted to real estate tax.

ISSUE:

Whether or not the Airport Lands and Buildings of MIAA are part of public dominion.

RULING:

Yes, properties of public dominion mentioned in Article 420 of the Civil Code, like
"roads, canals, rivers, torrents, ports and bridges constructed by the State," are owned
by the State. The term "ports" includes seaports and airports. The MIAA Airport Lands
and Buildings constitute a "port" constructed by the State. Under Article 420 of the Civil
Code, the MIAA Airport Lands and Buildings are properties of public dominion and thus
owned by the State or the Republic of the Philippines. The Airport Lands and Buildings
are devoted to public use because they are used by the public for international and
domestic travel and transportation. The fact that the MIAA collects terminal fees and other
charges from the public does not remove the character of the Airport Lands and Buildings as
properties for public use. The operation by the government of a tollway does not change the
character of the road as one for public use. The charging of fees to the public does not
determine the character of the property whether it is of public dominion or not. Article 420 of
the Civil Code defines property of public dominion as one "intended for public use." Even if the
government collects toll fees, the road is still "intended for public use" if anyone can use the
road under the same terms and conditions as the rest of the public. The charging of fees, the
limitation on the kind of vehicles that can use the road, the speed restrictions and other
conditions for the use of the road do not affect the public character of the road. The Airport
Lands and Buildings of MIAA, which its Charter calls the "principal airport of the Philippines for
both international and domestic air traffic," are properties of public dominion because they are
intended for public use. As properties of public dominion, they indisputably belong to the State
or the Republic of the Philippines. Moreover, properties of public dominion, being for
public use, are not subject to levy, encumbrance or disposition through public or
private sale. Any encumbrance, levy on execution or auction sale of any property of
public dominion is void for being contrary to public policy. Essential public services will
stop if properties of public dominion are subject to encumbrances, foreclosures and auction
sale.

#23 Levy Macasiano v. Roberto Diokno G.R. No. 97764 Aug 10, 1992

G.R. No. 97764; August 10, 1992 LEVY D. MACASIANO, Brigadier General/PNP
Superintendent, Metropolitan Traffic Command, petitioner, vs. HONORABLE ROBERTO
C. DIOKNO, Presiding Judge, Branch 62, Regional Trial Court of Makati, Metro Manila,
MUNICIPALITY OF PARAÑAQUE, METRO MANILA, PALANYAG KILUSANG BAYAN FOR
SERVICE, respondents.

FACTS:
 On June 13, 1990, the municipality of Paranaque passed an ordinance authorizing the
closure of some streets located at Baclaran, Paranaque, Metro Manila and the establishment
of a flea market thereon. By virtue of this Paranaque Mayor Ferrer was authorized to enter into
a contract to any service cooperative for the establishment, operation, maintenance and
management of flea market and/or vending areas. Because of this purpose, respondent
Palanyag entered into an agreement with the municipality of Paranaque with the obligation to
remit dues to the treasury. Consequently, market stalls were put up by respondent Palanyag
on the said streets. On September 30, 1990, Brig. Gen Macasiano, PNP Superintendent of
Metropolitan Traffic Command ordered the destruction and confiscation of the stalls. These
stalls were later returned to Palanyag. Petitioner then sent a letter to Palanyag giving the latter
10 days to discontinue the flea market otherwise the market stalls shall be dismantled. Hence,
respondents filed with the court a joint petition for prohibition and mandamus with damages
and prayer for preliminary injunction, to which the petitioner filed his memorandum/opposition
to the issuance of the writ of preliminary injunction. The court issued a temporary restraining
order to enjoin petitioner from enforcing his letter pending the hearing on the motion for writ of
preliminary injunction.

ISSUE:

Whether or not an ordinance issued by the municipality of Paranaque authorizing the

lease and use of public streets or thoroughfares as sites for flea market is valid.

RULING:

No, Article 424 lays down the basic principle that properties of public domain
devoted to public use and made available to the public in general are outside the
commerce of man and cannot be disposed or leased by the local government unit to
private persons. Aside from the requirement of due process, the closure of the road should
be for the sole purpose of withdrawing the road or other public property from public use when
circumstances show that such property is no longer intended or necessary for public use or
public service. When it is already withdrawn from public use, the property becomes patrimonial
property of the local government unit concerned. It is only then that respondent municipality
can use or convey them for any purpose for which other real property belonging to the local
unit concerned might lawfully used or conveyed. Those roads and streets which are
available to the public in general and ordinarily used for vehicular traffic are still
considered public property devoted to public use. In such case, the local government has
no power to use it for another purpose or to dispose of or lease it to private persons. Hence the
ordinance is null and void.

24.
Government

v. Cabangis

53 Phil. 112
 FACTS:

A certain lots were formerly a part of a

large parcel of land belonging to the predecessor of
the herein claimants and appellees. From the year
1896 said land began to wear away, due to the
action of the waves of Manila Bay, until the year
1901 when the said lots became completely
submerged in water in ordinary tides, and remained
in such a state until 1912 when the Government
undertook the dredging of Vitas Estuary in order to
facilitate navigation, depositing all the sand and silt
taken from the bed of the estuary on the low lands
which were completely covered with water,
surrounding that belonging to the Philippine
Manufacturing Company, thereby slowly and
gradually forming the lots, the subject matter of
this proceeding.

Issue:

Whether or not the lots in question are of

property of public dominion.

HELD:

Yes.

The Supreme Court held that the lots in

question having disappeared on account of the
gradual erosion due to the ebb and flow of the tide,
and having remained in such a state until they were
reclaimed from the sea by the filling in done by the
Government, they are public land in the sense that
neither the herein claimants-appellees nor their
predecessors did anything to prevent their
destruction.

25. Cebu Oxygen & Acetylene, Inc vs Hon. Pascual Bercilles, 66 SCRA 481

Doctrine: Art. 422 of the New Civil states that property of public dominion, when no longer
intended for public use or for public service, shall form part of the patrimonial property of the
State. Thus, the abandoned part of M. Borces Street, Mabolo, Cebu City can be conveyed to a
private person or corporation like Cebu Oxygen and Acetylene.

Facts: Cebu Oxygen and Acetylene assailed the judgment of Judge Pascual Bercilles
dismissing their application to register the land once part of M. Borces Street, Mabolo Cebu. It
upheld the argument of Assistant Provincial Fiscal Jose Espeleta that the land belongs to the
government, not an abandoned road or land, and not alienable.
On September 23, 1968, the City Council of Cebu, through Resolution No. 2193, approved on
October 3, 1968, declared the terminal portion of M. Borces Street, Mabolo, Cebu City, as an
abandoned road, the same not being included in the City Development Plan. Subsequently, on
December 19, 1968, the City Council of Cebu passed another resolution (Resolution No. 2755)
authorizing the Acting City Mayor to sell the land through a public bidding. In pursuance to the
said resolution, the lot was awarded to Cebu Oxygen and Acetylene, being the highest bidder.
Subsequently, a deed of absolute sale was executed on March 3, 1969 by the City of Cebu via
its Acting City Mayor to Cebu Oxygen and Acetylene for a total consideration of P10,800.00.

Issue: Whether Cebu Oxygen and Acetylene can own and register the land in their name?

Held: Yes. Since sec. 31 of RA No. 3857 (The City Charter of Cebu) authorized the Mayor “to
close any city road, street or alley, boulevard, avenue, park or square. Property thus withdrawn
from public servitude may be used or conveyed for any purpose for which other real property
belonging to the City may be lawfully used or conveyed”, the petitioners Cebu Oxygen and
Acetylene acquired valid ownership and the land is no longer under public dominion or public
use as conveyed by Art. 422 of the New Civil Code.

26 Tantoco v. Municipal Council 49 Phil 52 G.R. No. L-24950; March 25, 1926
VIUDA DE TAN TOCO, plaintiff-appellant, vs. THE MUNICIPAL COUNCIL OF ILOILO,
defendant-appellee.

FACTS:

The widow of Tan Toco sued the municipal council of Iloilo for the two strips of land,
consisting of 592 sq.m and 59 sq.m with the amount of P42,966.40, which the municipality of
Iloilo had appropriated for widening said street. CFI Ilo-ilo ordered the said municipality to pay
Mrs. Tantoco the said amount, plus its interest. Said judgment was appealed, and was
affirmed by the Supreme Court. On account of lack of funds the municipality of Iloilo was
unable to pay the said judgment, wherefore plaintiff had a writ of execution issue against the
property of the said municipality, by virtue of which the sheriff attached two auto trucks, one
police patrol automobile, the police stations on Mabini street, and in Molo and Mandurriao and
the concrete structures, with the corresponding lots.
After notice of the sale of said property had been made the provincial fiscal of Iloilo filed a
motion with the CFI praying that the attachment on the said property be dissolved, that the said
attachment be declared null and void as being illegal and violate the rights of the municipality.
To which the Court agree, declaring the attachment levied upon the aforementioned property
of the municipality null and void. Mrs. Tantoco appealed the decision of CFI Ilo-ilo.

ISSUE:
 Whether or not the Municipal properties can be executed in lieu of the unsatisfied
obligation.

RULING:

The Supreme Court denied appeal and affirmed the decision of CFI Ilo-ilo on the ground
that the principle governing property of the public domain of the State is applicable to property
for public use of the municipalities as said municipal property is similar in character. The
principle is that the property for public use of the State is not within the commerce of man and,
consequently, is unalienable and not subject to prescription. Likewise, property for public use
of the municipality is not within the commerce of man so long as it is used by the public and,
consequently, said property is also inalienable. The rule is that property held for public
uses, such as public buildings, streets, squares, parks, promenades, wharves landing
places, fire engines, hose and hose carriages, engine houses, public markets, hospitals,
cemeteries, and generally everything held for governmental purposes, is not subject to
levy and sale under execution against such corporation.

27 Salas v. Jarencio 46 SCRA 743 G.R. No. L-29788; August 30, 1972
RAFAEL S. SALAS, in his capacity as Executive Secretary; CONRADO F. ESTRELLA, in
his capacity as Governor of the Land Authority; and LORENZO GELLA, in his capacity
as Register of Deeds of Manila, petitioners-appellants, vsHON. HILARION U. JARENCIO,
as Presiding Judge of Branch XXIII, Court of First Instance of Manila; ANTONIO J.
VILLEGAS, in his capacity as Mayor of the City of Manila; and the CITY OF MANILA,
respondents-appellees.

ESGUERRA, J.:

FACTS:

City of Manila – owner in fee simple of a parcel of land known as Lot 1, Block 557 of
Cadastral Survey of City of Manila, containing an area of 9689.80 sqm. On various dates in
1927, City of Manila sold portions of the parcel of land. When the last sale was effected August
1924, Transfer Certificate of Title 22547 covering the residue of the land 7490.10 sam was
issued in the name of City of Manila. On September 1960, Municipal Board of Manila adopted
a resolution requesting the President to consider the feasibility of declaring the land under
Transfer Certificate of Title 25545-25547 as patrimonial property of Manila for the purpose of
selling these lots to the actual occupants thereof. The resolution was then transmitted to the
Congress. The bill was then passed by Congress and approved by President, and became
Republic Act 4118, converting the land from communal property to disposable and alienable
land of State. To implement RA 4118, Land Authority requested City of Manila to deliver the
City’s TCT 22547 in order to obtain title thereto in the name of Land Authority. The request
was granted with the knowledge and consent of City mayor, cancelling TCT 22547 and issuing
TCT 80876 in the name of Land Authority. City of Manila, for some reasons, brought an action
to restrain, prohibit, and enjoin Land Authority and Register of Deeds from implementing RA
4118, and praying for the declaration of RA 4118 as unconstitutional. Trial court declared RA
4118 to be unconstitutional and invalid on the ground that it deprived City of its property
without due process of law and payment of just compensation. Land Authority and Register of
Deeds argued that the land is a communal land, or a portion of public domain owned by State;
that the land has not been used by City of Manila for any public purpose; that it was originally a
communal land not because it was needed in connection with its organisation as a municipality
but rather for the common use of its inhabitants; that the City mayor merely enjoys the
usufruct over said land and its exercise of acts of ownership by selling parts thereof did
not necessarily convert the land into a patrimonial property of City of Manila nor divert
the State of its paramount title.

ISSUE:

Whether or not the aforementioned land is a private or patrimonial property of the City of
Manila.

RULING:

The land is public property, As a general rule, regardless of the source or classification
of the land in the possession of municipality, excepting those which it acquired in its own funds
in its private or corporate capacity, such property is held for the State for the benefit of its
inhabitants, whether it be for governmental or proprietary purposes. The legal situation is the
same if the State itself holds the property and puts it to a different use. When it comes to
property of municipality which it did not acquire in its private or corporate capacity with
its own funds (the land was originally given to City by Spain), the legislature can
transfer its administration and disposition to an agency of the National Government to
be disposed of according to its discretion. Here it did so in obedience to the constitutional
mandate of promoting social justice to insure the well-being and economic security of the
people. The property was not acquired by the City of Manila with its own funds in its private or
proprietary capacity. The land was part of the territory of City of Manila granted by sovereign in
its creation. Furthermore, City expressly recognised the paramount title of the State over its
land when it requested the President to consider the feasibility of declaring the lot as
patrimonial property for selling. There could be no more blatant recognition of the fact that said
land belongs to the State and was simply granted in usufruct to the City of Manila for municipal
purposes. But since the City did not actually use said land for any recognized public purpose
and allowed it to remain idle and unoccupied for a long time until it was overrun by squatters,
no presumption of State grant of ownership in favor of the City of Manila may be
acquiesced in to justify the claim that it is its own private or patrimonial property.

28 Zamboanga del Norte v. City of Zamboanga 22 SCRA 1334 G.R. No. L-24440;
March 28, 1968THE PROVINCE OF ZAMBOANGA DEL NORTE, plaintiff-appellee,
vs. CITY OF ZAMBOANGA, SECRETARY OF FINANCE and COMMISSIONER OF
INTERNAL REVENUE, defendants-appellants.

FACTS:
 Prior to its incorporation as a chartered city, the Municipality of Zamboanga used to be
the provincial capital of the then Zamboanga Province. On October 12, 1936, Commonwealth
Act 39 was approved converting the Municipality of Zamboanga into Zamboanga City. Sec. 50
of the Act also provided that “Buildings and properties which the province shall abandon upon
the transfer of the capital to another place will be acquired and paid for by the City of
Zamboanga at a price to be fixed by the Auditor General.” Such properties include lots of
capitol site, schools, hospitals, leprosarium, high school playgrounds, burleighs, and hydro-
electric sites. On June 6, 1952, Republic Act 711 was approved dividing the province of
Zamboanga into two (2): Zamboanga del Norte and Zamboanga del Sur. As to how the assets
and obligations of the old province were to be divided between the two new ones, Sec. 6 of
that law provided “Upon the approval of this Act, the funds, assets and other properties and the
obligations of the province of Zamboanga shall be divided equitably between the Province of
Zamboanga del Norte and the Province of Zamboanga del Sur by the President of the
Philippines, upon the recommendation of the Auditor General.” However, on June 17, 1961,
Republic Act 3039 was approved amending Sec. 50 of Commonwealth Act 39 by providing
that, “All buildings, properties and assets belonging to the former province of Zamboanga and
located within the City of Zamboanga are hereby transferred, free of charge, in favor of the
said City of Zamboanga.” This constrained Zamboanga del Norte to file on March 5, 1962, a
complaint against defendants-appellants Zamboanga City; that, among others, Republic Act
3039 be declared unconstitutional for depriving Zamboanga del Norte of property without due
process and just compensation. Lower court declared RA 3039 unconstitutional as it deprives
Zamboanga del Norte of its private properties.

ISSUE:

Whether or not RA 3039 is unconstitutional on the grounds that it deprives Zamboanga

del Norte of its private properties.

RULING:

No. RA 3039 is valid. The properties petitioned by Zamboanga del Norte is a public
property.
The validity of the law ultimately depends on the nature of the 50 lots and buildings thereon in
question. For, the matter involved here is the extent of legislative control over the properties of
a municipal corporation, of which a province is one. The principle itself is simple: If the
property is owned by the municipality (meaning municipal corporation) in its public and
governmental capacity, the property is public and Congress has absolute control over
it. But if the property is owned in its private or proprietary capacity, then it is
patrimonial and Congress has no absolute control. The municipality cannot be deprived
of it without due process and payment of just compensation. The capacity in which the
property is held is, however, dependent on the use to which it is intended and devoted. Now,
which of two norms, i.e., that of the Civil Code or that obtaining under the law of Municipal
Corporations, must be used in classifying the properties in question? Civil Code: Art. 423. The
property of provinces, cities, and municipalities is divided into property for public use and
patrimonial property; ART. 424. Property for public use, in the provinces, cities, and
municipalities, consists of the provincial roads, city streets, municipal streets, the squares,
fountains, public waters, promenades, and public works for public service paid for by said
provinces, cities, or municipalities. All other property possessed by any of them is patrimonial
and shall be governed by this Code, without prejudice to the provisions of special laws.
Applying the above cited norm, all the properties in question, except the two (2) lots used as
High School playgrounds, could be considered as patrimonial properties of the former
Zamboanga province. Even the capital site, the hospital and leprosarium sites, and the school
sites will be considered patrimonial for they are not for public use. They would fall under the
phrase “public works for public service” for it has been held that under the ejusdem generis
rule, such public works must be for free and indiscriminate use by anyone, just like the
preceding enumerated properties in the first paragraph of Art 424. The playgrounds, however,
would fit into this category. Law of Municipal Corporations:
On the other hand, applying the norm obtaining under the principles constituting the law of
Municipal Corporations, all those of the 50 properties in question which are devoted to public
service are deemed public; the rest remain patrimonial. Under this norm, to be considered
public, it is enough that the property be held and, devoted for governmental purposes like local
administration, public education, public health, etc. The controversy here is more along the
domains of the Law of Municipal Corporations — State vs. Province — than along that of Civil
Law. If municipal property held and devoted to public service is in the same category as
ordinary private property, then that would mean they can be levied upon and attached; they
can even be acquired thru adverse possession — all these to the detriment of the local
community. It is wrong to consider those properties as ordinary private property. Lastly, the
classification of properties other than those for public use in the municipalities as patrimonial
under Art. 424 of the Civil Code — is “… without prejudice to the provisions of special laws.”
For purpose of this article, the principles, obtaining under the Law of Municipal Corporations
can be considered as “special laws”. Hence, the classification of municipal property
devoted for distinctly governmental purposes as public should prevail over the Civil
Code classification in this particular case.

29 Perez v. Mendoza, G.R. No. L-22006 July 28, 1975 G.R. No. L-22006; July 28,
1975 BASILIO PEREZ and PETRA MONTALBO, petitioners, vs. NICOLAS
MENDOZA, MARGARITA MACALALAD and the HONORABLE COURT OF
APPEALS, respondents.

FACTS:

In 1922, Felisa Montalbo-Ortega exchanged the land she inherited from her father with
the land of her aunt, Andrea Montalbo, because the latter wanted to donate a piece of land to
the municipality of Taysan, Batangas, to be used as a school site and the municipality
preferred the land belonging to Felisa as it was adjacent to the other properties of the
municipality. After the exchange, Andrea donated almost one-half of the land to the
municipality and gave the other to her daughter Margarita when the latter married Nicolas
Mendoza in 1972.  Since then, Margarita and Nicolas possessed and occupied the land
continuously, in the concept of owners. When Nicolas sought the transfer of the property in
their names he submitted the deed of exchange of property executed by Felisa and Andrea in
the presence of, and witnessed by the Municipal Secretary, Rafael Manahan. When Basilio
Perez came to know of the alleged deed of exchange, he had it investigated and found that the
signature of the municipal secretary was forged. Accused of falsification of private document,
Mendoza was convicted; but the Court of Appeals acquitted him for insufficiency of evidence. 
On March 20, 1959, petitioner Basilio and his wife Petra brought an action against respondent
spouses Margarita and Nicolas for quieting of title, alleging that the land in dispute was
inherited by Petra and Felisa from Estanislao Montalbo who died in 1918; that the heirs
partitioned said land in 1934 and the share of Felisa, the land in question, was sold by her
husband, Jose Ortega, and her children to petitioners; that they leased the said parcel of land
to respondents in 1946, but that when the lease expired in 1951, the latter refused to return the
land prompting the former to file an unlawful detainer action which was still pending during the
trial of this case. The trial court dismissed the complaint and declared respondents with a
better right over the property in litigation. The Court of Appeals affirmed the decision of the trial
court in toto.

ISSUE:

Whether or not the trial court erred in its decision.

RULING:

No, finding no reversible error, Supreme Court affirmed the judgment under review with
costs against petitioners. The claim of private respondents that they are the owners of the land
in dispute must be upheld on the ground that they were in actual and continuous possession of
the land, openly, adversely, and in the concept of owners thereof since 1927 thereby acquiring
ownership of the land through acquisitive prescription. Possession is an indicium of ownership
of the thing possessed and to the possessor goes the presumption that he holds the thing
under a claim of ownership. Article 433 of the Civil Code provides that "actual possession
under claim of ownership raises a disputable presumption of ownership. The true owner
must resort to judicial process for the recovery of the property." Article 538 of the Civil
Code provides that possession as a fact cannot be recognized at the same time in two
different personalities except in the cases of co-possession. Should a question arise
regarding the fact of possession, the present possessor shall be preferred; if there are two
possessors, the one longer in possession; if the dates of possession are the same, the one
who presents a title; and if all these conditions are equal, the thing shall be placed in judicial
deposit pending determination of its possession or ownership through proper proceedings.

30 Dizon v. CA G.R. No. 101929 January 6, 1993

G.R. No. 122544; January 28, 1999

FACTS:
 The spouses Hilario Galang and Martina Laxamana owned two (2) lots located in San Agustin,
Potrero, Municipality of Bacolor, Province of Pampanga. They had six (6) children, namely, Dionisio,
Marciana, Potenciana, Flaviana, Leonora and Gertrudes.

The spouses (Hilario and Martina) mortgaged the aforesaid lots to Camilo Angeles. It is alleged
by the respondents that Dionisio Galang redeemed these lots in his own name, despite the fact that
part of the funds used for the redemption came from his sisters. A cadastral survey involving the two
(2) lots was conducted, and on 19 May 1919, the Court of First Instance ordered the issuance in
Cadastral Case No. 14, of OCT Nos. 9010 (for lot 3548) and 9102 (for lot 3562) in the name solely of
Dionisio Galang.

Respondents, who are heirs of Galang's sisters, claim that Galang and his five (5) sisters had
partitioned the subject lots on 27 June 1920. As a consequence thereof, Galang's sisters constructed
their houses on Lot 3548. The structures passed on from generation to generation, with each of
Galang's sisters and their descendants enjoying the benefits therefrom. No one questioned or
disturbed them until the petitioners (heirs of Galang), informed them that the lots in question were
titled in Galang's name and had been partitioned, on the basis of a Deed of Extrajudicial Partition
(Exh. "D"), into three (3) equal parts corresponding to his (Galang's) three (3) children; that petitioners
had succeeded in subdividing the lots and in obtaining titles thereto in their name (TCT Nos. 182670-
R and 182671-R) despite their (respondents') earlier demands for an extrajudicial settlement of their
dispute.

Petitioners, on the other hand, contend that the cadastral case which culminated in the
issuance of the original certificates of title over the subject lots in the sole name of Galang, was a
proceeding in rem, thus binding on the whole world; that when original certificates of title (OCT Nos.
9010 and 9102) were issued on 9 January 1922 to Galang, respondents did not raise any objection
until March 1983 when they filed the complaint in Civil Case No. 6752, or after a lapse of sixty-one
(61) years.

The trial court upheld Galang's titles over the lots which, as aforestated, had been issued as
early as 1922 in his name. The trial court further held that respondents' action had long prescribed,
having been filed only on 24 March 1983, or after a lapse of sixty-one (61) long years from the
issuance of said titles. The court also noted respondents' failure to establish their relationship to
Galang's five (5) sisters, premising their claim solely on an unsubstantiated assertion that they are
descendants of the deceased Galang sisters.  The presence or construction of the houses on Lot No.
3548 was also not considered as evidence in respondents' favor, since no proof was submitted
establishing respondents' right to occupy the place. The documentary evidence allegedly showing co-
ownership among Dionisio and his co-heirs, was likewise ignored by the trial court as this did not
specifically refer to the disputed Lots 3548 and 3562.

ISSUE:

Whether or not  the Court of Appeals committed a reversible error of law in holding that
petitioner's complaint is within the competence of the RTC, not the MTCC.

RULING:

It is an elementary rule that the jurisdiction of a court over the subject matter is determined by
the allegations of the complaint and cannot be made to depend upon the defenses set up in the answer
or pleadings filed by the defendant. This rule is no different in an action for forcible entry or unlawful
detainer. All actions for forcible entry or unlawful detainer shall be filed with the proper Metropolitan
Trial Courts, the Municipal Trial Courts and the Municipal Circuit Trial Courts, which actions shall
include not only the plea for restoration of possession but also all claims for damages and costs
arising therefrom.  The said courts are not divested of jurisdiction over such cases even if the
defendants therein raises the question of ownership over the litigated property in his pleadings and
the question of possession cannot be resolved without deciding the issue of ownership.

Under Rule 70 of the Rules of Court, , there are two entirely distinct and different causes of
action, to wit: (1) a case for forcible entry, which is an action to recover possession of a property from
the defendant whose occupation thereof is illegal from the beginning as he acquired possession by
force, intimidation, threat, strategy or stealth; and (2) a case for unlawful detainer, which is an action
for recovery of possession from defendant whose possession of the property was inceptively lawful by
virtue of a contract (express or implied) with the plaintiff, but became illegal when he continued his
possession despite the termination of his right thereunder.

Petitioner's complaint for unlawful detainer in Civil Case No. 3506-B-96 is properly within the
competence of the MTCC. His pertinent allegations in the complaint read:

1) That defendants (spouses) have constructed an extension of their residential house as well
as other structures and have been occupying a portion of the PROPERTIES of the plaintiff
for the past several years by virtue of the tolerance of the plaintiff since at the time he has
no need of the property;

2) That plaintiff needed the property in the early part of 1996 and made demands to the
defendants to vacate and turn over the premises as well as the removal (of) their structures
found inside the PROPERTIES of plaintiff; that without any justifiable reasons, defendants
refused to vacate the portion of the PROPERTIES occupied by them to the damage and
prejudice of the plaintiff.

Verily, the petitioner's allegations in his complaint clearly make a case for an unlawful
detainer. SC found no error in the MTCC assuming jurisdiction over the petitioner's complaint. A
complaint for unlawful detainer is sufficient if it alleges that the withholding of the possession or the
refusal to vacate is unlawful without necessarily employing the terminology of the law. Here, there is
an allegation in petitioner's complaint that respondents occupancy on the portion of his property is by
virtue of his tolerance. Petitioner's cause of action for unlawful detainer springs from respondents'
failure to vacate the questioned premises upon his demand sometime in 1996. Within one (1) year
therefrom, or on November 6, 1996, petitioner filed the instant complaint.

31 G.R. No. 137013 May 6, 2005

RUBEN SANTOS, petitioner, vs. SPOUSES TONY AYON and MERCY AYON, respondents. SANDOVAL-
GUTIERREZ, J.:

FACTS:

Santos was the registered owner of three lots while the spouses Ayon were the registered owners of an
adjacent parcel of land. The previous occupant of this property built a building which straddled both the
lots of Santos and the Ayons. The Ayons had been using the building as a warehouse.

When Santos bought the three lots, he informed the Ayons that the building occupies a portion of his
land. However, he allowed them to continue using the building. However, later he demanded that the
Ayons demolish and remove the part of the building encroaching his property. They refused, continuing
to occupy the contested portion.

Santos filed a complaint for unlawful detainer against the Ayons. The MTCC found in favor of Santos. On
appeal, the RTC upheld the finding of the MTCC that the Ayons' occupation of the contested portion
was by mere tolerance.

Hence, when Santos needed the same, he had the right to eject them through court action. The CA
reversed and held that the proper remedy should have been an accion publiciana before the RTC, not
an action for unlawful detainer.

ISSUE:

Whether or not prior physical possession of the property by tolerance precludes an action for unlawful
detainer.

HELD:

No, prior physical possession of the property by tolerance does not preclude an action for unlawful
detainer. The SC reinstated the RTC decision.

A complaint for unlawful detainer is sufficient if it alleges that the withholding of the possession or the
refusal to vacate is unlawful without necessarily employing the terminology of the law. Here, there is an
allegation in the complaint that respondents' occupancy on the portion of his property is by virtue of his
tolerance. Possession by tolerance is lawful, but such possession becomes unlawful when the possessor
by tolerance refuses to vacate upon demand made by the owner. Thus, a person who occupies the land
of another at the latter's tolerance or permission, without any contract between them, is necessarily
bound by an implied promise that he will vacate upon demand, failing which, a summary action for
ejectment is the proper remedy against him.

32G.R. No. 150755 June 28, 2005

RENE GANILA,* EDUARDO DUMADA-OG, SR., RAFAEL GANILA, JOSE PASTRANA, LOURDES GANILA,
FLORENTINO GANILA, SERAFIN GANILA, LORETO ARELLANO, CONRADO GANILA, VIVENCIO ALVIOR,
EDUARDO GANTALA, AMPARO VILLANUEVA, ELEUTERIO SILVA, ADELINA GANILA, FELIZARDO GANILA,
SR., ENRIQUE GANILA, ABRAHAM TANONG, EMILIO ALFARAS, JR., BAPTIST CHRISTIAN LEARNING
CENTER, petitioners, vs. HON. COURT OF APPEALS AND VIOLETA C. HERRERA, respondents.

QUISUMBING, J.:

FACTS:

On March 19, 1997, private respondent Violeta Herrera filed 21 ejectment Complaints before the 16th
MCTC, Jordan-Buenavista-Nueva Valencia, Jordan, Guimaras. Private respondent alleged that she owns
Lot 1227 of the Cadastral Survey of Jordan, Guimaras, with an area of 43,210 square meters; that she
inherited the lot from her parents; and that she only tolerated petitioners to construct residential
houses or other improvements on certain portions of the lot without rental. Sometime in September or
October 1996, private respondent demanded that the petitioners vacate the lot and remove their
houses and other improvements thereon. Petitioners refused, despite offer of money by way of
assistance to them.

In their Answers, eight of the petitioners claimed that Lot 1227 was formerly a shoreline which they
developed when they constructed their respective houses. Another eight maintained that their houses
stood on Lot 1229 of the Cadastral Survey of Jordan, Guimaras. The other three8 asserted that Lot 1227
is a social forest area.

The RTC ruled that the evidence showed the better right of private respondent to possess Lot 1227.
Private respondent's position paper, affidavit and tax declaration supported her allegations. In addition,
the commissioners' report and sketch plan showed that indeed petitioners occupy Lot 1227. On the
other hand, according to the RTC, the petitioners failed to present evidence which would show that
they are entitled to possess the lot.

Based on the sketch plan, the RTC dismissed the cases against Gabasa and Amatorio since their houses
occupy only a small area of Lot 1227. It declared that Gabasa and Amatorio believed in good faith that
the whole area they occupied was part of the seashore.

The 19 petitioners, who were ordered to vacate the lot, filed a joint Petition for Review with the Court
of Appeals. The appellate court denied the petition. Petitioners moved for reconsideration and filed an
amended petition. The Court of Appeals, however, affirmed the factual findings and conclusions arrived
at by the trial courts and denied the amended petition for lack of merit. It also denied the motion for
reconsideration.

ISSUE:

Did the MCTC err in taking jurisdiction over and deciding the cases?

HELD:

No. At the outset, we note that petitioners question the MCTC's jurisdiction yet they admit in their
preliminary statement that the Complaints filed are indeed for unlawful detainer, and that the only
issue to be determined is mere physical possession (possession de facto) and not juridical possession
(possession de jure), much less ownership.

If only to stress the fundamental principles related to present controversy, jurisdiction over unlawful
detainer suits is vested in municipal trial courts. And in ejectment cases, the jurisdiction of the court is
determined by the allegations of the complaint.

In this case for ejectment, private respondent's allegations sufficiently present a case of unlawful
detainer. She alleged that (1) she owns Lot 1227; (2) she tolerated petitioners to construct their houses
thereon; (3) she withdrew her tolerance; and (4) petitioners refused to heed her demand to vacate the
lot. The Complaints were also filed within one year from the date of her demand. The cause of action
for unlawful detainer between the parties springs from the failure of petitioners to vacate the lot upon
lawful demand of the private respondent. When they refused to vacate the lot after her demand,
petitioners' continued possession became unlawful. Her complaint for ejectment against respondent, to
put it simply, is not without sufficient basis.

Petitioners' contention that private respondent should have filed an action to recover possession de
jure with the RTC is not supported by law or jurisprudence. The distinction between a summary action
of ejectment and a plenary action for recovery of possession and/or ownership of the land is settled in
our jurisprudence.

What really distinguishes an action for unlawful detainer from a possessory action (accion publiciana)
and from a reinvindicatory action (accion reinvindicatoria) is that the first is limited to the question of
possession de facto. An unlawful detainer suit (accion interdictal) together with forcible entry is the two
forms of an ejectment suit that may be filed to recover possession of real property. Aside from the
summary action of ejectment, accion publiciana or the plenary action to recover the right of possession
and accion reinvindicatoria or the action to recover ownership which includes recovery of possession,
make up the three kinds of actions to judicially recover possession.

It is not up to defendants, now petitioners herein, to dictate upon plaintiff, now the private respondent,
what her initial recourse should be. Her choice of an action for ejectment against so-called squatters is
well within her rights.

33 United States v. Causby

Supreme Court of the United States, 1946 328
U.S. 256, 66 S. Ct. 1062, 90 L. Ed. 1206 Douglas,
J.:

FACTS:

Thomas Lee Causby owned a chicken farm outside of Greensboro, North Carolina. The farm was located
near an airport used regularly by the United States military. According to Causby, noise from the airport
regularly frightened the animals on his farm, resulting in the deaths of several chickens. The problem
became so severe that Causby was forced to abandon his business. Under an ancient doctrine of the
common law, land ownership extended to the space above and below the earth. Using this doctrine as a
basis, Causby sued the United States, arguing that he owned the airspace above his farm. By flying
planes in this airspace, he argued, the government had confiscated his property without compensation,
thus violating the Takings Clause of the Fifth Amendment. The United States Court of Claims accepted
Causby's argument, and ordered the government to pay compensation.

ISSUE:
Whether respondent’s chicken farm had been taken without compensation.

HELD:

The Court of Claims granted respondents a judgment for the value of property destroyed and damage
to their property resulting from the taking of an easement over their property by low-flying military
aircraft of the United States, but failed to include in its findings of fact a specific description of the
nature or duration of the easement.

Hence, the case was remanded for a determination of the value of the easement and whether the
easement was permanent or temporary.

The Court concluded that the ancient common law doctrine "has no place in the modern world." Justice
Douglas noted that, were the Court to accept the doctrine as valid, "every transcontinental flight would
subject the operator to countless trespass suits. Common sense revolts at the idea." However, while the
Court rejected the unlimited reach above and below the earth described in the common law doctrine, it
also ruled that, "if the landowner is to have full enjoyment of the land, he must have exclusive control
of the immediate reaches of the enveloping atmosphere." Without defining a specific limit, the Court
stated that flights over the land could be considered a violation of the Takings Clause if they led to "a
direct and immediate interference with the enjoyment and use of the land." Given the damage caused
by the particularly low, frequent flights over his farm, the Court determined that the government had
violated Causby's rights, and he was entitled to compensation.

34
G.R. No. 4223 August 19, 1908
NICOLAS LUNOD, ET AL., plaintiffs-appellees, vs. HIGINO MENESES, defendant-appellant.
TORRES, J.

FACTS:

On March 14, 1904, Nicolas Lunod, et.al., alleged 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 Higino Meneses, 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 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 fishpond 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.

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,

Meneses denied each and everyone 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.

ISSUE:

Whether or not Meneses had the right to construct the works nor the dam which blocks the passage
through his lands.

HELD:

No. 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 on 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.

Ratio: 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 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.

According to article 530 of the Civil Code, an easement is 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 had imposed it for
the common public utility in view of the difference in the altitude of the lands in the barrio 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 estates construct works preventing this
easement, nor the one of the higher estate works increasing the burden.

The special law cited in 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. 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.

35 Bachrach v. Seifert, 87 Phil 117

Facts:

E.M. Bacrach’s last will and testament provided that he bequests to his wife Mary Bachrach all the fruits
and usufruct of the remainder of his estate, and that she may enjoy said usufruct and use or spend such
fruits as she may wish. The 108,000 shares of stock of E.M. Bachrach at the Atock Big Wedge Mining Co.,
Inc., received 54,000 shares representing 50% stock dividend of said 108,000 shares. Mary petitioned
the lower court to authorize the Peoples Bank and Trust Company as administrator of the estate to give
her the stock dividend, claiming that it is a fruit or income that belonged to her as usufructuary. Sophie
Siefert and Elisa Elianoff, legal heirs of deceased E.M. Bachrach, opposed the petition on the ground that
the stock dividend was not on income but part of the capital and therefore belonged not to the
usufructuary but to the remainderman.

Issue:

Is a stock dividend fruit or income which belongs to the usufructuary, or is it capital or part of the corpus
of the estate, which pertains to the remainderman?

Held:

Under Section 16 of the Corporation Law, no corporation may make or declare any dividend except from
the surplus profits arising from its business. Any dividend, therefore, whether cash or stock, represents
surplus profits. Article 471 of the Civil Code provides that the usufructuary shall be entitled to receive all
the natural, industrial, and civil fruits of the property in usufruct.

The 108,000 shares of stock are part of the property in usufruct. The 54,000 shares of stock dividend are
civil fruits of the original investment. They represent profits, and the delivery of the certificate of stock
covering said dividend is equivalent to the payment of said profits. Said shares may be sold
independently of the original share, just as the offspring of a domestic animal may be sold
independently of its mother.

36. Bachrach v. Talisay Silay

56 Phil 117

Facts:
Talisay-Silay Milling Co., Inc., was indebted to the Philippine National Bank. To
secure the payment of its debt, it succeeded in inducing its planters, among whom was
Mariano Ledesma, to mortgage their land to the creditor bank. And in order to
compensate those planters for the risk they were running with their property under that
mortgage, the aforesaid central, promised to pay bonus.
Mariano Ledesma is indebted to Bachrach Motor Co. Inc. Bachrach then filed a
complaint against Talisay-Silay Milling Co., Inc, (central) to deliver the amount which it
owes Ledesma by way of bonus. The PNB, on the other hand, filed a third party claim
alleging that it has preferential right to receive the amount because that bonus is a “civil
fruit” of the land mortgaged to said bank by Ledesma for the benefit of the said central.
The Lower court held that Bachrach Motor Co., Inc., had a preferred right to
receive the amount which was Mariano Lacson Ledesma's bonus, and it ordered the
defendant central to deliver said sum to the plaintiff.
PNB then filed this appeal.

Issue:
WON the bonus in question is a “civil fruit” of the mortgaged land and therefore
entitles PNB to preferential right over it.

Ruling:
No. The amount received as bonus is not a “civil fruit” of the mortgaged land
because it bears no immediate, but only a remote and accidental relation to the land
mentioned, having been granted as compensation for the risk of having subjected one's
land to a lien in favor of the bank, for the benefit of the entity granting said bonus.
The Bonus was not obtained from that land but from something else (it is income
arising from said risk or from Mariano Ledesma's generosity in facing the danger for the
protection of the central)

Article 355 of the Civil Code considers three things as civil fruits: First, the rents
of buildings; second, the proceeds from leases of lands; and, third, the income from
perpetual or life annuities, or other similar sources of revenue.
By "civil fruits" the Civil Code understands one of three and only three things, to
wit: the rent of a building, the rent of land, and certain kinds of income. As the bonus in
question is not the rent of a building or of land, the only meaning of "civil fruits" left to be
examined is that of "income."

37. Bernardo v. Bataclan, 66 Phil 598

VICENTE STO. DOMINGO BERNARDO vs. CATALINO BATACLAN

66 Phil 598

G.R. No. L-44606 November 28, 1938

Doctrine:

The Civil Code confirms certain time-honored principles of the law of property. One of these is
the principle of accession whereby the owner of property acquires not only that which it
produces but that which is united to it either naturally or artificially.

Whatever is built, planted or sown on the land of another, and the improvements or repairs
made thereon, belong to the owner of the land (art. 358). Where, however, the planter, builder,
or sower has acted in good faith, a conflict of rights arises between the owners and it becomes
necessary to protect the owner of the improvements without causing injustice to the owner of
the land.

Facts:

1. Bernardo learned when he entered into the premises of the property purchased from
Pastor Samonte that the latter authorised Catalino Bataclan to make improvements
thereon. In a civil case to secure possession, the court ruled that Bataclan was a builder
and possessor in good faith and was entitled to reimbursement for the works and
improvements,

2. The court gave the plaintiff 30 days within which to choose between the sale of the land
or to buy the works. Bernardo decided to sell the land to the defendant but the latter
informed the court that he is unable to pay the sum required. The court then awarded the
respondent 30 days to purchase the land or else the property will be sold in a public
auction.

3. In the auction sale, Toribio Teodoro was the highest bidder for 8,000 Pesos. The
purchaser sought judicial remedy for the possession of the property.

Issue:

W/N the defendant lost his right to retain the property pending payment for indemnity.

Decision:
The Court ruled that the right to retain the property has already been lost. Due to the failure and
inability of the defendant to pay the purchase price the subject property was sold in a public
auction which Bernardo asked for, without any protest from Bataclan. Therefore, the court found
no reason to keep the property in the possession of the defendant.

the Court explained that Article 448 provides a just and equitable solution to the impracticability
of creating "forced co-ownership" by giving the owner of the land the option to acquire the
improvements after payment of the proper indemnity or to oblige the builder or planter to pay for
the land and the sower to pay the proper rent. The owner of the land is allowed to exercise the
said options because his right is older and because, by the principle of accession, he is entitled
to the ownership of the accessory thing.

38. Ignacio v. Hilarion, 76 Phil 605

G.R. No. L-175             April 30, 1946

FACTS OF THE CASE:

The Hilarios were owners of a parcel of land partly rice land and partly
residencial, The Ignacios built houses and granaries on the said land. The Hilarios then
filed a case against Ignacios. The lower court rendered a decision declaring the Hilarios
as the legal owners of a parcel of land. On the other hand, Ignacios, as builders in good
faith of the houses and granaries, were entitled to retain the property until the Hilarios
makes a decision whether to pay for the value of the house and granaries or to sell the
land.
Hilarios did not make any choice, instead, they asked the Ignacios to remove the
structures at their own expense. They filed a case against Ignacios and the judge ruled
in favour of the Hilarios. Ignacios were issued a writ of execution.

Issue:
WON the Hilarios may compel Ignacios to vacate the land after choosing neither
to pay for the house nor to sell the land.

Ruling:
No.
Under Art. 448, the owner of the land has the option to either pay for the
improvement or sell the land to the owner of the improvement. But he cannot refuse to
choose and compel the owners of the building to remove it from the land where it is
erected. He is entitled to such remotion only when, after having agreed to sell the land,
the other party fails to pay for the same. But this is not the case here.
The order of Judge compelling defendants-petitioners to remove their buildings
from the land belonging to plaintiffs-respondents only because the latter chose neither
to pay for such buildings nor to sell the land, is null and void, for it amends substantially
the judgment sought to be executed and is, furthermore, offensive to articles 448 and
546 of the Civil Code.

39. Sarmiento v. Agana, 129 SCRA 122

Sarmiento vs. Agana 129 scra 122

Facts:

ERNESTO was still courting his wife, the latter's mother had told him the couple could
build a RESIDENTIAL HOUSE whom Ernesto did construct a RESIDENTIAL HOUSE on the LAND at
a cost of P8,000.00 to P10,000.00 who probably assumed that the wife's mother was the
owner of the LAND and that, it would be transferred to the spouses. Subsequently turned out
that the LAND had been titled in the name of Mr. & Mrs. Jose C. Santo, Jr. who, sold the same
to petitioner SARMIENTO. SARMIENTO filed an Ejectment suit against them. In the evidentiary
hearings before the Municipal Court, SARMIENTO submitted the deed of sale of the LAND in her
favor, which showed the price to be P15,000.00. On the other hand, ERNESTO testified that the
then cost of the RESIDENTIAL HOUSE would be from P30,000.00 to P40,000.00.Sarmiento
refuse to pay and give option to buy the property.

Issue: 1.Whether or not Ernesto was in good faith.

2.Whether or not Sarmiento could exercise both refusal to pay the spouses and give
option to purchase.

Held:

1.Yes. We agree that ERNESTO and wife were builders in good faith in view of the
peculiar circumstances under which they had constructed the RESIDENTIAL HOUSE. As far as
they knew, the LAND was owned by ERNESTO's mother-in-law who, having stated they could
build on the property, could reasonably be expected to later on give them the LAND.

In regards to builders in good faith, Article 448 of the Code provides:

ART. 448. The owner of the land on which anything has been built, sown or planted in good
faith,shall have the rightto appropriate as his own the works, sowing or planting, after payment
of the indemnity provided for in articles 546 and 548, or to oblige the one who built or planted to
pay the price of the land, and the one who sowed, the proper rent.However, the builder or
planter cannot be obliged to buys the land if its value is considerably more than that of the
building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not
choose to appropriate the building or trees after proper indemnity. The parties shall agree upon
the terms of the lease and in case of disagreement, the court shall fix the terms thereof.
 2.No. The owner of the building erected in good faith on a land owned by another, is
entitled to retain the possession of the land until he is paid the value of his building, under
article 453 (now Article 546). The owner, of the land. upon, the other hand, has the option,
under article 361 (now Article 448), either to pay for the building or to sell his land to the owner
of the building. But he cannot, as respondents here did, refuse both to pay for the building and
to sell the land and compel the owner of the building to remove it from the land where it is
erected. He is entitled to such remotion only when, after having chosen to sell his land, the
other party fails to pay for the same.

40. Pershing Tan Queto v. CA 148 SCRA 54

G.R. NO. L-35648 FEBRUARY 27, 1987

TAN QUETO
VS.
CA

Facts: 
Restituta Pombuena received the questioned lot (Lot 304-B of the Cadastre Survey of the
Municipality of Centro, Misamis Occidental) either as a purported donation or by way of
purchase on 1927 for P50.00 as the alleged consideration thereof. The transaction took place
during her mother’s lifetime (her father having predeceased the mother) and consummated
while Restituta was already married to her husband Juan Pombuena. On 1935, Juan filed an
application of Torrens title over the land for himself and his supposed co-owner Restituta. On
1938, a decision was promulgated pronouncing Juan (married to Restituto) as the owner of the
land. On 1949 a contract of lease over the lot was entered into between Pershing Tan Queto
and Restituta (with the consent of her husband) for a period of 10 years.
Meanwhile, On 1960 Restituta sued Tan Queto for unlawful detainer (the lease contract having
expired) before the Municipal Court of Ozamis City.
On 1962, as a consequence of the cadastral case, an OCT was issued in Juan’s name. Then,
Tan Queto and Juan entered into a barter agreement whereby Tan Queto became the owner of
the disputed lot, and the spouses in turn became the owners of a parcel of land with the house
constructed thereon previously owned (that is, before the barter) by Tan Queto. Thereafter, Tan
Queto constructed on the disputed land a concrete building, without any objection on the part of
Restituta.
The Municipal court ruled in favor of the spouses in the unlawful detainer case; but on appeal in
the CFI, the entire case was dismissed because of an understanding (barter) entered into by
Juan and Tan Queto.

Issue: WON Tan Queto is builder in good faith and entitled to reimbursement

Held:

There is no admission of Restituta’s exclusive ownership. Although, Tan Queto admitted

Restituta was an owner and not the owner of the lot since she was a co-owner of the lot
together with Juan. Even assuming that despite registration of the lot as conjugal, Tan Queto
nursed the belief that the lot was actually Restituta’s (making him in bad faith), still Restituta’s
failure to prohibit from building despite her knowledge that construction was actually being done,
makes her also in bad faith. The net resultant of mutual bad faith would entitle Tan Queto to the
rights of a builder in good faith, ergo, reimbursements should be given him if Restituta decides
to appropriate the building for herself.

While Tan Queto having bartered his own lot and small house with the questioned lot with Juan
(who has been adverted to by court decision and by the OCT a conjugal owner) may said to be
the owner-possessor of the lot. Certainly, he is not merely a possessor or builder in good
faith(this phrase presupposes ownership in another); much less is he a builder in bad faith. He
is a builder-possessor because he is the owner himself.

The difference between a builder (or possessor) in good faith and one in bad faith is that the
former is not aware of the defect or flaw in his title or mode of acquisition while the latter is
aware of such defect or flaw. But in either case there is a flaw or defect. In the present case,
there is no such flaw or defect because it is Tan Queto himself (not somebody else) who is the
owner of the property.

41. PECSON VS. CA. 224 SCRA 407

FACTS:

Petitioner Pedro P. Pecson was the owner of a commercial lot located in KAMIAS
Street, Quezon City, on which he built a four-door two-storey apartment building.

For he’s failure to pay realty taxes amounting to P12,000, the lot was sold public auction
to Mamerto Nepumuceno who in turn sold to private respondents NUGUID.

The petitioner challenged the validity of auction sale in Civil Case No. Q-41470 before
the RTC of the Quezon City.

The RTC dismissed the complaint, but as to the private respondent claim that the sale
included the apartment building, it held that there was no legal basis for the contention
that the apartment building was included in the sale.

Both the RTC and CA have ruled that the sale of the lot was valid. And both courts have
also ruled that what was sold was only the lot resulting from unpaid realty tax, but valid
sale does not include the apartment building.

ISSUE:

Whether petitioner Pecson is entitled to possession of the apartment building and its
rental while unpaid of the cost of the building he built.

RULING:
Yes. Since the private, respondents, spouses NUGUID, have opted appropriate the
apartment building, the petitioner, Pecson, is thus entitled to the possession and
enjoyment of the apartment building, until he is paid the proper indemnity, as well as of
the portion of the lot where the building has been constructed.
This is no, because the right to retain the improvements while the corresponding
indemnity is not paid implies the tenancy or possession in fact of the land on which is
built, planted or sown. The petitioner not having been so paid, he was entitled to retain
ownership of the building and, necessarily, the income therefrom.

42. DEPRA VS. DUMLAO, 136 SCRA 476

FACTS:

Petitioner DEPRA owns a parcel of land in municipality of Dumangas, Iloilo. Defendant

Dumlao also owns an adjoining to the lot of DEPRA.

When defendant Dumlao constructed his house, his kitchen encroached an area of
34sq meters of DEPRA’s property.

After the encroachment was discovered in a relocation survey, his mother Beatring
wrote a demand letter asking Dumlao to move back from his encroachment. She further
filed a case of unlawful detainer against Dumlao.

The Municipal Trial Court found that Dumlao was a builder in good faith applying article
448 of the Civil Code. The Trial Court ordered a forced lease between the two parties.
Dumlao to pay DEPRA’s 5 pesos month for the 34 square meters encroachment.

Neither party appealed for the decision but DEPRA did not accept the payment of
rentals so that Dumlao deposited such rentals with the Municipal Trial court.

DEPRA the filed for quieting of the title against Dumlao claiming that the decision of the
Municipal Trial Court is null and void because the jurisdiction is not within the Municipal
Trial Court.

ISSUE:
Whether land owner can be compelled to accept rent payments by the court(with both
Land Owner and BPS being in good faith)

RULING:

The owner of the land on which improvement was built by another in good faith is
entitled to removal of improvement only after land owner has opted to sell the land and
the builder refused to pay for the same. Art. 448. The owner of the land on which
anything has been built sown or planted in good faith, shall have the right to appropriate
as he owned the works. Sowing or planting, after payment of the indemnity provided for
in articles 456 and 548, or to oblige the one who built or planted to pay the price of the
land, and the one who sowed, the proper rent.

However, the builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case, he shall pay
reasonable rent, if the owner of the land does not choose to appropriate the building or
trees after the proper indemnity. The parties shall agree upon the terms and the lease
and in case of disagreement, the Court shall fix the term thereof.

He is entitled to such removal only when, after having chosen to sell his encroached land, DUMLAO
fails to pay for the same.   In this case, DUMLAO had expressed his willingness to pay for the land,
6

but DEPRA refused to sell.

The owner of the building erected in good faith on a land owned by another, is entitled to retain the
possession of the land until he is paid the value of his building, under article 453 (now Article 546).
The owner of the land, upon the other hand, has the option, under article 361 (now Article 448),
either to pay for the building or to sell his land to the owner of the building. But he cannot as
respondents here did refuse both to pay for the building and to sell the land and compel the owner of
the building to remove it from the land where it erected. He is entitled to such remotion only when,
after having chosen to sell his land. the other party fails to pay for the same 
 It is the owner of the land who is authorized to exercise the option, because his right is older, and
because, by the principle of accession, he is entitled to the ownership of the accessory thing.

43. TECHNOGAS PHIL. VS. CA 268 SCRA 5

FACTS:

Petitioner and respondent owns an adjoing lot. It was discovered in a survey that the
building of the petitioner Technogas encroached the lot of the private respondent
Edward Uy.

Upon the discovery of the encroachment, petitioner Technogas offered to pay the
portion lot but was refused by the respondent Uy.

The portion entered into an agreement wherein petitioner agreed to demolish the wall at
the back portion of its land to give possession to respondent of his previously enclosed
land by the petitioner.
However, respondent Uy filed a complaint against petitioner before the office of the
Municipal Engineer of Paranaque and before the office of the Provincial of Rizal in
connection of the encroachment of the petitioner Technogas.

The complaint however did not prosper prompting respondent Uy to dig a canal along
Technogas wall that caused the portion of the wall to collapsed.

Petitioner filed complaint against respondent Uy and his wife for malicious mischief.

ISSUE:

Whether Technogas is a buider in good faith because it is presumed to know the meters
and bound of his property.

RULING:

No. No one can determine the precise extent on location of his property by merely
examining his proper title unless one is versed in the science of surveying. There is no
question in that when Technogas purchased the land from Poring Industries, the
buildings and other structures were already in existence. Furthermore, it is not clear as
to who actually built these structures but it can be assumed that the predecessor-in
interest of Technogas, Pariz, Industries, did no.

Art. 527 of the New Civil presumes Good faith. Since no proof exist to show that the
builder built the encroaching structures in bad faith, the structure should be presumed to
have been built in good faith.

44. ORTIZ VS. KAYAN 92 SCRA 146

FACTS:

Petitioner Ortiz continued the cultivation of the property owned by his ward Martin
Dolorico II, who later died.

However, the heir of Martin Dolorico II executed an affidavit relingquishing his rights in
favor of the defendants Quirino Comintan and Eleuterio Zamora.

Respondents filed their respective sales applications but petitioner protested that he be
given preference to purchase the lot since he is the actual occupant and has been
continuous possession of the lot.

The respondent court ruled that defendants should pay petitioner the improvements and
has the right to retain the property without being first paid of all his improvements.
Respondents court appointed respondent Vicente Ferro, clerk of Court, as receiver to
collect tolls on a portion of the property used as a diversion road.. It maintained that the
tolls collected by the plaintiff or an unimproved portion naturally belongs to the
defendants, following the doctrine on accretion.

Ortiz filed petition contenting that all the fruits of the property, including the tolls
collected by him from the passing vehicles. This is in lieu of the interest of the amount to
be paid to petitioner or reimbursement for improvements.

ISSUE:

Whether petitioner is still entitled to retain for his own exclusive benefit all the fruits of
the property.

RULING:

45. GEMENIANO VS. CA 259 SCRA 10

FACTS:

Petitioner sold their unfinished bungalow to the respondents, with a promise to sell the
lot to a respondent. The lot was originally owned by the mother of the petitioner. The
property was later leased to the respondents in 1978 for 7 years for P40 a month as
evidence by their lease contract.
The respondents introduced improvements but in1985, the mother of the petitioner
refused to receive the monthly rentals. It turned out that the lot was already sold to
Maria Lee which was sold to Salcedo, who later sold to spouse of Dionisio.

The property eventually came back to the petitioner when the spouse Dionisio executed
a Deed of Quit claim over the said property in favor of the petitioners.

In 1993, petitioner wrote letter to respondents to vacate the land but the respondents
refused. Petitioner filed complaint in Court. Respondent claimed that they should be
entitled to buy the land because of the promise of the petitioner to sell them the land
and because they were builders in good faith.

ISSUE:

Whether the respondent are builders in good faith.

RULING:

NO, they were not builders in good faith. The respondents knew that their stay would
end after the lease contract expires. They can’t bank on the promise, which was not in
writing, of the petitioner that the latter will sell the land to them. According to 1403, an
agreement for the sale of real property or an interest therein is unenforceable, unless
some not or memorandum thereof be produced. Other than the alleged promise by the
petitioner, respondents had no other evidence to prove their claim.

46. PLEASANTVILLE DEVELOPMENT CORPORATION VS. CA 253 SCRA 10

FACTS:

Edith Robillo purchased a land from the petitioner Pleasantville Development

Corporation, designated as lot 9.

In 1975, respondent Eldred Jordinico bought lot No. 8 of the same subdivision from CT
Torres Enterpises (CTTE). One of the CTTEI’s employees, Zenaida Octaviano,
accompanied Kee and his wife to the site and mistakenly pointed to lot 9 instead of lot
8.
Afterwards, Kee made improvements on lot 9, constructing a residence, a store, etc. In
the contract of sale on installment signed by Kee, it is provided that the vendee shall
bear the expenses of whatever consequential change made in the property.

ISSUE:

Whether the contract waive the rights of the respondent to recover damages.

RULING:

NO, such waiver would be contrary to public policy and could not be allowed. Kee was a
builder in good faith, honestly thinking that he was making improvements on his own
property. Article 448 provides the right of respondents.

47. BALTAZAR VS. CARIDAD 17 SCRA 460

FACTS:

Julio Baltazar, the registered owner of a lot 8864 died on December 6, 1961, his
surviving wife and children filed a motion, in the cadastral case praying for writ of
possession against Silvina Caridad and her daughter, Eduardo Caridad, who had been
in possession of the southern portion of the said property since 1939.

On December 11, 1961, the Trial Court issued an order granting Baltazar’s motion, and
overruled Caridad’s opposition but directed the sheriff not to remove or destroy the
permanent improvements on the lot without an express command.

On January 2, 1962, the order having become final, the sheriff enforced the writ and
placed Baltazar in possession of the southern portion of the lot.

ISSUE:

Whether the respondent is builder in good faith.

RULING:

NO. The respondent Caridad cannot be regarded as builder in good faith because she
is bound by the 1941 decree of registration which obligated their parents and
predecessors-in-interest. Good faith must rest on a colorable right in the builder, beyond
a mere stubborn belief in one’s title despite judicial adjudication. The fact that Caridad
demolished and replaced their old house in 1959 with new and bigger one cannot
weaken the rights of the registered owners.

48. SPOUSES DEL CAMPO V. ABESIA 167 SCRA 379

FACTS:

The case involves two friendly parties who are co-owners of a corner lot at Flores an
Covan streets in Cebu. Petitioner owns 2/3 of the lot and defendants owns 1/3 of the
same. The total size of the lot is 45 square meters.

Later, the 2 parties decided to divide the co-owned property into 2 lots. 30 square
meters went to petitioner and 15 square meters went to the defendants. From the
sketch plan, both parties discovered that the house of defendant occupied a portion of
the petitioner adjacent land, covering 5 square meters of it. The parties the requested
the Trial Court to adjudicate who should take possession of the encroached 5 square
meters.

ISSUE:

Whether rules on accession can apply on property that used to be co-owned, but was
subdivided.

RULING:

YES. The rule on accession applies co-ownership was terminated upon the partitioning
of the lot. Article 448 therefore governs. The house of the defendant overlapped that of
Petitioner, but this was built on good faith. Hence, the petitioner has the right to choose
of two options:

1. To appropriate the 5 square meters portion of the house of the defendant

after indemnifying the defendant; or
2. Obliging the defendants to pay a portion of the land on which their home
rested, or they can rent it.

GR: Article 448 of the Civil Code cannot apply where a co-owner builds, plants or sows on the land
owned in common for then he did not build, plant or sow upon land that exclusively belongs to
another but of which he is a co-owner. The co-owner is not a third person under the circumstances,
and the situation is governed by the rules of co-ownership. 
ER: 1.  co-ownership is terminated by the partition
 2.  said provision of the Civil Code may apply even when there was co-ownership if good
faith has been established. 

49. PROGRAM INCORPORATED VS PROVINCE OF BATAAN 492 SCRA 529

FACTS:

Petitioner in1946 had a contract of lease over Piazza Hotel and Mariveles Lodge owned
by BASECO for 3 years. The agreement was after the expiration of the contract the
petitioner is allowed to continue operating the hotel on monthly extensions of the lease.

However, in 1989, the Presidential Commission on Good Governance seized the lot
where Piazza Hotel stood pursuant to Executive Order No. 1 of the former President
Corazon Aquino.

However, on the same year Piazza Hotel was sold at a public auction for nonpayment of
taxes to respondent Province of Bataan. The title of the property was transferred to the
respondent Province of Bataan.

For this, petitioner filed complaint for preliminary injunction and collection for sum of
money against BASECO.

On November 22, 1990, respondent filed a complaint-in-intervention praying, inter alia,

that petitioner be ordered to vacate the Piazza Hotel and Mariveles Lodge for lack of
legal interest.

On February 3, 1995, the RTC rendered judgement in favor of respondent. On appeal,

they affirmed the ownership of the respondent over the property.

ISSUE:

Whether petitioner is possessor in good faith.

RULING:

NO. The petitioner is not a possessor in good faith. The interest of the petitioner was
only a tenant under a rental contract. The lessee cannot claim reimbursement, as a
matter of right, for useful improvements ha has made on the property, nor can assert a
right of retention until reimbursed. His only remedy is to remove the improvement if the
lessor does not choose to pay its value; but the court cannot give him the right to buy
the land.
50. FILIPINO FOUNDATION 576 SCRA 655 SULO SA NAYON INC. V. NAYONG

FACTS:

In 1975, respondent leased to petitioner a portion of land for the constructions and
operation of a hotel building for a period of 21 years and renewable for 25 years upon
due notice in writing at least 6 months prior to the expiration of the lease.

On March, 1995, the parties agreed to a new contract for another 25 years. However,
beginning 2001, petitioner defaulted in the payment of their monthly rental. When the
petitioner did not pay, respondent filed for unlawful detainer.

Petitioner argued that they are builders in good faith and have the right to retain the
property until fully reimbursed of their improvements.

ISSUE:

Whether petitioner is a builder in good faith.

RULING:

NO. In the case at bar, petitioner have no adverse claim or title to the land. In fact, a
lessee, they recognized that the respondent is the owner of the land. The introduction of
valuable improvements on the leased premises does not give the petitioners right of
retention and reimbursement which rightfully belongs to a builder in good faith.
Otherwise, such a situation would allow the lease to easily improve the lessor out of
property.

We affirm the ruling of the CA that introduction of valuable improvements on the leased premises
does not give the petitioners the right of retention and reimbursement which rightfully belongs to a
builder in good faith. Otherwise, such a situation would allow the lessee to easily "improve" the
lessor out of its property. We reiterate the doctrine that a lessee is neither a builder in good faith nor
in bad faith12 that would call for the application of Articles 448 and 546 of the Civil Code. His rights
are governed by Article 1678 of the Civil Code, which reads:

Art. 1678. If the lessee makes, in good faith, useful improvements which are suitable to the use for
which the lease is intended, without altering the form or substance of the property leased, the lessor
upon the termination of the lease shall pay the lessee one-half of the value of the improvements at
that time. Should the lessor refuse to reimburse said amount, the lessee may remove the
improvements, even though the principal thing may suffer damage thereby. He shall not, however,
cause any more impairment upon the property leased than is necessary.
With regard to ornamental expenses, the lessee shall not be entitled to any reimbursement, but he
may remove the ornamental objects, provided no damage is caused to the principal thing, and the
lessor does not choose to retain them by paying their value at the time the lease is extinguished.

Under Article 1678, the lessor has the option of paying one-half of the value of the improvements
which the lessee made in good faith, which are suitable for the use for which the lease is intended,
and which have not altered the form and substance of the land. On the other hand, the lessee may
remove the improvements should the lessor refuse to reimburse.

51. BALATTAN VS. CA 304 SCRA 37

FACTS:

Petitioner and respondent are the owners of the registered lots. Also, a Li Ching Yao is
an owner of a registered lot. Their lots are adjacent to each other.

When petitioner Balattan constructed her house, she noticed that the property of
respondent encroached portion of her property.

Respondent claimed that his house built within the perimeters of his father’s lot as it was
surveyed by the authorized surveyor of Araneta Institute of Agriculture.

Petitioner requested for another survey and it was found out that respondent
encroached 42 square meters of the lot of the petitioner. It was found out that the
previous survey was not correct because the lot of the respondent Li Ching Yao were
moved towards the lot of the petitioner.

Petitioner filed action publiciana in court against respondent. Respondent also file their
answer with third party complaint impleading Li Ching Yao and the Engineer who
surveyed the lots.

ISSUE:

Whether respondent and Li Ching Yao are builders in good faith.

RULING:

Yes. It was established in the case that the parties had no knowledge of the
encroachment until petitioner Balattan it, there they are all builders in good faith, in that
scenario they have two options:

1. The land owner will buy the improvements;

2. The builders to buy the land given that the value of the land is not
considerably more than the building or tree; otherwise, the owner may
remove the improvements thereon.

52. PABLO M. PADILLA v. LEOPOLDO MALICSI, GR No. 201354, 2016-09-21

Facts:

Spouses Padilla bought a parcel of land in Magsaysay Norte, Cabanatuan City in 1984

Sometime in 1998, Spouses Padilla discovered that Leopoldo Malicsi, Lito Casino, and Agrifino Guanes
(Malicsi, et al.) constructed houses on their lot.

Spouses Padilla made repeated verbal and written demands for Malicsi, et al. to vacate the premises and
pay a monthly rental of P2,000.00, but Malicsi, et al. refused to heed Spouses Padilla's demands.

On August 6, 2007, Spouses Padilla filed a complaint for recovery of possession against Malicsi, et al.,
along with three (3) others: Larry Marcelo, Diosdado dela Cruz, and Rolando Pascua.

Malicsi, et al. alleged that they believed in all honesty and good faith that the lot belonged to Toribia Vda.
De Mossessgeld (De Mossessgeld).[11] They claimed that they possessed the land and built their houses
on the lot only after receiving De Mossessgeld's permission.

Malicsi, et al. also claimed that they and De Mossessgeld agreed that she would sell them the areas
occupied by their houses, provided that pending full payment, they would pay her P40.00 per month as
rent.

In the Decision[22] dated July 15, 2009, the Regional Trial Court ruled that Malicsi, et al. cannot be
considered as builders in good faith.[23] The dispositive of the Regional Trial Court Decision
reads:WHEREFORE, premises considered, judgment is hereby rendered in favor of the [Spouses Padilla]
and against [Malicsi, et al.] ordering the latter:To vacate the property covered by TCT-T-45565 of the
Registry of Deeds of Cabanatuan City and surrender possession of the same to [Spouses Padilla];To pay
[Spouses Padilla] jointly and severally attorney's fees in the amount of P20,000.00 and litigation expenses
in the amount of P10,000.00.SO ORDERED.[24] (Emphasis in the original)... they point out that
respondents Leopoldo Malicsi, Lito Casino, and Agrifino Guanes failed to substantiate their claim of
being builders in good faith:

A builder in good faith is a builder who was not aware of a defect or flaw in his or her title when he or she
introduced improvements on a lot that turns out to be owned by another

Article 546. Necessary expenses shall be refunded to every possessor; but only the possessor in good faith
may retain the thing until he has been reimbursed therefor.

Respondents claim to be builders in good faith because they believed that the lot was owned by De
Mossessgeld.[52] Operating under this belief, they entered into an agreement with her where she would
sell them the areas occupied by their respective houses, and pending full payment, they would each pay
her P40.00 monthly as rent.

Regional Trial Court was not swayed by respondents' assertion of being builders in good faith since it
found that the property was titled, as early as 1963, to petitioner Pablo M. Padilla, Jr.'s mother, while
respondents only entered the lot sometime between 1980 and 1983, thus:

Issues:

Whether respondents are builders in good faith, that planted or sown in bad faith may demand the
demolition of the work, or that the planting or sowing be removed.

Ruling:

recoup - reimburse or compensate (someone) for money spent or lost.

Under Article 452[67] of the Civil Code, a builder in bad faith is entitled to recoup the necessary
expenses incurred for the preservation of the land. However, respondents neither alleged nor presented
evidence to show that they introduced improvements for the preservation of the land.

53. DELOS SANTOS v. ALBERTO ABEJON, GR No. 215820, 2017-03-20

Facts:

The complaint alleged that Erlinda and her late husband Pedro Delos Santos (Pedro) borrowed the amount
of P100,000.00 from the former's sister, Teresita

As security for the loan, Erlinda and Pedro mortgaged their property

After Pedro died, Erlinda ended up being unable to pay the loan,... name of "Teresita, Abejon[,] married
to Alberto S. Abejon."

Despite the foregoing, petitioners refused to acknowledge the sale, pointing out that since Pedro died in
1989,... his signature in the Deed of Sale executed in 1992 was definitely forged.

Issues:

whether or not the CA correctly held that petitioners should be held liable to respondents in the aggregate
amount of P2,200,000.00, consisting of the loan obligation of P100,000.00, the construction cost of the
three (3)-storey building in the amount of P2,000,000.00, and attorney's fees and costs of suit amounting
to P100,000.00.

Ruling:

Pursuant to Article 121 of the Family Code, the P100,000.00 loan obligation, including interest, if any, is
chargeable to Erlinda and Pedro's conjugal partnership as it was a debt contracted by the both of them
during their marriage; and should the conjugal partnership be insufficient to cover the same, then Erlinda
and Pedro (more particularly, his estate as he is already deceased) shall be solidarity liable for the unpaid
balance with their separate properties.

In other words, respondents have the option to either file a personal action for collection of sum of money
or institute a real action to foreclose on the mortgage security. The aforesaid remedies are alternative,
meaning the choice of one will operate to preclude the other.

It is settled that "the declaration of nullity of a contract which is void ab initio operates to restore things to
the state and condition in which they were found before the execution thereof." Pursuant to this rule, since
the Deed of Sale involving the subject land stands to be nullified in view of the parties' stipulation to this
effect, it is incumbent upon the parties to return what they have received from said sale.

In this case, it bears stressing that the execution of the Deed of Sale involving the subject land was
done in 1992. However, and as keenly pointed out by Justice Alfredo Benjamin S. Caguioa during
the deliberations of this case, Teresita was apprised of Pedro's death as early as 1990 when she
went on a vacation in the Philippines.  As such, she knew all along that the aforesaid Deed of Sale -
35

which contained a signature purportedly belonging to Pedro, who died in 1989, or three (3) years
prior to its execution - was void and would not have operated to transfer any rights over the subject
land to her name. Despite such awareness of the defect in their title to the subject land, respondents
still proceeded in constructing a three (3)-storey building thereon. Indubitably, they should be
deemed as builders in bad faith.
On the other hand, petitioners knew of the defect in the execution of the Deed of Sale from the start,
but nonetheless, still acquiesced to the construction of the three (3)-storey building thereon. Hence,
they should likewise be considered as landowners in bad faith.

In this relation, Article 453 of the Civil Code provides that where both the landowner and the builder,
planter, or sower acted in bad faith, they shall be treated as if both of them were in good faith, viz.:

Article 453. If there was bad faith, not only on the part of the person who built, planted or sowed on
the land of another, but also on the part of the owner of such land, the rights of one and the other
shall be the same as though both had acted in good faith.

It is understood that there is bad faith on the part of the landowner whenever the act was done with
his knowledge and without opposition on his part.

Whenever both the landowner and the builder/planter/sower are in good faith (or in bad faith,
pursuant to the afore-cited provision), the landowner is given two (2) options under Article 448  of 36

the Civil Code, namely: (a) he may appropriate the improvements for himself after reimbursing the
buyer (the builder in good faith) the necessary and useful expenses under Articles 546  and 548  of
37 38

the Civil Code; or (b) he may sell the land to the buyer, unless its value is considerably more than
that of the improvements, in which case, the buyer shall pay reasonable rent

54. REPUBLIC v. CA, GR No. L-61647, 1984-10-12

Facts:

Respondents Benjamin Tancinco, Azucena Tancinco Reyes, Marina (should be "Maria") Tancinco
Imperial and Mario C. Tancinco are registered owners of a parcel of land covered by Transfer Certificate
of Title No. T-89709 situated at Barrio Ubihan, Meycauayan, Bulacan bordering on... the Meycauayan
and Bocaue rivers.

On June 24, 1973, the private respondents filed an application for the registration of three lots adjacent to
their fishpond property

On April 5, 1974, Assistant Provincial Fiscal Amando C. Vicente, in representation of the Bureau of
Lands filed a written opposition to the application for registration.

On March 6, 1975, the private respondents filed a partial withdrawal of the application for registration
with respect to Lot 3 of Plan Psu-131892 in line with the recommendation of the Commissioner appointed
by the Court.

On March 7, 1975, Lot 3 was ordered withdrawn from the application and trial proceeded only with
respect to Lots 1 and 2 covered by Plan Psu-131892.
On June 26, 1976, the lower court rendered a decision granting the application on the finding that the
lands in question are accretions to the private respondents' fishponds covered by Transfer Certificate of
Title No. 89709.

On July 30, 1976, the petitioner Republic appealed to the respondent Court of Appeals.

On August 19, 1982, the respondent Court rendered a decision affirming in toto the decision of the lower
court

The petitioner submits that there is no accretion to speak of under Article 457 of the New Civil Code
because what actually happened is that the private respondents simply transferred their dikes further down
the river bed of the Meycauayan River, and thus, if there is any... accretion to speak of, it is man-made
and artificial and not the result of the gradual and imperceptible sedimentation by the waters of the river.

On the other hand, the private respondents rely on the testimony of Mrs. Virginia Acuña

Issues:

The private respondents submit that the foregoing evidence establishes the fact of accretion without
human intervention because the transfer of the dike occurred after the accretion was complete

Ruling:

We agree with the petitioner.

Article 457 of the New Civil Code provides: 

"To the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive
from the effects of the current of the waters."

The above-quoted article requires the concurrence of three requisites before an accretion covered by this
particular provision is said to have taken place. They are (1) that the deposit be gradual and
imperceptible; (2) that it be made through the effects of the current of... the water; and (3) that the land
where accretion takes place is adjacent to the banks of rivers.

The requirement that the deposit should be due to the effect of the current of the river is indispensable.
This excludes from Art. 457 of the New Civil Code all deposits caused by human intervention. Alluvion
must be the exclusive work of nature. In the instant case, there is... no evidence whatsoever to prove that
the addition to the said property was made gradually through the effects of the current of the Meycauayan
and Bocaue rivers. We agree with the observation of the Solicitor General that it is preposterous to
believe that almost four (4)... hectares of land came into being because of the effects of the Meycauayan
and Bocaue rivers. The lone witness of the private respondents who happens to be their overseer and
whose husband was first cousin of their father noticed the four hectare accretion to the twelve hectare...
fishpond only in 1939.

55. IGNACIO GRANDE v. CA, GR No. L-17652, 1962-06-30

Facts:

Petitioners are the owners of a parcel of land... by inheritance from their deceased mother

Patricia Angui (who inherited it from her parents Isidro Angui and Ana Lopez, in whose name said land
appears registered, as shown by Original Certificate of Title

Said property is identified as Lot No. 1

When it was surveyed... for purposes of registration... its northeastern boundary was the Cagayan River

Since then, and for many years thereafter, a gradual accretion on the northeastern side took place, by
action of the current of the Cagayan

River, so much so, that... the bank thereof had receded to a distance of about 105 meters from its original
site, and an alluvial deposit of 19,964 square meters... had been added to the registered area... petitioners
instituted the present action in the Court of First Instance of Isabela against respondents, to quiet title to
said portion (19,964 square meters) formed by accretion, alleging in their complaint... that they and...
their predecessors-in-interest, were formerly in peaceful and continuous possession thereof... when
respondents entered upon the land under claim of ownership.

In their answer... respondents claim ownership in themselves, asserting that they have been in continuous,
open, and undisturbed possession of said portion, since prior to the year 1933 to the present.

After trial, the Court of First Instance... rendered a decision adjudging the ownership of the portion in
question to petitioners, and ordering respondents to vacate the premises and deliver possession thereof to
petitioners... the Court of Appeals... rendered... adverted

"The oral evidence for the defendants concerning the period of their possession from 1933 to 1958 is not
only preponderant in itself, but is, moreover, supported by the fact that it is they and not the plaintiffs who
declared the disputed property for taxation, and by the... additional circumstance that if the plaintiffs had
really been in prior possession and were deprived thereof in 1948, they would have immediately taken
steps to recover the same.

By then, however, prescription had already supervened in... favor of the defendants."

Issues:

whether respondents have acquired the alluvial property in question through prescription.

whether the accretion becomes... automatically registered land just because the lot which receives it is
covered by a Torrens title thereby making the alluvial property imprescriptible.

did respondents acquire said alluvial property through acquisitive prescription?

Ruling:

There can be no dispute that both under Article 457 of the new Civil Code, petitioners are the lawful
owners of said alluvial property, as they are the registered owners of the land to which it adjoins.
We agree with the Court of Appeals that it does not, just as an unregistered land purchased by the
registered owner of the... adjoining land does not, by extension, become ipso facto registered land.

Ownership over the accretion received by the land adjoining a river is... governed by the Civil Code.

Imprescriptibility of registered land is provided in the registration law.

Registration under the Land Registration and Cadastral Acts does not vest or give title to the land,
but merely confirms and thereafter protects the title already possessed by... the owner, making it
imprescriptible by occupation of third parties

But to obtain this protection, the land must be placed under the operation of the registration laws wherein
certain judicial procedures have been provided.

The fact remains, however, that petitioners never... sought registration of said alluvial property... up to the
time they instituted the present action in the Court of First Instance

The increment, therefore, never became registered property, and hence is not entitled or subject to the
protection of imprescriptibility enjoyed by registered property under the Torrens system.

Consequently, it was subject to acquisition through prescription by third... persons.

The Court of Appeals, after analyzing the evidence,... found that respondents-appellees were in
possession of the alluvial lot since 1933 or 1934, openly, continuously and adversely, under a claim of
ownership up to the filing of the action in 1958. This finding of the existence of these facts, arrived at by
the Court of Appeals... after an examination of the evidence presented by the parties, is conclusive as to
them and can not be reviewed by us.

The law on prescription applicable to the case is that provided in Act 190 and not the provisions of the
Civil Code, since the possession started in 1933 or 1934 when the pertinent articles of the Old Civil Code
were not in force and before the effectivity of the New Civil

Code in 1950.

Hence, the conclusion of the Court of Appeals that the respondents acquired the alluvial lot in question by
acquisitive prescription is in accordance with law.

The decision of the Court of Appeals under review is hereby affirmed, with costs against the petitions.

56. Lim-Rosario v. Lim

G.R. No. 206534. October 5, 2016

BRIGIDA LIM acquired leasehold rights on a government lot in Baguio City; Brigida and her son
ALFONSO LIM allegedly entered into an AGREEMENT for the construction of a building on the said
property which would be fully financed by ALFONSO LIM.
An AFFIDAVIT OF WAIVER OF RIGHTS was executed by BRIGIDA categorically waiving,
renouncing, and transferring all her rights and interests over the leased lot in Alfonsos favor. Another
Deed of Waiver of Rights reiterating her waiver of rights over the leased lot and the erected building in
favor of her son. However, in an AFFIDAVIT assailing the validity of the documents she stated that she
and her husband LUIS were the real owners of the property and that Alfonso never caused and paid for
the construction of the subject building.

BRIGIDA dies intestate and ALFONSO and his sisters JULIA LIM ROSARIO, MERCEDES LIM
CUSTODIO, NORMA LICARDO, AND LEILA ESPIRITU executed a DEED OF EXTRAJUDICIAL
SETTLEMENT for the estates of their parents without including the disputed property.

JULIA LIM ROSARIO then filed a complaint before the Court for JUDICIAL PARTITION OF REAL
ESTATE including the disputed property.

Lower Court Granted the petition of JULIA LIM-ROSARIO but the CA reversed the decision of the
Lower Court ordering that further proceedings be made to determine the proper application of Articles
448 in relation to Article 546 of the Civil Code.

ISSUE: Whether or not the property in question should be included in Brigida’s estate and be divided in
equal shares among her children.

RULING:

Records provide that Brigida had acquired the disputed property during her marriage to Luis and the title
to property remains under her name; Credit was given to her affidavit by the Court pertinent provisions of
which are;

Alfonso Lim revealed his greedy intention to own for himself alone the said entire building at the
exclusion of all his aforenamed sisters. And towards this end, with use of threats and intimidation, my
said son Alfonso Lim, forced me to sign an affidavit dated May 27, 1988 stating therein, among others,
that it was my said son Alfonso Lim who financed the construction of the first two (2) storeys and who
entered into a building contract with a certain Romeo F. Laigo. It is also stated therein that it was my said
son who financed the construction of the 3rd and fourth floors, plus the penthouse of the same building
sometime in 1977. All these matters are absolutely false because all the expenses therefor are my own
money as stated earlier and none came from my said son Alfonso Lim because the latter was jobless that
time up to the present and gets his money from me. When the building was already completed, my said
son got all the rentals therefrom at the exclusion of his sisters, although, there were rare occasions that my
said son gave me minimal amount from said rentals;

The affidavit of Brigida provides that

  it was never Brigidas intention to give the exclusive ownership of the contested lot to Alfonso,
and the title to the same was never transferred in anybody elses name.

 the development of the building had actually come from Brigida and Luis and not from Alfonso,
who was jobless and had no sufficient source of income at that time to finance the construction of
a building.

 exposes the fact that Brigida never intended to transfer the sole ownership of the contested
property to her only son, but wanted it to benefit all of her children, and that whatever document
she may have had executed in the past was fraudulently acquired and not obtained with her valid
consent.

57. SPS. FELIX BAES AND RAFAELA BAES v. CA, GR No. 108065, 1993-07-06

Facts:

The controversy began in 1962, when the government dug a canal on a private parcel of land... to
streamline the Tripa de Gallina creek.

This lot was later acquired by Felix Baes, who registered it in his name... and then had it subdivided into
three lots

In exchange for Lot... which was totally occupied by the canal, the government gave Baes a lot with
exactly the same area as Lot... through a Deed of Exchange of Real Property... he soil displaced by the
canal was used to fill up the old bed of the creek.

The soil displaced by the canal was used to fill up the old bed of the creek.

In 1978, the Republic of the Philippines discovered that Lot 1-B (with TCT No. 14405 and an area of 826
sq.m.)... on which the petitioners had erected an apartment building, covered Lot 3611 of the Pasay
Cadastre, which is a filled-up portion of the Tripe de Gallina creek.

Moreover, Lot 2958-C (covered by TCT Nos. 29592 to 29595, with an increased area of 2,770 sq.m. after
resurvey and subdivision) had been unlawfully enlarged.

On November 17, 1982, it filed a petition for cancellation of TCT Nos. 14405 and 29592 to 29595.[3]

Baes did not object in his answer to the cancellation of TCT Nos. 29592, 29594 and 29595

Issues:

The only remaining dispute relates to Lot 1-B (TCT No. 14405), which the petitioners, relying on Article
461 of the Civil Code, are claiming as their own. The government rejects this claim and avers that the
petitioners had already been fully compensated for it on June 20,... 1970 when they agreed to exchange
their Lot 2958-B with Lot 3271-A belonging to the government.
Ruling:

Article 461 of the Civil Code states:

River beds which are abandoned through the natural change in the course of the waters ipso facto belong
to the owners whose lands are occupied by the new course in proportion to the area lost. However, the
owners of the lands adjoining the old... bed shall have the right to acquire the same by paying the value
thereof, which value shall not exceed the value of the area occupied by the new bed. (Emphasis supplied)

A portion of the Tripa de Gallina creek was diverted to a man-made canal which totally occupied Lot
2958-B (with an area of 3,588 sq.m.) belonging to Felix Baes. Thus, the petitioners claim that they
became the owners of the old bed (which was eventually filled up by soil... excavated from Lot 2958-B)
by virtue of Article 461.

The petitioners rely heavily on Dr. Arturo M. Tolentino's interpretation of this Article, to wit:

This article (461) refers to a natural change in the course of a stream. If the change of the course is due to
works constructed by concessioners authorized by the government, the concession may grant the
abandoned river bed to the concessioners. If there is no such... grant, then, by analogy, the abandoned
river bed will belong to the owners of the land covered by the waters, as provided in this article, without
prejudice to a superior right of third persons with sufficient title.

We agree.

If the riparian owner is entitled to compensation for the damage to or loss of his property due to natural
causes, there is all the more reason to compensate him when the change in the course of the river is
effected through artificial means.

. The loss to the petitioners of... the land covered by the canal was the result of a deliberate act on the part
of the government when it sought to improve the flow of the Tripa de Gallina creek. It was therefore
obligated to compensate the Baeses for their loss.

We find, however, that the petitioners have already been so compensated. Felix Baes was given Lot 3271-
A in exchange for the affected Lot 2958-B through the Deed of Exchange of Real Property

The petitioners cannot now claim additional compensation because, as correctly observed by the Solicitor
General,... ... to allow petitioners to acquire ownership of the dried-up portion of the creek would be a
clear case of double compensation and unjust enrichment at the expense of the state.

WHEREFORE, the petition is DENIED, with costs against the petitioners. It is so ordered.

58. BINALAY VS. MANALO

A sudden and forceful action like that of flooding is not the alluvial process contemplated in Art. 457.
The accumulation of the soil deposits must be slow and hardly imperceptible in order for the riparian
owner to acquire ownership thereof. Also, the land where the accretion takes place is adjacent to the
banks of the rivers (or the sea coast).

FACTS

Manalo acquired 2 lots which were originally owned by Judge Taccad from 2 different people (the latter’s
daughter and from an earlier purchaser). These lots were later consolidated into Lot 307, a total of 10.45
hectares. The lot was beside the Cagayan River, which, due to flooding, would place a portion of the land
underwater during the rainy season (September to December). On sunny days, however, the land would
be dried up for the entire dry season (January to August). When a survey of the land was conducted on a
rainy month, a portion of the land that Manalo bought was then underwater and was thus left unsurveyed
and excluded from Lot 307.

The big picture is this: Cagayan River running from south to north, forks at a certain point to form two
branches (western and eastern) and then unites at the other end, further north, to form a narrower strip of
land. The eastern branch of the river cuts through Lot 307, and is flooded during the rainy season. The
unsurveyed portion, on the other hand, is the bed of the eastern branch. Note that the fork exists only
during the rainy season while the “island”/elongated strip of land formed in the middle of the forks
becomes dry and perfect for cultivation when the Cagayan river is at its ordinary depth. The strip of land
in the middle of the fork totaled 22.7 hectares and was labeled Lot 821-822. Lot 821 is directly opposite
Lot 307 and is separated by the eastern branch of the river’s fork.

Manalo claims that Lot 821 belongs to him by way of accretion to the submerged portion of the land to
which it is adjacent. Petitioners (Binalay, et al) who possess the Lot 821, on the other hand, insist that
they own it. They occupy the other edges of the lot along the river bank (i.e. the fertile portions on which
they plant tobacco and other agricultural products) and also cultivate the western strip during the summer.

Manalo filed 2 cases for forcible entry which were both dismissed. Later on, he filed a complaint for
quieting of title, possession, and damages against petitioner. The trial court and the CA ruled in favor of
Manalo, saying that Lot 821 and Lot 307 cannot be considered separate and distinct from each other.
They reasoned that when the land dries up for the most part of the year, the two are connected. [Note: The
CA applied the ruling in Gov’t of the Phil Islands vs. Colegio de San Jose, which was actually
inappropriate because the subject matter in this case was a lake so that the definition of a “bed” was
different.]

ISSUE:

Whether or not Manalo owns Lot 821 by way of accretion

RULING: No.
The disputed property is not an accretion. It is the action of the heavy rains that cause the highest ordinary
level of waters of the Cagayan River during the rainy season. The depressed portion is a river bed and is
thus considered property of public domain.

The SC observed the following:

a) The pictures identified by Manalo during his direct examination depict the depressed portion as a  river
bed. The dried up portion had dike-like slopes (around 8m) on both sides connecting it to Lot 307 and Lot
821 that are vertical and very prominent.

b) The eastern bed already existed even before Manalo bought the land. It was called “Rio Muerte de
Cagayan.”

c) Manalo could not have acquire ownership of the land because article 420 of the civil code states that
rivers are property of public dominion. The word “river” includes the running waters, the bed, and the
banks. [The seller never actually owned that part of the land since it was public property]

d) The submerged area (22.72 ha) is twice the area of the land he actually bought. It is difficult to suppose
that such a sizable area could have been brought about by accretion.

More importantly, the requisites of accretion in article 457 were not satisfied. These are: 1) that the
deposition of the soil or sediment be gradual and imperceptible; 2) that it be the result of the action of the
waters of the river (or sea); and 3) the land where the accretion takes place is adjacent to the banks of the
rivers (or the sea coast). The accretion should’ve been attached to Lot 307 for Manalo to acquire its
ownership. BUT, the claimed accretion lies on the bank of the river; not adjacent to Lot 307 but directly
opposite it – across the river. Aside from that, the dike-like slopes which were very steep may only be
formed by a sudden and forceful action like flooding. The steep slopes could not have been formed by the
river in a slow and gradual manner.

59. SIARI VALLEY ESTATE v. FILEMON LUCASAN, GR No. L-7046, 1955-08-31

Facts:

In December 1948 the Siari Valley Estate Inc., a duly organized agricultural corporation, filed an action
to recover about 200 head of cattle that were driven, or wandered, from its pasture lands into the
adjoining ranch of defendant Filemon Lucasan,... Plaintiff asked for the return of its animals with their
offspring, or for payment of those disposed of by defendant,... he defendant denied having appropriated or
retained any cattle belonging to the corporation. On the contrary, alleging that plaintiff had taken away
from his pasture 105 head of cattle thru force and intimidation, he demanded suitable compensation.

he Hon. Patricio Ceniza, Judge, rendered judgment the dispositive part of which reads as follows:

"Premises considered, judgment is hereby rendered, adjudicating to the Siari "Valley Estate all the cattle
that may be found in the cattle ranch of Filemon Lucasan,... The Siari Valley Estate Inc. started raising
livestock on its 950-hectare ranch, in 1921, with 7 native cattle. In 1923 it acquired 30 native cattle and
two Indian bulls. It also introduced native stock into its herd thru a native black bull. Male offspring of
this bull were... castrated.

Prior to the Japanese occupation, the fence enclosing plaintiff's pasture was well kept. However in 1943 a
portion thereof was destroyed, with the result that some cattle strayed into the adjoining unfenced range
of defendant Lucasan. And taking advantage of the situation... several men in the employ of defendant
willfully and deliberately rounded up and drove many animals from the Siari pasture towards Lucasan's
grazing land

Eriberto Garrovillo, foreman of the company, swore that in 1944, defendant informed plaintiff that some
of the latter's cattle were mixed with his cows. With due permission they (he and plaintiff's men) were
allowed to catch eight (8) head of the Siari Valley Estate cattle in... the toril of defendant. Lucasan also
informed this witness that there were still about 200 head of the company's cattle, in his ranch mixed with
his herd.

The defendant, admitted that some cattle of the Siari Valley Estate did enter his ranch. He says however
that thru the good offices of Fiscal Ubay the company rounded up and drove away from his ranch 98 head
of cattles

Issues:

whether plaintiff's cattle were commingled with defendant's and whether the commixtion was made in
bad faith

Ruling:

Therefore it is hereby affirmed, with costs against appellant, So ordered,,... After going thru the record,
we have no doubt that hundreds of cattle belonging to plaintiff have been driven, into or wandered into
defendant's land. Defendant himself admitted such commixtion although, he says, plaintiff had already
retrieved its animals.

Lucasan started raising his own cattle in 1939 with 53 head of cattle he received as his share from his
partners R. Macias and Teck Lee. (432-433 s. n.)) A 30% increase per year (that is what Dr. Geronimo
said) should give him around 417 head of cattle in 1951. Yet in 1951 he... had 400 head, after disposing
of 230 head according to his evidence, or "less than 800"

Where did he get the excess of 200 or 700

On the other hand the Report of the Siari Valley for September 1941 to September 1945 showed that the
company had or should have 1768 head of cattle, 249 of which was slaughtered or died, leaving a total of
1513 head. Thereafter it sold 593 head; therefore it should have 925... head. Actually it could count only
102 head. Therefore it lost 823 head. Now then, is it far-fetched to conclude -as the lower court
concluded- that these were part of the 700 which was disposed of by Lucasan, and a part is the remaining
flock in his... possession[1]?

No actual evidence exists that all these missing animals (323) were taken by defendant or his men; but in
view of the proof that his men on two occasions drove away more than 30 head of cattle, it is not
erroneous to believe that the others must have also been driven... away on subsequent or prior occasions,
applying, by analogy, the principle that one who stole a part of the stolen money must have taken also the
larger sum lost by the offended party

Another thing, Of the heard now kept by defendant, 322 head were impounded for purposes of inspection
and identification. Two out of three, experts found the great majority to be mestizos, (Indian or Nellore)
an average of about 29 only being natives. This is... significant, because defendant's flock could have
mestizos, all his original stock being entirely native. It

On course it is quite possible that some of these mestizos are the result of the intermingling which began
in 1943 and continued up to 1951. Although generally, offspring or the increase of domestic animals
belongs to the owner of the dam by accretion... it is impossible to trace such ownership of these mestizos
under the circumstances. Yet as the trial judge said "Filemon had been actuated by bad faith in retaining
in his ranch, to multiply and increased there for his own benefit, the... cattle belonging to the Siari Valley
Estate" and under the Civil Code "if the commingling of two things is made in bad faith, the one
responsible for it will lose his share x x x

The same principle obtains in the United States where parallel situations have arisen.

"Where the goods are so mingled that they cannot thereafter properly be identified or divided, all the
inconvenience or loss resulting from the confusion is thrown on the party who occasioned it; and,
generally, it is for him to distinguish his own property or lose it, it... being held, in this connection, that
the rule of confusion of goods is merely a rule of evidence."

Did defendant act in bad faith? The circumstances disclosed in this record answer the question in the
affirmative: his cowboys -and even his sons Rafael and Vicente- rounded up and drove plaintiff's cattle
into his pasture; he knew he had plaintiff's cattle, but refused to... return them despite demands by
plaintiff; he even threatened plaintiff's men when the latter tried to retrieve its animals;

60. SANTOS v. BERNABE

If two things of identical or dissimilar nature are mixed and the owners of the things are in good faith, OR
if the mixture occurs accidentally and cannot be separated without injury, each owner shall acquire a right
in the mixture proportionate to the part belonging to him, according to the value of the things mixed or
comingled.

FACTS:
Santos deposited 778 cavans and 38 kilos of palay in the warehouse of Bernabe. At the same time,
Tiongson also deposited 1,026 cavans and 9 kilos of palay. The share of Tiongson and Santos were mixed
together and cannot be separated.

Later on and for some unknown reason, Tiongson files a case against Bernabe to recover the 1,026 cavans
and 9 kilos of palay deposited in Bernabe’s warehouse. So Tiongson files for a petition for a writ of
attachment and the Court granted it. Bernabe’s properties were attached, including only 924 cavans of
rice and 31 ½ kilos of palay. These were sold at a public auction and the proceeds were delivered to
Tiongson.

Santos tried to intervene in the attachment of the palay but then the sheriff had already proceeded with the
attachment, so Santos files a complaint. He says that Tiongson cannot claim the 924 cavans of palay; he
says that by asking for the attachment of the properties, Tiongson is claiming that the cavans of rice all
belonged to Bernabe and not to him.

ISSUE:

Whether or not Tiongson can claim the 924 cavans of rice as his own.

HELD:

No, both Tiongson and Santos must divide the cavans and palay proportionately.

The cavans belonging to Santos, having been mixed with those belonging to Tiongson, the following rule
prescribed is Article 381 of the Civil Code: “If, by will of one of their owners, two things of identical or
dissimilar nature are mixed, or if the mixture occurs accidentally, if in the latter case, the things cannot be
separated without injury, each owner shall acquire a right in the mixture proportionate to the part
belonging to him, according to the value of the things mixed or comingled.”

The number of kilos in a cavan not having been determined, the Court took the proportion only of the 924
cavans of palay which were attached andsold, therby giving Santos, who deposited 778 cavans, 398.49
and Tiongson, who deposited 1,026 cavans, 525.51, or the value thereof at the rate of 3Php per cavan.
61. HEIRS OF OLVIGA V COURT OF APPEALS

Gr no. 104813Oct. 21 1993Grio-Aquino ,J

FACTS

Eutequio Pureza and his father cultivated a forest land in 1950. The same land was surveyed in 1954 by
the Bureau of Lands in the name of Eutequio Pureza and has since been known as Lot 13,Pls-84.
However, Godofredo Olviga protested and claimed that 1/2 hectare of the surveyed land belonged to him
and not to Pureza. In 1960, Pureza filed a homestead application over Lot 13. Since his application had
not been acted upon, he transferred his rights in said land to Cornelio Glor. Unfortunately, the said
transfer was also not acted upon by the Director of Lands for undisclosed reasons.

In 1967, Jose Olviga obtained a registered title for Lot 13 in a cadastral proceeding in fraud of Pureza and
Cornelio Glor. He also failed to disclose that the land in dispute was currently in possession of the Glors.
Angelita Glor, wife of Cornelia Glor, testified that she did not receive any notice about the said
proceedings. Glor then filed an action for reconveyance over Lot 13.

ISSUE

Whether or not the action for reconveyance has already prescribed

HELD
No, the cause of action should be considered to have accrued not from the date of registration of the title
of Olviga over Lot 13 in 1967, but on 1988 when the Glors gained knowledge of the said proceedings.
The rule that an action for reconveyance of a parcel of land based on implied or constructive trust
prescribes in 10 years cannot be applied in this case because it only applies when the plaintiff is not in
possession of the property. However, if a person claiming to be owner of the property is in actual
possession of the property, in this case the Glors, then their right to seek reconveyance does not prescribe.
In Faja vs CA, it was held that the owner who is in actual possession of the property may wait until his
possession is disturbed or his title is attacked before taking steps to vindicate his right.

62. PINGOL V. COURT OF APPEALS

A vendee in an oral contract to convey land who had made part payment thereof, entered upon the land
and had made valuable improvements thereon is entitled to bring suit to clear his title against the vendor
who had refused to transfer the title to him. It is not necessary that the vendee should have an absolute
title, an equitable title being sufficient to clothe him with personality to bring an action to quiet title.

FACTS:

In 1969, Pingol, the owner of a lot (Lot No. 3223) in Caloocan City, executed a DEED OF ABSOLUTE
SALE OF ONE-HALF OF AN UNDIVIDED PORTION OF [his] PARCEL OF LAND in favor of
Donasco (private respondent), payable in 6 years.

In 1984, Donasco died and was only able to pay P8,369 plus P2,000 downpayment, leaving a balance of
P10,161. The heirs of Donasco remained in possession of such lot and offered to settle the balance with
Pingol. However, Pingol refused to accept the offer and demanded a larger amount. Thus, the heirs of
Donasco filed an action for specific performance (with Prayer for Writ of Prelim. Injunction, because
Pingol were encroaching upon Donasco’s lot). Pingol averred that the sale and transfer of title was
conditional upon the full payment of Donasco (contract to sell, not contract of sale). With Donasco’s
breach of the contract in 1976 and death in 1984, the sale was deemed cancelled, and the heirs’
continuous occupancy was only being tolerated by Pingol.

ISSUES:

(1) Whether or not Pingol can refuse to transfer title to Donasco

(2) Whether or not Donasco has the right to quiet title
RULING:

(1) No. The contract between Pingol and Donasco is a contract of sale and not a contract to sell. The acts
of the parties, contemporaneous and subsequent to the contract, clearly show that the parties intended an
absolute deed of sale; the ownership of the lot was transferred to the Donasco upon its actual (upon
Donasco’s possession and construction of the house) and constructive delivery (upon execution of the
contract). The delivery of the lot divested Pingol of his ownership and he cannot recover the title unless
the contract is resolved or rescinded under Art. 1592 of NCC. It states that the vendee may pay even after
the expiration of the period stipulated as long as no demand for rescission has been made upon him either
judicially or by notarial act. Pingol neither did so. Hence, Donasco has equitable title over the property.

(2) Although the complaint filed by the Donascos was an action for specific performance, it was actually
an action to quiet title. A cloud has been cast on the title, since despite the fact that the title had been
transferred to them by the execution of the deed of sale and the delivery of the object of the contract,
Pingol adamantly refused to accept the payment by Donascos and insisted that they no longer had the
obligation to transfer the title.

Donasco, who had made partial payments and improvements upon the property, is entitled to bring suit to
clear his title against Pingol who refused to transfer title to him. It is not necessary that Donasco should
have an absolute title, an equitable title being sufficient to clothe him with personality to bring an action
to quiet title.

Prescription cannot also be invoked against the Donascos because an action to quiet title to property in
ONE’s POSSESSION is imprescriptible.

63. Titong v. Court of Appeals G.R. No. 111141 March 6, 1998

FACTS:

The case originated from an action for quieting of title over a 20, 000 hectares parcel of land filed by
Mario Titong.

Petitioner alleges that he is the owner of an unregistered parcel of land with an area of 3.2800 hectares.

He claims that private respondents, with their hired laborers, forcibly entered a portion of the land
containing an area of approximately two (2) hectares; and began plowing the same under pretext of
ownership.
Private respondents denied this allegation, and averred that the disputed property formed part of the
5.5-hectare agricultural land which they had purchased from their predecessor-in-interest, Pablo
Espinosa on August 10, 1981.

The land was adjudged by the lower court in favor of private respondents, and Angeles Laurio, Aas the
true and lawful owners of the disputed land.

Court of Appeals affirmed the decision. On motion for reconsideration, the same was denied for lack of
merit. petitioner comes to us for a favorable reversal. Hence, this petition for review on certiorari.

Issue:

1. Whether or not a claim of ownership by a mere possession for more than twenty (20) years is
meritorious.

2. Whether or not the instrument, record, claim, encumbrance or proceeding involved constitutes
a cloud upon the petitioners' interest or title in and to said property.

Petitioner's claim that he acquired ownership over the disputed land through possession for more than
twenty (20) years is likewise unmeritorious. While Art. 1134 of the Civil Code provides that "ownership
and other real rights over immovable property are acquired by ordinary prescription through possession
of ten years," this provision of law must be read in conjunction with Art. 1117 of the same Code. This
article states that ". . . ordinary acquisitive prescription of things requires possession in good faith and
with just title for the time fixed by law." Hence, a prescriptive title to real estate is not acquired by mere
possession thereof under claim of ownership for a period of ten years unless such possession was
acquired with color of title and good faith.

Petitioners have not satisfactorily met the requirements of good faith and just title. As aptly observed by
the trial court, the plaintiff's admitted acts of converting boundary line (Bugsayon River) into a ricefield
and thereafter claiming ownership thereof were acts constituting deprivation of the rights of others and
therefore "tantamount to bad faith." To allow petitioner to benefit from his own wrong would run
counter to the maxim (no man can allowed to found a claim upon his own wrongdoing).

Petitioner's alleged possession in 1962 up to September 1983 when private respondents entered the
property in question spanned twenty-one (21) years. This period of time is short of the thirty-year
requirement mandated by Art. 1137.

Petitioner basically anchors his claim over the property on the survey plan prepared upon his request,
the tax declaration in his name, the commissioner's report on the relocation survey, and the survey plan.
Respondent court correctly held that these documents do not conclusively demonstrate petitioner's title
over Lot Nos. 3918-A and 3606.
64. Spouses Jenestor, et al v. Obado, GR No. 181596, January 30, 2017

Jenestor B. Caldito and Maria Filomena T. Caldito vs. Isagani v. Obado and Gereon V. Obado

G.R. No. 181596

January 30, 2017

Facts:

Felipe Obado was the owner of Lot No. 1633 situated in Brgy. 5, San Vicente, Sarrat, Ilocos Norte. After
Felipe’s death, Paterno Obado, whom Felipe treated like his own son, subsequently occupied Lot No.
1633 and continued to pay the realty taxes of the same.

In 1995, Antonio Ballesteros executed an Affidavit of Ownership dated narrating his claim over the
subject parcel of land. In his affidavit, Antonio claimed that Lot No. 1633 was co-owned by Felipe with
his five siblings, namely: Eladia, Estanislao, Maria, Severino, and Tomasa, all surnamed Obado. Antonio
then sold the land to Jenestor and Maria Caldito. In 2002, Spouses Caldito tried to construct a house on
the subject parcel of land but sons of Paterno, Isagani and Gereon Obado prevented them from
completing the same.

Spouses Caldito instituted a complaint for quieting of ownership against respondents before the RTC.
Respondents averred that Spouses Caldito were not the owners and possessors of the subject parcel of
land. They maintain that the lot was inherited by their father from its original owner. They asserted they
have been in open, continuous and uninterrupted possession of the lot for more than 30 years in the
concept of owner and have been paying the realty taxes of the subject parcel of land from the time they
inherited it.

The RTC rendered a judgment in favor of the Spouses Caldito but was later on reversed and set aside by
the CA finding that Spouses Caldito failed to prove the title of their immediate predecessor-in-interest,
Antonio.

Issue:

Whether or not the Spouses Caldito were able to prove their ownership over the subject parcel of land.

Ruling:
No. In this case, the Spouses Caldito’s cause of action relates to an action to quiet title which has two
indispensable requisites, namely: (1) the plaintiff or complaint has a legal or an equitable title to or
interest in the real property subject of the action; and (2) the deed, claim, encumbrance or proceeding
claimed to be casting cloud on his title must be shown to be in fact invalid or inoperative despite its
prima facie appearance of validity or legal efficacy. From the foregoing provisions, it is clear that the
Spouses Caldito’s cause of action must necessarily fail mainly in view of the absence of the first requisite
since the Spouses Caldito were not able to prove equitable title or ownership over the subject parcel of
land. Spouses Caldito’s claim is based on the Deed of Sale and Affidavit of Ownership issued by Antonio
cannot stand because they failed to prove the title of their immediate predecessors-in-interest, the
Spouses Ballesteros.

65. Pardell v. Bartolome, 23 Phil 450

Facts

Plaintiff Vicenta and Defendant Matilde are sisters born to the spouses Miguel Ortiz, who has died and
was soon to be followed by his wife Calixta Felin. Prior to Calixta’s death, she executed a nuncupative
will where she made her four children, Manuel, Francisca, Vicenta and Matilde, her sole and universal
heirs. Manuel and Francisca died leaving no heirs.

The properties included in the will consists of two houses (La Quinta and Calle Escolta) and a number of
parcels of lands. Vicenta and her husband went to Spain leaving Matilde and her husband Gaspar to
assume administration of the properties co-owned. Vicenta now has returned and asked her sister to
deliver her share of the property but despite repeated demands, defendants failed to perform, Plaintiff
now sues her sister for the recovery her share in the properties and the profits generated by it.

1. WON the plaintiffs should be indemnified for the losses and damages comprised by rents
generated by the property.

2. WON the defendants were entitled to be reimbursed WITH INTERESTS the expenses spent for
the repairs on the House Calle Escolta because of the earthquake and the to pay for the losses incurred
due to the deficit in profit.

Held:

1. No and Yes

a. No rent from the upper floor of House Calle Escolta

b. Yes half-rent from the lower floor of House Calle Escolta

2. Yes
Ratio:

1. Rents

a. Upper Floor: Defendant as co-owner was entitled to reside in the first floor. Article 486 of the
Civil Code provides that each co-owner may use the things owned in common in such a manner as to not
injure the interests or prevent the other owners from utilizing them according to their rights.

i. The upper floor was designed for dwelling, and the record shows no proof that defendants
caused any injury to the detriment of the community property or prevent her sister from utilizing the
same. Each co-owner of realty held pro indiviso exercises his rights over the whole property and may
use and enjoy the same with no other limitation.

b. Lower Floor: Stores of the lower floor were rented an accounting of the rents were duly made to
the plaintifs.

i. Gaspar had no right to freely use the room, because it would be a detriment to the plaintiffs
who would not receive the would be one-half share in the rent produced by the occupation of the room
used by Gaspar.

2. Reimbursement of expenses for the rehabilitation of the Calle Escolta House because of an
earthquake

i. Plaintiff should pay her sister one-half amount of the expenses for the repairs since the building
was valued higher (P9000 instead of P6000).

ii. The counterclaim was also proper, however the award to the defendants should be deducted by
the amount of rent to be paid by Administrator Gaspar as rent.

66. Gatchalian v. Collector, 67 Phil 666

G.R. No. L-45425             April 29, 1939

Art 1665 (now Art 1767 of the NCC)

67. Siari Valley Estate v. Lucasan, GR No L-11005, October 31, 1957

97 Phil. 987

FACTS:

Siara Valley Estate filed an action to recover 200 head of cattle that were driven to the adjoining ranch
of Lucasan, which the latter denied having appropriated or retained any cattle belonging to the former.
Lucasan alleging that there’s no actual evidence on the number of missing bulls and that plaintiff’s cattle
comingle with his. Trial Court: Ruled in favor of Siara Valley.

ISSUE:

WON Lucasan can recover his share of the cattle. -- NO

HELD:

Defendant’s cowboys and even his sons Rafael and Vicente- rounded up and drove plaintiff's cattle into
his pasture; he knew he had plaintiff's cattle, but refused to return them despite demands by plaintiff;
he even threatened plaintiff's men when the latter tried to retrieve its animals; he harassed them with
false prosecutions for their attempts to get back the company's animals; he wouldn't allow plaintiff' s
cowboys to get into his pasture to identify its flock; he rebranded several Siari Valley cattle with his own
brand; he sold cattle without registering the sales; after some cattle impounded were entrusted to his
custody as trustee, he disposed of not less than 5 head of cattle among those he received as such
trustee; lastly, he disposed of much more cattle than he had a right to.

One who has stolen a part of the stolen money must have taken the larger sum lost by the offended
party. If the commingling of two things is made in bad faith, the one responsible for it will lose his share.