Serg’s Products and Goquiola v.

PCI Leasing and Finance

338 SCRA 499

DOCTRINE: After agreeing to a contract stipulating that a real or immovable property be

considered as personal or movable, a party is estopped from subsequently claiming otherwise.
Hence, such property is a proper subject of a writ of replevin obtained by the other contracting
party.

FACTS:
PCI Leasing and Finance, Inc. filed a complaint with the RTC for a sum of money with an
application for a writ of replevin. Upon an ex-parte application of PCI Leasing, respondent judge
issued a writ of replevin directing its sheriff to seize and deliver the machineries and equipment
to PCI Leasing after 5 days and upon the payment of the necessary expenses.

Serg’s filed a motion for special protective order. This 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.

In their Reply, petitioners asserted that the properties sought to be seized were immovable as
defined in Article 415 of the Civil Code, the parties’ agreement to the contrary notwithstanding.
They argued that to give effect to the agreement would be prejudicial to innocent third parties.
They further stated that PCI Leasing was estopped from treating these machineries as personal
because the contracts in which the alleged agreement were embodied were totally sham and
farcical.

Citing the Agreement of the parties, the appellate court held that the subject machines were
personal property, and that they had only been leased, not owned, by petitioners. It also ruled
that the “words of the contract are clear and leave no doubt upon the true intention of the
contracting parties.”

ISSUE:
Whether or not the machineries purchased and imported by SERG’S became real property by
virtue of immobilization.

HELD:
The machineries herein are real properties but are considered personal by the parties’
agreement.

The Court will resolve whether the said machines are personal, not immovable, property which
may be a proper subject of a writ of replevin. Rule 60 of the Rules of Court provides that writs of
replevin are issued for the recovery of personal property only. Section 3 thereof reads:

“SEC. 3. Order. -- Upon the filing of such affidavit and approval of the bond, the
court shall issue an order and the corresponding writ of replevin describing the
personal property alleged to be wrongfully detained and requiring the sheriff
forthwith to take such property into his custody.”

On the other hand, Article 415 of the Civil Code enumerates immovable or real property as
follows:

“ART. 415. The following are immovable property:

x x x....................................x x x....................................x x x

(5) Machinery, receptacles, instruments or implements intended by the owner of

the tenement for an industry or works which may be carried on in a building or on
a piece of land, and which tend directly to meet the needs of the said industry or
works;

x x x....................................x x x....................................x x x”

In the present case, the machines that were the subjects of the Writ of Seizure were placed by
petitioners in the factory built on their own land. Indisputably, they were essential and principal
elements of their chocolate-making industry. Hence, although each of them was movable or
personal property on its own, all of them have become “immobilized by destination because
they are essential and principal elements in the industry.” In that sense, petitioners are correct
in arguing that the said machines are real, not personal, property pursuant to Article 415 (5) of
the Civil Code.

Be that as it may, we disagree with the submission of the petitioners that the said machines are
not proper subjects of the Writ of Seizure.

The Court has held that contracting parties may validly stipulate that a real property be
considered as personal. After agreeing to such stipulation, they are consequently estopped
from claiming otherwise. Under the principle of estoppel, a party to a contract is ordinarily
precluded from denying the truth of any material fact found therein.

Hence, in Tumalad v. Vicencio, the Court upheld the intention of the parties to treat a house as
a personal property because it had been made the subject of a chattel mortgage.

It should be stressed, however, that our holding -- that the machines should be deemed
personal property pursuant to the Lease Agreement – is good only insofar as the contracting
parties are concerned. Hence, while the parties are bound by the Agreement, third persons
acting in good faith are not affected by its stipulation characterizing the subject machinery as
personal. In any event, there is no showing that any specific third party would be adversely
affected.

Tumalad v. Vicencio
41 SCRA 143

DOCTRINE: The view that parties to a deed of chattel mortgage may agree to consider a house
as personal property for the purposes of said contract, "is good only insofar as the contracting
parties are concerned. It is based, partly, upon the principle of estoppel.”

FACTS:
On 1 September 1955 defendants executed a chattel mortgage in favor of plaintiffs over their
house located at Quiapo, Manila, which were being rented from Madrigal & Company, Inc. The
mortgage was registered in the Registry of Deeds of Manila on 2 September 1955. The
mortgage was executed to guarantee a loan of P4,800.00 received from plaintiffs. 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 and the Chattel Mortgage will be
enforceable in accordance with the provisions of Special Act No. 3135, and for this purpose, the
Sheriff of the City of Manila or any of his deputies is hereby empowered and authorized to sell
all the Mortgagor's property after the necessary publication in order to settle the financial debts
of P4,800.00, plus 12% yearly interest, and attorney's fees.

When defendants defaulted in paying, the mortgage was extrajudicially foreclosed, and the
house was sold at public auction pursuant to the said contract. As highest bidder, plaintiffs were
issued the corresponding certificate of sale. Thereafter, plaintiffs commenced Civil Case No.
43073 in the municipal court of Manila, praying, among other things, that the house be vacated
and its possession surrendered to them, and for defendants to pay rent of P200.00 monthly
from 27 March 1956 up to the time the possession is surrendered. MTC granted petition.

Defendants, in their answers in both the municipal court and court a quo impugned the legality
of the chattel mortgage, claiming that they are still the owners of the house. During the
pendency of the appeal to the Court of First Instance, defendants failed to deposit the rent as
ordered in the decision of the municipal court. As a result, the court granted plaintiffs motion for
execution. However, the judgment regarding the surrender of possession to plaintiffs could not
be executed because the subject house had been already demolished pursuant to the order of
the court in a separate civil case for ejectment against the present defendants for non-payment
of rentals on the land on which the house was constructed.

ISSUE:
W/N the house may be a subject of a Chattel Mortgage. – YES, it may be the subject of a
chattel mortgage.

HELD:
Defendants predicate their theory of nullity of the chattel mortgage on the ground that the
subject matter of the mortgage is a house of strong materials, and, being an immovable, it can
only be the subject of a real estate mortgage and not a chattel mortgage.

The rule about the status of buildings as immovable property is that it is obvious that the
inclusion of the building, separate and distinct from the land, in the enumeration of what may
constitute real properties could only mean one thing — that a building is by itself an immovable
property irrespective of whether or not said structure and the land on which it is adhered to
belong to the same owner.

It is undeniable that the parties to a contract may by agreement treat as personal property that
which by nature would be real property. The view that parties to a deed of chattel mortgage may
agree to consider a house as personal property for the purposes of said contract, "is good only
insofar as the contracting parties are concerned. It is based, partly, upon the principle of
estoppel.”

In a case, a mortgaged house built on a rented land was held to be a personal property, not only
because the deed of mortgage considered it as such, but also because it did not form part of the
land for it is now settled that an object placed on land by one who had only a temporary right to
the same, such as the lessee or usufructuary, does not become immobilized by attachment.
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, however that the principle is predicated on statements by the owner declaring
his house to be a chattel, a conduct that may conceivably estop him from subsequently claiming
otherwise.

Although there is no specific statement referring to the subject house as personal property, yet
by ceding, selling or transferring a property by way of chattel mortgage defendants could only
have meant to convey the house as chattel, or at least, intended to treat the same as such, so
that they should not now be allowed to make an inconsistent stand by claiming otherwise.
Moreover, the subject house stood on a rented lot to which defendants merely had a temporary
right as lessee, and although this can not in itself alone determine the status of the property, it
does so when combined with other factors to sustain the interpretation that the parties,
particularly the mortgagors, intended to treat the house as personalty. Finally, because it is the
defendants themselves, as debtors-mortgagors, who are attacking the validity of the chattel
mortgage in this case, the doctrine of estoppel therefore applies to the defendants, having
treated the subject house as personalty.

Lopez v. Orosa
G.R. Nos. L-10817-18, 103 SCRA 98

DOCTRINE: For while it is true that generally, real estate connotes the land and the building
constructed thereon, it is obvious that the inclusion of the building in the enumeration of what
may constitute real properties could only mean one thing—that a building is by itself an
immovable property

FACTS:
Lopez was engaged in business under the name Lopez-Castelo Sawmill. Orosa, who lived in
the same province as Lopez, one day approached Lopez and invited the latter to make an
investment in the theatre business. Orosa, his family and close friends apparently were forming
a corporation named Plaza Theatre. Lopez expressed his unwillingness to invest. Nonetheless,
there was an oral agreement between Lopez and Orosa that Lopez would be supplying the
lumber for the construction of the theatre. The terms were the following: one, Orosa would be
personally liable for any account that the said construction would incur; two, payment would be
by demand and not by cash on delivery.

Pursuant to the agreement, Lopez delivered the lumber for the construction. Lopez was only
paid one-third of the total cost. The land on which the building has been erected was previously
owned by Orosa, which was later on purchased by the corporation. Due to the incessant
demands of Lopez, the corporation mortgaged its properties. On an earlier relevant date, the
corporation obtained a loan with Luzon Surety Company as surety and in turn, the corporation
executed a mortgage over the land and building. In the registration of the land under Act 496,
such mortgage wasn’t revealed. Also due to the demands of Lopez, Orosa issued a deed of
assignment over his shares of stock in the corporation. As there was still an unpaid balance,
Lopez filed a case against Orosa and Plaza theatre. He asked that Orosa and Plaza theatre be
held liable solidarily for the unpaid balance; and in case defendants failed to pay, the land and
building should be sold in public auction with the proceeds to be applied to the balance; or that
the shares of stock be sold in public auction. Lopez also had lis pendens be annotated in the
OCT. The trial court decided that there was joint liability between defendants and that the
material man’s lien was only confined to the building.

ISSUE:
W/N the material men’s lien for the value of the materials used in the construction of the building
attaches to said structure alone and doesn’t extend to the land on which the building is adhered
to?

HELD:
The contention that the lien executed in favor of the furnisher of materials used for the
construction and repair of a building is also extended to land on which the building was
constructed is without merit. For while it is true that generally, real estate connotes the land and
the building constructed thereon, it is obvious that the inclusion of the building in the
enumeration of what may constitute real properties could only mean one thing—that a building
is by itself an immovable property. Moreover, in the absence of any specific provision to the
contrary, a building is an immovable property irrespective of whether or not said structure and
the land on which it is adhered to belong to the same owner.
Appellant invoked Article 1923 of the Spanish Civil Code, which provides—“With respect to
determinate real property and real rights of the debtor, the following are preferred: xxx Credits
for reflection, not entered or recorded, and only with respect to other credits different from those
mentioned in four next preceding paragraphs.” Close examination of the abovementioned
provision reveals that the law gives preference to unregistered refectionary credits only with
respect to the real estate upon which the refectionary or work was made. This being so, the
inevitable conclusion must be that the lien so created attaches merely to the immovable
property for the construction or repair of which the obligation was incurred. Therefore, the lien in
favor of appellant for the unpaid value of the lumber used in the construction of the building
attaches only to said structure and to no other property of the obligors.

Fels Energy, Inc. v. Province of Batangas, et al.

G.R. No. 168557

DOCTRINE: 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 or work.

FACTS:
On January 18, 1993, National Power Corporation (NPC) entered into a lease contract with
Polar Energy, Inc. over 3×30 MW diesel engine power barges moored at Balayan Bay in
Calaca, Batangas. The contract, denominated as an Energy Conversion Agreement, was for a
period of five years. Article 10 states that NPC shall be responsible for the payment of taxes.
(other than (i) taxes imposed or calculated on the basis of the net income of POLAR and
Personal Income Taxes of its employees and (ii) construction permit fees, environmental permit
fees and other similar fees and charges. Polar Energy then assigned its rights under the
Agreement to Fels despite NPC’s initial opposition.

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. It then gave NPC the full power
and authority to represent it in any conference regarding the real property assessment of the
Provincial Assessor. NPC filed a petition with the Local Board Assessment Appeals (LBAA).
The LBAA ordered Fels to pay the real estate taxes. The LBAA ruled that the power plant
facilities, while they may be classified as movable or personal property, are nevertheless
considered real property for taxation purposes because they are installed at a specific location
with a character of permanency. The LBAA also pointed out that the owner of the barges–FELS,
a private corporation–is the one being taxed, not NPC. A mere agreement making NPC
responsible for the payment of all real estate taxes and assessments will not justify the
exemption of FELS; such a privilege can only be granted to NPC and cannot be extended to
FELS. Finally, the LBAA also ruled that the petition was filed out of time.

Fels appealed to the Central Board Assessment Appeals (CBAA). The CBAA reversed and
ruled that the power barges belong to NPC; since they are actually, directly and exclusively
used by it, the power barges are covered by the exemptions under Section 234(c) of R.A. No.
7160. As to the other jurisdictional issue, the CBAA ruled that prescription did not preclude the
NPC from pursuing its claim for tax exemption in accordance with Section 206 of R.A. No. 7160.
Upon MR, the CBAA reversed itself.

ISSUE: Whether or not barges are considered as real property, thus can be subject to real
property tax -- YES

HELD:
The CBAA and LBAA power barges are real property and are thus subject to real property tax.

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 or work.

Villanueva v. Castañeda
154 SCRA 142

DOCTRINE: Article 344 of the Civil Code: "Property for public use in provinces and in towns
comprises the provincial and town roads, the squares, streets, fountains, and public waters, the
promenades, and public works of general service supported by said towns or provinces.” Such
is outside the commerce of man and cannot be the object of a valid contract. (Article 1271)

FACTS:
The subject of the herein petition is a “talipapa” that the petitioners claim they have a right to
remain in and conduct business in this area by virtue of a previous authorization granted to
them by the municipal government. The respondents deny this and justify the demolition of their
stalls as illegal constructions on public property.

This dispute goes back to when the municipal council of San Fernando adopted Resolution No.
218 authorizing some 24 members of the Fernandino United Merchants and Traders
Association to construct permanent stags and sell in the above-mentioned place. 2 The action
was protested where the Court of First Instance of Pampanga, Branch 2, issued a writ of
preliminary injunction that prevented the defendants from constructing the said stalls until final
resolution of the controversy. 3 On January 18, 1964, while this case was pending, the municipal
council of San Fernando adopted Resolution G.R. No. 29, which declared the subject area as
"the parking place and as the public plaza of the municipality. Four years later, the judge
decided that the land occupied by the petitioners, being public in nature, was beyond the
commerce of man and therefore could not be the subject of private occupancy. 5 The writ of
preliminary injunction was made permanent. 6
The decision was apparently not enforced, for the petitioners were not evicted from the place; in
fact, according to then they and the 128 other persons were in 1971 assigned specific areas or
space allotments therein for which they paid daily fees to the municipal government. Then, on
January 12, 1982, the Association of Concerned Citizens and Consumers of San Fernando filed
a petition for the immediate implementation of Resolution No. 29, to restore the subject property
"to its original and customary use as a public plaza thereby the respondent was tasked to
demolish the stalls in the subject place which was favored by the trial court.

The basic contention of the petitioners is that the disputed area is under lease to them by virtue
of contracts they had entered into with the municipal government.

ISSUE:
WON the lease agreement whereby the municipality of Cavite leased to the petitioner valid
given the fact the said area is dedicated for public use? -- NO

HELD:
Applying this well-settled doctrine, we rule that the petitioners had no right in the first place to
occupy the disputed premises and cannot insist in remaining there now on the strength of their
alleged lease contracts. The lease agreement is null and void.

According to article 344 of the Civil Code: "Property for public use in provinces and in towns
comprises the provincial and town roads, the squares, streets, fountains, and public waters, the
promenades, and public works of general service supported by said towns or provinces.
The said Plaza Soledad being a promenade for public use, the municipal council of Cavite could
not in 1907 withdraw or exclude from public use a portion thereof in order to lease it for the sole
benefit of the defendant Hilaria Rojas.

Furthermore, the Civil Code, article 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.

Maneclang v. IAC
144 SCRA 553

DOCTRINE: Finding that subject body of water is a creek belonging to the public domain,not
susceptible to private appropriation, a factual determination binding on the Supreme Court.

FACTS:
● Maneclang filed a complaint for quieting of title over a certain fishpond located
within the four parcels of land belonging to them.
● The trial court dismissed the complaint upon finding that the body of water
traversing the titled properties of petitioners is a creek constituting a tributary of a river;
therefore public in nature and not subject to private appropriation.

ISSUE:
Whether or not a creek can be registered under the Torrens System -- NO

HELD:
A creek is a recess/arm extending from a river and participating in the ebb and flow of the sea. It
is a property belonging to the public domain, It is a property belonging to the public domain. it is
not susceptible to appropriation and acquisitive prescription. As a public water, it cannot be
registered under the Torrens System in the name of any individual.

Its nature as property of the public domain cannot be modified by the construction of irrigation
dikes by the National Irrigation Authority, or by its conversion into a fishpond. Hence, a
compromise agreement adjudicating the ownership of such property in favor of an individual is
null and void. The compromise agreement has no legal effect since it is contrary to law and
public policy.
 Laurel v. Garcia
187 SCRA 797

DOCTRINE: An abandonment of the intention to use the property for public service and to
make it patrimonial property under Article 422 of the Civil Code must be definite Abandonment
and it cannot be inferred from the non-use alone specially if the non-use was attributable not to
the government's own deliberate and indubitable will but to a lack of financial support to repair
and improve the property Abandonment must be a certain and positive act based on correct
legal premises.

FACTS:
These are two petitions for prohibition seeking to enjoin respondents, their representatives and
agents from proceeding with the bidding for the sale of the 3,179 square meters of land at
Tokyo, Japan scheduled on February 21, 1990.

The subject property in this case is 1 of the 4 properties in Japan acquired by the Philippine
government under the Reparations Agreement entered into with Japan on May 9, 1956. The
properties and the capital goods and services procured from the Japanese government for
national development projects are part of the indemnification to the Filipino people for their
losses in life and property and their suffering during World War II.

A proposal was presented to President Corazon C. Aquino by former Philippine Ambassador to

Japan, Carlos J. Valdez, to make the property the subject of a lease agreement with a
Japanese firm. No change of ownership or title shall occur. The Philippine government retains
the title all throughout the lease period and thereafter. However, the government has not acted
favorably.

On July 25, 1987, the President issued Executive Order No. 296 entitling non-Filipino citizens or
entities to avail of separations' capital goods and services in the event of sale, lease or
disposition. The four properties in Japan including the Roppongi were specifically mentioned in
the first "Whereas" clause.

Amidst opposition by various sectors, the Executive branch of the government has been
pushing its decision to sell the reparations properties starting with the Roppongi lot. The
property has twice been set for bidding at a minimum floor price of $225 million.

ISSUE:
W/N the Roppongi property and others of its kind be alienated by the Philippine Government. --
NO

HELD:
NO, the subject property cannot be alienated by the government, even if the property has not
been in use for a long time.

Vice President Laurel asserts that the lands were acquired as part of the reparations for
diplomatic and consular use by the Philippine government. Laurel states that the Roppongi
property is classified as one of public dominion, and not of private ownership under Article 420
of the Civil Code.

The petitioner submits that the Roppongi property comes under "property intended for public
service" in paragraph 2 of the above provision. He states that being one of public dominion, no
ownership by anyone can attach to it, not even by the State. The Roppongi and related
properties were acquired for "sites for chancery, diplomatic, and consular quarters, buildings
and other improvements. The petitioner states that they continue to be intended for a necessary
service. They are held by the State in anticipation of an opportune use. (Citing 3 Manresa 65-
66). Hence, it cannot be appropriated, is outside the commerce of man, or to put it in more
simple terms, it cannot be alienated nor be the subject matter of contracts (Citing Municipality of
Cavite v. Rojas, 30 Phil. 20 [1915]). Noting the non-use of the Roppongi property at the
moment, the petitioner avers that the same remains property of public dominion so long as the
government has not used it for other purposes nor adopted any measure constituting a removal
of its original purpose or use.
As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot be
alienated. Its ownership is a special collective ownership for general use and enjoyment, an
application to the satisfaction of collective needs, and resides in the social group. The purpose
is not to serve the State as a juridical person, but the citizens; it is intended for the common and
public welfare and cannot be the object of appropration

The applicable provisions of the Civil Code are:

ART. 419. Property is either of public dominion or of private ownership.
ART. 420. The following things are property of public dominion
(1) 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;
(2) Those which belong to the State, without being for public use, and are
intended for some public service or for the development of the national
wealth.
ART. 421. All other property of the State, which is not of the character stated in the
preceding article, is patrimonial property.

The Roppongi property is correctly classified under paragraph 2 of Article 420 of the Civil Code
as property belonging to the State and intended for some public service.

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

An abandonment of the intention to use the Roppongi property for public service and to make it
patrimonial property under Article 422 of the Civil Code must be definite Abandonment cannot
be inferred from the non-use alone specially if the non-use was attributable not to the
government's own deliberate and indubitable will but to a lack of financial support to repair and
improve the property Abandonment must be a certain and positive act based on correct legal
premises.

A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not relinquishment of the
Roppongi property's original purpose.

Moreover, President Aquino’s approval of the recommendation by the investigating committee

to sell the Roppongi property was premature or, at the very least, conditioned on a valid change
in the public character of the Roppongi property. It does not have the force and effect of law
since the President already lost her legislative powers. The Congress had already convened for
more than a year. Assuming that the Roppongi property is no longer of public dominion, there is
another obstacle to its sale by the respondents. There is no law authorizing its conveyance, and
thus, the Court sees no compelling reason to tackle the constitutional issue raised by petitioner
Ojeda.

Cebu Oxygen and Acetylene Co. v. Bercilles

66 SCRA 431

FACTS:
A portion of land, sought to be registered, was declared, through law, an abandoned road. The
lot was awarded to the petitioner for being the highest bidder.

The Assistant Provincial Fiscal of Cebu filed a motion to dismiss the application on the ground
that the property sought to be registered being a public road intended for public use is
considered part of the public domain and therefore outside the commerce of man.

ISSUE:
WON the portion of land is susceptible to registration by a private individual. -- YES

HELD:
Revised Charter of Cebu, under section 31, provides that, the City Council shall have the power
to close any city road, street or alley, etc, withdrawn from public servitude, may be used or
conveyed for any purpose.

It is undoubtedly clear that the City of Cebu is empowered to close a city road or street. Such
power is discretionary and will not ordinarily be controlled or interfered with by the courts,
absent a plain case of abuse or fraud or collusion. It follows that such withdrawn portion
becomes patrimonial property which can be the object of an ordinary contract.

Villarico v. Court of Appeals

309 SCRA 193

DOCTRINE: Private persons cannot own forest lands. Possession thereof, no matter how long,
does not ripen into a registrable title.

FACTS:
Spouses Villarico filed an application for confirmation of title over a parcel of land in
Meycauayan, Bulacan. The applicants alleged that 1)they are the absolute owners of the
property having bought the same from Segundo Villarico and Mercedes Cardenas, 2) they and
their predecessors-in-interest have been in actual, open, adverse and continuous possession
thereof for more than 30 years, 3) they are not aware of any mortgage or encumbrance thereon
nor of any person having an estate or interest therein, and 4) the land involved is not within the
forest zone or government reservation.

Marcos Camargo opposed the application for the registration of the land claiming that he is the
real owner thereof. The Government interposed its opposition, through the Director of Forestry,
averring that the land in question is part of the public domain, within the unclassified area in
Meycauayan, Bulacan hence, it is not available for private appropriation.

The trial court dismissed the case saying that “a certificate of title is void when it covers property
of the public domain classified as forest or timber and mineral lands. Any title thus issued on
non-disposable lots, even in the hands of an innocent purchaser for value, should be cancelled.”

ISSUE:
W/N the property in question can be registered by the applicant or by the oppositor or by their
respective predecessors-in-interest?

HELD:
The Supreme Court Held in the negative. Since there is no showing that a declassification has
been made by the Director of Forestry declaring the land in question as disposable or alienable,
the land remains to be part of the public domain as a forest land. Considering this, possession
of the land in question by the applicants and/or their predecessors-in-interest even for more
than 30 years does not convert the land into private property capable of private appropriation.

The SC stated that forest lands cannot be owned by private persons. Its possession, no matter
how long it is, does not ripen into a registrable title. Furthermore, it must be noted that the
adverse possession which may be the basis of a grant of title or confirmation of an imperfect
title refers only to alienable or disposable portions of the public domain.