1|Page

SALVADOR H. LAUREL vs. RAMON GARCIA There can be no doubt that it is of public dominion
unless it is convincingly shown that the property has
G.R. No. 92013 and G.R. No. 92047 July 25, 1990
become patrimonial. This, the respondents have failed
Facts: These are two petitions for prohibition seeking to do.
to enjoin respondents, their representatives and
As property of public dominion, the Roppongi lot is Page | 1
agents from proceeding with the bidding for the sale
outside the commerce of man. It cannot be alienated.
of the 3,179 square meters of land at Tokyo, Japan
Its ownership is a special collective ownership for
scheduled on February 21, 1990.
general use and enjoyment, an application to the
The subject property in this case is 1 of the 4 satisfaction of collective needs, and resides in the
properties in Japan acquired by the Philippine social group. The purpose is not to serve the State as a
government under the Reparations Agreement juridical person, but the citizens; it is intended for the
entered into with Japan on May 9, 1956. The common and public welfare and cannot be the object
properties and the capital goods and services procured of appropration.
from the Japanese government for national
The fact that the Roppongi site has not been used for a
development projects are part of the indemnification
long time for actual Embassy service does not
to the Filipino people for their losses in life and
automatically convert it to patrimonial property. Any
property and their suffering during World War II.
such conversion happens only if the property is
A proposal was presented to President Corazon C. withdrawn from public use. A property continues to be
Aquino by former Philippine Ambassador to Japan, part of the public domain, not available for private
Carlos J. Valdez, to make the property the subject of a appropriation or ownership until there is a formal
lease agreement with a Japanese firm. No change of declaration on the part of the government to
ownership or title shall occur. The Philippine withdraw it from being such
government retains the title all throughout the lease
Rabuco vs. Villegas
period and thereafter. However, the government has
not acted favorably. G.R. No. L-24661 G.R. No. L-24915 G.R. No. L-24916
February 28, 1974
On July 25, 1987, the President issued Executive Order
No. 296 entitling non-Filipino citizens or entities to Facts: The origin and background of the cases at bar
avail of separations' capital goods and services in the which deal with the decisive issue of constitutionality
event of sale, lease or disposition. The four properties of Republic Act 3120 enacted on June 17, 1961, as
in Japan including the Roppongi were specifically raised by respondent mayor of Manila in resisting
mentioned in the first "Whereas" clause. petitioners' pleas that respondent may or not only
lacks the authority to demolish their houses or eject
Amidst opposition by various sectors, the Executive
them as tenants and bona fide occupants of a parcel of
branch of the government has been pushing its
land in San Andres, Malate but is also expressly
decision to sell the reparations properties starting with
prohibited from doing so by section 2 of the Act, may
the Roppongi lot. The property has twice been set for
be summarized from the Court of Appeals'
bidding at a minimum floor price of $225 million.
certification of resolution of May 31, 1965.
Issue: Can the Roppongi property and others of its
petitioners' appeal to the Court of Appeals from the
kind be alienated by the Philippine Government?
decision of the Manila CFI dismissing their petition for
Ruling: No. The petitioners and respondents in both injunction and mandamus to enjoin the demolition of
cases do not dispute the fact that the Roppongi site their houses and the ejectment from the public lots in
and the three related properties were through question and to direct respondent administrator of the
reparations agreements, that these were assigned to Land Authority to implement the provisions of
the government sector and that the Roppongi Republic Act 3120 for the subdivision and sale on
property itself was specifically designated under the installment basis of the subdivided lots to them as the
Reparations Agreement to house the Philippine tenants and bona fide occupants thereof, and instead
Embassy. ordering their ejectment.

The nature of the Roppongi lot as property for public petitioners' independent petition for injunction filed
service is expressly spelled out. It is dictated by the directly with the Court of Appeals January 29, 1965 to
terms of the Reparations Agreement and the forestall the demolition overnight of their houses
corresponding contract of procurement which bind pursuant to the order of demolition set for January 30,
both the Philippine government and the Japanese 1965 at 8 a.m. issued by respondents city officials
government. pending the elevation of their appeal. The appellate
2|Page

court gave due course thereto and issued the writ of On June 13, 1990, the respondent municipality passed
preliminary injunction as prayed for. Ordinance No. 86, Series of 1990 which authorized the
closure of J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia
The two cases were ordered "consolidated into one"
Extension and Opena Streets located at Baclaran,
since they were "unavoidably interlaced." The
Paranaque, Metro Manila and the establishment of a Page | 2
appellate court, finding that the constitutionality of
flea market thereon. July 20, 1990, the Metropolitan
Republic Act 3120 was "the dominant and inextricable
Manila Authority approved Ordinance No. 86, s. 1990
issue in the appeal" over which it had no jurisdiction
of the municipal council of respondent municipality
and that the trial court incorrectly "sidetracked" the
subject to the following conditions:
issue.
1. That the aforenamed streets are not used for
Issue: Can a communal property be converted into
vehicular traffic, and that the majority of the residents
disposable or alienable land through legislation?
do not oppose the establishment of the flea
Ruling: YES. market/vending areas thereon;

Respondents city officials' contention that the Act 2. That the 2-meter middle road to be used as flea
must be stricken down as unconstitutional for market/vending area shall be marked
depriving the city of Manila of the lots in question and
distinctly, and that the 2 meters on both sides of the
providing for their sale in subdivided small lots to bona
road shall be used by pedestrians; 3. That the time
fide occupants or tenants without payment of just
during which the vending area is to be used shall be
compensation is untenable and without basis, since
clearly designated;
the lots in question are manifestly owned by the city in
its public and governmental capacity and are therefore 4. That the use of the vending areas shall be
public property over which Congress had absolute temporary and shall be closed once the
control as distinguished from patrimonial property
reclaimed areas are developed and donated by the
owned by it in its private or proprietary capacity of
Public Estate Authority.
which it could not be deprived without due process
and without just compensation. June 20, 1990, Mayor Walfrido N. Ferrer to enter into
contract with any service cooperative for the
Here, Republic Act 3120 expressly declared that the
establishment, operation, maintenance and
properties were "reserved as communal property" and
management of flea markets and/or vending areas. On
ordered their conversion into "disposable and
August 8, 1990, respondent municipality and
alienable lands of the State" for sale in small lots to
respondent Palanyag, a service cooperative, entered
the bona fide occupants thereof. It is established
into an agreement whereby the latter shall operate,
doctrine that the act of classifying State property calls
maintain and manage the flea market in the
for the exercise of wide discretionary legislative power
aforementioned streets with the obligation to remit
which will not be interfered with by the courts.
dues to the treasury of the municipal government of
The Court therein reaffirmed the established general Paranaque. Consequently, market stalls were put up
rule that "regardless of the source or classification of by respondent Palanyag on the said streets. On
land in the possession of a municipality, excepting September 13, 1990, petitioner Brig. Gen. Macasiano,
those acquired with its own funds in its private or PNP Superintendent of the Metropolitan Traffic
corporate capacity, such property is held in trust for Command, ordered the destruction and confiscation
the State for the benefit of its inhabitants, whether it of stalls along G.G. Cruz and J. Gabriel St. in Baclaran.
be for governmental or proprietary purposes. the These stalls were later returned to respondent
Court holds that the Acts in question were intended to Palanyag. October 16, 1990, petitioner Brig. General
implement the social justice policy of the Constitution Macasiano wrote a letter to respondent Palanyag
and the government program of land for the landless giving the latter ten (10) days to discontinue the flea
and that they were not "intended to expropriate the market; otherwise, the market stalls shall be
property involved but merely to confirm its character dismantled. Hence, on October 23, 1990, respondents
as communal land of the State and to make it available municipality and Palanyag filed with the trial court a
for disposition by the National Government. joint petition for prohibition and mandamus with
damages and prayer for preliminary injunction, to
which the petitioner filed his
Macasiano vs. Diokno memorandum/opposition to the issuance of the writ
of preliminary injunction. October 24, 1990, the trial
G.R. No. 97764 August 10, 1992 court issued a temporary restraining order to enjoin
Facts: petitioner from enforcing his letter- order of October
16, 1990 pending the hearing on the motion for writ of
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preliminary injunction. On December 17, 1990, the was established that the subject land is a portion of
trial court issued an order upholding the validity of the Calauag Bay, five (5) to six (6) feet deep under
Ordinance No. 86 s. 1990 of the Municipality of water during high tide and two (2) feet deep at low
Paranaque and enjoining petitioner Brig. Gen. tide, and not suitable to vegetation. Moreover, a
Macasiano from enforcing his letter-order against portion of the land was mortgaged by respondent Page | 3
respondent Palanyag. Morato to respondents Nenita Co and Antonio
Quilatan. The spouses Quilatan constructed a house
Issue: whether or not an ordinance or resolution
on the land. Another portion of the land was leased to
issued by the municipal council of Parañaque
Perfecto Advincula, where a warehouse was
authorizing the lease and use of public streets or
constructed.
thoroughfares as sites for flea markets is valid.
Petitioner filed an amended complaint against
Ruling: NO. The Executive Order issued by acting
respondents Morato, spouses Nenita Co and Antonio
Mayor Robles authorizing the use of Heroes del '96
Quilatan, and the Register of Deeds of Quezon for the
Street as a vending area for stallholders who were
cancellation of title and reversion of a parcel of land to
granted licenses by the city government contravenes
the public domain, subject of a free patent in favor of
the general law that reserves city streets and roads for
respondent Morato, on the grounds that the land is a
public use. Mayor Robles' Executive Order may not
foreshore land and was mortgaged and leased within
infringe upon the vested right of the public to use city
the five- year prohibitory period.
streets for the purpose they were intended to serve:
i.e., as arteries of travel for vehicles and pedestrians. The lower court ruled that there was no violation of
The Solicitor General furthers the matter with his the 5-year period ban against alienating or
observation, "Verily, the powers of a local government encumbering the land, because the land was merely
unit are not absolute. They are subject to limitations leased and not alienated. It also found that the
laid down by the Constitution and the laws such as our mortgage to Nenita Co and Antonio Quilatan covered
Civil Code. Moreover, the exercise of such powers only the improvement and not the land itself.
should be subservient to paramount considerations of
On appeal, the Court of Appeals affirmed the decision
health and well-being of the members of the
of the trial court. Thereafter, the Republic of the
community. Every local government unit has the
Philippines filed the present petition.
sworn obligation to enact measures that will enhance
the public health, safety and convenience, maintain Issue: Whether the questioned land is a foreshore land
peace and order, and promote the general prosperity and thus must be reverted to the public domain. -- YES
of the inhabitants of the local units. Based on this
objective, the local government should refrain from HELD:
acting towards that which might prejudice or The Supreme Court found that the subject land was
adversely affect the general welfare." Moreover, the foreshore land, it nevertheless sustained the award
municipality did not even comply with the guidelines thereof to Respondent Morato. It defined a foreshore
set forth by the Metropolitan Manila Authority. Even if land as “that parcel of land which is between high and
we were to argue for purposes of debate, the city of low water and left dry by the flux and reflux of the
Paranaque's claim would still be bereft and lacking in tides”; it is that “strip of land that lies between the
reason. high and low water marks and that is alternatively wet
Republic vs. Court of Appeals and dry according to the flow of the tide”.

GR No. 100709 November 14, 1997 From the actual findings of the lower court, it was
found out that years before the issuance of the free
FACTS: patent to private respondent, the questioned land was
subjected to several natural calamities like
Respondent Josefina Morato filed a Free Patent
earthquakes and typhoons that caused severe erosion
Application on a parcel of land. The patent was
of the land. Then private respondent introduced
approved at the Register of Deeds of Quezon. Both the
improvements and developments to the land. At the
free patent and the title specifically mandate that the
time then of the issuance of free patent of land to
land shall not be alienated nor encumbered within five
Morato, it was not covered by water but due to the
years from the date of the issuance of the patent
gradual sinking of the land caused by natural
(Sections 118 and 124 of CA No. 141, as amended).
calamities, the sea advances had permanently invaded
Subsequently, the District Land Officer in Lucena City, a portion of subject land. During high tide, at least half
acting upon reports that respondent Morato had of the land is 6 feet deep under water and three feet
encumbered the land in violation of the condition of deep during low tide. The Calauag Bay has extended
the patent, conducted an investigation. Thereafter, it up to a portion of the land.
4|Page

Thus, uncontestedly, the land has become a foreshore and assets belonging to the former province of
land and is now a part of the public domain pursuant Zamboanga and located within the City of Zamboanga
to Article 420 of the New Civil Code – being part of the are transferred, free of charge, in favor of the said City
“shores” defined therein. Accordingly, it cannot be of Zamboanga.
disposed of by the government and appropriated by a
Consequently, the Secretary of Finance ordered the Page | 4
private individual, i.e. be a subject of a free patent.
CIR to stop from effecting further payments to
Province of Zamboanga del Norte vs. City of Zamboanga del Norte and to return to Zamboanga City
Zamboanga the sum taken from it out of the internal revenue
allotment of Zamboanga del Norte.
G.R. No. L-24440 March 28, 1969
Zamboanga del Norte filed a complaint for relief with
FACTS:
Preliminary Mandatory Injunction against Zamboanga
On October 12, 1936, Commonwealth Act 39 was City, the Secretary of Finance and the Commissioner of
approved converting the Municipality of Zamboanga Internal Revenue. They prayed that 1) RA 3039 be
into Zamboanga City. It further provided that buildings declared unconstitutional, 2) plaintiff's rights and
and properties which the province shall abandon upon obligations under said law be declared, 3) they be
the transfer of the capital to another place will be reimbursed the sum paid to defendant City, and 4) the
acquired and paid for by the City of Zamboanga at a latter be ordered to continue paying the balance of its
price to be fixed by the Auditor General. internal revenue allotments.

The properties and buildings referred to consisted of The lower court ruled in favor of the plaintiff.
50 lots and some buildings constructed thereon,
ISSUE:
located in the City of Zamboanga and covered
individually by Torrens certificates of title in the name WON RA 3039 is valid – PARTLY VALID
of Zamboanga Province. Pursuant to CA 39, the
HELD:
Auditor General fixed the value of the properties and
buildings in question left by Zamboanga Province in Applying the norm obtaining under the principles
Zamboanga City at P1,294,244.00. constituting the law of Municipal Corporations, all
those of the 50 properties in question which are
When RA 711 was approved dividing the province of
devoted to public service are deemed public; the rest
Zamboanga into Zamboanga del Norte and
remain patrimonial. Under this norm, to be considered
Zamboanga del Sur, assets and obligations of the
public, it is enough that the property be held and,
previous Zamboanga province were divided as follows:
devoted for governmental purposes like local
54.39% for Zamboanga del Norte and 45.61% for
administration, public education, public health, etc.
Zamboanga del Sur. Zamboanga del Norte therefore
became entitled to 54.39% of P1,294,244.00, the total Following this classification, RA 3039 is valid insofar as
value of the lots and buildings in question, or it affects the lots used as capitol site, school sites and
P704,220.05 payable by Zamboanga City. its grounds, hospital and leprosarium sites and the
high school playground sites — a total of 24 lots —
The Executive Secretary issued a ruling holding that
since these were held by the former Zamboanga
Zamboanga del Norte had a vested right as owner of
province in its governmental capacity and therefore
the properties mentioned in Sec. 50 of CA 39, and is
are subject to the absolute control of Congress.
entitled to the price thereof, payable by Zamboanga
City. This ruling revoked the previous Cabinet Regarding the several buildings existing on the lots
Resolution conveying all the said 50 lots and buildings above-mentioned, the records do not disclose
thereon to Zamboanga City when the provincial capital whether they were constructed at the expense of the
of the then Zamboanga Province was transferred to former Province of Zamboanga. Considering however
Dipolog. the fact that said buildings must have been erected
even before 1936 when CA 39 was enacted and the
The Secretary of Finance then authorized the
further fact that provinces then had no power to
Commissioner of Internal Revenue to deduct an
authorize
amount equal to 25% of the regular internal revenue
allotment for the City of Zamboanga. The deductions, construction of buildings at their own expense, it can
all aggregating P57,373.46, was credited to the be assumed that said buildings were erected by the
province of Zamboanga del Norte, in partial payment National Government, using national funds. Even
of the P704,220.05 due it. assuming that provincial funds were used, still the
buildings constitute mere accessories to the lands,
On June 17, 1961, RA 3039 was approved amending
Sec. 50 of CA 39 by providing that buildings, properties
5|Page

which are public in nature, and so, they follow the JVA be declared null and void for it violating the
nature of said lands, i.e., public. Constitutional and statutory provisions.

But RA 3039 cannot be applied to deprive Zamboanga ISSUE:

del Norte of its share in the value of the rest of the 26
Whether or not AMARI, a private corporation may Page | 5
remaining lots which are patrimonial properties since
acquire the reclaimed lands? NO
they are not being utilized for distinctly, governmental
purposes. Moreover, the fact that these 26 lots are HELD:
registered strengthens the proposition that they are
truly private in nature. However, the fact that the 24 In this case, the SC traced back the laws governing
lots used for governmental purposes are also reclaimed lands as regards its alienability. The
registered is of no significance since registration previous Constitutions including the 1987 Constitution
cannot convert public property to private. has adopted the Regalian Doctrine wherein it states
that all public lands and waters are owned by the
It results then that Zamboanga del Norte is still State. The court discussed and emphasized also CA No.
entitled to collect from the City of Zamboanga the 141 which states that the only way the government
former's 54.39% share in the 26 properties which are can sell to private parties’ government reclaimed and
patrimonial in nature. marshy disposable lands of the public domain is for
the legislature to pass a law authorizing such sale. In
Chavez vs. Public Estates Authority
addition, the Constitution has established that private
GR No. 133250 July 9, 2002 corporations (such as AMARI) cannot acquire the
reclaimed lands however; these corporations are
FACTS:
allowed to lease them. This rule is absolute.
The government, through the Commissioner of Public
Applying these provisions to the case, the reclaimed
Highways, signed a contract with CDCP to reclaim
lands are classified as public property and in order for
certain foreshore and offshore areas of Manila Bay
PEA to sell these lands; there must be a legislative act
under the MCCRRP. Later on President Marcos signed
granting such right to sell. In addition, even if there
PD No. 1084 and 1085 creating PEA and transferring to
exist an express provision in favor of PEA, such would
PEA the reclaimed lands in the foreshore and offshore
still subject of the constitutional ban as regards private
of the Manila Bay. In addition, a Memorandum of
corporation acquiring reclaimed alienable lands.
Agreement was executed between PEA and CDCP
wherein the latter acceded and transferred its rights As mentioned and established already, these
and interest in favor of the former as regards CDCP’s reclaimed lands are considered inalienable public
reclaimed lands under MCCRRP. During Aquino’s property. PD No. 1085 granting PEA the power to
administration, special patents as well as 3 TCTs (the oversee the Freedom Islands did not in any way
lands were known as Freedom Islands) were issued in convert the lands into alienable or disposable lands.
favor of PEA. The issuance of special patents by Pres. Aquino as well
as the TCTs also did not convert it into private lands. It
PEA and AMARI, a private corporation, through
must be noted that the registration of public lands
negotiation but without conducting any public bidding
under Torrens system cannot convert it into private
entered into a Joint Venture Agreement (JVA for
property.
brevity) for the development of the Freedom Islands.
A year later, Senate President Maceda described such VILLARICO VS. SARMIENTO
JVA during his privileged speech as the “grandmother
Facts:
of all scams”. Consequently, a joint investigation was
conducted and the report concluded that the JVA is Teofilo C. Villarico is the owner of a lot in La Huerta,
illegal because what PEA seeks to do is to transfer Parañaque City with an area of sixty-six (66) square
ownership of the reclaimed lands which are public meters and covered by Transfer Certificate of Title
lands hence inalienable to AMARI. However, the Legal (T.C.T.) No. 95453.
Task formed by Pres. Ramos upheld the legality of the
JVA. Petitioner’s lot is separated from the Ninoy Aquino
Avenue (highway) by a strip of land belonging to the
Phillipine Daily Inquirer and Today published reports government. As this highway was elevated by four (4)
that Pres. Ramos ordered that renegotiations meters and therefore higher than the adjoining areas,
regarding the JVA be again made. Such JVA (now the DPWH constructed stairways at several portions of
called Amended JVA) was later on approved by Pres. this strip of public land to enable the people to have
Estrada. Petitioner Chavez prays that the Amended access to the highway.
6|Page

Sometime in 1991, Vivencio Sarmiento et al., cannot be acquired by prescription against the State;
respondents herein, had a building constructed on a (3) is not subject to attachment and execution; and (4)
portion of said government land. In November that cannot be burdened by any voluntary easement.
same year, a part thereof was occupied by Andok’s
Considering that the lot on which the stairways were
Litson Corporation and Marites’ Carinderia, also
constructed is a property of public dominion, it can Page | 6
impleaded as respondents.
not be burdened by a voluntary easement of right of
In 1993, by means of a Deed of Exchange of Real way in favor of herein petitioner. In fact, its use by the
Property, petitioner acquired a 74.30 square meter public is by mere tolerance of the government through
portion of the same area owned by the government. the DPWH. Petitioner cannot appropriate it for
The property was registered in his name as T.C.T. No. himself. Verily, he can not claim any right of
74430 in the Registry of Deeds of Parañaque City. possession over it. This is clear from Article 530 of the
Civil Code which provides:
In 1995, petitioner filed with the RTC, a complaint for
accion publiciana against respondents. He alleged "ART. 530. Only things and rights which are susceptible
inter alia that respondents’ structures on the of being appropriated may be the object of
government land closed his "right of way" to the Ninoy possession."
Aquino Avenue; and encroached on a portion of his lot
Accordingly, both the trial court and the Court of
covered by T.C.T. No. 74430.
Appeals erred in ruling that respondents have better
Respondents, in their answer, specifically denied right of possession over the subject lot.
petitioner’s allegations, claiming that they have been
issued licenses and permits by Parañaque City to
construct their buildings on the area; and that HEIRS OF MARIO MALABANAN v. REPUBLIC G.R. No.
petitioner has no right over the subject property as it 179987 September 3, 2013
belongs to the government.
FACTS:
Issue: WHETHER OR NOT THE PLAINTIFF-APPELLANT
HAS ACQUIRED A RIGHT OF WAY OVER THE LAND OF Mario Malabanan filed an application for land
THE GOVERNMENT WHICH IS BETWEEN HIS PROPERTY registration covering the property he purchased from
AND THE NINOY AQUINO AVENUE. Eduardo Velazco, claiming that the property formed
part of the alienable and disposable land of the public
Ruling: domain, and that he and his predecessors-in-interest
had been in open, continuous, uninterrupted, public
NO. It is not disputed that the lot on which petitioner’s
and adverse possession and occupation of the land for
alleged "right of way" exists belongs to the state or
more than 30 years, thereby entitling him to the
property of public dominion. Property of public
judicial confirmation of his title.
dominion is defined by Article 420 of the Civil Code as
follows: The application was granted by the RTC. However, the
OSG for the Republic appealed the judgment to the
"ART. 420. The following things are property of public
CA, which reversed the RTC Judgment.
dominion:
Due to Malabanan’s intervening demise during the
(1) Those intended for public use such as roads, canals,
appeal in the CA, his heirs elevated the said decision to
rivers, torrents, ports and bridges constructed by the
this Court through a petition for review on certiorari.
State, banks, shores, roadsteads, and other of similar
character. The petition was denied.
(2) Those which belong to the State, without being for Petitioners and the Republic filed Motions for
public use, and are intended for some public service or Reconsideration.
for the development of the national wealth."
ISSUE:
Public use is "use that is not confined to privileged
individuals, but is open to the indefinite public."6 1. What are the classifications of public lands?
Records show that the lot on which the stairways were 1. Whether or not petitioners were able to prove
built is for the use of the people as passageway to the that the property was an alienable and
highway. Consequently, it is a property of public disposable land of the public domain.
dominion.
RULING:
Property of public dominion is outside the commerce
of man and hence it: (1) cannot be alienated or leased 1. Classifications of land according to ownership.
or otherwise be the subject matter of contracts; (2)
7|Page

Land, which is an immovable property, may be the land cannot be considered ipso jure
classified as either of public dominion or of private converted to private property even upon the
ownership. Land is considered of public dominion if it subsequent declaration of it as alienable and
either: disposable.

(a) is intended for public use; or Prescription never began to run against the State, such Page | 7
that the land has remained ineligible for registration
(b) belongs to the State, without being for public use,
under Section 14(1) of the Property Registration
and is intended for some public service or for the
Decree. Likewise, the land continues to be ineligible
development of the national wealth.
for land registration under Section 14(2) of the
Land belonging to the State that is not of such Property Registration Decree unless Congress enacts a
character, or although of such character but no longer law or the President issues a proclamation declaring
intended for public use or for public service forms part the land as no longer intended for public service or for
of the patrimonial property of the State.   Land that is the development of the national wealth.
other than part of the patrimonial property of the
G.R. No. 160453               November 12, 2012
State, provinces, cities and municipalities is of private
ownership if it belongs to a private individual. REPUBLIC vs. ARCADIO IVAN A. SANTOS III, and
ARCADIO C. SANTOS, JR., 
Pursuant to the Regalian Doctrine (Jura Regalia), all
lands of the public domain belong to the State. This Facts: 
means that the State is the source of any asserted
Alleging continuous and adverse possession of more
right to ownership of land, and is charged with the
than ten years, respondent Arcadio Ivan A. Santos III
conservation of such patrimony.
(Arcadio Ivan) applied on March 7, 1997 for the
All lands not appearing to be clearly under private registration of Lot 4998-B (the property) in the
ownership are presumed to belong to the State. Also, Regional Trial Court (RTC) in Parafiaque City. The
public lands remain part of the inalienable land of the property, which had an area of 1,045 square meters,
public domain unless the State is shown to have more or less, was located in Barangay San Dionisio,
reclassified or alienated them to private persons. Paraque City, and was bounded in the Northeast by
Lot 4079 belonging to respondent Arcadio C. Santos,
A positive act of the Government is necessary to
Jr. (Arcadio, Jr.), in the Southeast by the Paraque River,
enable such reclassification, and the exclusive
in the Southwest by an abandoned road, and in the
prerogative to classify public lands under existing laws
Northwest by Lot 4998-A also owned by Arcadio Ivan.
is vested in the Executive Department, not in the
On May 21, 1998, Arcadio Ivan amended his
courts. If, however, public land will be classified as
application for land registration to include Arcadio, Jr.
neither agricultural, forest or timber, mineral or
as his co-applicant because of the latters co-ownership
national park, or when public land is no longer
of the property. He alleged that the property had been
intended for public service or for the development of
formed through accretion and had been in their joint
the national wealth, thereby effectively removing the
open, notorious, public, continuous and adverse
land from the ambit of public dominion, a declaration
possession for more than 30 years.
of such conversion must be made in the form of a law
duly enacted by Congress or by a Presidential Issue: Whether or not the subject parcel land maybe
proclamation in cases where the President is duly acquired through the process of accretion.
authorized by law to that effect. Thus, until the
Held: No. Accretion is the process whereby the soil is
Executive Department exercises its prerogative to
deposited along the banks of rivers. The deposit of
classify or reclassify lands, or until Congress or the
soil, to be considered accretion, must be: (a) gradual
President declares that the State no longer intends the
and imperceptible; (b) made through the effects of the
land to be used for public service or for the
current of the water; and (c) taking place on land
development of national wealth, the Regalian Doctrine
adjacent to the banks of rivers.
is applicable.
The RTC and the CA grossly erred in treating the dried-
2. Petitioners failed to present sufficient
up river bed as an accretion that became respondents
evidence to establish that they and their
property pursuant to Article 457 of the Civil Code. That
predecessors-in-interest had been in
land was definitely not an accretion. The process of
possession of the land since June 12, 1945.
drying up of a river to form dry land involved the
Without satisfying the requisite character and
recession of the water level from the river banks, and
period of possession – possession and
the dried-up land did not equate to accretion, which
occupation that is open, continuous, exclusive,
was the gradual and imperceptible deposition of soil
and notorious since June 12, 1945, or earlier –
8|Page

on the river banks through the effects of the current. part of the land was declared to be for the VFP as a
In accretion, the water level did not recede and was site for rehabilitation, etc.
more or less maintained. Hence, respondents as the
On November 15, 1991, the property was the subject
riparian owners had no legal right to claim ownership
of a Deed of Sale between the Republic of the
of Lot 4998-B. Considering that the clear and
Philippines,  and petitioner NOVAI. The deed of sale Page | 8
categorical language of Article 457 of the Civil Code
was subsequently registered and from which TCT No.
has confined the provision only to accretion, we
T-15387 was issued in NOVAI’s name. Republic wants
should apply the provision as its clear and categorical
the title cancelled on the ground that, among others,
language tells us to.
the land covered by NOVAFs title is part of a military
The State exclusively owned Lot 4998-B and may not reservation.
be divested of its right of ownership. Article 502 of the
RTC: In favor of NOVAI, contending that the land is
Civil Code expressly declares that rivers and their
already alienable and disposable.
natural beds are public dominion of the State. It
CA: Reversed, inalienable land as the petitioner failed
follows that the river beds that dry up, like Lot 4998-B,
to prove the positive act of the government.
continue to belong to the State as its property of
public dominion, unless there is an express law that Issue: Whether or not the land is already A&D and
provides that the dried-up river beds should belong to hence, can be registered.
some other person.
Held: No. It is settled that the land falls under those
Yet, even conceding, for the sake of argument, that which are reserved for public use in CA 141. In a
respondents possessed Lot 4998-B for more than limited sense, parcels of land classified as reservations
thirty years in the character they claimed, they did not for public or quasi-public uses under Section 9 (d) of
thereby acquire the land by prescription or by other C.A. No. 141 are still non-alienable and non-
means without any competent proof that the land was disposable, even though they are, by the general
already declared as alienable and disposable by the classification under Section 6, alienable and disposable
Government. Absent that declaration, the land still lands of the public domain. By specific declaration
belonged to the State as part of its public dominion. under Section 88, in relation with Section 8 and
Section 83, these lands classified as reservations are
Indeed, under the Regalian doctrine, all lands not
non-alienable and non-disposable.
otherwise appearing to be clearly within private
ownership are presumed to belong to the State. No From the perspective of the general Civil Code
public land can be acquired by private persons without provisions on Property, lands which are intended for
any grant, express or implied, from the Government. It public use or public service such as reservations for
is indispensable, therefore, that there is a showing of a public or quasi-public uses are property of the public
title from the State. Occupation of public land in the dominion and remain to be so as long as they remain
concept of owner, no matter how long, cannot ripen reserved.
into ownership and be registered as a title.
Applying to the case at bar, Proclamation No. 478 was
Subject to the exceptions defined in Article 461 of the issued after Proclamation No. 461. Hence, while
Civil Code, all river beds remain property of public Proclamation No. 461 withdrew a certain area or
dominion and cannot be acquired by acquisitive parcel of land from the FBMR and made the covered
prescription unless previously declared by the area available for disposition in favor of the
Government to be alienable and disposable. AFPOVAI, Proclamation No. 478 subsequently
Considering that Lot 4998-B was not shown to be withdrew the property from the total disposable
already declared to be alienable and disposable, portion and reserved it for the use of the VRMTC.
respondents could not be deemed to have acquired
the property through prescription. Petition Denied.

LADERA VS. HODGES (G.R. NO. 8027-R, VOL. 48, NO.

12, O.G. 5374, SEPTEMBER 23, 1952)
Navy Officers’ Village Association, Inc. (NOVAI)
Vs. Republic FACTS:

G.R. no. 177168 1. Hodges entered into a contract promising to

sell a lot to Ladera under certain terms and
Facts: conditions. One of which is that the contract
may be rescinded and annulled in case Ladera
On 1965, a certain portion of land was declared for
failed to make the monthly payment 60 days
“AFP Officer’s Village” for disposal. A month later, a
after it is due.
9|Page

2. After the execution of the contract, Ladera Hodges and the low bid made by her as well as
built a house on the lot assessed at 4,500 the fact that she sold the house to Villa on the
pesos. However, Ladera failed to pay the same day Hodges sold him the land, proves
agreed installments so Hodges rescinded the that she was merely acting for and in behalf of
contract and filed an action for ejectment. Hodges. Page | 9
3. The MTC ruled in favor of Hodges and issued 4. In the sale of immovables, the lack of title of
an alias writ of execution. Pursuant thereto, the vendor taints the rights of the subsequent
the sheriff levied upon all rights, interests and purchasers. Possession in good faith is not
participation over the house. Notices of sale equivalent to title.
were posted, however, were not published in
5. The principles of accession regard buildings
a newspaper of general circulation.
and constructions as mere accessories to the
4. An auction sale was then conducted but land on which it is built, it is logical that said
Ladera was not able to attend as she had gone accessories should partake the nature of the
to Manila. The house was then sold to one principal thing.
Avelina Magno as the highest bidder.
Mindanao Bus Co. v. City Assessor & Treasurer
Meanwhile, Ladera sold the same lot to one
Manuel Villa and on the same day purchased GR No. L-17870
the house from Magno for 200 pesos. This,
however, was not recorded. Facts:

5. Ladera then returned to Iloilo and learned The City Assessor of Cagayan De Oro City assessed a
what happened. She went to see the sheriff realty tax on several equipment and machineries of
and represented that the property can still be Mindanao Bus Co., a public utility solely engaged in
redeemed and so she gave him 230 pesos. It transporting passengers and cargoes by motor trucks..
does not appear, however, that it was turned The machineries sought to be assessed by the
over to Hodges. Thereupon, Ladera filed an respondent as real properties are sitting on cement or
action against Hodges, the sheriff, Magno and wooden platforms.
Villa to set aside the sale and recover the The petitioner appealed the assessment to the Board
house. of Tax Appeals on the ground that the same are not
6. The lower court ruled in favor of Ladera on the realty. The Board of Tax Appeals sustained the
ground of non-compliance based on Rule 39 of assessment of the city assessor.
the Rules of Court. On appeal, Hodges The machineries sought to be assessed by the
contends that the house, built on a lot owned respondent as real properties are the following:
by another, should be regarded as movable or
personal property. The sale of the land was o Hobart Electric Welder Machine;
also made without proper publication o Storm Boring machine;
required by law.
o Lathe machine with motor;
ISSUE: Was the house movable or immovable?
o Black and Decker Grinder;
RULING: Immovable.
o PEMCO Hydraulic Press;
1. As enumerated in the Civil Code, immovable
property includes lands, buildings, roads and o Battery charger (Tungar charge machine); and
constructions of all kinds adhered to the soil.
o D-Engine Waukesha-M-Fuel.
The law does not make any distinction
whether or not the owner of the lot was the These machineries have never been or were never
one who built the construction. used as industrial equipment to produce finished
products for sale, nor to repair machineries, parts and
2. Also, Ladera did not declare his house to be a
the like offered to the general public indiscriminately
chattel mortgage. The object of the levy or
for business or commercial purposes for which
sale was real property and its publication in a
petitioner has never engaged in, to date.”
newspaper of general circulation was
indespensible. Without it, the execution sale Issue:
was void.
Whether the equipment and machineries in question,
3. In addition, Magno, the alleged purchaser at are considered immovable properties, and therefore,
the auction sale, was a mere employee of subject to realty tax.
10 | P a g e

Held: and the only way to remove it from Wearever textile’s

plant would be to drill out or destroy the concrete
No. The equipment and machineries in question, are
floor. When the motion for reconsideration of Makati
movable properties, and therefore, not subject to
Leasing was denied by the Court of Appeals, Makati
realty tax.
Leasing elevated the matter to the Supreme Court. Page |
Movable equipment to be immobilized in
Issue: Whether or not the machinery in suit is real or 10
contemplation of the law must first be “essential and
personal property from the point of view of the
principal elements” of an industry or works without
parties.
which such industry or works would be “unable to
function or carry on the industrial purpose for which it Held:
was established.” The said machinery is a personal property. Like what
was involved in the Tumalad case, if a house of strong
The tools and equipment in question in this instant
materials, may be considered as personal property for
case are, by their nature, not essential and principal
purposes of executing a chattel mortgage thereon, as
elements of petitioner’s business of transporting
long as the parties to the contract so agree and no
passengers and cargoes by motor trucks. They are
innocent third party will be prejudiced thereby, there
merely incidentals — acquired as movables and used
is absolutely no reason why a machinery, which
only for expediency to facilitate and/or improve its
is movable in its nature and becomes immobilized only
service. Even without such tools and equipment, its
by destination or purpose, may not be likewise treated
business may be carried on, as petitioner has carried
as such. This is really because one who has so agreed
on, without such equipment, before the war. The
is estopped from the denying the existence of the
transportation business could be carried on without
chattel mortgage. The decision of the Court of Appeals
the repair or service shops if its rolling equipment is
was set aside and the order of the lower court was
repaired or serviced in another shop belonging to
reinstated.
another.
G.R. No. L-11139             April 23, 1958
Aside from the element of essentiality, Article 415 (5)
of the New Civil Code also requires that the industry or SANTOS EVANGELISTA vs. ALTO SURETY &
works be carried on in a building or on a piece of land. INSURANCE CO., INC.

But in the case at bar the equipment in question are FACTS: 

destined only to repair or service the transportation
Petitioner Santos Evangelista sued Rivera for collection
business, which is not carried on in a building or
of sum of money. On the same date, he obtained a
permanently on a piece of land, as demanded by the
writ of preliminary attachment, which was levied upon
law. Said equipment may not, therefore, be deemed
a house built by Rivera, a lessee,  on a land owned by
real property.
respondent lessor Alto Surety. The levy was made
G.R. No. L-58469 May 16, 1983 pursuant to the rules governing the levy of real
properties.
MAKATI LEASING and FINANCE CORPORATION
In due course, judgment was rendered in favor of
vs. WEAREVER TEXTILE MILLS, INC.,
Evangelista, who bought the house at the public
Facts: auction made to satisfy the judgment. The
Wearever Textile Mills, Inc. executed a chattel corresponding deed of sale was issued to him. When
mortgage contract in favor of Makati Leasing and Evangelista sought to take possession of the house, he
Finance Corporation covering certain raw materials was told that Alto Surety was now the owner of the
and machinery. Upon default, Makati Leasing filed a house because the latter allegedly bought the house at
petition for judicial foreclosure of the properties an auction sale. It turned out that Alto Surety likewise
mortgaged. Acting on Makati Leasing’s application for filed an action against Rivera and likewise obtained a
replevin, the lower court issued a writ of seizure. favorable judgment. The corresponding deed was
issued to Alto Surety. 
Pursuant thereto, the sheriff enforcing the seizure
order and removed the main motor of the subject Subsequently, Evangelista instituted an action against
machinery. In a petition for certiorari and prohibition, Alto Surety and Rivera for the purpose of establishing
the Court of Appeals ordered the return of the his title over said house. The trial court ruled in favor
machinery on the ground that the same cannot be the of Evangelista. On appeal, however, the Court of
subject of replevin because it is a real property Appeals reversed the decision of the trial court on the
pursuant to Article 415 of the new Civil Code, the ground that Evangelista did not acquire a preferential
same being attached to the ground by means of bolts lien through the preliminary writ of attachment
11 | P a g e

because the house was levied as if it were an Facts:

immovable property. The Court of Appeals was of the
Petitioner Capitol Wireless Inc. (Capwire) is a
opinion that the house should have been levied
Philippine corporation in the business of providing
pursuant to the rules governing the levy of personal
international telecommunications services. As such
property (apparently for the reason that the house
provider, Capwire has signed agreements with other Page |
was constructed on a land belonging to another).
local and foreign telecommunications companies 11
covering an international network of submarine cable
ISSUE: Whether a house, constructed by the lessee of systems such as the Asia Pacific Cable Network System
the land on which it is built, should be dealt with, for (APCN) (which connects Australia, Thailand, Malaysia,
purpose, of attachment, as immovable property, or as Singapore, Hong Kong, Taiwan, Korea, Japan,
personal property. Indonesia and the Philippines); the Brunei-Malaysia-
Philippines Cable Network System (BMP-CNS), the
Philippines-Italy (SEA-ME-WE-3 CNS), and the Guam
HELD: 
Philippines (GP-CNS) systems. The agreements provide
The house is an immovable property. As explicitly for co-ownership and other rights among the parties
held, in Ladera v. Hodges, a true building (not merely over the network.
superimposed on the soil) is immovable or real
Petitioner Capwire claims that it is co-owner only of
property, whether it is erected by the owner of the
the so-called "Wet Segment" of the APCN, while the
land or by usufructuary or lessee.
landing stations or terminals and Segment E of APCN
It is true that the parties to a deed of chattel mortgage located in Nasugbu, Batangas are allegedly owned by
may agree to consider a house as personal property the Philippine Long Distance Telephone Corporation
for purposes of said contract. However, this view is (PLDT). Moreover, it alleges that the Wet Segment is
good only insofar as the contracting parties are laid in international, and not Philippine, waters.
concerned. It is based, partly, upon the principle of
Capwire claims that as co-owner, it does not own any
estoppel. Neither this principle, nor said view, is
particular physical part of the cable system but,
applicable to strangers to said contract. Much less is it
consistent with its financial contributions, it owns the
in point where there has been no contract
right to use a certain capacity of the said system.This
whatsoever, with respect to the status of the house
property right is allegedly reported in its financial
involved, as in the case at bar.
books as "Indefeasible Rights in Cable Systems.
As held in Manarang v Ofilada, “Sales on execution
However, for loan restructuring purposes, Capwire
affect the public and third persons. The regulation
claims that "it was required to register the value of its
governing sales on execution are for public officials to
right," hence, it engaged an appraiser to "assess the
follow. The form of proceedings prescribed for each
market value of the international submarine cable
kind of property is suited to its character, not to the
system and the cost to Capwire."
character, which the parties have given to it or desire
to give it. When the rules speak of personal property, Alter the filing of the public respondents' Comment,
property which is ordinarily so considered is meant; on May 5, 2003, the RTC issued an Order dismissing
and when real property is spoken of, it means the petition for failure of the petitioner Capwire to
property which is generally known as real property.  follow the requisite of payment under protest as well
The regulations were never intended to suit the as failure to appeal to the Local Board of Assessment
consideration that parties may have privately given to Appeals (LBAA), as provided for in Sections 206 and
the property levied upon. Enforcement of regulations 226 of Republic Act (R.A.) No. 7160, or the Local
would be difficult were the convenience or agreement Government Code.
of private parties to determine or govern the nature of
Issue:
the proceedings. We therefore hold that the mere fact
that a house was the subject of the chattel mortgage Whether the submarine communications cables be
and was considered as personal property by the classified as taxable real property by the local
parties does not make said house personal property governments?
for purposes of the notice to be given for its sale of
public auction.” Ruling:

No. It is not in dispute that the submarine cable

system's landing station in Nasugbu, Batangas, is
CAPITOL WIRELESS INC.Vs. PROVINCIAL TREASURER owned by PLDT and not by Capwire. Obviously,
OF BATANGAS, GR No. 190110 Capwire is not liable for real property tax on this
landing station. Nonetheless, Capwire admits that it
12 | P a g e

co-owns the submarine cable system that is the real property tax as of 1985. MERALCO appealed the
subject of the tax assessed and being collected by the Tax Declaration before the LBAA of Lucena City and
respondents. As the Court takes judicial notice that claimed that its capital investment consisted only of its
Nasugbu is a coastal town and the surrounding sea substation facilities and that MERALCO was exempted
falls within what arts 2 and 3 of UNCLOS define as the from payment of real property tax on said substation Page |
country's territorial sea over which the country has facilities. 12
sovereignty, including the seabed and subsoil, it
follows that a portion of the submarine cable system
lies within Philippine territory and thus falls within the The LBAA rendered a Decision finding that MERALCO
jurisdiction of the local taxing authorities. It easily was required to pay the City Government of Lucena a
belies Capwire's contention that the cable system is 5% tax of its gross earnings, whereas the poles, wires,
entirely in international waters. And even if such insulators, transformers, and electric meters of
portion does not lie in the 12-nautical-mile vicinity of MERALCO, these were real properties and held that:
the territorial sea but further inward, in Magallona v (1) the steel towers fell within the term “poles”
Ermita this Court held that 'whether referred to as expressly exempted from taxes under the franchise of
Philippine "internal waters" or as "archipelagic MERALCO; and (2) the steel towers were personal
waters" under UNCLOS the Philippines exercises properties under the provisions of the Civil Code and,
sovereignty over the body of water lying landward of hence, not subject to real property tax.
its baselines, including the air space over it and the
submarine areas underneath'. Further, under art 79 of The City Assessor of Lucena filed an appeal with the
UNCLOS, the Philippines clearly has jurisdiction with CBAA, which the CBAA affirmed the LBAA judgment
respect to cables laid in its territory that are utilized in and which became final and executory.
support of other installations and structures under its MERALCO again received a letter from the City
jurisdiction. Treasurer of Lucena six years later, which they were
As far as local government units are concerned, the being assessed for real property delinquency on its
areas described above are to be considered subsumed machineries beginning 1990. MERALCO argues that its
under the term 'municipal waters' which, under the transformers, electric posts, transmission lines,
Local Government Code, includes 'not only streams, insulators, and electric meters are not subject to real
lakes, and tidal waters within the municipality, not property tax, given that the definition of “machinery”
being the subject of private ownership and not under Section 199(o) of the Local Government Code,
comprised within the national parks, public forest, on which real property tax is imposed, must still be
timber lands, forest reserves or fishery reserves, but within the contemplation of real or immovable
also marine waters included between two lines drawn property under Article 415 of the Civil Code because it
perpendicularly to the general coastline from points is axiomatic that a statute should be construed to
where the boundary lines of the municipality or city harmonize with other laws on the same subject matter
touch the sea at low tide and a third line parallel with as to form a complete, coherent, and intelligible
the general coastline and fifteen kilometers from it'. system.

Thus, the jurisdiction or authority over such part of the Issue:

subject submarine cable system lying within Philippine Whether MERALCO is liable for real property tax on its
jurisdiction includes the authority to tax the same, for transformers, electric posts (or poles), transmission
taxation is one of the three basic and necessary lines, insulators, and electric meters, beginning 1992.
attributes of sovereignty and such authority has been
delegated by the national legislature to the local Ruling:
governments with respect to real property taxation. No. MERALCO is a public utility engaged in electric
distribution, and its transformers, electric posts,
transmission lines, insulators, and electric meters
MANILA ELECTRIC COMPANY vs. THE CITY ASSESSOR constitute the physical facilities through which
AND CITY TREASURER OF LUCENA CITY MERALCO delivers electricity to its consumers. Each
may be considered as one or more of the following: a
G.R. No. 166102 August 05, 2015 “machine,” “equipment,” “contrivance,” “instrument,”
“appliance,” “apparatus,” or “installation.”
Facts:
On February 20, 1989, MERALCO received from the Article 290 of the Rules and Regulations Implementing
City Assessor of Lucena a notice that electric facilities, the Local Government Code of 1991 recognizes the
classified as capital investment of the company: (a) following exemption:
transformer and electric post; (b) transmission line; (c)
insulator; and (d) electric meter, were subjected to
13 | P a g e

Machinery which are of general purpose use including possession of it. Upon NIDC’s failure to comply with
but not limited to office equipment, typewriters, certain conditions, the sale was rescinded. NIDC
telephone equipment, breakable or easily damaged reported to respondent that there were certain
containers (glass or cartons), microcomputers, defects in the air conditioning system. Respondent
facsimile machines, telex machines, cash dispensers, filed a complaint against petitioner for non- Page |
furnitures and fixtures, freezers, refrigerators, display compliance with the agreed plans and specifications. 13
cases or racks, fruit juice or beverage automatic Petitioner moved to dismiss the complaint on the
dispensing machines which are not directly and ground of the 6-month prescription of warranty
exclusively used to meet the needs of a particular against hidden defects. Private respondent averred
industry, business or activity shall not be considered that the contract was not of sale but for a piece of
within the definition of machinery under this Rule. work, the action for damages of which prescribes after
10 years.
The tax law does not provide for a definition of real
property; but Article 415 of the Civil Code does, by Issue:
stating the following are immovable property:
Whether a contract for the fabrication and installation
(1) Land, buildings, roads, and constructions of all of a central air-conditioning system in a building is one
kinds adhered to the soil; (3) Everything attached to an of "sale" or "for a piece of work"?
immovable in a fixed manner, in such a way that it
cannot be separated therefrom without breaking the
material or deterioration of the object; (5) Machinery, Ruling:
receptacles, instruments or implements intended by
the owner of the tenement for an industry or works A contract for a piece of work, labor and materials
which may be carried in a building or on a piece of may be distinguished from a contract of sale by the
land, and which tends directly to meet the needs of inquiry as to whether the thing transferred is one not
the said industry or works; in existence and which would never have existed but
for the order, of the person desiring it. In such case,
MERALCO maintaining that electric posts are not the contract is one for a piece of work, not a sale.
machinery subject to real property tax because these
are not exclusively used by MERALCO but likewise by On the other hand, if the thing subject of the contract
other cable and telephone companies, is however a would have existed and been the subject of a sale to
factual issue with the Court cannot take cognizance as some other person even if the order had not been
it is not a trier of facts. The issue is best left to the given, then the contract is one of sale.
determination of the City Assessor or his deputy who Clearly, the contract in question is one for a piece of
has been granted authority to take evidence under work. It is not petitioner's line of business to
Article 304 of the Rules and Regulations Implementing manufacture air-conditioning systems to be sold "off-
the Local Government Code of 1991. the-shelf." Its business and particular field of expertise
The Court finds that the transformers, electric posts, is the fabrication and installation of such systems as
transmission lines, insulators, and electric meters of ordered by customers and in accordance with the
MERALCO are no longer exempted from real property particular plans and specifications provided by the
tax and may qualify as “machinery” subject to real customers. Naturally, the price or compensation for
property tax under the Local Government Code. the system manufactured and installed will depend
Nevertheless, the Court declares null and void the greatly on the particular plans and specifications
appraisal and assessment of said properties of agreed upon with the customers. The remedy against
MERALCO by the City Assessor in 1997 for failure to violations of the warranty against hidden defects is
comply with the requirements of the Local either to withdraw from the contract (redhibitory
Government Code and, thus, violating the right of action) or to demand a proportionate reduction of the
MERALCO to due process. price (accion quanti manoris), with damages in either
case.
ENGINEERING AND MACHINERY CORPORATION VS.
While it is true that Article 1571 of the Civil Code
COURT OF APPEALS 96 Phil 70 provides for a prescriptive period of six months for a
redhibitory action, a cursory reading of the ten
Facts:
preceding articles to which it refers will reveal that
Pursuant to a contract, petitioner undertook to install said rule may be applied only in case of implied
air conditioning system in private respondent’s warranties; and where there is an express warranty in
building. The building was later sold to the National the contract, as in the case at bench, the prescriptive
Investment and Development Corporation which took period is the one specified in the express warranty,
14 | P a g e

and in the absence of such period, "the general rule on deterioration. Obviously the separation or removal of
rescission of contract, which is four years (Article the pump involved nothing more complicated than the
1389, Civil Code) shall apply". loosening of bolts or dismantling of other fasteners.
DENIED.
It would appear that this suit is barred by prescription
because the complaint was filed more than four years ENRIQUE LOPEZ, petitioner, vs. Page |
after the execution of the contract and the completion 14
VICENTE OROSA, JR., and PLAZA THEATRE, INC.
of the air-conditioning system. However, a close
scrutiny of the complaint filed in the trial court reveals Facts:
that the original action is not really for enforcement of
the warranties against hidden defects, but one for After agreeing to make an investment in Orosa’s
breach of the contract itself. The governing law is theatre business and his assurance that he would be
Article 1715. However, inasmuch as this provision personally liable for any account that the said
does not contain a specific prescriptive period, the construction might incur, Lopez delivered the lumber
general law on prescription, which is Article 1144 of which was used for the construction of the Plaza
the Civil Code, will apply. Said provision states, inter Theatre.  But of the total cost of the materials
alia, that actions "upon a written contract" prescribe amounting to P62,255.85, Lopez was paid only
in ten (10) years. Since the governing contract was P20848.50.
executed on September 10, 1962 and the complaint Plaza Theatre was erected on a piece of land formerly
was filed on May 8, 1971, it is clear that the action has owned by Orosa, and was acquired by the corporation.
not prescribed. The mere fact that the private As Lopez was pressing Orosa for payment of remaining
respondent accepted the work does not, ipso facto, unpaid obligation, the latter promised to obtain a bank
relieve the petitioner from liability for deviations from loan by mortgaging the properties of Plaza Theatre.
and violations of the written contract, as the law gives Unknown to Lopez, the corporation already got a loan
him ten (10) years within which to file an action based from a bank with Luzon Surety Company as surety, and
on breach thereof. the corporation in turn executed a mortgage on the
YAP Vs. TAÑADA, GR. NO. L-32917 land and building in favor of said company as counter-
security.

Facts: Persistent demand from Lopez caused Orosa to

execute an alleged “deed of assignment” of his 480
Yap bought from Goulds Pumps a water pump. The shares of stock of Plaza Theatre, at P100 per share;
water pump was the installed in his premises. Upon and as the obligation still remain unsettled, Lopez filed
failure to pay the installment, Goulds instituted the a complaint against Orosa and Plaza Theatre Inc,
case. praying that xxx in case defendants fail to pay, the
RTC: Judge Tañada rendered judgment in favor of building and land owned by corporation be sold at
Goulds. A writ of execution was released and the same public auction, or the shares of the capital stock be
pump was levied by the sheriff. Yap appealed the sold, and the proceeds thereof be applied to said
judgment to SC. indebtedness.

As a defense, Orosa contended that the shares of

Issue: stocks were personal properties and cannot be made
to cover and satisfy the obligation.  it was thus prayed
Whether or not the pump is immovable as contested
that he be declared exempted from payment of
by petitioner Yap such that the judgment of Judge
deficiency in case the proceeds from the sale of
Tañada be invalidated for not following the procedure
properties are not enough.
in levying a real property.
The surety company, upon discovery that the land was
already registered, file a petition to annotate the
Ruling:
rights and interests of the surety company over the
The water pump installed in movable property. The said properties, which was opposed by Lopez who
Civil Code considers as immovable property, among asserted that he has preferred lien over the
others, anything "attached to an immovable in a fixed properties.
manner, in such a way that it cannot be separated
The two cases were heard jointly, and lower court held
therefrom without breaking the material or
that Orosa were liable for the unpaid balance of the
deterioration of the object. The pump does not fit this
cost of lumber used in the construction, and Lopez
description. It could be, and was in fact separated
thus acquired materialman’s lien over it.  In making
from Yap's premises without being broken or suffering
the pronouncement that tyhe lien was merely
15 | P a g e

confined to the building and did not extend to the land Two warrants were issued against petitioners for the
where it was built, the trial jduge took into search on the premises of “Metropolitan Mail” and
consideration that xxx codal provisions specifying that “We Forum” newspapers and the seizure of items
refection credits are preferred could refer to buildings alleged to have been used in subversive activities.
which are also classified as real properties upon which Petitioners prayed that a writ of preliminary Page |
the refaction was made.  Orosa were thus required to mandatory and prohibitory injunction be issued for 15
xxx with respect tohe building, said mortgage was the return of the seized articles, and that respondents
subject to materialmen’s lien in favor of Lopez. be enjoined from using the articles thus seized as
evidence against petitioner.
Lopez tried to secure a modification of decision in so
far as it declared that lien did not extend to the land, Petitioners questioned the warrants for the lack of
but was denied by court.  Hence, the appeal. probable cause and that the two warrants issued
indicated only one and the same address. In addition,
Issue:
the items seized subject to the warrant were real
Whether a materialmen’s lien for the value of properties.
materials used in the construction of building attaches
 Issue:
to said structure alone, and does not extend to the
land on which building is adhered to.  Whether or not the two warrants were valid to justify
seizure of the items.
Ruling:
Ruling:
Yes.  Such lien attaches to structure alone and does
not extend to the land where the building is. No, the two warrants were not valid to justify the
seizure of the items.
In view of employment of the phrase, “real estate or
immovable property”, and in as much as said provision The defect in the indication of the same address in the
does not contain any specification delimiting the lien two warrants was held by the court as a typographical
to the building, said article must be construed as to error and immaterial in view of the correct
embrace both the land and building or the structure determination of the place sought to be searched set
adhering thereto.  SC cannot subscribe to this view, for forth in the application. The purpose and intent to
while it is true that real estate connotes land and search two distinct premises was evident in the
building constructed thereon, it is obvious that the issuance of the two warrant.
inclusion of the building, separate and distinct from
As to the issue that the  items seized were real
the land, in the enumeration of what may constitute
properties, the court applied the principle in the case
real properties could mean only one thing – that the
of Davao Sawmill Co. v. Castillo, ruling “that machinery
building is by itself an immovable property.  Moreover,
which is movable by nature becomes immobilized
in view of the absence of any specific provision of law
when placed by the owner of the tenement, property
to the contrary, a building is an immovable property,
or plant, but not so when placed by a tenant,
irrespective of whether or not said structure and the
usufructuary, or any other person having only a
land on which it is adhered to belong to the same
temporary right, unless such person acted as the agent
owner.
of the owner.” In the case at bar, petitioners did not
A close examination of the provision of the Civil Code claim to be the owners of the land and/or building on
reveals that the law gives preference to unregistered which the machineries were placed. This being the
refectionary credits only with respect to the real case, the machineries in question, while in fact bolted
estate upon the refection or work was made.  The to the ground remain movable property susceptible to
conclusion is that it must be that the lien so created seizure under a search warrant.
attaches merely to the immovable property for the
However, the Court declared the two warrants null
construction or repair of which the obligation was
and void.
incurred.  Therefore, the lien in favor of appellant for
the unpaid value of the lumber used in construction of Probable cause for a search is defined as such facts
the building attaches only to said structure and to no and circumstances which would lead a reasonably
other property of the obligors. discreet and prudent man to believe that an offense
has been committed and that the objects sought in
connection with the offense are in the place sought to
BURGOS, SR. vs. CHIEF OF STAFF, GR NO. 64261 be searched.

Facts:  
16 | P a g e

SERGS PRODUCTS, INC vs. PCI LEASING AND FINANCE, In the present case, the machines that were the
INC., G.R. No. 137705 subjects of the Writ of Seizure were placed by
petitioners in the factory built on their own land.
Indisputably, they were essential and principal
Facts: elements of their chocolate-making industry. Hence, Page |
although each of them was movable or personal 16
Respondent PCI Leasing and Finance, Inc. (PCI Leasing property on its own, all of them have become
for short) filed with the RTC-QC a complaint for a sum immobilized by destination because they are essential
of money with an application for a writ of replevin. In and principal elements in the industry. In that sense,
implementation of said writ, the sheriff proceeded to petitioners are correct in arguing that the said
petitioner’s factory, seized one machinery with the machines are real, not personal, property pursuant to
word that he would return for the other machineries. Article 415 (5) of the Civil Code.
Petitioners filed a motion for special protective order, The Court has held that contracting parties may validly
praying for a directive for the sheriff to defer stipulate that a real property be considered as
enforcement of the writ of replevin. personal. Under the principle of estoppel, a party to a
PCI Leasing filed a motion to opposed on the ground contract is ordinarily precluded from denying the truth
that are still personal and therefore still subject to of any material fact found therein.
seizure and a writ of replevin.

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 estopped
from treating these machineries as personal because
the contracts in which the alleged agreement
embodied 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 the said machines are personal, not

immovable, property which may be a proper subject
of a writ of replevin.

Ruling:

YES. ART. 415. The following are immovable property:

(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;