Archie M.

Serrano LPU-COL
Property Law Held:
Case digests We conclude that the ruling in favor of the machinery company cannot be
Atty. Regalado sustained on the ground assigned by the trial judge. We are of opinion,
however, that the judgment must be sustained on the ground that the
I TITLE ONE- CLASSIFICATION OF PROPERTY agreed statement of facts in the court below discloses that neither the
purchase of the building by the plaintiff nor his inscription of the sheriff's
A. Article 414-418 certificate of sale in his favor was made in good faith, and that the
machinery company must be held to be the owner of the property Article
Leung Yee v. Strong Machinery Company37 Phil. 644 1544 of the New Civil Code, it appearing that the company first took
I possession of the property; and further, that the building and the land were
Facts: sold to the machinery company long prior to the date of the sheriff's sale
The "Compañia Agricola Filipina" bought a considerable quantity of rice- to the plaintiff. But it appearing that he had full knowledge of the
cleaning machinery company from the defendant machinery company, machinery company's claim of ownership when he executed the indemnity
and executed a chattel mortgage thereon to secure payment of the bond and bought in the property at the sheriff's sale, and it appearing
purchase price. It included in the mortgage deed the building of strong further that the machinery company's claim of ownership was well
materials in which the machinery was installed, without any reference to founded, he cannot be said to have been an innocent purchaser for value.
the land on which it stood. The indebtedness secured by this instrument He took the risk and must stand by the consequences; and it is in this
not having been paid when it fell due, the mortgaged property was sold by sense that we find that he was not a purchaser in good faith. The decision
the sheriff, in pursuance of the terms of the mortgage instrument. A few of the trial court is hereby affirmed.
weeks thereafter, on or about the 14th of January, 1914, the "Compañia
Agricola Filipina" executed a deed of sale of the land upon which the
building stood to the machinery company, but this deed of sale, although Davao Sawmill Co. v. Castillo
executed in a public document, was not registered. The machinery 61 Phil. 709
company went into possession of the building at or about the time when Facts:
this sale took place, that is to say, the month of December, 1913, and it The Davao Saw Mill Co., Inc., is the holder of a lumber concession from
has continued in possession ever since. At or about the time when the
the Government of the Philippine Islands. It has operated a sawmill in
chattel mortgage was executed in favor of the machinery company, the
mortgagor, the "Compañia Agricola Filipina" executed another mortgage thesi tio of Maa, barrio of Tigatu, municipality of Davao, Province of
to the plaintiff upon the building, separate and apart from the land on Davao. However, the land upon which the business was conducted
which it stood. Upon the failure of the mortgagor to pay the amount of the belonged to another person. On the land the sawmill company erected a
indebtedness secured by the mortgage, the plaintiff secured judgment for building which housed the machinery used by it. Some of the implements
that amount, levied execution upon the building, bought it in at the
thus used were clearly personal property, the conflict concerning
sheriff's sale on or about the 18th of December, 1914. This action was
instituted by the plaintiff to recover possession of the building from the machines which were placed and mounted on foundations of cement. In
machinery company. The trial judge gave judgment in favor of the the contract of lease between the sawmill company and the owner of the
machinery company. Hence, this appeal. land there appeared the following provision:
That on the expiration of the period agreed upon, all the improvements
Issue: and buildings introduced and erected by the party of the second part shall
Whether or not the trial judge erred in sustaining the machinery company
pass to the exclusive ownership of the party of the first part without any
on the ground that it had its title to the building registered prior to the date
of registry of plaintiff¶s certificate. obligation on its part to pay any amount for said improvements and
buildings; also, in the event the party of the second part should leave or of the land. In this case, they had stipulated that the land in the end
abandon the land leased before the time herein stipulated, the thereby be acted as an agent for the owner of the land. In this sense the
improvements and buildings shall likewise pass to the ownership of the property (machines for use in the sawmill) became real property.
party of the first part as though the time agreed upon had expired: The judgment appealed from is hereby affirmed
Provided, however, That the machineries and accessories are not included
in the improvements which will pass to the party of the first part on the STANDARD OIL CO. vs. JARAMILLO
expiration or abandonment of the land leased.
The trial judge found that those properties were personal in nature and as Facts:
a consequence absolved the defendants from the complaint. On November 27, 1922, Gervasia de la Rosa, Vda. de Vera, was the lessee
of a parcel of land situated in the City of Manila and owner of the house
Issue:
Whether or not the trial judge erred in finding that the subject properties of strong materials built thereon, upon which date she executed a
are personal in nature. document in the form of a chattel mortgage to convey to the Standard Oil.
Co. byway of mortgage both the leasehold interest in said lot and the
Held: building to which it stands
As connecting up with the facts, it should further be explained that the After said document had been duly acknowledged and delivered, it was
Davao Saw Mill Co., Inc., has on a number of occasions treated the then presented to Joaquin Jaramillo, Register of Deeds of the City of
machinery as personal property by executing chattel mortgages in favor of Manila, for the purpose of having the same recorded. Upon examination
third persons. One of such persons is the appellee by assignment from the of the instrument, the Jaramillo was of the opinion that it was not chattel
original mortgages. mortgage, for the reason that the interest therein mortgaged did not appear
Article 334, paragraphs 1 and 5, of the [Old]Civil Code, is in point. to be personal property, within the meaning of the Chattel Mortgage Law,
According to the Code, real property and registration was refused on this ground only.
consists of
1. Land, buildings, roads and constructions of all kinds adhering to the Issue:
soil; Whether or not the deed may be registered in the chattel mortgage
5. Machinery, liquid containers, instruments or implements intended by registry?
the owner of any building or land for use in connection with any industry
or trade being carried on therein and which are expressly adapted to meet Held:
the requirements of such trade of industry. Yes it may be registered. The duties of a register of deeds in respect to the
Appellant emphasizes the first paragraph, and appellees the last mentioned registration of chattel mortgages are purely of a ministerial character, and
paragraph. We entertain no doubt that the trial judge and appellees are he is clothed with no judicial or quasi-judicial power to determine the
right in their appreciation of the legal doctrines flowing from the facts. nature of the property, whether real or personal, which is the subject of the
As a rule, the machinery should be considered as personal, since it was mortgage. Generally speaking, he should accept the qualification of the
not placed on the land by the owner of the land immobilization by property adapted by the person who presents the instrument for
destination on purpose cannot generally be made by a person, whose registration and should place the instrument on record, upon payment of
the proper fee, leaving the effects of registration to be determined by the
possession of the property is only temporary, otherwise was will be forced
court if such question should arise for legal determination.
to presume that be intended to give the property permanently to the owner
The efficacy of the act of recording a chattel mortgage consists in the fact without such equipments, before the war. The transportation business
that registration operates as constructive notice of the existence of the could be carried on without the repair or service shop if its rolling
contract, and the legal effects of the instrument must be discovered in the equipment is repaired or serviced in another shop belonging to another.-
document itself, in relation with the fact of notice. Registration adds The equipments in question are destined only to repair or service the
nothing to the instrument, considered as a source of title, and affects transportation business, which is not carried on in a building or
nobody's rights except as a species of constructive notice. permanently on a piece of land, as demanded by the law. Said equipments
may not, therefore, be deemed real property.-The equipments in question
MINDANAO BUS V CITY ASSESOR are not absolutely essential to the petitioner's transportation business, and
petitioner's business is not carried on in a building, tenement or on a
FACTS:-Mindanao Bus Company is a public utility engaged in specified land, so said equipment may not be considered real estate.
transporting passengers and cargoes by motor trucks in Mindanao; having
its main offices in Cagayan de Oro. The company is also owner to the
land where it maintains and operates a garage, a repair shop, blacksmith Berkenkotter v. Cu Unjieng
and carpentry shops; the machineries are placed therein on wooden and
cement platforms.-With these machineries which are placed therein, its Facts: On 26 April 1926, the Mabalacat Sugar Company obtained from
TPU trucks are made; body constructed; and same are repaired in a Cu Unjieng e Hijos, a loan secured by a first mortgage constituted on 2
condition to be serviceable in the TPU land transportation business it parcels of land "with all its buildings, improvements, sugar-cane mill,
operates. These machineries have never been or were never used as steel railway, telephone line, apparatus, utensils and whatever forms part
industrial equipments to produce finished products for sale, nor to repair or is a necessary complement of said sugar-cane mill, steel railway,
machineries, parts and the like offered to the general public telephone line, now existing or that may in the future exist in said lots.”
indiscriminately for business or commercial purposes for which Mindanao On 5 October 1926, the Mabalacat Sugar Company decided to increase
Bus has never engaged in.-City Assessor of Cagayan de Oro City assessed the capacity of its sugar central by buying additional machinery and
at P4,400 as realty tax imposed on the maintenance and repair equipment equipment, so that instead of milling 150 tons daily, it could produce 250.
of Mindanao Bus. Mindanao appealed the assessment to the respondent Green proposed to the Berkenkotter, to advance the necessary amount for
Board of Tax Appeals on the ground that the equipment are not realty. the purchase of said machinery and equipment, promising to reimburse
The Board of Tax Appeals of the City as well as the CTA sustained the him as soon as he could obtain an additional loan from the mortgagees, Cu
city assessor, thus Mindanao appealed. Unjieng e Hijos, and that in case Green should fail to obtain an additional
loan from Cu Unjieng e Hijos, said machinery and equipment would
ISSUE:W/N the equipment are immovable become security therefore, said Green binding himself not to mortgage
nor encumber them to anybody until Berkenkotter be fully reimbursed for
HELD: NO.-The tools and equipments in question are, by their nature, the corporation's indebtedness to him. Having agreed to said proposition
not essential and principle municipal elements of Mindanao’s business of made in a letter dated 5 October 1926, Berkenkotter, on 9 October 1926,
transporting passengers and cargoes by motor trucks. They are merely delivered the sum of P1,710 to Green, the total amount supplied by him to
incidentals — acquired as movables and used only for expediency to Green having been P25,750. Furthermore, Berkenkotter had a credit of
facilitate and/or improve its service. Even without such tools and P22,000 against said corporation for unpaid salary. With the loan of
equipments, its business may be carried on, as Mindanao has carried on, P25,750 and said credit of P22,000, the Mabalacat Sugar Co., Inc.,
purchased the additional machinery and equipment. On 10 June 1927, MERALCO V BOARD OF ASSESSMENT
Green applied to Cu Unjieng e Hijos for an additional loan of P75,000
offering as security the additional machinery and equipment acquired by FACTS:-There are two oil storage tanks installed in 1969 by Meralco on
said Green and installed in the sugar central after the execution of the a lot in San Pascual, Batangaswhich it leased in 1968 from Caltex (Phil.),
original mortgage deed, on 27 April 1927, together with whatever Inc. The tanks are within the Caltex refinery compound.They have a total
additional equipment acquired with said loan. Green failed to obtain said capacity of 566,000 barrels. They are used for storing fuel oil for
loan. Hence, above mentioned mortgage was in effect. Meralco's power plants.-The storage tanks are made of steel plates welded
and assembled on the spot. Their bottoms reston a foundation consisting
of compacted earth as the outermost layer, a sand pad as theintermediate
Issue: Are the additional machines also considered mortgaged? layer and a two-inch thick bituminous asphalt stratum as the top layer.
The bottom of each tank is in contact with the asphalt layer. The steel
sides of the tank are directly supported underneath by a circular wall made
Held: Article 1877 of the Civil Code provides that mortgage includes all of concrete, eighteen inches thick, to prevent the tank from sliding. Hence,
natural accessions, improvements, growing fruits, and rents not collected according to Meralco, the tank is not attached to its foundation. It is not
when the obligation falls due, and the amount of any indemnities paid or anchored or welded to the concrete circular wall. Its bottom plate is not
due the owner by the insurers of the mortgaged property or by virtue of attached to any part of the foundation bybolts, screws or similar devices.
the exercise of the power of eminent domain, with the declarations, The tank merely sits on its foundation. Each empty tank can be floated by
amplifications, and limitations established by law, whether the state flooding its dike-in closed location with water four feet deep.-The Board
continues in the possession of the person who mortgaged it or whether it concludes that while the tanks rest or sit on their foundation, the
passes into the hands of a third person. It is a rule, that in a mortgage of foundation itself and the walls, dikes and steps, which are integral parts of
real estate, the improvements on the same are included; therefore, all the tanks, are affixed to the land while the pipelines are attached to the
objects permanently attached to a mortgaged building or land, although tanks. In 1970, the municipal treasurer of Bauan, Batangas, on the basis of
they may have been placed there after the mortgage was constituted, are an assessment made by the provincial assessor, required Meralco to pay
also included. Article 334, paragraph 5, of the Civil Code gives the realty taxes on the two tanks. For the five-year period from 1970 to 1974,
character of real property to machinery, liquid containers, instruments or the tax and penalties amounted toP431,703.96. The Board required
implements intended by the owner of any building or land for use in Meralco to pay the tax and penalties as a condition for entertaining its
connection with any industry or trade being carried on therein and which appeal from the adverse decision of the Batangas board of assessment
are expressly adapted to meet the requirements of such trade or industry. appeals.-The Central Board of Assessment Appeals ruled that the tanks
The installation of a machinery and equipment in a mortgaged sugar together with the foundation, walls,dikes, steps, pipelines and other
central, in lieu of another of less capacity, for the purpose of carrying out appurtenances constitute taxable improvements. Meralco contends that the
the industrial functions of the latter and increasing production, constitutes said oil storage tanks do not fall within any of the kinds of real property
a permanent improvement on said sugar central and subjects said enumerated in article 415 of the Civil Code and, therefore, they cannot be
machinery and equipment to the mortgage constituted thereon. categorized as realty by nature, by incorporation, by destination nor by
analogy. Stress is laid on the fact that the tanks are not attached to the land
and that they were placed on leased land, not on the land owned by
Meralco.
ISSUE:W/N the oil tanks are considered as real property Jose Curaminas filed with the CFI of Cebu a petition praying that
Francisco Jarque be declared an insolvent debtor. This was granted and
HELD: YES.-While the two storage tanks are not embedded in the land, Jarque’s properties were then assigned to Curaminas.
they may, nevertheless, be considered as improvements on the land,
enhancing its utility and rendering it useful to the oil industry. It is A problem arose when Judge Jose Hontiveros declined to order the
undeniable that the two tanks have been installed with some degree of foreclosure of the mortgages, and instead, ruled that they were defective
permanence as receptacles for the considerable quantities of oil needed by because they did not have affidavits of good faith.
Meralco for its operations.-For purposes of taxation, the term "real
property" may include things which should generally be regarded as ISSUE: Whether or not the mortgages of the vessels are governed by the
personal property. It is a familiar phenomenon to see things classed as real Chattel Mortgage Law. Whether or not an affidavit of good faith is needed
propertyfor purposes of taxation which on general principle might be to enforce a chattel mortgage on a vessel
considered personal property.
RULING: Yes. “Personal property” includes vessels. They are subject to
-ADDITIONAL: baka lang ipa-compare: The case of Board of the provisions of the Chattel Mortgage Law. The Chattel Mortgage Law
Assessment Appeals vs. ManilaElectric Company, 119 Phil. 328, wherein says that a good chattel mortgage includes an affidavit of good faith. The
Meralco's steel towers were held not to be subject to realty tax, is not in absence of such affidavit makes mortgage unenforceable against creditors
point because in that case the steel towers were regarded as poles and and subsequent encumbrances. The judge was correct.
under its franchise Meralco's poles are exempt from taxation. Moreover,
the steel towers were notattached to any land or building. They were Note: A mortgage on a vessel is generally like other chattel mortgages.
removable from their metal frames. The only difference between a chattel mortgage of a vessel and a chattel
mortgage of other personalty is that the first must be noted in the registry
of the register of deeds.

PHILIPPINE REFINING COMPANY V. JARQUE RICARDO PRESBITERO vs, FERNANDEZ(Immovable – Calinisan)

FACTS: Facts:1) ESPERIDION Presbitero failed to furnish Nava the value of the
properties under litigation.2) Presbitero was ordered by the lower court to
Plaintiff Philippine Refining Co. and defendant Jarque executed three pay Nava to settle his debts.3) Nava's counsel still tried to settle this case
mortgages on the motor vessels Pandan and Zargazo. The documents were with Presbitero, out of court. But to no avail.4) Thereafter, the sheriff
recorded as transfer and encumbrances of the vessels for the port of Cebu levied upon and garnished the sugar quotas allotted to the plantation and
and each was denominated a chattel mortgage. adhered to the Ma-ao Mill District and registered in the name of
Presbitero as the original plantation owner.5) The sheriff was not able to
The first two mortgages did not have an affidavit of good faith. A fourth present for registration thererof to the Registry of Deeds.6) The court then
mortgage was executed by Jarque and Ramon Aboitiz over motorship ordered Presbitero to segregate the portion of Lot 608 pertaining to Nava
Zaragoza and was entered in the Chattel Mortgage Registry on May 12, from the mass of properties belonging to the defendant within a period to
1932, within the period of 30 days prior to the foreclosure/institution of expire on August 1960.7) Bottomline, Presbitero did not meet his
the insolvency proceedings. obligations, and the auction sale was scheduled.8) Presbitero died after.9)
RICARDO Presbitero, the estate administrator, then petitioned that the Facts: Plaintiff alleged that the defendant Vitaliano Mamawal, deputy
sheriff desist in holding the auction sale on the ground that the levy on the sheriff of the Province of Tarlac, by virtue of a writ of execution issued by
sugar quotas was invalid because the notice thereof was not registered the Court of First Instance of Pampanga, attached and sold to the
with the Registry of Deeds. defendant Emiliano J. Valdez the sugar cane planted by the plaintiff and
his tenants on seven parcels of land. Plaintiff offered to redeem said sugar
Issue: W/N the sugar quotas are real (immovable) or personal properties. cane and tendered to the defendant Valdez the amount sufficient to cover
the price paid by the latter, the interest thereon and any assessments or
Held:1) They are real properties.2) Legal bases : a) The Sugar Limitation taxes which he may have paid thereon after the purchase, and the interest
Law xxx attaching to the land xxx (p 631)b) RA 1825xxx to be an corresponding thereto. However, Valdez refused to accept the money and
improvement attaching to the land xxx (p 631)c) EO # 873"plantation" to return the sugar cane to the plaintiff.
xxx to which is attached an allotment of centrifugal sugar.3) Under the
express provisions of law, the sugar quota allocations are accessories to Meanwhile, defendant argued that the sugar cane was personal property
the land, and cannot have independent existence away from a plantation.4) hence not subject to redemption.
Since the levy is invalid for non-compliance with law, xxx the levy
amount to no levy at all. Issue: 1. Whether or not the sugar cane is to be classified as personal
property

2. Whether or not future crops to be harvested can be considered a valid

SIBAL v. VALDEZ G.R. No. L-26278 August 4, 1927 object of sale

Johnson, J. Held: 1. No. A crop raised on leased premises in no sense forms part of
the immovable. It belongs to the lessee, and may be sold by him, whether
Doctrine: it be gathered or not, and it may be sold by his judgment creditors.

• A crop raised on leased premises belongs to the lessee and in no sense “Ungathered products” have the nature of personal property. In other
forms part of the immovable. words, the phrase “personal property” should be understood to include
“ungathered products.” Crops, whether growing or standing in the field
• “Ungathered products” have the nature of personal property. In other ready to be harvested, are, when produced by annual cultivation, no part
words, the phrase “personal property” should be understood to include of the realty.
“ungathered products.” Crops, whether growing or standing in the field
ready to be harvested, are, when produced by annual cultivation, no part 2. Yes. A valid sale may be made of a thing, which though not yet actually
of the realty. in existence, is reasonably certain to come into existence as the natural
increment or usual incident of something already in existence, and then
• A valid sale may be made of a thing, which though not yet actually in belonging to the vendor, and then title will vest in the buyer the moment
existence, is reasonably certain to come into existence. A man may sell the thing comes into existence (Emerson vs. European Railway Co., 67
property of which he is potentially and not actually possessed. Me., 387; Cutting vs. Packers Exchange, 21 Am. St. Rep., 63.).
A man may sell property of which he is potentially and not actually ones in the name of the plaintiff because prior to the date when the
possessed. plaintiff made his demand, to wit, February 4, 1933, nine attachments had
been issued and served and noted on the books of the corporation against
the shares of Gonzalo H. Co Toco and the plaintiff objected to having
these attachments noted on the new certificates which he demanded. 12) It
Chua Guan v. SAMAHANG MAGSASAKA INC.(1935) 1) will be noted that the first eight of the said writs of attachment were
served on the corporation and noted on its records before the corporation
Facts: Gonzalo H. Co Toco was the owner of 5,894 shares of the capital received notice from the mortgagee Chua Chiu of the mortgage of said
stock of the said corporation represented by nine certificates. 2) Gonzalo shares dated June 18, 1931. 13) No question is raised as to the validity of
H. Co Toco, a resident of Manila, mortgaged said 5,894 shares to Chua said mortgage or of said writs of attachment and the sole question
Chiu to guarantee the payment of a debt 3) The said certificates of stock presented for decision is whether the said mortgage takes priority over the
were delivered with the mortgage to the mortgagee, Chua Chiu. 4) The said writs of attachment. 14)
said mortgage was duly registered in the office of the register of deeds of
Manila on June 23, 1931, and in the office of the said corporation on ISSUE: Did the registration of said chattel mortgage in the registry of
September 30, 1931. 5) Subsequently, Chua Chiu assigned all his right chattel mortgages in the office of the register of deeds of Manila, under
and interest in said mortgage to the plaintiff and the assignment was date of July 23, 1931, give constructive notice to the said attaching
registered in the office of the register of deeds in the City of Manila on creditors?
December 28, 1931, and in the office of the said corporation on January 4,
1932. 6) The debtor, Gonzalo H. Co Toco, having defaulted in the HELD: The attaching creditors are entitled to priority over the defectively
payment of said debt at maturity, the plaintiff foreclosed said mortgage registered mortgage of the appellant RATIO: The property in the shares
and delivered the certificates of stock and copies of the mortgage and maybe deemed to be situated in the province in which the corporation has
assignment to the sheriff in order to sell the said shares at public auction. its principal office or place of business. If this province is also the
7) The sheriff auctioned said 5,894 shares of stock on December 22, 1932, province of the owner's domicile, a single registration is sufficient. If not,
and the plaintiff having been the highest bidder for the sum of P14,390, the chattel mortgage should be registered both at the owner's domicile and
the sheriff executed in his favor a certificate of sale of said shares. 8) The in the province where the corporation has its principal office or place of
plaintiff tendered the certificates of stock standing in the name of Gonzalo business. In this sense the property mortgaged is not the certificate but the
H. Co Toco to the proper officers of the corporation for cancellation and participation and share of the owner in the assets of the corporation.
demanded that they issue new certificates in the name of the plaintiff. 9)
The said officers (the individual defendants) refused and still refuse to
issue said new shares in the name of the plaintiff. 10) The prayer is that a
writ of mandamus be issued requiring the defendants to transfer the said Bachrach vs Ledesma
5,894 shares of stock to the plaintiff by cancelling the old certificates and
issuing new ones in their stead. 11) C Defense: that the defendants refuse FACTS: June 30, 1927: CFI favored Bachrach Motor Co., Inc
to cancel the said certificates standing in the name of Gonzalo H. Co Toco (Bachrach) against Mariano Lacson Ledesma
on the books .of the corporation and to issue new
Ledesma mortgaged to the Philippine National Bank (PNB) Talisay-Silay
Milling Co., Inc shares
September 29, 1928: PNB brought an action against Ledesma and his wife Certificates of stock or of stock dividends, under the Corporation Law, are
Concepcion Diaz for the recovery of a mortgage credit quasi negotiable instruments in the sense that they may be given in pledge
or mortgage to secure an obligation
January 2, 1929: PNB amended its complaint by including the Bachrach
Motor Co., Inc., as party defendant because they claim to have rights to certificates of stock, while not negotiable in the sense of the law merchant,
some of the subject matters of this complaint like bills and notes, are so framed and dealt with as to be transferable,
when property endorsed, by mere delivery, and as they frequently convey,
January 30, 1929: Bachrach field a gen. denial by estoppel against the corporation or against prior holders, as good a title
to the transferee as if they were negotiable, and inasmuch as a large
CFI: favored PNB commercial use is made of such certificates as collateral security, and it is
to the public interest that such use should be simplify and facilitated by
December 20, 1929: Bachrach brought an action in the CFI against the placing them as nearly as possible on the plane of commercial paper, they
Talisay-Silay Milling Co., Inc., to recover P13,850 against the bonus or are often spoken of and treated as quasi negotiable, that is as having some
dividend w/c, by virtue of the resolution of December 22, 1923, Central of the attributes and partaking of the character of negotiable instruments,
Talisay-Silay Milling Co., Inc., had declared in favor of Ledesma as one in passing from hand to hand, especially where they are accompanied by
of the owners of the hacienda which had been mortgaged to the PNB to an assignment and power of attorney, executed in blank, to transfer them
secure the obligation of the Talisay-Silay Milling Co., Inc. in favor of said to anyone who may obtain possession as holders, even though such
bank assignment and power are under seal.

CFI: favored Bachrach

ISSUE: W/N shares of stock are personal property and therefore can be B. ARTICLE 419-425
subject to pledge or chattel mortgage

HELD: YES. AFIRMED

REPUBLIC VS. VDA. DE CASTELLVI,
section 4 of the Chattel Mortgage Law, in so far as it provides that a
chattel mortgage shall not be valid against any person except the GR # L-20620 August 15, 1974 (Constitutional Law – Eminent
mortgagor, his executors or administrators, unless the possession of the Domain, Elements of Taking)
property is delivered to and retained by the mortgagee or unless the
mortgage is recorded in the office of the register of deeds of the province FACTS: After the owner of a parcel of land that has been rented and
in which the mortgagor resides. occupied by the government in 1947 refused to extend the lease, the latter
commenced expropriation proceedings in 1959. During the assessment of
pledge of the 6,300 stock dividends is valid against the Bachrach because just compensation, the government argued that it had taken the property
the certificate was delivered to the creditor bank, notwithstanding the fact when the contract of lease commenced and not when the proceedings
that the contract does not appear in a public instrument begun. The owner maintains that the disputed land was not taken when the
government commenced to occupy the said land as lessee because the not subject to private appropriation); and held that Resolution 38, ordering
essential elements of the “taking” of property under the power of eminent an ocular inspection of the Cayangan Creek situated between Barrios
domain, namely (1) entrance and occupation by condemnor upon the Salomague Sur and Salomague Norte, and Resolution 95 authorizing
private property for more than a momentary period, and (2) devoting it to public bidding for the lease of all municipal ferries and fisheries were
a public use in such a way as to oust the owner and deprive him of all passed by the members of the Municipal Council of Bugallon, Pangasinan
beneficial enjoyment of the property, are not present. in the exercise of their legislative powers. Manaclang appealed said
decision to the IAC, which affirmed the same on 29 April 1983. Hence,
ISSUE: Whether or not the taking of property has taken place when the the petition for review on certiorari.
condemnor has entered and occupied the property as lessee.
Before the respondents were able to comment on the petition, the
HELD: No, the property was deemed taken only when the expropriation petitioners manifested that for lack of interest on the part of respondent
proceedings commenced in 1959. Alfredo Maza, the awardee in the public bidding of the fishpond, as the
parties desire to amicably settle the case by submitting to the Court a
The essential elements of the taking are: (1) Expropriator must enter a Compromise Agreement praying that judgment be rendered recognizing
private property, (2) for more than a momentary period, (3) and under the ownership of the petitioners over the land the body of water found
warrant of legal authority, (4) devoting it to public use, or otherwise within their titled properties.
informally appropriating or injuriously affecting it in such a way as (5)
substantially to oust the owner and deprive him of all beneficial The Supreme Court dismissed the petition for lack of merit, and set aside
enjoyment thereof. the Compromise Agreement and declare the same null and void for being
contrary to law and public policy.
In the case at bar, these elements were not present when the government
entered and occupied the property under a contract of lease. 1. Stipulations null and void for being contrary to law and public policy

The stipulations contained in the Compromise Agreement partake of the

nature of an adjudication of ownership of the fishpond in dispute, which
Maneclang v. IAC [G.R. No. L-66575. September 30, 1986.] was originally a creek forming a tributary of the Agno River. A creek,
defined as a recess or arm extending from a river and participating in the
Second Division, Fernan (J): 4 concur ebb and flow of the sea, is a property belonging to the public domain
which is not susceptible to private appropriation and acquisitive
Facts: Adriano Maneclang, et.al., petitioners, filed before the then CFI prescription (Mercado vs. Municipal President of Macabebe), and as a
Pangasinan (Branch XI) a complaint for quieting of title over a certain public water, it cannot be registered under the Torrens System in the name
fishpond located within 4 parcels of land belonging to them situated in of any individual (Diego v. CA; Mangaldan v. Manaoag) and considering
Barrio Salomague, Bugallon, Pangasinan, and the annulment of further that neither the mere construction of irrigation dikes by the
Resolutions 38 and 95 of the Municipal Council of Bugallon, Pangasinan. National Irrigation
On 15 August 1975, the trial court dismissed the complaint upon a finding
that the body of water traversing the titled properties is a creek
constituting a tributary of the Agno River (therefore public in nature and
Administration which prevented the water from flowing in and out of the guarding and patrolling of the hacienda by security guards called
subject fishpond, nor its conversion into a fishpond, alter or change the “arundines”. By the gradual process of erosion these canals acquired the
nature of the creek as a property of the public domain. The Compromise characteristics and dimensions of rivers.

Agreement, thus, is null and void and of no legal effect, the same being In 1924 Ayala y Cia shifted from the business of alcohol production to
contrary to law and public policy. bangus culture. It converted Hacienda San Esteban from a forest of nipa
groves to a web of fishponds. Sometime in 1925 or 1926 Ayala y Cia.,
2. Municipal council authorized to pass laws dealing with its municipal sold a portion of Hacienda San Esteban to Roman Santos who also
waters transformed the swamp land into a fishpond. In so doing, he closed and
built dikes across Sapang Malauling Maragul, Quiñorang Silab,
The Municipality of Bugallon, acting thru its duly-constituted municipal Pepangebunan, Bulacus, Nigui and Nasi. The closing of the man-made
council is clothed with authority to pass, as it did the two resolutions canals in Hacienda San Esteban drew complaints from residents of the
dealing with its municipal waters. surrounding communities. Claiming that the closing of the canals caused
floods during the rainy season, and that it deprived them of their means of
3. Publication a constructive notice to the whole world; due process transportation and fishing grounds, said residents demanded re-opening of
followed those canals. Subsequently, Mayor Lazaro Yambao of Macabebe,
accompanied by policemen and some residents went to Hacienda San
Petitioners were not deprived of their right to due process as mere Esteban and opened the closure dikes at Sapang Malauling Maragul,
publication of the notice of the public bidding suffices as a constructive Nigui and Quiñorang Silab. Whereupon, Roman Santos filed Civil Case
notice to the whole world. 4488 in the CFI Pampanga which preliminarily enjoined Mayor Yambao
and others from demolishing the dikes across the canals. The municipal
officials of Macabebe countered by filing a complaint (Civil Case 4527)
in the same court. The CFI Pampanga rendered judgment in both cases
Santos v. Moreno [G.R. No. L-15829. December 4, 1967.] against Roman Santos who immediately elevated the case to the Supreme
Court. In the meantime, the Secretary of Commerce and Communications
En Banc, Bengzon JP (J): 9 concur conducted his own investigation, found and declared on 8 November 1930
that the streams closed by Roman Santos were natural, floatable and
Facts: The Zobel family of Spain formerly owned a vast track of navigable and were utilized by the public for transportation since time
marshland in Macabebe, Pampanga called Hacienda San Esteban, which immemorial. However, on 8 May 1931 the said official revoked his
was administered and managed by the Ayala y Cia. From 1860 to 1924 decision and declared the streams in question privately owned because
Ayala y Cia., devoted the hacienda to the planting and cultivation of nipa they were artificially constructed. Subsequently, upon authority granted
palms from which it gathered nipa sap or “tuba”. It operated a distillery under Act 3982 the Secretary of Commerce and
plant in barrio San Esteban to turn nipa tuba into potable alcohol which
was in turn manufactured into liquor. Accessibility through the nipa palms Communications entered into a contract with Roman Santos whereby the
deep into the hacienda posed as a problem; thus Ayala y Cia dug canals former recognized the private ownership of 6 streams and the latter turned
leading towards the hacienda’s interior where most of them interlinked over for public use 2 artificial canals and bound himself to maintain them
with each other. The canals facilitated the gathering of tuba and the
in navigable state. The Provincial Board of Pampanga and the municipal rivers and appropriated them as fishponds without color of title. On the
councils of Macabebe and Masantol objected to the contract. However, same day, Benigno Musni and other residents in the vicinity of Hacienda
the Secretary of Justice, in his opinion dated 6 March 1934, upheld its San Esteban petitioned the Secretary of Public Works and
legality. Roman Santos withdrew his appeals in the Supreme Court. Communications to open the following streams: Balbaro, Batasan Matua,
Bunga, Cansusu, Macabacle, Macanduling Maragul, Mariablus Malate,
On 25 February 1935 the municipality of Macabebe and the Zobel family Matalabang Maisac, Nigui, Quiñorang Silab, Sapang Maragul and Sepung
executed an agreement whereby they recognized the nature of the streams Bato. On 20 October 1958 Musni and his co-petitioners amended their
mentioned in Panopio’s report as public or private, depending on the petition to include other streams: Balbaro, Balili, Banawa, Batasan Matua,
findings in said report. This agreement was approved by the Secretary of Bato, Bengco, Bunga, Butabuta, Camastiles, Cansusu, Cela, Don Timpo,
Public Works and Communications on 27 February1935 and confirmed Mabalanga, Mabutol, Macabacle, Macabacle qng. Iba, Macanduling
the next day by the municipal council of Macabebe under Resolution 36. Maragul, Malauli, Magasawa, Mariablus Malate, Masamaral, Matalabang
Maisac, Mariablus, 3 Nigui, Pita, Quiñorang Silab, Sapang Maragul,
On 12 June 1935 however, the Secretary of Justice issued an opinion Sepung Bato, Sinag and Tumbong. On March 2, 4, 10, 30 and 31, and 1
holding that the contract executed by the Zobel family and the April 1959, the Secretary of Public Works and Communications rendered
municipality of Macabebe has no validity. Still, despite the ruling of the his decisions ordering the opening and restoration of the channel of all the
Secretary of streams except Sapang Malauling Maragul, Quiñorang Silab, Nigui,
Pepangebonan, Nasi and Bulacus, within 30 days.
Justice, the streams in question remained closed.
On 29 April 1959, after receipt of the Secretary’s decision, Roman Santos
In 1939 administrative investigations were again conducted by various filed a petition with the CFI Manila for injunction against the Secretary of
agencies of the Executive branch of our government culminating in an Public Works and Communications and Julian C. Cargullo. As prayed for,
order of President Manuel Quezon immediately before the national preliminary injunction was granted on 8 May 1959. On April 29 and 12
elections in 1941 requiring the opening of Sapang Macanduling Maragul, June 1959, Roman Santos received the decision of the Secretary of Public
Macabacle, Balbaro and Cansusu. Works and Communications dated March 10 and March 30,

Said streams were again closed in 1942 allegedly upon order of President March 31, and 1 April 1959. Consequently, on June 24, 1959 he asked the
Quezon. court to cite in contempt Secretary Florencio Moreno, Undersecretary M.
D. Bautista and Julian Cargullo for issuing and serving upon him the said
Roman Santos acquired in 1940 from the Zobel family a larger portion of decisions despite the existence of the preliminary injunction. The Cou rt
Hacienda San Esteban wherein are located 25 streams which were closed however ruled that Secretary Moreno, Undersecretary Bautista and
by Ayala y Cia. 18 years later or in 1950, Congress enacted RA 2056. Cargullo acted in good faith, and hence were merely “admonished to
desist from any and further action in this Court, with the stern warning,
Thereafter, on 15 August 1958, Senator de la Rosa requested in writing however, that a repetition of the acts complained of shall be dealt with
the Secretary of Public Works and severely.” On 18 July 1959 the trial court declared all the streams under
litigation private, and made the writ of preliminary injunction permanent.
Communications to proceed in pursuance of Republic Act No. 2056 The Secretary of Public Works and Communications and Julian Cargullo
against fishpond owners in the province of Pampanga who have closed
appealed to the Supreme Couurt from the order of 17 July 1959 issued in against the defendants City Engineer of Manila, District Engineer of
connection with Roman Santos’ motion for contempt and from the Rizal, the Director of Public Works, and Engr. Busuego, the Engineer-in-
decision of the lower court on the merits of the case. charge of the plant. Subsequently, the Bureau of Mines and Atty. Maximo
Calalang were respectively allowed to join the litigation as intervenors; as
The Supreme Court affirmed the decision appealed from, except as to per issue of fees and penalties for materials (sand and gravel) extracted.
Sapang Cansusu which was declared public and thus as to which the On 14 March 1954, defendants filed a petition for injunction against
judgment of the lower court was reversed. No costs. plaintiff and intervenor Calalang in the same case, alleging that the latter
have fenced off the disputed area in contravention of an agreement had
between the latter and the Director of Public Works wherein the
defendants were allowed to continue their operations but subject to the
Hilario v. City of Manila [GR No. L-19570 April 27, 1967] final outcome of the pending suit. On 13 May 1954, plaintiff amended
his complaint and impleaded as additional defendants the City of Manila,
Bengzon JP (J): 8 concur the Provincial Treasurer of Rizal, and Engr. Eulogio Sese, the new
Engineer-in-charge of the plant. Plaintiff also converted his claim to one
Facts: Dr. Jose Hilario was the registered owner of a large tract of land purely for damages directed against the City of Manila and the Director of
around 49 hectares in area (Barrio Guinayang, San Mateo, Rizal). Upon Public Works, solidarily, in the amount of P1,000,000.00, as the cost of
his death this property was inherited by his son, Jose Hilario, Jr., to whom materials taken since 1949, as well as those to be extracted therefrom until
a new certificate of title was issued. During the lifetime of plaintiff’s defendants stop their operations.
father, the Hilario estate was bounded on the western side by the San
Mateo River.3 To prevent its entry into the land, a bamboo and lumber On 21 December 1956, the lower court rendered its decision, ordering the
post dike or ditch was constructed on the northwestern side. This was City of Manila and Director of Public Works to pay Hilario in solidum the
further fortified by a stonewall built on the northern side. For years, these sum of P376,989.60 as cost of gravel and sand extracted from the
safeguards served their purpose. However, in 1937, a great and plaintiff’s land, plus costs; and ordering the Provincial Treasurer of Rizal
extraordinary flood occurred which inundated the entire place including to reimburse intervenor Calalang of P36.80 representing gravel fees
the neighboring barrios and municipalities. The River destroyed the dike illegally collected. None of the parties litigants seemed satisfied with this
on the northwest, left its original bed and meandered into the Hilario decision and they all sought a reconsideration of the same. On August 30,
estate, segregating from the rest thereof a lenticular piece of land. The 1957, the lower court resolved the motions to reconsider with an order,
disputed area is on the eastern side of this lenticular strip which now holding that the 2/5 portion of the area in controversy to Hilario, and
stands between the old riverbed site and the new course. In 1945, the US dismissing the case against the Bureau of Public Works insofar as money
Army opened a sand and gravel plant within the premises, and started claims are concerned without prejudice to Hilario taking action against
scraping, excavating and extracting soil, gravel and sand from the nearby proper party in such claim. Hilario and Calalang filed a second motion for
areas along the River. The operations eventually extended northward into reconsideration, which the lower court denied. Hence, the appeal. The
the strip of land. Consequently, a claim for damages was filed with the US Supreme Court set aside the decision and orders appealed from, and
War Department by Luis Hidalgo, the then administrator of Dr. Hilario’s entered another judgment to the effect that the City of Manila and the
estate. The US Army paid. In 1947, the plant was turned over to herein Director of Public Works, and his agent and employees, are absolved of
defendants-appellants and appellee who took over its operations. On 22
October 22, 1949, plaintiff filed his complaint for injunction and damages
liability from extracting materials from subject property (of public The natural bed or channel of a creek or river is the ground covered by its
domain); and the portion within the strip of waters during the highest [ordinary]\floods (Article 70 of the Law of the
Waters).
land question declared not part of public domain and confirmed as part of
Hilario’s private property. No 4. New bed, when river changes course, is of public ownership; Means to
recover
Costs.
Article 372 of the old Civil Code which provides that “whenever a
1. Old Civil Code and Law of Waters of 1866 controlling law Since the navigable or floatable river changes its course from natural causes and
change in the course of the River took place in 1937, long before the opens a new bed through a private estate, the new bed shall be of public
present Civil Code took effect, the question should be determined in ownership, but the owner of the estate shall recover it in the event that the
accordance with the provisions of the old Civil Code and those of the Law waters leave it dry again either naturally or as the result of any work
of Waters of 3 August 1866. legally authorized for this purpose.” Banks are not mentioned in the
provision, as the nature of banks follows that of the bed and the running
2. All riverbanks, as part of the riverbeds, are of public ownership water of the river.

Under the old Civil Law and the Law of Waters, all riverbanks are of 5. A river is a compound concept consisting of running waters, bed, and
public ownership, including those formed when a river leaves its old bed banks A river is a compound concept consisting of three elements; (1) the
and opens a new course through a private estate. Artcile 339 of the old running waters, (2) the bed and (3) the banks. All these constitute the
river. American authorities are in accord with this view, as that “‘ River’
Civil Code is very clear. Without any qualifications, it provides that “that consists of water, bed and banks”; and that “A ‘river’ consists of water, a
devoted to public use, such as roads, canals, rivers, torrents, ports and bed and banks, these several parts
bridges constructed by the State, riverbanks, shores, roadsteads, and that
of a similar character” are property of public ownership. Further, the constituting the river, the whole river. It is a compound idea; it cannot
riverbank is part of the riverbed. Article 73 of the Law of Waters which exist without all its parts. Evaporate the
provides that the phrase “banks of a river” is understood those lateral
strips of zones of its beds which are washed by the stream only during water, and you have a dry hollow. If you could sink the bed, instead of a
such high floods as do not cause inundations. The use of the words “of its river you would have a fathomless
bed [de sus alveos] “ clearly indicates the intent of the law to consider the
banks for all legal purposes, as part of the riverbed. Thus, the banks of the gulf. Remove the banks, and you have, a boundless flood”
River are part of its bed. Since undeniably all beds of river are of public
ownership, it follows that the banks, which form part of them, are also of 6. River is of public ownership, elements follow same nature of
public ownership. ownership; Law explicit

3. Natural bed or channel of a creek or river defined Since a river is but one compound concept, it should have only one nature,
i.e., it should either be totally
public or completely private. Since rivers are of public ownership, it is with cost against the Municipality. The counsel for the municipality
implicit that all the three component elements be of the same nature also. excepted and in writing asked for a reopening of the case and the holding
Still, the law expressly makes all three elements public. Thus, riverbanks of a new trial. This motion was denied, with exception on the part of the
and beds are public under Articles 339 and 407, respectively, of the Code, Municipality, and the corresponding bill of exceptions was filed, approved
while the flowing waters are declared so under Articles 33, par. 2 of the and forwarded to the clerk of the Supreme Court.
Law of Waters of 1866.
The Supreme Court reversed the judgment appealed from and declared the
land occupied public, as it formed part of the public plaza called Soledad,
and the lease of said parcel of land as null and void. The Court ordered
Municipality of Cavite v. Rojas [G.R. No. 9069. March 31, 1915.] Rojas to vacate it and release the land within 30 days, leaving it and as it
was before her occupation. There is no ground for the indemnity sought in
En Banc, Torres (J): 3 concur, 1concur in result the nature of damages, but the municipality must in its turn restore to
Rojas the rentals collected; without special finding as to the costs.
Facts: The Municipality (constituted through Act 82), and as the
successor to the rights said entity had under the late Spanish government, 1. Plaza Soledad; Municipality or objectors not entitled for inscription of
and by virtue of Act 1039, had exclusive right, control and administration land for public use and reserved for the common benefit
over the streets, lanes, plazas, and public places of the municipality of
Cavite. Rojas, et.al., by virtue of a lease secured from the Municipality By section 3 of the said Act No. 1039, passed January 12, 1904, the
(Resolution 10, dated 3 July 1907), occupied a parcel of land 93 sq. m. in Philippine Commission granted to the municipality of Cavite all the land
area that forms part of the public plaza known under the name of Soledad, included in the tract called Plaza Soledad. In the case of Nicolas vs. Jose
belonging to the municipality of Cavite. Rojas constructed thereon a (6 Phil 589), wherein the municipality of Cavite, represented by its
house, paying the Municipality a rental of P5.58 a quarter in advance for president Catalino Nicolas, sought inscription in its name of the land
occupation thereof (schedule fixed in Ordinance 43, s. 1903), with the comprised in the said Plaza Soledad, with objection on the part of Maria
condition that Rojas are obligated to vacate the leased land within 60 days Jose et al., who occupied some parts thereof with their houses and who
subsequent to the Municipality’s demand to that effect. Rojas has been also sought that inscription be decreed in their name of the parcels of land
required by the municipality to vacate and deliver possession of the said in this plaza occupied by them, this court decided that neither the
land, wherein the 60days within which it was ought to vacated elapsed municipality nor the objectors were entitled to inscription, for with respect
without Rojas doing so. Thus, by an instrument dated 5 December 1911, to the objectors said plaza belonged to the municipality of Cavite and with
afterwards amended on 14 March 1912, the provincial fiscal of Cavite, respect to the latter the said Plaza Soledad was not transferable property of
representing the municipality, filed a complaint in the CFI Cavite against that municipality to be inscribed in its name, because the intention of Act
Rojas alleging that the lease secured from the municipality of Cavite is No. 1039 was that the said plaza and other places therein enumerated
ultra vires and therefore ipso facto null and void and of no force or effect, should be kept open for public transit; wherefore there can be no doubt
for the said land is an integral portion of a public plaza of public domain, that the defendant has no right to continue to occupy the land of the
and thus prayed that judgment be rendered declaring that possession of the municipality leased by her, for it is an integral portion of Plaza Soledad,
said land lies with the Municipality and ordering Rojas to vacate the land which is for public use and is reserved for the common benefit.
and deliver possession thereof to the Municipality. After hearing and on
27 March 1913, the court rendered the judgment dismissing the complaint 2. Property for public use in provinces and in towns
Article 344 of the Civil Code provides that “property for public use in Sps. Teofilo and Maxima Villarico, filed an application for confirmation
provinces and in towns comprises the Property, 2003 ( 36 )Haystacks of the title over a parcel of land which they allege they bought from
(Berne Guerrero) provincial and town roads, the squares, streets, Teofilo’s father. Said application was opposed by the Director of Forestry
fountains, and public waters, the promenades, and public works of general contending that the said land forms part of the public domain as it is
service supported by said towns or provinces.” Plaza Soledad being a within the unclassified area in Meycauayan and is not available for private
promenade for public use, the municipal council of Cavite could not in appropriation. The TC dismissed the case since the property forms part of
1907 withdraw or exclude from public use a portion thereof in order to the public domain therefore the certificate of title is void. The CA
lease it for the sole benefit of Rojas. In leasing a portion of said plaza or affirmed the findings of the Trial Court, thus the case at bar.
public place for private use, municipality exceeded its authority in the
exercise of its powers by executing a contract over a thing of which it ISSUE:
could not dispose, nor is it empowered so to do.
Whether or not the property still forms part of the public domain
3. Communal things cannot be sold as they are outside the commerce of
man HELD: YES

Article 1271 of the Civil Code prescribes that everything which is not > The SC held that both the TC and the appellate court correctly adjudged
outside the commerce of man may be the object of a contract. As plazas the area to be within the unclassified forest zone therefore incapable of
and streets are outside of this commerce, the 12 February 1895 decision of private appropriation.
the Spanish Supreme Court stated that “communal things that cannot be
sold because they are by their very nature outside of commerce are those > There has been no showing that a declassification has been made
for public use, such as the plazas, streets, common lands, rivers, fountains, declaring the said lands as disposable or alienable and the spouses have
etc.” The lease contract, whereby the municipality of Cavite leased to not showed evidence to lead to the court to rule otherwise.
Rojas a portion of the Plaza Soledad, is null and void and of no force or
effect, in accordance with the provision of Article 1303 of the Civil Code, > Thus, if the land in question still forms part of the public forest, then
because it is contrary to the law and the thing leased cannot be the object possession thereof, however long, cannot convert it into private property
of a contract. Thus, Rojas must restore and deliver possession of the land as it is beyond the power and jurisdiction of the cadastral court to register
described in the complaint to the municipality of Cavite, which in its turn under the Torrens System.
must restore to Rojas all the sums it may have received from her in the
nature of rentals just as soon as she restores the land improperly leased. MANILA INTERNATIONAL AIRPORT AUTHORITY vs. COURT
For the same reasons as have been set forth, consequently Rojas is not OF APPEALS
entitled to claim that the municipality indemnify her for the damages she
may suffer by the removal of her house from the said land. G.R. No. 155650 July 20, 2006

VILLARICO V. COURT OF APPEALS 309 SCRA 193 Facts: MIAA received Final Notices of Real Estate Tax Delinquency
from the City of Parañaque for the taxable years 1992 to 2001. MIAA’s
FACTS real estate tax delinquency was estimated at P624 million.
The City of Parañaque, through its City Treasurer, issued notices of levy Held: 1. MIAA is Not a Government-Owned or Controlled
and warrants of levy on the Airport Lands and Buildings. The Mayor of Corporation. MIAA is not a government-owned or controlled corporation
the City of Parañaque threatened to sell at public auction the Airport but an instrumentality of the National Government and thus exempt from
Lands and Buildings should MIAA fail to pay the real estate tax local taxation.
delinquency.
MIAA is not a stock corporation because it has no capital stock divided
MIAA filed with the Court of Appeals an original petition for prohibition into shares. MIAA has no stockholders or voting shares.
and injunction, with prayer for preliminary injunction or temporary
restraining order. The petition sought to restrain the City of Parañaque MIAA is also not a non-stock corporation because it has no members. A
from imposing real estate tax on, levying against, and auctioning for non-stock corporation must have members.
public sale the Airport Lands and Buildings.
MIAA is a government instrumentality vested with corporate powers to
Paranaque’s Contention: Section 193 of the Local Government Code perform efficiently its governmental functions. MIAA is like any other
expressly withdrew the tax exemption privileges of “government-owned government instrumentality, the only difference is that MIAA is vested
and-controlled corporations” upon the effectivity of the Local with corporate powers.
Government Code. Respondents also argue that a basic rule of statutory
construction is that the express mention of one person, thing, or act When the law vests in a government instrumentality corporate powers, the
excludes all others. An international airport is not among the exceptions instrumentality does not become a corporation. Unless the government
mentioned in Section 193 of the Local Government Code. Thus, instrumentality is organized as a stock or non-stock corporation, it
respondents assert that MIAA cannot claim that the Airport Lands and remains a government instrumentality exercising not only governmental
Buildings are exempt from real estate tax. but also corporate powers. Thus, MIAA exercises the governmental
powers of eminent domain, police authority and the levying of fees and
charges. At the same time, MIAA exercises “all the powers of a
corporation under the Corporation Law, insofar as these powers are not
MIAA’s contention: Airport Lands and Buildings are owned by the inconsistent with the provisions of this Executive Order.”
Republic. The government cannot tax itself. The reason for tax exemption
of public property is that its taxation would not inure to any public 2. Airport Lands and Buildings of MIAA are Owned by the
advantage, since in such a case the tax debtor is also the tax creditor. Republic

a. Airport Lands and Buildings are of Public Dominion

Issue: WON Airport Lands and Buildings of MIAA are exempt from real The Airport Lands and Buildings of MIAA are property of public
estate tax under existing laws? Yes. Ergo, the real estate tax assessments dominion and therefore owned by the State or the Republic of the
issued by the City of Parañaque, and all proceedings taken pursuant to Philippines.
such assessments, are void.
No one can dispute that properties of public dominion mentioned in
Article 420 of the Civil Code, like “roads, canals, rivers, torrents, ports
and bridges constructed by the State,” are owned by the State. The term c. MIAA is a Mere Trustee of the Republic
“ports” includes seaports and airports. The MIAA Airport Lands and
Buildings constitute a “port” constructed by the State. Under Article 420 MIAA is merely holding title to the Airport Lands and Buildings in trust
of the Civil Code, the MIAA Airport Lands and Buildings are properties for the Republic. Section 48, Chapter 12, Book I of the Administrative
of public dominion and thus owned by the State or the Republic of the Code allows instrumentalities like MIAA to hold title to real properties
Philippines. owned by the Republic. n MIAA’s case, its status as a mere trustee of the
Airport Lands and Buildings is clearer because even its executive head
The Airport Lands and Buildings are devoted to public use because they cannot sign the deed of conveyance on behalf of the Republic. Only the
are used by the public for international and domestic travel and President of the Republic can sign such deed of conveyance.
transportation. The fact that the MIAA collects terminal fees and other
charges from the public does not remove the character of the Airport d. Transfer to MIAA was Meant to Implement a Reorganization
Lands and Buildings as properties for public use.
The transfer of the Airport Lands and Buildings from the Bureau of Air
The charging of fees to the public does not determine the character of the Transportation to MIAA was not meant to transfer beneficial ownership of
property whether it is of public dominion or not. Article 420 of the Civil these assets from the Republic to MIAA. The purpose was merely
Code defines property of public dominion as one “intended for public toreorganize a division in the Bureau of Air Transportation into a separate
use.” The terminal fees MIAA charges to passengers, as well as the and autonomous body. The Republic remains the beneficial owner of the
landing fees MIAA charges to airlines, constitute the bulk of the income Airport Lands and Buildings. MIAA itself is owned solely by the
that maintains the operations of MIAA. The collection of such fees does Republic. No party claims any ownership rights over MIAA’s assets
not change the character of MIAA as an airport for public use. Such fees adverse to the Republic.
are often termed user’s tax. This means taxing those among the public
who actually use a public facility instead of taxing all the public including e. Real Property Owned by the Republic is Not Taxable
those who never use the particular public facility.
Sec 234 of the LGC provides that real property owned by the Republic of
b. Airport Lands and Buildings are Outside the Commerce of Man the Philippines or any of its political subdivisions except when the
beneficial use thereof has been granted, for consideration or otherwise, to
The Court has also ruled that property of public dominion, being outside a taxable person following are exempted from payment of the real
the commerce of man, cannot be the subject of an auction sale. property tax.

Properties of public dominion, being for public use, are not subject to However, portions of the Airport Lands and Buildings that MIAA leases
levy, encumbrance or disposition through public or private sale. Any to private entities are not exempt from real estate tax. For example, the
encumbrance, levy on execution or auction sale of any property of public land area occupied by hangars that MIAA leases to private corporations is
dominion is void for being contrary to public policy. Essential public subject to real estate tax.
services will stop if properties of public dominion are subject to
encumbrances, foreclosures and auction sale. This will happen if the City
of Parañaque can foreclose and compel the auction sale of the 600-hectare
runway of the MIAA for non-payment of real estate tax.
Cebu Oxygen vs Judge Bercilles
As presented in MO 161, NHA prepared feasibility studies to turn the
FACTS: In 1968, a terminal portion of a street in Cebu was excluded in dumpsite into low-cost housing project, thus, Smokey Mountain
Development and Reclamation Project (SMDRP), came into place. RA
the city’s development plan hence the council declared it as abandoned 6957 (Build-Operate-Transfer Law) was passed on July 1990 declaring
and was subsequently opened for public bidding. Cebu Oxygen was the the importance of private sectors as contractors in government projects.
highest bidder @P10,800.00. Cebu Oxygen applied for the land’s Thereafter, Aquino proclaimed MO 415 applying RA 6957 to SMDRP,
registration before CFI Cebu but the provincial fiscal denied it, so did the among others. The same MO also established EXECOM and TECHCOM
court later, alleging that the road is part of the public domain hence in the execution and evaluation of the plan, respectively, to be assisted by
beyond the commerce of man. the Public Estates Authority (PEA).

Notices of public bidding to become NHA’s venture partner for SMDRP

ISSUE: Whether or not Cebu Oxygen can validly own said land. were published in newspapers in 1992, from which R-II Builders, Inc.
(RBI) won the bidding process. Then-President Ramos authorized NHA
HELD: Yes. Under Cebu’s Charter (RA 3857), the city council “may to enter into a Joint Venture Agreement with RBI.
close any city road, street or alley, boulevard, avenue, park or square.
Property thus withdrawn from public servitude may be used or conveyed Under the JVA, the project involves the clearing of Smokey Mountain for
for any purpose for which other real property belonging to the City may eventual development into a low cost housing complex and
industrial/commercial site. RBI is expected to fully finance the
be lawfully used or conveyed.” Since that portion of the city street subject
development of Smokey Mountain and reclaim 40 hectares of the land at
of Cebu Oxygen’s application for registration of title was withdrawn from the Manila Bay Area. The latter together with the commercial area to be
public use, it follows that such withdrawn portion becomes patrimonial built on Smokey Mountain will be owned by RBI as enabling
property which can be the object of an ordinary contract. components. If the project is revoked or terminated by the Government
through no fault of RBI or by mutual agreement, the Government shall
compensate RBI for its actual expenses incurred in the Project plus a
reasonable rate of return not exceeding that stated in the feasibility study
and in the contract as of the date of such revocation, cancellation, or
Article 422 of the Civil Code expressly provides that “Property of public
termination on a schedule to be agreed upon by both parties.
dominion, when no longer intended for public use or for public service,
shall form part of the patrimonial property of the State.” To summarize, the SMDRP shall consist of Phase I and Phase II. Phase I
of the project involves clearing, levelling-off the dumpsite, and
Chavez vs. NHA construction of temporary housing units for the current residents on the
cleared and levelled site. Phase II involves the construction of a fenced
FACTS: On August 5, 2004, former Solicitor General Francisco Chavez, incineration area for the on-site disposal of the garbage at the dumpsite.
filed an instant petition raising constitutional issues on the JVA entered by
National Housing Authority and R-II Builders, Inc. Due to the recommendations done by the DENR after evaluations done,
the JVA was amended and restated (now ARJVA) to accommodate the
On March 1, 1988, then-President Cory Aquino issued Memorandum design changes and additional work to be done to successfully implement
order No. (MO) 161 approving and directing implementation of the the project. The original 3,500 units of temporary housing were decreased
Comprehensive and Integrated Metropolitan Manila Waste Management to 2,992. The reclaimed land as enabling component was increased from
Plan. During this time, Smokey Mountain, a wasteland in Tondo, Manila, 40 hectares to 79 hectares, which was supported by the issuance of
are being made residence of many Filipinos living in a subhuman state. Proclamation No. 465 by President Ramos. The revision also provided
for the 119-hectare land as an enabling component for Phase II of the (NHA is a government agency whose authority to reclaim lands under
project. consultation with PEA is derived under PD 727 and RA 7279).
Notwithstanding the need for DENR permission, the DENR is deemed to
Subsequently, the Clean Air Act was passed by the legislature which have granted the authority to reclaim in the Smokey Mountain Project for
made the establishment of an incinerator illegal, making the off-site the DENR is one of the members of the EXECOM which provides
dumpsite at Smokey Mountain necessary. On August 1, 1998, the project reviews for the project. ECCs and Special Patent Orders were given by
was suspended, to be later reconstituted by President Estrada in MO No. the DENR which are exercises of its power of supervision over the
33. project. Furthermore, it was the President via the abovementioned MOs
that originally authorized the reclamation. It must be noted that the
On August 27, 2003, the NHA and RBI executed a Memorandum of reclamation of lands of public domain is reposed first in the Philippine
Agreement whereby both parties agreed to terminate the JVA and President.
subsequent agreements. During this time, NHA reported that 34 The reclaimed lands were classified alienable and disposable via MO 415
temporary housing structures and 21 permanent housing structures had issued by President Aquino and Proclamation Nos. 39 and 465 by
been turned over by RBI. President Ramos.
Despite not having an explicit declaration, the lands have been deemed to
ISSUES: Whether respondents NHA and RBI have been granted the be no longer needed for public use as stated in Proclamation No. 39 that
power and authority to reclaim lands of the public domain as this power is these are to be “disposed to qualified beneficiaries.” Furthermore, these
vested exclusively in PEA as claimed by petitioner lands have already been necessarily reclassified as alienable and
Whether respondents NHA and RBI were given the power and authority disposable lands under the BOT law.
by DENR to reclaim foreshore and submerged lands Letter I of Sec. 6 of PD 757 clearly states that the NHA can acquire
Whether respondent RBI can acquire reclaimed foreshore and submerged property rights and interests and encumber or otherwise dispose of them
lands considered as alienable and outside the commerce of man as it may deem appropriate.
Whether respondent RBI can acquire reclaimed lands when there was no There is no doubt that respondent NHA conducted a public bidding of the
declaration that said lands are no longer needed for public use right to become its joint venture partner in the Smokey Mountain Project.
Whether there is a law authorizing sale of reclaimed lands It was noted that notices were published in national newspapers. The
Whether the transfer of reclaimed lands to RBI was done by public bidding proper was done by the Bids and Awards Committee on May 18,
bidding 1992.
Whether RBI, being a private corporation, is barred by the Constitution to RA 6957 as amended by RA 7718 explicitly states that a contractor can be
acquire lands of public domain paid “a portion as percentage of the reclaimed land” subject to the
Whether respondents can be compelled to disclose all information related constitutional requirement that only Filipino citizens or corporation with
to the SMDRP at least 60% Filipino equity can acquire the same. In addition, when the
Whether the operative fact doctrine applies to the instant position lands were transferred to the NHA, these were considered Patrimonial
lands of the state, by which it has the power to sell the same to any
HELD: qualified person.
Executive Order 525 reads that the PEA shall be primarily responsible for This relief must be granted. It is the right of the Filipino people to
integrating, directing, and coordinating all reclamation projects for and on information on matters of public concerned as stated in Article II, Sec. 28,
behalf of the National Government. This does not mean that it shall be and Article III, Sec. 7 of the 1987 Constitution.
responsible for all. The requisites for a valid and legal reclamation project When the petitioner filed the case, the JVA had already been terminated
are approval by the President (which were provided for by MOs), by virtue of MOA between RBI and NHA. The properties and rights in
favourable recommendation of PEA (which were seen as a part of its question after the passage of around 10 years from the start of the
recommendations to the EXECOM), and undertaken either by PEA or project’s implementation cannot be disturbed or questioned. The
entity under contract of PEA or by the National Government Agency petitioner, being the Solicitor General at the time SMDRP was
formulated, had ample opportunity to question the said project, but did not HELD:
do so. The moment to challenge has passed. The ownership of lands reclaimed from foreshore and submerged areas is
rooted in the Regalian doctrine, which holds that the State owns all lands
and waters of the public domain.

The 1987 Constitution recognizes the Regalian doctrine. It declares that

all natural resources are owned by the State and except for alienable
agricultural lands of the public domain, natural resources cannot be
alienated.
CHAVEZ V. PUBLIC ESTATES AUTHORITY
384 SCRA 152 The Amended JVA covers a reclamation area of 750 hectares. Only
157.84 hectares of the 750 hectare reclamation project have been
FACTS: reclaimed, and the rest of the area are still submerged areas forming part
President Marcos through a presidential decree created PEA, which of Manila Bay. Further, it is provided that AMARI will reimburse
was tasked with the development, improvement, and acquisition, the actual costs in reclaiming the areas of land and it will shoulder the
lease, and sale of all kinds of lands. The then president also transferred to other reclamation costs to be incurred.
PEA the foreshore and offshore lands of Manila Bay under the Manila-
Cavite Coastal The foreshore and submerged areas of Manila Bay are part of the lands of
Road and Reclamation Project. the public domain, waters and other natural resources and
consequently owned by the State. As such, foreshore and submerged
Thereafter, PEA was granted patent to the reclaimed areas of land areas shall not be alienable unless they are classified as agricultural
and then, years later, PEA entered into a JVA with AMARI for the lands of the public domain. The mere reclamation of these areas by the
development of the Freedom Islands. These two entered into a joint PEA doesn’t convert these inalienable natural resources of the State
venture in the absence of any public bidding. into alienable and disposable lands of the public domain. There must be
a law or presidential
Later, a privilege speech was given by Senator President proclamation officially classifying these reclaimed lands as alienable
Maceda denouncing the JVA as the grandmother of all scams. An and disposable if the law has reserved them for some public or
investigation was conducted and it was concluded that the lands that PEA quasi-public use.
was conveying to AMARI were lands of the public domain; the
certificates of title over the
Freedom Islands were void; and the JVA itself was illegal. This prompted
Ramos to form an investigatory committee on the legality of the JVA.

Petitioner now comes and contends that the government stands to DACANAY JR. V. ASISTIO JR.
lose billions by the conveyance or sale of the reclaimed areas to 208 SCRA 404
AMARI. He also asked for the full disclosure of the renegotiations
happening between the parties. FACTS:
An ordinance was issued designated certain city and municipal
ISSUE: streets, roads, and other public areas for sites of public markets. Pursuant
W/N stipulations in the amended JVA for the transfer to AMARI of to this, licenses were issued to market stall owners to put up their stalls in
the lands, reclaimed or to be reclaimed, violate the Constitution. certain streets. Thereafter, the OIC mayor of Caloocan has caused the
demolition of the stalls, which was upheld by the trial court, saying
that the public streets are part of the public dominion and is not open to all judicial acts, decisions, orders and resolutions performed promulgated
the commerce of man. Then there come about a change in administration and issued by then Judge Madella
of the city. The after 2 January 1976. A motion to set aside the decision of 18 December
next mayor did not continue the demolition of the stalls. Using the 1975 was filed. On 21 April 1976,
trial court’s decision, here now comes petitioner asking for the demolition Judge Delia P. Medina now presiding in the trial court, issued an order
of the stalls. declaring the Government’s motion for
reconsideration moot and academic in light of the aforementioned
HELD: resolution; and required the Merchans to
There is no doubt that the disputed areas from which the private file an answer to the motion to set aside the decision of December 1975.
respondent’s market stalls are sought to be evicted are public streets. A Thereafter, and on 23 July 23, the
public street is property for public use hence outside the commerce motion to vacate was granted. Motion for reconsideration was filed by the
of man. Being outside the commerce of man, it may not be the Merchans, but were denied. On 16
subject of lease or other contract. September 1976, the Merchans filed a manifestation assailing the
The right of the public to use the city streets may not be bargained away jurisdiction of the court to hear the case,
through contract. The interests of the few should not prevail over the which was denied.
good of the greater number in the community. Thereafter on 27 September 1976, the Merchans filed with the Court of
Appeals a petition for certiorari and
prohibition with preliminary injunction against Judge Medina. On 29
Republic v. IAC [G.R. No. 73085. June 4, 1990.] November 1977, the CA denied the
petition for certiorari and lifted the restraining order that it previously
Second Division, Paras (J): 4 concur issued.
Meanwhile, while the case above was pending before the CA and on 29
Facts: Claiming that they acquired the property by virtue of a document December 1976, 6 months after the
which they alleged to be a Spanish title originally issued in the name of effectivity of PD 892, the Merchans filed an application for the
Bernardo Merchan, the Merchans filed a complaint dated 7 August 1974 registration of the parcel of land involved in
against Republic of the Philippines for quieting of title over said property Civil Case 7840 (LRC N-1055). The trial court, this time presided by
located in Sitio de Malapianbato alias Arras, Barrio de Ayuti, Lucban, Judge Benigno M. Puno, issued an order
Quezon, containing an area of 166 hectares, more or less. The setting the case for pre-trial. For failure of Government’s counsel to attend
Government moved to dismiss the complaint on the ground that the trial the scheduled hearing, the trial
court had no jurisdiction over the subject matter of the case because the court issued an order declaring the said failure as a waiver to present
land is part of a forest reserve established by Proclamation 42 (14 evidence and to cross-examine the
October 1921), and by Proclamation 716 (26 May 1941) which declared Merchans’ witnesses and declared the case submitted for decision. On 3
the area as part of the “Mts. Banahaw-San Cristobal National Park.” The March 1980, the trial court rendered
motion was denied. The Merchans filed a motion to declare the its decision in favor of the Merchans. The Government appealed to the
Government in default for failure to file its answer within the then IAC, which affirmed the judgment of the trial court. Hence, the
reglementary period. The latter motion was petition.
granted. The Government filed for a motion for reconsideration. The Supreme Court reversed the decision of the appellate court, and
On 18 December 1975, Judge Manolo L. Madella rendered a decision dismissed Civil Case 7840 and
declaring the Merchans as owners of Registration Case N-1055.
Property, 2003 ( 170 )Haystacks (Berne Guerrero)
the land subject of the litigation. Meanwhile, the Supreme Court rendered
a resolution declaring null and void