Property Cases2bsubmitted

MARK KEVIN A.
VIDAR
Property
Second Year Wesleyan Law School
Mindanao Bus Company v. The City Assessor & Treasurer and the Board of Tax
Appeals of CDO City
FACTS: A petition for the review of the decision of the CTA with case n. 710 holding that
the petitioner is liable to the payment of the realty tax on its maintenance and repair
equipment hereunder referred to. The respondent City Assessor assessed at P4,400
petitioner's above-mentioned equipment.
Petitioner appealed the assessment to the respondent Board of Tax Appeals on the
ground that the same are not realty to impose taxes due. The board sustained the
objection. Hence, filing of petition for review of assessment with the CTA. The CTA ruled
in favor of the board, hence, this petition.
The petitioner appealed that the CTA erred for upholding the validity of the board's
assessment and that said tools, equipments or machineries are immovable taxable real
properties and Respondents contend that said equipments, tho movable, are
immobilized by destination, in accordance with paragraph 5 of Article 415 of the New
Civil Code.
ISSUE: Whether or not the above-mentioned equipments are considered movable but
immobilized by destination under paragraph 5 of Article 415 of the New Civil Code.
RULING: No, movable equipments to be immobilized in contemplation of the law must
first be essential and principal elements of an industry or works without which such
industry or works would be unable to function or carry on the industrial purpose for
which it was established. We may here distinguish, therefore, those movables which
become immobilized by destination because they are essential and principal elements
in the industry from those which may not be so considered immobilized because they
are merely incidental, not essential and principal.
MARK KEVIN A. VIDAR

Property
Makati Leasing and Finance Corp. vs. Wearever Textile Mills, Inc.
FACTS: Wearever Textile Mills, Inc. executed a chattel mortgage contract in favor of
Makati Leasing and Finance Corporation covering certain raw materials and machinery.
Upon default, Makati Leasing fi led a petition for judicial foreclosure of the properties
mortgaged. Acting on Makati Leasings application for replevin, the lower court issued a
writ of seizure. Pursuant thereto, the sheriff enforcing the seizure order seized the
machinery subject matter of the mortgage. In a petition for certiorari and prohibition, the
Court of Appeals ordered the return of the machinery on the ground that the same cannot be the subject of replevin because it is a real property pursuant to Article415 of the
new Civil Code, the same being attached to the ground by means of bolts and the only
way to remove it from Wearever textiles plant would be to drill out or destroy the
concrete fl oor. When the motion for reconsideration of Makati Leasing was denied by
the Court of Appeals, Makati Leasing elevated the matter to the Supreme Court.
ISSUE: Whether or not the property in suit is real or personal as to the point of view of
the parties considering the agreement they entered into.
RULING: The Supreme Court decided otherwise and held that said machineries and
equipments are not subject to the assessment of real estate tax. Said equipments are
not considered immobilized as they are merely incidental, not esential and principal to
the business of the petitioner. The transportation business could be carried on without
repair or service shops of its rolling equipment as they can be repaired or services in
another shop belonging to another.
MARK KEVIN A. VIDAR

Property
Ladera v. Hodges
G.R. No. 8027-R
FACTS: Ladera entered into a contract with Hodges. The latter promised to sell a lot
with an area of 278 square meters to Lad`era, subject to certain terms and conditions.
The agreement called for a down payment of P 800.00 and monthly installments of P
5.00 each with interest of 1% per month, until P 2,085 is paid in full. In case of failure of
the purchaser to make any monthly payment within 60 days after it fell due, the contract
may be considered as rescinded.
Ladera built a house on the lot. Later on, she defaulted in the payment of the agreed
monthly installment. Hodges filed an action for the ejectment of Ladera.
The court issued an alias writ of execution and pursuant thereto, the city sheriff levied
upon all rights, interests, and participation over the house of Ladera. At the auction sale,
Laderas house was sold to Avelino A. Magno. Manuel P. Villa, later on, purchased the
house from Magno.
Ladera filed an action against Hodges and the judgment sale purchasers. Judgment
was rendered in favor of Ladera, setting aside the sale for non-compliance with Rule 39,
Rules of Court regarding judicial sales of real property. On appeal, Hodges contends
that the house, being built on a lot owned by another, should be regarded as movable or
personal property.
ISSUE: Whether or not Laderas house is an immovable property.
HELD: Yes. The old Civil Code numerates among the things declared by it as
immovable property the following: lands, buildings, roads and constructions of all kind
adhered to the soil. The law does not make any distinction whether or not the owner of
the lot is the one who built. Also, since the principles of accession regard buildings and
constructions as mere accessories to the land on which it is built, it is logical that said
accessories should partake the nature of the principal thing.
MARK KEVIN A. VIDAR

Property
Santos Evangelista v. Alto Surety and Insurance Co., Inc.

G.R. No. L-11139, April 23, 1958, 103 Phil. 401
Concepcion, J.
FACTS: On June 4, 1949, Santos Evangelista instituted a civil case for a sum of money.
On the same date, he obtained a writ of attachment, which was levied upon a house,
built by Rivera on a land situated in Manila and leased to him. In due course, judgment
was rendered in favor of Evangelista, who bought the house at public auction held in
compliance with the writ of execution issued in said case. When Evangelista sought to
take possession of the house, Rivera refused to surrender it, upon the ground that he
had leased the property from the Alto Surety & Insurance Co., Inc. and that the latter is
now the true owner of said property. It appears that on May 10, 1952, a definite deed of
sale of the same house had been issued to Alto Surety, as the highest bidder at an
auction sale held. Hence, Evangelista instituted an action against Alto Surety and
Ricardo Rivera, for the purpose of establishing his title over said house, and securing
possession thereof, apart from recovering damages. After due trial, the CFI Manila
rendered judgment for Evangelista, sentencing Rivera and Alto Surety to deliver the
house in question to Evangelista and to pay him, jointly and severally, P40.00 a month
from October, 1952, until said delivery, plus costs.
ISSUE: Whether or not a house constructed by the lessee of the land on which it is
built, should be dealt with, for purposes of attachment, as immovable property or as
personal property.
HELD: The house is not personal property, much less a debt, credit or other personal
property not capable of manual delivery, but immovable property. As explicitly held, in
Ladera vs. Hodges (48 OG 5374), "a true building (not merely superimposed on the soil)
is immovable or real property, whether it is erected by the owner of the land or by a
usufructuary or lessee. The opinion that the house of Rivera should have been attached
in accordance with subsection (c) of said section 7, as "personal property capable of
manual delivery, by taking and safely keeping in his custody", for it declared that
"Evangelista could not have validly purchased Ricardo Rivera's house from the sheriff
as the latter was not in possession thereof at the time he sold it at a public auction is
untenable.
MARK KEVIN A. VIDAR

Property
Tsai v. Court of Appeals

G.R. No. 120098, October 2, 2001, 366 SCRA 324
Quisumbing, J.
FACTS: On November 26, 1975, respondent Ever Textile Mills, Inc. (EVERTEX)
obtained a three million peso (P3,000,000.00) loan from petitioner Philippine Bank of
Communications (PBCom). As security for the loan, EVERTEX executed in favor of
PBCom, a deed of Real and Chattel Mortgage over the lot where its factory stands, and
the chattels located therein. On April 23, 1979, PBCom granted a second loan to
EVERTEX. The loan was secured by a chattel mortgage over personal properties
enumerated in a list attached thereto. After April 23, 1979, the date of the execution of
the second mortgage mentioned above, EVERTEX purchased various machines and
equipments.
Upon EVERTEX's failure to meet its obligation to PBCom, the latter commenced
extrajudicial foreclosure proceedings against EVERTEX. On December 15, 1982, the
first public auction was held where petitioner PBCom emerged as the highest bidder
and a Certificate of Sale was issued in its favor on the same date. On March 7, 1984,
PBCom consolidated its ownership over the lot and all the properties in it. In November
1986, it leased the entire factory premises to petitioner Ruby L. Tsai. On May 3, 1988,
PBCom sold the factory, lock, stock, and barrel to Tsai, including the contested
machineries.
On March 16, 1989, EVERTEX filed a complaint for annulment of sale, reconveyance,
and damages with the Regional Trial Court against PBCom. EVERTEX claimed that no
rights having been transmitted to PBCom over the assets of insolvent EVERTEX,
therefore Tsai acquired no rights over such assets sold to her, and should reconvey the
assets.
ISSUE: Whether or not the inclusion of the questioned properties in the foreclosed
properties is proper.
HELD: Yes. While it is true that the questioned properties appear to be immobile, a
perusal of the contract of Real and Chattel Mortgage executed by the parties gives a
contrary indication. In the case at bar, the true intention of PBCOM and the owner,
EVERTEX, is to treat machinery and equipment as chattels. Assuming that the
properties in question are immovable by nature, nothing detracts the parties from
treating it as chattels to secure an obligation under the principle of estoppel. It has been
held that an immovable may be considered a personal property if there is a stipulation
as when it is used as security in the payment of an obligation where a chattel mortgage
is executed over it, as in the case at bar.
MARK KEVIN A. VIDAR

Property
Sergs Products, Inc. v. PCI Leasing and Finance, Inc.

G.R. No. 137705, August 22, 2000, 338 SCRA 499
Panganiban, J.
FACTS: Respondent PCI Leasing and Finance Inc. filed with the RTC of Quezon City a
complaint for sum of money, with an application for a writ of replevin. A writ of replevin
was issued, directing the sheriff to seize and deliver the machineries and equipment to
PCI Leasing after five days and upon payment of the necessary expenses. The sheriff
proceeded to petitioner's factory and seized one machinery. Petitioner filed a motion for
special protective order invoking the power of the court to control the conduct of its
officers and amend and control its processes, praying for a directive for the sheriff to
defer enforcement of the writ of replevin. The motion was opposed by PCI on the
ground that the properties were personal and therefore still subject to seizure and writ of
replevin. In their reply, petitioners asserted that the properties were immovable as
defined in Article 415 of the Civil Code, the parties' agreement to the contrary
notwithstanding. Petitioners went to the Court of Appeals via an original action for
certiorari. The Court of Appeals ruled that the subject machines were personal property
as provided by the agreement of the parties.
ISSUE: Whether or not the subject machines were personal, not real, property, which
may be a proper subject of a writ of replevin.
HELD: The contracting parties may validly stipulate that a real property be considered
as personal. After agreeing to such stipulation, they are consequently estopped from
claiming otherwise. Under the principle of estoppel, a party to a contract is ordinarily
precluded from denying the truth of any material fact found therein. In the present case,
the lease agreement clearly provides that the machines in question are to be
considered as personal properties. Clearly then, petitioners were estopped from
denying the characterization of the subject machines as personal property. Under the
circumstances, they are proper subject of the writ of seizure. Accordingly, the petition
was denied and the assailed decision of the Court of Appeals was affirmed.
MARK KEVIN A. VIDAR

Property
Burgos v. Chief of Staff, AFP

G.R. No. 64261, December 26, 1984, 133 SCRA 800
Escolin, J.
FACTS: On December 7, 1982, two search warrants where issued and the premises
at 19, Road 3, Project 6, Quezon City, and 784 Units C & D, RMS Building, Quezon
Avenue, Quezon City, business addresses of the "Metropolitan Mail" and "We Forum"
newspapers were searched. Office and printing machines, equipment, paraphernalia,
motor vehicles and other articles used in the printing, publication and distribution of the
said newspapers, as well as numerous papers, documents, books and other written
literature alleged to be in the possession and control of Jose Burgos, Jr. publisher-editor
of the "We Forum" newspaper, were seized.
ISSUE: Whether or not real properties were seized under the disputed warrants.
HELD: No. Under Article 415 (5) of the Civil Code, "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" are considered immovable property. In Davao
Sawmill Co. v. Castillo, it was said that machinery which is movable by nature becomes
immobilized when placed by the owner of the tenement, property or plant, but not so
when placed by a tenant, usufructuary, or any other person having only a temporary
right, unless such person acted as the agent of the owner. In the present case,
petitioners do not claim to be the owners of the land and/or building on which the
machineries were placed. The machineries, while in fact bolted to the ground, remain
movable property susceptible to seizure under a search warrant.
MARK KEVIN A. VIDAR

Property
Lopez v. Orosa, Jr., and Plaza Theatre, Inc.

G.R. No. L-10817-18 | 103 Phil. 98
FACTS: Lopez was engaged in business under the name Lopez-Castelo Sawmill.
Orosa approached Lopez and invited the latter to make an investment in the theatre
business he was forming, the Plaza Theatre. Lopez expressed his unwillingness to
invest. Nonetheless, Lopez agreed to supply the lumber for the construction of the
theatre. Lopez further agreed that that the payment therefore would be on demand and
not cash on delivery basis. Lopex delivered the lumber which was used for the
construction of the Plaza Theatre. However, of the total cost of materials amounting to
P62, 255.85, Lopez was paid only P 20, 848.50, thus leaving a balance of P 41, 771.35.
Due to Lopez demands, Orosa issued a deed of assignment over his shares of stock of
the Plaza Theatre, Inc. As there was still an unpaid balance, Lopez filed a case against
Orosa and Plaza Theatre. He asked that Orosa and Plaza theatre be held liable
solidarily for the unpaid balance, and in case defendants failed to pay, the land and
building should be sold in public auction with the proceeds to be applied to the balance,
or that the shares of stock be sold in public auction.
ISSUE: Whether or not the lien for the value of the materials used in the construction of
the building attaches to said structure alone and does not extend to the land on which
the building is adhered to.
HELD: No. While it is true that generally, real estate connotes the land and the building
constructed thereon, it is obvious that the inclusion of the building, separate and distinct
from the land, in the enumeration of what may constitute real properties could only
mean one thingthat a building is by itself an immovable property. In view of the
absence of any specific provision to the contrary, a building is an immovable property
irrespective of whether or not said structure and the land on which it is adhered to
belong to the same owner. The lien so created attaches merely to the immovable
property for the construction or repair of which the obligation was incurred. Therefore,
the lien in favor of appellant for the unpaid value of the lumber used in the construction
of the building attaches only to said structure and to no other property of the obligors.
MARK KEVIN A. VIDAR

Property
Yap v. Taada
G.R. No. L-32917,163 SCRA 464
FACTS: Goulds Pumps International (Phil.), Inc. filed a complaint against Yap and his
wife seeking recovery of P1,459.30 representing the balance of the price and
installation cost of a water pump in the latter's premises. Goulds presented evidence ex
parte and judgment by default was rendered by Judge Taada requiring Yap to pay to
Goulds the unpaid balance of the pump purchased by him and interest of 12% per
annum.
Thereafter, the water pump in question was levied by the sheriff and by notice dated
November 4, 1969, scheduled the execution sale thereof. But in view of the pendency of
Yap's motion for reconsideration, suspension of the sale was directed. It appears
however that a copy of the order suspending the sale was not transmitted to the sheriff
Hence, the Deputy Provincial Sheriff went ahead with the scheduled auction sale and
sold the property levied on to Goulds as the highest bidder.
Yap argues that "the sale was made without the notice required by Sec. 18, Rule 39, of
the New Rules of Court," i.e., notice by publication in case of execution sale of real
property, the pump and its accessories being immovable because attached to the
ground with character of permanency (Art. 415, Civil Code).
ISSUE: Whether or not the water pump in question is an immovable property.
HELD: No. Yap's argument is untenable. The Civil Code considers as immovable
property, among others, anything "attached to an immovable in a fixed manner, in such
a way that it cannot be separated therefrom without breaking the material or
deterioration of the object." The pump does not fit this description. It could be, and was
in fact separated from Yap's premises without being broken or suffering deterioration.
Obviously, the separation or removal of the pump involved nothing more complicated
than the loosening of bolts or dismantling of other fasteners.
MARK KEVIN A. VIDAR

Property
Machinery and Engineering Supplies, Inc. v. Court of Appeals

G.R. No. L-7057, 96 Phil. 70
Concepcion, J.
FACTS: Petitioner Machinery and Engineering Supplies filed a complaint for replevin for
the recovery of the machinery and equipment sold and delivered to Ipo Limestone Co.
An order was issued to seize and take immediate possession of the properties specified
in the order. Upon carrying out the courts order, Roco, the companys President, along
with a crew of technical men and labourers, proceeded to the factory. The manager of
Ipo Limestone Co. and Torres protested against the seizure of the properties on the
ground that they are not personal properties. However, since the sheriff contended that
his duty is purely ministerial, they all went to the factory and dismantled the equipment
despite the fact that the equipment could not be dismantled without causing damage or
injuries to the wooden frames attached to them. Consequently, they had to cut some of
the supports of the equipment which rendered its use impracticable.
ISSUE: Whether or not the machinery and equipment in question could be the subject
of replevin.
HELD: No. Replevin is applicable only to personal property. The machinery and
equipment in question appeared to be attached to the land, particularly to the concrete
foundation of said premises, in a fixed manner, in such a way that the former could not
be separated from the latter without breaking the material or deterioration of the object.
Hence, in order to remove the said outfit, it became necessary not only to unbolt the
same, but also to cut some of its wooden supports. Moreover, said machinery and
equipment were intended by the owner of the tenement for an industry carried on said
immovable. For these reasons, they were already immovable pursuant to paragraphs 3
and 5 of Article 415 of the Civil Code.
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MARK KEVIN A. VIDAR

Property
FELS Energy, Inc. v. The Province of Batangas

G.R. No. 168557, February 16, 2007
FACTS: On January 18, 1993, NPC entered into a lease contract with Polar Energy,
Inc. over diesel engine power barges moored at Balayan Bay in Calaca, Batangas. The
contract staes that NPC shall be responsible for the payment of all taxes other levies
imposed government to which POLAR may be or become subject to in respect of the
Power Barges. Subsequently, Polar Energy, Inc. assigned its rights under the
agreement to FELS Energy Inc.
On August 7, 1995, FELS received an assessment of real property taxes on the power
barges from Provincial Assessor of Batangas City. The assessed tax amounted to
P56,184,088.40 per annum. FELS referred the matter to NPC, reminding it of its
obligation under the agreement to pay all real estate taxes. NPC sought reconsideration
of the Provincial Assessors decision to assess real property taxes on the power barges,
alleging that barges are non-taxable items. In its answer, the Provincial Assessor
averred that the barges were real property for purposes of taxation under Section 199(c)
of Republic Act (R.A.) No. 7160.
ISSUE: Whether power barges, which are floating and movable, are personal properties
and therefore, not subject to real property tax.
HELD: NO. The power barges are real property and are thus subject to real property
tax. Tax assessments by tax examiners are presumed correct and made in good faith,
with the taxpayer having the burden of proving otherwise. Besides, factual findings of
administrative bodies, which have acquired expertise in their field, are generally binding
and conclusive upon the Court.
11
MARK KEVIN A. VIDAR

Property
Laurel v. Garcia
G.R. No. 92013, July 25, 1990, 187 SCRA 797
Gutierrez, J.
FACTS: In view of the Reparations Agreement between the Philippines and Japan, four
properties located in Japan were given to the Philippines. One of these properties is the
Roppongi property. The said property was formerly the location of the Chancery of the
Philippine Embassy until it was transferred to Nampeidai on July 22, 1976. The
Roppongi property has remained abandoned from the time of the transfer due to lack of
funds to develop the said property. Consequently, Administrative orders were issued by
the President authorizing the study of the condition of the properties of the Philippines in
Japan. Subsequently, Executive Order 296 was issued by President Aquino allowing
non-Filipinos to buy or lease some of the properties of the Philippines located in Japan,
including Roppongi.
Petitioners now contend that the Roppongi property cannot be alienated as it is
classified as public dominion and not of private ownership because it is a property
intended for public service under paragraph 2, article 420 of the Civil Code. On the
other hand, respondents aver that it has already become part of the patrimonial property
of the State which can be alienated because it has not been used for public service for
over 13 years. They further contend that EO 296 converted the subject property to
patrimonial property.
ISSUE: Whether or not the Roppongi property still forms part of the public dominion
hence cannot be disposed nor alienated.
HELD: Yes. The respondents failed to convincingly show that the property has already
become patrimonial. The fact that the Roppongi site has not been used for a long time
for actual Embassy service does not automatically convert it to patrimonial property.
Under Art. 422 of the Civil Code, there must be a definite and a formal declaration on
the part of the government to withdraw it from being public. Abandonment must be a
certain and a positive act based on correct legal premises. The mere transfer of the
embassy to Nampeidai is not a relinquishment of the propertys original purpose.
The Administrative orders authorizing the study of the conditions of government
properties in Japan were merely directives for investigation but did not in any way
signify a clear intention to dispose of the properties. Likewise, EO 296 did not declare
that the properties lost their public character; it merely made them available to
foreigners in case of sale, lease or other disposition. Thus, since there is no law
authorizing its conveyance, the Roppongi property still remains part of the inalienable
properties of the State.
12
MARK KEVIN A. VIDAR

Property
Rabuco v. Villegas
G.R. No. L-24916, 55 SCRA 658
FACTS: The issue in this case involves the constitutionality of Republic Act No. 3120
whereby the Congress converted the lots in question together with another lot in San
Andres, Malate that are reserved as communal property into disposable or alienable
lands of the State. Such lands are to be placed under the administration and disposal of
the Land Tenure Administration for subdivision into small lots not exceeding 120 square
meters per lot for sale on instalment basis to the tenants or bona fide occupants thereof
and expressly prohibited ejectment and demolition of petitioners' homes under Section 2
of the Act. Respondent contends that the Act is invalid and unconstitutional for it
constitutes deprivation of property without due process of law and without just
compensation.
ISSUE: Whether or not Republic Act No. 3120 is constitutional.
HELD: Yes. The lots in question are manifestly owned by the city in its public and
governmental capacity and are therefore public property over which Congress had
absolute control as distinguished from patrimonial property owned by it in its private or
proprietary capacity of which it could not be deprived without due process and without
just compensation. It is established doctrine that the act of classifying State property
calls for the exercise of wide discretionary legislative power, which will not be interfered
with by the courts. The Acts in question were intended to implement the social justice
policy of the Constitution and the government program of land for the landless and that
they were not intended to expropriate the property involved but merely to confirm its
character as communal land of the State and to make it available for disposition by the
National Government. The subdivision of the land and conveyance of the resulting
subdivision lots to the occupants by Congressional authorization does not operate as an
exercise of the power of eminent domain without just compensation in violation of
Section 1, subsection (2), Article III of the Constitution, but simply as a manifestation of
its right and power to deal with state property.
13
MARK KEVIN A. VIDAR

Property
Macasiano v. Diokno
G.R. No. 97764, August 10, 1992, 212 SCRA 464
Medialdea, J.
FACTS: The Municipality of Paranque passed an ordinance that authorized the closure
of J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena Streets located at
Baclaran, Paranaque Metro Manila and the establishment of a flea market thereon.
Thereafter, the municipal council of Paranaque issued a resolution authorizing
Paranaque Mayor Walfrido N. Ferrer to enter into a contract with any service
cooperative for the establishment, operation, maintenance and management of flea
markets and/or vending areas. By virtue of this, respondent municipality and respondent
Palanyag, a service cooperative, entered into an agreement whereby the latter shall
operate, maintain and manage the flea market in the aforementioned streets with the
obligation to remit dues to the treasury of the municipal government of Paranaque.
Consequently, market stalls were put up by Palanyag on the said streets.
Petitioner Macasiano, PNP Superintendent of the Metropolitan Traffic Command, then
ordered the destruction and confiscation of the stalls along the abovementioned streets.
Hence, respondents filed with the trial court a joint petition for prohibition and
mandamus with damages and prayer for preliminary injunction, to which the petitioner
filed his opposition to the issuance of the writ of preliminary injunction. The trial court
upheld the validity of the ordinance in question.
ISSUE: Whether or not an ordinance or resolution which authorizes the lease and use
of public streets or thoroughfares as sites for flea markets is valid.
HELD: No. The aforementioned streets are local roads used for public service and are
therefore considered public properties of respondent municipality. Article 424 of the Civil
Code provides that properties of public dominion devoted for public use and made
available to the public in general are outside the commerce of man and cannot be
disposed of or leased by the local government unit to private persons. Properties of the
local government which are devoted to public service are deemed public and are under
the absolute control of Congress. Hence, LGUs have no authority whatsoever to control
or regulate the use of public properties unless specific authority is vested upon them by
Congress.
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MARK KEVIN A. VIDAR

Property
Republic of the Philippines v. Court of Appeals

G.R. No. 100709, November 14, 1997, 281 SCRA 639
Panganiban, J.
FACTS: Morato filed for a patent on a parcel of land located in Calauag, Quezon, which
was approved, provided that the land shall not be encumbered or alienated within a
period of five years from the date of the issuance of the patent. Later on, the land was
established to be a portion of Calauag Bay, which was five to six feet deep during high
tides and three feet deep on low tides. The water level rose because of the ebb and flow
of tides from the bay and the storms that frequently passed through the area.
Furthermore, it was observed by the Director of Lands from his investigation, that the
land of Morato was leased to Advincula for P100 per month and it was also mortgaged
to Co for P10,000. The Director of Lands filed a suit with the contention that Morato
violated the 5-year prohibitory period and thus the patent should be cancelled and the
land should revert back to the State.
ISSUE: Whether or not there is a violation of the prohibition of the patent, and thus, the
subject land should revert back to the ownership of the State.
HELD: Yes. The lease was an encumbrance included in the prohibitions of the patent
because it impairs the use of the land by Morato herself. As for the mortgage, it is a
legal limit on the title and if there will be foreclosure because Morato was not able to pay
her debts, the property will be auctioned. It is also a limitation on Morato's right to enjoy
and possess the land for herself. Encumbrance, as defined, is an impairment on the use
or transfer of property, or a claim or lien on the property where there is a burden on the
title. Thus, Morato clearly violated the terms of the patent on these points. Moreover, the
property became a foreshore land because it turned into a portion of land which was
covered most of the time with water, whether it was low or high tide. Foreshore is
defined as land between high and low waters which is dry depending on the reflux or
ebb of the tides. In accordance with this land reclassification, the land can no longer be
subject to a pending patent application and must be returned to the State.
15
MARK KEVIN A. VIDAR

Property
Province of Zamboanga del Norte v. City of Zamboanga

G.R. No. L-24440, March 28, 1968, 22 SCRA 1334
Bengzon, J.P., J.
FACTS: On June 6, 1952, Republic Act 711 was approved dividing the province of
Zamboanga into two (2): Zamboanga del Norte and Zamboanga del Sur. Republic Act
3039 was approved providing that all buildings, properties and assets belonging to the
former province of Zamboanga and located within the City of Zamboanga are hereby
transferred, free of charge, in favor of the said City of Zamboanga.
Plaintiff-appellee Zamboanga del Norte filed a complaint in the Court of First Instance of
Zamboanga del Norte against defendants-appellants Zamboanga City, the Secretary of
Finance and the Commissioner of Internal Revenue. It was prayed that Republic Act
3039 be declared unconstitutional for depriving plaintiff province of property without due
process and just compensation. Included in the properties were the capital site and
capitol building, certain school sites, hospital and leprosarium sites, and high school
playground.
ISSUE: Whether or not the properties mentioned are properties for public use or
patrimonial.
HELD: The subject properties are properties for public use. The validity of the law
ultimately depends on the nature of the lots and buildings in question. The principle
itself is simple: If the property is owned by the municipality (meaning municipal
corporation) in its public and governmental capacity, the property is public and
Congress has absolute control over it. But if the property is owned in its private or
proprietary capacity, then it is patrimonial and Congress has no absolute control. The
municipality cannot be deprived of it without due process and payment of just
compensation.
Applying the norm obtaining under the principles constituting the law of Municipal
Corporations, all those of the 50 properties in question which are devoted to public
service are deemed public; the rest remain patrimonial. Under this norm, to be
considered public, it is enough that the property be held and, devoted for governmental
purposes like local administration, public education, public health, etc.
Regarding the several buildings existing on the lots above-mentioned, the records do
not disclose whether they were constructed at the expense of the former Province of
Zamboanga. Considering however the fact that said buildings must have been erected
even before 1936 when Commonwealth Act 39 was enacted and the further fact that
provinces then had no power to authorize construction of buildings such as those in the
case at bar at their own expense, it can be assumed that said buildings were erected by
the National Government, using national funds. Hence, Congress could very well
dispose of said buildings in the same manner that it did with the lots in question.
16
MARK KEVIN A. VIDAR

Property
Chavez v. Public Estates Authority

G.R. No. 133250, July 9, 2002
Carpio, J.
FACTS: In 1973, the Government through the Commissioner of Public Highways and
the Construction and Development Corporation of the Philippines (CDCP) signed a
contract to reclaim certain foreshore and offshore areas of Manila Bay. PD 1084 was
issued, creating Public Estates Authority (PEA), and PD 1085, transferring the
reclaimed lands under the MCCRRP to PEA.
In 1995, PEA entered into a Joint Venture Agreement (JVA) with AMARI, a private
corporation to develop the Freedom Islands, and the JVA was approved by President
Ramos. However, PEA and AMARI entered into the JVA through negotiation without
public bidding. A Legal Task Force was created to look into the issue. The said task
force upheld the legality of the JVA.
In 1998, Frank I. Chavez, as a taxpayer, filed a petition to compel PEA to disclose all
facts on its negotiations with AMARI, invoking the constitutional right of the people to
information on matters of public concern. He assails the sale to AMARI of lands of the
public domain as a blatant violation of the constitutional prohibiting in the sale of
alienable lands of the public domain to private corporations.
Despite the ongoing court petitions, PEA and AMARI signed an Amended Joint Venture
Agreement (Amended JVA) in 1999, and such was approved by President Estrada. The
Amended JVA seeks to convey to AMARI the ownership of 77.34 hectares of the
Freedom Islands.
ISSUE: Whether AMARI has the capacity to acquire the lands held by PEA.
HELD: No. Under the 1987 Constitution, private corporations such as AMARI cannot
acquire alienable land of the public domain. Reclaimed lands comprising the Freedom
Islands, which are covered by certificates of title in the name of PEA, are alienable
lands of the public domain. PEA may lease these lands to private corporations but may
not sell or transfer ownership of these lands to private corporations. PEA may only sell
these lands to Philippine citizens, subject to the ownership limitations in the 1987
Constitution and existing laws. Thus, the Amended Joint Venture Agreement between
AMARI and PEA was null and void.
17
MARK KEVIN A. VIDAR

Property
Chavez v. National Housing Authority

G.R. No. 164527, August 15, 2007
Velasco, Jr., J.
FACTS: President Corazon Aquino issued Memorandum Order No. 161 approving and
directing the implementation of the Comprehensive and Integrated Metropolitan Manila
Waste Management Plan. Respondent National Housing Authority was ordered to
conduct feasibility studies and develop lowcost housing projects at the dumpsite and
absorb scavengers in NHA resettlement/lowcost housing projects, particularly in the
Smokey Mountain. It produced the Smokey Mountain Development Plan and
Reclamation of the Area Across R-10 or the Smoke Mountain Development and
Reclamation Project. The Project aimed to covert Smokey mountain dumpsite into a
habitable housing project, inclusive of the reclamation of the area. President Aquino
approved the said Project through MO 415. After President Aquinos term, President
Fidel Ramos, through Proclamation No. 39, authorized the NHA to enter into a Joint
Venture Agreement with R-II Builders, Inc. (RBI) for the implementation of the project.
Afterwards, President Ramos issued Proclamation No. 465 increasing the proposed
area for reclamation across R-10 from 40 hectares to 79 hectares. The petitioner
Francisco Chavez contended that the respondent NHA or respondent RBI has no
authority to reclaim foreshore and submerged land.
ISSUE: Whether or not respondent NHA has the authority to reclaim foreshore and
submerged land.
HELD: Yes. The National Housing Authority (NHA) is a government agency not tasked
to dispose of public lands under its charter it is an end-user agency authorized by
law to administer and dispose of reclaimed lands. The moment titles over reclaimed
lands based on the special patents are transferred to the National Housing Authority
(NHA) by the Register of Deeds, they are automatically converted to patrimonial
properties of the State which can be sold to Filipino citizens and private corporations,
60% of which are owned by Filipinos. The combined and collective effect of
Proclamations Nos. 39 and 465 with Special Patents Nos. 3592 and 3598 is tantamount
to and can be considered to be an official declaration that the reclaimed lots are
alienable or disposable lands of the public domain. Even if it is conceded that there was
no explicit declaration that the lands are no longer needed for public use or public
service, there was however an implicit executive declaration that the reclaimed areas
are not necessary anymore for public use or public service when President Aquino
through MO 415 conveyed the same to the National Housing Authority (NHA) partly for
housing project and related commercial/industrial development intended for disposition
to and enjoyment of certain beneficiaries and not the public in general and partly as
enabling component to finance the project.
18
MARK KEVIN A. VIDAR

Property
Manila International Airport Authority v. Court of Appeals

G.R. No. 155650, July 20, 2006
Carpio, J.
FACTS: MIAA received Final Notices of Real Estate Tax Delinquency from the City of
Paraaque for the taxable years 1992 to 2001. MIAAs real estate tax delinquency was
estimated at P624 million. Thus, the City of Paraaque, through its City Treasurer,
issued notices of levy and warrants of levy on the Airport Lands and Buildings. The
Mayor of the City of Paraaque threatened to sell at public auction the Airport Lands
and Buildings should MIAA fail to pay the real estate tax delinquency. City of Paraaque
contends that Section 193 of the Local Government Code expressly withdrew the tax
exemption privileges of government-owned and-controlled corporations upon the
effectivity of the Local Government Code. However, MIAA avers that airport lands and
buildings are owned by the State, and thus, exempt from tax.
ISSUE: Whether or not airport lands and buildings of MIAA are exempt from real estate
tax.
HELD: Yes. MIAA is a government instrumentality vested with corporate powers to
perform efficiently its governmental functions. MIAA is like any other government
instrumentality, the only difference is that MIAA is vested with corporate powers. Unless
the government instrumentality is organized as a stock or non-stock corporation, it
remains a government instrumentality exercising not only governmental but also
corporate powers. Thus, MIAA exercises the governmental powers of eminent domain,
police authority and the levying of fees and charges. The airport lands and buildings of
MIAA are property of public dominion and therefore owned by the State or the Republic
of the Philippines. Hence, the subject properties are not subject to tax.
19
MARK KEVIN A. VIDAR

Property
Javier v. Veridiano II
G.R. No. L-48050, October 10, 1994, 237 SCRA 565
Bellosillo, J.
FACTS: Javier filed a Miscellaneous Sales Application for lot 1641. She later instituted a
complaint for forcible entry against Babol, alleging that she was forcibly dispossessed of
a portion of said land. The case for forcibly entry was however dismissed as it was
found by the court that the occupied portion was outside Lot 1641. The same was
dismissed on appeal. Javier was eventually granted a Miscellaneous Sales Patent and
issued an OCT for lot 1641. Babol, however had sold the property he was occupying,
including a portion of 200 square meters to Rosete. Javier demanded the surrender of
the same area from Rosete who repeatedly refused to comply. After 4 years, Javier
instituted a complaint for quieting of title and recovery of possession with damages
against Babol and Rosete. Rosete moved to dismiss the complaint on the ground of res
judicata. The CFI sustained the argument of Rosete and granted his motion to dismiss.
Javier contends that res judicata cannot apply in the instant case since there is no
identity of parties and causes of action between her complaint for forcible entry, which
had long become final and executory, and her subsequent petition for quieting of title.
Javier maintains that there is no identity of causes of action since the first case was for
forcible entry, which is merely concerned with the possession of the property, whereas
the subsequent case was for quieting of title, which looks into the ownership of the
disputed land.
ISSUE: Whether or not there are really different causes of action between the forcible
entry case and the later quieting of title case.
HELD: Yes. For res judicata to bar the institution of a subsequent action the following
requisites must concur: (1) There must be a final judgment or order; (2) The court
rendering the judgment must have jurisdiction over the subject matter; (3) The former
judgment is a judgment on the merits; and, (4) There is between the first and second
actions identity of (4a) parties, (4b) of subject matter and (4c) of causes of action.
Javier's argument that there is no identity of parties between the two actions is without
merit. We have repeatedly ruled that for res judicata to apply, what is required is not
absolute but only substantial identity of parties. But, there is merit in Javier's argument
that there is no identity of causes of action.
"The only issue in an action for forcible entry is the physical or material possession of
real property, that is, possession de facto and not possession de jure. The philosophy
underlying this remedy is that irrespective of the actual condition of the title to the
property, the party in peaceable quiet possession shall not be turned out by strong
hand, violence or terror." A judgment rendered in a case for recovery of possession is
conclusive only on the question of possession and not on the ownership. It does not in
any way bind the title or affects the ownership of the land or building.
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Property
On the other hand, Civil Case No. 2203-0 is in reality an action to recover a parcel of
land or an accion reivindicatoria under Art. 434 of the Civil Code, and should be
distinguished from Civil Case No. 926, which is an accion interdictal. Accion interdictal,
which is the summary action for forcible entry (detentacion) where the defendant's
possession of the property is illegal ab initio, or the summary action for unlawful
detainer (desahuico) where the defendant's possession was originally lawful but ceased
to be so by the expiration of his right to possess, both of which must be brought within
one year from the date of actual entry on the land, in case of forcible entry, and from the
date of last demand, in case of unlawful detainer, in the proper municipal trial court or
metropolitan trial court; accion publiciana which is a plenary action for recovery of the
right to possess and which should be brought in the proper regional trial court when the
dispossession has lasted for more than one year; and, accion reivindicatoria or accion
de reivindicacion which seeks the recovery of ownership and includes the jus utendi and
the jus fruendi brought in the proper regional trial court.
Accion reivindicatoria or accion de reivindicacion is thus an action whereby plaintiff
alleges ownership over a parcel of land and seeks recovery of its full possession. It is
different from accion interdictal or accion publiciana where plaintiff merely alleges proof
of a better right to possess without claim of title.
In Civil Case No. 926 Javier merely claimed a better right or prior possession over the
disputed area without asserting title thereto. It should be distinguished from Civil Case
No. 2203-0 where she expressly alleged ownership.
21
MARK KEVIN A. VIDAR

Property
Bustos v. Court of Appeals

G.R. No. 120784-85, 350 SCRA 155
FACTS: Paulino Fajardo died intestate on April 2, 1957. He had four (4) children,
namely: Manuela, Trinidad, Beatriz and Marcial, all surnamed Fajardo. On September
30, 1964, the heirs executed an extra-judicial partition of the estate of Paulino Fajardo.
On the same date, Manuela sold her share to Moses G. Mendoza, husband of Beatriz
by deed of absolute sale. At the time of the sale, there was no cadastral survey in
Masantol, Pampanga. Later, the cadastre was conducted and the property involved in
the partition case was specified as Lots 280, 283, 284, 1000-A and 1000-B. The share
of Manuela, which was sold to Moses, includes Lot 284 of the Masantol Cadastre and
Lot 284 was subdivided into Lots 284-A and 284-B. Trinidad was in physical possession
of the land. She refused to surrender the land to her brother-in-law Moses G. Mendoza,
despite several demands.
On September 3, 1971, Moses filed with the Court of First Instance, Pampanga a
complaint for partition claiming the one fourth (1/4) share of Manuela which was sold to
him. During the pendency of the case for partition, Trinidad Fajardo died. On December
15, 1984, the heirs executed an extra-judicial partition of the estate of Trinidad Fajardo.
On February 16, 1987, Lucio Fajardo Ignacio, son of Trinidad sold Lot 284-B to spouses
Venancio Viray and Cecilia Nunga-Viray.
On February 8, 1989, the Regional Trial Court, Pampanga, Macabebe, Branch 55
rendered a decision in favor of Moses G. Mendoza.In the meantime, on November 6,
1989, spouses Venancio Viray and Cecilia Nunga-Viray, buyers of Lucio Ignacio's share
of the property, filed with the Municipal Circuit Trial Court, Macabebe-Masantol,
Pampanga an action for unlawful detainer against spouses Bustos, the buyers of Moses
G. Mendoza, who were in actual possession as lessees of the husband of Trinidad,
Francisco Ignacio, of the subject land. The municipal circuit trial court decided the case
in favor of spouses Viray. Subsequently, the trial court issued writs of execution and
demolition, but stayed when spouses Bustos filed with the regional Trial Court,
Pampanga, Macabebe, Branch 55, a petition for certiorari, prohibition and injunction. On
December 18, 1992, the regional trial court rendered a decision dismissing the case. On
September 9, 1994, petitioners filed a motion for reconsideration; however, on June 21,
1995, the Court of Appeals denied the motion.
ISSUE: Whether or not petitioners could be ejected from what is now their own land.
HELD: In this case, the issue of possession is intertwined with the issue of ownership.
In the unlawful detainer case, the Court of Appeals affirmed the decision of the trial
court as to possession on the ground that the decision has become final and executory.
This means that the petitioners may be evicted. In the accion reinvindicatoria, the Court
of Appeals affirmed the ownership of petitioners over the subject land. Hence, the court
declared petitioners as the lawful owners of the land. In the present case, the stay of
execution is warranted by the fact that petitioners are now legal owners of the land in
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Property
question and are occupants thereof. To execute the judgment by ejecting petitioners
from the land that they owned would certainly result in grave injustice. Besides, the
issue of possession was rendered moot when the court adjudicated ownership to the
spouses Bustos by virtue of a valid deed of sale. Placing petitioners in possession of the
land in question is the necessary and logical consequence of the decision declaring
them as the rightful owners is possession. It follows that as owners of the subject
property, petitioners are entitled to possession of the same. "An owner who cannot
exercise the seven (7) "juses" or attributes of ownership-the right to possess, to use and
enjoy, to abuse or consume, to accessories, to dispose or alienate, to recover or
vindicate and to the fruits is a crippled owner.
23
MARK KEVIN A. VIDAR

Property
Heirs of Roman Soriano v. Court of Appeals

G.R. No. 128177, August 15, 2001, 363 SCRA 87
Ynares Santiago, J.
FACTS: The land in dispute in this case is originally owned by Adriano Soriano who
died sometime in 1947. Adriano Soriano has 7 heirs whom leased the subject parcel of
land to David de Vera and Consuelo Villasista for a term of 15 years starting July 1,
1967. The lease contract states that Roman Soriano will serve as the caretaker of the
said property during the period of lease. During the effectivity of the lease contract, the
heirs of Adriano Soriano entered into extrajudicial settlement of his estate. As a result of
the settlement, the property was divided into two property, Lot No. 60052 which was
assigned to Lourdes and Candido, heirs of Adriano and the heirs of Dionisia another
heir of Adriano. The other property, Lot No. 8459 was assigned to Francisco, Librada,
Elcociado and Roman all heirs of Adriano. The owners of Lot No. 60052 sold the lot to
spouses Braulio and Aquiliana Abalos, and the owners of Lot No. 8459, except Roman
also sold their shares to spouses Briones.
On March 14, 1968, the de Vera spouses ousted Roman as caretaker and appointed
Isidro Versoza and Vidal Versoza as his substitute. Roman filed a case for
reinstatement and reliquidation against the de Vera spouses in CAR Case No. 1724-P68. On September 30, 1969, the Agrarian Court rendered a decision authorizing the
ejectment of Roman. On appeal, the decision was reversed by the Court of Appeals.
The deicion became final and executor. However, before it was executed, the parties
entered into a post-decisional agreement wherein the de Vera spouses allowed Roman
Soriano to sub-lease the property until the termination of the original lease on June 30,
1982. This agreement was approved by the CAR court in an order dated December 22,
1972.
On August 16, 1976, the Abalos spouses applied for the registration of the disputed
parcel of land. Roman Soriano and the Director of Lands acted as oppositors. On June
27, 1983, the Land Registration Court granted the application for registration. On April
13, 1983, after the expiration of the original lease and sub-lease in favor of Roman
Soriano, the Abalos spouses filed a case for unlawful detainer against Roman Soriano,
later, this case was dismissed on motion of the Abalos spouses. On July 14, 1983,
Elcociado, Librada, Roman, Francisco, Lourdes, Candido and the heirs of Dionisia filed
a complaint to annul the deeds of sale they executed in favor of the Abalos spouses or
should the deeds be not annulled, to allow Roman, Elcociado and Librada to redeem
their shares in the disputed land and to uphold Roman Sorianos possession of the
fishpond portion of the property as a tenant-caretaker.
After the dismissal of the case for unlawful detainer, the Abalos spouses filed on August
22, 1984, a motion for execution of the post-decisional order embodying the agreement
of Roman Soriano and the de Vera spouses allowing the former to sublease the
property. On October 25, 1984, Roman filed a motion to suspend hearing on the rental
demanded by the Abalos spouses until after the other issues raised in his opposition to
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Property
the motion for execution are resolved. The motion to suspend hearing on the issue of
the rentals was denied and the trial court authorized the substitution of the de Vera
spouses by the Abalos spouses. Roman Soriano's motion for reconsideration was
denied on March 16, 1985. Roman filed petition for certiorari and prohibition in the Court
of Appeals but the latter denied the petition, pending the denial of this petition, Roman
Soriano died. Not satisfied with the decision of the Court of Appeals, the heirs of Roman
Soriano brought this case in the Supreme Court.
ISSUE: Whether or not a winning party (ABALOS) in a land registration case can
effectively eject the possessor (SORIANO) thereof, whose security of tenure rights is
still pending determination before the DARAB.
HELD: No. The Court held that a judgment in a land registration case cannot effectively
used to oust the possessor of the land, whose security of tenure rights are still pending
determination before the DARAB. There is no dispute that Abalos spouses' title over the
land under litigation has been confirmed with finality. However, the declaration pertains
only to ownership and does not automatically include possession, especially soin the
instant case where there is a third party occupying the said parcel of land, allegedly in
the concept of an agricultural tenant. Agricultural lessees are entitled to security of
tenure and they have the right to work on their respective landholdings once the
leasehold relationship is established. Security of tenure is a legal concession to
agricultural lessees which they value as life itself ad deprivation of their landholdings is
tantamount to deprivation of their only means of livelihood. The exercise of the right of
ownership, then, yields to the exercise of the rights of an agricultural tenant. The
Supreme Court decided to refrain from ruling whether petitioners may be dispossessed
of the subject property while petitioner's status as tenant has not yet been declared by
the DARAB.
25
MARK KEVIN A. VIDAR

Property
Garcia v. Court of Appeals

G.R. No. 133140, August 10, 1999, 312 SCRA 180
FACTS: Petitioner Atty. Pedro Garcia, with the consent of his wife Remedios Garcia,
sold a parcel of land situated at Bel Air II Village, Makati to his daughter Maria Luisa
Magpayo and her husband Luisito Magpayo. The Magpayos mortgaged the land to the
Philippine Bank of Communications (PBCom) to secure a loan. The Magpayos failed to
pay their loan upon its maturity, hence, the mortgage was extrajudicially foreclosed and
at the public auction sale in which PBCom bought the land. The redemption period of
the foreclosed mortgage expired without the Magpayos redeeming the same, hence,
title over the land was consolidated in favor of PBCom.
PBCom subsequently filed a petition for the issuance of a writ of possession over the
land with the Regional Trial Court (RTC) of Makati. The RTC granted the petition. Upon
service of the writ of possession, Maria Luisa Magpayos brother, Jose Ma. T. Garcia,
who was in possession of the land, refused to honor it. Jose Garcia thereupon filed
against PBCom, the Magpayos, and the RTC Sheriff the instant suit for recovery of
realty and damages wherein he contended, inter alia, that at the time of the alleged sale
to the Magpayo spouses, he was in possession of the property; that, when his mother
Remedios Tablan Garcia died, sometime in October, 1980, he became, by operation of
law, a co-owner of the property; and that, Atty. Pedro V. Garcia, at the time of the
execution of the instrument in favor of the Magpayo spouses was not in possession of
the subject property.
ISSUE: Whether or not Jose Magpayo was a co-owner of the parcel of the land in
dispute.
HELD: No. Possession and ownership are distinct legal concepts. Ownership exists
when a thing pertaining to one person is completely subjected to his will in a manner not
prohibited by law and consistent with the rights of others. Ownership confers certain
rights to the owner, one of which is the right to dispose of the thing by way of sale. Atty.
Pedro Garcia and his wife Remedios exercised their right to dispose of what they owned
when they sold the subject property to the Magpayo spouses. On the other hand,
possession is defined as the holding of a thing or the enjoyment of a right. Literally, to
possess means to actually and physically occupy a thing with or without right.
Possession may be had in one of two ways: possession in the concept of an owner and
possession of a holder. A possessor in the concept of an owner may be the owner
himself or one who claims to be so. On the other hand, one who possesses as a mere
holder acknowledges in another a superior right which he believes to be ownership,
whether his belief be right or wrong. The records show that petitioner Jose Garcia
occupied the property not in the concept of an owner for his stay was merely tolerated
by his parents. An owners act of allowing another to occupy his house, rent-free does
not create a permanent and indefeasible right of possession in the latters favor.
Consequently, it is of no moment that petitioner was in possession of the property at the
time of the sale to the Magpayo spouses.
26
MARK KEVIN A. VIDAR

Property
Rodil Enterprises, Inc. v. Court of Appeals

Bellosillo, J.
FACTS: Rodil Enterprises Inc. (RODIL) is the lessee of the Ides O'Racca Building
(O'RACCA) since 1959 which is a property owned by the Republic of the Philippines. In
1980, Rodil entered into a sublease contract with respondents Carmen Bondoc, Teresita
Bondoc-Esto, Divisoria Footwear and Chua Huay Soon, members of the Ides ORacca
Building Tenants Association, Inc. On 12 September 1982 BP 233 was enacted. It
authorized the sale of "former alien properties" classified as commercial and industrial,
and the O'RACCA building was classified as commercial property. RODIL and Ides
ORacca Building Tenants Association, Inc., offered to purchase the subject property.
Pending action on the offer of RODIL to purchase the property, Director Factora of the
Building Services and Real Property Management Office granted RODIL's request for
another renewal of the lease contract on 23 September 1987 for another five (5) years
from 1 September 1987. The renewal contract was forwarded to then Secretary Jose de
Jesus of Department of General Services and Real Estate Property Management
(DGSREPM) for approval. Upon recommendation of DGSREPM Rufino Banas, De
Jesus disapproved the renewal contract in favour of Rodil and recalled all papers signed
by him regarding the subject. Secretary De Jesus likewise directed RODIL to pay its
realty tax delinquency and ordered the issuance of a temporary occupancy permit to the
ASSOCIATION.
On 6 October 1987 RODIL filed an action for specific performance, damages and
injunction with prayer for temporary restraining order before the Regional Trial Court of
Manila against the REPUBLIC, De Jesus, Banas, Factora and the ASSOCIATION. De
Jesus, Banas and Factora were later substituted by Secretary Fulgencio Factoran of the
Department of Environment and Natural Resources (DENR) in the action for specific
performance. On 31 May 1988 Factora issued Order No. 1 designating the Land
Management Bureau represented by Director Abelardo Palad, Jr. as custodian of all
"former alien properties" owned by the REPUBLIC. Pending the action for specific
performance, RODIL signed a renewal contract with Director Palad which was approved
by Secretary Factora. The renewal contract would extend the lease for ten (10) years
from 1 September 1987. A supplement to the renewal contract was subsequently
entered into on 25 May 1992 where rentals on the previous lease contract were
increased. As a result, the action was dismissed in favour of Rodil. Rodil then filed an
action for unlawful detainer against Divisoria Footwear, Bondoc, Bondoc-Esto and Chua
Huay Soon. Upon appeal, the Court of Appeals declared the contracts null and void and
dismissed the actions for unlawful detainer.
ISSUE: Whether or not Rodil has the right to occupy the building by virtue of its lease
contract with the Republic.
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Property
HELD: Yes. The owner has the right to enjoy and dispose of a thing, without other
limitations than those established by law. Every owner has the freedom of disposition
over his property. It is an attribute of ownership, and this rule has no exception. The
REPUBLIC being the owner of the disputed property enjoys the prerogative to enter into
a lease contract with RODIL in the exercise of its jus disponendi. Hence, as lessor, the
REPUBLIC has the right to eject usurpers of the leased property where the factual
elements required for relief in an action for unlawful detainer are present.
Private respondents claim that the agreements of 23 September 1987, 18 May 1992
and 25 May 1992 did not give rise to valid contracts.This is true only of the Contract of
Lease entered into on 23 September 1987 which the REPUBLIC did not approve.
RODIL neither alleged nor proved that such approval was made known to it. The socalled approval of the lease contract was merely stated in an internal memorandum of
Secretary De Jesus addressed to Director Factora. This is evident from the fact that
Secretary De Jesus, in his letter, asked Factora to duly execute a lease contract and
forward it to his office for approval. The consequences of this fact are clear. The Civil
Code provides that no contract shall arise unless acceptance of the contract is
communicated to the offeror. Until that moment, there is no real meeting of the minds,
no concurrence of offer and acceptance, hence, no contract.
However, the same is not true of the contracts of 18 May 1992 and 25 May 1992. As
argued by RODIL, these contracts are not proscribed by law; neither is there a law
prohibiting the execution of a contract with provisions that are retroactive. Where there
is nothing in a contract that is contrary to law, morals, good customs, public policy or
public order, the validity of the contract must be sustained.
The Court of Appeals invalidated the contracts because they were supposedly executed
in violation of a temporary restraining order issued by the Regional Trial Court. The
appellate court however failed to note that the order restrains the REPUBLIC from
awarding the lease contract only as regards respondent ASSOCIATION but not
petitioner RODIL. While a temporary restraining order was indeed issued against
RODIL, it was issued only on 25 May 1992 or after the assailed contracts were entered
into. As correctly stated by petitioner, one cannot enjoin an act already fait accompli.
Private respondents argue that the "renewal contract" cannot "renew" a void contract.
However, they could cite no legal basis for this assertion. It would seem that
respondents consider the renewal contract to be a novation of the earlier lease contract
of 23 September 1987. However, novation is never presumed. Also, the title of a
contract does not determine its nature. On the contrary, it is the specific provisions of
the contract which dictate its nature. Furthermore, where a contract is susceptible of two
(2) interpretations, one that would make it valid and another that would make it invalid,
the latter interpretation is to be adopted. The assailed agreement of 18 May 1992,
"Renewal of Contract of Lease," merely states that the term of the contract would be for
ten (10) years starting 1 September 1987. This is hardly conclusive of the existence of
an intention by the parties to novate the contract of 23 September 1987. Nor can it be
argued that there is an implied novation for the requisite incompatibility between the
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Property
original contract and the subsequent one is not present. Based on this factual milieu,
the presumption of validity of contract cannot be said to have been overturned.
Respondent ASSOCIATION claims that the Decision of the Office of the President
declaring null and void the lease contracts of 18 May 1992 and 25 May 1992 should be
counted in its favor. We do not agree. The contention does not hold water. It is wellsettled that a court's judgment in a case shall not adversely affect persons who were not
parties thereto.
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Property
Isaguirre v. De Lara
G.R. No. 138053, May 31, 2000, 332 SCRA 803
FACTS: Alejandro de Lara was the original applicant-claimant for a Miscellaneous
Sales Application over a parcel of land with an area of 2,342 square meters. Upon his
death, Alejandro de Lara was succeeded by his wife-respondent Felicitas de Lara as
claimant. On this lot stands a two-story residential-commercial apartment declared for
taxation purposes in the name of respondents sons, Apolonio and Rodolfo de Lara.
When Felicitas encountered financial difficulties, she approached petitioner Cornelio M.
Isaguirre. On February 10, 1960, a document denominated as Deed of Sale and
Special Cession of Rights and Interests was executed by Felicitas and Isaguirre,
whereby the former sold a 250 square meter portion of the subject lot, together with the
two-story commercial and residential structure standing thereon. Sometime in May
1969, Apolonio and Rodolfo de Lara filed a complaint against petitioner for recovery of
ownership and possession of the two-story building. However, petitioner filed a sales
application over the subject property and was issued an OCT. Due to overlapping of
title, petitioner filed an action for quieting of title. Judgment was rendered in favor of the
respondents. When respondent filed a motion for execution, petitioner opposed, and
alleged that he had a right of retention over the property until payment of the value of
the improvements he had introduced on the property.
ISSUE: Whether or not petitioner can be considered a builder in good faith with respect
to the improvements he made on the property.
HELD: No. The petitioner is a possessor in bad faith. Based on the factual findings
from this case, it is evident that petitioner knew from the very beginning that there was
really no sale and that he held respondents property as mere security for the payment
of the loan obligation. Therefore, petitioner may claim reimbursement only for necessary
expenses; however, he is not entitled to reimbursement for any useful expenses which
he may have incurred.
German Management & Services, Inc. v. Court of Appeals

30
MARK KEVIN A. VIDAR

Property
G.R. No. 76216 and 76217, September 14, 1989, 177 SCRA 495
FACTS: Spouses Cynthia Cuyegkeng Jose and Manuel Rene Jose, residents of
Pennsylvania, Philadelphia, USA are the owners of a parcel of land situated in Sitio
Inarawan, San Isidro, Antipolo, Rizal, with an area of 232,942 sq. M. The land was originally
registered on 5 August 1948 in the Office of the Register of Deeds Rizal as OCT 19,
pursuant to a Homestead Patent granted by the President of the Philippines on 27 July
1948. On 26 February 1982, the spouses Jose executed a special power of attorney
authorizing German Management Services to develop their property into a residential
subdivision. Consequently, the German Management obtained Development Permit 00424
from the Human Settlements Regulatory Commission for said development. Finding that
part of the property was occupied by Gernale and Villeza and 20 other persons, German
Management advised the occupants to vacate the premises but the latter refused.
Nevertheless, German Management proceeded with the development of the subject
property which included the portions occupied and cultivated by Gernale, et.al. Gernale,
et.al. filed an action for forcible entry against German Management before the MTC
Antipolo, Rizal, alleging that they are mountainside farmers of Sitio Inarawan who have
occupied and tilled their farmholdings some 12 to 15 years prior to the promulgation of PD
27, and that they were deprived of their property without due process of law when German
Management forcibly removed and destroyed the barbed wire fence enclosing their
farmholdings without notice and bulldozing the rice, corn, fruit bearing trees and other crops
that they planted by means of force, violence and intimidation The MTC dismissed Gernale
et.al.'s complaint for forcible entry. On appeal, the RTC sustained the dismissal by the MTC.
Gernale then filed a petition for review with the Court of Appeals. Said court gave due
course to their petition and reversed the decisions of the MTC and the RTC. The Appellate
Court held that since Gernale, et.al. were in actual possession of the property at the time
they were forcibly ejected by German Management, they have a right to commence an
action for forcible entry regardless of the legality or illegality of possession. German
Management moved to reconsider but the same was denied by the Appellate Court. Hence,
here is the present recourse.
ISSUE: Whether the doctrine of self-help may be availed of when respondents refused
to vacate the premises.
HELD: No. The justification that the drastic action of bulldozing and destroying the crops of
the prior possessor on the basis of the doctrine of self help (enunciated in Article 429 NCC)
is unavailing because the such doctrine can only be exercised at the time of actual or
threatened dispossession, which is absent in the present case. When possession has
already been lost, the owner must resort to judicial process for the recovery of property. This
is clear from Article 536 New Civil Code which provides that "in no case may possession be
acquired through force or intimidation as long as there is a possessor who objects thereto.
He, who believes that he has an action or right to deprive another of the holding of a thing,
must invoke the aid of the competent court, if the holder should refuse to deliver the thing."
31
MARK KEVIN A. VIDAR

Property
Caisip v. People of the Philippines

G.R. No. L-28716, November 18, 1970, 36 SCRA 17
FACTS: Spouses Marcelino Guevarra and Gloria Cabalag cultivated a parcel of land
known as Lot 105-A of Hacienda Palico situated in Nasugbu, Batangas, the same land
used to be tenanted by Cabalags father when he was still alive. Hacienda Palico is
owned by Roxas y Cia, administered by Antonio Chuidian, and supervised by the
overseer, Felix Caisip. Prior to the incident involved, Guevarra sought recognition as a
lawful tenant of Royas y Cia from the Court of Agrarian Relations but his action was
dismissed. Thereafter, Roxas y Cia filed an action against Guevarra for forcible entry
with prayer that Guevarra be ejected from the premises of Lot 105-A. The Justice of the
Peace of Court of Nasugbu decided in favor of Roxas y Cia and on June 6, 1959, a
trouble between Cabalag and Caisip occurred regarding the cutting of sugarcane.
A day later, Cabalag entered again the premises of Lot 105-A and refused to be driven
out by Caisip. Due to Cabalags tenacious attitude, Caisip sought the help of the Chief
of Police of Nasugbu. The Deputy Sheriff, however, informed Caisip that his request to
eject Cabalag cannot be acted upon without a proper court order. Nevertheless, the
Chief of Police assigned Sergeant Ignacio Rojales and Corporal Frederico Villadelrey to
Haciendo Palico. On June 17, 1959, Cabalag was seen weeding a portion of Lot 105-A
which was a ricefield. Caisip approached her and bade her to leave, but she refused to
do so. So, Caisip went to Sgt. Rojales and Cpl. Villadelrey and brought them to
Cabalag. Rojales told Cabalag to stop weeding but she insisted on her right to stay in
the said lot. While in squatting position, Cabalag was grabbed by Rojales who twisted
her right arm and wrested the trowel she was holding. Villadelrey held her left hand and
together Rojales forcibly dragged her towards a banana plantation while Caisip stood
nearby, with a drawn gun. Cabalag shouted, Ina ko po! Ina ko po! and was heard by
some neighbors. Zoilo Rivera, head of the tenant organization to which Cabalag was
affiliated, went with them on their way to the municipal building. Upon arrival, Cabalag
was turned over by Rojales and Villadelrey to the policemen on duty, who interrogated
her. But upon representations made by Rivera, she was released and allowed to go
home. Cabagan then filed a complaint charging Caisip, Rojales and Villadelrey of the
crime of grave coercion.
The Court of First Instance of Batangas found them guilty as charged. On appeal, The
Court of Appeals affirmed the trial courts decision.
ISSUE: Whether or not the force employed by Caisip and others, in the exercise of his
right granted by Article 429, is reasonably necessary to repel or prevent an actual or
threatened unlawful physical invasion or usurpation of his property.
HELD: No. Caisip was not even entitled to the right granted by Article 429. This is totally
inapplicable to the case, for, having been given 20 days from June 6th within which to
vacate the lot, Cabalag did not, on June 17th and within said period, invades or usurps
32
MARK KEVIN A. VIDAR

Property
the said lot. She had merely remained in possession thereof, even though the hacienda
owner may have become its co-possessor by reason of the prior order of the Justice of
Peace Court of Nasugbu. Caisip and others did not repel or prevent an actual or
threatened physical invasion or usurpation. They expelled Cabalag from a property
which she and her husband were in possession, despite the fact that the Sheriff had
explicitly authorized Guevarra and Cabalag to stay in said property up to June 26th, and
had expressed the view that he could not oust them without a judicial order. It is clear,
therefore, that Caisip, Rojales and Villadelrey, by means of violence, and without legal
authority, had prevented the complainant from doing something not prohibited by law
(weeding and being in Lot 105-A), and compelled her to do something against her will
(stopping the weeding and leaving said lot), whether it be right or wrong, thereby taking
the law into their hands, in violation of Article 286 of the Revised Penal Code.
33
MARK KEVIN A. VIDAR

Property
People of the Philippines v. Pletcha

G.R. No. 19029-CR
FACTS: Tito Pletcha, Jr., farmer, invoking self-help in defense of the land he inherited
from his father 19 years ago against the workers of Radeco Corporation, who without
court order, were constructing a fence in a hacienda allegedly leased by the corporation
from a certain Lopinco.
Claiming actual possession and ownership and believing that the land sought to be
fenced was an integral part of the land he inherited, Pletcha asked the group to desist
from fenicing pending a resurvey he proposed, but he was totally ignored, thus he
fought off and prevented the workers. As a result of such resistance he was prosecuted
and convicted of grave coercion by the Municipal Trial Court. Pletcha appealed the
decision of the MTC with the Court of Appeals.
ISSUE: Whether the appellants action is a legitimate exercise of a private citizens selfhelp.
HELD: Yes. In the instant case,the usurpers possession has not yet become complete
and the complainants were in the act of building a fence. Such an act constitutes force
in contemplation of the law. This act of trespass justified the appellant to drive them
away, even by means of bolo because they refused to listen to his appeal which is
reasonable. The appellant need not rush to the court to seek redress before reasonably
resisting the invasion of his property. The situation required immediate action and Art.
429 gave him the self executory mechanics of self-defense and self-reliance. The
provision in Art 429 of the New Civil Code confirms the right of the appellant, an owner
and lawful possessor, to use reasonable force to repel an invasion or usurpation, actual,
threatened or physical of his property. The principle of self-defense and the protective
measures related thereto, covers not only his life, but also his liberty and property.
The principle of self-help authorizes the lawful possessor to use force, not only to
prevent a threatened unlawful invasion or usurpation thereof; it is a sort of self-defense.
It is lawful to repel force by force. He who merely uses force to defend his possession
does not possess by force. The use of such necessary force to protect propriety or
possessory rights constitutes a justifying circumstance under the Penal Code.
34
MARK KEVIN A. VIDAR

Property
Andamo v. Intermediate Appellate Court

FACTS: Petitioner spouses Emmanuel and Natividad Andamo are the owners of a
parcel of land situated in Biga (Biluso) Silang, Cavite which is adjacent to that of private
respondent, Missionaries of Our Lady of La Salette, Inc., a religious corporation. Within
the land of respondent corporation, waterpaths and contrivances, including an artificial
lake, were constructed, which allegedly inundated and eroded petitioners' land, caused
a young man to drown, damaged petitioners' crops and plants, washed away costly
fences, endangered the lives of petitioners and their laborers during rainy and stormy
seasons, and exposed plants and other improvements to destruction.
Petitioners instituted a criminal action against the officers and directors of respondent
corporation, for destruction by means of inundation under Article 324 of the Revised
Penal Code. Subsequently, petitioners filed a civil action against respondent corporation
for damages. The trial court dismissed the civil case for lack of jurisdiction, as the
criminal case which was instituted ahead of the civil case was still unresolved. The
appellate court affirmed the order of the trial court. The motion for reconsideration was
also denied.
ISSUE: Whether a corporation, which has built through its agents, waterpaths, water
conductors and contrivances within its land, thereby causing inundation and damage to
an adjacent land, can be held civilly liable for damages.
HELD: Yes. Petitioners' complaint sufficiently alleges that petitioners have sustained
and will continue to sustain damage due to the waterpaths and contrivances built by
respondent corporation. It must be stressed that the use of one's property is not without
limitations. Article 431 of the Civil Code provides that "the owner of a thing cannot make
use thereof in such a manner as to injure the rights of a third person." SIC UTERE TUO
UT ALIENUM NON LAEDAS. Moreover, adjoining landowners have mutual and
reciprocal duties which require that each must use his own land in a reasonable manner
so as not to infringe upon the rights and interests of others. Although we recognize the
right of an owner to build structures on his land, such structures must be so constructed
and maintained using all reasonable care so that they cannot be dangerous to adjoining
landowners and can withstand the usual and expected forces of nature. If the structures
cause injury or damage to an adjoining landowner or a third person, the latter can claim
indemnification for the injury or damage suffered.
Article 2176 of the Civil Code imposes a civil liability on a person for damage caused by
his act or omission constituting fault or negligence. However, responsibility for fault or
negligence under the said article is entirely separate and distinct from the civil liability
arising from negligence under the Penal Code. The plaintiff cannot recover damages
twice for the same act or omission of the defendant. The decision is reversed and set
aside.
35

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