CIVIL REVIEW PROPERTYLAUREL VS ABROGARFACTS: Philippine Long Distance Telephone Company (PLDT) is the holder of a legislative franchise to render local and international telecommunication services under Republic Act No. 7082.2Under said law, PLDT is authorized to establish, operate, manage, lease, maintain and purchase telecommunication systems, including transmitting, receiving and switching stations, for both domestic and international calls. For this purpose, it has installed an estimated 1.7 million telephone lines nationwide. PLDT also offers other services as authorized by Certificates of Public Convenience and Necessity (CPCN) duly issued by the National Telecommunications Commission (NTC), and operates and maintains an International Gateway Facility (IGF). The PLDT network is thus principally composed of the Public Switch Telephone Network (PSTN), telephone handsets and/or telecommunications equipment used by its subscribers, the wires and cables linking said telephone handsets and/or telecommunications equipment, antenna, the IGF, and other telecommunications equipment which provide interconnections.31avvphil.netPLDT alleges that one of the alternative calling patterns that constitute network fraud and violate its network integrity is that which is known as International Simple Resale (ISR). ISR is a method of routing and completing international long distance calls using International Private Leased Lines (IPL), cables, antenna or air wave or frequency, which connect directly to the local or domestic exchange facilities of the terminating country (the country where the call is destined). The IPL is linked to switching equipment which is connected to a PLDT telephone line/number. In the process, the calls bypass the IGF found at the terminating country, or in some instances, even those from the originating country.4One such alternative calling service is that offered by Baynet Co., Ltd. (Baynet) which sells "Bay Super Orient Card" phone cards to people who call their friends and relatives in the Philippines. With said card, one is entitled to a 27-minute call to the Philippines for about 37.03 per minute. After dialing the ISR access number indicated in the phone card, the ISR operator requests the subscriber to give the PIN number also indicated in the phone card. Once the callers identity (as purchaser of the phone card) is confirmed, the ISR operator will then provide a Philippine local line to the requesting caller via the IPL. According to PLDT, calls made through the IPL never pass the toll center of IGF operators in the Philippines. Using the local line, the Baynet card user is able to place a call to any point in the Philippines, provided the local line is National Direct Dial (NDD) capable.5PLDT asserts that Baynet conducts its ISR activities by utilizing an IPL to course its incoming international long distance calls from Japan. The IPL is linked to switching equipment, which is then connected to PLDT telephone lines/numbers and equipment, with Baynet as subscriber. Through the use of the telephone lines and other auxiliary equipment, Baynet is able to connect an international long distance call from Japan to any part of the Philippines, and make it appear as a call originating from Metro Manila. Consequently, the operator of an ISR is able to evade payment of access, termination or bypass charges and accounting rates, as well as compliance with the regulatory requirements of the NTC. Thus, the ISR operator offers international telecommunication services at a lower rate, to the damage and prejudice of legitimate operators like PLDT.6PLDT pointed out that Baynet utilized the following equipment for its ISR activities: lines, cables, and antennas or equipment or device capable of transmitting air waves or frequency, such as an IPL and telephone lines and equipment; computers or any equipment or device capable of accepting information applying the prescribed process of the information and supplying the result of this process; modems or any equipment or device that enables a data terminal equipment such as computers to communicate with other data terminal equipment via a telephone line; multiplexers or any equipment or device that enables two or more signals from different sources to pass through a common cable or transmission line; switching equipment, or equipment or device capable of connecting telephone lines; and software, diskettes, tapes or equipment or device used for recording and storing information.7PLDT also discovered that Baynet subscribed to a total of 123 PLDT telephone lines/numbers.8Based on the Traffic Study conducted on the volume of calls passing through Baynets ISR network which bypass the IGF toll center, PLDT incurred an estimated monthly loss of P10,185,325.96.9Records at the Securities and Exchange Commission (SEC) also revealed that Baynet was not authorized to provide international or domestic long distance telephone service in the country. The following are its officers: Yuji Hijioka, a Japanese national (chairman of the board of directors); Gina C. Mukaida, a Filipina (board member and president); Luis Marcos P. Laurel, a Filipino (board member and corporate secretary); Ricky Chan Pe, a Filipino (board member and treasurer); and Yasushi Ueshima, also a Japanese national (board member).Upon complaint of PLDT against Baynet for network fraud, and on the strength of two search warrants10issued by the RTC of Makati, Branch 147, National Bureau of Investigation (NBI) agents searched its office at the 7th Floor, SJG Building, Kalayaan Avenue, Makati City on November 8, 1999. Atsushi Matsuura, Nobuyoshi Miyake, Edourd D. Lacson and Rolando J. Villegas were arrested by NBI agents while in the act of manning the operations of Baynet. Seized in the premises during the search were numerous equipment and devices used in its ISR activities, such as multiplexers, modems, computer monitors, CPUs, antenna, assorted computer peripheral cords and microprocessors, cables/wires, assorted PLDT statement of accounts, parabolic antennae and voltage regulators.State Prosecutor Ofelia L. Calo conducted an inquest investigation and issued a Resolution11on January 28, 2000, finding probable cause for theft under Article 308 of the Revised Penal Code and Presidential Decree No. 40112against the respondents therein, including Laurel.On February 8, 2000, State Prosecutor Calo filed an Information with the RTC of Makati City charging Matsuura, Miyake, Lacson and Villegas with theft under Article 308 of the Revised Penal Code. After conducting the requisite preliminary investigation, the State Prosecutor filed an Amended Information impleading Laurel (a partner in the law firm of Ingles, Laurel, Salinas, and, until November 19, 1999, a member of the board of directors and corporate secretary of Baynet), and the other members of the board of directors of said corporation, namely, Yuji Hijioka, Yasushi Ueshima, Mukaida, Lacson and Villegas, as accused for theft under Article 308 of the Revised Penal Code. The inculpatory portion of the Amended Information reads:On or about September 10-19, 1999, or prior thereto, in Makati City, and within the jurisdiction of this Honorable Court, the accused, conspiring and confederating together and all of them mutually helping and aiding one another, with intent to gain and without the knowledge and consent of the Philippine Long Distance Telephone (PLDT), did then and there willfully, unlawfully and feloniously take, steal and use the international long distance calls belonging to PLDT by conducting International Simple Resale (ISR), which is a method of routing and completing international long distance calls using lines, cables, antennae, and/or air wave frequency which connect directly to the local or domestic exchange facilities of the country where the call is destined, effectively stealing this business from PLDT while using its facilities in the estimated amount of P20,370,651.92 to the damage and prejudice of PLDT, in the said amount.CONTRARY TO LAW.13Accused Laurel filed a "Motion to Quash (with Motion to Defer Arraignment)" on the ground that the factual allegations in the Amended Information do not constitute the felony of theft under Article 308 of the Revised Penal Code. He averred that the Revised Penal Code, or any other special penal law for that matter, does not prohibit ISR operations. He claimed that telephone calls with the use of PLDT telephone lines, whether domestic or international, belong to the persons making the call, not to PLDT. He argued that the caller merely uses the facilities of PLDT, and what the latter owns are the telecommunication infrastructures or facilities through which the call is made. He also asserted that PLDT is compensated for the callers use of its facilities by way of rental; for an outgoing overseas call, PLDT charges the caller per minute, based on the duration of the call. Thus, no personal property was stolen from PLDT. According to Laurel, the P20,370,651.92 stated in the Information, if anything, represents the rental for the use of PLDT facilities, and not the value of anything owned by it. Finally, he averred that the allegations in the Amended Information are already subsumed under the Information for violation of Presidential Decree (P.D.) No. 401 filed and pending in the Metropolitan Trial Court of Makati City, docketed as Criminal Case No. 276766.The prosecution, through private complainant PLDT, opposed the motion,14contending that the movant unlawfully took personal property belonging to it, as follows: 1) intangible telephone services that are being offered by PLDT and other telecommunication companies, i.e., the connection and interconnection to their telephone lines/facilities; 2) the use of those facilities over a period of time; and 3) the revenues derived in connection with the rendition of such services and the use of such facilities.15The prosecution asserted that the use of PLDTs intangible telephone services/facilities allows electronic voice signals to pass through the same, and ultimately to the called partys number. It averred that such service/facility is akin to electricity which, although an intangible property, may, nevertheless, be appropriated and be the subject of theft. Such service over a period of time for a consideration is the business that PLDT provides to its customers, which enables the latter to send various messages to installed recipients. The service rendered by PLDT is akin to merchandise which has specific value, and therefore, capable of appropriation by another, as in this case, through the ISR operations conducted by the movant and his co-accused.The prosecution further alleged that "international business calls and revenues constitute personal property envisaged in Article 308 of the Revised Penal Code." Moreover, the intangible telephone services/facilities belong to PLDT and not to the movant and the other accused, because they have no telephone services and facilities of their own duly authorized by the NTC; thus, the taking by the movant and his co-accused of PLDT services was with intent to gain and without the latters consent.The prosecution pointed out that the accused, as well as the movant, were paid in exchange for their illegal appropriation and use of PLDTs telephone services and facilities; on the other hand, the accused did not pay a single centavo for their illegal ISR operations. Thus, the acts of the accused were akin to the use of a "jumper" by a consumer to deflect the current from the house electric meter, thereby enabling one to steal electricity. The prosecution emphasized that its position is fortified by the Resolutions of the Department of Justice in PLDT v. Tiongson, et al. (I.S. No. 97-0925) and in PAOCTF-PLDT v. Elton John Tuason, et al. (I.S. No. 2000-370) which were issued on August 14, 2000 finding probable cause for theft against the respondents therein.On September 14, 2001, the RTC issued an Order16denying the Motion to Quash the Amended Information. The court declared that, although there is no law that expressly prohibits the use of ISR, the facts alleged in the Amended Information "will show how the alleged crime was committed by conducting ISR," to the damage and prejudice of PLDT.Laurel filed a Motion for Reconsideration17of the Order, alleging that international long distance calls are not personal property, and are not capable of appropriation. He maintained that business or revenue is not considered personal property, and that the prosecution failed to adduce proof of its existence and the subsequent loss of personal property belonging to another. Citing the ruling of the Court in United States v. De Guzman,18Laurel averred that the case is not one with telephone calls which originate with a particular caller and terminates with the called party. He insisted that telephone calls are considered privileged communications under the Constitution and cannot be considered as "the property of PLDT." He further argued that there is no kinship between telephone calls and electricity or gas, as the latter are forms of energy which are generated and consumable, and may be considered as personal property because of such characteristic. On the other hand, the movant argued, the telephone business is not a form of energy but is an activity.In its Order19dated December 11, 2001, the RTC denied the movants Motion for Reconsideration. This time, it ruled that what was stolen from PLDT was its "business" because, as alleged in the Amended Information, the international long distance calls made through the facilities of PLDT formed part of its business. The RTC noted that the movant was charged with stealing the business of PLDT. To support its ruling, it cited Strochecker v. Ramirez,20where the Court ruled that interest in business is personal property capable of appropriation. It further declared that, through their ISR operations, the movant and his co-accused deprived PLDT of fees for international long distance calls, and that the ISR used by the movant and his co-accused was no different from the "jumper" used for stealing electricity.Laurel then filed a Petition for Certiorari with the CA, assailing the Order of the RTC. He alleged that the respondent judge gravely abused his discretion in denying his Motion to Quash the Amended Information.21As gleaned from the material averments of the amended information, he was charged with stealing the international long distance calls belonging to PLDT, not its business. Moreover, the RTC failed to distinguish between the business of PLDT (providing services for international long distance calls) and the revenues derived therefrom. He opined that a "business" or its revenues cannot be considered as personal property under Article 308 of the Revised Penal Code, since a "business" is "(1) a commercial or mercantile activity customarily engaged in as a means of livelihood and typically involving some independence of judgment and power of decision; (2) a commercial or industrial enterprise; and (3) refers to transactions, dealings or intercourse of any nature." On the other hand, the term "revenue" is defined as "the income that comes back from an investment (as in real or personal property); the annual or periodical rents, profits, interests, or issues of any species of real or personal property."22Laurel further posited that an electric companys business is the production and distribution of electricity; a gas companys business is the production and/or distribution of gas (as fuel); while a water companys business is the production and distribution of potable water. He argued that the "business" in all these cases is the commercial activity, while the goods and merchandise are the products of such activity. Thus, in prosecutions for theft of certain forms of energy, it is the electricity or gas which is alleged to be stolen and not the "business" of providing electricity or gas. However, since a telephone company does not produce any energy, goods or merchandise and merely renders a service or, in the words of PLDT, "the connection and interconnection to their telephone lines/facilities," such service cannot be the subject of theft as defined in Article 308 of the Revised Penal Code.23He further declared that to categorize "business" as personal property under Article 308 of the Revised Penal Code would lead to absurd consequences; in prosecutions for theft of gas, electricity or water, it would then be permissible to allege in the Information that it is the gas business, the electric business or the water business which has been stolen, and no longer the merchandise produced by such enterprise.24Laurel further cited the Resolution of the Secretary of Justice in Piltel v. Mendoza,25where it was ruled that the Revised Penal Code, legislated as it was before present technological advances were even conceived, is not adequate to address the novel means of "stealing" airwaves or airtime. In said resolution, it was noted that the inadequacy prompted the filing of Senate Bill 2379 (sic) entitled "The Anti-Telecommunications Fraud of 1997" to deter cloning of cellular phones and other forms of communications fraud. The said bill "aims to protect in number (ESN) (sic) or Capcode, mobile identification number (MIN), electronic-international mobile equipment identity (EMEI/IMEI), or subscriber identity module" and "any attempt to duplicate the data on another cellular phone without the consent of a public telecommunications entity would be punishable by law."26Thus, Laurel concluded, "there is no crime if there is no law punishing the crime."On August 30, 2002, the CA rendered judgment dismissing the petition.27The appellate court ruled that a petition for certiorari under Rule 65 of the Rules of Court was not the proper remedy of the petitioner. On the merits of the petition, it held that while business is generally an activitywhich is abstract and intangible in form, it is nevertheless considered "property" under Article 308 of the Revised Penal Code. The CA opined that PLDTs business of providing international calls is personal property which may be the object of theft, and cited United States v. Carlos28to support such conclusion. The tribunal also cited Strochecker v. Ramirez,29where this Court ruled that one-half interest in a days business is personal property under Section 2 of Act No. 3952, otherwise known as the Bulk Sales Law. The appellate court held that the operations of the ISR are not subsumed in the charge for violation of P.D. No. 401.Laurel, now the petitioner, assails the decision of the CA, contending that -THE COURT OF APPEALS ERRED IN RULING THAT THE PERSONAL PROPERTY ALLEGEDLY STOLEN PER THE INFORMATION IS NOT THE "INTERNATIONAL LONG DISTANCE CALLS" BUT THE "BUSINESS OF PLDT."THE COURT OF APPEALS ERRED IN RULING THAT THE TERM "BUSINESS" IS PERSONAL PROPERTY WITHIN THE MEANING OF ART. 308 OF THE REVISED PENAL CODE.30Petitioner avers that the petition for a writ of certiorari may be filed to nullify an interlocutory order of the trial court which was issued with grave abuse of discretion amounting to excess or lack of jurisdiction. In support of his petition before the Court, he reiterates the arguments in his pleadings filed before the CA. He further claims that while the right to carry on a business or an interest or participation in business is considered property under the New Civil Code, the term "business," however, is not. He asserts that the Philippine Legislature, which approved the Revised Penal Code way back in January 1, 1932, could not have contemplated to include international long distance calls and "business" as personal property under Article 308 thereof.In its comment on the petition, the Office of the Solicitor General (OSG) maintains that the amended information clearly states all the essential elements of the crime of theft. Petitioners interpretation as to whether an "international long distance call" is personal property under the law is inconsequential, as a reading of the amended information readily reveals that specific acts and circumstances were alleged charging Baynet, through its officers, including petitioner, of feloniously taking, stealing and illegally using international long distance calls belonging to respondent PLDT by conducting ISR operations, thus, "routing and completing international long distance calls using lines, cables, antenna and/or airwave frequency which connect directly to the local or domestic exchange facilities of the country where the call is destined." The OSG maintains that the international long distance calls alleged in the amended information should be construed to mean "business" of PLDT, which, while abstract and intangible in form, is personal property susceptible of appropriation.31The OSG avers that what was stolen by petitioner and his co-accused is the business of PLDT providing international long distance calls which, though intangible, is personal property of the PLDT.32For its part, respondent PLDT asserts that personal property under Article 308 of the Revised Penal Code comprehends intangible property such as electricity and gas which are valuable articles for merchandise, brought and sold like other personal property, and are capable of appropriation. It insists that the business of international calls and revenues constitute personal property because the same are valuable articles of merchandise. The respondent reiterates that international calls involve (a) the intangible telephone services that are being offered by it, that is, the connection and interconnection to the telephone network, lines or facilities; (b) the use of its telephone network, lines or facilities over a period of time; and (c) the income derived in connection therewith.33PLDT further posits that business revenues or the income derived in connection with the rendition of such services and the use of its telephone network, lines or facilities are personal properties under Article 308 of the Revised Penal Code; so is the use of said telephone services/telephone network, lines or facilities which allow electronic voice signals to pass through the same and ultimately to the called partys number. It is akin to electricity which, though intangible property, may nevertheless be appropriated and can be the object of theft. The use of respondent PLDTs telephone network, lines, or facilities over a period of time for consideration is the business that it provides to its customers, which enables the latter to send various messages to intended recipients. Such use over a period of time is akin to merchandise which has value and, therefore, can be appropriated by another. According to respondent PLDT, this is what actually happened when petitioner Laurel and the other accused below conducted illegal ISR operations.34ISSUES: The issues for resolution are as follows: (a) whether or not the petition for certiorari is the proper remedy of the petitioner in the Court of Appeals; (b) whether or not international telephone calls using Bay Super Orient Cards through the telecommunication services provided by PLDT for such calls, or, in short, PLDTs business of providing said telecommunication services, are proper subjects of theft under Article 308 of the Revised Penal Code; and (c) whether or not the trial court committed grave abuse of discretion amounting to excess or lack of jurisdiction in denying the motion of the petitioner to quash the amended information.HELD: The petition is meritorious.On the issue of whether or not the petition for certiorari instituted by the petitioner in the CA is proper, the general rule is that a petition for certiorari under Rule 65 of the Rules of Court, as amended, to nullify an order denying a motion to quash the Information is inappropriate because the aggrieved party has a remedy of appeal in the ordinary course of law. Appeal and certiorari are mutually exclusive of each other. The remedy of the aggrieved party is to continue with the case in due course and, when an unfavorable judgment is rendered, assail the order and the decision on appeal. However, if the trial court issues the order denying the motion to quash the Amended Information with grave abuse of discretion amounting to excess or lack of jurisdiction, or if such order is patently erroneous, or null and void for being contrary to the Constitution, and the remedy of appeal would not afford adequate and expeditious relief, the accused may resort to the extraordinary remedy of certiorari.35A special civil action for certiorari is also available where there are special circumstances clearly demonstrating the inadequacy of an appeal. As this Court held in Bristol Myers Squibb (Phils.), Inc. v. Viloria:36Nonetheless, the settled rule is that a writ of certiorari may be granted in cases where, despite availability of appeal after trial, there is at least a prima facie showing on the face of the petition and its annexes that: (a) the trial court issued the order with grave abuse of discretion amounting to lack of or in excess of jurisdiction; (b) appeal would not prove to be a speedy and adequate remedy; (c) where the order is a patent nullity; (d) the decision in the present case will arrest future litigations; and (e) for certain considerations such as public welfare and public policy.37In his petition for certiorari in the CA, petitioner averred that the trial court committed grave abuse of its discretion amounting to excess or lack of jurisdiction when it denied his motion to quash the Amended Information despite his claim that the material allegations in the Amended Information do not charge theft under Article 308 of the Revised Penal Code, or any offense for that matter. By so doing, the trial court deprived him of his constitutional right to be informed of the nature of the charge against him. He further averred that the order of the trial court is contrary to the constitution and is, thus, null and void. He insists that he should not be compelled to undergo the rigors and tribulations of a protracted trial and incur expenses to defend himself against a non-existent charge.Petitioner is correct.An information or complaint must state explicitly and directly every act or omission constituting an offense38and must allege facts establishing conduct that a penal statute makes criminal;39and describes the property which is the subject of theft to advise the accused with reasonable certainty of the accusation he is called upon to meet at the trial and to enable him to rely on the judgment thereunder of a subsequent prosecution for the same offense.40It must show, on its face, that if the alleged facts are true, an offense has been committed. The rule is rooted on the constitutional right of the accused to be informed of the nature of the crime or cause of the accusation against him. He cannot be convicted of an offense even if proven unless it is alleged or necessarily included in the Information filed against him.As a general prerequisite, a motion to quash on the ground that the Information does not constitute the offense charged, or any offense for that matter, should be resolved on the basis of said allegations whose truth and veracity are hypothetically committed;41and on additional facts admitted or not denied by the prosecution.42If the facts alleged in the Information do not constitute an offense, the complaint or information should be quashed by the court.43We have reviewed the Amended Information and find that, as mentioned by the petitioner, it does not contain material allegations charging the petitioner of theft of personal property under Article 308 of the Revised Penal Code. It, thus, behooved the trial court to quash the Amended Information. The Order of the trial court denying the motion of the petitioner to quash the Amended Information is a patent nullity.On the second issue, we find and so hold that the international telephone calls placed by Bay Super Orient Card holders, the telecommunication services provided by PLDT and its business of providing said services are not personal properties under Article 308 of the Revised Penal Code. The construction by the respondents of Article 308 of the said Code to include, within its coverage, the aforesaid international telephone calls, telecommunication services and business is contrary to the letter and intent of the law.The rule is that, penal laws are to be construed strictly. Such rule is founded on the tenderness of the law for the rights of individuals and on the plain principle that the power of punishment is vested in Congress, not in the judicial department. It is Congress, not the Court, which is to define a crime, and ordain its punishment.44Due respect for the prerogative of Congress in defining crimes/felonies constrains the Court to refrain from a broad interpretation of penal laws where a "narrow interpretation" is appropriate. The Court must take heed to language, legislative history and purpose, in order to strictly determine the wrath and breath of the conduct the law forbids.45However, when the congressional purpose is unclear, the court must apply the rule of lenity, that is, ambiguity concerning the ambit of criminal statutes should be resolved in favor of lenity.46Penal statutes may not be enlarged by implication or intent beyond the fair meaning of the language used; and may not be held to include offenses other than those which are clearly described, notwithstanding that the Court may think that Congress should have made them more comprehensive.47Words and phrases in a statute are to be construed according to their common meaning and accepted usage.As Chief Justice John Marshall declared, "it would be dangerous, indeed, to carry the principle that a case which is within the reason ormischief of a statute is within its provision, so far as to punish a crime not enumerated in the statute because it is of equal atrocity, or of kindred character with those which are enumerated.48When interpreting a criminal statute that does not explicitly reach the conduct in question, the Court should not base an expansive reading on inferences from subjective and variable understanding.49Article 308 of the Revised Penal Code defines theft as follows:Art. 308. Who are liable for theft. Theft is committed by any person who, with intent to gain but without violence, against or intimidation of persons nor force upon things, shall take personal property of another without the latters consent.The provision was taken from Article 530 of the Spanish Penal Code which reads:1. Los que con nimo de lucrarse, y sin violencia o intimidacin en las personas ni fuerza en las cosas, toman las cosas muebles ajenas sin la voluntad de su dueo.50For one to be guilty of theft, the accused must have an intent to steal (animus furandi) personal property, meaning the intent to deprive another of his ownership/lawful possession of personal property which intent is apart from and concurrently with the general criminal intent which is an essential element of a felony of dolo (dolus malus).An information or complaint for simple theft must allege the following elements: (a) the taking of personal property; (b) the said property belongs to another; (c) the taking be done with intent to gain; and (d) the taking be accomplished without the use of violence or intimidation of person/s or force upon things.51One is apt to conclude that "personal property" standing alone, covers both tangible and intangible properties and are subject of theft under the Revised Penal Code. But the words "Personal property" under the Revised Penal Code must be considered in tandem with the word "take" in the law. The statutory definition of "taking" and movable property indicates that, clearly, not all personal properties may be the proper subjects of theft. The general rule is that, only movable properties which have physical or material existence and susceptible of occupation by another are proper objects of theft.52As explained by Cuelo Callon: "Cosa juridicamente es toda sustancia corporal, material, susceptible de ser aprehendida que tenga un valor cualquiera."53According to Cuello Callon, in the context of the Penal Code, only those movable properties which can be taken and carried from the place they are found are proper subjects of theft. Intangible properties such as rights and ideas are not subject of theft because the same cannot be "taken" from the place it is found and is occupied or appropriated.Solamente las cosas muebles y corporales pueden ser objeto de hurto. La sustraccin de cosas inmuebles y la cosas incorporales (v. gr., los derechos, las ideas) no puede integrar este delito, pues no es posible asirlas, tomarlas, para conseguir su apropiacin. El Codigo emplea la expresin "cosas mueble" en el sentido de cosa que es susceptible de ser llevada del lugar donde se encuentra, como dinero, joyas, ropas, etctera, asi que su concepto no coincide por completo con el formulado por el Codigo civil (arts. 335 y 336).54Thus, movable properties under Article 308 of the Revised Penal Code should be distinguished from the rights or interests to which they relate. A naked right existing merely in contemplation of law, although it may be very valuable to the person who is entitled to exercise it, is not the subject of theft or larceny.55Such rights or interests are intangible and cannot be "taken" by another. Thus, right to produce oil, good will or an interest in business, or the right to engage in business, credit or franchise are properties. So is the credit line represented by a credit card. However, they are not proper subjects of theft or larceny because they are without form or substance, the mere "breath" of the Congress. On the other hand, goods, wares and merchandise of businessmen and credit cards issued to them are movable properties with physical and material existence and may be taken by another; hence, proper subjects of theft.There is "taking" of personal property, and theft is consummated when the offender unlawfully acquires possession of personal property even if for a short time; or if such property is under the dominion and control of the thief. The taker, at some particular amount, must have obtained complete and absolute possession and control of the property adverse to the rights of the owner or the lawful possessor thereof.56It is not necessary that the property be actually carried away out of the physical possession of the lawful possessor or that he should have made his escape with it.57Neither asportation nor actual manual possession of property is required. Constructive possession of the thief of the property is enough.58The essence of the element is the taking of a thing out of the possession of the owner without his privity and consent and without animus revertendi.59Taking may be by the offenders own hands, by his use of innocent persons without any felonious intent, as well as any mechanical device, such as an access device or card, or any agency, animate or inanimate, with intent to gain. Intent to gain includes the unlawful taking of personal property for the purpose of deriving utility, satisfaction, enjoyment and pleasure.60We agree with the contention of the respondents that intangible properties such as electrical energy and gas are proper subjects of theft. The reason for this is that, as explained by this Court in United States v. Carlos61and United States v. Tambunting,62based on decisions of the Supreme Court of Spain and of the courts in England and the United States of America, gas or electricity are capable of appropriation by another other than the owner. Gas and electrical energy may be taken, carried away and appropriated. In People v. Menagas,63the Illinois State Supreme Court declared that electricity, like gas, may be seen and felt. Electricity, the same as gas, is a valuable article of merchandise, bought and sold like other personal property and is capable of appropriation by another. It is a valuable article of merchandise, bought and sold like other personal property, susceptible of being severed from a mass or larger quantity and of being transported from place to place. Electrical energy may, likewise, be taken and carried away. It is a valuable commodity, bought and sold like other personal property. It may be transported from place to place. There is nothing in the nature of gas used for illuminating purposes which renders it incapable of being feloniously taken and carried away.In People ex rel Brush Electric Illuminating Co. v. Wemple,64the Court of Appeals of New York held that electric energy is manufactured and sold in determinate quantities at a fixed price, precisely as are coal, kerosene oil, and gas. It may be conveyed to the premises of the consumer, stored in cells of different capacity known as an accumulator; or it may be sent through a wire, just as gas or oil may be transported either in a close tank or forced through a pipe. Having reached the premises of the consumer, it may be used in any way he may desire, being, like illuminating gas, capable of being transformed either into heat, light, or power, at the option of the purchaser. In Woods v. People,65the Supreme Court of Illinois declared that there is nothing in the nature of gas used for illuminating purposes which renders it incapable of being feloniously taken and carried away. It is a valuable article of merchandise, bought and sold like other personal property, susceptible of being severed from a mass or larger quantity and of being transported from place to place.Gas and electrical energy should not be equated with business or services provided by business entrepreneurs to the public. Business does not have an exact definition. Business is referred as that which occupies the time, attention and labor of men for the purpose of livelihood or profit. It embraces everything that which a person can be employed.66Business may also mean employment, occupation or profession. Business is also defined as a commercial activity for gain benefit or advantage.67Business, like services in business, although are properties, are not proper subjects of theft under the Revised Penal Code because the same cannot be "taken" or "occupied." If it were otherwise, as claimed by the respondents, there would be no juridical difference between the taking of the business of a person or the services provided by him for gain, vis--vis, the taking of goods, wares or merchandise, or equipment comprising his business.68If it was its intention to include "business" as personal property under Article 308 of the Revised Penal Code, the Philippine Legislature should have spoken in language that is clear and definite: that business is personal property under Article 308 of the Revised Penal Code.69We agree with the contention of the petitioner that, as gleaned from the material averments of the Amended Information, he is charged of "stealing the international long distance calls belonging to PLDT" and the use thereof, through the ISR. Contrary to the claims of the OSG and respondent PLDT, the petitioner is not charged of stealing P20,370,651.95 from said respondent. Said amount of P20,370,651.95 alleged in the Amended Information is the aggregate amount of access, transmission or termination charges which the PLDT expected from the international long distance calls of the callers with the use of Baynet Super Orient Cards sold by Baynet Co. Ltd.In defining theft, under Article 308 of the Revised Penal Code, as the taking of personal property without the consent of the owner thereof, the Philippine legislature could not have contemplated the human voice which is converted into electronic impulses or electrical current which are transmitted to the party called through the PSTN of respondent PLDT and the ISR of Baynet Card Ltd. within its coverage. When the Revised Penal Code was approved, on December 8, 1930, international telephone calls and the transmission and routing of electronic voice signals or impulses emanating from said calls, through the PSTN, IPL and ISR, were still non-existent. Case law is that, where a legislative history fails to evidence congressional awareness of the scope of the statute claimed by the respondents, a narrow interpretation of the law is more consistent with the usual approach to the construction of the statute. Penal responsibility cannot be extended beyond the fair scope of the statutory mandate.70Respondent PLDT does not acquire possession, much less, ownership of the voices of the telephone callers or of the electronic voice signals or current emanating from said calls. The human voice and the electronic voice signals or current caused thereby are intangible and not susceptible of possession, occupation or appropriation by the respondent PLDT or even the petitioner, for that matter. PLDT merely transmits the electronic voice signals through its facilities and equipment. Baynet Card Ltd., through its operator, merely intercepts, reroutes the calls and passes them to its toll center. Indeed, the parties called receive the telephone calls from Japan.In this modern age of technology, telecommunications systems have become so tightly merged with computer systems that it is difficult to know where one starts and the other finishes. The telephone set is highly computerized and allows computers to communicate across long distances.71The instrumentality at issue in this case is not merely a telephone but a telephone inexplicably linked to a computerized communications system with the use of Baynet Cards sold by the Baynet Card Ltd. The corporation uses computers, modems and software, among others, for its ISR.72The conduct complained of by respondent PLDT is reminiscent of "phreaking" (a slang term for the action of making a telephone system to do something that it normally should not allow by "making the phone company bend over and grab its ankles"). A "phreaker" is one who engages in the act of manipulating phones and illegally markets telephone services.73Unless the phone company replaces all its hardware, phreaking would be impossible to stop. The phone companies in North America were impelled to replace all their hardware and adopted full digital switching system known as the Common Channel Inter Office Signaling. Phreaking occurred only during the 1960s and 1970s, decades after the Revised Penal Code took effect.The petitioner is not charged, under the Amended Information, for theft of telecommunication or telephone services offered by PLDT. Even if he is, the term "personal property" under Article 308 of the Revised Penal Code cannot be interpreted beyond its seams so as to include "telecommunication or telephone services" or computer services for that matter. The word "service" has a variety of meanings dependent upon the context, or the sense in which it is used; and, in some instances, it may include a sale. For instance, the sale of food by restaurants is usually referred to as "service," although an actual sale is involved.74It may also mean the duty or labor to be rendered by one person to another; performance of labor for the benefit of another.75In the case of PLDT, it is to render local and international telecommunications services and such other services as authorized by the CPCA issued by the NTC. Even at common law, neither time nor services may be taken and occupied or appropriated.76A service is generally not considered property and a theft of service would not, therefore, constitute theft since there can be no caption or asportation.77Neither is the unauthorized use of the equipment and facilities of PLDT by the petitioner theft under the aforequoted provision of the Revised Penal Code.78If it was the intent of the Philippine Legislature, in 1930, to include services to be the subject of theft, it should have incorporated the same in Article 308 of the Revised Penal Code. The Legislature did not. In fact, the Revised Penal Code does not even contain a definition of services.If taking of telecommunication services or the business of a person, is to be proscribed, it must be by special statute79or an amendment of the Revised Penal Code. Several states in the United States, such as New York, New Jersey, California and Virginia, realized that their criminal statutes did not contain any provisions penalizing the theft of services and passed laws defining and penalizing theft of telephone and computer services. The Pennsylvania Criminal Statute now penalizes theft of services, thus:(a) Acquisition of services. --(1) A person is guilty of theft if he intentionally obtains services for himself or for another which he knows are available only for compensation, by deception or threat, by altering or tampering with the public utility meter or measuring device by which such services are delivered or by causing or permitting such altering or tampering, by making or maintaining any unauthorized connection, whether physically, electrically or inductively, to a distribution or transmission line, by attaching or maintaining the attachment of any unauthorized device to any cable, wire or other component of an electric, telephone or cable television system or to a television receiving set connected to a cable television system, by making or maintaining any unauthorized modification or alteration to any device installed by a cable television system, or by false token or other trick or artifice to avoid payment for the service.In the State of Illinois in the United States of America, theft of labor or services or use of property is penalized:(a) A person commits theft when he obtains the temporary use of property, labor or services of another which are available only for hire, by means of threat or deception or knowing that such use is without the consent of the person providing the property, labor or services.In 1980, the drafters of the Model Penal Code in the United States of America arrived at the conclusion that labor and services, including professional services, have not been included within the traditional scope of the term "property" in ordinary theft statutes. Hence, they decided to incorporate in the Code Section 223.7, which defines and penalizes theft of services, thus:(1) A person is guilty of theft if he purposely obtains services which he knows are available only for compensation, by deception or threat, or by false token or other means to avoid payment for the service. "Services" include labor, professional service, transportation, telephone or other public service, accommodation in hotels, restaurants or elsewhere, admission to exhibitions, use of vehicles or other movable property. Where compensation for service is ordinarily paid immediately upon the rendering of such service, as in the case of hotels and restaurants, refusal to pay or absconding without payment or offer to pay gives rise to a presumption that the service was obtained by deception as to intention to pay; (2) A person commits theft if, having control over the disposition of services of others, to which he is not entitled, he knowingly diverts such services to his own benefit or to the benefit of another not entitled thereto.Interestingly, after the State Supreme Court of Virginia promulgated its decision in Lund v. Commonwealth,80declaring that neither time nor services may be taken and carried away and are not proper subjects of larceny, the General Assembly of Virginia enacted Code No. 18-2-98 which reads:Computer time or services or data processing services or information or data stored in connection therewith is hereby defined to be property which may be the subject of larceny under 18.2-95 or 18.2-96, or embezzlement under 18.2-111, or false pretenses under 18.2-178.In the State of Alabama, Section 13A-8-10(a)(1) of the Penal Code of Alabama of 1975 penalizes theft of services:"A person commits the crime of theft of services if: (a) He intentionally obtains services known by him to be available only for compensation by deception, threat, false token or other means to avoid payment for the services "In the Philippines, Congress has not amended the Revised Penal Code to include theft of services or theft of business as felonies. Instead, it approved a law, Republic Act No. 8484, otherwise known as the Access Devices Regulation Act of 1998, on February 11, 1998. Under the law, an access device means any card, plate, code, account number, electronic serial number, personal identification number and other telecommunication services, equipment or instrumentalities-identifier or other means of account access that can be used to obtain money, goods, services or any other thing of value or to initiate a transfer of funds other than a transfer originated solely by paper instrument. Among the prohibited acts enumerated in Section 9 of the law are the acts of obtaining money or anything of value through the use of an access device, with intent to defraud or intent to gain and fleeing thereafter; and of effecting transactions with one or more access devices issued to another person or persons to receive payment or any other thing of value. Under Section 11 of the law, conspiracy to commit access devices fraud is a crime. However, the petitioner is not charged of violation of R.A. 8484.Significantly, a prosecution under the law shall be without prejudice to any liability for violation of any provisions of the Revised Penal Code inclusive of theft under Rule 308 of the Revised Penal Code and estafa under Article 315 of the Revised Penal Code. Thus, if an individual steals a credit card and uses the same to obtain services, he is liable of the following: theft of the credit card under Article 308 of the Revised Penal Code; violation of Republic Act No. 8484; and estafa under Article 315(2)(a) of the Revised Penal Code with the service provider as the private complainant. The petitioner is not charged of estafa before the RTC in the Amended Information.Section 33 of Republic Act No. 8792, Electronic Commerce Act of 2000 provides:Sec. 33. Penalties. The following Acts shall be penalized by fine and/or imprisonment, as follows:a) Hacking or cracking which refers to unauthorized access into or interference in a computer system/server or information and communication system; or any access in order to corrupt, alter, steal, or destroy using a computer or other similar information and communication devices, without the knowledge and consent of the owner of the computer or information and communications system, including the introduction of computer viruses and the like, resulting on the corruption, destruction, alteration, theft or loss of electronic data messages or electronic documents shall be punished by a minimum fine of One hundred thousand pesos (P100,000.00) and a maximum commensurate to the damage incurred and a mandatory imprisonment of six (6) months to three (3) years.the petition is GRANTED.

SERGS VS PCI LEASINGAfter agreeing to a contract stipulating that a real or immovable property be considered as personal or movable, a party is estopped from subsequently claiming otherwise.Hence, such property is a proper subject of a writ of replevin obtained by the other contracting party.Facts: On February 13, 1998, respondent PCI Leasing and Finance, Inc. (PCI Leasing for short) filed with the RTC-QC a complaint for [a] sum of money (Annex E), with an application for a writ of replevin docketed as Civil Case No. Q-98-33500.On March 6, 1998, upon an ex-parte application of PCI Leasing, respondent judge issued a writ of replevin (Annex B) directing its sheriff to seize and deliver the machineries and equipment to PCI Leasing after 5 days and upon the payment of the necessary expenses.On March 24, 1998, in implementation of said writ, the sheriff proceeded to petitioners factory, seized one machinery with [the] word that he [would] return for the other machineries.On March 25, 1998, petitioners filed a motion for special protective order (Annex C), 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.This motion was opposed by PCI Leasing (Annex F), on the ground that the properties [were] still personal and therefore still subject to seizure and a writ of replevin.In their Reply, petitioners asserted that the properties sought to be seized [were] immovable as defined in Article 415 of the Civil Code, the parties agreement to the contrary notwithstanding.They argued that to give effect to the agreement would be prejudicial to innocent third parties.They further stated that PCI Leasing [was] estopped from treating these machineries as personal because the contracts in which the alleged agreement [were] embodied [were] totally sham and farcical.On April 6, 1998, the sheriff again sought to enforce the writ of seizure and take possession of the remaining properties.He was able to take two more, but was prevented by the workers from taking the rest.On April 7, 1998, they went to [the CA] via an original action for certiorari.Ruling of the Court of AppealsCiting the Agreement of the parties, the appellate court held that the subject machines were personal property, and that they had only been leased, not owned, by petitioners.It also ruled that the words of the contract are clear and leave no doubt upon the true intention of the contracting parties.Observing that Petitioner Goquiolay was an experienced businessman who was not unfamiliar with the ways of the trade,it ruled that he should have realized the import of the document he signed.The CA further held:Furthermore, to accord merit to this petition would be to preempt the trial court in ruling upon the case below, since the merits of the whole matter are laid down before us via a petition whose sole purpose is to inquire upon the existence of a grave abuse of discretion on the part of the [RTC] in issuing the assailed Order and Resolution.The issues raised herein are proper subjects of a full-blown trial, necessitating presentation of evidence by both parties.The contract is being enforced by one, and [its] validity is attacked by the other a matter x x x which respondent court is in the best position to determine.ISSUES:A. Whether or not the machineries purchased and imported by SERGS became real property by virtue of immobilization.B. Whether or not the contract between the parties is a loan or a lease.[12]In the main, the Court will resolve whether the said machines are personal, not immovable, property which may be a proper subject of a writ of replevin.As a preliminary matter, the Court will also address briefly the procedural points raised by respondent.HELD: The Petition is not meritorious.Preliminary Matter:Procedural QuestionsRespondent contends that the Petition failed to indicate expressly whether it was being filed under Rule 45 or Rule 65 of the Rules of Court.It further alleges that the Petition erroneously impleadedJudge Hilario Laqui as respondent.There is no question that the present recourse is under Rule 45.This conclusion finds support in the very title of the Petition, which is Petition for Review on Certiorari.[13]While Judge Laqui should not have been impleaded as a respondent,[14]substantial justice requires that such lapse by itself should not warrant the dismissal of the present Petition.In this light, the Court deems it proper to remove,motu proprio, the name of Judge Laqui from the caption of the present case.Main Issue:Nature of the Subject MachineryPetitioners contend that the subject machines used in their factory were not proper subjects of the Writ issued by the RTC, because they were in fact real property.Serious policy considerations, they argue, militate against a contrary characterization.Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only.[15]Section 3 thereof reads:SEC. 3.Order.-- Upon the filing of such affidavit and approval of the bond, the court shall issue an order and the corresponding writ of replevin describing the personal property alleged to be wrongfully detained and requiring the sheriff forthwith to take such property into his custody.On the other hand, Article 415 of the Civil Code enumerates immovable or real property as follows:ART. 415.The following are immovable property:(5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or works;In the present case, the machines that were the subjects of the Writ of Seizure were placed by petitioners in the factory built on their own land.Indisputably, they were essential and principal elements of their chocolate-making industry.Hence, although each of them was movable or personal property on its own, all of them have become immobilized by destination because they are essential and principal elements in the industry.[16]In that sense, petitioners are correct in arguing that the said machines are real, not personal, property pursuant to Article 415 (5) of the Civil Code.[17]Be that as it may, we disagree with the submission of the petitioners that the said machines are not proper subjects of the Writ of Seizure.The Court has held that contracting parties may validly stipulate that a real property be consideredas personal.[18]After agreeing to such stipulation, they are consequently estopped from claiming otherwise.Under the principle of estoppel, a party to a contract is ordinarily precluded from denying the truth of any material fact found therein.Hence, inTumalad v. Vicencio,[19]the Court upheld the intention of the parties to treat ahouseas a personal propertybecause it had been made the subject of a chattel mortgage.The Court ruled:Although there is no specific statement referring to the subject house as personal property, yet by ceding, selling or transferring a property by way of chattel mortgage defendants-appellants could only have meant to convey the house as chattel, or at least, intended to treat the same as such, so that they should not now be allowed to make an inconsistent stand by claiming otherwise.ApplyingTumalad,the Court inMakati Leasing and Finance Corp. v. Wearever Textile Mills[20]also held that the machinery used in a factory and essential to the industry, as in the present case, was a proper subject of a writ of replevin because it was treated as personal property in a contract.Pertinent portions of the Courts ruling are reproduced hereunder:x x x.If a house of strong materials, like what was involved in the above Tumalad case, may be considered as personal property for purposes of executing a chattel mortgage thereon as long as the parties to the contract so agree and no innocent third party will be prejudiced thereby, there is absolutely no reason why a machinery, which is movable in its nature and becomes immobilized only by destination or purpose, may not be likewise treated as such.This is really because one who has so agreed is estopped from denying the existence of the chattel mortgage.In the present case, the Lease Agreement clearly provides that the machines in question are to be consideredas personal property.Specifically, Section 12.1 of the Agreement reads as follows:[21]12.1The PROPERTY is, and shall at all times be and remain, personal property notwithstanding that the PROPERTY or any part thereof may now be, or hereafter become, in any manner affixed or attached to or embedded in, or permanently resting upon, real property or any building thereon, or attached in any manner to what is permanent.Clearly then, petitioners are estopped from denying the characterization of the subject machines as personal property.Under the circumstances, they are proper subjects of the Writ of Seizure.It should be stressed, however, that our holding -- that the machines should be deemed personal property pursuant to the Lease Agreement is good only insofar as the contracting parties are concerned.[22]Hence, while the parties are bound by the Agreement, third persons acting in good faith are not affected by its stipulation characterizing the subject machinery as personal.[23]In any event, there is no showing that any specific third party would be adversely affected.Validity of the Lease AgreementIn their Memorandum, petitioners contend that the Agreement is a loan and not a lease.[24]Submitting documents supposedly showing that they own the subject machines, petitioners also argue in their Petition that the Agreement suffers from intrinsic ambiguity which places in serious doubt the intention of the parties and the validity of the lease agreement itself.[25]In their Reply to respondents Comment, they further allege that the Agreement is invalid.[26]These arguments are unconvincing.The validity and the nature of the contract are thelis motaof the civil action pending before the RTC.A resolution of these questions, therefore, is effectively a resolution of the merits of the case.Hence, they should be threshed out in the trial, not in the proceedings involving the issuance of the Writ of Seizure.Indeed, inLa Tondea Distillers v. CA,[27]the Court explained that the policy under Rule 60 was that questions involving title to the subject property questions which petitioners are now raising --should be determined in the trial.In that case, the Court noted that the remedy of defendants under Rule 60 was either to post a counter-bond or to question the sufficiency of the plaintiffs bond.They were not allowed, however, to invoke the title to the subject property.The Court ruled:In other words, the law does not allow the defendant to file a motion to dissolve or discharge the writ of seizure (or delivery) on ground of insufficiency of the complaint or of the grounds relied upon therefor, as in proceedings on preliminary attachment or injunction, and thereby put at issue the matter of the title or right of possession over the specific chattel being replevied, the policy apparently being that said matter should be ventilated and determined only at the trial on the merits.[28]Besides, these questions require a determination of facts and a presentation of evidence, both of which have no place in a petition for certiorari in the CA under Rule 65 or in a petition for review in this Court under Rule 45.[29]Reliance on the Lease AgreementIt should be pointed out that the Court in this case may rely on the Lease Agreement, fornothing on record shows that it has been nullified or annulled.In fact, petitioners assailed it first only in the RTC proceedings, which had ironically been instituted by respondent.Accordingly, it must be presumed valid and binding as the law between the parties.Makati Leasing and Finance Corporation[30]is also instructive on this point.In that case, the Deed of Chattel Mortgage, which characterized the subject machinery as personal property, was also assailed because respondent had allegedly been required to sign a printed form of chattel mortgage which was in a blank form at the time of signing.The Court rejected the argument and relied on the Deed, ruling as follows:x x x.Moreover, even granting that the charge is true, such fact alone does not render a contract voidab initio, but can only be a ground for rendering said contract voidable, or annullable pursuant to Article 1390 of the new Civil Code, by a proper action in court.There is nothing on record to show that the mortgage has been annulled.Neither is it disclosed that steps were taken to nullify the same. x x xAlleged Injustice Committed on the Part of PetitionersPetitioners contend that if the Court allows these machineries to be seized, then its workers would be out of work and thrown into the streets.[31]They also allege that the seizure would nullify all efforts to rehabilitate the corporation.Petitioners arguments do not preclude the implementation of the Writ.As earlier discussed, law and jurisprudence support its propriety.Verily, the above-mentioned consequences, if they come true, should not be blamed on this Court, but on the petitioners for failing to avail themselves of the remedy under Section 5 of Rule 60, which allows the filing of a counter-bond.The provision states:SEC. 5.Return of property. --If the adverse party objects to the sufficiency of the applicants bond, or of the surety or sureties thereon, he cannot immediately require the return of the property, but if he does not so object, he may, at any time before the delivery of the property to the applicant, require the return thereof, by filing with the court where the action is pending a bond executed to the applicant, in double the value of the property as stated in the applicants affidavit for the delivery thereof to the applicant, if such delivery be adjudged, and for the payment of such sum to him as may be recovered against the adverse party, and by serving a copy bond on the applicant.WHEREFORE, the Petition isDENIEDand the assailed Decision of the Court of AppealsAFFIRMED.Costs against petitioners.

ACAP VS CAFACTS: The controversy began when Pido died intestate and on 27 November 1981, his surviving heirs executed a notarized document denominated as "Declaration of Heirship and Waiver of Rights of Lot No. 1130 Hinigaran Cadastre," The document was signed by all of Pido's heirs. Private respondent Edy de los Reyes did not sign said document. It will be noted that at the time of Cosme Pido's death, title to the property continued to be registered in the name of the Vasquez spouses. Upon obtaining the Declaration of Heirship with Waiver of Rights in his favor, private respondent Edy de los Reyes filed the same with the Registry of Deeds as part of anotice of an adverse claim against the original certificate of title.Thereafter, private respondent sought for petitioner (Acap) to personally inform him that he (Edy) had become the new owner of the land and that the lease rentals thereon should be paid to him. Private respondent further alleged that he and petitioner entered into an oral lease agreement wherein petitioner agreed to pay ten (10) cavans of palayper annumas lease rental. In 1982, petitioner allegedly complied with said obligation. In 1983, however, petitioner refused to pay any further lease rentals on the land, prompting private respondent to seek the assistance of the then Ministry of Agrarian Reform (MAR) in Hinigaran, Negros Occidental. The MAR invited petitioner to a conference scheduled on 13 October 1983. Petitioner did not attend the conference but sent his wife instead to the conference. During the meeting, an officer of the Ministry informed Acap's wife about private respondent's ownership of the said land but she stated that she and her husband (Teodoro) did not recognize private respondent's claim of ownership over the land.On 28 April 1988, after the lapse of four (4) years, private respondent filed a complaint for recovery of possession and damages against petitioner, alleging in the main that as his leasehold tenant, petitioner refused and failed to pay the agreed annual rental of ten (10) cavans of palay despite repeated demands.During the trial before the courta quo, petitioner reiterated his refusal to recognize private respondent's ownership over the subject land. He averred that he continues to recognize Cosme Pido as the owner of the said land, and having been a registered tenant therein since 1960, he never reneged on his rental obligations. When Pido died, he continued to pay rentals to Pido's widow. When the latter left for abroad, she instructed him to stay in the landholding and to pay theaccumulated rentalsupon her demand or return from abroad.Petitioner further claimed before the trial court that he had no knowledge about any transfer or sale of the lot to private respondent in 1981 and even the following year after Laurenciana's departure for abroad. He denied having entered into a verbal lease tenancy contract with private respondent and that assuming that the said lot was indeed sold to private respondent without his knowledge, R.A. 3844, as amended, grants him the right to redeem the same at a reasonable price. Petitioner also bewailed private respondent's ejectment action as a violation of his right to security of tenure under P.D. 27.On 20 August 1991, the lower court rendered a decision in favor of private respondentIn arriving at the above-mentioned judgment, the trial court stated that the evidence had established that the subject land was "sold" by the heirs of Cosme Pido to private respondent. Aggrieved, petitioner appealed to the Court of Appeals, imputing error to the lower court when it ruled that private respondent acquired ownership of Lot No. 1130 and that he, as tenant, should pay rentals to private respondent and that failing to pay the same from 1983 to 1987, his right to a certificate of land transfer under P.D. 27 was deemed forfeited.The Court of Appeals brushed aside petitioner's argument that the Declaration of Heirship and Waiver of Rights (Exhibit "D"), the document relied upon by private respondent to prove his ownership to the lot, was excluded by the lower court in its order dated 27 August 1990. The order indeed noted that the document was not identified by Cosme Pido's heirs and was not registered with the Registry of Deeds of Negros Occidental. According to respondent court, however, since the Declaration of Heirship and Waiver of Rights appears to have been duly notarized, no further proof of its due execution was necessary. Like the trial court, respondent court was also convinced that the said document stands asprima facieproof of appellee's (private respondent's)ownershipof the land in dispute.With respect to its non-registration, respondent court noted that petitioner had actual knowledge of the subjectsaleof the land in dispute to private respondent because as early as 1983, he (petitioner) already knew of private respondent's claim over the said land but which he thereafter denied, and that in 1982, he (petitioner) actually paid rent to private respondent. Otherwise stated, respondent court considered this fact of rental payment in 1982 as estoppel on petitioner's part to thereafter refute private respondent's claim of ownership over the said land. Under these circumstances, respondent court ruled that indeed there was deliberate refusal by petitioner to pay rent for a continued period of five years that merited forfeiture of his otherwise preferred right to the issuance of a certificate of land transfer.In the present petition, petitioner impugns the decision of the Court of Appeals as not in accord with the law and evidence when it rules that private respondent acquired ownership of Lot No. 1130 through the aforementioned Declaration of Heirship and Waiver of Rights.ISSUES: 1. WHETHER OR NOT THE SUBJECT DECLARATION OF HEIRSHIP AND WAIVER OF RIGHTS IS A RECOGNIZED MODE OF ACQUIRING OWNERSHIP BY PRIVATE RESPONDENT OVER THE LOT IN QUESTION.2. WHETHER OR NOT THE SAID DOCUMENT CAN BE CONSIDERED A DEED OF SALE IN FAVOR OF PRIVATE RESPONDENT OF THE LOT IN QUESTION.HELD: We find the petition impressed with merit.In the first place, an asserted right or claim to ownership or a real right over a thing arising from a juridical act, however justified, is notper sesufficient to give rise to ownership over theres. That right or title must be completed by fulfilling certain conditions imposed by law. Hence, ownership and real rights are acquired only pursuant to a legal mode or process. While title is the juridical justification, mode is the actual process of acquisition or transfer of ownership over a thing in question.8Under Article 712 of the Civil Code, the modes of acquiring ownership are generally classified into two (2) classes, namely, theoriginal mode(i.e., through occupation, acquisitive prescription, law or intellectual creation) and thederivative mode(i.e., through successionmortis causaor tradition as a result of certain contracts, such as sale, barter, donation, assignment or mutuum).In the case at bench, the trial court was obviously confused as to the nature and effect of the Declaration of Heirship and Waiver of Rights, equating the same with a contract (deed) of sale. They are not the same.In a Contract of Sale, one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other party to pay a price certain in money or its equivalent.9Upon the other hand, a declaration of heirship and waiver of rights operates as a public instrument when filed with the Registry of Deeds whereby the intestate heirs adjudicate and divide the estate left by the decedent among themselves as they see fit. It is in effect an extrajudicial settlement between the heirs under Rule 74 of the Rules of Court.10Hence, there is a marked difference between asaleof hereditary rights and awaiverof hereditary rights. The first presumes the existence of a contract or deed of sale between the parties.11The second is, technically speaking, a mode of extinction of ownership where there is an abdication or intentional relinquishment of a known right with knowledge of its existence and intention to relinquish it,in favor of other persons who are co-heirs in the succession.12Private respondent, being then a stranger to the succession of Cosme Pido, cannot conclusively claim ownership over the subject lot on the sole basis of the waiver document which neither recites the elements of either a sale,13or a donation,14or any other derivative mode of acquiring ownership.Quite surprisingly, both the trial court and public respondent Court of Appeals concluded that a "sale" transpired between Cosme Pido's heirs and private respondent and that petitioner acquired actual knowledge of said sale when he was summoned by the Ministry of Agrarian Reform to discuss private respondent's claim over the lot in question. This conclusion has no basis both in fact and in law.On record, Exhibit "D", which is the "Declaration of Heirship and Waiver of Rights" wasexcludedby the trial court in its order dated27 August 1990because the document was neither registered with the Registry of Deeds nor identified by the heirs of Cosme Pido. There is no showing that private respondent had the same document attached to or made part of the record. What the trial court admitted was Annex "E", a notice of adverse claim filed with the Registry of Deeds which contained the Declaration of Heirship with Waiver of rights and was annotated at the back of the Original Certificate of Title to the land in question.A notice of adverse claim, by its nature, does not however prove private respondent's ownership over the tenanted lot. "A notice of adverse claim is nothing but a notice of a claim adverse to the registered owner, the validity of which is yet to be established in court at some future date, and is no better than a notice oflis pendenswhich is a notice of a case already pending in court."15It is to be noted that while the existence of said adverse claim was duly proven, there is no evidence whatsoever that a deed of sale was executed between Cosme Pido's heirs and private respondent transferring the rights of Pido's heirs to the land in favor of private respondent. Private respondent's right or interest therefore in the tenanted lot remains an adverse claim which cannot by itself be sufficient to cancel the OCT to the land and title the same in private respondent's name.Consequently, while the transaction between Pido's heirs and private respondent may be binding on both parties, the right of petitioner as a registered tenant to the land cannot be perfunctorily forfeited on a mere allegation of private respondent's ownership without the corresponding proof thereof.Petitioner had been a registered tenant in the subject land since 1960 and religiously paid lease rentals thereon. In his mind, he continued to be the registered tenant of Cosme Pido and his family (after Pido's death), even if in 1982, private respondent allegedly informed petitioner that he had become the new owner of the land.Under the circumstances, petitioner may have, in good faith, assumed such statement of private respondent to be true and may have in fact delivered 10 cavans of palay as annual rental for 1982 to private respondent. But in 1983, it is clear that petitioner had misgivings over private respondent's claim of ownership over the said land because in the October 1983 MAR conference, his wife Laurenciana categorically denied all of private respondent's allegations. In fact, petitioner even secured a certificate from the MAR dated 9 May 1988 to the effect that he continued to be the registered tenant of Cosme Pido and not of private respondent. The reason is that private respondentnever registeredthe Declaration of Heirship with Waiver of Rights with the Registry of Deeds or with the MAR. Instead, he (private respondent) sought to do indirectly what could not be done directly,i.e., file anotice of adverse claim on the said lot to establish ownership thereover.It stands to reason, therefore, to hold that there was nounjustified or deliberate refusalby petitioner to pay the lease rentals or amortizations to the landowner/agricultural lessor which, in this case, private respondent failed to establish in his favor by clear and convincing evidence.16Consequently, the sanction of forfeiture of his preferred right to be issued a Certificate of Land Transfer under P.D. 27 and to the possession of his farmholdings should not be applied against petitioners, since private respondent has not established a cause of action for recovery of possession against petitioner.the Court hereby GRANTS the petition

DREAM VILLAGE VS BCDAFACTS: Petitioner Dream Village Neighborhood Association, Inc. (Dream Village) claims to represent more than 2,000 families who have been occupying a 78,466-square meter lot in Western Bicutan, Taguig City since 1985 "in the concept of owners continuously, exclusively and notoriously."6The lot used to be part of the Hacienda de Maricaban (Maricaban), owned by Dolores Casal y Ochoa and registered under a Torrens title,7Original Certificate of Title (OCT) No. 291, issued on October 17, 1906 by the Registry of Deeds of Rizal.8Maricaban covered several parcels of land with a total area of over 2,544 hectares spread out over Makati, Pasig, Taguig, Pasay, and Paraaque.9Following the purchase of Maricaban by the government of the United States of America (USA) early in the American colonial period, to be converted into the military reservation known as Fort William Mckinley, Transfer Certificate of Title (TCT) No. 192 was issued in the name of the USA to cancel OCT No. 291.10The US government later transferred 30 has. of Maricaban to the Manila Railroad Company, for which TCT No. 192 was cancelled by TCT Nos. 1218 and 1219, the first in the name of the Manila Railroad Company for 30 has., and the second in the name of the USA for the rest of the Maricaban property.11On January 29, 1914, TCT No. 1219 was cancelled and replaced by TCT No. 1688, and later that year, on September 15, 1914, TCT No. 1688 was cancelled and replaced by TCT No. 2288, both times in the name of the USA.12On December 6, 1956, the USA formally ceded Fort William Mckinley to the Republic of the Philippines (Republic), and on September 11, 1958, TCT No. 2288 was cancelled and replaced by TCT No. 61524, this time in the name of the Republic.13On July 12, 1957, President Carlos P. Garcia issued Proclamation No. 423 withdrawing from sale or settlement the tracts of land within Fort William Mckinley, now renamed Fort Bonifacio, and reserving them for military purposes.14On January 7, 1986, President Ferdinand E. Marcos issued Proclamation No. 2476 declaring certain portions of Fort Bonifacio alienable and disposable15in the manner provided under Republic Act (R.A.) Nos. 274 and 730, in relation to the Public Land Act,16thus allowing the sale to the settlers of home lots in Upper Bicutan, Lower Bicutan, Signal Village, and Western Bicutan.17On October 16, 1987, President Corazon C. Aquino issued Proclamation No. 172 amending Proclamation No. 2476 by limiting to Lots 1 and 2 of the survey Swo-13-000298 the areas in Western Bicutan open for disposition.18On March 13, 1992, R.A. No. 7227 was passed19creating the Bases Conversion and Development Authority (BCDA) to oversee and accelerate the conversion of Clark and Subic military reservations and their extension camps (John Hay Station, Wallace Air Station, ODonnell Transmitter Station, San Miguel Naval Communications Station and Capas Relay Station) to productive civilian uses. Section 820of the said law provides that the capital of the BCDA will be provided from sales proceeds or transfers of lots in nine (9) military camps in Metro Manila, including 723 has. of Fort Bonifacio. The law, thus, expressly authorized the President of the Philippines "to sell the above lands, in whole or in part, which are hereby declared alienable and disposable pursuant to the provisions of existing laws and regulations governing sales of government properties,"21specifically to raise capital for the BCDA. Titles to the camps were transferred to the BCDA for this purpose,22and TCT No. 61524 was cancelled on January 3, 1995 by TCT Nos. 23888, 23887, 23886, 22460, 23889, 23890, and 23891, now in the name of the BCDA.23Excepted from disposition by the BCDA are: a) approximately 148.80 has. reserved for the National Capital Region (NCR) Security Brigade, Philippine Army officers housing area, and Philippine National Police jails and support services (presently known as Camp Bagong Diwa); b) approximately 99.91 has. in Villamor Air Base for the Presidential Airlift Wing, one squadron of helicopters for the NCR and respective security units; c) twenty one (21) areas segregated by various presidential proclamations; and d) a proposed 30.15 has. as relocation site for families to be affected by the construction of Circumferential Road 5 and Radial Road 4, provided that the boundaries and technical description of these exempt areas shall be determined by an actual ground survey.24Now charging the BCDA of wrongfully asserting title to Dream Village and unlawfully subjecting its members to summary demolition, resulting in unrest and tensions among the residents,25on November 22, 1999, the latter filed a letter-complaint with the COSLAP to seek its assistance in the verification survey of the subject 78,466-sq m property, which they claimed is within Lot 1 of Swo-13-000298 and thus is covered by Proclamation No. 172. They claim that they have been occupying the area for thirty (30) years "in the concept of owners continuously, exclusively and notoriously for several years," and have built their houses of sturdy materials thereon and introduced paved roads, drainage and recreational and religious facilities. Dream Village, thus, asserts that the lot is not among those transferred to the BCDA under R.A. No. 7227, and therefore patent applications by the occupants should be processed by the Land Management Bureau (LMB).On August 15, 2000, Dream Village formalized its complaint by filing an Amended Petition26in the COSLAP. Respondent BCDA in its Answer28dated November 23, 2000 questioned the jurisdiction of the COSLAP to hear Dream Villages complaint, while asserting its title to the subject property pursuant to R.A. No. 7227. It argued that under Executive Order (E.O.) No. 561 which created the COSLAP, its task is merely to coordinate the various government offices and agencies involved in the settlement of land problems or disputes, adding that BCDA does not fall in the enumeration in Section 3 of E.O. No. 561, it being neither a pastureland-lease holder, a timber concessionaire, or a government reservation grantee, but the holder of patrimonial government property which cannot be the subject of a petition for classification, release or subdivision by the occupants of Dream Village.In its Resolution29dated April 28, 2004, the COSLAP narrated that it called a mediation conference on March 22, 2001, during which the parties agreed to have a relocation/verification survey conducted of the subject lot. On April 4, 2001, the COSLAP wrote to the Department of Environment and Natural Resources (DENR)-Community Environment and Natural Resources Office-NCR requesting the survey, which would also include Swo-00-0001302, covering the adjacent AFP-RSBS Industrial Park established by Proclamation No. 1218 on May 8, 1998 as well as the abandoned Circumferential Road 5 (C-5 Road).30On April 1, 2004, the COSLAP received the final report of the verification survey and a blueprint copy of the survey plan from Atty. Rizaldy Barcelo, Regional Technical Director for Lands of DENR. Specifically, Item No. 3 of the DENR report states:3. Lot-1, Swo-000298 is inside Proclamation 172. Dream Village Neighborhood Association, Inc. is outside Lot-1, Swo-13-000298 and inside Lot-10, 11 & Portion of Lot 13, Swo-00-0001302 with an actual area of 78,466 square meters. Likewise, the area actually is outside Swo-00-0001302 of BCDA.31(Emphasis ours and underscoring supplied)COSLAP RulingOn the basis of the DENRs verification survey report, the COSLAP resolved that Dream Village lies outside of BCDA, and particularly, outside of Swo-00-0001302, and thus directed the LMB of the DENR to process the applications of Dream Villages members for sales patent, noting that in view of the length of time that they "have been openly, continuously and notoriously occupying the subject property in the concept of an owner, x x x they are qualified to apply for sales patent on their respective occupied lots pursuant to R.A. Nos. 274 and 730 in relation to the provisions of the Public Land Act."32On the question of its jurisdiction over the complaint, the COSLAP cited the likelihood that the summary eviction by the BCDA of more than 2,000 families in Dream Village could stir up serious social unrest, and maintained that Section 3(2) of E.O. No. 561 authorizes it to "assume jurisdiction and resolve land problems or disputes which are critical and explosive in nature considering, for instance, the large number of parties involved, the presence or emergence of social tension or unrest, or other similar critical situations requiring immediate action," even as Section 3(2)(d) of E.O. No. 561 also allows it to take cognizance of "petitions for classification, release and/or subdivision of lands of the public domain," exactly the ultimate relief sought by Dream Village. Rationalizing that it was created precisely to provide a more effective mechanism for the expeditious settlement of land problems "in general," the COSLAP invoked as its authority the 1990 case of Baaga v. COSLAP,33where this Court said:It is true that Executive Order No. 561 provides that the COSLAP may take cognizance of cases which are "critical and explosive in nature considering, for instance, the large number of parties involved, the presence or emergence of social tension or unrest, or other similar critical situations requiring immediate action." However, the use of the word "may" does not mean that the COSLAPs jurisdiction is merely confined to the above mentioned cases. The provisions of the said Executive Order are clear that the COSLAP was created as a means of providing a more effective mechanism for the expeditious settlement of land problems in general, which are frequently the source of conflicts among settlers, landowners and cultural minorities. Besides, the COSLAP merely took over from the abolished PACLAP whose functions, including its jurisdiction, power and authority to act on, decide and resolve land disputes (Sec. 2, P.D. No. 832) were all assumed by it. The said Executive Order No. 561 containing said provision, being enacted only on September 21, 1979, cannot affect the exercise of jurisdiction of the PACLAP Provincial Committee of Koronadal on September 20, 1978. Neither can it affect the decision of the COSLAP which merely affirmed said exercise of jurisdiction.34In its Motion for Reconsideration35filed on May 20, 2004, the BCDA questioned the validity of the survey results since it was conducted without its representatives present, at the same time denying that it received a notification of the DENR verification survey.36It maintained that there is no basis for the COSLAPs finding that the members of Dream Village were in open, continuous, and adverse possession in the concept of owner, because not only is the property not among those declared alienable and disposable, but it is a titled patrimonial property of the State.37In the Order38dated June 17, 2004, the COSLAP denied BCDAs Motion for Reconsideration, insisting that it had due notice of the verification survey, while also noting that although the BCDA wanted to postpone the verification survey due to its tight schedule, it actually stalled the survey when it failed to suggest an alternative survey date to ensure its presence.CA RulingOn Petition for Review39to the CA, the BCDA argued that the dispute is outside the jurisdiction of the COSLAP because of the lands history of private ownership and because it is registered under an indefeasible Torrens title40; that Proclamation No. 172 covers only Lots 1 and 2 of Swo-13-000298 in Western Bicutan, whereas Dream Village occupies Lots 10, 11 and part of 13 of Swo-00-0001302, which also belongs to the BCDA41; that the COSLAP resolution is based on an erroneous DENR report stating that Dream Village is outside of BCDA, because Lots 10, 11, and portion of Lot 13 of Swo-00-0001302 are within the DA42; that the COSLAP was not justified