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NAVARRO NOTES ON PROPERTY Part 1

In the Mindanao Bus Company yung transportation buc company case, which I was referring to a while ago, sabi ng Supreme Court dun, the industry is not carried on in this building where the repair shop is located. The transportation business is carried on outside not here. So that’s another reason why the court said the repair equipment there should not be considered as immobilized but remained personal property.

Can the parties agree that a certain machinery which has been installed by the owner of the tenement for an industry or works which will be carried on in that building which tend to directly meet the needs of the industry or works? Can the owner of that machinery and a creditor agree to treat this machinery as personal property subject them to a chattel mortgage? Is that allowable? The answer is yes. In other words, again the principle of estoppel will apply. Although the machinery inside the building were installed by the owner and they tend directly to meet the needs of an industry or work which can be carried on in that building, if the parties agree to treat the machinery as chattel and enter into a chattel mortgage, neither of them will be permitted to question the validity later on of the chattel mortgage on the ground that the subject was actually real property.

Next point. In number 6 of Art. 415, the law deals with animal houses, pigeon houses, fish ponds, and other breeding places of similar nature. In case their owner place them or reserves them with the intention to have them permanently attached to the land, the animals in these places are included. So if there is a pigeon house, permanently attached to the land, the pigeons in that pigeon house are also considered real property. Of course pigeons sometimes fly around or in the case of fish ponds and you happen to bangus in your fish ponds, the bangus are considered immovable real property even if they are swimming around. For purposes of sale, however, they should be considered as movable property. So if you enter into a contract of sale of the bangus in your fishpond, that’s not a sale of real property. That should be considered of course as a sale of personal property. Or if you donate the bangus to the certain individual, that should not be considered a donation of real property but a donation of personal property. If you will consider it a donation of real property you will need to execute a public document both for the donation and the acceptance.

Fertilizers actually used in a piece of land. What about insecticide? Same rule should apply. Mines, quarries and slag dumps when the matter thereof forms part of the bed and waters either running or

stagnant. The waters referred to here are yung natural waters. So if you have several drums of water which you keep in your land because in some areas the water becomes scarce, the waters in those drums which you have earlier collected cannot be considered as waters referred to in Art 415. Yung mga waters dito either running or stagnant ay yung mga waters in rivers, lakes, lagoons. Natural waters.

Number 9, docks and structures which although floating are intended by their nature and object to remain in a fixed place in a river, lake or port. A question has already been asked regarding this. There was a barge which was at a fixed place, basta nasa fixed place even if floating consider it as real property. For example NAPOCOR and some other private companies have these power barges which supply electricity to some island provinces. These power barges are usually docked along a port or a shore and they remain there for a considerable period of time. They are considered as real property. Yung floating restaurant jan sa mei reclamation area. It is floating but it remains in fixed place. That should be considered as real property. But of course if its actually a boat, takes passengers, go on a cruise in Manila Bay while cruising around Manila Bay dinner is served, you don’t considered that as real property or immovable property.

Lastly, contracts for public works and servitudes and other real rights over real property. So please remember the enumeration of real property under Art 415. Then take a look at what are in turn considered as immovable property under Art 416 and 417 of the NCC. I just want to call your attention.

Certain real property by special provision of law also considered as movable property. Very good example are growing crops. Growing crops are considered under certain provisions of law as movable property under the chattel mortgage law as well as the civil code provisions on sales they are considered personal property. Sabi nga eh in the case

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of growing crops, while they are still there growing in the soil, sabi ng SC in the case of Sibal vs Valdez, it’s a mobilization by anticipation. The law already anticipates there subsequently becoming movable. When would that happen? When they are actually gathered. So even before they are gathered there is mobilization by anticipation. That’s’ why they can be a subject of chattel mortgage.

Forces of nature which are brought under the control of science; nuclear power, wind power, electricity, these are considered movable property.

Shares of stock in any corporation as long as you are talking of shares of stock they are considered personal property regardless of the fact that the corporations in which the shares are held are real property or even if the assets of the corporation consist of real property, the shares of stock in that corporation are considered personal.

The next important classification of course is the classification between property of public dominion and property of private ownership. So remember Art 420.

What are considered property of public dominion? Those intended for public use. Those intended for public service or for the development of national wealth.

Property intended for public use – roads, streets, parks. A property is considered according to the court, for public use within the meaning of the civil code if it is open indiscriminately to public . In other words, anyone can go there and use it. Like our streets. It is open to anyone indiscriminately. That’s property for public use.

Properties of public dominion are subject to certain special rules. We have to remember these. They cannot be the subject matter of contracts. They cannot be sold or leased or subject of contracts. They cannot be acquired by prescription. They cannot be attached and sold at public auction to satisfy any judgment. They cannot be burdened with an easement. They cannot be even registered and titled in your name under the Torrens system. If a title is issued covering a property of public dominion, that’s not a valid title.

The government has property of two types: Property of public dominion and patrimonial property. With respect to the patrimonial property, just like any ordinary and private property, that can be the subject of contracts. Property of public dominion as long as it remains such is subject to special rules we have just mentioned – cannot be subject to prescription, not subject to contracts, etc. Is it possible to convert property of public dominion to patrimonial property? Yes possible. How can that be done? Will the mere fact that the property of public dominion is no longer actually being used for public use or is no longer actually being devoted to some public service, will that automatically convert into patrimonial property? No it will not. There must be a formal declaration in the case of nation government property by the executive or legislative of such conversion otherwise the property remains a property of public dominion. With respect to property of political subdivisions, conversion must always be authorized by law. Example, the Raponggi Cases involving the property of the Philippines located in Japan which was given to us by way of reparation by the Japanese as part of the reparations agreement. Those properties were originally intended for the use of our embassy but they were never used for that purpose. After a long period of time there was an attempt to sell these properties. The SC said the mere fact that these properties in Japan had not been actually used for their original purpose does not automatically convert these properties into patrimonial property. They remain part of the public domain and consequently not available for private appropriation or ownership until there is a formal declaration from the government to withdraw from being such. Abandonment according to SC cannot be inferred, it must be definite.

On the part of local government entities, just like the state, their properties are subdivided into properties for public use and patrimonial properties. Again for property to be considered for public use, it must be open indiscriminately to the public otherwise it cannot be said a property for public use. In some cases however, the SC in determining the properties of a local government unit should be considered as public or patrimonial, the SC opted to apply the special laws governing municipal corporation. Thus in the case of Zamboanga del Norte vs City of Zambuanga, the SC said we cannot strictly decide this case on the parameters set by the Civil Code in determining what are public use and patrimonial property. This involved the creation of a new local government curve out of a political unit. In that case and other similar cases involving local governments, the SC instead considered the USE of the property whether it is

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for governmental purposes or not. As long as the property was used for governmental purposes, it was considered property for public use or a public property.

Still on this point. As to the absence of clear evidence as the source of funds used in acquiring the property which is currently being held by the local government unit, the presumption is that the land came from the State. Salas vs Jarencio and some other cases. So if a local government unit is currently holding property but there is no clear showing as the funds used to acquire the property or how the property was acquired, the presumption is that property or land actually came from the State and the local government unit is holding it merely in trust for the State for the benefit of the inhabitants of that locality. If that is so, those properties cannot be considered as patrimonial property. They will be considered public property and the national legislature will be considered to have absolute control over these properties. In some cases decided by the SC, it has been made clear that LGUs cannot enter into contracts, cannot even validly authorized by means of an ordinance, the awarding of contracts of certain streets in favour of certain individuals for purposes of having plea market there. As long as the street remains a street, it’s for public use and therefore beyond the power of LGU to deal with by means of contract. In one case the LGU authorized that a certain street be converted a plea market, there was an ordinance authorizing that. The SC said that cannot be. What is clear from this cases is that while even under the LGC, LGUs are allowed to withdraw certain streets when no longer necessary or withdraw from public use, in other words they cannot have their cake and eat it too. Without actually withdrawing the road from public use, they will still maintain it as a street and at the same time operate it as a plea market. That cannot be done. Sabi ng SC sa mga ganitong kaso, Hindi pwede yan. As long as they have not been withdrawn from public use, they remain property for public use. They cannot at the same time enter into contract with private individual who intended to operate a plea market in that road. Kailingan kung gusto nyo i-withdraw, i-withdraw nyo. In other words, that street will cease as a street. Only after that can you deal with it as patrimonial property but not while it is still a street.

You recall the ruling by the SC in Chavez vs PEA. There was this agreement between the PEA and the AMARI. AMARI would reclaim areas of Manila Bay and as payment it will be paid with reclaimed lands. The SC said, with respect to the reclaimed lands on freedom islands around 157 hectares, which are covered by titles in the name of PEA they are alienable lands of the public domain. But they may only be leased not sold to public corporations of course they may be sold to Filipino citizens. Of course with regards to submerged areas, they are inalienable and outside the commerce of man. Only after the PEA has reclaimed them may the government reclassify them as alienable and disposable lands IF NO longer needed for public service. The transfer of the submerged lands to AMARI is also void since the Constitution prohibits alienation of our natural resources other than the agricultural land of public domains. So remember the important points of the decision.

OWNERSHIP…Remember the traditional attributes of ownership. Generally, what are the rights of an

owner? You have the right to use, right to the fruits, the right, yung jus abutendi, that should not interpreted to mean the right to abuse. There is no such thing. Jus abutendi simply means the right to consume the thing by its use. Right to dispose. Right to vindicate or recover. You also remember the limitations on the rights of ownership. These are limitations which may either come from the State in the exercise of its inherent powers of Government:: police power, eminent domain and taxation. Or these may be limitations imposed by specific provisions of law like the provisions on Civil Code dealing with easements, legal easements. This maybe limitations imposed by the person transmitting the property. If I am donating a property to you, I may impose in the deed of donation certain limitations on your use of the property, for example.

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In connection with the rights of ownership, you remember the doctrine of self-help under Article 429. An owner or lawful possessor is allowed by law the use of such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful deprivation or physical invasion or usurpation of his property. Only reasonable force should be used. The doctrine can only invoke at the time when there is an actual or threatened unlawful, physical invasion not thereafter. If the property has already been taken by the third person, you are not allowed to use force to get it back. You must invoke the aid of judicial authorities. One of the best examples in connection with the doctrine of self-help is of course the case of German Management and Services Inc. Here was a landowner. He wanted to develop his property and so he executed a power of attorney in favor of German Management Services to develop that property. German Management Services went to the property and discovered that certain individuals are occupying the property. They are cultivating the property. So German Management used reasonable force to oust these occupants who are cultivating portions of that property. Later on they tried to invoke the principle of self-help. Court said that’s not proper because it is not disputed that when they tried to enter the property those occupants were already there. They have been cultivating the land for some time. A party in peaceable quiet possession shall not be turned out by a strong hand, violence or terror according to the Court . The doctrine of self-help can only be exercised and invoked at the time of actual or threatened dispossession. When possession has already been lost, the owner must resort to judicial process for the recovery of his property. He cannot take the law in his own hands. I think we can take a little oxygen break at this point.

Alright, still on ownership. The owner of the property has the right to enclose his property with a fence, a wall or any other means. There is this beautiful case in this connection and I referred to Custodio v. CA. There was a property owned by a person. There was no fence around his property so some of his neighbors were passing through his land to reach the public road. Later on, the property owner decided to enclose his property with a fence. Consequently, his neighbors could no longer pass through his land. They had to take a long route to reach the public street. They filed a complaint for damages. The Court said this is a case of damnum absque injuria. The property owner was simply exercising a right explicitly granted to him by law, the right to enclose his property with a fence. If at the meantime, great inconvenience was caused to his neighbors who now take a longer route to reach the street, it’s just too bad but obviously they do not have the legal right to claim damages. Please take note that when the case was decided, there was no easement yet. Wala pang easement. It was only after the case was decided when the Court said that an easement must be created but they need to pay indemnity. So as long there was no easement yet, you have the perfect right to enclose your property with a fence. That is very clear in Article 430 of the Civil Code.

A property owner has, of course, the jus utendi. The right to use his property. But the right to use one’s property must be exercised in such a way as not to injure others. Sic uter et to utelienum non laedas (not sure). So use your own as not to injure others. In one case, there was two adjoining properties. The owner of the higher property built thereon certain artificial bodies of water. There were artificial lakes, water pots, etc. unfortunately, during an inclement or bad weather, some of these constructions were washed away and they fell to the adjoining lower estate. The lower court dismissed the case. The Supreme Court said the case must be reinstated applying Article 431 while you have the right to use your property; you use it in such a way as not to injure others. Obviously, the Court considered the construction of these artificial bodies of

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water on the higher estate as something which causes during bad weather some damage or prejudice to the adjoining lower estate.

You also take note of the provisions of Article 432 of the Civil Code which is sometimes referred to as the emergency doctrine, emergency rule. If you are the owner of a thing, the law says you have no right to prohibit the interference of another person with your property as long as the interference is necessary to prevent an imminent danger and as long as the threatened damage or injury is greater, much greater as a matter of fact. The law says much greater than the damage that would arise to you from the interference with your property. In this connection, the view has been advanced to which I agree that negligence on the part of the person interfering does not preclude resort to the rule under Article 432. If, for example, while I was using my car another vehicle owned and driven by Mr. X carrined to the street and it was being driven carelessly and slammed to the Meralco post and started to billow with smoke. It was obviously under fire. Under this Article, Mr. X although he was negligent in driving his car would have the right to interfere with my property. If I happened to have a fire extinguisher for example I do not have the right to prohibit the interference with the use of that fire extinguisher. His negligence does not preclude him from invoking the rule under Article 432 of the Civil Code. Obviously, any possible damage which might cause to me with the use of my fire extinguisher is much less than the damage that would result to the complete burning of his car. So in that case I submit the requirements of Article 432 would clearly be met.

You just read Articles 433 and 434. Actual possession under claim of ownership raises disputable presumption of ownership. The true owner must resort to judicial process if he wants to recover his property. And the requirement to recover property, the property must be identified and the plaintiff must rely on the strength of his evidence and not on the weakness of the defendant’s claim which is in accord with the rule that he who alleges has the burden of proof.

Article 435 is simply a reinstatement of the basic principle in Constitutional Law. One of the inherent powers of the State is of course the power of eminent domain. Property can be taken for public use as long as there is payment of just compensation.

Article 436, on the other hand, is a reinstatement of the rule on police power. Of course, the moment the State exercises its police power then property rights must necessarily yield. If property is taken or damaged or destroyed as a consequence of the exercise of police power, of course, there is no right to indemnity. The only indemnity they get, the only possible indemnity you get is the feeling of satisfaction that somehow you have contributed to the common good.

I call your attention to Article 437 at this point. The owner of property is the owner not only of its surface but of everything under it. If you are the owner of a parcel of land, you own not only the surface but everything under it. Of course, that does not necessarily mean that provision that everything under it is to be taken in its literal sense. If there are for example minerals under your land, ah that does not belong to you. That belongs to our Kabalikat sa Kaunlaran, the State. Regalian doctrine. The question is up to what depth you will be considered an owner of what is beneath your land? Does that extend up to the middle of the earth? The rule of thumb is that it extends only up to such depth as you can still make use of it…up to such depth that you can still make use of it. And in a case decided by the Supreme Court, it would seem that it is quite deep, at least from the point of view of the Supreme Court. I refer to NPC v. Ibrahim. For example, there is a property owner. Unknown to him, the NPC constructed a tunnel

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passing beneath his land because, this happened somewhere in Mindanao, the NPC was drawing water from Agus River if I remember correctly. One of the big rivers there. So the property owner was not aware that there was a tunnel underneath his land constructed by the NPC, it was much later when….

Hidden TreasuresI think you will agree if you have been reading previous bar questions, paborito ito for one reason or another.

Remember No. 1, first of all, what is considered as treasures? So the law defines that in Art. 438, it is any hidden and unknown deposit of money, jewellery or other precious objects, the lawful ownership of which does not appear. In other words, hindi alam kung sinong may-ari. If you see your neighbour one midnight, digging a hole on a parcel of land near your house and hiding a jar full of jewellery, that is not hidden treasure, okay? Alam mo kung sino ang nagbaon. The lawful ownership must not appear. The law enumerates money, jewellery, or other precious objects. It applying the ejusdem generis (*not sure if proper latin term) rule that should be limited to things of similar nature. Therefore, again, this does not include mineral deposits, or oil, hindi pwedeng hidden treasure yan, okay. Pag-aari yan ng ating kabalikat sa kaunlaran, the State.

What is the rule with respect to hidden treasure? It belongs to the owner of the land, building or other property in which it is found. If it is found by another person, in other words, somebody other than the owner of the property and by chance, you have the ½ - ½ rule, 50-50. ½ will belong to the owner, ½ will belong to the finder. If however the finder happens to be a trespasser, he is not entitled to any share.

The law requires that the finding should be by chance. By chance. In other words, this would usually mean, and I think the traditional meaning ascribed to this phrase is that the finding was not intended. Totally unexpected, not intended. In other words, the finder was not looking for the treasure. Supposing that a man has been given the usufruct of a parcel of land by his friend, and so he is staying there on that land. And then one day, there was an old man who gave him what appeared to be an old map, and the old man told him, that on a part of that property, there is treasure buried by pirates a long time ago. And so this usufructuary believing what was told to him by the old man, digs at the precise spot indicated in that old map. And true enough, he finds hidden treasure. Will he be entitled to any share of the treasure? Will his finding be considered as a finding by chance? If you go to the traditional view as to the meaning of by chance, then it would seem that he would not fall under that category because he intentionally looks for the treasure. But I think this logic and good sense in the view advanced by others. According to them, when the law says by chance, that should be interpreted to mean “by a stroke of good fortune.” Let me put it this way, a lot of people had been engaged all over the Philippines for the search of the so-called Yamashita Treasure. Even books have been written about the search of this treasure. A lot of people have engaged in diggings, spent millions even to finance this excavations but a lot of them have turned, well, were not able to locate any treasure at all. In other words, even if you look for treasure, there is no guarantee, even if you are using an old map, there is no guarantee that you will find one. So in that sense, if you do find treasure, you’re finding could be considered as by a stroke of good fortune. And in that sense, it can be considered as finding by chance. Okay.

If the finder was precisely employed by the owner of the land to look for treasure there, the finder, I submit will not be entitled to any share under art. 438. His remuneration will depend on his contract or agreement with the land owner. As to how the treasure will be shared, or as to his compensation, direct compensation, for the work which will be undertaken.

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Lets now go to accession, another favorite area of course. Accession. The general rule is contained in art. 440. If you are the owner of the property, by right of accession, you are also entitled, you also owned everything which is produced by the property or which is incorporated with that property, or which is attached to that property, either naturally or artificially. The owner has the right by accession to everything produced, incorporated or attached to the property.

There are various kinds of accession. Okay. You have accession discreta, the right given to the owner to everything which is produced by the property. This is in turn subdivided into the three types of fruits which can possibly be produced, natural fruits, industrial fruits and civil fruits. Natural fruits are the spontaneous products of the soil, as well as the young and other products of animals. So animal manure, that’s natural fruits okay. Mushrooms, yung mushrooms which are not cultivated, which just sprout in the field, especially after a thunderstorm the previous evening, those of you who come from the provinces, usually after a thunderstorm the previous night, if you walk early morning, you’ll be able to find mushrooms. But you have to be careful because some of these are poisonous. So that could be considered as spontaneous products of the soil.

Industrial fruits, on the other hand, are those which are produced by lands through human labor and cultivation, okay. If you are talking of mushrooms produced by a farm, they are cultured, that would be industrial rather than natural fruits.

Of course you have the third type of fruit, civil fruits. Rents, price of leases of lands and other properties, life annuities and other similar income.

And then you have accession continua. You have, this is the right given to the owner to everything which is incorporated or attached to his property, either naturally or artificially.

With regard to immovable property, you have accession industrial, sub classification of accession continua. You have, first, with respect to immovables, accession industrial which covers building, planting, sowing, and you have accession natural. What would fall under accession natural? Alluvion, avulsion, change of river beds, formation of islands.

With regard to personal or movable property, you have adjuction or conjuction, commixtion or confusion, specification.

Alright, to the owner belongs all of the fruits. Do not forget, however, the rule under art. 443, very important rule. He who receives the fruits has the obligation to reimburse the expenses made by another person in their production, gathering, and preservation. Please take note, that in art. 434, the law does not distinguish between people or persons in good faith and persons in bad faith. It applies to everyone. You might have been in bad faith, but as long as you have spent for the production, gathering and preservation of the fruits, the owner who is able to get back possession is obligated under art 443 to reimburse you in the expenses you were able to incur to production, gathering, preservation.

Please take note however, another important thing we have to remember in connection with art 443, that the article would not apply if the fruits have not yet been gathered. So if the fruits are still ungathered, you don’t apply art 443. Consequently, if you happen to be in bad faith and you have not yet gathered these fruits, when the lawful owner or possessor recovers the property from you, you don’t apply 443. You simply lose all of these ungathered fruits,

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applying the rule with respect to possessors in bad faith, as well as planters and sowers in bad faith. He who is in bad faith, loses everything which he has built, planted, or sown.

Art. 445 tells us when these rules on accession with respect to immovable property will apply and when they would not. What do I mean? The law says whatever is built, planted or sown on the land of another, underlying that phrase, “land of another,” together with the improvements and repairs thereon shall belong to the owner of the land. If I build, plant or sow on my own land, therefore, these rules on accession would find no proper application. You apply these rules if something is built, planted or sown on the land of another. Because if it is the owner of the land himself who builds, plants, or sows, there is no question, he is really the owner of everything, okay. As a matter of fact, there is a presumption under art. 446 that everything, all works of sowing or planting, all works, sowing and planting are presumed to have been made by the owner and at his expense. Of course, that is a disputable presumption but that is a presumption just the same.

Lets first tackle the situation contemplated in art. 447. What is the scenario in art. 447? Here is a land owner, and he decides to build on his property using the materials of another person, okay so simpleng simple ang situation. I have a parcel of land, I build a house there, or any other thing, but I used your materials, okay. Of course, there are always 2 possibilities. Either I am in good faith or in bad faith. When would I be in good faith in that situation? If I thought that I have the right to use those materials. If I thought I owned those materials. I would be in bad faith if I knew that you were the owner of those materials, and despite of that knowledge, I still used them, okay.

If I am in good faith, akala ko saken yung materials na yun, what’s my obligation under art. 447? The law says, I should pay their value. I should pay their value, that is fair and square. Can I be held liable for damages? The answer is no because precisely, I was in good faith. I simply have to pay the value of the materials owned by you.

If I am in bad faith, ah of course, I have to pay the value of the materials plus damages. Damages would of course be intended to penalize me for my bad faith.

What about you, the owner of the materials? What would be your rights? The law says, you can remove your materials, if it is possible to do so without injury to the work constructed. If it is possible to remove your materials without injury, that means it is not really a case of real attachment, kasi its possible to remove e without injury. There is no real case of attachment. At any rate, the law says you can remove your materials if its possible to do so without injury to the plantings, constructions, or works.

If I was in bad faith however, ah the law says you can remove your materials in any case. Aside from your right to recover damages. So if I am in good faith, limited right of removal from your part. Alright.

Scenario contemplated by art. 448. Here, the law contemplates a situation where there is a land owner and somebody builds, plants, or sows on his property. Okay. Again, we have to determine whether the builder, planter, or sower is in good faith or in bad faith. The land owner also, because even the land owner in that case can be in bad faith. When will the land owner be in bad faith in that situation? If he knew that somebody was building on his property and he permitted, he allowed that building to continue. Sige lang, sige lang magtayo ka dyan, tapos ka after a while akin yan. Bad faith yun, okay. Of course if he was not aware that somebody was building, sowing, or planting in his property, you would obviously be in good faith.

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The builder, planter or sower on the other hand, would be in good faith if he is not aware of any defect or flaw in his title or mode of acquisition. The builder thinks he owns that land or he thought he had the legal right to build thereon, he was in good faith. If he was aware that he had no legal right to build on that property, but he built, planted just the same, he would obviously be in bad faith.

What would be the respective rights? Assuming that both parties, land owner and builder, are in good faith, the rights would be as follows:

The land owner can appropriate what has been built, planted or sown on his land. Of course, he has to pay proper indemnity to the builder, planter or sower. In the case of building and planting, the land owner also has the option of selling the land occupied by the building or planting to the builder or planter. He cannot however avail of that option, yung ask the builder or planter to buy the land, if the value of the land is considerably more than the value of the building or planting. Please take note, the law uses the phrase “considerably more.” If the value of the land and the value of the building or planting are more or less the same, or if the difference is the value is not too much, then the land owner is not precluded from availing that option. Kasi dapat ang difference of value, the value of the land must be considerably more than the value of the building or planting. In that case, they can simply enter into a lease agreement. If they cannot agree on the terms of the lease, the court shall fix the terms thereof. According to art 448.

Please take note that art 448 distinguishes between a planter and a sower, okay. Obviously, parehong nagtatanim yan, okay. What’s the difference? You are a sower if what you actually sow is something not produced fruits for a long period of time. Rice, for example. Sabi nung kanta, planting rice is never fun, but actually, pagdating sa 448, it is not planting rice, it’s sowing rice, okay. Once you harvest, you have to sow again, sower ka niyan. But if what you plant is something which will last for years and continues producing fruits year after year, you are not a sower, you are a planter. Halimbawa nagtanim ka ng punong manga, okay, or indian mango or whatever, coconut, that’s a case of planting because what you planted will last for years and continue producing fruits year after year, without having to replant them, alright. Bananas, if what is involved is bananas, are you a planter or a sower? Ordinarily, I would say that you should merely be considered as a sower, not a planter. Because the ordinary way of getting the fruits from a banana is by cutting down the trunk. Pag bumagsak na, chaka mo kukunin yung mga bunches of bananas okay. Although I understand that in some areas of South America, yung mga large banana plantations, hindi daw ganun, they simply get the bunches of bananas and they are somehow able to produce fruits for quite sometime. Okay. So… (30:18)

PART 2 (30:00 – 1:00)

The landowner has the right to appropriate but he must pay the proper indemnity. What is the indemnity? Supposing that the builder spent P500k when he built it. At that time when the landowner exercises his option to appropriate the building was already worth P5 million. What is the amount which will constitute the proper indemnity? SC has already decided that point. It is the market value at the time when the indemnity is to be paid. So in that problem, although only P500k was spent since the property at the time when indemnity is to be paid the property was already worth P5 million which should be paid by the landowner to the builder.

If the landowner decides to appropriate he has to pay the indemnity and prior to the payment of the proper indemnity to the builder, the builder has the right of retention. If you are the landowner and I am the builder we’re both in good faith. I built on your land a building. You informed me that your option is to appropriate the building. So the price of indemnity is let’s say is P10 million. Prior of payment of P10 million to me, I have the right to retain the building and to continue occupying your land. That is the right of retention given by law to me.

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What is the purpose of the right of retention? To ensure that I will be paid properly the indemnity due to me. Now, supposing during the period of retention while you have not yet paid me the indemnity naghahanap ka pa ng pera pambayad sa akin the building is lost because of caso fortuito. Tinamaan ng kidlat nasunog and it was completely incinerated. What’s the net effect? Ah, sorry na lang ako. I lose my right of retention because you are not obligated as landowner to pay for buildings or improvements which have already ceased to exist. Wala na, no more right of retention.

Now during the period of retention can the landowner demand from the builder the payment of rent? O can you tell me but you have to pay rent… Teka muna, magbayad ka muna ng renta dyan sa occupied area ng building mo, eh lupa ko yan. In the meantime, I am deprived of the use of my property. Can I be required to pay rent? The answer is NO. As long as there is a right of retention brought about by the earlier exercise by the landowner of the option to appropriate. As long as the builder has the right of retention he cannot be compelled to pay rent. Why? Because if he is required to pay rent that will damage injure/negate his security for the payment of the indemnity.

Supposing that the property, the building which I constructed in good faith on your land is producing fruits . Let’s assume that portions of that building are being leased out/rented out by me to third persons who are paying me rent. During the period when I have the right of retention, who is entitled to the rentals paid by the tenants? Can these rentals be offset with the indemnity due to me? In one early case, I refer to Ortiz vs. Cayanan which involved possessor in good faith. There were some improvements for which he was entitled to indemnity. There was a right of retention because the indemnity has not yet been paid. During the period when he had the right of retention, nung hindi pa siya nababayaran ng indemnity for some useful improvements. A detour was constructed through the property. Detour kasi one highway was being constructed or repaired by the government. In the meantime, vehicles had to take a detour through the property which was under the right of retention and tolls were collected. Lahat ng vehicles na dumadaan doon ay may toll. Ang tanong doon is… Can the tolls collected by the possessor who had a right of retention, can the tolls he collected be offset/compensated with the indemnity which is due to him? Ang sabi ng SC sa Ortiz vs. Cayanan, YES pwede. In other words, the right of retention according to SC could in that case not merely a security but rather a way for the extinguishment of the obligation to pay indemnity. So pwede raw.

In some other cases decided by SC, Pecson for example of which I am sure you are familiar. Sabi ng SC hindi pwede. If fruits are collected by the builder in good faith during the period when he is exercising his right of retention, these fruits and rentals cannot be compensated with the indemnity due him. Why? Because he is the one entitled as a consequence of a right of retention to the possession and tenancy of the property. He is also entitled to these fruits . So there can be no compensation between the fruits and the indemnity for the simple reason that they are both due to him. They both belong to him.

You know this is admittedly one of the well… I could sense a certain ambivalence on the part of court decisions. Kasi one reason according to some decisions the builder in good faith is no longer entitled to the fruits during the period of retention. It’s because you know under the law on possession the moment the builder becomes aware that he is not really the owner of the property, there is some mode, there is a defect in the mode on title or acquisition, then strictly speaking he is no longer in good faith. And from that moment on under the law on possession he is not entitled to the fruits. That’s the basis on SC decisions to the effect that he is not entitled to the fruits.

But personally I think the better view is that he would still be entitled. In other words, as long as he builds in good faith he cannot be deprived of the rights pertaining to a builder in good faith. One of which is the right of retention even if considered assumed at some point he becomes aware there is a defect or flaw in his title or mode of acquisition he continues to exercise the rights of a builder in good faith. One of which is the right of retention. And the right of

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retention I submit necessarily implies tenancy and continued possession as such he should be entitled to the fruits. And there can be no compensation between the fruits and the amount of indemnity due to him.

The option is given to the landowner and not the builder. It is the landowner who decides whether he will appropriate what has been built or planted or whether he will ask the builder or planter to buy the land. That option is given to him. The builder cannot compel the landowner to simply sell the land to him or at least the portion thereof occupied by his building. He cannot do that because the option is not given to him. The option is given by law to the landowner. Why? In Depra vs. Dumlao, the SC said because the right of the landowner is older.

Alright, can the landowner simply refuse the exercise the options under Art. 448? He does not want to appropriate the building. Sabi niya ayaw ko nyang building mo, ano ang gagawin ko ang pangit yang bahay mo… Neither does he want to sell the land occupied by the building. Ayaw ko ding ibenta. In short, he simply tells the builder lumayas ka, tanggalin mo yang building mo dyan dahil hindi mo lupa yan, lupa ko yan. Can the landowner do that? NO, he cannot. He cannot just refuse to exercise this option and simply ask for the removal of what in good faith has been built or planted on his land. The option is limited to those stated in Art. 448.

But supposing that the landowner avails or elects the option of selling his land. Sabi niya, o sige bilhin mo na lang yan. Ito ang presyo and the value of the land let’s assume is not considerably more than that of the building. The builder however is unable to pay. Wala kahit sunugin mo yung builder eh wala kang maaamoy na pera. Wala siyang pera pambayad duon sa land. Sabi ng SC, if that is the case then the landowner can ask for the removal of the building if having opted to sell his land and assuming the value is not considerably more than that of the building. The builder is unable to pay then that’s the situation when the landowner can actually ask for the removal of the building.

Any other remedies available to the landowner if that were the case? Yung builder is unable to pay. Of course there is always the remedy of simply entering into a lease. They can simply enter into a lease. Sabi niya, o sige hindi mo pala kaya bayaran eh mag-lease na lang tayo. And there is a third remedy. So they can enter into a lease. No. 2, the landowner can ask for removal. No. 3 option, they can ask for the sale of both the land and the building. The proceeds of the sale will be first applied to the value of the land. The rest and any excess will be delivered to the owner of the house or the building.

Prior to the time that the landowner exercises his option of either appropriation or sale. Prior to his moment of decision, the builder of course have been occupying the land of the landowner. Can he be required to pay rent for his occupancy during that period prior to the exercise by the landowner of his option? The answer is YES. He should be. The moment the landowner exercises the option to appropriate there arises the right of retention. On the part of the builder from that moment he cannot be compelled to pay rent.

If the landowner opts instead of appropriation, ang option nya is sale of the land to the builder. Can rent be demanded in the meantime? The answer is YES. Rent will have to be paid until such time when the land is in fact acquired by the builder. Pag na acquire na nya yun, of course, he is the owner already he simply does not have to pay rent anymore.

Next point, we said earlier that these rules in accession on immovable property would not apply to a situation where it is the landowner himself who builds or plants on his own property. Kasi sabi natin under the law, planted, built or sown on the land of another. Kung sarili mong lupa, no application ito. Now, having said that it follows therefore that if a co-owner of a property builds or plants on the property under co-ownership these rules would not apply. It is

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because a co-owner is the owner of an ideal or aliquot share of the whole property. And as a matter of fact under the law on co-ownership, a co-owner has the right to use the property under co-ownership as long as he does not prevent the other co-owners from similarly using it. So if something is built or planted by a co-owner this rules on accession would not apply.

However, if the co-ownership has already been terminated by a partition of the property and after the partition it is discovered one of the co-owners, the previous co-owners has built on a part of the property which was later on adjudicated to another co-owner then the rules under Art. 448 should apply . The co-owner who had earlier built on the property under co-ownership but a portion of whose building is discovered to have encroached upon the part adjudicated in the partition to the other co-owners will have the rights of a builder in good faith. Kung terminated na ang co-ownership at na-diskubre na… Halimbawa, we are the two co-owners during the existence of a co-ownership over a parcel of land. I built on that land. Later on, we agree to partition the property. Tapos na ang co-ownership. Pagka-partition natin na-diskubre na ang building ko pala a few square meters of my building occupying a part allotted to you under our partition agreement. Art 448 can be applied. I will be considered a builder in good faith with the same rights under Art. 448.

The claim of good faith may be made by a successor-in-interest of the original builder. In one case, a certain land together with the building standing thereon was purchased by a buyer. Later on, upon resurvey of the land it was discovered that a portion of that building encroached upon the adjacent property. Sabi ng SC, YES the buyer in this case can invoke good faith and the provisions of Art. 448 can apply.

Well, sometimes to a certain extent it’s quite amusing to remember some of the cases involved. In one case can you imagine there was a couple who bought a lot from a subdivision. Usually ang mga subdivision lot numbers so and so… block numbers so and so… The time finally came when they decided to construct a house. So, punta sila sa subdivision. Tinanong nila yung representative of the division/developer. Sabi nila, we are going to construct na. Saan ba yung lote na nabili namin. Sabi ng rep., o eto ho at itinuro ang lote. Ok, so they constructed. Anak ng tokwa, hindi pala yun ang lote. Nagkamali ng turo. Can they invoke the rights of a builder in good faith? YES, they can invoke the rights of a builder in good faith.

By the way, even if the property involved is a registered property. Halimbawa, magkatabi yung lote natin parehong may titulo. Of course when property is titled very precise and description nyan at ng boundaries. Beginning at the point mark one on plan. 2000 meters from so and so… (Basta precise…)Can you still claim good faith if the properties are covered by a torrens title? The answer is YES. Because if you are an ordinary person you are not expected unless you happen to be an expert in the science of surveying… You are not expected to know the precise boundaries of your properties even if your property is covered by a torrens title. Kung surveyor ka yan ok yan. Pero tayong ordinary person, ano ang malay natin kung nasaan yang north 70 degrees na yan. Although of course meron na ngayong GPS. Even sa cellphone meron yan eh. Sasabihin sayo kung nasaang lugar ka. Accurate ang description within 5 meters. May GPS na nakalagay sa kotse at nagsasalita. Turn right after 100 meters. But even then, I submit that the rule still applies unless you happen to be an expert in the science of surveying. You should not be held accountable for a mistake. You can invoke good faith.

Pero ibang usapan naman kung halimbawa, I build on a land in Manila. Nakita ko ang isang bakanteng lote at nagtayo ako duon. Nuong sinita ako ng may-ari sabi ko ay ganun ba. Pasensya akala ko lote ko ito. E wala naman akong titulo maski ano. Ang pag-aari ko ay nasa Quezon City. Wala akong properties sa Manila. Can I claim good faith? NO. I should not be allowed to claim good faith. My mere assertion that I thought I had the legal right to be on that property obviously is a vagrant assertion. Why vagrant? Because it has no visible means of support. Ok, so hindi pwedeng vagrant assertion.

Next point, supposing that the builder is in bad faith. When a builder is in bad faith napakasimple. He loses everything. He becomes liable for damages. If you build in bad faith you lose everything. The landowner can demand that you buy his land regardless of its value. No restrictions needed. Basta in bad faith ka at sinabi kong bilhin mo ang

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lupa ko dapat bilhin mo yun. If your building is worth P1 million yung land na tinayuan mo is worth P5 million. You can be compelled to buy the land. Bad faith ka. Pasaway ka. Kasalanan mo and so you are liable for damages. The landowner would have the right to demand removal. Tanggalin mo yan at lumayas ka sa lupa ko. Basta in bad faith you have no rights whatsoever except yung recovery of expenses for the preservation of the property. Why so? Kasi pagdating sa necessary expenses since these are supposedly incurred for the preservation of the property the landowner would have incurred the same expenses even if he was the one in possession of the property. So in terms of fairness and basic justice the law mandates that the builder in bad faith should be entitled to this.

By the way, sabi natin everything produced all fruits of the property belong to the owner. Siguraduhin lang natin na talagang fruits. There is an old case yung BONUS. Certain landowners were asked by a certain company. Pwede ba sabi nila i-mortgage nyo yang mga lupa ninyo para maka secure kami ng loan. For the risk you are going to take we will give you certain bonuses. So pumayag ang landowners and binigyan sila ng bonuses. Are this bonuses fruits? The answer is NO. Because they were not produced by the land. Hindi yan fruits. They are not even civil fruits. Bigla ko lang naisip baga maitanong.

PART 1 – 01:00:00 – 01:10:03 Next point. Supposing that both the land owner and the land builder are in bad faith. Ah madali yan, they are

both considered to have acted in good faith so you apply the provisions of Article 448.

Supposing that the builder used the materials of a third person in building on the land of another, okay, a lot will depend on whether the builder and the land owner are in bad faith.

Assuming that they are both in good faith, both the builder and the land owner are in good faith and the material owner is also in good faith, ano ang magiging rights ng owner ng materials? The owner of the materials of course can recover the value of his materials from the builder who used it but the land owner can be held subsidiarily liable for the value of the materials in case the builder is unable to pay the owner of the materials their value. If however the builder is in bad faith and consequently the land owner demands the removal or the demolition of the building remember that the landowner would have no subsidiary liability okay ano reason? In accession he who benefits from the accession must pay for it. That’s one underlying principle. Kung sino nakinabang sa accession dapat magbayad. That’s the reason why that if the landowner decides to appropriate the building, there is subsidiary liability on his part in case the builder is insolvent.

If the land owner however decides to ask for the removal, destruction of the building he does not benefit from that accession and therefore that’s the reason why there would be no subsidiary liability on the part of the landowner. Okay which is also the reason what if the property is sold ha if the property is sold by the land owner pending payment of indemnity to the builder okay ang tanong is who will pay the indemnity to the builder? It depends, if in the contract of sale between the landowner and the third person, the landowner was already paid not just the value of the land but the value of the building as well then obviously the ah, the landowner must pay, must pay the value of the building, the proper indemnity to the builder. If on the other hand the landowner was not paid the value of the building then he does not benefit from the building it would then be the buyer who will benefit from the accession it would be the buyer who will have to pay the builder of the proper indemnity. I repeat, he who benefits from an accession must be the one who pay for it. Okay. Alright.

Let’s now go to the matter of alluvion. We have the provisions of Article 457. If you are the owner of a parcel land adjoining the bank of a river and due to the natural action of the water over a period of time deposit of river, deposits of river silt are left there by the water such that the area of your land gradually increased year after year you

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are the owner of that additional area. Your ownership is automatic. The additional area bought about by the alluvion automatically belongs to the landowner of that land adjoining the banks of a river . It is not however, I am referring to the additional area, it is not however automatically registered or covered or protected by the Torrens title of the landowner, he has to register it in his name. And if prior to his registration of that additional area a third person succeeds in occupying that area claiming it as his own satisfies the requisite for acquisitive prescription, tapos, that third person would have acquired ownership of that area. Okay, so I repeat ha if you are the owner of a property adjoining the banks of a river in the course of many years due to the gradual deposits of the river silt lumaki ng lumaki yung area mo automatically ha as long as everything happens naturally, hindi ka nagconstruct ng catchment basin or whatever there, no human intervention you are automatically the owner of the additional area through alluvion but that additional area is not automatically covered by your Torrens title. Kung may Torrens title ka dun sa property mo, your Torrens title will not automatically extend to the additional area. Therefore the additional area can still be acquired by a third person through acquisitive prescription.

The increase in the area must be exclusively be due to nature there must be absolutely be no human intervention otherwise that’s not alluvion. In so far as areas bordering lake are concerned like Laguna de Bay, Laguna de bay is not a bay it is a lake. Okay. Lakes are large bodies of water which usually have a connection with the river, yan ang lake. What about the areas there if there are additional areas brought by the action of the water or whatever to who this additional areas belong? They would belong to the owners of the adjacent lands applying the Spanish Law of Waters.

If you own a parcel of land ah let’s say in La Union and through the action of the sea your land gradually increased in the area nasa sa may tabing dagat. Who would own the additional area? Ah kabalikat sa kaunlaran wag natin pakilalaman yan that belongs to the State. Itong alluvion ha applicable lang sa rivers okay hindi kasama dito ang mga shores of the seas pero applying the Spanish law of waters if what is involved is a lake like Laguna de Bay or lake Lanao for that matter the additional area will also belong to the owner of the adjacent land because sila may-ari nung property. Okay. Alright.

In the Mindanao Bus Company yung transportation bus company case, which I was referring to a while ago, sabi ng Supreme Court dun, the industry is not carried on in this building where the repair shop is located. The transportation business is carried on outside not here. So that’s another reason why the court said the repair equipment there should not be considered as immobilized but remained personal property.

Can the parties agree that a certain machinery which has been installed by the owner of the tenement for an industry or works which will be carried on in that building which tend to directly meet the needs of the industry or works? Can the owner of that machinery and a creditor agree to treat this machinery as personal property subject them to a chattel mortgage? Is that allowable? The answer is yes. In other words, again the principle of estoppel will apply. Although the machinery inside the building were installed by the owner and they tend directly to meet the needs of an industry or work which can be carried on in that building, if the parties agree to treat the machinery as chattel and enter into a chattel mortgage, neither of them will be permitted to question the validity later on of the chattel mortgage on the ground that the subject was actually real property.

Next point. In number 6 of Art. 415, the law deals with animal houses, pigeon houses, fish ponds, and other breeding places of similar nature. In case their owner place them or reserves them with the intention to have them permanently attached to the land, the animals in these places are included. So if there is a pigeon house, permanently attached to the land, the pigeons in that pigeon house are also considered real property. Of course pigeons sometimes fly around or in the case of fish ponds and you happen to bangus in your fish ponds, the bangus are considered immovable real property even if they are swimming around. For purposes of sale, however, they should be considered

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as movable property. So if you enter into a contract of sale of the bangus in your fishpond, that’s not a sale of real property. That should be considered of course as a sale of natural property. Or if you donate the bangus to the certain individual, that should not be considered a donation of real property but a donation of personal property. If you will consider it a donation of real property you will need to execute a public document both for the donation and the acceptance.

Fertilizers actually used in a piece of land. What about insecticide? Same rule should apply. Mines, quarries and slag dumps when the matter thereof forms part of the bed and waters either running or

stagnant. The waters referred to here are yung natural waters. So if you have several drums of water which you keep in your land because in some areas the water becomes scarce, the waters in those drums which you have earlier collected cannot be considered as waters referred to in Art 415. Yung mga waters ditto either running or stagnant ay yung mga waters in rivers, lakes, lagoons. Natural waters.

Number 9, docks and structures which although floating are intended by their nature and object to remain in a fixed place in a river, lake or port. A question has already been asked regarding this. There was a barge which was at a fixed place, basta nasa fixed place even if floating consider it as real property. For example NAPOCOR and some other private companies have these power barges which supply electricity to some island provinces. These power barges are usually docked along a port or a shore and they remain there for a considerable period of time. They are considered as real property. Yung floating restaurant jan sa mei reclamation area. It is floating but it remains in fixed place. That should be considered as real property. But of course if its actually a boat, takes passengers, go on a cruise in Manila Bay while cruising around Manila Bay dinner is served, you don’t considered that as real property or immovable property.

Lastly, contracts for public works and servitudes and other real rights over real property. So please remember the enumeration of real property under Art 415. Then take a look at what are in turn considered as immovable property under Art 416 and 417 of the NCC. I just want to call your attention.

Certain real property by special provision of law also considered as movable property. Very good example are growing crops. Growing crops are considered under certain provisions of law as movable property under the chattel mortgage law as well as the civil code provisions on sales they are considered personal property. Sabi nga eh in the case of growing crops, while they are still there growing in the soil, sabi ng SC in the case of Sibal vs Valdez, it’s a mobilization by anticipation. The law already anticipates there subsequently becoming movable. When would that happen? When they are actually gathered. So even before they are gathered there is mobilization by anticipation. That’s’ why they can be a subject of chattel mortgage.

Forces of nature which are brought under the control of science; nuclear power, wind power, electricity, these are considered movable property.

Shares of stock in any corporation as long as you are talking of shares of stock they are considered real property regardless of the fact that the corporations in which the shares are held are real property or even if the assets of the corporation consist of real property, the shares of stock in that corporation are considered personal.

The next important classification of course is the classification between property of public dominion and property of private ownership. So remember Art 420.

What are considered property of public dominion? Those intended for public use. Those intended for public service or for the development of national wealth.

Property intended for public use – roads, streets, parks. A property is considered according to the court, for public use within the meaning of the civil code if it is open indiscriminately to public. In other words, anyone can go there and use it. Like our streets. It is open to anyone indiscriminately. That’s property for public use.

Properties of public dominion are subject to certain special rules. We have to remember these. They cannot be the subject matter of contracts. They cannot be sold or leased or subject of contracts. They cannot be acquired by prescription. They cannot be attached and sold at public auction to satisfy any judgment. They cannot be burdened with

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an easement. They cannot be even registered and titled in your name under the Torrens system. If a title is issued covering a property of public dominion, that’s not a valid title.

The government has property of two types: Property of public dominion and patrimonial property. With respect to the patrimonial property, just like any ordinary and private property, that can be the subject of contracts. Property of public dominion as long as it remains such is subject to special rules we have just mentioned – cannot be subject to prescription, not subject to contracts, etc. Is it possible to convert property of public dominion to patrimonial property? Yes possible. How can that be done? Will the mere fact that the property of public dominion is no longer actually being used for public use or is no longer actually being devoted to some public service, will that automatically convert into patrimonial property? No it will not. There must be a formal declaration in the case of nation government property by the executive or legislative of such conversion otherwise the property remains a property of public dominion. With respect to property of political subdivisions, conversion must always be authorized by law. Example, the Raponggi Cases involving the property of the Philippines located in Japan which was given to us by way of reparation by the Japanese as part of the reparations agreement. Those properties were originally intended for the use of our embassy but they were never used for that purpose. After a long period of time there was an attempt to sell these properties. The SC said the mere fact that these properties in Japan had not been actually used for their original purpose does not automatically convert these properties into patrimonial property. They remain part of the public domain and consequently not available for private appropriation or ownership until there is a formal declaration from the government to withdraw from being such. Abandonment according to SC cannot be inferred, it must be definite.

On the part of local government entities, just like the state, their properties are subdivided into properties for public use and patrimonial properties. Again for property to be considered for public use, it must be open indiscriminately to the public otherwise it cannot be said a property for public use. In some cases however, the SC in determining the properties of a local government unit should be considered as public or patrimonial, the SC opted to apply the special laws governing municipal corporation. Thus in the case of Zamboanga del Norte vs City of Zambuanga, the SC said we cannot strictly decide this case on the parameters set by the Civil Code in determining what are public use and patrimonial property. This involved the creation of a new local government curve out of a political unit. In that case and other similar cases involving local governments, the SC instead considered the USE of the property whether it is for governmental purposes or not. As long as the property was used for governmental purposes, it was considered property for public use or a public property.

Still on this point. As to the absence of clear evidence as the source of funds used in acquiring the property which is currently being held by the local government unit, the presumption is that the land came from the State. Salas vs Jarencio and some other cases. So if a local government unit is currently holding property but there is no clear showing as the funds used to acquire the property or how the property was acquired, the presumption is that property or land actually came from the State and the local government unit is holding it merely in trust for the State for the benefit of the inhabitants of that locality. If that is so, those properties cannot be considered as patrimonial property. They will be considered public property and the national legislature will be considered to have absolute control over these properties. In some cases decided by the SC, it has been made clear that LGUs cannot enter into contracts, cannot even validly authorized by means of an ordinance, the awarding of contracts of certain streets in favour of certain individuals for purposes of having plea market there. As long as the street remains a street, it’s for public use and therefore beyond the power of LGU to deal with by means of contract. In one case the LGU authorized that a certain street be converted a plea market, there was an ordinance authorizing that. The SC said that cannot be. What is clear from this cases is that while even under the LGC, LGUs are allowed to withdraw certain streets when no longer necessary or withdraw from public use, in other words they cannot have their cake and eat it too. Without actually withdrawing the road from public use, they will still maintain it as a street and at the same time operate it as a plea market. That cannot be done. Sabi ng SC sa mga ganitong kaso, Hindi pwede yan. As long as they have not been withdrawn from public use, they remain property for public use. They cannot at the same time enter into contract with

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private individual who intended to operate a plea market in that road. Kailingan kung gusto nyo i-withdraw, i-withdraw nyo. In other words, that street will cease as a street. Only after that can you deal with it as patrimonial property but not while it is still a street.

You recall the ruling by the SC in Chavez vs PEA. There was this agreement between the PEA and the AMARI. AMARI would reclaim areas of Manila Bay and as payment it will be paid with reclaimed lands. The SC said, with respect to the reclaimed lands on freedom islands around 157 hectares, which are covered by titles in the name of PEA they are alienable lands of the public domain. But they may only be leased not sold to public corporations of course they may be sold to Filipino citizens. Of course with regards to submerged areas, they are inalienable and outside the commerce of man. Only after the PEA has reclaimed them may the government reclassify them as alienable and disposable lands IF NO longer needed for public service. The transfer of the submerged lands to AMARI is also void since the Constitution prohibits alienation of our natural resources other than the agricultural land of public domains. So remember the important points of the decision.