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Ladera v. Hodges G.R. No. 8027-R, September 23, 1952, Vol. 48, No. 12, Official Gazette 5374 Reyes, J.B.L., J. FACTS: Paz G. Ladera entered into a contract with C.N. Hodges. Hodges promised to sell a lot with an area of 278 square meters to Ladera, subject to certain terms and conditions. The agreement called for a down payment of P 800.00 and monthly installments of P 5.00 each with interest of 1% per month, until P 2,085 is paid in full. In case of failure of the purchaser to make any monthly payment within 60 days after it fell due, the contract may be considered as rescinded or annulled. Ladera built a house on the lot. Later on, she defaulted in the payment of the agreed monthly installment. Hodges filed an action for the ejectment of Ladera. The court issued an alias writ of execution and pursuant thereto, the city sheriff levied upon all rights, interests, and participation over the house of Ladera. At the auction sale, Laderas house was sold to Avelino A. Magno. Manuel P. Villa, later on, purchased the house from Magno. Ladera filed an action against Hodges and the judgment sale purchasers. Judgment was rendered in favor of Ladera, setting aside the sale for non-compliance with Rule 39, Rules of Court regarding judicial sales of real property. On appeal, Hodges contends that the house, being built on a lot owned by another, should be regarded as movable or personal property. ISSUE: Whether or not Laderas house is an immovable property. HELD: YES. The old Civil Code numerates among the things declared by it as immovable property the following: lands, buildings, roads and constructions of all kind adhered to the soil. The law does not make any distinction whether or not the owner of the lot is the one who built. Also, since the principles of accession regard buildings and constructions as mere accessories to the land on which it is built, it is logical that said accessories should partake the nature of the principal thing. Mindanao Bus Company v. The City Assessor and Treasurer G.R. No. L-17870, September 29, 1962, 6 SCRA 197 Labrador, J. FACTS: Petitioner Mindanao Bus Company is a public utility solely engaged in transporting passengers and cargoes by motor trucks, over its authorized lines in the Island of Mindanao, collecting rates approved by the Public Service Commission. Respondent sought to assess the following real properties of the petitioner; (a) Hobart Electric Welder Machine, (b) Storm Boring Machine; (c) Lathe machine with motor; (d) Black and Decker Grinder; (e) PEMCO Hydraulic Press; (f) Battery charger (Tungar

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charge machine) and (g) D-Engine Waukesha-M-Fuel. It was alleged that these machineries are sitting on cement or wooden platforms, and that petitioner is the owner of the land where it maintains and operates a garage for its TPU motor trucks, a repair shop, blacksmith and carpentry shops, and with these machineries, which are placed therein. Respondent City Assessor of Cagayan de Oro City assessed at P4, 400 petitioner's above-mentioned equipment. Petitioner appealed the assessment to the respondent Board of Tax Appeals on the ground that the same are not realty. Respondents contend that said equipments, though movable, are immobilized by destination, in accordance with paragraph 5 of Article 415 of the New Civil Code. ISSUE: Whether the equipments in question are immovable or movable properties. HELD: The equipments in question are movable. So that movable equipments to be immobilized in contemplation of the law, it must first be "essential and principal elements" of an industry or works without which such industry or works would be "unable to function or carry on the industrial purpose for which it was established." Thus, the Court distinguished those movable which become immobilized by destination because they are essential and principal elements in the industry from those which may not be so considered immobilized because they are merely incidental, not essential and principal. The tools and equipments in question in this instant case are, by their nature, not essential and principle municipal elements of petitioner's business of transporting passengers and cargoes by motor trucks. They are merely incidentalsacquired as movables and used only for expediency to facilitate and/or improve its service. Even without such tools and equipments, its business may be carried on, as petitioner has carried on, without such equipments, before the war. The transportation business could be carried on without the repair or service shop if its rolling equipment is repaired or serviced in another shop belonging to another. Makati Leasing and Finance Corporation v. Wearever Textile Mills, Inc. G.R. No. L-58469, May 16, 1983, 122 SCRA 29 De Castro, J. FACTS: To obtain financial accommodations from the Makati Leasing and Finance Corporation, the Wearever Textile discounted and assigned several receivables with them under a receivable purchase agreement. To secure the collection of receivables assigned, Wearever Textile executed a chattel mortgage over certain raw materials inventory, as well as machinery described as an aero dryer stentering range. Upon default of Wearever Textile, the Makati Leasing petitioned for extrajudicial foreclosure of the properties mortgaged to it. When the sheriff failed to enter Wearever Textiles premises to seize the machinery, Makati Leasing applied for a replevin. Wearever Textile contended that it cannot be a subject of replevin or a chattel mortgage because

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

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

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Sergs Products, Inc. v. PCI Leasing and Finance, Inc. G.R. No. 137705, August 22, 2000, 338 SCRA 499 Panganiban, J. FACTS: Respondent PCI Leasing and Finance Inc. filed with the RTC of Quezon City a complaint for sum of money, with an application for a writ of replevin. A writ of replevin was issued, directing the sheriff to seize and deliver the machineries and equipment to PCI Leasing after five days and upon payment of the necessary expenses. The sheriff proceeded to petitioner's factory and seized one machinery. Petitioner filed a motion for special protective order invoking the power of the court to control the conduct of its officers and amend and control its processes, praying for a directive for the sheriff to defer enforcement of the writ of replevin. The motion was opposed by PCI on the ground that the properties were personal and therefore still subject to seizure and writ of replevin. In their reply, petitioners asserted that the properties were immovable as defined in Article 415 of the Civil Code, the parties' agreement to the contrary notwithstanding. Petitioners went to the Court of Appeals via an original action for certiorari. The Court of Appeals ruled that the subject machines were personal property as provided by the agreement of the parties. ISSUE: Whether or not the subject machines were personal, not real, property, which may be a proper subject of a writ of replevin. HELD: The contracting parties may validly stipulate that a real property be considered as personal. After agreeing to such stipulation, they are consequently estopped from claiming otherwise. Under the principle of estoppel, a party to a contract is ordinarily precluded from denying the truth of any material fact found therein. In the present case, the lease agreement clearly provides that the machines in question are to be considered as personal properties. Clearly then, petitioners were estopped from denying the characterization of the subject machines as personal property. Under the circumstances, they are proper subject of the writ of seizure. Accordingly, the petition was denied and the assailed decision of the Court of Appeals was affirmed. Burgos v. Chief of Staff, AFP G.R. No. 64261, December 26, 1984, 133 SCRA 800 Escolin, J. FACTS: On December 7, 1982, two search warrants where issued and the premises at 19, Road 3, Project 6, Quezon City, and 784 Units C & D, RMS Building, Quezon Avenue, Quezon City, business addresses of the "Metropolitan Mail" and "We Forum" newspapers were searched. Office and printing machines, equipment, paraphernalia, motor vehicles and other articles used in the printing, publication and distribution of the

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said newspapers, as well as numerous papers, documents, books and other written literature alleged to be in the possession and control of Jose Burgos, Jr. publisher-editor of the "We Forum" newspaper, were seized. ISSUE: Whether or not real properties were seized under the disputed warrants. HELD: No. Under Article 415 (5) of the Civil Code, "machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land and which tend directly to meet the needs of the said industry or works" are considered immovable property. In Davao Sawmill Co. v. Castillo, it was said that machinery which is movable by nature becomes immobilized when placed by the owner of the tenement, property or plant, but not so when placed by a tenant, usufructuary, or any other person having only a temporary right, unless such person acted as the agent of the owner. In the present case, petitioners do not claim to be the owners of the land and/or building on which the machineries were placed. The machineries, while in fact bolted to the ground, remain movable property susceptible to seizure under a search warrant. Lopez v. Orosa, Jr., and Plaza Theatre, Inc. G.R. No. L-10817-18, February 28, 1958, 103 Phil. 98 Felix, J. FACTS: Lopez was engaged in business under the name Lopez-Castelo Sawmill. Orosa approached Lopez and invited the latter to make an investment in the theatre business he was forming, the Plaza Theatre. Lopez expressed his unwillingness to invest. Nonetheless, Lopez agreed to supply the lumber for the construction of the theatre. Lopez further agreed that that the payment therefore would be on demand and not cash on delivery basis. Lopex delivered the lumber which was used for the construction of the Plaza Theatre. However, of the total cost of materials amounting to P62, 255.85, Lopez was paid only P 20, 848.50, thus leaving a balance of P 41, 771.35. Due to Lopez demands, Orosa issued a deed of assignment over his shares of stock of the Plaza Theatre, Inc. As there was still an unpaid balance, Lopez filed a case against Orosa and Plaza Theatre. He asked that Orosa and Plaza theatre be held liable solidarily for the unpaid balance, and in case defendants failed to pay, the land and building should be sold in public auction with the proceeds to be applied to the balance, or that the shares of stock be sold in public auction. ISSUE: Whether or not the lien for the value of the materials used in the construction of the building attaches to said structure alone and does not extend to the land on which the building is adhered to. HELD: No. While it is true that generally, real estate connotes the land and the building constructed thereon, it is obvious that the inclusion of the building, separate and distinct

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from the land, in the enumeration of what may constitute real properties could only mean one thingthat a building is by itself an immovable property. In view of the absence of any specific provision to the contrary, a building is an immovable property irrespective of whether or not said structure and the land on which it is adhered to belong to the same owner. The lien so created attaches merely to the immovable property for the construction or repair of which the obligation was incurred. Therefore, the lien in favor of appellant for the unpaid value of the lumber used in the construction of the building attaches only to said structure and to no other property of the obligors. Yap v. Taada G.R. No. L-32917, July 18, 1988, 163 SCRA 464 Narvasa, J. FACTS: Goulds Pumps International (Phil.), Inc. filed a complaint against Yap and his wife seeking recovery of P1,459.30 representing the balance of the price and installation cost of a water pump in the latter's premises. Goulds presented evidence ex parte and judgment by default was rendered by Judge Taada requiring Yap to pay to Goulds the unpaid balance of the pump purchased by him and interest of 12% per annum. Thereafter, the water pump in question was levied by the sheriff and by notice dated November 4, 1969, scheduled the execution sale thereof. But in view of the pendency of Yap's motion for reconsideration, suspension of the sale was directed. It appears however that a copy of the order suspending the sale was not transmitted to the sheriff Hence, the Deputy Provincial Sheriff went ahead with the scheduled auction sale and sold the property levied on to Goulds as the highest bidder. Yap argues that "the sale was made without the notice required by Sec. 18, Rule 39, of the New Rules of Court," i.e., notice by publication in case of execution sale of real property, the pump and its accessories being immovable because attached to the ground with character of permanency (Art. 415, Civil Code). ISSUE: Whether or not the water pump in question is an immovable property. HELD: No. Yap's argument is untenable. The Civil Code considers as immovable property, among others, anything "attached to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without breaking the material or deterioration of the object." The pump does not fit this description. It could be, and was in fact separated from Yap's premises without being broken or suffering deterioration. Obviously, the separation or removal of the pump involved nothing more complicated than the loosening of bolts or dismantling of other fasteners.

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Machinery and Engineering Supplies, Inc. v. Court of Appeals G.R. No. L-7057, October 29, 1954, 96 Phil. 70 Concepcion, J. FACTS: Petitioner Machinery and Engineering Supplies filed a complaint for replevin for the recovery of the machinery and equipment sold and delivered to Ipo Limestone Co. An order was issued to seize and take immediate possession of the properties specified in the order. Upon carrying out the courts order, Roco, the companys President, along with a crew of technical men and labourers, proceeded to the factory. The manager of Ipo Limestone Co. and Torres protested against the seizure of the properties on the ground that they are not personal properties. However, since the sheriff contended that his duty is purely ministerial, they all went to the factory and dismantled the equipment despite the fact that the equipment could not be dismantled without causing damage or injuries to the wooden frames attached to them. Consequently, they had to cut some of the supports of the equipment which rendered its use impracticable. ISSUE: Whether or not the machinery and equipment in question could be the subject of replevin. HELD: No. Replevin is applicable only to personal property. The machinery and equipment in question appeared to be attached to the land, particularly to the concrete foundation of said premises, in a fixed manner, in such a way that the former could not be separated from the latter without breaking the material or deterioration of the object. Hence, in order to remove the said outfit, it became necessary not only to unbolt the same, but also to cut some of its wooden supports. Moreover, said machinery and equipment were intended by the owner of the tenement for an industry carried on said immovable. For these reasons, they were already immovable pursuant to paragraphs 3 and 5 of Article 415 of the Civil Code. FELS Energy, Inc. v. The Province of Batangas G.R. No. 168557, February 16, 2007 Callejo, Sr., J. FACTS: On January 18, 1993, NPC entered into a lease contract with Polar Energy, Inc. over diesel engine power barges moored at Balayan Bay in Calaca, Batangas. The contract staes that NPC shall be responsible for the payment of all taxes other levies imposed government to which POLAR may be or become subject to in respect of the Power Barges. Subsequently, Polar Energy, Inc. assigned its rights under the agreement to FELS Energy Inc. On August 7, 1995, FELS received an assessment of real property taxes on the power barges from Provincial Assessor of Batangas City. The assessed tax amounted to P56,184,088.40 per annum. FELS referred the matter to NPC, reminding it of its obligation under the agreement to pay all real estate taxes. NPC sought reconsideration

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of the Provincial Assessors decision to assess real property taxes on the power barges, alleging that barges are non-taxable items. In its answer, the Provincial Assessor averred that the barges were real property for purposes of taxation under Section 199(c) of Republic Act (R.A.) No. 7160. ISSUE: Whether power barges, which are floating and movable, are personal properties and therefore, not subject to real property tax. HELD: NO. The power barges are real property and are thus subject to real property tax. Tax assessments by tax examiners are presumed correct and made in good faith, with the taxpayer having the burden of proving otherwise. Besides, factual findings of administrative bodies, which have acquired expertise in their field, are generally binding and conclusive upon the Court.

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Laurel v. Garcia G.R. No. 92013, July 25, 1990, 187 SCRA 797 Gutierrez, J. FACTS: In view of the Reparations Agreement between the Philippines and Japan, four properties located in Japan were given to the Philippines. One of these properties is the Roppongi property. The said property was formerly the location of the Chancery of the Philippine Embassy until it was transferred to Nampeidai on July 22, 1976. The Roppongi property has remained abandoned from the time of the transfer due to lack of funds to develop the said property. Consequently, Administrative orders were issued by the President authorizing the study of the condition of the properties of the Philippines in Japan. Subsequently, Executive Order 296 was issued by President Aquino allowing non-Filipinos to buy or lease some of the properties of the Philippines located in Japan, including Roppongi.

Petitioners now contend that the Roppongi property cannot be alienated as it is classified as public dominion and not of private ownership because it is a property intended for public service under paragraph 2, article 420 of the Civil Code. On the other hand, respondents aver that it has already become part of the patrimonial property of the State which can be alienated because it has not been used for public service for over 13 years. They further contend that EO 296 converted the subject property to patrimonial property. ISSUE: Whether or not the Roppongi property still forms part of the public dominion hence cannot be disposed nor alienated. HELD: Yes. The respondents failed to convincingly show that the property has already become patrimonial. The fact that the Roppongi site has not been used for a long time for actual Embassy service does not automatically convert it to patrimonial property. Under Art. 422 of the Civil Code, there must be a definite and a formal declaration on the part of the government to withdraw it from being public. Abandonment must be a certain and a positive act based on correct legal premises. The mere transfer of the embassy to Nampeidai is not a relinquishment of the propertys original purpose. The Administrative orders authorizing the study of the conditions of government properties in Japan were merely directives for investigation but did not in any way signify a clear intention to dispose of the properties. Likewise, EO 296 did not declare that the properties lost their public character; it merely made them available to foreigners in case of sale, lease or other disposition. Thus, since there is no law authorizing its conveyance, the Roppongi property still remains part of the inalienable properties of the State. Rabuco v. Villegas G.R. No. L-24916, February 28, 1974, 55 SCRA 658

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Teehankee, J. FACTS: The issue in this case involves the constitutionality of Republic Act No. 3120 whereby the Congress converted the lots in question together with another lot in San Andres, Malate that are reserved as communal property into disposable or alienable lands of the State. Such lands are to be placed under the administration and disposal of the Land Tenure Administration for subdivision into small lots not exceeding 120 square meters per lot for sale on instalment basis to the tenants or bona fide occupants thereof and expressly prohibited ejectment and demolition of petitioners' homes under Section 2 of the Act. Respondent contends that the Act is invalid and unconstitutional for it constitutes deprivation of property without due process of law and without just compensation. ISSUE: Whether or not Republic Act No. 3120 is constitutional. HELD: Yes. The lots in question are manifestly owned by the city in its public and governmental capacity and are therefore public property over which Congress had absolute control as distinguished from patrimonial property owned by it in its private or proprietary capacity of which it could not be deprived without due process and without just compensation. It is established doctrine that the act of classifying State property calls for the exercise of wide discretionary legislative power, which will not be interfered with by the courts. The Acts in question were intended to implement the social justice policy of the Constitution and the government program of land for the landless and that they were not intended to expropriate the property involved but merely to confirm its character as communal land of the State and to make it available for disposition by the National Government. The subdivision of the land and conveyance of the resulting subdivision lots to the occupants by Congressional authorization does not operate as an exercise of the power of eminent domain without just compensation in violation of Section 1, subsection (2), Article III of the Constitution, but simply as a manifestation of its right and power to deal with state property. Macasiano v. Diokno G.R. No. 97764, August 10, 1992, 212 SCRA 464 Medialdea, J. FACTS: The Municipality of Paranque passed an ordinance that authorized the closure of J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena Streets located at Baclaran, Paranaque Metro Manila and the establishment of a flea market thereon. Thereafter, the municipal council of Paranaque issued a resolution authorizing Paranaque Mayor Walfrido N. Ferrer to enter into a contract with any service cooperative for the establishment, operation, maintenance and management of flea markets and/or vending areas. By virtue of this, respondent municipality and respondent Palanyag, a service cooperative, entered into an agreement whereby the latter shall operate, maintain and manage the flea market in the aforementioned streets with the

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obligation to remit dues to the treasury of the municipal government of Paranaque. Consequently, market stalls were put up by Palanyag on the said streets. Petitioner Macasiano, PNP Superintendent of the Metropolitan Traffic Command, then ordered the destruction and confiscation of the stalls along the abovementioned streets. Hence, respondents filed with the trial court a joint petition for prohibition and mandamus with damages and prayer for preliminary injunction, to which the petitioner filed his opposition to the issuance of the writ of preliminary injunction. The trial court upheld the validity of the ordinance in question. ISSUE: Whether or not an ordinance or resolution which authorizes the lease and use of public streets or thoroughfares as sites for flea markets is valid. HELD: No. The aforementioned streets are local roads used for public service and are therefore considered public properties of respondent municipality. Article 424 of the Civil Code provides that properties of public dominion devoted for public use and made available to the public in general are outside the commerce of man and cannot be disposed of or leased by the local government unit to private persons. Properties of the local government which are devoted to public service are deemed public and are under the absolute control of Congress. Hence, LGUs have no authority whatsoever to control or regulate the use of public properties unless specific authority is vested upon them by Congress. Republic of the Philippines v. Court of Appeals G.R. No. 100709, November 14, 1997, 281 SCRA 639 Panganiban, J. FACTS: Morato filed for a patent on a parcel of land located in Calauag, Quezon, which was approved, provided that the land shall not be encumbered or alienated within a period of five years from the date of the issuance of the patent. Later on, the land was established to be a portion of Calauag Bay, which was five to six feet deep during high tides and three feet deep on low tides. The water level rose because of the ebb and flow of tides from the bay and the storms that frequently passed through the area. Furthermore, it was observed by the Director of Lands from his investigation, that the land of Morato was leased to Advincula for P100 per month and it was also mortgaged to Co for P10,000. The Director of Lands filed a suit with the contention that Morato violated the 5-year prohibitory period and thus the patent should be cancelled and the land should revert back to the State. ISSUE: Whether or not there is a violation of the prohibition of the patent, and thus, the subject land should revert back to the ownership of the State. HELD: Yes. The lease was an encumbrance included in the prohibitions of the patent because it impairs the use of the land by Morato herself. As for the mortgage, it is a

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legal limit on the title and if there will be foreclosure because Morato was not able to pay her debts, the property will be auctioned. It is also a limitation on Morato's right to enjoy and possess the land for herself. Encumbrance, as defined, is an impairment on the use or transfer of property, or a claim or lien on the property where there is a burden on the title. Thus, Morato clearly violated the terms of the patent on these points. Moreover, the property became a foreshore land because it turned into a portion of land which was covered most of the time with water, whether it was low or high tide. Foreshore is defined as land between high and low waters which is dry depending on the reflux or ebb of the tides. In accordance with this land reclassification, the land can no longer be subject to a pending patent application and must be returned to the State. Province of Zamboanga del Norte v. City of Zamboanga G.R. No. L-24440, March 28, 1968, 22 SCRA 1334 Bengzon, J.P., J. FACTS: On June 6, 1952, Republic Act 711 was approved dividing the province of Zamboanga into two (2): Zamboanga del Norte and Zamboanga del Sur. Republic Act 3039 was approved providing that all buildings, properties and assets belonging to the former province of Zamboanga and located within the City of Zamboanga are hereby transferred, free of charge, in favor of the said City of Zamboanga. Plaintiff-appellee Zamboanga del Norte filed a complaint in the Court of First Instance of Zamboanga del Norte against defendants-appellants Zamboanga City, the Secretary of Finance and the Commissioner of Internal Revenue. It was prayed that Republic Act 3039 be declared unconstitutional for depriving plaintiff province of property without due process and just compensation. Included in the properties were the capital site and capitol building, certain school sites, hospital and leprosarium sites, and high school playground. ISSUE: Whether or not the properties mentioned are properties for public use or patrimonial. HELD: The subject properties are properties for public use. The validity of the law ultimately depends on the nature of the lots and buildings in question. The principle itself is simple: If the property is owned by the municipality (meaning municipal corporation) in its public and governmental capacity, the property is public and Congress has absolute control over it. But if the property is owned in its private or proprietary capacity, then it is patrimonial and Congress has no absolute control. The municipality cannot be deprived of it without due process and payment of just compensation. Applying the norm obtaining under the principles constituting the law of Municipal Corporations, all those of the 50 properties in question which are devoted to public service are deemed public; the rest remain patrimonial. Under this norm, to be

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considered public, it is enough that the property be held and, devoted for governmental purposes like local administration, public education, public health, etc. Regarding the several buildings existing on the lots above-mentioned, the records do not disclose whether they were constructed at the expense of the former Province of Zamboanga. Considering however the fact that said buildings must have been erected even before 1936 when Commonwealth Act 39 was enacted and the further fact that provinces then had no power to authorize construction of buildings such as those in the case at bar at their own expense, it can be assumed that said buildings were erected by the National Government, using national funds. Hence, Congress could very well dispose of said buildings in the same manner that it did with the lots in question. Chavez v. Public Estates Authority G.R. No. 133250, July 9, 2002 Carpio, J. FACTS: In 1973, the Government through the Commissioner of Public Highways and the Construction and Development Corporation of the Philippines (CDCP) signed a contract to reclaim certain foreshore and offshore areas of Manila Bay. PD 1084 was issued, creating Public Estates Authority (PEA), and PD 1085, transferring the reclaimed lands under the MCCRRP to PEA. In 1995, PEA entered into a Joint Venture Agreement (JVA) with AMARI, a private corporation to develop the Freedom Islands, and the JVA was approved by President Ramos. However, PEA and AMARI entered into the JVA through negotiation without public bidding. A Legal Task Force was created to look into the issue. The said task force upheld the legality of the JVA. In 1998, Frank I. Chavez, as a taxpayer, filed a petition to compel PEA to disclose all facts on its negotiations with AMARI, invoking the constitutional right of the people to information on matters of public concern. He assails the sale to AMARI of lands of the public domain as a blatant violation of the constitutional prohibiting in the sale of alienable lands of the public domain to private corporations. Despite the ongoing court petitions, PEA and AMARI signed an Amended Joint Venture Agreement (Amended JVA) in 1999, and such was approved by President Estrada. The Amended JVA seeks to convey to AMARI the ownership of 77.34 hectares of the Freedom Islands. ISSUE: Whether AMARI has the capacity to acquire the lands held by PEA. HELD: No. Under the 1987 Constitution, private corporations such as AMARI cannot acquire alienable land of the public domain. Reclaimed lands comprising the Freedom Islands, which are covered by certificates of title in the name of PEA, are alienable

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lands of the public domain. PEA may lease these lands to private corporations but may not sell or transfer ownership of these lands to private corporations. PEA may only sell these lands to Philippine citizens, subject to the ownership limitations in the 1987 Constitution and existing laws. Thus, the Amended Joint Venture Agreement between AMARI and PEA was null and void. Chavez v. National Housing Authority G.R. No. 164527, August 15, 2007 Velasco, Jr., J. FACTS: President Corazon Aquino issued Memorandum Order No. 161 approving and directing the implementation of the Comprehensive and Integrated Metropolitan Manila Waste Management Plan. Respondent National Housing Authority was ordered to conduct feasibility studies and develop lowcost housing projects at the dumpsite and absorb scavengers in NHA resettlement/lowcost housing projects, particularly in the Smokey Mountain. It produced the Smokey Mountain Development Plan and Reclamation of the Area Across R-10 or the Smoke Mountain Development and Reclamation Project. The Project aimed to covert Smokey mountain dumpsite into a habitable housing project, inclusive of the reclamation of the area. President Aquino approved the said Project through MO 415. After President Aquinos term, President Fidel Ramos, through Proclamation No. 39, authorized the NHA to enter into a Joint Venture Agreement with R-II Builders, Inc. (RBI) for the implementation of the project. Afterwards, President Ramos issued Proclamation No. 465 increasing the proposed area for reclamation across R-10 from 40 hectares to 79 hectares. The petitioner Francisco Chavez contended that the respondent NHA or respondent RBI has no authority to reclaim foreshore and submerged land. ISSUE: Whether or not respondent NHA has the authority to reclaim foreshore and submerged land. HELD: Yes. The National Housing Authority (NHA) is a government agency not tasked to dispose of public lands under its charter it is an end-user agency authorized by law to administer and dispose of reclaimed lands. The moment titles over reclaimed lands based on the special patents are transferred to the National Housing Authority (NHA) by the Register of Deeds, they are automatically converted to patrimonial properties of the State which can be sold to Filipino citizens and private corporations, 60% of which are owned by Filipinos. The combined and collective effect of Proclamations Nos. 39 and 465 with Special Patents Nos. 3592 and 3598 is tantamount to and can be considered to be an official declaration that the reclaimed lots are alienable or disposable lands of the public domain. Even if it is conceded that there was no explicit declaration that the lands are no longer needed for public use or public service, there was however an implicit executive declaration that the reclaimed areas are not necessary anymore for public use or public service when President Aquino through MO 415 conveyed the same to the National Housing Authority (NHA) partly for

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

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Javier v. Veridiano II G.R. No. L-48050, October 10, 1994, 237 SCRA 565 Bellosillo, J. FACTS: Javier filed a Miscellaneous Sales Application for lot 1641. She later instituted a complaint for forcible entry against Babol, alleging that she was forcibly dispossessed of a portion of said land. The case for forcibly entry was however dismissed as it was found by the court that the occupied portion was outside Lot 1641. The same was dismissed on appeal. Javier was eventually granted a Miscellaneous Sales Patent and issued an OCT for lot 1641. Babol, however had sold the property he was occupying, including a portion of 200 square meters to Rosete. Javier demanded the surrender of the same area from Rosete who repeatedly refused to comply. After 4 years, Javier instituted a complaint for quieting of title and recovery of possession with damages against Babol and Rosete. Rosete moved to dismiss the complaint on the ground of res judicata. The CFI sustained the argument of Rosete and granted his motion to dismiss. Javier contends that res judicata cannot apply in the instant case since there is no identity of parties and causes of action between her complaint for forcible entry, which had long become final and executory, and her subsequent petition for quieting of title. Javier maintains that there is no identity of causes of action since the first case was for forcible entry, which is merely concerned with the possession of the property, whereas the subsequent case was for quieting of title, which looks into the ownership of the disputed land. ISSUE: Whether or not there are really different causes of action between the forcible entry case and the later quieting of title case. HELD: Yes. For res judicata to bar the institution of a subsequent action the following requisites must concur: (1) There must be a final judgment or order; (2) The court rendering the judgment must have jurisdiction over the subject matter; (3) The former judgment is a judgment on the merits; and, (4) There is between the first and second actions identity of (4a) parties, (4b) of subject matter and (4c) of causes of action. Javier's argument that there is no identity of parties between the two actions is without merit. We have repeatedly ruled that for res judicata to apply, what is required is not absolute but only substantial identity of parties. But, there is merit in Javier's argument that there is no identity of causes of action. "The only issue in an action for forcible entry is the physical or material possession of real property, that is, possession de facto and not possession de jure. The philosophy underlying this remedy is that irrespective of the actual condition of the title to the property, the party in peaceable quiet possession shall not be turned out by strong hand, violence or terror." A judgment rendered in a case for recovery of possession is conclusive only on the question of possession and not on the ownership. It does not in any way bind the title or affects the ownership of the land or building. On the other hand, Civil Case No. 2203-0 is in reality an action to recover a parcel of land or an accion reivindicatoria under Art. 434 of the Civil Code, and should be

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distinguished from Civil Case No. 926, which is an accion interdictal. Accion interdictal, which is the summary action for forcible entry (detentacion) where the defendant's possession of the property is illegal ab initio, or the summary action for unlawful detainer (desahuico) where the defendant's possession was originally lawful but ceased to be so by the expiration of his right to possess, both of which must be brought within one year from the date of actual entry on the land, in case of forcible entry, and from the date of last demand, in case of unlawful detainer, in the proper municipal trial court or metropolitan trial court; accion publiciana which is a plenary action for recovery of the right to possess and which should be brought in the proper regional trial court when the dispossession has lasted for more than one year; and, accion reivindicatoria or accion de reivindicacion which seeks the recovery of ownership and includes the jus utendi and the jus fruendi brought in the proper regional trial court. Accion reivindicatoria or accion de reivindicacion is thus an action whereby plaintiff alleges ownership over a parcel of land and seeks recovery of its full possession. It is different from accion interdictal or accion publiciana where plaintiff merely alleges proof of a better right to possess without claim of title. In Civil Case No. 926 Javier merely claimed a better right or prior possession over the disputed area without asserting title thereto. It should be distinguished from Civil Case No. 2203-0 where she expressly alleged ownership. Bustos v. Court of Appeals G.R. No. 120784-85, January 24, 2001, 350 SCRA 155 Pardo, J. FACTS: Paulino Fajardo died intestate on April 2, 1957. He had four (4) children, namely: Manuela, Trinidad, Beatriz and Marcial, all surnamed Fajardo. On September 30, 1964, the heirs executed an extra-judicial partition of the estate of Paulino Fajardo. On the same date, Manuela sold her share to Moses G. Mendoza, husband of Beatriz by deed of absolute sale. At the time of the sale, there was no cadastral survey in Masantol, Pampanga. Later, the cadastre was conducted and the property involved in the partition case was specified as Lots 280, 283, 284, 1000-A and 1000-B. The share of Manuela, which was sold to Moses, includes Lot 284 of the Masantol Cadastre and Lot 284 was subdivided into Lots 284-A and 284-B. Trinidad was in physical possession of the land. She refused to surrender the land to her brother-in-law Moses G. Mendoza, despite several demands. On September 3, 1971, Moses filed with the Court of First Instance, Pampanga a complaint for partition claiming the one fourth (1/4) share of Manuela which was sold to him. During the pendency of the case for partition, Trinidad Fajardo died. On December 15, 1984, the heirs executed an extra-judicial partition of the estate of Trinidad Fajardo. On February 16, 1987, Lucio Fajardo Ignacio, son of Trinidad sold Lot 284-B to spouses Venancio Viray and Cecilia Nunga-Viray.

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On February 8, 1989, the Regional Trial Court, Pampanga, Macabebe, Branch 55 rendered a decision in favor of Moses G. Mendoza.In the meantime, on November 6, 1989, spouses Venancio Viray and Cecilia Nunga-Viray, buyers of Lucio Ignacio's share of the property, filed with the Municipal Circuit Trial Court, Macabebe-Masantol, Pampanga an action for unlawful detainer against spouses Bustos, the buyers of Moses G. Mendoza, who were in actual possession as lessees of the husband of Trinidad, Francisco Ignacio, of the subject land. The municipal circuit trial court decided the case in favor of spouses Viray. Subsequently, the trial court issued writs of execution and demolition, but stayed when spouses Bustos filed with the regional Trial Court, Pampanga, Macabebe, Branch 55, a petition for certiorari, prohibition and injunction. On December 18, 1992, the regional trial court rendered a decision dismissing the case. On September 9, 1994, petitioners filed a motion for reconsideration; however, on June 21, 1995, the Court of Appeals denied the motion. ISSUE: Whether or not petitioners could be ejected from what is now their own land. HELD: In this case, the issue of possession is intertwined with the issue of ownership. In the unlawful detainer case, the Court of Appeals affirmed the decision of the trial court as to possession on the ground that the decision has become final and executory. This means that the petitioners may be evicted. In the accion reinvindicatoria, the Court of Appeals affirmed the ownership of petitioners over the subject land. Hence, the court declared petitioners as the lawful owners of the land. In the present case, the stay of execution is warranted by the fact that petitioners are now legal owners of the land in question and are occupants thereof. To execute the judgment by ejecting petitioners from the land that they owned would certainly result in grave injustice. Besides, the issue of possession was rendered moot when the court adjudicated ownership to the spouses Bustos by virtue of a valid deed of sale. Placing petitioners in possession of the land in question is the necessary and logical consequence of the decision declaring them as the rightful owners is possession. It follows that as owners of the subject property, petitioners are entitled to possession of the same. "An owner who cannot exercise the seven (7) "juses" or attributes of ownership-the right to possess, to use and enjoy, to abuse or consume, to accessories, to dispose or alienate, to recover or vindicate and to the fruits is a crippled owner. Heirs of Roman Soriano v. Court of Appeals G.R. No. 128177, August 15, 2001, 363 SCRA 87 Ynares Santiago, J. FACTS: The land in dispute in this case is originally owned by Adriano Soriano who died sometime in 1947. Adriano Soriano has 7 heirs whom leased the subject parcel of land to David de Vera and Consuelo Villasista for a term of 15 years starting July 1, 1967. The lease contract states that Roman Soriano will serve as the caretaker of the said property during the period of lease. During the effectivity of the lease contract, the

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heirs of Adriano Soriano entered into extrajudicial settlement of his estate. As a result of the settlement, the property was divided into two property, Lot No. 60052 which was assigned to Lourdes and Candido, heirs of Adriano and the heirs of Dionisia another heir of Adriano. The other property, Lot No. 8459 was assigned to Francisco, Librada, Elcociado and Roman all heirs of Adriano. The owners of Lot No. 60052 sold the lot to spouses Braulio and Aquiliana Abalos, and the owners of Lot No. 8459, except Roman also sold their shares to spouses Briones. On March 14, 1968, the de Vera spouses ousted Roman as caretaker and appointed Isidro Versoza and Vidal Versoza as his substitute. Roman filed a case for reinstatement and reliquidation against the de Vera spouses in CAR Case No. 1724-P-68. On September 30, 1969, the Agrarian Court rendered a decision authorizing the ejectment of Roman. On appeal, the decision was reversed by the Court of Appeals. The deicion became final and executor. However, before it was executed, the parties entered into a post-decisional agreement wherein the de Vera spouses allowed Roman Soriano to sub-lease the property until the termination of the original lease on June 30, 1982. This agreement was approved by the CAR court in an order dated December 22, 1972. On August 16, 1976, the Abalos spouses applied for the registration of the disputed parcel of land. Roman Soriano and the Director of Lands acted as oppositors. On June 27, 1983, the Land Registration Court granted the application for registration. On April 13, 1983, after the expiration of the original lease and sub-lease in favor of Roman Soriano, the Abalos spouses filed a case for unlawful detainer against Roman Soriano, later, this case was dismissed on motion of the Abalos spouses. On July 14, 1983, Elcociado, Librada, Roman, Francisco, Lourdes, Candido and the heirs of Dionisia filed a complaint to annul the deeds of sale they executed in favor of the Abalos spouses or should the deeds be not annulled, to allow Roman, Elcociado and Librada to redeem their shares in the disputed land and to uphold Roman Sorianos possession of the fishpond portion of the property as a tenant-caretaker. After the dismissal of the case for unlawful detainer, the Abalos spouses filed on August 22, 1984, a motion for execution of the post-decisional order embodying the agreement of Roman Soriano and the de Vera spouses allowing the former to sublease the property. On October 25, 1984, Roman filed a motion to suspend hearing on the rental demanded by the Abalos spouses until after the other issues raised in his opposition to the motion for execution are resolved. The motion to suspend hearing on the issue of the rentals was denied and the trial court authorized the substitution of the de Vera spouses by the Abalos spouses. Roman Soriano's motion for reconsideration was denied on March 16, 1985. Roman filed petition for certiorari and prohibition in the Court of Appeals but the latter denied the petition, pending the denial of this petition, Roman Soriano died. Not satisfied with the decision of the Court of Appeals, the heirs of Roman Soriano brought this case in the Supreme Court.

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ISSUE: Whether or not a winning party (ABALOS) in a land registration case can effectively eject the possessor (SORIANO) thereof, whose security of tenure rights is still pending determination before the DARAB. HELD: No. The Court held that a judgment in a land registration case cannot effectively used to oust the possessor of the land, whose security of tenure rights are still pending determination before the DARAB. There is no dispute that Abalos spouses' title over the land under litigation has been confirmed with finality. However, the declaration pertains only to ownership and does not automatically include possession, especially soin the instant case where there is a third party occupying the said parcel of land, allegedly in the concept of an agricultural tenant. Agricultural lessees are entitled to security of tenure and they have the right to work on their respective landholdings once the leasehold relationship is established. Security of tenure is a legal concession to agricultural lessees which they value as life itself ad deprivation of their landholdings is tantamount to deprivation of their only means of livelihood. The exercise of the right of ownership, then, yields to the exercise of the rights of an agricultural tenant. The Supreme Court decided to refrain from ruling whether petitioners may be dispossessed of the subject property while petitioner's status as tenant has not yet been declared by the DARAB. Garcia v. Court of Appeals G.R. No. 133140, August 10, 1999, 312 SCRA 180 Puno, J. FACTS: Petitioner Atty. Pedro Garcia, with the consent of his wife Remedios Garcia, sold a parcel of land situated at Bel Air II Village, Makati to his daughter Maria Luisa Magpayo and her husband Luisito Magpayo. The Magpayos mortgaged the land to the Philippine Bank of Communications (PBCom) to secure a loan. The Magpayos failed to pay their loan upon its maturity, hence, the mortgage was extrajudicially foreclosed and at the public auction sale in which PBCom bought the land. The redemption period of the foreclosed mortgage expired without the Magpayos redeeming the same, hence, title over the land was consolidated in favor of PBCom. PBCom subsequently filed a petition for the issuance of a writ of possession over the land with the Regional Trial Court (RTC) of Makati. The RTC granted the petition. Upon service of the writ of possession, Maria Luisa Magpayos brother, Jose Ma. T. Garcia, who was in possession of the land, refused to honor it. Jose Garcia thereupon filed against PBCom, the Magpayos, and the RTC Sheriff the instant suit for recovery of realty and damages wherein he contended, inter alia, that at the time of the alleged sale to the Magpayo spouses, he was in possession of the property; that, when his mother Remedios Tablan Garcia died, sometime in October, 1980, he became, by operation of law, a co-owner of the property; and that, Atty. Pedro V. Garcia, at the time of the execution of the instrument in favor of the Magpayo spouses was not in possession of the subject property.

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ISSUE: Whether or not Jose Magpayo was a co-owner of the parcel of the land in dispute. HELD: No. Possession and ownership are distinct legal concepts. Ownership exists when a thing pertaining to one person is completely subjected to his will in a manner not prohibited by law and consistent with the rights of others. Ownership confers certain rights to the owner, one of which is the right to dispose of the thing by way of sale. Atty. Pedro Garcia and his wife Remedios exercised their right to dispose of what they owned when they sold the subject property to the Magpayo spouses. On the other hand, possession is defined as the holding of a thing or the enjoyment of a right. Literally, to possess means to actually and physically occupy a thing with or without right. Possession may be had in one of two ways: possession in the concept of an owner and possession of a holder. A possessor in the concept of an owner may be the owner himself or one who claims to be so. On the other hand, one who possesses as a mere holder acknowledges in another a superior right which he believes to be ownership, whether his belief be right or wrong. The records show that petitioner Jose Garcia occupied the property not in the concept of an owner for his stay was merely tolerated by his parents. An owners act of allowing another to occupy his house, rent-free does not create a permanent and indefeasible right of possession in the latters favor. Consequently, it is of no moment that petitioner was in possession of the property at the time of the sale to the Magpayo spouses. It was not a hindrance to a valid transfer of ownership. All said, the Magpayo spouses were already the owners when they mortgaged the property to PBCom. Rodil Enterprises, Inc. v. Court of Appeals G.R. No. 129609, November 29, 2001, 371 SCRA 79 Bellosillo, J. FACTS: Rodil Enterprises Inc. (RODIL) is the lessee of the Ides O'Racca Building (O'RACCA) since 1959 which is a property owned by the Republic of the Philippines. In 1980, Rodil entered into a sublease contract with respondents Carmen Bondoc, Teresita Bondoc-Esto, Divisoria Footwear and Chua Huay Soon, members of the Ides ORacca Building Tenants Association, Inc. On 12 September 1982 BP 233 was enacted. It authorized the sale of "former alien properties" classified as commercial and industrial, and the O'RACCA building was classified as commercial property. RODIL and Ides ORacca Building Tenants Association, Inc., offered to purchase the subject property. Pending action on the offer of RODIL to purchase the property, Director Factora of the Building Services and Real Property Management Office granted RODIL's request for another renewal of the lease contract on 23 September 1987 for another five (5) years from 1 September 1987. The renewal contract was forwarded to then Secretary Jose de Jesus of Department of General Services and Real Estate Property Management (DGSREPM) for approval. Upon recommendation of DGSREPM Rufino Banas, De Jesus disapproved the renewal contract in favour of Rodil and

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recalled all papers signed by him regarding the subject. Secretary De Jesus likewise directed RODIL to pay its realty tax delinquency and ordered the issuance of a temporary occupancy permit to the ASSOCIATION. On 6 October 1987 RODIL filed an action for specific performance, damages and injunction with prayer for temporary restraining order before the Regional Trial Court of Manila against the REPUBLIC, De Jesus, Banas, Factora and the ASSOCIATION. De Jesus, Banas and Factora were later substituted by Secretary Fulgencio Factoran of the Department of Environment and Natural Resources (DENR) in the action for specific performance. On 31 May 1988 Factora issued Order No. 1 designating the Land Management Bureau represented by Director Abelardo Palad, Jr. as custodian of all "former alien properties" owned by the REPUBLIC. Pending the action for specific performance, RODIL signed a renewal contract with Director Palad which was approved by Secretary Factora. The renewal contract would extend the lease for ten (10) years from 1 September 1987. A supplement to the renewal contract was subsequently entered into on 25 May 1992 where rentals on the previous lease contract were increased. As a result, the action was dismissed in favour of Rodil. Rodil then filed an action for unlawful detainer against Divisoria Footwear, Bondoc, Bondoc-Esto and Chua Huay Soon. Upon appeal, the Court of Appeals declared the contracts null and void and dismissed the actions for unlawful detainer. ISSUE: Whether or not Rodil has the right to occupy the building by virtue of its lease contract with the Republic. HELD: Yes. The owner has the right to enjoy and dispose of a thing, without other limitations than those established by law. Every owner has the freedom of disposition over his property. It is an attribute of ownership, and this rule has no exception. The REPUBLIC being the owner of the disputed property enjoys the prerogative to enter into a lease contract with RODIL in the exercise of its jus disponendi. Hence, as lessor, the REPUBLIC has the right to eject usurpers of the leased property where the factual elements required for relief in an action for unlawful detainer are present. Private respondents claim that the agreements of 23 September 1987, 18 May 1992 and 25 May 1992 did not give rise to valid contracts.This is true only of the Contract of Lease entered into on 23 September 1987 which the REPUBLIC did not approve. RODIL neither alleged nor proved that such approval was made known to it. The so-called approval of the lease contract was merely stated in an internal memorandum of Secretary De Jesus addressed to Director Factora. This is evident from the fact that Secretary De Jesus, in his letter, asked Factora to duly execute a lease contract and forward it to his office for approval. The consequences of this fact are clear. The Civil Code provides that no contract shall arise unless acceptance of the contract is communicated to the offeror. Until that moment, there is no real meeting of the minds, no concurrence of offer and acceptance, hence, no contract. However, the same is not true of the contracts of 18 May 1992 and 25 May 1992. As argued by RODIL, these contracts are not proscribed by law; neither is there a law

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prohibiting the execution of a contract with provisions that are retroactive. Where there is nothing in a contract that is contrary to law, morals, good customs, public policy or public order, the validity of the contract must be sustained. The Court of Appeals invalidated the contracts because they were supposedly executed in violation of a temporary restraining order issued by the Regional Trial Court. The appellate court however failed to note that the order restrains the REPUBLIC from awarding the lease contract only as regards respondent ASSOCIATION but not petitioner RODIL. While a temporary restraining order was indeed issued against RODIL, it was issued only on 25 May 1992 or after the assailed contracts were entered into. As correctly stated by petitioner, one cannot enjoin an act already fait accompli. Private respondents argue that the "renewal contract" cannot "renew" a void contract. However, they could cite no legal basis for this assertion. It would seem that respondents consider the renewal contract to be a novation of the earlier lease contract of 23 September 1987. However, novation is never presumed. Also, the title of a contract does not determine its nature. On the contrary, it is the specific provisions of the contract which dictate its nature. Furthermore, where a contract is susceptible of two (2) interpretations, one that would make it valid and another that would make it invalid, the latter interpretation is to be adopted. The assailed agreement of 18 May 1992, "Renewal of Contract of Lease," merely states that the term of the contract would be for ten (10) years starting 1 September 1987. This is hardly conclusive of the existence of an intention by the parties to novate the contract of 23 September 1987. Nor can it be argued that there is an implied novation for the requisite incompatibility between the original contract and the subsequent one is not present. Based on this factual milieu, the presumption of validity of contract cannot be said to have been overturned. Respondent ASSOCIATION claims that the Decision of the Office of the President declaring null and void the lease contracts of 18 May 1992 and 25 May 1992 should be counted in its favor. We do not agree. The contention does not hold water. It is well-settled that a court's judgment in a case shall not adversely affect persons who were not parties thereto. Isaguirre v. De Lara G.R. No. 138053, May 31, 2000, 332 SCRA 803 Gonzaga Reyes, J. FACTS: Alejandro de Lara was the original applicant-claimant for a Miscellaneous Sales Application over a parcel of land with an area of 2,342 square meters. Upon his death, Alejandro de Lara was succeeded by his wife-respondent Felicitas de Lara as claimant. On this lot stands a two-story residential-commercial apartment declared for taxation purposes in the name of respondents sons, Apolonio and Rodolfo de Lara. When Felicitas encountered financial difficulties, she approached petitioner Cornelio M. Isaguirre. On February 10, 1960, a document denominated as Deed of Sale and Special Cession of Rights and Interests was executed by Felicitas and Isaguirre,

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whereby the former sold a 250 square meter portion of the subject lot, together with the two-story commercial and residential structure standing thereon. Sometime in May 1969, Apolonio and Rodolfo de Lara filed a complaint against petitioner for recovery of ownership and possession of the two-story building. However, petitioner filed a sales application over the subject property and was issued an OCT. Due to overlapping of title, petitioner filed an action for quieting of title. Judgment was rendered in favor of the respondents. When respondent filed a motion for execution, petitioner opposed, and alleged that he had a right of retention over the property until payment of the value of the improvements he had introduced on the property. ISSUE: Whether or not petitioner can be considered a builder in good faith with respect to the improvements he made on the property. HELD: No. The petitioner is a possessor in bad faith. Based on the factual findings from this case, it is evident that petitioner knew from the very beginning that there was really no sale and that he held respondents property as mere security for the payment of the loan obligation. Therefore, petitioner may claim reimbursement only for necessary expenses; however, he is not entitled to reimbursement for any useful expenses which he may have incurred.

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

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

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HELD: No. Caisip was not even entitled to the right granted by Article 429. This is totally inapplicable to the case, for, having been given 20 days from June 6th within which to vacate the lot, Cabalag did not, on June 17th and within said period, invades or usurps the said lot. She had merely remained in possession thereof, even though the hacienda owner may have become its co-possessor by reason of the prior order of the Justice of Peace Court of Nasugbu. Caisip and others did not repel or prevent an actual or threatened physical invasion or usurpation. They expelled Cabalag from a property which she and her husband were in possession, despite the fact that the Sheriff had explicitly authorized Guevarra and Cabalag to stay in said property up to June 26th, and had expressed the view that he could not oust them without a judicial order. It is clear, therefore, that Caisip, Rojales and Villadelrey, by means of violence, and without legal authority, had prevented the complainant from doing something not prohibited by law (weeding and being in Lot 105-A), and compelled her to do something against her will (stopping the weeding and leaving said lot), whether it be right or wrong, thereby taking the law into their hands, in violation of Article 286 of the Revised Penal Code. People of the Philippines v. Pletcha G.R. No. 19029-CR, June 27, 1977, 22 CA Rep. 807 Sison, J. FACTS: Tito Pletcha, Jr., farmer, invoking self-help in defense of the land he inherited from his father 19 years ago against the workers of Radeco Corporation, who without court order, were constructing a fence in a hacienda allegedly leased by the corporation from a certain Lopinco. Claiming actual possession and ownership and believing that the land sought to be fenced was an integral part of the land he inherited, Pletcha asked the group to desist from fenicing pending a resurvey he proposed, but he was totally ignored, thus he fought off and prevented the workers. As a result of such resistance he was prosecuted and convicted of grave coercion by the Municipal Trial Court. Pletcha appealed the decision of the MTC with the Court of Appeals. ISSUE: Whether the appellants action is a legitimate exercise of a private citizens self-help. HELD: Yes. In the instant case,the usurpers possession has not yet become complete and the complainants were in the act of building a fence. Such an act constitutes force in contemplation of the law. This act of trespass justified the appellant to drive them away, even by means of bolo because they refused to listen to his appeal which is reasonable. The appellant need not rush to the court to seek redress before reasonably resisting the invasion of his property. The situation required immediate action and Art. 429 gave him the self executory mechanics of self-defense and self-reliance. The provision in Art 429 of the New Civil Code confirms the right of the appellant, an owner

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and lawful possessor, to use reasonable force to repel an invasion or usurpation, actual, threatened or physical of his property. The principle of self-defense and the protective measures related thereto, covers not only his life, but also his liberty and property. The principle of self-help authorizes the lawful possessor to use force, not only to prevent a threatened unlawful invasion or usurpation thereof; it is a sort of self-defense. It is lawful to repel force by force. He who merely uses force to defend his possession does not possess by force. The use of such necessary force to protect propriety or possessory rights constitutes a justifying circumstance under the Penal Code.

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Andamo v. Intermediate Appellate Court G.R. No. 74761, November 6, 1990, 191 SCRA 195 Fernan, C.J. FACTS: Petitioner spouses Emmanuel and Natividad Andamo are the owners of a parcel of land situated in Biga (Biluso) Silang, Cavite which is adjacent to that of private respondent, Missionaries of Our Lady of La Salette, Inc., a religious corporation. Within the land of respondent corporation, waterpaths and contrivances, including an artificial lake, were constructed, which allegedly inundated and eroded petitioners' land, caused a young man to drown, damaged petitioners' crops and plants, washed away costly fences, endangered the lives of petitioners and their laborers during rainy and stormy seasons, and exposed plants and other improvements to destruction. Petitioners instituted a criminal action against the officers and directors of respondent corporation, for destruction by means of inundation under Article 324 of the Revised Penal Code. Subsequently, petitioners filed a civil action against respondent corporation for damages. The trial court dismissed the civil case for lack of jurisdiction, as the criminal case which was instituted ahead of the civil case was still unresolved. The appellate court affirmed the order of the trial court. The motion for reconsideration was also denied. ISSUE: Whether a corporation, which has built through its agents, waterpaths, water conductors and contrivances within its land, thereby causing inundation and damage to an adjacent land, can be held civilly liable for damages. HELD: Yes. Petitioners' complaint sufficiently alleges that petitioners have sustained and will continue to sustain damage due to the waterpaths and contrivances built by respondent corporation. It must be stressed that the use of one's property is not without limitations. Article 431 of the Civil Code provides that "the owner of a thing cannot make use thereof in such a manner as to injure the rights of a third person." SIC UTERE TUO UT ALIENUM NON LAEDAS. Moreover, adjoining landowners have mutual and reciprocal duties which require that each must use his own land in a reasonable manner so as not to infringe upon the rights and interests of others. Although we recognize the right of an owner to build structures on his land, such structures must be so constructed and maintained using all reasonable care so that they cannot be dangerous to adjoining landowners and can withstand the usual and expected forces of nature. If the structures cause injury or damage to an adjoining landowner or a third person, the latter can claim indemnification for the injury or damage suffered. Article 2176 of the Civil Code imposes a civil liability on a person for damage caused by his act or omission constituting fault or negligence. However, responsibility for fault or negligence under the said article is entirely separate and distinct from the civil liability arising from negligence under the Penal Code. The plaintiff cannot recover damages twice for the same act or omission of the defendant. The decision is reversed and set aside.

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Republic of the Philippines v. Court of Appeals G.R. No. L-43938, April 15, 1988, 160 SCRA 228 Cruz, J. FACTS: An application for registration of a parcel of land was filed on February 11, 1965, by Jose de la Rosa on his own behalf and on behalf of his three children. The land, situated in Tuding, Itogon, Benguet Province, was divided into 9 lots. According to the application, Lots 1-5 were sold to Jose de la Rosa and Lots 6-9 to his children by Mamaya Balbalio and Jaime Alberto, respectively, in 1964. In support of the application, both Balbalio and Alberto testified that they had acquired the subject land by virtue of prescription Balbalio claimed to have received Lots 1-5 from her father shortly after the Liberation. Alberto said he received Lots 6-9 in 1961 from his mother, Bella Alberto. She was corroborated by Felix Marcos, who recalled the earlier possession of the land by Alberto's father. Benguet opposed on the ground that the June Bug mineral claim covering Lots 1-5 was sold to it on September 22, 1934, by the successors-in-interest of James Kelly, who located the claim in September 1909 and recorded it on October 14, 1909. From the date of its purchase, Benguet had been in actual, continuous and exclusive possession of the land in concept of owner. Atok alleged that a portion of Lots 1-5 and all of Lots 6-9 were covered by the Emma and Fredia mineral claims located by Harrison and Reynolds on December 25, 1930, and recorded on January 2, 1931, in the office of the mining recorder of Baguio. These claims were purchased from these locators on November 2, 1931, by Atok, which has since then been in open, continuous and exclusive possession of the said lots. The Bureau of Forestry Development also interposed its objection, arguing that the land sought to be registered was covered by the Central Cordillera Forest Reserve under Proclamation No. 217 dated February 16, 1929. Moreover, by reason of its nature, it was not subject to alienation under the Constitutions of 1935 and 1973. The trial court denied the application, holding that the applicants had failed to prove their claim of possession and ownership of the land sought to be registered. The applicants appealed to the respondent court, which reversed the trial court and affirmed the surface rights of the de la Rosas over the land while at the same time reserving the sub-surface rights of Benguet and Atok by virtue of their mining claims. Both Benguet and Atok appealed to the Supreme Court, invoking their superior right of ownership. The Republic filed its own petition for review and reiterated its argument that neither the private respondents nor the two mining companies had any valid claim to the land because it was not alienable and registerable. ISSUE: Whether or not Benguet and Atok have a better right over the property in question. HELD: Yes. It is true that the subject property was considered forest land and included in the Central Cordillera Forest Reserve, but this did not impair the rights already vested in Benguet and Atok at that time. The perfection of the mining claim converted the property to mineral land and under the laws then in force removed it from the public domain. By such act, the locators acquired exclusive rights over the land, against even

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the government, without need of any further act such as the purchase of the land or the obtention of a patent over it. As the land had become the private property of the locators, they had the right to transfer the same, as they did, to Benguet and Atok. It is true, as the Court of Appeals observed, that such private property was subject to the "vicissitudes of ownership," or even to forfeiture by non-user or abandonment or, as the private respondents aver, by acquisitive prescription. The Court of Appeals justified this by saying there is "no conflict of interest" between the owners of the surface rights and the owners of the sub-surface rights. Under the aforesaid ruling, the land is classified as mineral underneath and agricultural on the surface, subject to separate claims of title. However, the rights over the land are indivisible and that the land itself cannot be half agricultural and half mineral. The classification must be categorical; the land must be either completely mineral or completely agricultural. In the instant case, as already observed, the land which was originally classified as forest land ceased to be so and became mineral and completely mineral once the mining claims were perfected. As long as mining operations were being undertaken thereon, or underneath, it did not cease to be so and become agricultural, even if only partly so, because it was enclosed with a fence and was cultivated by those who were unlawfully occupying the surface. This is an application of the Regalian doctrine. If a person is the owner of agricultural land in which minerals are discovered, his ownership of such land does not give him the right to extract or utilize the said minerals without the permission of the State to which such minerals belong. Benguet and Atok have exclusive rights to the property in question by virtue of their respective mining claims which they validly acquired before the Constitution of 1935 prohibited the alienation of all lands of the public domain except agricultural lands, subject to vested rights existing at the time of its adoption. The land was not and could not have been transferred to the private respondents by virtue of acquisitive prescription, nor could its use be shared simultaneously by them and the mining companies for agricultural and mineral purposes. The decision is set aside and that of the trial court is reinstated.

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Custodio v. Court of Appeals G.R. No. 116100, February 9, 1996, 253 SCRA 483 Regalado, J. FACTS: Pacifico Mabasa owns a parcel of land with a two-door apartment. Said property may be described to be surrounded by other immovables owned by petitioner Spouses Custodio, Spouses Santos and Rosalina Morato. From the main street P. Burgos, there are two possible passageways to Mabasas property. One of the tenants of the apartment vacated because an adobe fence was constructed thereby making the first passageway narrower in width. Ma. Cristina Santos testified that she constructed said fence for security reasons. Morato also constructed her fence and even extended it in such a way that the entire passageway was enclosed. It was then that the remaining tenants of the apartment left. Thereafter, Mabasa filed a case for the grant of an easement of right of way against petitioners. The RTC granted the easement of right of way sought by private respondent. On appeal, the CA affirmed the decision of the RTC and furthermore, ordering petitioners to pay private respondent a sum of money for damages. ISSUE: Whether the award of damages to private respondent is proper. HELD: No, the act of petitioners in constructing a fence within their lot is a valid exercise of their right as owners. Article 430 of the Civil Code provides that every owner may enclose or fence his land or tenements by means of walls, ditches, live or dead hedges, or by any other means without detriment to servitudes constituted thereon. The proper exercise of a lawful right cannot constitute a legal wrong for which an action will lie, although the act may result in damage to another. The courts can give no redress for hardship to an individual resulting from action reasonably calculated to achieve a lawful end by lawful means.

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Abejaron v. Nabasa G.R. No. 84831, June 20, 2001, 359 SCRA 47 Puno, J. FACTS: Petitioner Abejaron avers that he is the actual and lawful possessor and claimant of a 118-square meter portion of a 175-square meter residential lot in Silway, General Santos City. Petitioner Abeja