PROP

G.R. No. 93654 May 6, 1992 FRANCISCO U. DACANAY, petitioner, vs. MAYOR MACARIO ASISTIO, JR.May public streets or thoroughfares be leased or licensed to market stallholders by virtue of a city ordinance or resolution of the Metro Manila Commission? This issue is posed by the petitioner, an aggrieved Caloocan City resident who filed a special civil action of mandamus against the incumbent city mayor and city engineer, to compel these city officials to remove the market stalls from certain city streets which the aforementioned city officials have designated as flea markets, and the private respondents (stallholders) to vacate the streets. On January 5, 1979, MMC Ordinance No. 79-02 was enacted by the Metropolitan Manila Commission, designating certain city and municipal streets, roads and open spaces as sites for flea markets. Pursuant, thereto, the Caloocan City mayor opened up seven (7) flea markets in that city. One of those streets was the "Heroes del '96" where the petitioner lives. Upon application of vendors Rodolfo Teope, Mila Pastrana, Carmen Barbosa, Merle Castillo, Bienvenido Menes, Nancy Bugarin, Jose Manuel, Crisaldo Paguirigan, Alejandro Castron, Ruben Araneta, Juanita and Rafael Malibaran, and others, the respondents city mayor and city engineer, issued them licenses to conduct vending activities on said street. In 1987, Antonio Martinez, as OIC city mayor of Caloocan City, caused the demolition of the market stalls on Heroes del '96, V. Gozon and Gonzales streets. To stop Mayor Martinez' efforts to clear the city streets, Rodolfo Teope, Mila Pastrana and other stallowners filed an action for prohibition against the City of Caloocan, the OIC City Mayor and the City Engineer and/or their deputies (Civil Case No. C-12921) in the Regional Trial Court of Caloocan City, Branch 122, praying the court to issue a writ of preliminary injunction ordering these city officials to discontinue the demolition of their stalls during the pendency of the action. The court issued the writ prayed for. However, on December 20, 1987, it dismissed the petition and lifted the writ of preliminary injunction which it had earlier issued. The trial court observed that: A perusal of Ordinance 2, series of 1979 of the Metropolitan Manila Commission will show on the title itself that it is an ordinance –– Authorizing and regulating the use of certain city and/or municipal streets, roads and open spaces within Metropolitan Manila as sites for flea market and/or vending areas, under certain terms and conditions, subject to the approval of the Metropolitan Manila Commission, and for other purposes which is further amplified in Section 2 of the said ordinance, quoted hereunder: Sec. 2. The streets, roads and open spaces to be used as sites for flea markets (tiangge) or vending areas; the design, measurement or specification of the structures, equipment and apparatuses to be used or put up; the allowable distances; the days and time allowed for the conduct of the businesses and/or activities herein authorized; the rates or fees or charges to be imposed, levied and collected; the kinds of merchandise, goods and commodities sold and services rendered; and other matters and activities related to the establishment, maintenance and management and operation of flea markets and vending areas, shall be determined and prescribed by the mayors of the cities and municipalities in the Metropolitan Manila where the same are located, subject to the approval of the Metropolitan Manila Commission and consistent with the guidelines hereby prescribed. Further, it is so provided in the guidelines under the said Ordinance No. 2 of the MMC that — Sec. 6. In the establishment, operation, maintenance and management of flea markets and vending areas, the following guidelines, among others, shall be observed: (m) That the permittee shall remove the equipment , facilities and other appurtenances used by him in the conduct of his business after the close or termination of business hours. (Emphasis ours; pp. 15-16, Rollo.) The trial court found that Heroes del '96, Gozon and Gonzales streets are of public dominion, hence, outside the commerce of man: The Heroes del '96 street, V. Gozon street and Gonzales street, being of public dominion must, therefore, be outside of the commerce of man. Considering the nature of the subject premises, the following jurisprudence co/principles are applicable on the matter: 1) They cannot be alienated or leased or otherwise be the subject matter of contracts. (Municipality of Cavite vs. Rojas, 30 Phil. 602); 2) They cannot be acquired by prescription against the state (Insular Government vs. Aldecoa, 19 Phil. 505). Even municipalities can not acquire them for use as communal lands against the state (City of Manila vs. Insular Government, 10 Phil. 327); 3) They are not subject to attachment and execution (Tan Toco vs. Municipal Council of Iloilo, 49 Phil. 52); 4) They cannot be burdened by any voluntary easement (2-II Colin & Capitant 520) (Tolentino, Civil Code of the Phils., Vol. II, 1983 Ed. pp. 29-30). In the aforecited case of Municipality of Cavite vs. Rojas, it was held that properties for public use may not be leased to private individuals. Such a lease is null and void for the reason that a municipal council cannot withdraw part of the plaza from public use. If possession has already been given, the lessee must restore possession by vacating it and the municipality must thereupon restore to him any sums it may have collected as rent. In the case of City of Manila vs. Gerardo Garcia, 19 SCRA 413, the Supreme Court held: The property being a public one, the Manila Mayors did not have the authority to give permits, written or oral, to the squatters, and that the permits granted are therefore considered null and void. This doctrine was reiterated in the case of Baguio Citizens Action Inc. vs. The City Council, 121 SCRA 368, where it was held that: An ordinance legalizing the occupancy by squatters of public land is null and void. The authority of respondent Municipality of Makati to demolish the shanties of the petitioner's members is mandated by P.D. 772, and Sec. 1 of Letter of Instruction No. 19 orders certain public officials, one of whom is the Municipal Mayor to remove all illegal constructions including buildings on and along esteros and river banks, those along railroad tracks and those built without permits on public or private property (Zansibarian Residents Association vs. Mun. of Makati, 135 SCRA 235). The City Engineer is also among those required to comply with said Letter of Instruction. The occupation and use of private individuals of sidewalks and other public places devoted for public use constitute both public and private nuisances and nuisance per se , and this applies to even case involving the use or lease of public places under permits and licenses issued by competent authority, upon the theory that such holders could not take advantage of their unlawful permits and license and claim that the land in question is a part of a public street or a public place devoted to public use, hence, beyond the commerce of man. (Padilla, Civil Code Annotated, Vol. II, p. 59, 6th Ed., citing Umali vs. Aquino, IC. A. Rep. 339.) From the aforequoted jurisprudence/principles, the Court opines that defendants have the right to demolish the subject stalls of the plaintiffs, more so when Section 185, par. 4 of Batas Pambansa Blg. 337, otherwise known as the Local Government Code provides that the City Engineer shall: (4) . . . (c) Prevent the encroachment of private buildings and fences on the streets and public places; (j) Inspect and supervise the construction, repair, removal and safety of private buildings; (k) With the previous approval of the City Mayor in each case, order the removal of materials employed in the construction or repair of any building or structures made in violation of law or ordinance, and cause buildings and structures dangerous to the public to made secure or torn down; Further, the Charter of the City of Caloocan, Republic Act No. 5502, Art. VII, Sec. 27, par. g, 1 and m, grants the City Engineer similar powers. (Emphasis supplied; pp. 17-20, Rollo.) However, shortly after the decision came out, the city administration in Caloocan City changed hands. City Mayor Macario Asistio, Jr., as successor of Mayor Martinez, did not pursue the latter's policy of clearing and cleaning up the city streets. Invoking the trial court's decision in Civil Case No. C-12921, Francisco U. Dacanay, a concerned citizen, taxpayer and registered voter of Barangay 74, Zone 7, District II of Caloocan City, who resides on Heroes del '96 Street, one of the affected streets, wrote a letter dated March 7, 1988 to Mayor Asistio, Jr., calling his attention to the illegally-constructed stalls on Heroes del '96 Street and asked for their demolition. Dacanay followed up that letter with another one dated April 7, 1988 addressed to the mayor and the city engineer, Luciano Sarne, Jr. (who replaced Engineer Arturo Samonte), inviting their attention to the Regional Trial Court's decision in Civil Case No. 12921. There was still no response. Dacanay sought President Corazon C. Aquino's intervention by writing her a letter on the matter. His letter was referred to the city mayor for appropriate action. The acting Caloocan City secretary, Asuncion Manalo, in a letter dated August 1, 1988, informed the Presidential Staff Director that the city officials were still studying the issue of whether or not to proceed with the demolition of the market stalls. Dacanay filed a complaint against Mayor Asistio and Engineer Sarne (OMB-0-89-0146) in the Office of the OMBUDSMAN. In their letter-comment dated April 3, 1989, said city officials explained that in view of the huge number of stallholders involved, not to mention their dependents, it would be harsh and inhuman to eject them from the area in question, for their relocation would not be an easy task. In reply, Dacanay maintained that respondents have been derelict in the performance of their duties and through manifest partiality constituting a violation of Section 3(e) of R.A. 3019, have caused undue injury to the Government and given unwarranted benefits to the stallholders. After conducting a preliminary investigation, the OMBUDSMAN rendered a final evaluation and report on August 28, 1989, finding that the respondents' inaction is purely motivated by their perceived moral and social responsibility toward their constituents, but "the fact remains that there is an omission of an act which ought to be performed, in clear violation of Sections 3(e) and (f) of Republic Act 3019 ." (pp. 83-84, Rollo.) The OMBUDSMAN recommended the filing of the corresponding information in court. As the stallholders continued to occupy Heroes del '96 Street, through the tolerance of the public respondents, and in clear violation of the decision it Civil Case No. C-12921, Dacanay filed the present petition for mandamuson June 19, 1990, praying that the public respondents be ordered to enforce the final decision in Civil Case No. C-12921 which upheld the city mayor's authority to order the demolition of market stalls on V. Gozon, Gonzales and Heroes del '96 Streets and to enforce P.D. No. 772 and other pertinent laws. On August 16, 1990, the public respondents, through the City Legal Officer, filed their Comment' on the petition. The Office of the Solicitor General asked to be excused from filing a separate Comment in behalf of the public respondents. The City Legal Officer alleged that the vending area was transferred to Heroes del '96 Street to decongest Malonzo Street, which is comparatively a busier thoroughfare; that the transfer was made by virtue of Barangay Resolution No. 30 s'78 dated January 15, 1978; that while the resolution was awaiting approval by the Metropolitan Manila Commission, the latter passed Ordinance No. 79-2, authorizing the use of certain streets and open spaces as sites for flea markets and/or vending areas; that pursuant thereto, Acting MMC Mayor Virgilio P. Robles issued Executive Order No. 135 dated January 10, 1979, ordering the establishment and operation of flea markets in specified areas and created the Caloocan City Flea Market Authority as a regulatory body; and that among the sites chosen and approved by the Metro Manila Commission, Heroes del '96 Street has considered "most viable and progressive, lessening unemployment in the city and servicing the residents with affordable basic necessities." The petition for mandamus is meritorious. There is no doubt that the disputed areas from which the private respondents' market stalls are sought to be evicted are public streets, as found by the trial court in Civil Case No. C-12921. A public street is property for public use hence outside the commerce of man (Arts. 420, 424, Civil Code). Being outside the commerce of man, it may not be the subject of lease or other contract (Villanueva et al. vs. Castañeda and Macalino, 15 SCRA 142, citing the Municipality of Cavite vs. Rojas, 30 SCRA 602; Espiritu vs. Municipal Council of Pozorrubio, 102 Phil. 869; and Muyot vs. De la Fuente, 48 O.G. 4860). As the stallholders pay fees to the City Government for the right to occupy portions of the public street, the City Government, contrary to law, has been leasing portions of the streets to them. Such leases or licenses are null and void for being contrary to law. The right of the public to use the city streets may not be bargained away through contract. The interests of a few should not prevail over the good of the greater number in the community whose health, peace, safety, good order and general welfare, the respondent city officials are under legal obligation to protect. The Executive Order issued by Acting Mayor Robles authorizing the use of Heroes del '96 Street as a vending area for stallholders who were granted licenses by the city government contravenes the general law that reserves city streets and roads for public use. Mayor Robles' Executive Order may not infringe upon the vested right of the public to use city streets for the purpose they were intended to serve: i.e., as arteries of travel for vehicles and pedestrians. As early as 1989, the public respondents bad started to look for feasible alternative sites for flea markets. They have had more than ample time to relocate the street vendors. WHEREFORE, it having been established that the petitioner and the general public have a legal right to the relief demanded and that the public respondents have the corresponding duty, arising from public office, to clear the city streets and restore them to their specific public purpose (Enriquez vs. Bidin, 47 SCRA 183; City of Manila vs. Garcia et al., 19 SCRA, 413 citing Unson vs. Lacson, 100 Phil. 695), the respondents City Mayor and City Engineer of Caloocan City or their successors in office are hereby ordered to immediately enforce and implement the decision in Civil Case No. C-1292 declaring that Heroes del '96, V. Gozon, and Gonzales Streets are public streets for public use, and they are ordered to remove or demolish, or cause to be removed or demolished, the market stalls occupying said city streets with utmost dispatch within thirty (30)days from notice of this decision. This decision is immediately executory. G.R. No. 92161 March 18, 1991 SIMPLICIO BINALAY et al, petitioners vs. GUILLERMO MANALO and COURT OF APPEALS, respondents. The late Judge Taccad originally owned a parcel of land situated in Tumauini, Isabela having an estimated area of twenty (20) hectares. The western portion of this land bordering on the Cagayan River has an elevation lower than that of the eastern portion which borders on the national road. Through the years, the western portion would periodically go under the waters of the Cagayan River as those waters swelled with the coming of the rains. The submerged portion, however, would re-appear during the dry season from January to August. It would remain under water for the rest of the year, that is, from September to December during the rainy season. The ownership of the landholding eventually moved from one person to another. On 9 May 1959, respondent Guillermo Manalo acquired 8.65 hectares thereof from Faustina Taccad, daughter of Judge Juan Taccad. The land sold was described in the Deed of Absolute Sale 1 as follows: . . . a parcel of agricultural land in Balug, Tumauini, Isabela, containing an area of 8.6500 hectares, more or less; bounded on the North by Francisco Forto on the East by National Road; on South by Julian Tumolva and on the West by Cagayan River; declared for taxation under Tax Declaration No. 12681 in the name of Faustina Taccad, and assessed at P 750.00. . . . Later in 1964, respondent Manalo purchased another 1.80 hectares from Gregorio Taguba who had earlier acquired the same from Judge Juan Taccad. The second purchase brought the total acquisition of respondent Manalo to 10.45 hectares. The second piece of property was more particularly described as follows: . . . a piece of agricultural land consisting of tobacco land, and containing an area of 18,000 square meters, more or less, bounded on the North by Balug Creek; on the South, by Faustina Taccad (now Guillermo R. Manalo); on the East, by a Provincial Road; and on the West, by Cagayan River assessed at P 440.00, as tax Declaration No. 3152. . . . During the cadastral survey conducted at Balug, Tumauini, Isabela on 21 October 1969, the two (2) parcels of land belonging to respondent Manalo were surveyed and consolidated into one lot, designated as Lot No. 307, Pls-964. Lot 307 which contains 4.6489 hectares includes: (a) the whole of the 1.80 hectares acquired from Gregorio Taguba; and (b) 2.8489 hectares out of the 8.65 hectares purchased from Faustina Taccad. As the survey was conducted on a rainy month, a portion of the land bought from Faustina Taccad then under water was left unsurveyed and was not included in Lot 307. The Sketch Plan submitted during the trial of this case and which was identified by respondent Manalo shows that the Cagayan River running from south to north, forks at a certain point to form two (2) branches—the western and the eastern branches—and then unites at the other end, further north, to form a narrow strip of land. The eastern branch of the river cuts through the land of respondent Manalo and is inundated with water only during the rainy season. The bed of the eastern branch is the submerged or the unsurveyed portion of the land belonging to respondent Manalo. For about eight (8) months of the year when the level of water at the point where the Cagayan River forks is at its ordinary depth, river water does not flow into the eastern branch. While this condition persists, the eastern bed is dry and is susceptible to cultivation. Considering that water flowed through the eastern branch of the Cagayan River when the cadastral survey was conducted, the elongated strip of land formed by the western and the eastern branches of the Cagayan River looked very much like an island. This strip of land was surveyed on 12 December 1969. 4 It was found to have a total area of 22.7209 hectares and was designated as Lot 821 and Lot 822. The area of Lot 822 is 10.8122 hectares while Lot 821 has an area of 11.9087 hectares. Lot 821 is located directly opposite Lot 307 and is separated from the latter only by the eastern branch of the Cagayan River during the rainy season and, during the dry season, by the exposed, dry river bed, being a portion of the land bought from Faustina Taccad. Respondent Manalo claims that Lot 821 also belongs to him by way of accretion to the submerged portion of the property to which it is adjacent. Petitioners who are in possession of Lot 821, upon the other hand, insist that they own Lot 821. They occupy the outer edges of Lot 821 along the river banks, i.e., the fertile portions on which they plant tobacco and other agricultural products. They also cultivate the western strip of the unsurveyed portion during summer. 5 This situation compelled respondent Manalo to file a case for forcible entry against petitioners on 20 May 1969. The case was dismissed by the Municipal Court of Tumauini, Isabela for failure of both parties to appear. On 15 December 1972, respondent Manalo again filed a case for forcible entry against petitioners. The latter case was similarly dismissed for lack of jurisdiction by the Municipal Court of Tumauini, Isabela. On 24 July 1974, respondent Manalo filed a complaints before the then Court of First Instance of Isabela, Branch 3 for quieting of title, possession and damages against petitioners. He alleged ownership of the two (2) parcels of land he bought separately from Faustina Taccad and Gregorio Taguba for which reason he prayed that judgment be entered ordering petitioners to vacate the western strip of the unsurveyed portion. Respondent Manalo likewise prayed that judgment be entered declaring him as owner of Lot 821 on which he had laid his claim during the survey. Petitioners filed their answer denying the material allegations of the complaint. The case was then set for trial for failure of the parties to reach an amicable agreement or to enter into a stipulation of facts. On 10 November 1982, the trial court rendered a decision with the following dispositive portion: WHEREFORE, in the light of the foregoing premises, the Court renders judgment against the defendants and in favor of the plaintiff and orders: 1. That plaintiff, Guillermo Manalo, is declared the lawful owner of the land in question, Lot No. 821, Pls-964 of Tumauini Cadastre, and which is more particularly described in paragraph 2-b of the Complaint; 2. That the defendants are hereby ordered to vacate the premises of the land in question, Lot No. 821, Pls-964 of Tumauini Cadastre, and which is more particularly described in paragraph 2-b of the Complaint; 3. That the defendants are being restrained from entering the premises of the land in question, Lot No. 821, Pls-964 of Tumauini Cadastre, and which is more particularly described in paragraph 2-b of the Complaint; and 4. That there is no pronouncement as to attorney's fees and costs. SO ORDERED. Petitioners appealed to the Court of Appeals which, however, affirmed the decision of the trial court. They filed a motion for reconsideration, without success. While petitioners insist that Lot 821 is part of an island surrounded by the two (2) branches of the Cagayan River, the Court of Appeals found otherwise. The Court of Appeals concurred with the finding of the trial court that Lot 821 cannot be considered separate and distinct from Lot 307 since the eastern branch of the Cagayan River substantially dries up for the most part of the year such that when this happens, Lot 821 becomes physically ( i.e., by land) connected with the dried up bed owned by respondent Manalo. Both courts below in effect rejected the assertion of petitioners that the depression on the earth's surface which separates Lot 307 and Lot 821 is, during part of the year, the bed of the eastern branch of the Cagayan River. and goes beyond that which is the ordinary depth." the highest depth of the waters of Laguna de Bay during the dry season is the ordinary one. since Laguna de Bay is a lake. Admittedly. 408). and the highest depth they attain during the extra-ordinary one (sic). Specifically. order and measure. If according to the definition given by Article 74 of the Law of Waters quoted above. which occurs always or most of the time during the year. The Court of Appeals adhered substantially to the conclusion reached by the trial court. it was held that — According to the foregoing definition of the words "ordinary" and "extra-ordinary. The trial court held: The Court believes that the land in controversy is of the nature and character of alluvion (Accretion). transcends the general rule. "W-3" and "W-4"). is a question of law cognizable by this Court. while the latter is uncommon. the natural bed or basin of the lakes is the ground covered by their waters when at their highest ordinary depth. the Court applied the definition of the natural bed or basin of lakes found in Article 74 of the Law of Waters of 3 August 1866. (Emphasis supplied) . Upon the other hand. The small residual of water between Lot [821] and 307 is part of the small stream already in existence when the whole of the late Judge Juan Taccad's property was still susceptible to cultivation and uneroded. the disputed property is not an island in the strict sense of the word since the eastern portion of the said property claimed by appellants to be part of the Cagayan River dries up during summer. Jurisprudence is likewise settled that the Court of Appeals is the final arbiter of questions of fact. and the deposit created by the current of the water becomes manifest" (Roxas vs. common. Colegio de San Jose is applicable to the present case. for it appears that during the dry season. Colegio de San Jose.It is a familiar rule that the findings of facts of the trial court are entitled to great respect. what is involved in the instant case is the eastern bed of the Cagayan River. 6 Phil. if the water level is high the whole strip of land would be under water. does not have to make an express act of possession. The highest ordinary level of the waters of the Cagayan River is that attained during the dry season which is confined only on the west side of Lot [821] and Lot [822]. that is up to the northeastern boundary of the two parcels of land in question. Consequently. river water flows through the eastern bed of the Cagayan River. inasmuch as the former is the one which is regular. Pls-964) and the two (2) parcels of land which the plaintiff purchased from Gregorio Taguba and Justina Taccad Cayaba becomes a marshy land and is only six (6) inches deep and twelve (12) meters in width at its widest in the northern tip (Exhs. This is where the water of the Cagayan river gains its entry. in order to determine the character and ownership of the disputed property. 821. the lower portion of the said strip of land located at its southernmost point would be inundated with water. natural. In Government of the Philippine Islands vs. In the instant case. As the river becomes swollen due to heavy rains. the Court applied the legal provisions governing the ownership and use of lakes and their beds and shores. "W-l". The law does not require it. The natural bed or channel of a creek or river is the ground covered by its waters during the highest floods . It has been held by our Supreme Court that "the owner of the riparian land which receives the gradual deposits of alluvion. "W". The Court is unable to agree with the Court of Appeals that Government of the Philippine Islands vs. "W-2". This is in recognition of the peculiar advantage on the part of the trial court of being able to observe first-hand the deportment of the witnesses while testifying. 70. Tuazon. it is the action of the heavy rains which comes during rainy season especially from September to November which increases the water level of the Cagayan river. This is the natural Cagayan river itself. That case involved Laguna de Bay. the conclusion reached by both courts below apparently collides with their findings that periodically at the onset of and during the rainy season. the body of water separating the same land in controversy (Lot No. and that they carry even more weight when affirmed by the Court of Appeals. the natural bed or basin of Laguna de Bay is the ground covered by its waters when at their highest depth during the dry season. thus: As found by the trial court. We believe and so hold that Article 70 of the Law of Waters of 3 August 1866 is the law applicable to the case at bar: Art. We find the foregoing ruling to be analogous to the case at bar. But whether a conclusion drawn from such findings of facts is correct. Exhibit "E" for the prosecution which was the Declaration of Real Property standing in the name of Faustina Taccad indicates that the eastern bed already existed even before the sale to respondent Manalo. esta agua corriente. In addition. num 1. roadsteads. 19 Manresa. has a height of eight (8) meters. from January to August). 2. stressed the public ownership of river beds: La naturaleza especial de los rios. then. respondent Manalo admitted in open court that the entire area he bought from Gregorio Taguba was included in Lot 307. banks. in commenting upon Article 339 of the Spanish Civil Code of 1889 from which Article 420 of the Philippine Civil Code was taken. torrents. en punto a su disfrute general. we cannot ignore the periodical swelling of the waters ( i. The records do not show when the Cagayan River began to carve its eastern channel on the surface of the earth. parece que debe ir implicito el dominio publico de aquellos tres elementos que integran el rio . (2) Those which belong to the State. Thus. Secondly. segun el cual. dried up portion has a markedly lower elevation than Lot 307 and Lot 821. pursuant to Article 420 of the Civil Code. such as roads. los rios y sus cauces naturales. respondent Manalo did not acquire private ownership of the bed of the eastern branch of the river even if it was included in the deeds of absolute sale executed by Gregorio Taguba and Faustina Taccad in his favor.80 hectares purchased from Gregorio Taguba was included in Lot 307.. las riberas. marked as Exhibits "W" to "W-4". Por otra parte. These vendors could not have validly sold land that constituted property of public dominion. The highest floods in the eastern branch of the Cagayan River occur with the annual coming of the rains as the river waters in their onward course cover the entire depressed portion. the depressed portion assumed the name Rio Muerte de Cagayan. y 3. en cuanto a los alveos o cauces tenemos la declaracion del art.e. It has dike-like slopes on both sides connecting it to Lot 307 and Lot 821 that are vertical upward and very prominent. as related by petitioner Gannaban. The pictures.e. and are intended for some public service or for the development of the national wealth. then the Cagayan River referred to as the western boundary in the Deed of Sale transferring the land from Gregorio Taguba to respondent Manalo as well as the Deed of Sale signed by Faustina Taccad. Article 420 of the Civil Code states: The following things are property of public dominion: (1) Those intended for public use. The words "old bed" enclosed in parentheses—perhaps written to make legitimate the claim of private ownership over the submerged portion—is an implied admission of the existence of the river bed. En efecto en todo rio es preciso distinguir 1. de suerte que al decir el Codigo civil que los rios son de dominio publico. Indeed. without being for public use. the pictures identified by respondent Manalo during his direct examination depict the depressed portion as a river bed. Ahora bien: son estas dos ultimas cosas siempre de dominio publico.We note that Article 70 defines the natural bed or channel of a creek or river as the ground covered by its waters during the highest floods. must refer to the dried up bed (during the dry months) or the eastern branch of the river (during the rainy months). Now. son . como las aguas? Realmente no puede imaginarse un rio sin alveo y sin ribera. from September to December) causing the eastern bed to be covered with flowing river waters. Firstly. 407. In the Declaration of Real Property made by respondent Manalo. hace que sea necesario considerar en su relacion de dominio algo mas que sus aguas corrientes. canals. declaracion que concuerda con lo que dispone el art. Though the eastern bed substantially dries up for the most part of the year ( i. . (Emphasis supplied) Although Article 420 speaks only of rivers and banks. Exhibit "W-2" which according to respondent Manalo was taken facing the east and Exhibit "W-3" which was taken facing the west both show that the visible. The cliff. Lot 307 is separated from the western branch of the Cagayan River by a large tract of land which includes not only Lot 821 but also what this Court characterizes as the eastern branch of the Cagayan River. petitioner Ponciano Gannaban testified that one had to go down what he called a "cliff" from the surveyed portion of the land of respondent Manalo to the depressed portion. However. In the Sketch Plan attached to the records of the case. and (3) the banks. were taken in July 1973 or at a time when the eastern bed becomes visible. donde dice: son de dominion publico . rivers. The conclusion of this Court that the depressed portion is a river bed rests upon evidence of record.. . and others of similar character. (2) the bed. This topographic feature is compatible with the fact that a huge volume of water passes through the eastern bed regularly during the rainy season. el alveo o cauce. 34 de la ley de [Aguas]. the steep dike-like slopes on either side of the eastern bed could have been formed only after a prolonged period of time. ports and bridges constructed by the State. shores. "rivers" is a composite term which includes: (1) the running waters. If the 1. Assuming (arguendo only) that the Cagayan River referred to in the Deeds of Sale transferring ownership of the land to respondent Manalo is the western branch. It so happened that instead of increasing the size of Lot 307. Any accretion formed by this eastern branch which respondent Manalo may claim must be deposited on or attached to Lot 307. Against respondent Manalo's allegation of prior possession. inter alia. the tax . (b) that it be the result of the action of the waters of the river (or sea). precludes a reasonable conclusion that Lot 821 is an increment to the depressed portion by reason of the slow and constant action of the waters of either the western or the eastern branches of the Cagayan River.72 hectares. the decision of the lower court made mention of several floods that caused the land to reappear making it susceptible to cultivation. If respondent Manalo's contention were accepted.91 hectares. Respondent Manalo's claim over Lot 821 rests on accretion coupled with alleged prior possession. he twice instituted the appropriate action before the Municipal Trial Court of Tumauini. respondent Manalo of private ownership over the new river bed. If respondent Manalo had proved prior possession.91 hectares was conducted in 1969. peaceful and adverse possession of Lot 821 since 1955. there are steep vertical dike-like slopes separating the depressed portion or river bed and Lot 821 and Lot 307. respondent Manalo took over the cultivation of the property and had it declared for taxation purposes in his name. by operation of law. among other things. it would mean that in a span of only ten (10) years. the eastern branch of the Cagayan River had carved a channel on it. in fact even smaller than Lot 821 which he claims by way of accretion. A sudden and forceful action like that of flooding is hardly the alluvial process contemplated under Article 457 of the Civil Code. he had more than doubled his landholding by what the Court of Appeals and the trial court considered as accretion. it was limited physically to Lot 307 and the depressed portion or the eastern river bed. It is the slow and hardly perceptible accumulation of soil deposits that the law grants to the riparian owner. That loss is compensated by. los alveos o cauces de los arroyos que no se hallen comprendidos en el art. it is important to note that Lot 821 has an area of 11. The cadastral survey showing that Lot 821 has an area of 11. As it is. the complaints for forcible entry lodged before the Municipal Trial Court of Tumauini.de dominion publico: 1. On the contrary. The total landholding purchased by respondent Manalo is 10. As already noted. We turn finally to the issue of ownership of Lot 821. and (c) that the land where accretion takes place is adjacent to the banks of rivers (or the sea coast).80 hectares from Gregorio Taguba in 1959 and 1964. They claimed lawful.45 hectares (8. 33. We turn next to the issue of accretion. Isabela. the right of accretion acknowledged by Article 457 of the Civil Code. He alleged that the parcels of land he bought separately from Gregorio Taguba and Faustina Taccad were formerly owned by Judge Juan Taccad who was in possession thereof through his (Judge Taccad's) tenants. We find it difficult to suppose that such a sizable area as Lot 821 resulted from slow accretion to another lot of almost equal size. Lot 821 is the northern portion of the strip of land having a total area of 22. petitioners presented tax declarations standing in their respective names. (Emphasis supplied) The claim of ownership of respondent Manalo over the submerged portion is bereft of basis even if it were alleged and proved that the Cagayan River first began to encroach on his property after the purchase from Gregorio Taguba and Faustina Taccad. Isabela pertained only to Lot 307 and the depressed portion or river bed and not to Lot 821. los alveos o cauces naturales de los rios en la extension que cubran sus aguas en las mayores crecidas ordinarias. When petitioners forcibly entered into his property. the decision of the Court of Appeals and of the trial court are bare of factual findings to the effect that the land purchased by respondent Manalo received alluvium from the action of the aver in a slow and gradual manner. In fact.65 hectares from Faustina Taccad and 1. the Court considers that there was no evidence to prove that Lot 821 is an increment to Lot 307 and the bed of the eastern branch of the river. Article 462 of the Civil Code would then apply divesting. Accretion as a mode of acquiring property under Article 457 of the Civil Code requires the concurrence of three (3) requisites: (a) that the deposition of soil or sediment be gradual and imperceptible. The intrusion of the eastern branch of the Cagayan River into his landholding obviously prejudiced respondent Manalo but this is a common occurrence since estates bordering on rivers are exposed to floods and other evils produced by the destructive force of the waters. In the same manner. When ownership was transferred to him. the claimed accretion (Lot 821) lies on the bank of the river not adjacent to Lot 307 but directly opposite Lot 307 across the river. 22 The Court notes that the parcels of land bought by respondent Manalo border on the eastern branch of the Cagayan River. y 2. Besides. respectively). This topography of the land. The testimony of Dominga Malana who was a tenant for Justina Taccad did not indicate that she was also cultivating Lot 821. After examining the records of the case. Quezon. November 14. on the grounds that the land is a foreshore land and was mortgaged and leased within the five-year prohibitory period (p. Under Article 477 of the Civil Code. After trial. G. 46. 141. the lower court ruled that there was no violation of the 5-year period ban against alienating or encumbering the land. COURT OF APPEALS. spouses Nenita Co and Antonio Quilatan. No. The evidence of record on this point is less than satisfactory and the Court feels compelled to refrain from determining the ownership and possession of Lot 821. Respondent Manalo is hereby declared the owner of Lot 307. it was established that the subject land is a portion of the Calauag Bay. petitioner. SPOUSES NENITA CO and ANTONIO QUILATAN AND THE REGISTER OF DEEDS OF QUEZON PROVINCE. the lower court. No pronouncement as to costs.000. Calauag. 1974. III-3-8186-B on a parcel of land with an area of 1. C-608. 04892 are hereby SET ASIDE. 1976 at P100. P-17789. The regularly submerged portion or the eastern bed of the Cagayan River is hereby DECLARED to be property of public dominion. subject of a free patent in favor of respondent Morato. a portion of the land was mortgaged by respondent Morato to respondents Nenita Co and Antonio Quilatan for P10. the plaintiff in an action for quieting of title must at least have equitable title to or interest in the real property which is the subject matter of the action. WHEREFORE. where a warehouse was constructed. dated December 28.265 square meters situated at Pinagtalleran. 1974 Original Certificate of Title No. The ownership of Lot 821 shall be determined in an appropriate action that may be instituted by the interested parties inter se. conducted an investigation. Both the free patent and the title specifically mandate that the land shall not be alienated nor encumbered within five (5) years from the date of the issuance of the patent (Sections 118 and 124 of CA No.00 a month. Respondent Court’s Decision dismissed petitioner’s appeal and affirmed in toto the decision of the Regional Trial Court of Calauag. Thereafter. on December 28. the Regional Trial Court’s decision dismissed petitioner’s complaint for cancellation of the Torrens Certificate of Title of Respondent Morato and for reversion of the parcel of land subject thereof to the public domain. The spouses Quilatan constructed a house on the land. CV No. and the Register of Deeds of Quezon for the cancellation of title and reversion of a parcel of land to the public domain. and not suitable to vegetation. JOSEFINA L. 1978. adjudging neither petitioners nor respondent Manalo as owner(s) thereof. Moreover. recites the following facts: “Sometime in December. 1974. The Facts The petition of the solicitor general. rendered a decision dismissing petitioner’s complaint. 1972. respondent Morato filed a Free Patent Application No. It also found that the mortgage to Nenita Co and Antonio Quilatan covered only the improvement and not the land itself. respondents. 2. 1997 REPUBLIC OF THE PHILIPPINES. represented by the DIRECTOR OF LANDS. the Decision and Resolution of the Court of Appeals in CA-GR CV No. 1991 which answered the said questions in the negative. representing the Republic of the Philippines. Quezon. In turn. On January 16. 1983 in Civil Case No. Folder of Exhibits). the District Land Officer in Lucena City. On November 5. 100709. In finding for private respondents. 25. MORATO. Records). 1983. acting upon reports that respondent Morato had encumbered the land in violation of the condition of the patent. as amended). because the land was merely leased and not alienated.declarations presented by petitioners conflict with those of respondent Manalo.R. Another portion of the land was leased to Perfecto Advincula on February 2. on October 24.” . Subsequently. petitioner filed an amended complaint against respondents Morato. five (5) to six (6) feet deep under water during high tide and two (2) feet deep at low tide. 02667 promulgated on June 13. Will the lease and/or mortgage of a portion of a realty acquired through free patent constitute sufficient ground for the nullification of such land grant? Should such property revert to the State once it is invaded by the sea and thus becomes foreshore land? The Case These are the two questions raised in the petition before us assailing the Court of Appeals’ Decision in CA-G. the patent was approved and the Register of Deeds of Quezon at Lucena City issued on February 4. vs.00 (pp.R. II-Respondent Court erred in holding that the questioned land is part of a disposable public land and not a foreshore land.00 who. 101. however. 141. 113 Phil. the Court of Appeals affirmed the decision of the trial court. L-27559.R. Director of Lands v. L-14702. (G. Again. 204). Manipon. the certificate of title issued in virtue of said patent has the force and effect of a Torrens Title issued under the Land Registration Act. G. C. Hon. from filing an action for reversion. 1971.’ (p. 1976 and “within the five-year prohibitory period. Padilla. Thereafter. San Agustin. 45 SCRA 44). (Pamintuan v. as amended. 1227 (1959). shortly thereafter. 1972.” Respondent Morato counters by stating that although a “portion of the land was previously leased. 60 Phil. 203). The rule is well-settled that an original certificate of title issued on the strength of a homestead patent partakes of the nature of a certificate of title issued in a judicial proceeding. No. Oliva. Heirs of Jose Alivalas. as follows: “But. Branch I. No. Respondent Court held: “x x x. Heirs of Jose Aliwalas. as long as the land disposed of is really part of the disposable land of the public domain. such may no longer be collaterally attacked. Judge. Court of Appeals. No. 168 SCRA 198. Lopez v . et al. Indefeasibility of the title. the Republic of the Philippines filed the present petition. Pajomayo v. 39 SCRA 676). 119.” The original certificate of title issued to Respondent Morato “contains the seeds of its own cancellation”: such certificate specifically states on its face that “it is subject to the provisions of Sections 118. in Lopez vs. in “violation of the terms of the patent. 122.” Further. petitioner argues that the defense of indefeasibility of title is “inaccurate. (supra).” Respondent Morato “leased a portion of the land to Perfecto Advincula at a monthly rent of P100. 498 (1960). If indeed there had been any fraud or misrepresentation in obtaining the title. Ramelo. Aliwalas’ title to the property having become incontrovertible.” Petitioner contends that the grant of Free Patent (IV-3) 275 and the subsequent issuance of Original Certificate of Title No. CFI of Nueva Ecija. 2 SCRA 32. G. Duran v . constructed a house of concrete materials on the subject land. 124 of CA No. who thereafter constructed a house thereon. may not bar the State. thru the Solicitor General.’ (p. A homestead patent. First Issue: Indefeasibility of a Free Patent Title In resolving the first issue against petitioner. Likewise. Olviga. on February 2. Jugado. P-17789 to Respondent Josefina L. Respondent Morato. and becomes indefeasible and incontrovertible upon the expiration of one year from the date of promulgation of the order of the Director of Lands for the issuance of the patent.R. It alleges that on October 24. Padilla. May 21. becomes as indefeasible as a Torrens Title. Manipon. 105 Phil. June 30. et al. 141. 144 (1961).A. Morato were subject to the conditions provided for in Commonwealth Act (CA) No. May 18. or nine (9) months and eight (8) days after the grant of the patent. The Court’s Ruling The petition is meritorious. 141.” The mortgage executed over the improvement “cannot be considered a violation of the said grant since it can never affect the ownership. Dr. L-33676. citing Iglesia ni Cristo v. El Hogar Filipino v . ‘x x. v. 17 (1934). The Issues Petitioner alleges that the following errors were committed by Respondent Court: I-Respondent Court erred in holding that the patent granted and certificate of title issued to Respondent Morato cannot be cancelled and annulled since the certificate of title becomes indefeasible after one year from the issuance of the title. 169 SCRA 271.” She states further: . (123 SCRA 516 (1983) and Pajomayo.R. 1961. No. 43 Phil. Heirs of Carle. mortgaged a portion of the land” to Respondent Nenita Co. 558 (1982). as correctly pointed out by the respondent Court of Appeals.” it resulted “from the fact that Perfecto Advincula built a warehouse in the subject land without [her] prior consent. 107 Phil.On appeal. Ingaran v. (39 SCRA 676 (1971) held that once a homestead patent granted in accordance with the Public Land Act is registered pursuant to Section 122 of Act 496. supra). one registered under the Land Registration Act. As ruled in Heirs of Gregorio Tengco vs . 1974. as ruled in Heirs of Gregorio Tengo v. 121. (Republic v. Lopez v. an action for reversion instituted by the Solicitor General would be the proper remedy (Sec. association. units or institutions. one hundred and twenty-one. the appeal of the petitioner was dismissed not because of the principle of indefeasibility of title but mainly due to failure of the latter to support and prove the alleged violations of respondent Morato. recognized or confirmed. The records of this case will readily show that although petitioner was able to establish that Morato committed some acts during the prohibitory period of 5 years. 456. or any permanent improvement on such land. 124. Act No. or property right whatsoever to any land granted under the free patent. Encumbrance has been defined as “[a]nything that impairs the use or transfer of property. it is the director of lands and not the Republic of the Philippines who is the real party in interest in this case. and one hundred and twenty-three of this Act shall be unlawful and null and void from its execution and shall produce the effect of annulling and cancelling the grant. shall exceed one hundred and forty-four hectares. 1939. conveyance. contrary to the provision of the Public Land Act which states that actions for reversion should be instituted by the solicitor general in the name of Republic of the Philippines. such encumbrance results in the cancellation of the grant and the reversion of the land to the public domain. approved June 8. anything which constitutes a burden on the title.)” “Sec. an . No land originally acquired in any manner under the provisions of this Act. actually or presumptively. on the other hand. or legally constituted banking corporations. or lease made in violation hereto shall be null and void. a burden or charge upon property. or other contract made or executed in violation of any of the provisions of sections one hundred and eighteen. except to persons. or individual sale provisions of this Act or to any permanent improvement on such land. otherwise known as the Public Land Act: “Sec. a perusal thereof will also show that what petitioner was able to prove never constituted a violation of the grant. and cause the reversion of the property and its improvements to the State. no land or any portion thereof originally acquired under the free patent. or partnerships who may acquire lands of the public domain under this Act or to corporations organized in the Philippines authorized therefore by their charters. (As amended by Com. Act No. Except in cases of hereditary successions. and solely for educational. association. nor any permanent improvement on such land. We find for petitioner. no corporation. or partnership may acquire or have any right. a claim or lien upon property.) The foregoing legal provisions clearly proscribe the encumbrance of a parcel of land acquired under a free patent or homestead within five years from the grant of such patent. lands acquired under free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent or grant nor shall they become liable to the satisfaction of any debt contracted prior to the expiration of said period. or individual sale provisions of this Act. Id. transfer. religious. No alienation. homestead. Act No. 141. nor shall such land or any permanent improvement thereon be leased to such individual. (As amended by Com. interest. added to that of his own.” Besides. shall be encumbered.” Respondent-Spouses Quilatan. title. 118. (As amended by Com. Except with the consent of the grantee and the approval of the Secretary of Agriculture and Natural Resources. corporations. homestead. transfer.)” “Sec. or conveyance of any homestead after five years and before twenty-five years after issuance of title shall be valid without the approval of the Secretary of Agriculture and Natural Resources. when the area of said land. Quoted below are relevant sections of Commonwealth Act No. or corporations. alienation. Except in favor of the Government or any of its branches.” It may be a “legal claim on an estate for the discharge of which the estate is liable. 1941) Sec. state that the mortgage contract they entered into with Respondent Morato “can never be considered as [an] ‘alienation’ inasmuch as the ownership over the property remains with the owner. 122. approved May 5. one hundred and twenty. 615. patent. assignment. Any transfer. 121. associations. Any acquisition. or charitable purposes or for a right of way. shall be transferred or assigned to any individual. which approval shall not be denied except on constitutional and legal grounds. but the improvements or crops on the land may be mortgaged or pledged to qualified persons. alienated or transferred. title. Furthermore. one hundred and twenty-two.” (Underscoring supplied.“x x x. or permit originally issued. 615. therefore. the owner temporarily grants the use of his or her property to another who undertakes to pay rent therefor. be in keeping with this fundamental idea to hold. This section 117 is undoubtedly a complement of section 116. In a contract of lease which is consensual. The prohibition against any alienation or encumbrance of the land grant is a proviso attached to the approval of every application. his widow or heirs within five years.” is applied only in the absence of. and never against. x x x” It is indisputable. such alienation is a sufficient cause for the reversion of the whole estate to the State. a mortgage constitutes a legal limitation on the estate.” By express provision of Section 118 of Commonwealth Act 141 and in conformity with the policy of the law. because such contract “impairs the use of the property” by the grantee. Positive rules prevail over all abstract arguments based on equity contra legem. Indeed.: “It is well-known that the homestead laws were designed to distribute disposable agricultural lots of the State to landdestitute citizens for their home and cultivation.lease and mortgage included -. The prohibition against the encumbrance -. the circumstances under which the lease was executed do not reflect a voluntary and blatant intent to violate the conditions provided for in the patent issued in her favor. interest. It would. viz.of a homestead which. that Respondent Morato cannot fully use or enjoy the land during the duration of the lease contract. whereas the total area of the land granted to Morato is 1. i. Respondents failed to justify their position that the mortgage should not be considered an encumbrance. During the term of the lease. The questioned mortgage falls squarely within the term “encumbrance” proscribed by Section 118 of the Public Land Act. the law requires that the land should not be encumbered. is mandated by the rationale for the grant. Prior to the fulfillment of the requirements of law. the Public Land Act does not permit a grantee of a free patent from encumbering any portion of such land. As already observed. that the right to repurchase exists not only when the original homesteader makes the conveyance. Equity. On the contrary. but in line with the primordial purpose to favor the homesteader and his family the statute provides that such alienation or conveyance (Section 117) shall be subject to the right of repurchase by the homesteader. and the foreclosure of such mortgage would necessarily result in the auction of the property. bilateral. or right in lands. onerous and commutative. statutory law or judicial rules of procedure. an estate. This restriction on the enjoyment of her property sufficiently meets the definition of an encumbrance under Section 118 of the Public Land Act. Pursuant to such benevolent intention the State prohibits the sale or encumbrance of the homestead (Section 116) within five years after the grant of the patent. that the lease was executed allegedly out of the goodness of her heart without any intention of violating the law. Above all.265 square meters.e. any transfer or alienation of a free patent or homestead within five years from the issuance of the patent is proscribed. Such transfer nullifies said alienation and constitutes a cause for the reversion of the property to the State. it has been proved that the area of the portion of the land. Respondent Morato had only an inchoate right to the . It aims to preserve and keep in the family of the homesteader that portion of public land which the State had gratuitously given to him. Even if only part of the property has been sold or alienated within the prohibited period of five years from the issuance of the patent. Such encumbrance is a ground for the nullification of the award. diminishing their value to the general owner. Morato was compelled to enter into that contract of lease out of sympathy and the goodness of her heart to accommodate a fellow man. Verily. by analogy applies to a free patent. Morato is only 10 x 12 square meters. subject matter of the lease contract (Exh. Morato’s resort to equity. sold or alienated within five years from the issuance of the patent. cannot help her. As a condition for the grant of a free patent to an applicant. a liability resting upon an estate. the grantee of the patent cannot enjoy the beneficial use of the land leased. It is clear from this that the portion of the land leased by Advincula does not significantly affect Morato’s ownership and possession. however. ‘B’) executed by and between Perfecto Advincula and Josefina L. After that five-year period the law impliedly permits alienation of the homestead. This construction is clearly deducible from the terms of the statute. as we hold. but also when it is made by his widow or heirs.” Do the contracts of lease and mortgage executed within five (5) years from the issuance of the patent constitute an “encumbrance” and violate the terms and conditions of such patent? Respondent Court answered in the negative: “From the evidence adduced by both parties. we do not find any support for such contention.embarrassment of the estate or property so that it cannot be disposed of without being subject to it. The sale or the alienation of part of the homestead violates that condition. which has been aptly described as “justice outside legality. the reversion of the property to the public domain necessarily follows. she introduced improvement and continued developing the area. The defendant Josefina Morato having taken possession of the land after the demise of Don Tomas Morato. Evidently this was the condition of the land when on or about December 5.property. A foreshore land. The Court noted with the significance of the newspaper clipping entitled ‘Baryo ng Mangingisda Kinain ng Dagat’ (Exh. he acquires a vested interest therein and has to be regarded an equitable owner thereof. a cinema house constructed of concrete materials. CA. Quezon. It cannot therefore be said to be foreshore land but land outside of the public dominion. On or about March 17. therefore. 539). the area continued to be utilized by the owner of the sawmill up to the time of his death in 1965.Alagad. Government vs . 1972 defendant Josefina L. vs. Prior to the fulfillment of all requirements of the law.” However. gradual reclamation was undertaken by the lumber company owned by the Moratos. ‘9’) based on the . such property remained part of the public domain and. Having applied for a free patent. ‘11’). Conversely. (Rep. rainful. that part of (the land) which is between high and low water and left dry by the flux and reflux of the tides x x x x (Republic vs. Quezon causing again great erosion this time than that which the area suffered in 1937. there again was a strong earthquake unfortunately causing destruction to hundreds of residential houses fronting the Calauag Bay including the Santiago Building. Colegio de San Jose..A. pursuant to Section 124. 119. for Respondent Morato’s title of ownership over the patented land to be perfected. Morato filed with the Bureau of Lands her free patent application.” Because she violated Section 118. the State as the grantor could petition for the annulment of the patent and the cancellation of the title. is really part of the foreshore lands. supra. however. 464. L-43190. The catastrophe totally caused the sinking of a concrete bridge at Sumulong river also in the municipality of Calauag. 122 and 124 of Commonwealth Act (CA) No.. on the other hand has been defined as follows: ‘. if the requirements are not complied with. 121. defendant had the land area surveyed and an approved plan (Exh. the ‘extraordinary’ action of nature. L-43105. Second Issue: Foreshore Land Reverts to the Public Domain There is yet another reason for granting this petition.. as follows: ‘Otherwise. The Supreme Court defines foreshore land in the case of Republic vs . Although Respondent Court found that the subject land was foreshore land. Respondent Morato cannot use the doctrine of the indefeasibility of her Torrens title to bar the state from questioning its transfer or encumbrance. Respondent Morato’s title over the property was incomplete. Accordingly. August 31. for instance. and land capable of registration as private property. On November 13. Having thus restored the land thru mostly human hands employed by the lumber company. not susceptible to alienation or encumbrance. From 1955 to 1968. 131 SCRA 532. the issue here is whether the land in question. the portions inundated thereby are not considered part of the bed or basin of the body of water in question. where the rise in water level is due to. one of which was to keep the property for herself and her family within the prescribed period of five (5) years. 141. 1977 a typhoon code named ‘Unding’ wrought havoc as it lashed the main land of Calauag. 53 Phil 423) The strip of land that lies between the high and low water marks and that is alternatively wet and dry according to the flow of the tide.’ The factual findings of the lower court regarding the nature of the parcel of land in question reads: ‘Evidence disclose that the marginal area of the land radically changed sometime in 1937 up to 1955 due to a strong earthquake followed by frequent storms eventually eroding the land. she should have complied with the requirements of the law. C. Nos. 1973. it nevertheless sustained the award thereof to Respondent Morato: “First of all. planted it to coconut trees. 169 SCRA 455. when a “homesteader has complied with all the terms and conditions which entitled him to a patent for [a] particular tract of public land. 1984. The certificate of title issued to her clearly stipulated that its award was “subject to the conditions provided for in Sections 118. to hold that in a case of gradual encroachment or erosion by the ebb and flow of the tide. subsection 1. Cabañgis explained the rationale for this proscription: “Article 339. In the case of Aragon vs . and that of a similar character. the land was not reached by the water. unless such factual findings are palpably unsupported by the evidence on record or unless the judgment itself is based on a misapprehension of facts.5 square meters) is 6 feet deep under water and three (3) feet deep during low tide. 339. after the grant of the patent. 4115 (Exh. however. torrents. 1979. but it disappeared in 1978 when the land was reached by the tides (Exhs. The area was declared for taxation purposes in the name of defendant Josefina Morato denominated as Tax Declaration No. the land was under water during high tide in the month of August 1978. the afore-cited findings of the lower court. reads: ‘Art. case 3.” As a general rule. it can no longer be subject of a free patent under the Public Land Act. volume XII. provides as follows: ‘ARTICLE 1. riverbanks. In fact.” Petitioner correctly contends. that Private Respondent Morato cannot own foreshore land: “Through the encroachment or erosion by the ebb and flow of the tide. In the Enciclopedia Jurìdica Española. that it is “unfair and unjust if Josefina Morato will be deprived of the whole property just because a portion thereof was immersed in water for reasons not her own doing. however. private property may not become ‘property of public ownership. such as roads. the shore begins on the land side at the line reached by the sea during ordinary storms or tempests. 12). That devoted to public use. ports and bridges constructed by the State. By the shore is understood that space covered and uncovered by the movement of the tide. Pili. While at the time of the grant of free patent to respondent Morato. rivers. Also. From the undisputed factual findings of the Court of Appeals.” Respondent-Spouses Quilatan argue. or the like. shores. by this decision.The application for a free patent was made in 1972. where it appear that the owner has to all intents and purposes abandoned it and permitted it to be totally destroyed. 17-18). but during low tide. Abraham B. page 558. Where the tides are not appreciable. the land has since become foreshore. the water is about a kilometer (TSN. 223). findings of facts of the Court of Appeals are binding and conclusive upon this Court. with reference to article 339 of the Civil Code just quoted. Government of the Philippine Islands vs. As disclosed at the trial. through the testimony of the court-appointed commissioner. however. in its decision dated December 28. of the Civil Code. this Court said: ‘We should not be understood. 12-14. The following are part of the national domain open to public use: ‘3. 1866. a portion of the subject land was invaded by the waves and sea advances. in 1974. roadsteads. due to gradual sinking of the land caused by natural calamities. must be respected.cadastral survey as early as 1927 (Exh. 1983. however. July 19.’ Article 1. ‘8’) and the corresponding realty taxes religiously paid as shown by Exh. at least half of the land (632. Accordingly. ‘10’) was secured. Decision. (pp. pp. Insular Government (19 Phil. the sea advances had permanently invaded a portion of subject land.’ as defined in article 339 of the code. the land was covered with vegetation. ‘E-1’. The water margin covers half of the property. DECISION). The Calauag Bay shore has extended up to a portion of the questioned land. the lower court observed that the erosion of the land was caused by natural calamities that struck the place in 1977 (Cf. so as to become a part of the ‘playa’ (shore of the sea). ‘E14’). canals. The Shores. During high tide. Its interior or terrestrial limit is the line reached by the highest equinoctal tides. of the Law of Waters of August 3. we read the following: . Engr. ‘8-A’). p. Property of public ownership is – ‘1. ‘rada’ (roadstead). Being supported by substantial evidence and for failure of the appellant to show cause which would warrant disturbance. In 1924 Ayala y Cia shifted from the business of alcohol production to bangus culture. the Court in Government vs. THE APPEAL The Honorable Secretary of Public Works & Communications appeals from the decision of the Court of First Instance of Manila declaring of private ownership certain creeks situated in barrio San Esteban. he closed and built dikes across Sapang Malauling Maragul. P-17789. said residents demanded re-opening of those canals. The subject land therefore REVERTS to the State. torrents. No costs. and that it deprived them of their means of transportation and fishing grounds. Ayala y Cia. FLORENCIO MORENO. The subject land in this case. respondents-appellants. The canals facilitated the gathering of tuba and the guarding and patrolling of the hacienda by security guards called “arundines. Pepangebunan. it cut down the nipa palm. shores. Called Hacienda San Esteban. 420. and others of similar character. SANTOS. it is a de facto case of eminent domain. It converted Hacienda San Esteban from a forest of nipa groves to a web of fishponds. To do so. petitioner-appellee. Macabebe. canals. CARGULLO . and not subject to indemnity. such as roads. constructed dikes and closed the canals criss-crossing the hacienda. December 4. They then pass to the public domain.R. In another case. banks. HON.” It operated a distillery plant in barrio San Esteban to turn nipa tuba into potable alcohol which was in turn manufactured into liquor. WHEREFORE. as Secretary of Public Works and Communications and JULIAN C. should therefore be returned to the public domain. devoted the hacienda to the planting and cultivation of nipa palms from which it gathered nipa sap or “tuba. (IV-3) 275 issued to Respondent Morato and the subsequent Original Certificate of Title No. This Court hereby REVERSES and SETS ASIDE the assailed Decision of Respondent Court and ORDERS the CANCELLATION of Free Patent No. Nigui and Nasi. Subsequently. without being for public use.” When the sea moved towards the estate and the tide invaded it. the petition is GRANTED.” By the gradual process of erosion these canals acquired the characteristics and dimensions of rivers. the Court voided the registration decree of a trial court and held that said court had no jurisdiction to award foreshore land to any private person or entity. Bulacus. and in this case they become part of the shore or beach. G. Quiñorang Silab. that is. The following things are property of public dominion: (1) Those intended for public use. the sea advances and private properties are permanently invaded by the waves. it was administered and managed by the Ayala y Cia. From the year 1860 to about the year 1924 Ayala y Cia. Pampanga province. In fact. rivers. .‘With relative frequency the opposite phenomenon occurs. (2) Those which belong to the State. roadsteads. being foreshore land. THE BACKGROUND The Zobel family of Spain formerly owned vast track of marshland in the municipality of Macabebe. Accessibility through the nipa palms deep into the hacienda posed as a problem... Sometime in 1925 or 1926 Ayala y Cia. and are intended for some public service or for the development of the national wealth.’” In comparison. but the owner thus dispossessed does not retain any right to the natural products resulting from their new nature. sold a portion of Hacienda San Esteban to Roman Santos who also transformed the swamp land into a fishpond. L-15829 ROMAN R.. ports and bridges constructed by the State. vs. No. In so doing. Article 420 of the Civil Code provides: “Art. Pampanga. the invaded property became foreshore land and passed to the realm of the public domain. The closing of the man-made canals in Hacienda San Esteban drew complaints from residents of the surrounding communities. Cabangis annulled the registration of land subject of cadastral proceedings when the parcel subsequently became foreshore land. 1967. therefore dug canals leading towards the hacienda‘s interior where most of them interlinked with each other. Claiming that the closing of the canals caused floods during the rainy season. Panquitan. Carbon. Salop Maisac. Dampalit. 1930 sustaining the latter’s power to declare streams as publicly owned under Sec. Pilapil. Maragul Mariablus Malate. Dalayap. Magasawa. 1930 the investigator of the Bureau of Public Works. provided the rest of the streams were declared private. Eliseo Panopio. Buengco Malati. Atlong. Whereupon. However. Mabutol. upon authority granted under Act 3982 the Secretary of Commerce and Communications entered into a contract with Roman Santos whereby the former recognized the private ownership of Sapang Malauling Maragul. Paumbong. Salamin. 1931 the said official revoked his decision of November 3. 4527) in the same court. Macabacle. Batasan. Roman Santos filed Civil Case No. Ayala y Cia. Baliti. With respect to the portion of Hacienda San Esteban still owned by the Zobel family. Maragul or Macabacle. Cruz. Cela. Maragul. in the Bureau of Public Works praying for the opening of the dikes and dams across certain streams in Hacienda San Esteban. Bulacus. 1930 of the Secretary of Commerce and Communications ordering the demolition of the dikes closing Malauling Maragul.. the Attorney General. Masamaral. . Palipit. Dilinquente. Inaun. He therefore recommended revocation of the decision already mentioned above. submitted his report recommending the removal of the dikes and dams in question. Bubong or Malauli Malati. Batasan Matlaue. floatable and navigable and were utilized by the public for transportation since time immemorial. Days before the Secretary of Commerce and Communications rendered his aforementioned decision. Malande. to proceed to Pampanga and conduct another investigation. 1930 and declared the streams in question privately owned because they were artificially constructed. Biuas or Batasan. Enrique. questioning the power of the Secretary of Commerce and Communications to order the demolition of said dikes. Iba. dated November 3. thru counsel. Bungo Malati. Lalap Maburac. Bato. On January 23. Roman Santos withdraw his appeals in the Supreme Court. In the meantime. Manulit. The Pampanga Court of First Instance rendered judgment in both cases against Roman Santos who immediately elevated the case to the Supreme Court. Bungalin. Sinubli and Vitas. upon a query from the Secretary of Commerce and Communications. Matalaba Palapat. Cauayan or Biabas.Mayor Lazaro Yambao of Macabebe. 1931 Panopio submitted his report to the Director of Public Works recommending that some streams enumerated therein be declared public and some private on the ground that they were originally dug by the hacienda owners. Acting on said offer. the Secretary of Commerce and Communications rendered his decision on November 3. In its letter dated October 11. Margarita. Ayala y Cia. 1930 ordering Ayala y Cia. Quiñorang Silab or Malauli Maragul. Mapanlao. 4 of Act 2152. Subsequently. Pinac. Maniup. Sermon and Sinca or Mabulog. the Secretary of Commerce and Communications1 conducted his own investigation and found that the aforementioned six streams closed by Roman Santos were natural. Eliseo Panopio. moved for reconsideration. Palipit Maisao. Nigui or Bulacus. 4488 in the Court of First Instance of Pampanga which preliminarily enjoined Mayor Yambao and others from demolishing the dikes across the canals. Panlovenas. the municipal authorities of Macabebe filed in 1930 an administrative complaint. on May 8. Balibago. Fabian. Cutut. Malati. The municipal officials of Macabebe countered by filing a complaint (docketed as Civil Case No.. On September 29. Danlimpu. Salop. Salop Maragul. 1930. Nigui and Nasi and the latter turned over for public use two artificial canals and bound himself to maintain them in navigable state. Capiz. offered to admit public ownership of the following creeks: Antipolo. Whereupon. And on the basis of said report. Laguzan. 1934. Camastiles. Pangebonan. He consequently ordered Roman Santos on November 3. Maragul or Macanduli.. However. the district engineer of Pampanga and a representative of the Bureau of Public Works conducted investigations. Macabacle or Mababo. Bungo Maragui. Catlu. the Secretary of Justice. to demolish the dikes and dams across the streams named therein situated in HaciendaSan Esteban. Quiñorang. Quinapati. Pinac Malati. upheld its legality. in his opinion dated March 6. 1930 to demolish the dikes across said six streams. Quiñorang Silab. Raymundo. the Director of Public Works instructed the surveyor in his office. Ayala y Cia. Malauli or Budbud. as amended by Act 3208. Quiñorang. The private streams were: Agape. Maisac. Pasco or Culali. Nasi. accompanied by policemen and some residents went to Hacienda San Esteban and opened the closure dikes at Sapang Malauling Maragul Nigui and Quiñorang Silab. In the meantime. Silab. Buta-buta. Balanga. The Provincial Board of Pampanga and the municipal councils of Macabebe and Masantol objected to the contract. Pepangebunan. made representations with the Director of Public Works for a compromise agreement. Maisac.. rendered an opinion dated October 11. Batasan Teracan. Mitulid. Sapang Maragul and Sepung Bato. Bunga. depending on the findings in said report. Macabacle. 1959.Pepangebonan. Cargullo. Batasan Matua. Bengco. 2056 against fishpond owners in the province of Pampanga who have closed rivers and appropriated them as fishponds without color of title. Pita. 2 of Act 2152 was revoked by the amending Act 4175 which took effect on December 7. Cargullo to conduct an investigation on the above named streams. the Secretary of Public Works and Communications rendered his decisions ordering the opening and restoration of the channel of all the streams in controversy except Sapang Malauling. Macabacle. Maragul. that is in 1958. A few months later. Buta-buta. Magasawa. On February 13. Nasi. Mariablus Malate Masamaral. As prayed for preliminary injunction was granted on May 8. Don Timpo. 1958 Senator de la Rosa requested in writing the Secretary of Public Works and communications to proceed in pursuance of Republic Act No. Balbaro and Cansusu. the streams in question remained closed. 1935. The amended petition therefore covered the following streams: Balbaro. 4. Cela. Quiñorang. after receipt of the Secretary’s decision dated March 4. Maisac. The Secretary of Public Work and Communications answered and alleged as defense that venue was improperly laid. Quiñorang. Nigui Pepangebonan. Nigui. Matalabang Maisa. Said streams were again closed in 1942 allegedly upon order of President Quezon. 20562 following a congressional inquiry which was kindled by a speech delivered by Senator Rogelio de la Rosa in the Senate. On October 20. Macanduling. In 1939 administrative investigations were again conducted by various agencies of the Executive branch of our government culminating in an order of President Manuel Quezon immediately before the national elections in 1941 requiring the opening of Sapang Macanduling. Nasi and Bulacus. Quiñorang Silab. and April 1. 10. 30 and 31. Iba. and Pinac. 1935 and confirmed the next day by the municipal council of Macabebe under Resolution No. Roman Santos filed a motion with the Court of First Instance of Man for junction against the Secretary of Public Works and Communications and Julian C. 1935 the municipality of Macabebe and the Zobel family executed an agreement whereby they recognized the nature of the streams mentioned in Panopio’s report as public or private. Malauli. On the same day. Bunga. 592. and are now the subject matter in the instant controversy. Benigno Musni and other residents in the vicinity of Hacienda San Esteban petitioned the Secretary of Public Works and Communications to open the following streams: Balbaro.. Mabutol. Mabalanga. Camastiles. Silab. Congress enacted Republic Act No.3 Nigui. 59 Phil. 1958 Musni and his co-petitioners amended their petition to include other streams. THE CASE. Malate. Macabacle qng. Sapang Maragul. Eighteen years later. On August 15. Sepung Bato. that is. 1959. Nigui. On February 25. Maragul Macabacle. Banawa. Silab. because such power under Sec. Maragul. namely. Municipality of Macabebe.. 1931 the Director of Public Works concurred in Panopio’s report and forwarded the same the Secretary of Commerce and Communications. Thereupon. he had no more power so to do. Mariablus. Maragul. and (2) at the time the Secretary of Commerce and Communications approved the said contract. the then Secretary of Justice issued an opinion holding that the contract executed by the Zobel family and the municipality of Macabebe has no validity for two reasons. Bulacus. that is. 1959. the Secretary of Public Works and Communications instructed Julian C. Matalabang. On April 29. Despite the above ruling of the Secretary of Justice. Sinag and Tumbong. This agreement was approved by the Secretary of Public Works and Communications on February 27. Cansusu. within 30 days on the ground that said streams belong to the public domain. 1934. Cansusu. Macanduling. 1959. Batasan Matua Bato. (1) the streams although originally dug by Ayala y Cia. on June 12. that Roman Santos failed to exhaust . Roman Santos acquired in 1940 from the Zobel family a larger portion of Hacienda San Esteban wherein are located 25 streams which were closed by Ayala y Cia. On March 2. Balili. citing Mercado vs. Mariablus. 36. lost their private nature by prescription inasmuch as the public was allowed to use them for navigation and fishing. and the Municipality of Macabebe is null and void. that Section 39 of Act 496 excludes public streams from the operation of the Torrens System. Hence. they were merely “admonished to desist from any and further action in this case. and. March 31. on June 24. 1959 the trial court declared all the streams under litigation private. 2056 underscores the urgency and summary nature of the proceedings authorized thereunder.D. namely. otherwise the removal of the dams would be done by the Government at the expense of said party. the party respondent concerned is given not than 30 days within which to comply with the decision of the Secretary of Public Works and Communications. 1959 issued in connection with Roman Santos’ motion for contempt and from the decision of the lower court on the merits of the case. that they were received after preliminary injunction issued because they were transmitted through the District Engineer of Pampanga to Roman Santos. From the context of the law. 2056 does not require the filing of a motion for reconsideration as a condition precedent to judicial relief. in exhausting available administrative remedies. Whether a litigant. ISSUES The issues are: (1) Did Roman Santos exhaust administrative remedies? (2) Was venue properly laid? (3) Did the lower court err in conducting a trial de novo of the case and in admitting evidence not presented during the administrative proceeding? (4) Do the streams involved in this case belong to the public domain or to the owner of Hacienda San Esteban according to law and the evidence submitted to the Department of Public Works and Communications? DISCUSSION OF THE ISSUES 1. Bautista and Julian Cargullo acted in good faith. (b) appeal to the President of the Philippines. and April 1. and rendered the following judgment: The Writ of preliminary injunction restraining the respondent Secretary of Public Works & Communications from enforcing the decisions of March 2 And 4.” On July 18.. on July 17. observe the preliminary injunction issued by this Court. The Secretary of Public Works and Communication and Julian Cargullo appealed to this Court from the order of July 17. that a repetition of the acts complained of shall be dealt with severely. 1959. that their issuance was for Roman Santos’ information and guidance. Undersecretary M. the trial court considered unsatisfactory the explanation of the Solicitor General but ruled that Secretary Florencio Moreno. Congress has precisely provided for a speedy and a most expeditious proceeding for the removal of illegal obstructions to rivers and on the basis of such a provision it would be preposterous to conclude that it had in mind to require a party to file a motion for reconsideration – an additional proceeding which would certainly lengthen the time towards the final settlement of existing controversies. however. Republic Act No. Roman Santos received the decision of the Secretary of Public Works and Communications dated March 10 and March 30. 1959. Thus in Section 2 thereof the Secretary of Public Works and Communications under pain of criminal liability is duty bound to terminate the proceedings and render his decision within a period not exceeding 90 days from the filing of the complaint. and.4 the rules of procedure and the usual practice followed in a particular office. 1969. (a) motion for reconsideration of the decisions of the Secretary of Public Works and Communications. that the contract between Ayala y Cia. 1959 and all other similar decisions is hereby made permanent. would largely depend upon the pertinent law. .5 Republic Act No.administrative remedies. Acting upon said motion. and. The logical conclusion is that Congress intended the decision of the Secretary of Public Works and Communications to be final and executory subject to a timely review by the courts without going through formal and time consuming preliminaries. with the stern warning. The Solicitor General opposed the motion alleging that the decisions in question had long been issued when the petition for injunction was filed. that the motion did not allege that respondents took steps to enforce the decision. On April 29 and June 12. the intention of the legislators to forego a motion for reconsideration manifests itself clearly. 1959 he asked the court to cite in contempt Secretary Florendo Moreno. Undersecretary M. Bautista and Julian Cargullo for issuing and serving upon him the said decisions despite the existence of the preliminary injunction. Under the same section.D. Respondents maintain that Roman Santos resorted to the courts without first exhausting administrative remedies available to him. need move for the reconsideration of an administrative decision before he can turn to the courts for relief. Consequently. Roman Santos assailed the constitutionality of Republic Act No. 1 the same rule. – Civil actions in Courts of First Instance may be commenced and tried where the defendant any of the defendants residents or may be found or where the plaintiff or any of the plaintiffs resides. the proposition is that since the controversy dwells on the ownership of or title to the streams located in Hacienda San Esteban. General rule. dated April 14. The purpose of this suit is to review the decision of the Secretary of Public Works and Communications to enjoin him from enforcing them and to prevent him from making and issuing similar decisions concerning the stream in Hacienda San Esteban. Roman Santos however stated in his brief that the practice is not to entertain motions for reconsideration for the reason that Republic Act No. The lower court tried this case de novo. It is contended that if this case were considered as an ordinary civil action. hence. that. venue was improperly laid when the same was instituted in the Court of First Instance of Manila for the reason that the case affects the title of a real property. The actions of the former are presumed to have the implied sanction of the latter. the case is real action which. petitioner Roman Santos seeks to control them. Against this procedure respondents objected and maintained that the action.6 2. there is no showing in the records of this case that the Secretary of Public Works and Communications adopted rule of procedure in investigations authorized under Republic Act No. and should properly be aired before a competent court as was rightly done by petitioner Roman Santos . at the election of the plaintiff. 1. although captioned as an injunction is really a petition for certiorari to review the decision of the Secretary of Public Works and Communications.7 Section 3 of Rule 5 of the Rules of Court does not apply to determine venue of this action. Furthermore. pursuant to Sec. 3 of Rule 5 of the Rules of Court should have been filed in the Court of First Instance of Pampanga. suffice it to state that such appeal could be dispensed with because said Secretary is the alter ego of the President. For the rule is that outside its territorial limits. Those questions are not within the competence of said Secretary to decide upon a motion for reconsideration. 2056 and the jurisdiction of the Secretary of Public Works and Communications to order the demolition of dams across rivers or streams. The acts of the Secretary of Public Works and Communications are the object of the litigation. The mere fact that the resolution of the controversy in this case would wholly rest on the ownership of the streams involved herein would not necessarily classify it as a real action. 3. accordingly. which states: Sec. As to the failure of Roman Santos to appeal from the decision of the Secretary of Public Works and Communications to the President of the Philippines. 2056 which require a party litigant to file a motion for the reconsideration of the Secretary’s decision before he can appeal to the courts. Applicable is Sec. In fine. At any rate. the suit ought to be filed in the Court of First Instance whose territorial jurisdiction encompasses the place where the respondent Secretary is found or is holding office. the lower court correctly acted in trying the case anew and rendering judgment upon evidence adduced during the trial. 61. the issues raised during the administrative proceedings of this case are the same ones submitted to court for resolution. Roman Santos now. On the other hand. 1959 of the Secretary of Justice. that is. not administrative in nature. No new matter was introduced during the proceeding in the court below which the Secretary of Public Works and Communications had no opportunity to correct under his authority. submits that the action is a proceeding independent and distinct from the administrative investigation. Respondents Secretary of Public Works and Communications and Julian Cargullo are found and hold office in the City of Manila. Therefore they now contend that the court should have confined itself to reviewing the decisions of the respondent Secretary of Public Works and Communications only on the basis of the evidence presented in the administrative proceedings. Series of 1959. They are purely legal questions. Accordingly. Roman Santos’ statement is supported by Opinion No. . the Petition for injunction who correctly filed in the Court of First Instance of Manila. the court has no power to enforce its order. 2056 does not expressly or impliedly allow the Secretary to grant the same.Moreover. . . 572. Being so. This conclusion and rationalization of the lower court amount in effect to declaring the law unconstitutional. it held that Roman Santos was being deprived of his property without due process of law. for the dikes of his fishponds were ordered demolished through an administrative. As aptly by this Court speaking through Mr.L. 538 and Bautista vs. 11 Phil. First. to whom the statute had not entrusted the case. stream. but with public navigable streams. Accordingly. it was error for the lower court to conduct a trial de novo. the administrative proceedings. That is. 2056. . streams.B. We see no reason here to hold otherwise. is unconstitutional is tantamount to saying that the law itself violates the Constitution. and considered by the trial court. supra. Justice J. They are tributaries of public streams. for purposes of this review. therefore they cannot be classified as canals. coastal waters. in either event the case must be resolved upon the evidence submitted to the Secretary. The question therefore is: Are the streams in Hacienda San Esteban which are mentioned in the petition of Benigno Musni and others. Note that the law provides for an expeditious administrative process to determine whether or not a dam or dike should be declare a public nuisance and ordered demolished. 636. 1. Dionisio. only the evidence presented and admitted in the administrative investigation will be considered in our determination of whether on the basis thereof the decisions of the Secretary of Public Works and Communications were correct. Evidence not presented therein shall not be admitted. as provided for in Section 1 thereof: Sec. Insular Government. proceeding. . We come to the question whether the streams involved in this case belong to the public domain or to the owner of Hacienda San Esteban. the Court of First Instance shall confine its inquiry to the evidence presented during. 12 Phil. no matter what the parties call it. . Moreno. .. Alarcon. (3) The streams have for their source public rivers. Discussing now the applicability of Republic Act 2056. It is immaterial that the present action should be one for prohibition or injunction and not one for certiorari. In reviewing the decision of the Secretary of Public Works and Communications. it is not susceptible to appropriation. . then Republic Act 2056 applies. Cited are the cases of Samson vs. the construction or building of dams. Respondents rely on Montano vs. It therefore belongs to the State.Whether the action instituted in the Court of First Instance be for mandamus. . dikes or any other works which encroaches into any public navigable river. et al. when put to operation. if private. Reyes. We are not concerned with communal fishing grounds because the streams here involved have not been so declared. . or waterways and (b) areas declared as communal fishing grounds. And to say that such an administrative process. in a similar case: The findings of the Secretary can not be enervated by new evidence not laid before him. If said streams are public. injunction or certiorari is not very material. 631. for that would be tantamount to holding a new investigation. then the Secretary of Public Works and Communications cannot order demolition of the dikes and dams across them pursuant to his authority granted by said law. and whether they find reasonable support in the evidence. coastal waters and any other navigable public waters or waterways as well as the construction or building of dams. 2056 constitutional but ruled that it was applied by respondents unconstitutionally. public and navigable? Respondents contend that said streams are public on the following grounds: (1) Hacienda San Esteban was formerly a marshland and being so. since a judicial review of executive decisions does not import a trial de novo. the same applies to two types of bodies of water. 23 Phil. stated inversely. namely (1) public navigable rivers. but only an ascertainment of whether the “executive findings are not in violation of the Constitution or of the laws. shall be ordered removed as public nuisances or as prohibited constructions as herein provided: . The lower court held Republic Act No. is in reality a review of several administrative decisions of the Secretary of Public Works and Communications. and are free from fraud or imposition. In Lovina vs.8 The case at bar. dikes or any other works in areas declared as communal fishing grounds. We held said law constitutional. we come to the question of the constitutionality of Republic Act No. instead of a judicial. 4. and to substitute for the discretion and judgment of the Secretary the discretion and judgment of the court. (2) The streams in question are natural streams. a distance of about one-half kilometer. called “Sapang Cansusu. unless it shall have been proved that he constructed the same within in property of his exclusive ownership. over Hacienda San Esteban. 59 Phil. Then exist channel at the Palapat River where the fishpond gate lies has been filled up with dredge spoils from the Pampanga River Control Project. 1935. 12 of Roman Santos. supra. Moreno. which found the streams in question of private ownership was nullified by the Secretary of Justice in his opinion dated June 12. runs from Canal Enrique near Rio Cansusu to Sapang Macabacle. The canal was situated within a public land. (4) Sapang Cansusu is a continuation of the Cansusu River. (2) Sapang Macabacle is found in Fishpond No.9 It is closed by four dikes: One dike at its inlet along the Antipolo River. has been recognized by the King of Spain and later by the Philippine Government when the same was registered under Act 496. 1. Respondents cite Mercado vs. (5) Assuming the streams in question are not mentioned as public in the certificates of title held by Ayala y Cia. and. where the plaintiff sought injunction against the defendants who allegedly constructed a dam across a public canal which conveyed water from the Obando River to fishponds belonging to several persons. Municipal President of Macabebe. Alarcon. and such usurpation constitutes a violation of the legal provisions which explicity exclude such waterways from the exclusive use or possession of a private party. Whereas. The Cansusu River opens at the Guagua River and allegedly ends at the Palanas River in front of Barrio San Esteban. This closed portion. At a point near the mouth of Sapang Balbaro. following our ruling in Lovina vs.” And at the point where Canal Enrique joins Cansusu they built a dike across Cansusu. One of them was constructed by the engineers of the Pampanga River Control Project. the owners of Hacienda San Esteban built a canal leading straight to one end of Barrio San Esteban. (Emphasis supplied) As indicated in the above-cited case.” is now part of Fishpond No. the contract between Ayala y Cia. Insular Government. a private person may take possession of a watercourse if he constructed the same within his property. . Its inlet is Antipolo River.. This stream is about 30 meters wide. It is passable by banca. two dikes in between. Like Macanduli. another dike at its outlet along the Palapat River. (6) The Panopio Report. And. 592. This puts Us into inquiry whether the streams in question are natural or artificial. We shall examine only the evidence presented before the Department of Public Works and Communications and disregard that which was presented for the first time before the lower court.(4) Assuming the streams were artificially made by Ayala y Cia.... The doctrine in Montano vs. the subject matter in this case – Hacienda San Esteban – is titled land and private ownership thereof by Ayala y Cia. 13. or lake of the public domain and use. (1) Sapang Macanduling Maragul or Macanduli is presently enclosed in Fishpond No. 13. still they cannot be considered as privately owned for Section 39 of Act 496 expressly excepts public streams from private ownership. supra. Its banks cannot anymore be seen but some traces of them could be noted by a row of isolated nipa palms. and the Secretary of Commerce and Communications agreeing on the ownership of the streams in question is ultra vires. section 54 of Act 926 of the Philippine Commission. In so doing. this Court said: No private persons has right to usurp possession of a watercourse. that a marshland which is inundated by the rise of the tides belongs to the State and is not susceptible to appropriation by occupation – has no application here inasmuch as in said case the land subject matter of the litigation was not yet titled and precisely Isabelo Montano sought title thereon on the strength of ten years’ occupation pursuant to paragraph 6. 23 Phil. thus closing this very portion of the river which extends up to Palanas River where they built another closure dike. another dike at its cutlet along the Palatpat River. They called this canal “Canal Enrique. 631. The closures of this stream consist of two dikes located at each ends on Canal Enrique and Sapang Macabacle. branch of a river. In sustaining the injunction granted by the Court of First Instance. its channel is obstructed by four dikes. two meters deep and one and one-half to two kilometers long. said titleholder lost ownership over them by prescription when it allowed the public to use them for navigation for a long time. Its banks are still evident. Its source is Rio Cansusu. Respondents further cite Bautista vs. Its water is subject to the rise and fall of the tides coming from Guagua and Antipolo Rivers and it is navigable by light watercrafts. (3) Sapang Balbaro which is found in Fishpond No. We observe that witnesses positively stated that Sapang Macanduli. Macabacle. who started working as an arundin12 testified that Ayala y Cia. which leads to the Matalaba River. Moreover.11 and that the tuba was brought to the distillery in Barrio San Esteban. It is not one of the streams found and recommended to be declared private in the Panopio Report. Balbaro and Cansusu were used as passageway and as fishing grounds. even Yangco’s ship “Cababayan” could pass through. Don Timpo is 220 meters long and 20 meters wide. the stream is called Sapang Batu. Mariano Guinto. 1. except Roman Santos himself. Mariano Ocampo and Mariano Guinto testified that Maragul. (5) Sapang Maragul.14 Exhibit F. that as an overseer he inspected their work. (7) Sapang Batu is found in Capiz Fishpond. 55. they made canals.20 meters deep. 4-5 meters wide and 1. gets its water from Sapanga Iba and empties at Sta. Roman Santos also testified that Sapang Macanduli. thus confirming the testimony that they were built precisely as a means of reaching the interior of the estate by banca. Simplicio Quiambao. Mabalanga and Don Timpo.60 meters deep. stated on direct examination that before closure of the above named four streams. Sapang Cansusu is a part of Cansusu River. Sepong Batu is not among those streams declared in the Panopio Report as private. Witnesses Nicanor Donarber. Bacolor. Mabalanga and Don Timpo are all part of Fishpond No. About 300-400 meters long. admittedly a public stream. that in order to reach remote nipagroves by banca. that he was one of the who worked in the construction of those canals. Maragul was connected to Mabalanga and Sapang Cela was extended to join Maragul. Balbaro and Cansusu are artificial canals excavated as far back as 1850 and due to erosion coupled with the spongy nature of the land. Balbaro and Macabacle. The weight of evidence. dug Sapang Macanduli. that he worked also in the construction together with other workers. From Capiz River until it intersects Sapang Nigui the stream is called Sapang Batu Commencing from Sapang Nigui and up to its end at Sapang Malauling Maragul. indicate that said streams are manmade. Masantol and Sexmoan fished and navigated in them. testified that Sapang Cansusu is an artificial canal. Maragul and Mabalanga open at Guagua River and join each other inside the hacienda to form one single stream. and that Cansusu River is different from Sapang Cansusu Witness Domingo Yumang likewise testified that Sapang Balbaro man-made. distinct from that of a canal such as that of Canal Enrique which is straight. Macabacle and Balbaro were made by the owners of Hacienda San Esteban. Macario Quiambao. Macabebe. 80. that people transported through them tuba.50-2. 36. all residents of Barrio San Esteban. now part of Bunga fishpond. Appellant’s witnesses.Sapang Cansusu is half a kilometer long and navigable by banca.. Sapang Don Timpo. Maragul. and that if any digging was done it was only to deepen the shallow parts to make passage easier. From the big rivers (Guagua and Matalaba Rivers) they lead deep into the interior of the hacienda. Sapang Cansusu follows a winding course different and. Mabalanga and Don Timpo are artificial canals dug by Ayala y Cia. Mariano Guinto testified that he worked for Ayala y Cia. it starts at Capiz River and ends at Malauling Maragul. people from the surrounding towns of Guagua. 55 and Castor Quiambao. shows that Maragul. According to witness Anastacio Quiambao said streams were navigable.13 Witness Mariano Guinto clarified that Don Timpo was originally dug but Mabalanga and Maragul were formerly small non-navigable streams which were deepened into artificial navigable canals by Ayala y Cia. (6) Sapang Bunga. and.10 wood and sasa. they acquired the proportion of rivers. and. formerly ended inside the hacienda but later Mabalanga was connected to Don Timpo. All of them are navigable by banca. . 41. and his own. Donarber. 76. that he joined Sapang Balbaro to Sapang Macabacle because the former was a dying canal. Sapang Macaduli. Beligno Musni. Mabalanga is 250 meters in length and 50 meters in width. It is about 300-400 meters long. Cruz River. Macario Quiambao testified also that said four streams “were created by God for the town people”. Against the aforementioned. Maragul is 600 meters long and 30 to 35 meters wide. 5-6 meters wide and 1-1. therefore. 71.. 96. testimonial evidence Roman Santos presented the testimony of Nicanor Donarber.. as a tuba gatherer. Commencing from Sapang Nigui and up to its end at Sapang Malauling Maragul. which is a map showing the streams and rivers in Hacienda San Esteban. Roman Manansala. and that they (Donarber and Mariano Guinto) worked in said excavations. testified that prior to their closure. Mabalanga and Don Timpo are more or less straight. and Marcelino Ocampo. Macabacle. the stream is called Sepong Batu. With respect to Sapang Cansusu none. It is about 200 meters long and four meters wide. (17) Sapang Cela is within Fishpond No. Banawa. Latter Cela was extended to connect with Sapang Maragul.5 meters deep.30-1. (19) Sapang Balili. 13 of Roman Santos. (21) Sapang Tumbong. Since its closure. a stream declared private by the Secretary of Public Works and Communications...17 (20) Sapang Pita is within Fishpond Capiz. (18) Sapang Sinag.50 meters deep at high tide. From its mouth at Cutod River it drifts into the interior of the hacienda and joins Sapang Bengco. (15) Sapang Batasan Matua about 600 meters long. It is at present a part of Fishpond No.. It is no part of Fishpond No. one meter and one and one-half meters deep at low and high tides. It is now a part of Fishpond No. 200 meters long. a dead end stream of about 200 to 300 meters in length.20 On the other hand. Balili. Buta-Buta and Masamaral were constructed by Ayala y Cia.2-1. They are enclosed within Fishpond No. (14) Sapang Matalabang Malate or Maisac opens at Guagua River and ends at Sapang Cela and Matalabang Maragul.80 meters deep at low tide and 1. situated inside Capiz Fishpond. it opens at Sapang Matalabang Malate or Maisac and ends at Sapang Malungkot. This testimony tallies with the findings in the Panopio Report which will be discussed herein later.15 while Batasan Matua Camastiles. It takes water from Capiz River but dies 250 meters inside the hacienda.40 meters deep. gets its water from Cutod River and leads inside the hacienda to connect with Sapang Atlong Cruz. a witness for Roman Santos. 1-A. is 100-200 meters long. It is now inside Fishpond No. three to four meters wide and one meter deep at low tide.50-2 meters deep. another stream which opens at Cansusu River And ends inside the hacienda. 14.5-2 meters deep.18 (22) Sapang Bengco is found within Fishpond No. It is within Fishpond No. Sapang Sinag. 4-5 meters wide and 1. (12) Sapang Magasawa consists of two streams running parallel to each other commencing from Matalaba River and terminating at Mariablus Rivers. 1.. and that it took years to construct them. About 600-700 meters long. Its whole length is within Fishpond No. these two streams are navigable by banca. and one meter deep at low tide and 1. 1. (11) Sapang Masamaral. It opens along Guagua river. 1. Sepong Batu.. It is about four to five meters wide.19 According to Marcos Guinto. testified that Sapang Tumbong is a natural stream and that the reason he said so is because the stream was already there as far back as 1910 when he . Marcelo Quiambao. All these streams were recommended in the Panopio Report for declaration as private streams. This stream. 13. The uncontradicted testimony of Marcos Guinto is that Sapang Bunga. dies inside the hacienda.(8) Sapang Banawa has one end at Palanas River and the other at Sapang Macabacle. (16) Sapang Camastiles. Magasawa and Cela are original canals made by Ayala y Cia. (10) Sapang Buta-buta. it has become part of Fishpond No. It now forms part of Fishpond No. 1. a stream declared private in the Panopio Report. It connects with Cansusu River and is about 100 meters long. Batu. testified without contradiction that Sapang Mariablus Malate and Matalabang Malate were formerly small and non-navigable streams which were dug by Ayala y Cia.50 meters deep at high tide it gets water from Sapang Biabas and connects with Baliling Maisac. Its whole length situated inside the hacienda. 3-4 meters wide and 1. it ends inside the hacienda.16 that he was one of those who worked in the construction of said canals. Two hundred meters long. that is. 13. interior of the hacienda. about 3-4 meters wide and 250 meters long. 3-4 meters wide and 1. Pita Tumbong and Bengco were excavated a long time ago by Ayala y Cia. respectively.90 meters deep at high tide crosses the hacienda from Mariablus River to Cansusu River. 3-4 meters wide and 1. also found inside Fishpond No. for easy passage into the hinterland of itshacienda. 14. is another stream that ends inside the hacienda and gets its water from Guagua River. Mabutol. which is about 800 meters long and 18 meters wide. five meters wide. It is about 300 meters long. gets its water from Biuas River. (13) Sapang Mariablus Malate. 1. and one meter deep at low tide and 1. derives its water from Sapang Quiñorang Silab. three meters wide and . 1 of Roman Santos. and ends inside the hacienda. to gain access to the nipa the. is about 200 meters long.. (9) Sapang Mabutol is a dead-end stream. Mariano Guinto. forms part of Fishpond No. 14. 71. four to five meters wide. The evidence adduced in the administrative proceeding conducted before a representative of the Secretary of Public Works and Communications supports the contention that said streams are merely canals built by Ayala y Cia. and that they have a winding course because when they were made the workers followed the location of the nipa palms. like Mabutol. This same conclusion was reached 27 years earlier by an investigator of the Bureau of Public Works whose report and recommendations were approved by the Director of Public Works and submitted to the Secretary of Commerce and Communications. exclusively for the employees. Later. Masamaral. One and all. the streams in question are public or private. Hilarion Lobo. widened. Lope Quiambao. That they have been used as means of communication from one place to another and to the inner most of the nipales. shows that the rivers. colonos and laborers of the said Hacienda San Esteban. including the Panopio Report.21 Bases for the above-quoted conclusion were “the reliable informations gathered from old residents of the locality. as well as those presented for the first time before it. concerning the ownership of the streams in Hacienda San Esteban. Cela Balanga. on February 27. 1906 and 1930. Mariano Guinto. Nicanor Donarber. Magasawa. That they have never been used by the public for navigation without the express consent of the owners of the said Hacienda. taking into account all the evidence adduced in the administrative hearing. Mariano Ocampo. Macabacle. and the Municipality of Macabebe. To show that the streams involved in this case were used exclusively by the hacienda personnel and occasionally by members of their families. the Bureau of Public Works and the Department of Commerce and Communications locked into and settled the question of whether or not the streams situated within Hacienda San Esteban are publicly or privately owned. esteros and canals listed in (1) have originally been constructed. In weighing the evidence presented before the administrative investigation which culminated in this appeal. . Matias Sunga facio Cruz. for being in conformity with said Panopio Report. As stated. Said report found the following streams. and lengthened by the owners of the Hacienda San Esteban. we see no merit in disturbing the lower court’s findings fact. No other oral evidence was presented to contradict the testimony of Marcos Guinto that the said five streams were artificially made by Ayala y Cia. . Gabriel Manansala. the sworn statements obtained from different persons not interested in this case and the comparison of the three plans prepared in 1880. Pangebonan and Quiñorang Silab on the ground that – The preponderance of the probatory facts. 1931 the Director of Public Works transmitted the Panopio Report to the Secretary of Commerce and Communications recommending approval thereof. as amended by Act 3208. Emigdio Ignacio. creeks. As stated. . who was designated to conduct formal hearings and investigation. 1934. however. a surveyor in the Bureau of Public Works. Inocencio Dayrit. 1935. Castor Quiambao. of private ownership: Camastiles. Bato. Batasan. Maragul. Nasi. Mabutol. deepened. Mariablus Malate. 1935. et al. Upon review. Accordingly.. presented by Roman Santos in the administrative proceedings supports the conclusion of the lower court that the streams involved in this case were originally man-made canals constructed by the former owners of Hacienda San Esteban and that said streams were not held open for public use. this conclusion of the lower court which is in accord with the findings of Panopio as contained in his report. Matalaba Malate. the lower court. Nigui. Don Timpo. respondent Secretary seemed to have ignored the Panopio Report and other documentary evidence as well as the testimony of witnesses presented by petitioner but instead gave credence only to the witnesses of Benigno Musni. Roman Santos introduced the testimony of Eliseo Panopio. Marcelino Bustos and Juan Lara . Malande Malate (Bunga). Macanduli. Secretary of Public Works and Communications De las Alas approved the agreement of Ayala y Cia. oral and documentary.reached the age of ten. Nullity of the aforesaid contract would not of course affect the findings of fact contained in the Panopio Report. The witnesses categorically testified that the public was prohibited from using the streams as a means of navigation and that the prohibition was enforced by guards called arundines. Blas Gaddi. We refer to the so-called Panopio Report which contains the findings and recommendations of Eliseo Panopio. Alejandro Manansala and himself. This agreement of Ayala y Cia and the Municipality of Macabebe which was approved by the Secretary of Public Works and Communications only on February 27.22 The persons referred to are Martin Isip. could not however bind the Government because the power of the Secretary of Public Works and Communication to enter thereto had been suppressed by the Philppine Legislature when it enacted Act 4175 which effect on December 7. from outsiders. On February 13. pursuant to Act 2152. finds ample support from the evidence presented and admitted in the administrative investigation. We next consider the issue of whether under pertinent laws. the evidence. Buta-buta. . sustained petitioner’s averment that the streams in question were artificially made. hence of private ownership. Bengco.. among others. The channels. are of private ownership in contemplation of Article 339(l) of the Spanish Civil Code. both the residents of the hacienda and those of other nearby barrios and municipalities. to the State. that is. banks. on public lands. Justice Diaz: And even granting that the Batasan-Limasan creek acquired the proportions which it had. had been using it not only for their bancas to pass through but also for fishing purposes. Municipal President of Macabebe. torrents. 3. Our attention has been called to the case of Mercado v. The waste waters of fountains. 4. formed by rain water. ports and bridges constructed by the State. Waters which flow continuously or intermittently from lands belonging to private persons. The water-beds of all creeks belong to the owners of the estates or lands over which they flow.We quote Articles 339. and their beds. it being a fact that. such as roads. 7. 8. Under Article 339. 2. subsequently allowed said creek to be used by the public for navigation and fishing purposes for a period of 22 years. and those of brooks crossing estates which are not of public ownership. either continuous or intermittent rising on private etates. The owners of estates through or along the boundaries of which the aqueduct passes can assert no ownership over it. The natural water-beds or channels of rivers are also part of the public domain. 408. The water. even though constructed under contract. river banks. That devoted to public use. 5. rivers. of which they originally were. Continuous or intermittent waters from springs or brooks running in their natural channels and the channels themselves. since the time it was opened as a water route between the Nasi River and Limasan creek. 9. There the creek (Batasan-Limasan) involved was originally dug by the estate’s owner who. Lakes and ponds formed by nature. are a part of the public domain. 1866. 71. continuous or intermittent. while they run through them. Said this Court through Mr. of creeks through which spring waters run. canals constructed by the State and devoted to public use are of public ownership. and public institutions Art. Subterranean waters on public lands. Articles 71 and 72 of the Spanish Law of Waters of August 3. 407 and 408 of the Spanish Civil Code of 1889: Art. The water-beds on public land. bed. Conversely. from the moment they leave such lands. channels of creeks and brooks belong to the owners of estates over which they flow. 1866 state: Art. 6. 3. Art. and floodgates of a ditch or aqueduct are deemed to be an integral part of the estate or building for which the waters are intended. and Article 408(5) of the Spanish Civil Code. Pursuant to Article 71 of the Spanish Law of Waters of August 3. The said streams. Art. before it was closed. 592. of the streams in question which may be classified creeks. Rain waters running through ravines or sand beds. 2. or to towns. 407. the channels of which are of public ownership. Subterranean waters found therein. Waters. The channels of flowing streams. shores. considered as canals. The following are of private ownership: 1. as a result of excavations made by laborers of the appellant’s predecesor in interest. Rivers and their natural channels. nor any right to make use. of it beds or banks. canals constructed by private persons within private lands and devoted exclusively for private use must be of private ownership. Lakes and ponds and their beds when formed by nature on such estates. 72. the owners thereof as well as strangers. Rain water falling thereon as long as their bounderies. 59 Phil. to provinces. sewers. Property of public ownerships is – 1. roadsteads. The following are of public ownership: 1. 5. 4. belong to the owners of Hacienda San Esteban. therefore. Waters found within the zone of operation of public works. and that of a similar character. and it being also a fact that such was the condition of the creek . Waters rising continuously or intermittently on lands of public ownership. unless they base their claims on title deed which specify the right or the ownership claimed. canals. 339. . The use and enjoyment of a creek. and they cannot now claim it exclusively for themselves after the general public had been openly using the same from 1906 to 1928. the conclusion would be inevitably in favor of private ownership. PEA entered into a Joint Venture Agreement with AMARI. they belong to the public domain either as rivers pursuant to Article 407 (1) of the Spanish Civil Code of 1889 or as property devoted to public use under Article 339 of the same code. PUBLIC ESTATE AUTHORITY FACTS: From the time of Marcos until Estrada. being artificial and devoted exclusively for the use of the hacienda owner and his personnel. except as to Sapang Cansusu which is hereby declared public and as to which the judgment of the lower court is reversed. All the other streams. and the appellant and her predecessors in interest certainly lost such right through the said cause. portions of Manila Bay were being reclaimed. Sapang Cansusu. ISSUE: Whether or not the stipulations in the Amended JVA for the transfer to AMARI of lands. they are deemed excluded herein. and in fact they have not obtained. considering that the owners of Hacienda San Esteban held them for their exclusive use and prohibited the public from using them. the creek could have been of private ownership had not its builder lost it by prescription. A law was passed creating the Public Estate Authority which was granted with the power to transfer reclaimed lands. are declared of private ownership. Under the Joint Venture Agreement between AMARI and PEA. Hence. WHEREFORE. The petition for the opening of Sapang Malauling Maragul. the watercourses which were dammed were natural navigable streams and used habitually by the public for a long time as a means of navigation. being a natural stream and a continuation of the Cansusu River. Pepangebunan. No costs. . they had such right through prescription. Nasi and Bulacus was dismissed by the Secretary of Public Works and Communications and the case considered closed. Finally. Necessarily. Quiñorang Silab. Hence. Mercado v. issued on June 12. With respect to the issue of contempt of court on the part of the Secretary of Public Works and Communications and Julian Cargullo for the alleged issuance of a administrative decisions ordering demolition of dikes involved in this case after the writ of injunction was granted and served. In the cited case. Consequently. Applying the principle therein enunciated to the case at bar. the decision appealed from is affirmed. The said administrative decision has not been questioned in this appeal by either party. Municipality of Macabebe was given application therein. Whereas. belongs to the public domain. because it was assumed that the streams were used “by the public as fishing ground and in transporting their commerce in bancas or in small crafts without the objection of the parties who dug” them.at least since 1906 until it was closed in 1928. Its closure therefore by the predecessors of Roman Santos was illegal. the necessary authorization to devote it to their own use to the exclusion of all others. . Precisely. as any other property simceptible of appropriation. the Secretary of Justice answered in the negative the query of the Secretary of Public Works and Communications whether the latter can declare of private ownership those streams which “were dug up artificially”. there is no conviction for contempt reviewable by this Court and any discussion on the matter would be academic. It may be noted that in the opinion. violate the Constitution .23 In those cases. The case at bar should be differentiated from those cases where We held illegal the closing and/or appropriation of rivers or streams by owners of estates through which they flow for purposes of converting them into fishponds or other works. a private corporation. as then found by the Bureau of Public Works. 1935. We cannot therefore take as controlling in determining the merits of this the factual premises and the legal conclusion contained in said opinion. the dams across them should not he ordered demolished as public nuisances. reclaimed or to be reclaimed. So ordered. the streams involved in this case were artificially made and devoted to the exclusive use of the hacienda owner. Nigui. inasmuch as they failed to obtain. However. the facts. CHAVEZ V. if the appellant and her predecessors in interest had acquired any right to the creek in question by virtue of excavations which they had made thereon. mentioned earlier. Now in this case. do not support the factual premise that the streams in question were used by the public “without the objection of the parties who dug” them. may be acquired or lost through prescription. suffice it to state that the lower court made no finding of contempt of court. admittedly a public stream. several hectares of reclaimed lands comprising the Freedom Islands and several portions of submerged areas of Manila Bay were going to be transferred to AMARI . No. as Secretary of Foreign Affairs. Clearly. Japan scheduled on February 21. 92047 asked for thirty (30) days to file a reply. Article XII of the 1987 Constitution. GARCIA. No. followed by a second motion for an extension of another thirty (30) days which we granted on May 8. The two petitions were consolidated on March 27. EXECUTIVE SECRETARY MACARAIG. as amended). We granted the prayer for a temporary restraining order effective February 20. RAUL MANGLAPUS. Garcia. were heard by the Court on March 13. 1990 SALVADOR H. 92013. 92013 July 25. The Court could not act on these cases immediately because the respondents filed a motion for an extension of thirty (30) days to file comment in G. et al.R. contracts whose “object or purpose is contrary to law. the Amended JVA violates glaringly Sections 2 and 3. I The subject property in this case is one of the four (4) properties in Japan acquired by the Philippine government under the Reparations Agreement entered into with Japan on May 9. 92047. Secretary Macaraig. (2) The Kobe Commercial Property at 63 Naniwa-cho. their representatives and agents from proceeding with the bidding for the sale of the 3.. et al. the petitioner in G. PEA may only sell these lands to Philippine citizens. as head of the Asset Privatization Trust. 1956.” or whose “object is outside the commerce of men. Under Article 1409 of the Civil Code. respondents. JR.R.” The Court must perform its duty to defend and uphold the Constitution. 1990 but calling the attention of the respondents to the length of time the petitions have been pending. OJEDA. 1990. subject to the ownership limitations in the 1987 Constitution and existing laws.489. Shibuya-ku.R.R.. petitioner. as Executive Secretary. the respondents were required to file a comment by the Court's resolution dated February 22. PEA may lease these lands to private corporations but may not sell or transfer ownership of these lands to private corporations. No. After the comment was filed. We noted his motion and resolved to decide the two (2) cases. 1990 DIONISIO S.RULING: YES! Under the Public Land Act (CA 141. reclaimed lands are classified as alienable and disposable lands of the public domain Section 3 of the Constitution: Alienable lands of the public domain shall be limited to agricultural lands. No.” are “inexistent and void from the beginning. Ojeda v. was filed. 1990. and . now covered by certificates of title in the name of PEA. 1990. and is at present the site of the Philippine Embassy Chancery. No. a third motion for extension of time granted on May 24. 1990. 92047. These are two petitions for prohibition seeking to enjoin respondents. 1990 and a fourth motion for extension of time which we granted on June 5.R.96 square meters. The oral arguments in G. as members of the PRINCIPAL AND BIDDING COMMITTEES ON THE UTILIZATION/DISPOSITION PETITION OF PHILIPPINE GOVERNMENT PROPERTIES IN JAPAN. petitioner. One of the petitioners (in G. vs. 1990.R. Tokyo which has an area of approximately 2. 92047 July 25. RAMON GARCIA. and CATALINO MACARAIG. No. After G. with an area of around 764. 92047) likewise prayes for a writ of mandamus to compel the respondents to fully disclose to the public the basis of their decision to push through with the sale of the Roppongi property inspire of strong public opposition and to explain the proceedings which effectively prevent the participation of Filipino citizens and entities in the bidding process.179 square meters of land at 306 Roppongi. No. 1990 when the memoranda of the parties in the Laurel case were deliberated upon. AMBASSADOR RAMON DEL ROSARIO. are alienable lands of the public domain. Kobe. G. Laurel v. the other lots being: (1) The Nampeidai Property at 11-24 Nampeidai-machi.72 square meters and categorized as a commercial lot now being used as a warehouse and parking lot for the consulate staff. 5-Chome Minato-ku Tokyo. LAUREL. vs.84 hectares of reclaimed lands comprising the Freedom Islands. G. Private corporations or associations may not hold such alienable lands of the public domain except by lease The 157. et al.R. ASSETS PRIVATIZATION TRUST CHAIRMAN RAMON T.respondents. and therefore declares the Amended JVA null and void ab initio. The second one. 1987. Japan through Administrative Order No. to make the property the subject of a lease agreement with a Japanese firm . Rep. The last scheduled bidding on February 21. (See Annex "B" to Reply to Comment) The Philippine government retains the title all throughout the lease period and thereafter. 1958. 3. The properties and the capital goods and services procured from the Japanese government for national development projects are part of the indemnification to the Filipino people for their losses in life and property and their suffering during World War II. its decision to sell the reparations properties starting with the Roppongi lot. 503). The consideration of the construction would be the lease to the foreign corporation of one (1) of the buildings to be constructed in Roppongi and the two (2) buildings in Nampeidai. The other building in Roppongi shall then be used as the Philippine Embassy Chancery. At the end of the lease period. The Court finds that each of the herein petitions raises distinct issues. These petitions have been consolidated and are resolved at the same time for the objective is the same . Those intended for the private sector shall be made available by sale to Filipino citizens or to one hundred (100%) percent Filipino-owned entities in national development projects.(3) The Kobe Residential Property at 1-980-2 Obanoyama-cho. 1990 was restrained by his Court. The petitioner in G. Nada-ku. Instead. the rules on bidding were changed such that the $225 million floor price became merely a suggested floor price. Valdez. Due to the failure of our government to provide necessary funds. 92013 raises the following issues: .Kajima Corporation — which shall construct two (2) buildings in Roppongi and one (1) building in Nampeidai and renovate the present Philippine Chancery in Nampeidai. The property has twice been set for bidding at a minimum floor price of $225 million. 1789. Aquino by former Philippine Ambassador to Japan. As intended. on August 11. through Reparations Contract No. C and D. The Roppongi property was acquired from the Japanese government under the Second Year Schedule and listed under the heading "Government Sector". The first bidding was a failure since only one bidder qualified. B. p. the Executive branch of the government has been pushing. No. Shinohara. it became the site of the Philippine Embassy until the latter was transferred to Nampeidai on July 22. No. The Roppongi property consists of the land and building "for the Chancery of the Philippine Embassy" (Annex M-D to Memorandum for Petitioner. 296 entitling non-Filipino citizens or entities to avail of separations' capital goods and services in the event of sale. Kobe. The four properties in Japan including the Roppongi were specifically mentioned in the first "Whereas" clause. 1976 when the Roppongi building needed major repairs. On July 25. lease or disposition. 300 dated June 27. No. The petitioner in G. 92047 adds as a principal objection the alleged unjustified bias of the Philippine government in favor of selling the property to non-Filipino citizens and entities. A proposal was presented to President Corazon C. Later. the Roppongi property has remained undeveloped since that time. Act No. all the three leased buildings shall be occupied and used by the Philippine government. President Aquino created a committee to study the disposition/utilization of Philippine government properties in Tokyo and Kobe. The procurements are divided into those for use by the government sector and those for private parties in projects as the then National Economic Council shall determine. a residential lot which is now vacant. Amidst opposition by various sectors. 1986. after postponements. However. the government has not acted favorably on this proposal which is pending approval and ratification between the parties. Reparations Agreement). with great vigor. No change of ownership or title shall occur. prescribes the national policy on procurement and utilization of reparations and development loans. The Reparations Agreement provides that reparations valued at $550 million would be payable in twenty (20) years in accordance with annual schedules of procurements to be fixed by the Philippine and Japanese governments (Article 2. the Reparations Law. Carlos J.R.to stop the sale of the Roppongi property.R. 92013 objects to the alienation of the Roppongi property to anyone while the petitioner in G.R. the President issued Executive Order No. followed by Administrative Orders Numbered 3-A. has not yet materialized. III In G. He had earlier filed a petition in G. petitioner Laurel asserts that the Roppongi property and the related lots were acquired as part of the reparations from the Japanese government for diplomatic and consular use by the Philippine government. dated January 27. 21. Civil Code) and because the intention by the Executive Department and the Congress to convert it to private use has been manifested by overt acts. . to sell the Roppongi property? Petitioner Dionisio Ojeda in G. 1989. 87478 which the Court dismissed on August 1. The respondents. Vice-President Laurel states that the Roppongi property is classified as one of public dominion. 296. (3) the issuance of Executive Order No. They are held by the State in anticipation of an opportune use.R. Sections 22 and 23 of Commonwealth Act 141). Series of 1988. no ownership by any one can attach to it. It has become patrimonial property because it has not been used for public service or for diplomatic purposes for over thirteen (13) years now (Citing Article 422. 1988 which contains a provision stating that funds may be taken from the sale of Philippine properties in foreign countries. 94047.R.R. transfer and devolution of the title to a property. it cannot be appropriated. buildings and other improvements" (Second Year Reparations Schedule). 6657 [the Comprehensive Agrarian Reform Law] on June 10. such as. or to put it in more simple terms. 296 in making the property available for sale to non-Filipino citizens and entities. and not of private ownership under Article 420 of the Civil Code (See infra). the Roppongi property has ceased to become property of public dominion.(1) Can the Roppongi property and others of its kind be alienated by the Philippine Government?. No. and consular quarters. (3) The protection given to Filipino enterprises against unfair competition and trade practices. (4) the enactment by the Congress of Rep. 55 of the bidding to a future date. privileges and concessions covering the national economy and patrimony (Section 10. They rely upon the rule of lex situs which is used in determining the applicable law regarding the acquisition.R. not even by the State. 92047. for their part. 296. The respondents add that even assuming for the sake of argument that the Civil Code is applicable.R.. refute the petitioner's contention by saying that the subject property is not governed by our Civil Code but by the laws of Japan where the property is located. G. It also allegedly violates: (1) The reservation of the ownership and acquisition of alienable lands of the public domain to Filipino citizens. et al. The Roppongi and related properties were acquired for "sites for chancery. (6) the deferment by the Senate in Resolution No. (Citing 3 Manresa 65-66). They also invoke Opinion No. No. (Sections 2 and 3. II In G. Article XII. The petitioner states that they continue to be intended for a necessary service. No. (5) the holding of the public bidding of the Roppongi property but which failed. Noting the non-use of the Roppongi property at the moment. i•t•c-aüsl (2) The preference for Filipino citizens in the grant of rights. 30 Phil. diplomatic. and (2) Does the Chief Executive. The petitioner submits that the Roppongi property comes under "property intended for public service" in paragraph 2 of the above provision. apart from questioning the authority of the government to alienate the Roppongi property assails the constitutionality of Executive Order No. Act No. Hence. No. 1989. her officers and agents. No. the petitioner avers that the same remains property of public dominion so long as the government has not used it for other purposes nor adopted any measure constituting a removal of its original purpose or use. it cannot be alienated nor be the subject matter of contracts (Citing Municipality of Cavite v. He states that being one of public dominion. He now avers that the executive order contravenes the constitutional mandate to conserve and develop the national patrimony stated in the Preamble of the 1987 Constitution. thus an acknowledgment by the Senate of the government's intention to remove the Roppongi property from the public service purpose. He also questions the bidding procedures of the Committee on the Utilization or Disposition of Philippine Government Properties in Japan for being discriminatory against Filipino citizens and Filipinoowned entities by denying them the right to be informed about the bidding requirements. have the authority and jurisdiction. 92013. is outside the commerce of man. Bidding Committee. among others: (1) the transfer of the Philippine Embassy to Nampeidai (2) the issuance of administrative orders for the possibility of alienating the four government properties in Japan. Constitution). 87478 which sought to enjoin the second bidding of the Roppongi property scheduled on March 30. Constitution. 1988 of the Secretary of Justice which used the lex situs in explaining the inapplicability of Philippine law regarding a property situated in Japan. petitioner Ojeda once more asks this Court to rule on the constitutionality of Executive Order No. Article VI. 20 [1915]). Rojas. and (7) the resolution of this Court dismissing the petition in Ojeda v. canals. There can be no doubt that it is of public dominion unless it is convincingly shown that the property has become patrimonial. Any such conversion happens only if the property is withdrawn from public use (Cebu Oxygen and Acetylene Co. and resides in the social group. the Roppongi lot is outside the commerce of man. 1963 Edition. not available for private appropriation or ownership until there is a formal declaration on the part of the government to withdraw it from being such (Ignacio v. Petitioner Ojeda warns that the use of public funds in the execution of an unconstitutional executive order is a misapplication of public funds He states that since the details of the bidding for the Roppongi property were never publicly disclosed until February 15. ports and bridges constructed by the State. 108 Phil. (Taken from 3 Manresa. A property continues to be part of the public domain. 1990 (or a few days before the scheduled bidding). v. Director of Lands. II.(4) The guarantee of the right of the people to information on all matters of public concern (Section 7. 1789). that these were assigned to the government sector and that the Roppongi property itself was specifically designated under the Reparations Agreement to house the Philippine Embassy. is patrimonial property. ART. such as roads. 421. Act No. and the accomplishment of requirements and the selection of qualified bidders should be done in Tokyo. Article III. rivers. Worse. Property is either of public dominion or of private ownership. which is not of the character stated in the preceding article. Article III. 420. cited in Tolentino. (2) Those which belong to the State. 26). 66 SCRA 481 [1975]). Commentaries on the Civil Code of the Philippines. This. 335 [1960]). and others of similar character. torrents. The Roppongi property is correctly classified under paragraph 2 of Article 420 of the Civil Code as property belonging to the State and intended for some public service. 66-69. The following things are property of public dominion (1) Those intended for public use. 419. and (6) The declaration of the state policy of full public disclosure of all transactions involving public interest (Section 28. Constitution). but the citizens. the respondents have failed to do. it is intended for the common and public welfare and cannot be the object of appropration. Has the intention of the government regarding the use of the property been changed because the lot has been Idle for some years? Has it 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. without being for public use. and are intended for some public service or for the development of the national wealth. It cannot be alienated. ART. p. The purpose is not to serve the State as a juridical person. All other property of the State. Constitution). . As property of public dominion. It is dictated by the terms of the Reparations Agreement and the corresponding contract of procurement which bind both the Philippine government and the Japanese government. Its ownership is a special collective ownership for general use and enjoyment. Bercilles. the bidding guidelines are available only in Tokyo. The applicable provisions of the Civil Code are: ART. IV The petitioners and respondents in both cases do not dispute the fact that the Roppongi site and the three related properties were through reparations agreements. the Roppongi shall be sold for a minimum price of $225 million from which price capital gains tax under Japanese law of about 50 to 70% of the floor price would still be deducted. (5) The prohibition against the sale to non-Filipino citizens or entities not wholly owned by Filipino citizens of capital goods received by the Philippines under the Reparations Act (Sections 2 and 12 of Rep. banks shores roadsteads. Vol. The nature of the Roppongi lot as property for public service is expressly spelled out. an application to the satisfaction of collective needs. interested Filipino citizens or entities owned by them did not have the chance to comply with Purchase Offer Requirements on the Roppongi. did not withdraw the Roppongi property from being classified as one of public dominion when it mentions Philippine properties abroad. Even the failure by the government to repair the building in Roppongi is not abandonment since as earlier stated.The respondents enumerate various pronouncements by concerned public officials insinuating a change of intention. The provisions of Republic Act No. that an abandonment of the intention to use the Roppongi property for public service and to make it patrimonial property under Article 422 of the Civil Code must be definite Abandonment cannot be inferred from the nonuse alone specially if the non-use was attributable not to the government's own deliberate and indubitable will but to a lack of financial support to repair and improve the property (See Heirs of Felino Santiago v. therefore. Section 63 (c) refers to properties which are alienable and not to those reserved for public use or service. the formalities of conveyance. 1789 differentiates the procurements for the government sector and the private sector (Sections 2 and 12. . A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not relinquishment of the Roppongi property's original purpose. the essential validity and effect of the transfer. lease or other disposition. The text of Executive Order No. A conflict of law situation arises only when: (1) There is a dispute over the title or ownership of an immovable. The Japanese law . pp. Executive Order No. It is a ed on faith that Japanese law would allow the sale. 166 SCRA 368 [1988]). there simply was a shortage of government funds. 377-383). As earlier stated. Rep Act No.. however. 6657 (the CARP Law) which provides as one of the sources of funds for its implementation. The recent Administrative Orders authorizing a study of the status and 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. We emphasize. though its title declares an "authority to sell". Rep. 296. lease or any other manner of disposition to non-Filipino citizens or to entities owned by non-Filipino citizens. 6657. It is exceedingly strange why our top government officials. Section 63 (c) of Rep. Private International Law. 1789). should be the ones to insist that in the sale of extremely valuable government property. Act No. Abandonment must be a certain and positive act based on correct legal premises. 296 is based on the wrong premise or assumption that the Roppongi and the three other properties were earlier converted into alienable real properties. 1981 ed. Rep. Lazaro. of all people. Japanese law and not Philippine law should prevail. are to be determined (See Salonga. We see no reason why a conflict of law rule should apply when no conflict of law situation exists. 296. Obviously any property outside of the commerce of man cannot be tapped as a source of funds. 1789. as amended. It merely intends to make the properties available to foreigners and not to Filipinos alone in case of a sale. It merely enumerates possible sources of future funding to augment (as and when needed) the Agrarian Reform Fund created under Executive Order No. It merely eliminates the restriction under Rep. Hence. and of other laws to the contrary notwithstanding. 296 provides: Section 1. does not have a provision in its text expressly authorizing the sale of the four properties procured from Japan for the government sector. Executive Order No. Act No. The respondents try to get around the public dominion character of the Roppongi property by insisting that Japanese law and not our Civil Code should apply. 1789 that reparations goods may be sold only to Filipino citizens and one hundred (100%) percent Filipino-owned entities.its coverage and effects. does not authorize the Executive Department to sell the Roppongi property. 299. The executive order does not declare that the properties lost their public character. the above-mentioned properties can be made available for sale. such that the capacity to take and transfer immovables. or the interpretation and effect of a conveyance. and (2) A foreign law on land ownership and its conveyance is asserted to conflict with a domestic law on the same matters. Act No. and exceptions to its provision — is not presented to the Court It is simply asserted that the lex loci rei sitae or Japanese law should apply without stating what that law provides. It is this nationality provision which was amended by Executive Order No. when enacted. Only the private sector properties can be sold to end-users who must be Filipinos or entities owned by Filipinos. the need to determine which law should apply. the proceeds of the disposition of the properties of the Government in foreign countries. Act No. instrument. conditioned on a valid change in the public character of the Roppongi property. 55 of the Senate dated June 8. Bidding Committee. Any such conveyance must be authorized and approved by a law enacted by the Congress. — In cases in which the Government of the Republic of the Philippines is a party to any deed or other instrument conveying the title to real estate or to any other property the value of which is in excess of one hundred thousand pesos. 734 which raises serious policy considerations and calls for a factfinding investigation of the circumstances behind the decision to sell the Philippine government properties in Japan. (2) For property belonging to the Republic of the Philippines but titled in the name of any political subdivision or of any corporate agency or instrumentality. The assertion that the opinion of the Secretary of Justice sheds light on the relevance of the lex situsrule is misplaced. — Whenever real property of the Government is authorized by law to be conveyed. Book I of the Administrative Code of 1987 (Executive Order No. by the executive head of the agency or instrumentality. or contract shall be executed and signed by the President of the Philippines on behalf of the Government of the Philippines unless the Government of the Philippines unless the authority therefor be expressly vested by law in another officer. 296. the Secretary merely explains that it is the foreign law which should determine who can acquire the properties so that the constitutional limitation on acquisition of lands of the public domain to Filipino citizens and entities wholly owned by Filipinos is inapplicable. SEC. (Emphasis supplied) The requirement has been retained in Section 48. We see no point in belaboring whether or not this opinion is correct. It is a mere resolution. 292). The rule of lex situs does not apply. 48. unless the authority therefor is expressly vested by law in another officer. we did not uphold the authority of the President to sell the . Contrary to respondents' assertion. Official Authorized to Convey Real Property. 1989. The issue is the authority of the respondent officials to validly dispose of property belonging to the State. There is no question that the property belongs to the Philippines. Such deed. It requires executive and legislative concurrence. et al. shall be submitted to the Congress of the Philippines for approval by the same. the deed of conveyance shall be executed in behalf of the government by the following: (1) For property belonging to and titled in the name of the Republic of the Philippines. however. the approval does not have the force and effect of law since the President already lost her legislative powers. Section 79 (f) of the Revised Administrative Code of 1917 provides: Section 79 (f ) Conveyances and contracts to which the Government is a party. The opinion does not tackle the alienability of the real properties procured through reparations nor the existence in what body of the authority to sell them. that the Roppongi property is no longer of public dominion. supra. The resolution of this Court in Ojeda v. 1988 by President Aquino of the recommendation by the investigating committee to sell the Roppongi property was premature or. In discussing who are capable of acquiring the lots. there is another obstacle to its sale by the respondents.. There is no law authorizing its conveyance. the Senate Committee on Foreign Relations is conducting hearings on Senate Resolution No. at the very least. And the validity of the procedures adopted to effect its sale. together with the proper recommendations. did not pass upon the constitutionality of Executive Order No. In fact. none of the above elements exists. the respective Department Secretary shall prepare the necessary papers which. The Congress had already convened for more than a year. (Emphasis supplied) It is not for the President to convey valuable real property of the government on his or her own sole will. Why should we discuss who can acquire the Roppongi lot when there is no showing that it can be sold? The subsequent approval on October 4. it is not a formal declaration abandoning the public character of the Roppongi property. Resolution No. Assuming for the sake of argument. by the President. Moreover. The issues are not concerned with validity of ownership or title. This is governed by Philippine Law.In the instant case. asking for the deferment of the sale of the Roppongi property does not withdraw the property from public domain much less authorize its sale. . p. 92013. not the issues raised in 1989. we see no compelling reason to tackle the constitutional issues raised by petitioner Ojeda. It is for what it stands for. Quezon. Even if we should become paupers we should not think of selling them. For it would be as if we sold the lives and blood and tears of our countrymen. (RolloG. 496 [1941]). Louisville and Nashville R. The Tokyo properties are a monument to the bravery and sacrifice of the Filipino people in the face of an invader..147) The petitioner in G. The February 20. We are resolving the issues raised in these petitions. and for what it could never bring back to life. the sale in 1989 did not materialize. Whether or not the Roppongi and related properties will eventually be sold is a policy determination where both the President and Congress must concur. for the suffering of widows and orphans who lost their loved ones and kindred. Railroad Commission v." In emphasizing that "the decision of the Executive to dispose of the Roppongi property to finance the CARP . The Court does not ordinarily pass upon constitutional questions unless these questions are properly raised in appropriate cases and their resolution is necessary for the determination of the case (People v.R. Co. we do not expect economic or financial benefits from them. 9) It is indeed true that the Roppongi property is valuable not so much because of the inflated prices fetched by real property in Tokyo but more so because of its symbolic value to all Filipinos — veterans and civilians alike. WHEREFORE. the Court did not acknowledge the fact that the property became alienable nor did it indicate that the President was authorized to dispose of the Roppongi property. 56 [1937]).. 92047 also states: Roppongi is no ordinary property. A writ of prohibition is issued enjoining the respondents from proceeding with the sale of the Roppongi property in Tokyo. 6657. 92013 states why the Roppongi property should not be sold: The Roppongi property is not just like any piece of property. . inspire of the lapse of 45 years since the war ended.R. It was given to the Filipino people in reparation for the lives and blood of Filipinos who died and suffered during the Japanese military occupation. The Court stated that the constitutionality of the executive order was not the real issue and that resolving the constitutional question was "neither necessary nor finally determinative of the case. No. Vera. [1909].. 213 U. cannot be questioned" in view of Section 63 (c) of Rep. The Court will not pass upon a constitutional question although properly presented by the record if the case can be disposed of on some other ground such as the application of a statute or general law (Siler v. The petitioner in G. Considering the properties' importance and value. 312 U. Moreover. No.. 65 Phil. the laws on conversion and disposition of property of public dominion must be faithfully followed.R. 1990 Temporary Restraining Order is made PERMANENT. the proceeds of a sale may be used for national economic development projects including the CARP. Act No. like the monuments of Rizal. It is one ceded by the Japanese government in atonement for its past belligerence for the valiant sacrifice of life and limb and for deaths. (Rollo-92047. physical dislocation and economic devastation the whole Filipino people endured in World War II. Japan. But who would think of selling these monuments? Filipino honor and national dignity dictate that we keep our properties in Japan as memorials to the countless Filipinos who died and suffered. for the homes and other properties lost by countless Filipinos during the war. p. that its significance today remains undimmed. IN VIEW OF THE FOREGOING.Roppongi property.S. The petitions before us question the proposed 1990 sale of the Roppongi property. Having declared a need for a law or formal declaration to withdraw the Roppongi property from public domain to make it alienable and a need for legislative authority to allow the sale of the property. inspire of the passage of 32 years since the property passed on to the Philippine government.." The Court noted that "[W]hat petitioner ultimately questions is the use of the proceeds of the disposition of the Roppongi property. 175. The resolution should be read to mean that in case the Roppongi property is re-classified to be patrimonial and alienable by authority of law. Roppongi is a reminder that cannot — should not — be dissipated . Pullman Co.S. and other Filipino heroes. the petitions are GRANTED. No. Rollo). the car hoist under a separate shed. The footing of the pump is a cement pad and this cement pad is imbedded in the pavement under the shed. in its gas stations located on leased land. vs. computing pumps. neon lights signboard. 58-60. where the gas station is located. This underground tank is connected with a steel pipe to the gasoline pump and the gasoline pump is commonly placed or constructed under the shed. concrete fence and pavement and the lot where they are all placed or erected. and to consider only the building as the service station is grossly erroneous. upon demand. air compressors and tireflators. This case is about the realty tax on machinery and equipment installed by Caltex (Philippines) Inc. The assessor appealed to the Central Board of Assessment Appeals. 52. The underground gasoline tank is attached to the shed by the steel pipe to the pump. petitioner. elevated tank. then to the electric motor which electric motor is placed under the shed. The city assessor of Pasay City characterized the said items of gas station equipment and machinery as taxable realty. gasoline pumps. ordinary wear and tear excepted. as well as all the improvements. The pavement covering the entire lot of the gasoline service station.R.. No. It is stipulated in the lease contract that the operators. The lessor of the land. shall return to Caltex the machines and equipment in good condition as when received.. The machines and equipment consists of underground tanks. all of them used in the pursuance of the gasoline service station business formed the entire gasoline service-station.G. they are attached and affixed to the pavement and to the improvement. May 31. The controversial underground tank. The city board of tax appeals ruled that they are personalty. . does not become the owner of the machines and equipment installed therein. . This is done to prevent conflagration because gasoline and other combustible oil are very inflammable. car hoists. respondents. elevated water tanks. car hoists are placed in an adjacent shed. water pumps and underground tanks are outside of the service station. Caltex retains the ownership thereof during the term of the lease. L-50466. CENTRAL BOARD OF ASSESSMENT APPEALS and CITY ASSESSOR OF PASAY. a water tank if there is any is placed in one corner of the lot. an air compressor is attached in the wall of the shed or at the concrete wall fence. CALTEX (PHILIPPINES) INC. equipments and apparatus are allowed by Caltex (Philippines) Inc. and evidence that the gasoline underground tank is attached and connected to the shed or building through the pipe to the pump and the pump is attached and affixed to the cement pad and pavement covered by the roof of the building or shed. for the tenement we consider in this particular case are (is) the pavement covering the entire lot which was constructed by the owner of the gasoline station and the improvement which holds all the properties under question. so with the water tank it is connected also by a steel pipe to the pavement. the elevated water tank. truck hoists. The said machines and equipment are loaned by Caltex to gas station operators under an appropriate lease agreement or receipt. So to say that the gasoline pumps. The building or shed. The city assessor described the said equipment and machinery in this manner: A gasoline service station is a piece of lot where a building or shed is erected. the air compressor. is dug deep about six feet more or less. depository of gasoline or crude oil.. it is clear they are. As to whether the subject properties are attached and affixed to the tenement.541. car washer. the underground gasoline tank. a few meters away from the shed. machines. (pp. Rollo). 1982. water tanks. The realty tax on said equipment amounts to P4.10 annually (p. water pumps. 38. 464. as appurtenances to the gas station building or shed owned by Caltex (as to which it is subject to realty tax) and which fixtures are necessary to the operation of the gas station. We hold that the said equipment and machinery. industrial or agricultural purposes (See sec. 1979 Caltex filed this certiorari petition wherein it prayed for the setting aside of the Board's decision and for a declaration that t he said machines and equipment are personal property not subject to realty tax (p. cities and municipalities an annual ad valorem tax on real property. the only remedy available for seeking a review by this Court of the decision of the Central Board of Assessment Appeals is the special civil action of certiorari. mechanical contrivances. Presidential Decree No. Consequently. instruments. a copy of which was received by its lawyer on April 2. beauty or utility or to adapt it for new or further purposes. machinery. Inc. m) Machinery — shall embrace machines. The issue is whether the pieces of gas station equipment and machinery already enumerated are subject to realty tax. 1979. buildings. The Solicitor General's contention that the Court of Tax Appeals has exclusive appellate jurisdiction over this case is not correct. are taxable improvements and machinery within the meaning of the Assessment Law and the Real Property Tax Code. denying Caltex's motion for reconsideration. Rollo). amounting to more than mere repairs or replacement of waste. Within that fifteen-day period. therefore. — There shall be levied. and other improvements" not specifically exempted in section 3 thereof. Section 2 of the Assessment Law provides that the realty tax is due "on real property. Acting Secretary of Justice Catalino Macaraig. there was as yet no Central Board of Assessment Appeals. assessed and collected in all provinces. and which have been attached or affixed permanently to the gas station site or embedded therein. Jr. together with all other equipment designed for or essential to its manufacturing. This issue has to be resolved primarily under the provisions of the Assessment Law and the Real Property Tax Code. which took effect on June 1. Section 36 of the Real Property Tax Code provides that the decision of the Central Board of Assessment Appeals shall become final and executory after the lapse of fifteen days from the receipt of its decision by the appellant.The Board. 1978. appliances and apparatus attached to the real estate. including land. The Code contains the following definitions in its section 3: k) Improvements — is a valuable addition made to property or an amelioration in its condition. The Code does not provide for the review of the Board's decision by this Court. a petition for reconsideration may be filed. in the same category as the Tax Court. The decision was reiterated by the Board (Minister Vicente Abad Santos took Macaraig's place) in its resolution of January 12. such as land. 1974. When Republic act No. the recourse resorted to herein by Caltex (Philippines). held in its decision of June 3. Incidence of Real Property Tax. and Secretary of Local Government and Community Development Jose Roño. which was composed of Secretary of Finance Cesar Virata as chairman. On May 2. 3[f]. This provision is reproduced with some modification in the Real Property Tax Code which provides: SEC. Section 7(3) of that law in providing that the Tax Court had jurisdiction to review by appeal decisions of provincial or city boards of assessment appeals had in mind the local boards of assessment appeals but not the Central Board of Assessment Appeals which under the Real Property Tax Code has appellate jurisdiction over decisions of the said local boards of assessment appeals and is. as well as the installations and appurtenant service facilities. 1977 that the said machines and equipment are real property within the meaning of sections 3(k) & (m) and 38 of the Real Property Tax Code. Assessment Law). 1125 created the Tax Court in 1954. 16. for without them the gas station would be useless. It includes the physical facilities available for production. and that the definitions of real property and personal property in articles 415 and 416 of the Civil Code are not applicable to this case. . buildings. machinery and other improvements affixed or attached to real property not hereinafter specifically exempted. costing labor or capital and intended to enhance its value. (Compare with Machinery & Engineering Supplies. This Court sustained the sheriff's action. BOARD OF ASSESSMENT APPEALS. where in a replevin case machinery was treated as realty). Court of Appeals. Nor are Caltex's gas station equipment and machinery the same as tools and equipment in the repair shop of a bus company which were held to be personal property not subject to realty tax (Mindanao Bus Co. running from the province of Laguna to the said City. Improvements on land are commonly taxed as realty even though for some purposes they might be considered personalty (84 C. Inc.. The respondent Meralco has constructed 40 of these steel towers within Quezon City. 1964. (Meralco for short). 119 Phil. The Central Board of Assessment Appeals did not commit a grave abuse of discretion in upholding the city assessor's is imposition of the realty tax on Caltex's gas station and equipment. respondent.R. are fastened to insulators attached on steel towers constructed by respondent at intervals. Three steel towers were inspected by the lower court and parties and the following were the descriptions given there of by said court: . 44 approved on March 24. vs. Laguna and is transmitted to the City of Manila by means of electric transmission wires. The steel towers were considered personalty because they were attached to square metal frames by means of bolts and could be moved from place to place when unscrewed and dismantled. City Assessor. vs. 116 Phil.Caltex invokes the rule that machinery which is movable in its nature only becomes immobilized when placed in a plant by the owner of the property or plant but not when so placed by a tenant. became the transferee and owner of the franchise. maintain and operate an electric street railway and electric light. Jaramillo. Here. No. Castillo. of New York vs. vs. 633). The sheriff treated the machinery as personal property. 484 which authorized the Municipal Board of Manila to grant a franchise to construct. marked Annex A. where Meralco's steel towers were considered poles within the meaning of paragraph 9 of its franchise which exempts its poles from taxation.S. 501). That ruling is an interpretation of paragraph 5 of article 415 of the Civil Code regarding machinery that becomes real property by destination. vs. CITY ASSESSOR and CITY TREASURER OF QUEZON CITY. 181-2. A photograph of one of these steel towers is attached to the petition for review.J. Respondent Manila Electric Co. Notes 40 and 41). 70. a usufructuary. Meralco's electric power is generated by its hydro-electric plant located at Botocan Falls. This question is different from the issue raised in the Davao Saw Mill case. January 31. G. the questioned decision and resolution of the Central Board of Assessment Appeals are affirmed. 44 Phil. MANILA ELECTRIC COMPANY. or any person having only a temporary right. "It is a familiar phenomenon to see things classed as real property for purposes of taxation which on general principle might be considered personal property" (Standard Oil Co. 630. 1903. 96 Phil. No costs. L-15334. the terms and conditions of which were embodied in Ordinance No. Manila Electric Co. In the Davao Saw Mills case the question was whether the machinery mounted on foundations of cement and installed by the lessee on leased land should be regarded as real property for purposes of execution of a judgment against the lessee. The petition for certiorari is dismissed for lack of merit. Swift was awarded the said franchise on March 1903. From the stipulation of facts and evidence adduced during the hearing. petitioners. 61 Phil 709). 1902. unless such person acted as the agent of the owner (Davao Saw Mill Co. from its hydro-electric plant in the province of Laguna to the City of Manila. Charles M. This case is also easily distinguishable from Board of Assessment Appeals vs. 328. on land belonging to it. the Philippine Commission enacted Act No. the following appear: On October 20. WHEREFORE. These electric transmission wires which carry high voltage current. heat and power system in the City of Manila and its suburbs to the person or persons making the most favorable bid. the question is whether the gas station equipment and machinery permanently affixed by Caltex to its gas station and pavement (which are indubitably taxable realty) should be subject to the realty tax. 651. that the concept of the "poles" for which exemption is granted. the ground around one of the four legs was excavate from seven to eight (8) feet deep and one and a half (1-½) meters wide. (Par. there was no concrete foundation but there was adobe stone underneath. ordering the cancellation of the said tax declarations and the petitioner City Treasurer of Quezon City to refund to the respondent the sum of P11. the ground around the two legs of the third tower was excavated to a depth about two or three inches beyond the outside level of the steel bar foundation. above quoted. franchise. as a dovecote set on a pole. They are called "poles" notwithstanding the fact that they are no made of wood. in the City of Manila. with two cross metals to prevent mobility. looks like mud or clay. the second tower is made up of metal rods joined together by means of bolts. 1959.. The tax exemption privilege of the petitioner is quoted hereunder: PAR 9.86 as real property tax on the said steel towers for the years 1952 to 1956.86. comparatively slender usually cylindrical piece of wood or timber. . The term also refers to "an upright standard to the top of which something is affixed or by which something is supported. Quezon City. and filed a petition for review in the Court of Tax Appeals (CTA for short) which rendered a decision on December 29. As in the first two towers given above. 484 Respondent's Franchise. 9.) The word "pole" means "a long. plant (not including poles. nor the material or form of which it is made. sometimes. an appeal was taken by respondent to the Board of Assessment Appeals of Quezon City. emphasis supplied. wires. on land owned by the petitioner approximate more than one kilometer from the first tower. The third tower examined is located along Kamias Road. may be seen cylindrical metal poles. as the place abounds with this kind of stone. 31992 and 15549. Quezon City. the CTA held that: (1) the steel towers come within the term "poles" which are declared exempt from taxes under part II paragraph 9 of respondent's franchise. It was also found that the square metal frame supporting the legs were not attached to any material or foundation. nor by the character of the electric current it carries.. The second tower inspected was located in Kamuning Road. Respondent paid the amount under protest. on April 22.. it could not be determined with certainty to whether said adobe stone was placed purposely or not. K-F. the tower could be dismantled and reassembled. telegraph poles. 1958. and (3) the City Treasurer of Quezon City is held responsible for the refund of the amount paid. earnings. and poles.) Along the streets. Like the two previous ones. buildings. specifically a vessel's master (Webster's New International Dictionary 2nd Ed. España Extension. which are made of two steel bars joined together by an interlacing metal rod. at the bottom of the post were two parallel steel bars attached to the leg means of bolts. In accordance with the definitions. and shall be in lieu of all taxes and assessments of whatsoever nature and by whatsoever authority upon the privileges.The first steel tower is located in South Tatalon. Said percentage shall be due and payable at the time stated in paragraph nineteen of Part One hereof. income. The leg was likewise provided with two parallel steel bars bolted to a square metal frame also bolted to each corner. but there soft adobe beneath. the tower proper was attached to the leg three bolts. is not determined by their place or location. but the use to which they are dedicated. a tent pole.. transformers. the bottom arrangement of the legs thereof were found to be resting on soft adobe. machinery and personal property as other persons are or may be hereafter required by law to pay . 1955. it was seen that there was no concrete foundation. In upholding the cause of respondents. probably due to high humidity. decreased to about a quarter of a meter as it we deeper until it reached the bottom of the post. as typically the stem of a small tree stripped of its branches. which. the instant petition for review was filed. transformers. The motion for reconsideration having been denied. It must be noted from paragraph 9. petitioner City Assessor of Quezon City declared the aforesaid steel towers for real property tax under Tax declaration Nos. Quezon City. and poles of the PLDT Co. pole is not restricted to a long cylindrical piece of . After denying respondent's petition to cancel these declarations.. There being very little water at the bottom. The grantee shall be liable to pay the same taxes upon its real estate. and insulators). a similar typically cylindrical piece or object of metal or the like". These are assigned as errors by the petitioner in the brief. (2) the steel towers are personal properties and are not subject to real property tax. It was found that there was no concrete foundation. 1907. cubical concrete poles. as the bottom of the excavation was covered with water about three inches high. with an opening of about one (1) meter in diameter. and insulators of the grantee from which taxes and assessments the grantee is hereby expressly exempted. Part Two. wires. and the tower carried five high voltage wires without cover or any insulating materials. so that by unscrewing the bolts. Like the first one. Act No. The findings were as follows: the ground around one of the four posts was excavated to a depth of about eight (8) feet. As in the first tower. On November 15. p. which required respondent to pay the amount of P11.651. also by extension. arms. 383. should be understood and taken as a part of the electric power system of the respondent Meralco.) The term "poles" was used to denote the steel towers of an electric company engaged in the generation of hydro-electric power generated from its plant to the Tower of Oxford and City of Waterbury. being wider at the bottom than at the top. but was considering the danger from any elevated wire carrying electric current. in such a way that it cannot be separated therefrom without breaking the material or deterioration of the object. or "rounded poles" as it used to do fifty years back. These steel towers are about 15 feet square at the base and extended to a height of about 35 feet to a point. for the conveyance of electric current from the source thereof to its consumers. and other equipment capable of carrying wires for the transmission of electric power (Connecticut Light and Power Co. as electric poles. but claimed that the steel towers on which it is carried were so large that their wire took their structure out of the definition of a pole line. and they denominated these supports or towers. p. should not be given a restrictive and narrow interpretation. any continuous series of structures intended and used solely or primarily for the purpose of supporting wires carrying electric currents is a pole line (Inspiration Consolidation Cooper Co. the top of which extends above the surface of the soil in the tower of Oxford. Oxford. In a case. As heretofore described. (Salt River Valley Users' Ass'n v. 32-A Words and Phrases. constructed like ladders and loaded with high voltage electricity. but Article 415 of the Civil Code does. The tax law does not provide for a definition of real property. (3) Everything attached to an immovable in a fixed manner. v. It was held that in defining the word pole. the defendant admitted that the structure on which a certain person met his death was built for the purpose of supporting a transmission wire used for carrying high-tension electric power. In a proceeding to condemn land for the use of electric power wires.W. The poles as contemplated thereon. 1). It should also be conceded by now that steel towers. 224. (Stemmons and Dallas Light Co. and are embedded in the cement foundations sunk in the earth. but includes "upright standards to the top of which something is affixed or by which something is supported. the logical question posited is whether they constitute real properties. constructed for the purpose of fastening high voltage and dangerous electric wires alongside public highways. therefore. as to defeat the very object for which the franchise was granted. in which the law provided that wires shall be constructed upon suitable poles. as used in Act No. for obvious reasons. 365. 222. the said two metal pieces being connected with criss-cross iron running from the bottom to the top. p.wood or metal. In their decisions the words "towers" and "poles" were used interchangeably. roads. The conclusion of the CTA that the steel supports in question are embraced in the term "poles" is not a novelty. Granting for the purpose of argument that the steel supports or towers in question are not embraced within the term poles. 249-250. Several courts of last resort in the United States have called these steel supports "steel towers". 101 Conn. like the ones in question. v. It is evident. (Tex) 212 S. In form and structure. the statute was interpreted to include towers or poles. then one should admit that the Philippines is one century behind the age of space. one should not be governed by the wire or material of the support used. and that regardless of the size or material wire of its individual members. by stating the following are immovable property: (1) Land. If the respondent would be required to employ "wooden poles". they are like the steel towers in question. and the necessary carrying of numerous wires and the distance between poles. can better effectuate the purpose for which the respondent's franchise was granted. 126 Atl. respondent's steel supports consists of a framework of four steel bars or strips which are bound by steel cross-arms atop of which are cross-arms supporting five high voltage transmission wires (See Annex A) and their sole function is to support or carry such wires. 1016).) The term "poles" was also used to denominate the steel supports or towers used by an association used to convey its electric power furnished to subscribers and members. so that they can be subject to a real property tax. 2nd. Compton. and to the towers are attached insulators. . The steel supports or towers were made of iron or other metals consisting of two pieces running from the ground up some thirty feet high. and it is well understood in that jurisdiction that a transmission tower or pole means the same thing. this term was construed to mean either wood or metal poles and in view of the land being subject to overflow. buildings. 484 and incorporated in the petitioner's franchise. that the word "poles". 8 P. and constructions of all kinds adhered to the soil. Bryan 252 P. A. he should not be ordered to effect the refund. It is finally contended that the CTA erred in ordering the City Treasurer of Quezon City to refund the sum of P11.86. instruments or implements intended by the owner of the tenement for an industry or works which may be carried in a building or on a piece of land. IN VIEW HEREOF. which can be disassembled by unscrewing the bolts and reassembled by screwing the same. L-17870. respondents. thru their respective counsels agreed to the following stipulation of facts: 1. joined together by means of bolts. they are removable and merely attached to a square metal frame by means of bolts. September 29. The Board of Tax Appeals of the City sustained the city assessor. Each of these steel towers or supports consists of steel bars or metal strips. notwithstanding its capacity to sue and be sued. as they are not attached to an immovable in a fixed manner. it was he (City Treasurer) whom had insisted that respondent herein pay the real estate taxes. Petitioner appealed the assessment to the respondent Board of Tax Appeals on the ground that the same are not realty. but Quezon City. In the Court of Tax Appeals the parties submitted the following stipulation of facts: Petitioner and respondents. instruments or implements. it cannot be properly raised for the first time on appeal. Zamboanga del Sur. The steel towers or supports in question. marked Annex "G". 710 holding that the petitioner Mindanao Bus Company is liable to the payment of the realty tax on its maintenance and repair equipment hereunder referred to.T. so petitioner herein filed with the Court of Tax Appeals a petition for the review of the assessment. the decision appealed from is hereby affirmed. As per description. marked Annex "B". which was not a party to the suit. do not come within the objects mentioned in paragraph 1. (f) Battery charger (Tungar charge machine) appearing in the attached photograph. Case No. Bukidnon Province. Having acted in his official capacity as City Treasurer of Quezon City. under the circumstances. This is a petition for the review of the decision of the Court of Tax Appeals in C. This question has not been raised in the court below. G.400 petitioner's above-mentioned equipment. appearing in the attached photograph. with costs against the petitioners. Davao City and Kibawe.651.R. The herein petitioner is indulging in legal technicalities and niceties which do not help him any. (b) Storm Boring Machine. 3. They are not construction analogous to buildings nor adhering to the soil. MINDANAO BUS COMPANY. They can not be included under paragraph 3. Pagadian. vs. appearing in the attached photograph. and which tends directly to meet the needs of the said industry or works. 1962. (d) Black and Decker Grinder. and. These steel towers or supports do not also fall under paragraph 5. appearing in the attached photograph. appearing in the attached photograph. Lanao. receptacles. they are not intended for industry or works on the land. receptacles. appearing in the attached photograph. despite the fact that Quezon City is not a party to the case. It is argued that as the City Treasurer is not the real party in interest. for they are not machineries. marked Annex "C". over its authorized lines in the Island of Mindanao. and (g) D-Engine Waukesha-M-Fuel. That the machineries sought to be assessed by the respondent as real properties are the following: (a) Hobart Electric Welder Machine. appearing in the attached photograph.(5) Machinery. It maintains Branch Offices and/or stations at Iligan City. he would surely know what to do. which respondent paid under protest. marked Annex "A". marked Annex "D". because they do not constitute buildings or constructions adhered to the soil. marked Annex "E". Petitioner is not engaged in an industry or works in the land in which the steel supports or towers are constructed. That petitioner is a public utility solely engaged in transporting passengers and cargoes by motor trucks. given by the lower court. THE CITY ASSESSOR & TREASURER and the BOARD OF TAX APPEALS of Cagayan de Oro City. which when unscrewed could easily be dismantled and moved from place to place. and even if they were. (c) Lathe machine with motor. Respondent City Assessor of Cagayan de Oro City assessed at P4. marked Annex "F". collecting rates approved by the Public Service Commission. therefore. 2. petitioner. . for factually. No. That petitioner has its main office and shop at Cagayan de Oro City. and they can be separated without breaking the material or causing deterioration upon the object to which they are attached. (e) PEMCO Hydraulic Press. and that said tools. gives the character of real property to "machinery. Inasmuch as the central is permanent in character. receptacles. 6. equipments or machineries are immovable taxable real properties. and which tend directly to meet the needs of the said industry or works. liquid containers. those movable which become immobilized by destination because they are essential and principal elements in the industry for those which may not be so considered immobilized because they are merely incidental. converted them into real property by reason of their purpose.nèt The Court of Tax Appeals having sustained the respondent city assessor's ruling. the Supreme Court said: Article 344 (Now Art. are immobilized by destination. 61 Phil. paragraph (5) of the Civil Code. 2. and same are repaired in a condition to be serviceable in the TPU land transportation business it operates. and 4. Respondents contend that said equipments. body constructed. blacksmith and carpentry shops.) So that movable equipments to be immobilized in contemplation of the law must first be "essential and principal elements" of an industry or works without which such industry or works would be "unable to function or carry on the industrial purpose for which it was established. paragraph (c) of Republic Act No. (Emphasis ours. — The following are immovable properties: (5) Machinery. 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. its TPU trucks are made. That petitioner is the owner of the land where it maintains and operates a garage for its TPU motor trucks. parts and the like offered to the general public indiscriminately for business or commercial purposes for which petitioner has never engaged in.1awphîl. nor to repair machineries. 3. for its sugar and industry. H. The Tax Court erred in its interpretation of paragraph 5 of Article 415 of the New Civil Code.4. petitioner brought the case to this Court assigning the following errors: 1. In the case of B. a repair shop." We may here distinguish. tho movable. and with these machineries which are placed therein. The Court of Tax Appeals erred in denying petitioner's contention that the respondent City Assessor's power to assess and levy real estate taxes on machineries is further restricted by section 31. without them the sugar central would be unable to function or carry on the industrial purpose for which it was established. The Tax Court erred in denying petitioner's motion for reconsideration. instruments or implements intended by the owner of any building or land for use in connection with any industry or trade being carried on therein and which are expressly adapted to meet the requirements of such trade or industry. it cannot be said that their incorporation therewith was not permanent in character because. as essential and principle elements of a sugar central. 5. That these machineries are sitting on cement or wooden platforms as may be seen in the attached photographs which form part of this agreed stipulation of facts. They can be moved around and about in petitioner's repair shop.) Note that the stipulation expressly states that the equipment are placed on wooden or cement platforms. 415." If the installation of the machinery and equipment in question in the central of the Mabalacat Sugar Co. in accordance with paragraph 5 of Article 415 of the New Civil Code which provides: Art. Inc. Cu Unjieng. (Emphasis ours. 521. 663. in lieu of the other of less capacity existing therein.. to date. by reason of their being intended or destined for use in an industry. Berkenkotter vs. 415). and having denied a motion for reconsideration. not essential and .. therefore. The Honorable Court of Tax Appeals erred in upholding respondents' contention that the questioned assessments are valid. the necessary machinery and equipment installed for carrying on the sugar industry for which it has been established must necessarily be permanent. That these machineries have never been or were never used as industrial equipments to produce finished products for sale. and holding that pursuant thereto the movable equipments are taxable realties. be deemed real property. though movable in nature. vs. Similarly. (Civil Code of the Phil. The information filed in this case is as follows: The undersigned accuses Ignacio Carlos of the crime of theft. are merely incidentals and are not and should not be considered immobilized by destination. of the value of nine hundred and nine (909) pesos and twenty (20) cents Philippine currency. are immobilized because they are essential to said industries. the "machinery. did then and there. by their nature. and petitioner's business is not carried on in a building. WHEREFORE.principal. 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. September 1. with intent of gain and without violence or intimidation against the person or force against the thing. restaurants. in the city of Manila. the decision subject of the petition for review is hereby set aside and the equipment in question declared not subject to assessment as real estate for the purposes of the real estate tax. for these businesses can continue or carry on their functions without these equity comments. The law that governs the determination of the question at issue is as follows: Art. as petitioner has carried on. to the damage and prejudice of the . steal . Cu Unjieng. 1910. and feloniously. as demanded by the law. not essentials. the tools and equipments in question in this instant case are. jeepwagons. Philippine Islands. before the war. typewriters. tenement or on a specified land. pressure pumps.R. receptacles. so said equipment may not be considered real estate within the meaning of Article 415 (c) of the Civil Code. The following are immovable property: (5) Machinery.273) kilowatts of electric current. during. But in the case at bar the equipments in question are destined only to repair or service the transportation business.. but the delivery trucks and adding machines which they usually own and use and are found within their industrial compounds are merely incidental and retain their movable nature. the said Ignacio Carlos. we hold that the equipments in question are not absolutely essential to the petitioner's transportation business. They are merely incidentals — acquired as movables and used only for expediency to facilitate and/or improve its service. On the other hand. 1909. which is not carried on in a building or permanently on a piece of land . machineries of breweries used in the manufacture of liquor and soft drinks.) Aside from the element of essentiality the above-quoted provision also requires that the industry or works be carried on in a building or on a piece of land . etc. 1911. therefore. unlawfully. and between the 13th day of February. A sawmill would also be installed in a building on land more or less permanently. Thus in the case of Berkenkotter vs. theaters. plaintiff-appellee. and instruments or implements" are found in a building constructed on the land. and the 3d day of March. 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. supra. willfully. and the sawing is conducted in the land or building. etc. cash registers. not essential and principle municipal elements of petitioner's business of transporting passengers and cargoes by motor trucks. liquid containers. THE UNITED STATES. No. Airline companies use forklifts. usually found and used in hotels. Resuming what we have set forth above. which are incidentals. defendant-appellant. G. a corporation doing business in the Philippine Islands. committed as follows: That on. without the consent of the owner thereof. Without costs. the property of the Manila Electric Railroad and Light Company. take. and which tend directly to meet the needs of the said industry or works. and carry away two thousand two hundred and seventy-three (2. 415. Even without such tools and equipments. its business may be carried on. 6295. IBM machines. without such equipments. and thus retain their movable nature. Thus. IGNACIO CARLOS. Said equipments may not. etc. 1910. M. . (Sgd.26. From this judgment the defendant appealed and makes the following assignments of error: I. A warrant for the arrest of the defendant was issued by the Honorable J.) L.) CHARLES LOBINGIER. in view of the evidence submitted. in the sum of P 865. Philippine Islands. M. Southworth. III. or that this defendant has committed any crime. SOUTHWORTH. in accordance with the provisions of section 39 of Act No. in the city of Manila. equal to and equivalent of 4. (Sgd. 183 of the Philippine Commission. Prosecuting Attorney. Subscribed and sworn to before me this 4th day of March. SOUTWORTH.saidManila Electric Railroad and Light Company in the said sum of nine hundred and nine (909) pesos and twenty (20) cents Philippine currency. Philippine Islands. Subscribed and sworn to before me this 4th day of March. (Sgd. The Manila Electric Railroad and Light Company. having examined the witness under oath. prosecuting attorney for the city of Manila. The court erred in declaring the accused to be guilty. because he was not given a preliminary investigation as required by law. A preliminary investigation has heretofore been conducted in this case. After due consideration of all the proofs presented and the arguments of counsel the trial court found the defendant guilty of the crime charged and sentenced him to one year eight months and twenty-one days’ presidio correccional. a plea of not guilty was entered by direction of the court for him and the trial proceeded. (2) That the facts charged do not constitute a public offense. by L. LOBINGIER. Judge. prosecuting attorney for the city of Manila. The demurrer was overruled on the same day and the defendant having refused to plead. to indemnify the offended party. M. All contrary to law. C. II. On the 14th of the same month counsel for the defendant demurrer to the complaint on the following grounds: (1) That the court has no jurisdiction over the person of the accused nor of the offense charged because the accused has not been accorded a preliminary investigation or examination as required by law and no court. Jenkins on the 4th of March and placed in the hands of the sheriff. magistrate. (Sgd) L. or other competent authority has determined from a sworn complaint or evidence adduced that there is probable cause to believe that a crime has been committed. The court erred in overruling the objection of the accused to the jurisdiction of the court. in the city of Manila. Prosecuting Attorney. First Instance. and in overruling his demurrer for the same reason.) CHARLES S. under my direction. by L. Judge. Southworth. 612 of the Philippine Commission. The sheriff’s return shows that the defendant gave bond for his appearance. 1910.546 pesetas Philippine currency. to the corresponding subsidiary imprisonment in case of insolvency and to the payment of the costs. The court erred in declaring that electrical energy may be stolen. First Instance. M. as amended by section 2 of Act No. The court erred in not declaring that the plaintiff consented to the taking of the current. and such possession. Grant and Kennedy (18 Phil. under the Code of Civil Procedure. Obviously this difference could not be due to normal causes. 1910 each was read again.” The result of this registration therefore is that while the outsider meter (Exhibit A) showed a consumption in defendant’s building of 2. the difference is more than 900 per cent. installed an additional meter (Exhibit A) on a pole outside of defendant’s house. 1909. and the accused fails to explain why he should have had thirty lights installed if he needed but four or five. an employee of the Light Company.500 kilowatt hours of electricity. Exhibit B. There is a further evidence that the consumption of 223 kilowatt hours. On the strength of this showing a search warrant was issued for the examination of defendant’s premises and was duly served by a police officer (Hartpence). raises the presumption that the accused was the owner of a device whose only use was to deflect the current from the meter. Besides. There is a sharp conflict between the several spectators on some points but on one there is no dispute. was after a thorough examination and due consideration. a boy of twelve years. Upon this point the trial court said: For considerably more than a year previous to the filing of this complaint the accused had been a consumer of electricity furnished by the Manila Electric Railroad and Light Company for a building containing the residence of the accused and three other residences. The boy is the only witness who so testifies and Porter himself squarely denies it. He was accompanied at the time by three employees of the Manila Electric Railroad and Light Company. section 334 (10). as we have seen.S. We cannot agree with counsel for the defense that the . according to the defendant’s electrician. Here. Exactly the same question as that raised in the first assignment of error. this inside meter (Exhibit B) showed but 223 kilowatt hours. and which was equipped. In the absence of a satisfactory explanation this constituted possession on defendant’s part. 745 kilowatt hours. vs. It is undisputed that the current which supplied the house passed through both meters and the city electrician testifies that each meter was tested on the date of the last reading and was “in good condition. the representatives of the company. Is there any other “satisfactory explanation” of the “jumper’s” presence? The only one sought to be offered is the statement by the son of the accused. that he saw the “jumper” placed there by the witness Porter. believing that more light was being used than their meter showed. Exhibit A showing 2. while according to the test made in this case the inside meter (Exhibit B) ran the faster. and there is other testimony that there were marks on the insulation of the meter Exhibit B which showed the use of such a device. the outside meter should normally run faster. and both it and the meter (Exhibit B) which had been previously installed in the house were read on said date. On March 3.The court erred in condemning the accused to pay P 865. and perhaps one or two others. The court erred in finding the accused guilty of more than one offense. V. 122). he places the extreme limit of such difference between them 5 per cent. registered by the inside meter would not be a reasonable amount for the number of lights installed in defendant’s building during the period in question. Exhibit A read 218 kilowatt hours. The question raised in the second assignment of error is purely one fact. VI. In other words the actual consumption. Rep. 968. with thirty electric lights. and he found there the accused. All agree that the “jumper” (Exhibit C) was found in a drawer of a small cabinet in the room of defendant’s house where the meter was installed and not more than 20 feet therefrom. according to the defendant’s testimony. was more than ten times as great as that registered by the one inside. his wife and son. The city electrician also testifies that the electric current could have been deflected from the inside meter by placing thereon a device known as a “jumper” connecting the two outside wires. for while the electrician called by the defense (Lanusa) testifies to the possibility of a difference between two such meters. No sufficient reason is presented why we should not follow the doctrine enunciated in that case.26 to the electric company as damages. decided adversely to appellant’s contention in the case of U.IV.718 kilowatt hours and Exhibit B. according to the outside meter. On March 15. This is a much more serious charge than that contained in the complaint and should be supported by very strong corroborating circumstances which we do not find here. Counsel for the appellant insists that the only corporeal property can be the subject of the crime of larceny. the “jumper” was placed in the cabinet for the first time by Porter there would be no occasion for any change of demeanor on the part of the accused. and which had some. after holding that said ordinance was valid. one witness whom so far as appears. who executed the search warrant. The court.S. The presence of such an official was neither required nor authorized by law and the very efficacy of a search depends upon its swiftness. accordingly. including the accused. was using a contrivance known as a “jumper” on the electric meter installed by the Manila Electric Railroad and the Light Company. said: . We do not think that the officer’s declination to wait until defendant should secure a notary public shows bias. Genato (15 Phi. Finally. We must also agree with the prosecuting attorney that the attending circumstances do not strengthen the story told by the boy. unable to consider as satisfactory defendant’s explanation of the “jumper’s” presence. After a careful examination of the entire record we are satisfied beyond peradventure of a doubt that the proofs presented fully support the facts as set forth in the foregoing finding. and in the support of this proposition cites several authorities for the purpose of showing that the only subjects of larceny are tangible. something which could be taken in possession and carried away. This is Officer Hartpence. that the latter would have been likely to call out at the time he saw the “jumper” being placed in the drawer. Where the only two witnesses who are supposed to know anything of the matter thus contradict each other this item of testimony by the officer is of more than ordinary significance. or at least directed his father’s attention to it immediately instead of waiting. movable. An appeal was taken from the judgment of the Court of First Instance to the Supreme Court on the ground that the ordinance in question was null and void. As a result of the use of this “jumper” the meter. until the latter was called by the officer. approached the cabinet in which the “jumper” was found. 154 Escolta. thereby reducing the current approximately 95 per cent. There is.boy’s interest in the outcome of this case is less than that of the witness for the prosecution. would be merely pecuniary. Manila. as the accused claims. It seems to us that his natural desire to shield his father would far outweigh any interest such an employee like Porter would have and which. as he says. although trifling. He appealed to the Court of First Instance. however. Genato was charged in the municipal court with a violation of a certain ordinance of the city of Manila. 170) the defendant. intrinsic value. It is true that the only question directly presented was of the validity of the city ordinance. the officer’s attention was called to the defendant’s appearance and the former noticed that the latter was becoming nervous. chattels. the owner of the store situated at No. vs. has no interest in the matter whatsoever. at most. registered one in seventy-seven seconds. was again tried and sentenced to pay the same fine. He testifies that after inspecting other articles and places in the building as he and the other spectators. and was sentenced to pay a fine of P 200. We are. for if. The only alternative is the conclusion that the “jumper” was placed there by the accused or by someone acting for him and that it was the instrument by which the current was deflected from the matter Exhibit B and the Light Company deprived of its lawful compensation. to accept the boy’s story we must believe that this company or its representatives deliberately conspired not merely to lure the defendant into the commission of a crime but to fasten upon him a crime which he did not commit and thus convict an innocent man by perjured evidence. In the U. Rep. and also to show that electricity is an unknown force and can not be a subject of larceny. instead of making one revolution in every four seconds. 221.. 6 Cox C. 1909. 12. bought and sold like other personal property. 213. and April 1. Firth.. Shaw. All this being proved to have been done by her secretly and with intent to deprive the company of their property and to appropriate it to her own use. 1887. 385. regarded by electricians as a fluid.. 11 Cox C. 308. 1910. like those of gas. It is true that electricity is no longer. Shaw. a fluid used for lighting. the court. The taking of this current continued over a period of one year. 520. 172.718 kilowatt hours while the one on the inside only showed 968. and the outside one showed 2. articles identical with articles 517 and 518 of the code in force in these Islands. p. It is urged in support of the fourth assignment of error that if it be true that the appellant did appropriate to his own use the electricity as charged he can not be held guilty of larceny for any part of the electricity thus appropriated. the application of these articles in case of subtraction of gas. the difference in consumption during this time being 2. N. speaking through Chief Justice Bigelow. Commonwealth vs. January 20. and that the defendant severed a portion of that which was in the pipes of the company by taking it into her house and there consuming it. also (England) Queen vs. 1897. or force against things. It is a valuable article of merchandise. State vs.. but its manifestation and effects.. Wellman. 293. the right of ownership of electric current is secured by articles 517 and 518 of the Penal Code. So no error was committed by the trial court in holding that electricity is a subject of larceny. Electricity. & K. (Decisions of supreme court of Spain. 1887. for the reason that the complaining party. 1 C. construing and enforcing the provisions of articles 530 and 531 of the penal code of that country. W. is a valuable article of merchandise. Both meters were again read on March 3. that it was in their possession by being confined in conduits and tubes which belonged to them. R. said: There is nothing in the nature of gas used for illuminating purposes which renders it incapable of being feloniously taken and carried away. C. and read 218 kilowatt hours. In the present case it appears that it was the property of the Boston Gas Light Company. after the first month. bought and sold like other personal property and is capable of appropriation by another. 1897. 222 III. as formerly. shall take another’s personal property without the owner’s consent.Even without them (ordinances). 234. On the same day the inside meter was read and showed 745 kilowatt hours. and in some respects resembling electricity. White. Queen vs. A. the same as gas.. may be seen and felt. R. C. is confirmed by the rule laid down in the decisions of the supreme court of Spain January 20. and April 1.) In the case of Commonwealth vs. and 25 Cyc. and of being transported from place to place. The true test of what is a proper subject of larceny seems to be not whether the subject is corporeal. 3 C. And article 518 fixes the penalty for larceny in proportion to the value of the personal property stolen. note 10. Article 517 of the Penal Code above referred to reads as follows: The following are guilty of larceny: (1) Those who with intent of gain and without violence or intimidation against the person. People. L. It is well-settled that illuminating gas may be the subject of larceny. C. 363. 4 Allen (Mass).277 kilowatt hours. but whether it is capable of appropriation by another than the owner. Woods vs. knew of this misappropriation and consented thereto. clearly constitutes the crime of larceny. The outside meter was installed on March 15.. the Manila Electric Road and Light Company.. susceptible of being severed from a mass or larger quantity. less .. supra. even in the absence of a statute so providing. 7 L. 34 Minn. supra. Rep. and no measures of inducement of any kind were employed by the company for the purpose of leading the defendant into temptation.” But under the facts in the case at bar it is not difficult to reach a conclusion that the acts performed by the plaintiff company did not constitute a consent on its part the defendant take its property. during. It may be difficult in some instances to determine whether certain acts constitute. as a general proposition. In disposing of this question this court said: The said defect constitutes one of the dilatory pleas indicated by section 21.S. that larceny is not committed when the property is taken with the consent of its owner. and the 3d of March. Macaspac (12 Phil. It is true. it must be understood that has waived such objection. The defendant called upon Marcelina. The fourth assignment of error is. No. and feloniously take. can not justify a reversal of the judgment appealed from. in order to avoid detection. and that t continued to furnish the current. three. and carry away 2. It is. It could not stop the misappropriation without cutting off the current entirely. but instead of delivering the said amount she asked Marcelina for P 30 in the name of Joaquina who had in no way authorized her to do so. Had this been done. Assuming that the company read both meters at the end of each month. 26). no doubt. steal. with the request to deliver it to Marcelina Dy-Oco. It could not reduce the current so as to just furnish sufficient for the lighting of two. The Government had no opportunity to amend or correct this error. the allegation of the defect above alluded to. the defendant committed not a single offense but a series of offenses. and no mutual understanding between thecompany and the defendant. At most there was a mere passive submission on the part of the company that the current should be taken and no indication that it wished it to be taken. unlawfully. and is not now entitled to raise for the first time any question in reference thereto when submitting to this court her assignment of errors. Rep. that it knew the defendant was misappropriating the current to that extent. in law. or five lights. true that the defendant did not allow the “jumper” to remain in place continuously for any number of days as the company inspected monthly the inside meter. not well founded. and no preconcert whatever between him and company. The company had a contract with the defendant to furnish him with current for lighting purposes. It is also contended that since the “jumper” was not used continuously. as claimed by the defendant that he used during the most of this time. if error at all.50. Counsel for the defendant insisted that the complaint charged his client with two different crimes of estafa in violation of section 11 of General Orders.twelve days. but the current must always be sufficiently strong to furnish current for the thirty lights.. we think. at any time the defendant desired to use them.277 kilowatts of electric current of the value of P 909. The complaint alleged that the defendant did on. such “consent. and while the “jumper” was off the defendant was not misappropriating the current. the defendant received from one Joquina Punu the sum of P 31. We have been unable to find a well considered case holding contrary opinion under similar facts. 58. So the “jumper” was put on and taken off at least monthly. believing that Joaquina had sent for it. 1909. 1910. and no knowledge by the defendant that the company wished him to take the current. No. no doubt. 2. 58. if not daily. therefore. There is no pretense that the accused was solicited by the company or anyone else to commit the acts charged. but. Apart from the fact that the defense does not pretend that any of the essential rights of the accused have been injured. No demurrer was presented against this complaint on the ground that more than one crime was charged. that the defendant is criminally responsible for the taking of the whole amount. still. according to the provisions of section 10 of General Orders. In the case of U. there are numerous cases holding that such acts do not constitute such consent as would relieve the taker of criminal responsibility. The original design to misappropriate this current was formed by the defendant absolutely independent of any acts on the part of the company or its agents. and the accused ought to have raised the point before the trial began. vs. which in any case would only affect form of the complaint. the complaint might have been amended in time.277 kilowatt hours. willfully. and between the 13th day of February. thereby giving the defendant an opportunity to continue the misppropriation. because it is merely a defect of form easily remedied…Inasmuch as in the first instance the accused did not make the corresponding dilatory plea to the irregularity of the complaint. . Marcelina gave her P 30. 1998 Order. This finding is fully in accordance with the evidence presented. vol. a continuous taking of the gas and not a series of separate talkings. and not prejudicial to the rights of the defendant.) The value of the electricity taken by the defendant was found by the trial court to be P 865. If twelve distinct and separate complaints had been filed against the defendant. although the “jumper” might have been removed and replaced daily or monthly. 1998 is hereby LIFTED.. The decretal portion of the CA Decision reads as follows: “WHEREFORE. one for each month. The defendant was moved by one impulse to appropriate to his own use the current. in the same manner. 1 C. So no error was committed in sentencing the defendant to indemnify the company in this amount. again. the taking would have been continuous. C. 10th ed..Firth. premises considered. there was. 758 of Wharton’s Criminal Law. which drew off the gas from the main without allowing it to pass through the meter. The judgment being strictly in accordance with the law and the merits of the case. 1998 in Civil Case No. Hence. 1998 and Resolution dated March 31. Q-98-33500 are hereby AFFIRMED. 137705. The March 18. with costs against the appellant. C. and the means adopted by him for the taking of the current were in the execution of a general fraudulent plan. the assailed Order dated February 18. Cited on p. It was held also that even if the pipe had not been kept full.” The Facts . August 22. The electricity was stolen from the same person. vs. in fact. praying that the deputy sheriff be enjoined “from seizing immobilized or other real properties in (petitioners’) factory in Cainta. such property is a proper subject of a writ of replevin obtained by the other contracting party.. The writ of preliminary injunction issued on June 15. The covering of the entire period by one charge has been beneficial. R. the Regional Trial Court (RTC) of Quezon City (Branch 218) issued a Writ of Seizure. GOQUIOLAY. we are of the opinion that the charge was properly laid. and consequently always remained full of gas.. A person stole gas for the use of a manufactory by means of pipe. The pipe was never closed at this junction with the main. The prosecuting attorney elected to cover the entire period with one charge and the accused having been convicted for this offense. 1999 Decision of the Court of Appeals (CA) in CA-GR SP No. 47332 and its February 26. the sum total of the penalties imposed might have been very much greater than that imposed by the court in this case. petitioners. 2000. respondent. he can not again be prosecuted for the stealing of the current at any time within that period. a party is estopped from subsequently claiming otherwise. It was substantially one continuous act. if anything. PCI LEASING AND FINANCE. After agreeing to a contract stipulating that a real or immovable property be considered as personal or movable. L. 11 Cox C. and turned off at night. SERG’S PRODUCTS. and in the same place. The gas from this pipe was burnt every day. G. It was held. 1999 Resolution denying reconsideration.26. that if the pipe always remained full.R. INC. as it was substantially all one transaction. INC. No.. 1998 Resolution denied petitioners’ Motion for Special Protective Order. same is hereby affirmed. and SERGIO T.” In its February 18. (Regina vs. Rizal and to return to their original place whatever immobilized machineries or equipments he may have removed.In the case at bar it is not pointed out wherein any of the essential rights of the defendant have been prejudiced by reason of the fact that the complaint covered the entire period. or to suffer the corresponding subsidiary imprisonment in case of insolvency. Then. 172. The Case Before us is a Petition for Review on Certiorari assailing the January 6. 234. 1. ” Observing that Petitioner Goquiolay was an experienced businessman who was “not unfamiliar with the ways of the trade. the sheriff proceeded to petitioner’s factory. they went to [the CA] via an original action for certiorari. “On March 24. this Petition. 1998. petitioners asserted that the properties sought to be seized [were] immovable as defined in Article 415 of the Civil Code. on the ground that the properties [were] still personal and therefore still subject to seizure and a writ of replevin. petitioners filed a motion for special protective order (Annex ‘C’). necessitating presentation of evidence by both parties. The Issues In their Memorandum. “In their Reply. the sheriff again sought to enforce the writ of seizure and take possession of the remaining properties. seized one machinery with [the] word that he [would] return for the other machineries. 1998. Whether or not the contract between the parties is a loan or a lease. He was able to take two more.” Hence. They further stated that PCI Leasing [was] estopped from treating these machineries as personal because the contracts in which the alleged agreement [were] embodied [were] totally sham and farcical. not owned. praying for a directive for the sheriff to defer enforcement of the writ of replevin. “This motion was opposed by PCI Leasing (Annex ‘F’). and [its] validity is attacked by the other – a matter x x x which respondent court is in the best position to determine. the appellate court held that the subject machines were personal property. It also ruled that the “words of the contract are clear and leave no doubt upon the true intention of the contracting parties. with an application for a writ of replevin docketed as Civil Case No. Q-9833500. respondent PCI Leasing and Finance. ” . petitioners submit the following issues for our consideration: “A. 1998. They argued that to give effect to the agreement would be prejudicial to innocent third parties. invoking the power of the court to control the conduct of its officers and amend and control its processes.” The CA further held: “Furthermore. since the merits of the whole matter are laid down before us via a petition whose sole purpose is to inquire upon the existence of a grave abuse of discretion on the part of the [RTC] in issuing the assailed Order and Resolution. “On April 7. The issues raised herein are proper subjects of a full-blown trial. 1998. “On March 6. by petitioners. to accord merit to this petition would be to preempt the trial court in ruling upon the case below. B. “On March 25.The undisputed facts are summarized by the Court of Appeals as follows: “On February 13. respondent judge issued a writ of replevin (Annex ‘B’) directing its sheriff to seize and deliver the machineries and equipment to PCI Leasing after 5 days and upon the payment of the necessary expenses. 1998.” Ruling of the Court of Appeals Citing the Agreement of the parties. in implementation of said writ. upon an ex-parte application of PCI Leasing. the parties’ agreement to the contrary notwithstanding. The contract is being enforced by one. and that they had only been leased. “On April 6. Inc. Whether or not the machineries purchased and imported by SERG’S became real property by virtue of immobilization. but was prevented by the workers from taking the rest.” it ruled that he “should have realized the import of the document he signed. (“PCI Leasing” for short) filed with the RTC-QC a complaint for [a] sum of money (Annex ‘E’). 1998. Order. they argue. the Court will also address briefly the procedural points raised by respondent. receptacles. which is “Petition for Review on Certiorari. This conclusion finds support in the very title of the Petition. Main Issue: Nature of the Subject Machinery Petitioners contend that the subject machines used in their factory were not proper subjects of the Writ issued by the RTC. property pursuant to Article 415 (5) of the Civil Code. 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. militate against a contrary characterization.” While Judge Laqui should not have been impleaded as a respondent. Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only. property which may be a proper subject of a writ of replevin. petitioners are correct in arguing that the said machines are real.” On the other hand. motu proprio. we disagree with the submission of the petitioners that the said machines are not proper subjects of the Writ of Seizure. In this light. Preliminary Matter:Procedural Questions Respondent contends that the Petition failed to indicate expressly whether it was being filed under Rule 45 or Rule 65 of the Rules of Court. the Court will resolve whether the said machines are personal.Upon the filing of such affidavit and approval of the bond. Hence. Article 415 of the Civil Code enumerates immovable or real property as follows: “ART. The Court’s Ruling The Petition is not meritorious.In the main. Serious policy considerations. -. they were essential and principal elements of their chocolate-making industry. It further alleges that the Petition erroneously impleaded Judge Hilario Laqui as respondent. 3. Section 3 thereof reads: “SEC. Indisputably. not personal. and which tend directly to meet the needs of the said industry or works. As a preliminary matter. the Court deems it proper to remove. There is no question that the present recourse is under Rule 45. because they were in fact real property. the name of Judge Laqui from the caption of the present case. The following are immovable property: (5) Machinery. the machines that were the subjects of the Writ of Seizure were placed by petitioners in the factory built on their own land. the court shall issue an order and the corresponding writ of replevin describing the personal property alleged to be wrongfully detained and requiring the sheriff forthwith to take such property into his custody. substantial justice requires that such lapse by itself should not warrant the dismissal of the present Petition. Be that as it may. 415. although each of them was movable or personal property on its own. all of them have become “immobilized by destination because they are essential and principal elements in the industry. In the present case. not immovable.” In that sense. . however. personal property notwithstanding that the PROPERTY or any part thereof may now be.1 of the Agreement reads as follows: “12.that the machines should be deemed personal property pursuant to the Lease Agreement – is good only insofar as the contracting parties are concerned. A resolution of these questions. in any manner affixed or attached to or embedded in. Although there is no specific statement referring to the subject house as personal property.” Applying Tumalad. In that case. may not be likewise treated as such. In any event. therefore. so that they should not now be allowed to make an inconsistent stand by claiming otherwise. petitioners are estopped from denying the characterization of the subject machines as personal property.should be determined in the trial.1 The PROPERTY is. Under the principle of estoppel. real property or any building thereon. they are consequently estopped from claiming otherwise. that our holding -. was a proper subject of a writ of replevin because it was treated as personal property in a contract. not in the proceedings involving the issuance of the Writ of Seizure. or permanently resting upon. they should be threshed out in the trial. This is really because one who has so agreed is estopped from denying the existence of the chattel mortgage. petitioners contend that the Agreement is a loan and not a lease. like what was involved in the above Tumalad case. Hence. Hence. Hence. is effectively a resolution of the merits of the case. they further allege that the Agreement is invalid. Specifically. as in the present case.” In the present case.” In their Reply to respondent’s Comment. petitioners also argue in their Petition that the Agreement suffers from “intrinsic ambiguity which places in serious doubt the intention of the parties and the validity of the lease agreement itself. Validity of the Lease Agreement In their Memorandum. or hereafter become. while the parties are bound by the Agreement. selling or transferring a property by way of chattel mortgage defendants-appellants could only have meant to convey the house as chattel. the Court noted that the remedy of defendants under Rule 60 was either to post a counter-bond or .” Clearly then. Section 12.The Court has held that contracting parties may validly stipulate that a real property be considered as personal. or attached in any manner to what is permanent. The validity and the nature of the contract are the lis mota of the civil action pending before the RTC. intended to treat the same as such. the Court upheld the intention of the parties to treat a house as a personal property because it had been made the subject of a chattel mortgage. Pertinent portions of the Court’s ruling are reproduced hereunder: “x x x. Submitting documents supposedly showing that they own the subject machines. CA. It should be stressed. yet by ceding. the Court in Makati Leasing and Finance Corp. If a house of strong materials. Indeed. and shall at all times be and remain. or at least. a party to a contract is ordinarily precluded from denying the truth of any material fact found therein. Under the circumstances. they are proper subjects of the Writ of Seizure. in Tumalad v. Wearever Textile Mills also held that the machinery used in a factory and essential to the industry. After agreeing to such stipulation. in La Tondeña Distillers v. v. Vicencio. there is absolutely no reason why a machinery. the Court explained that the policy under Rule 60 was that questions involving title to the subject property – questions which petitioners are now raising -. may be considered as personal property for purposes of executing a chattel mortgage thereon as long as the parties to the contract so agree and no innocent third party will be prejudiced thereby. These arguments are unconvincing. the Lease Agreement clearly provides that the machines in question are to be considered as personal property. The Court ruled: “x x x. there is no showing that any specific third party would be adversely affected. which is movable in its nature and becomes immobilized only by destination or purpose. third persons acting in good faith are not affected by its stipulation characterizing the subject machinery as personal. ” They also allege that the seizure would nullify all efforts to rehabilitate the corporation. to invoke the title to the subject property. Return of property.” Besides. or annullable pursuant to Article 1390 of the new Civil Code. but on the petitioners for failing to avail themselves of the remedy under Section 5 of Rule 60. by a proper action in court. ruling as follows: “x x x. 1935. The provision states: “SEC.. In fact. both of which have no place in a petition for certiorari in the CA under Rule 65 or in a petition for review in this Court under Rule 45. The issue in this case. but if he does not so object. for nothing on record shows that it has been nullified or annulled. 5. at any time before the delivery of the property to the applicant. and for the payment of such sum to him as may be recovered against the adverse party. which had ironically been instituted by respondent.” WHEREFORE. as in proceedings on preliminary attachment or injunction. which characterized the subject machinery as personal property. Reliance on the Lease Agreement It should be pointed out that the Court in this case may rely on the Lease Agreement. in double the value of the property as stated in the applicant’s affidavit for the delivery thereof to the applicant. law and jurisprudence support its propriety. and thereby put at issue the matter of the title or right of possession over the specific chattel being replevied. x x x” Alleged Injustice Committed on the Part of Petitioners Petitioners contend that “if the Court allows these machineries to be seized. involves the determination of the nature of the properties described in the complaint. should not be blamed on this Court..” The Court rejected the argument and relied on the Deed. In that case. INC. the policy apparently being that said matter should be ventilated and determined only at the trial on the merits. . -. he cannot immediately require the return of the property. Costs against petitioners. Makati Leasing and Finance Corporation is also instructive on this point.. require the return thereof. Verily. Moreover. and by serving a copy bond on the applicant. Neither is it disclosed that steps were taken to nullify the same. August 7. even granting that the charge is true.. he may. No. Accordingly. L-40411. it must be presumed valid and binding as the law between the parties. the law does not allow the defendant to file a motion to dissolve or discharge the writ of seizure (or delivery) on ground of insufficiency of the complaint or of the grounds relied upon therefor. the above-mentioned consequences. the Deed of Chattel Mortgage. CASTILLO and DAVAO LIGHT & POWER CO. as announced in the opening sentence of the decision in the trial court and as set forth by counsel for the parties on appeal. DAVAO SAW MILL CO. then its workers would be out of work and thrown into the streets. was also assailed because respondent had allegedly been required “to sign a printed form of chattel mortgage which was in a blank form at the time of signing. but can only be a ground for rendering said contract voidable. and as a consequence absolved the defendants from the complaint. if they come true.to question the sufficiency of the plaintiff’s bond. There is nothing on record to show that the mortgage has been annulled. defendants-appellees. which allows the filing of a counter-bond. G.R. vs. INC. if such delivery be adjudged. Petitioners’ arguments do not preclude the implementation of the Writ. however. by filing with the court where the action is pending a bond executed to the applicant. As earlier discussed. APRONIANO G. with costs against the plaintiff. They were not allowed.If the adverse party objects to the sufficiency of the applicant’s bond. these questions require a determination of facts and a presentation of evidence. or of the surety or sureties thereon. plaintiff-appellant. The trial judge found that those properties were personal in nature. the Petition is DENIED and the assailed Decision of the Court of Appeals AFFIRMED. such fact alone does not render a contract void ab initio. petitioners assailed it first only in the RTC proceedings. The Court ruled: “In other words. or any person having only a temporary right. whether obiter dicta or not. In the contract of lease between the sawmill company and the owner of the land there appeared the following provision: That on the expiration of the period agreed upon. It is. the improvements and buildings shall likewise pass to the ownership of the party of the first part as though the time agreed upon had expired: Provided.The Davao Saw Mill Co.. was the plaintiff and the Davao.. No third party claim was filed for such properties at the time of the sales thereof as is borne out by the record made by the plaintiff herein. a judgment was rendered in favor of the plaintiff in that action against the defendant in that action. real property consists of — 1. and on appeal being taken to the United States Supreme Court. the land upon which the business was conducted belonged to another person. which was the plaintiff in that action. it should further be explained that the Davao Saw Mill Co.. it must again be pointed out that the appellant should have registered its protest before or at the time of the sale of this property. In this connection the decision of this court in the case of Standard Oil Co. of the Civil Code. Appellant emphasizes the first paragraph. Inc. barrio of Tigatu.. was the defendant. Province of Davao. 44 Phil. However. also. the conflict concerning machines which were placed and mounted on foundations of cement. but intended by a lessee for use in a building erected on the land by the latter to be returned to the lessee on the expiration or abandonment of the lease. proceeded to take possession of the machinery and other properties described in the corresponding certificates of sale executed in its favor by the sheriff of Davao. municipality of Davao. and the properties now in question were levied upon as personalty by the sheriff. In another action. is in point. Land. machinery not intended by the owner of any building or land for use in connection therewith. 5. That the machineries and accessories are not included in the improvements which will pass to the party of the first part on the expiration or abandonment of the land leased. 630). and the defendant herein having consummated the sale. Inc. unless such person acted as the agent of the owner. a writ of execution issued thereon. buildings. It is machinery which is involved. As connecting up with the facts. Indeed the bidder. but not when so placed by a tenant. Machinery. paragraphs 1 and 5. of New York vs. Some of the implements thus used were clearly personal property. a usufructuary. in the event the party of the second part should leave or abandon the land leased before the time herein stipulated. and appellees the last mentioned paragraph. One of such persons is the appellee by assignment from the original mortgages. liquid containers. furnishes the key to such a situation. It has operated a sawmill in the sitio of Maa. Article 334. A similar question arose in Puerto Rico. instruments or implements intended by the owner of any building or land for use in connection with any industry or trade being carried on therein and which are expressly adapted to meet the requirements of such trade of industry. Inc. On the land the sawmill company erected a building which housed the machinery used by it.. It must further be pointed out that while not conclusive. is the holder of a lumber concession from the Government of the Philippine Islands. however not necessary to spend overly must time in the resolution of this appeal on side issues. In the first place.. We entertain no doubt that the trial judge and appellees are right in their appreciation of the legal doctrines flowing from the facts. Saw. however. all the improvements and buildings introduced and erected by the party of the second part shall pass to the exclusive ownership of the party of the first part without any obligation on its part to pay any amount for said improvements and buildings. Inc. Mill Co. According to the Code. roads and constructions of all kinds adhering to the soil. Jaramillo ( [1923]. whose knowledge of the Civil Law is well known. has on a number of occasions treated the machinery as personal property by executing chattel mortgages in favor of third persons. In the opinion written by Chief Justice White. the characterization of the property as chattels by the appellant is indicative of intention and impresses upon the property the character determined by the parties. wherein the Davao Light & Power Co... it was in part said: . moreover. it was held that machinery which is movable in its nature only becomes immobilized when placed in a plant by the owner of the property or plant.. vs." says section 334 of the Porto Rican Code. Tarlac. Section 164. No. for the purpose of collecting his debt. Petitioner then leased the warehouse to one Hermogenes Sibal for a period of 10 years starting January 1975. Laurent. respondents. "may be immovable either by their own nature or by their destination or the object to which they are applicable. It appears that petitioner. vessels. However. The machinery levied upon by Nevers & Callaghan. deprived the tenant of any right to charge against the lessor the cost such machinery. and decisions quoted in Fuzier-Herman ed. Jr. p. since the lease in substance required the putting in of improved machinery. 2. but for failure to pay said amount. and the immobilization of the machinery which resulted arose in legal effect from the act of the owner in giving by contract a permanent destination to the machinery." ( See also Code Nap. L-55729 March 28.. (Valdes vs. which is as follows: "Machinery. Tit. ANTONIO PUNSALAN. de Lacsamana as the case had been dismissed on the ground of improper venue upon motion of co-respondent Philippine National Bank (PNB). ORTIZ. Central Altagracia [192]. not only land and buildings. In 1963. that is. that machinery which is movable in its nature only becomes immobilized when placed in a plant by the owner of the property or plant. No. he could not. In the meantime. the Porto Rican Code treats as immovable (real) property. Following the Code Napoleon. recapitulating the things which. the bank secured title thereto only on December 14. it follows that they had the right to levy on it under the execution upon the judgment in their favor. But in the concrete immobilization took place because of the express provisions of the lease under which the Altagracia held. Code Napoleon under articles 522 et seq. No. though in themselves movable. the costs of this instance to be paid by the appellant. 225 U. may be immobilized.. as the result of his obligations under the lease. in 1974. 1983. personal property. while the properly was still in the alleged possession of petitioner and with the alleged acquiescence of respondent PNB (Tarlac Branch). petitioner. "Things. as regards Nevers & Callaghan. Such result would not be accomplished. petitioner constructed a warehouse on said property. but also attributes immovability in some cases to property of a movable nature." Numerous illustrations are given in the fifth subdivision of section 335. Aubry et Rau. movable property. upon the fact that one only having a temporary right to the possession or enjoyment of property is not presumed by the law to have applied movable property belonging to him so as to deprive him of it by causing it by an act of immobilization to become the property of another. because of the destination to which it is applied. instruments or implements intended by the owner of the tenements for the industrial or works that they may carry on in any building or upon any land and which tend directly to meet the needs of the said industry or works. REMEDIOS VDA. to and inclusive of article 534. 5. The sole issue presented by petitioner for resolution is whether or not respondent Court erred in denying the Motion to Set Case for Pre-trial with respect to respondent Remedios Vda.) So far as the subject-matter with which we are dealing — machinery placed in the plant — it is plain. the judgment appealed from will be affirmed. by the placing of machinery in a plant by a tenant or a usufructuary or any person having only a temporary right. Antonio Punsalan. Tit. G.000. DE LACSAMANA and THE HONORABLE JUDGE RODOLFO A. since as to him the property was a part of the realty which. proceed separately against. JR. both under the provisions of the Porto Rican Law and of the Code Napoleon.) Finding no reversible error in the record.R.To determine this question involves fixing the nature and character of the property from the point of view of the rights of Valdes and its nature and character from the point of view of Nevers & Callaghan as a judgment creditor of the Altagracia Company and the rights derived by them from the execution levied on the machinery placed by the corporation in the plant. Petitioner declared said warehouse for tax purposes for which he was issued Tax Declaration No. petitioner mortgaged said land to respondent PNB (Tarlac Branch) in the amount of P10. 518 et seq. . being. 203. and the exercise of that right did not in a legal sense conflict with the claim of Valdes. 447. It follows that abstractly speaking the machinery put by the Altagracia Company in the plant belonging to Sanchez did not lose its character of movable property and become immovable by destination. Under such conditions the tenant in putting in the machinery was acting but as the agent of the owner in compliance with the obligations resting upon him. the property was foreclosed on December 16. that which was placed in the plant by the Altagracia Company. and upon securing a permit from the Municipal Mayor.00. was the former registered owner of a parcel of land consisting of 340 square meters situated in Bamban. 58. articles 516... and it was expressly stipulated that the machinery so put in should become a part of the plant belonging to the owner without compensation to the lessee. 9. as pointed out by Demolombe.S. 1970. that is. 1977. 12. (Demolombe. therefore. Respondent PNB (Tarlac Branch) was the highest bidder in said foreclosure proceedings. Tit.) The distinction rests. 5619. Province of Tarlac.. petitioner alleged: 22. by selling the building which never became the property of defendant. which warehouse is an immovable property pursuant to Article 415. a Deed of Sale was executed between respondent PNB (Tarlac Branch) and respondent Lacsamana over the property. by virtue of the request of defendant . particularly to include in the sale. considered against the plaintiff's opposition thereto dated April 1. Quezon City. in so far as respondent Lacsamana was concerned. under Section 2. as such the action of the plaintiff is a real action affecting title to real property which.. including the reply therewith of said defendant. Rule 4 of the New Rules of Court. On March 14. the amendment to Deed of Absolute Sale executed by the defendant Philippine National Bank in favor of the defendant Remedios T.. 1978. that the sale in its favor should likewise have included the building.respondent Court denied reconsideration for lack of merit. 23. de Lacsamana. be awarded to him. the building and improvement thereon. executed a document dated July 31. 173744) as well as separate tax declarations for the land and building. Petitioner then filed a Motion to Set Case for Pre-trial. they have violated the principle against 'pactum commisorium'. respondent . 1980. only limited the sale to the land. essentially impugning the validity of the sale of the building as embodied in the Amended Deed of Sale. which is not an action affecting title to real property. as the issues had already been joined with the filing . Branch XXXI.Lacsamana secured title over the property in her name (TCT No. respondent Court granted respondent PNB's Motion to Dismiss as follows: Acting upon the 'Motion to Dismiss' of the defendant Philippine National Bank dated March 13. and. That said defendant bank fraudulently mentioned ... 1977 .. 1978. involves a warehouse allegedly owned and constructed by the plaintiff on the land of the defendant Philippine National Bank situated in the Municipality of Bamban.On July 26. 1980. 1978. 1 of the New Civil Code. 1980. petitioner commenced suit for "Annulment of Deed of Sale with Damages" against herein respondents PNB and Lacsamana before respondent Court of First Instance of Rizal.00. which seeks to recover not the title nor possession of the property but to compel payment of damages. this Court resolves to DISMISS the plaintiff's complaint for improper venue considering that the plaintiff's complaint which seeks for the declaration as null and void. 5619. No. Philippine National Bank. hence. On September 1. through its Branch Manager .. 1980. In his Motion for Reconsideration of the aforestated Order. On April 25.000... on July 31. must be tried in the province where the property or any part thereof lies. In her Answer filed on March 4. entitled Amendment to Deed of Absolute Sale ... By virtue of said instruments. petitioner contended that the action for annulment of deed of sale with damages is in the nature of a personal action. more or less. respondent PNB filed a Motion to Dismiss on the ground that venue was improperly laid considering that the building was real property under article 415 (1) of the New Civil Code and therefore section 2(a) of Rule 4 should apply. 1 On November 22. notwithstanding the fact that said building is not owned by the bank either by virtue of the public auction sale conducted by the Sheriff and sold to the Philippine National Bank or by virtue of the Deed of Sale executed by the bank itself in its favor on September 21. That defendant. Opposing said Motion to Dismiss.. 1980. 1979. This contract was amended on July 31.. wherein said defendant bank as Vendor sold to defendant Lacsamana the building owned by the plaintiff under Tax Declaration No. Vda. 1978. Petitioner prayed that the Deed of Sale of the building in favor of respondent Lacsamana be declared null and void and that damages in the total sum of P230.-respondent Lacsamana averred the affirmative defense of lack of cause of action in that she was a purchaser for value and invoked the principle in Civil Law that the "accessory follows the principal". 1980. notwithstanding no legal basis for the same and despite full knowledge that the Certificate of Sale executed by the sheriff in its favor .. petitioner reiterated the argument that the action to annul does not involve ownership or title to property but is limited to the validity of the deed of sale and emphasized that the case should proceed with or without respondent PNB as respondent Lacsamana had already filed her Answer to the Complaint and no issue on venue had been raised by the latter. In this connection. the mortgagor hereby conveys and transfer to the mortgage. Petitioner's other contention that the case should proceed in so far as respondent Lacsamana is concerned as she had already filed an Answer. petitioner. seeking a peremptory mandamusto compel the respondent to record in the proper register a document purporting to be a chattel mortgage executed in the City of Manila by Gervasia de la Rosa. situated on the aforesaid leased premises. After said document had been duly acknowledge and delivered. The warehouse claimed to be owned by petitioner is an immovable or real property as provided in article 415(l) of the Civil Code. and registration was refused on this ground only. did not err in dismissing the case on the ground of improper venue (Section 2. No. Hence. We are of the opinion that the position taken by the respondent is untenable. Costs against petitioner. is considered immovable property. therefore. and it is his duty to accept the proper fee and place the instrument on record. which is to recover said real property. We affirm respondent Court's Order denying the setting for pre-trial. his action for annulment of sale and his claim for damages are closely intertwined with the issue of ownership of the building which. Vda. March 16. 1923. and in and to the premises the subject of the said lease. the following described personal property. In the Order of November 10. The duties of a register of deeds in respect to the registration of chattel mortgage are of a . JOAQUIN JARAMILLO. A building treated separately from the land on which it stood is immovable property and the mere fact that the parties to a contract seem to have dealt with it separate and apart from the land on which it stood in no wise changed its character as immovable property. (2) The building. under the law. register of deeds of the City of Manila. vs. While it is true that petitioner does not directly seek the recovery of title or possession of the property in question. Joaquin Jaramillo.of respondent Lacsamana's Answer. It would. for the purpose of having the same recorded in the book of record of chattel mortgages. This cause is before us upon demurrer interposed by the respondent. Respondent PNB is an indispensable party as the validity of the Amended Contract of Sale between the former and respondent Lacsamana is in issue. Rule 4). by way of mortgage.R. It appears from the petition that on November 27. issues had already been joined. within the meaning of the Chattel Mortgage Law. was the lessee of a parcel of land situated in the City of Manila and owner of the house of strong materials built thereon. situated in the City of Manila. the respondent was of the opinion that it was not a chattel mortgage. for the reason that the interest therein mortgaged did not appear to be personal property. Rule 16). in the proper forum. and now in possession of the mortgagor. Upon examination of the instrument. and interest of the mortgagor in and to the contract of lease hereinabove referred to. G. be futile to proceed with the case against respondent Lacsamana alone. title. as register of deeds of the City of Manila. 1922. is likewise untenable. Gervasia de la Rosa. to which we gave due course. purporting to convey to the petitioner by way of mortgage both the leasehold interest in said lot and the building which stands thereon. Vda. property of the mortgagor. 1980 respondent Court denied said Motion to Set Case for Pre-trial as the case was already dismissed in the previous Orders of April 25. Jr. which did not allege improper venue and. Buildings are always immovable under the Code. upon which date she executed a document in the form of a chattel mortgage. therefore. in favor of the Standard Oil Company of New York. It is a real action. WHEREFORE. L-20329. The clauses in said document describing the property intended to be thus mortgage are expressed in the following words: Now. The prevalent doctrine is that an action for the annulment or rescission of a sale of real property does not operate to efface the fundamental and prime objective and nature of the case. the petition is hereby denied without prejudice to the refiling of the case by petitioner Antonio Punsalan. 1980. this Petition for Certiorari. the petitioner caused the same to be presented to the respondent. de Vera. as register of deeds of the City of Manila. to wit: (1) All of the right. Joaquin Jaramillo. to an original petition of the Standard Oil Company of New York. the recovery of which is petitioner's primary objective. de Vera. respondent. Respondent Court. 1980 and September 1. indeed. which was timely raised (Section 1. therefore. THE STANDARD OIL COMPANY OF NEW YORK. Then. in an opinion dated August 11. 1914. the discussion may be confined to the point as to whether a register of deeds has authority to deny the registration of a document purporting to be a chattel mortgage and executed in the manner and form prescribed by the Chattel Mortgage Law. and we declare it to be the duty of the register of deeds to accept the estimate placed upon the document by the petitioner and to register it. The point submitted to us in this case was determined on September 8. 1918. if the mortgaged property is real instead of personal the chattel mortgage would no doubt be held ineffective as against third parties. It is undeniable that the parties to a contract may by agreement treat as personal property that which by nature would be real property. In Leung Yee vs. and Williamson (37 Phil. after quoting section 5 of the Chattel Mortgage Law (Act No. but acting at that time in the capacity of Judge of the fourth branch of the Court of First Instance of the Ninth Judicial District. The efficacy of the act of recording a chattel mortgage consists in the fact that it operates as constructive notice of the existence of the contract. Ostrand. Strong Machinery Co. . Articles 334 and 335 of the Civil Code supply no absolute criterion for discriminating between real property and personal property for purpose of the application of the Chattel Mortgage Law. G. 1508). A fortiori a register of deeds can have no authority to pass upon the character of the property sought to be encumbered by a chattel mortgage. but these have been transferred to section 198 of the Administrative Code. this court held that where the interest conveyed is of the nature of real. and from time to time are presented to this court. 1508). defendants-appellees. The original provisions touching this matter are contained in section 15 of the Chattel Mortgage Law (Act No. and no provision of law can be cited which confers upon him any judicial or quasi-judicial power to determine the nature of any document of which registration is sought as a chattel mortgage. L-11658. 1909. We accordingly quote therefrom as follows: It is unnecessary here to determine whether or not the property described in the document in question is real or personal. and unless within the period of five days from the date of the notification hereof. property. which has reference to the function of the register of deeds in placing the document on record. but that decision is not decisive of the question now before us. considered as a general doctrine. In the light of what has been said it becomes unnecessary for us to pass upon the point whether the interests conveyed in the instrument now in question are real or personal. where they are now found. Other situations are constantly arising. FRANK L. considered as a source of title. the writ of mandamus will be issued. of chattel mortgage. plaintiff-appellant. and little of value can be here added to the observations contained in said ruling.purely ministerial character. There is nothing in any of these provisions conferring upon the register of deeds any authority whatever in respect to the "qualification. LEUNG YEE. in the City of Manila.R. now a Justice of this Court. Of course. WILLIAMSON." as the term is used in Spanish law. and it is a familiar phenomenon to see things classed as real property for purposes of taxation which on general principle might be considered personal property. are law in this jurisdiction. STRONG MACHINERY COMPANY and J. 2496. the placing of the document on record in the chattel mortgage register is a futile act. Frank L. and the legal effects of the contract must be discovered in the instrument itself in relation with the fact of notice. in an administrative ruling promulgated by the Honorable James A. but it must not be forgotten that under given conditions property may have character different from that imputed to it in said articles. So ordered. in which the proper classification of one thing or another as real or personal property may be said to be doubtful. and affects nobody's rights except as a specifies of notice. His duties in respect to such instruments are ministerial only. Those articles state rules which. held that a register of deeds has no authority to pass upon the capacity of the parties to a chattel mortgage which is presented to him for record. as amended by Act No. The demurrer is overruled. G. his Honor continued: Based principally upon the provisions of section quoted the Attorney-General of the Philippine Islands. the respondent shall interpose a sufficient answer to the petition. February 15. as prayed. Registration adds nothing to the instrument.. but this is a question to be determined by the courts of justice and not by the register of deeds. vs. but without costs. 644). upon payment of the proper fee. No. 000. which was in possession. provided there is good faith. relying upon the terms of article 1473 of the Civil Code.The "Compañia Agricola Filipina" bought a considerable quantity of rice-cleaning machinery company from the defendant machinery company. At the time when the execution was levied upon the building. mortgages of personal property executed in the manner and form prescribed in the statute. although executed in a public document. and the mere fact that the parties seem to have dealt with it separate and apart from the land on which it stood in no wise changed its character as real property. to the person who presents the oldest title. and was bought in by the machinery company. This deed makes no reference to the building erected on the land and would appear to have been executed for the purpose of curing any defects which might be found to exist in the machinery company's title to the building under the sheriff's certificate of sale. The mortgage was registered in the chattel mortgage registry. not the annotation in that registry of the sale of the mortgaged property. however. without any reference to the land on which it stood. and had the sheriff's certificate of the sale duly registered in the land registry of the Province of Cavite. The registry her referred to is of course the registry of real property. that the judgment must be sustained on the ground that the agreed statement of facts in the court below discloses that neither the purchase of the building by the plaintiff nor his inscription of the sheriff's . The trial judge. and executed a chattel mortgage thereon to secure payment of the purchase price. in pursuance of the terms of the mortgage instrument. By its express terms." that is to say. it shall belong to the person acquiring it who first recorded it in the registry. that is to say. and it has continued in possession ever since. the plaintiff secured judgment for that amount. the "Compañia Agricola Filipina" executed another mortgage to the plaintiff upon the building. Thereafter. Should it be real property. the plaintiff executed an indemnity bond in favor of the sheriff in the sum of P12. in the absence thereof. the month of December. the Chattel Mortgage Law contemplates and makes provision for mortgages of personal property. It follows that neither the original registry in the chattel mortgage of the building and the machinery installed therein. the ownership shall be transfer to the person who may have the first taken possession thereof in good faith. the mortgaged property was sold by the sheriff. the "Compañia Agricola Filipina" executed a deed of sale of the land upon which the building stood to the machinery company. Should there be no entry. At or about the time when the chattel mortgage was executed in favor of the machinery company. and the sale of the property to the machinery company in satisfaction of the mortgage was annotated in the same registry on December 29. Article 1473 of the Civil Code is as follows: If the same thing should have been sold to different vendees. It included in the mortgage deed the building of strong materials in which the machinery was installed. 1914. A few weeks thereafter. who was the highest bidder at the sheriff's sale. bought it in at the sheriff's sale on or about the 18th of December. and the sole purpose and object of the chattel mortgage registry is to provide for the registry of "Chattel mortgages. This action was instituted by the plaintiff to recover possession of the building from the machinery company. to secure payment of the balance of its indebtedness to the plaintiff under a contract for the construction of the building. but this deed of sale. The machinery company went into possession of the building at or about the time when this sale took place. The building of strong materials in which the rice-cleaning machinery was installed by the "Compañia Agricola Filipina" was real property. the mortgagor. gave judgment in favor of the machinery company. on or about the 14th of January. separate and apart from the land on which it stood. and it must be apparent that the annotation or inscription of a deed of sale of real property in a chattel mortgage registry cannot be given the legal effect of an inscription in the registry of real property. in reliance upon which the sheriff sold the property at public auction to the plaintiff. the property shall belong to the person who first took possession of it in good faith. the defendant machinery company. levied execution upon the building. upon demand of the sheriff. Upon the failure of the mortgagor to pay the amount of the indebtedness secured by the mortgage. 1913. was not registered. 1914. had any effect whatever so far as the building was concerned. on the ground that the company had its title to the building registered prior to the date of registry of the plaintiff's certificate. 1913. We are of opinion. if it should be personal property. and. filed with the sheriff a sworn statement setting up its claim of title and demanding the release of the property from the levy. The indebtedness secured by this instrument not having been paid when it fell due. We conclude that the ruling in favor of the machinery company cannot be sustained on the ground assigned by the trial judge. he cannot be said to have been an innocent purchaser for value. just to comply with a mere formality which. and if later developments had confirmed his unfounded hopes. We are strongly inclined to believe that in procuring the levy of execution upon the factory building and in buying it at the sheriff's sale. Code. which are predicated upon an inscription in a public registry. He took the risk and must stand by the consequences. provides that the title of conveyance of ownership of the real property that is first recorded in the registry shall have preference. in given cases. and it is in this sense that we find that he was not a purchaser in good faith. . the plaintiff cannot be said to have been a purchaser in good faith. in its second paragraph. after the machinery company had filed its sworn claim of ownership. it appearing that the company first took possession of the property. does not obtain even in real disputes between third persons. Medina and Maranon [1911] edition. We cannot agree with this contention. and it appearing further that the machinery company's claim of ownership was well founded. It could not have been the intention of the legislator to base the preferential right secured under this article of the code upon an inscription of title in bad faith. art. was duly notified that the machinery company had bought the building from plaintiff's judgment debtor. the supreme court of Spain held in its sentencia of the 13th of May. The public records cannot be converted into instruments of fraud and oppression by one who secures an inscription therein in bad faith. issued by the publishers of the La Revista de los Tribunales. The force and effect given by law to an inscription in a public record presupposes the good faith of him who enters such inscription.) The agreed statement of facts clearly discloses that the plaintiff. leaves no room for doubt in this regard. Civ. and of course. There was no collusion on his part with the common debtor. Civ. therefore. art. 13th edition. Code. do not and cannot accrue under an inscription "in bad faith. that: This rule is always to be understood on the basis of the good faith mentioned in the first paragraph. But it appearing that he had full knowledge of the machinery company's claim of ownership when he executed the indemnity bond and bought in the property at the sheriff's sale.) Although article 1473. the question is to be decided in accordance with the following paragraph. and no thought of the perpetration of a fraud upon the rights of another. in any way. that it had gone into possession long prior to the sheriff's sale. he considered that he was doing no more than he had a right to do under all the circumstances. Such an interpretation placed upon the language of this section would open wide the door to fraud and collusion. no one could question the legality of the propriety of the course he adopted. that the building and the land were sold to the machinery company long prior to the date of the sheriff's sale to the plaintiff." in express terms. it must be presumed that good faith is not an essential requisite of registration in order that it may have the effect contemplated in this article. (Note 2. the subsequent inscription of the sheriff's certificate of title must be held to have been tainted with the same defect. and that the machinery company must be held to be the owner of the property under the third paragraph of the above cited article of the code. Having bought in the building at the sheriff's sale with full knowledge that at the time of the levy and sale the building had already been sold to the machinery company by the judgment debtor. and that it was in possession at the time when the sheriff executed his levy. The execution of an indemnity bond by the plaintiff in favor of the sheriff. Perhaps we should make it clear that in holding that the inscription of the sheriff's certificate of sale to the plaintiff was not made in good faith. and it is highly possible and even probable that he thought at that time that he would be able to maintain his position in a contest with the machinery company. Construing the second paragraph of this article of the code. and rights created by statute. and further. when he bought the building at the sheriff's sale and inscribed his title in the land registry. 1473. and doubtless he did hope. (Note 2." The truth is that both the plaintiff and the defendant company appear to have had just and righteous claims against their common debtor. the good faith and genuineness of the plaintiff's claim against the "Compañia Agricola Filipina. He may have hoped. No criticism can properly be made of the exercise of the utmost diligence by the plaintiff in asserting and exercising his right to recover the amount of his claim from the estate of the common debtor." but contain no express requirement as to "good faith" in relation to the "inscription" of the property on the registry." to the benefit of the person who thus makes the inscription. it having been found that the second purchasers who record their purchase had knowledge of the previous sale. we should not be understood as questioning. in relation to "possession" and "title.certificate of sale in his favor was made in good faith. this provision must always be understood on the basis of the good faith mentioned in the first paragraph. 1473. the legislator could not have wished to strike it out and to sanction bad faith. It has been suggested that since the provisions of article 1473 of the Civil Code require "good faith. 1908. in the ordinary sense of the word. that the title of the machinery company would not stand the test of an action in a court of law. 8. 2094-2098." and so it is that proof of such knowledge overcomes the presumption of good faith in which the courts always indulge in the absence of proof to the contrary. A purchaser cannot close his eyes to facts which should put a reasonable man upon his guard. we are necessarily controlled by the evidence as to the conduct and outward acts by which alone the inward motive may. His mere refusal to believe that such defect exists. Shadel.. or his willful closing of his eyes to the possibility of the existence of a defect in his vendor's title. or lack of it. Bromley. be determined. . 505. and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor. and the same rule must be applied to one who has knowledge of facts which should have put him upon such inquiry and investigation as might be necessary to acquaint him with the defects in the title of his vendor. 55 Vt." (Wilder vs. is not a visible. Cf. vs. Co.. but in ascertaining the intention by which one is actuated on a given occasion. 504." "the honest lawful intent. with safety.. tangible fact that can be seen or touched. vs. 52 La. "Good faith. will not make him an innocent purchaser for value. Gilman. So ordered. Ann. is in its analysis a question of intention. Cardenas Lumber Co. or the want of it. 17. 119 Mich. but rather a state or condition of mind which can only be judged of by actual or fancied tokens or signs. Good faith.) We conclude that upon the grounds herein set forth the disposing part of the decision and judgment entered in the court below should be affirmed with costs of this instance against the appellant.One who purchases real estate with knowledge of a defect or lack of title in his vendor cannot claim that he has acquired title thereto in good faith as against the true owner of the land or of an interest therein. Pinkerton Bros. and it appears that he had such notice of the defects as would have led to its discovery had he acted with that measure of precaution which may reasonably be acquired of a prudent man in a like situation." which constitutes good faith implies a "freedom from knowledge and circumstances which ought to put a person on inquiry. So it is that "the honesty of intention. if afterwards develops that the title was in fact defective. 10.