G.R. No.

L-3691, November 21, 1951JACINTO DEL SAZ OROZCO y MORTERA and MARIA PAZ ALCANTARA, plaintiffs-appellants, vs. SALVADOR ARANETA, FRANCISCO DEL SAZ OROZCO Y LOPEZ, DOLORES DELSAZ OROZCO Y LOPEZ, and the minors FELISA, EUGENIO, ANTONIO, JOSE, MARIA Y CARLOS,all surnamed DEL SAZ OROZCO Y LOPEZ whose natural guardian is DOA CONCEPCION LOPEZVDA. DE DEL SAZ OROZCO, defendants-appellees. FACTS Eugenio del Saz Orozco died on February 7, 1922, leaving a will which he had executed on March 5,1921, and was afterwards duly admitted to probate. The pertinent clause of that will provided that certainproperties should be given in life usufruct to his son Jacinto del Saz Orozco y Mortera, with the obligationon his part to preserve said properties in favor of the other heirs who were declared the naked ownersthereof. Among these properties were 5,714 shares of stock of the Benguet Consolidated MiningCompany, according to the project of partition executed pursuant to said will and duly approved by thecourt.On September 11, 1934, the Benguet Consolidated Mining Company declared and distributed stockdividends out of its surplus profits, the plaintiff receiving his proportionate portion of 11,428 shares. OnNovember 17, 1939, said Mining Company again declared stock dividends out of its surplus profits, of which the plaintiff received 17,142 shares, making a total of 28,570 shares. ISSUE Whether or not the stock dividend is an income of fruits of the capital which should be given to andenjoyed by the life usufructuary. DECISION Yes. The same question was raised in the Matter of the Testate Estate of Emil Maurice Bachrach. In saidcase, Emil Maurice Bachrach was the owner of 108,000 shares of stock of the Atok Big Wedge MiningCo., Inc. He received 54,000 shares, representing 50 per cent stock dividend on said original shares.Justice Ozaeta, with the unanimous concurrence of the other members of this Court, ruled that adividend, whether in the form of cash or stock, is income and, consequently, should go to theusufructuary, taking into consideration that a stock dividend as well as a cash dividend can be declaredonly out of profits of the corporation, for it were declared out of the capital it would be a serious violation of the law.One of the differences pointed out by respondents is that by the declaration of stock dividends the votingpower of the original shares of stock is considerably diminished, and, if the stock dividends are not givento the remainder men, the voting power of the latter would be greatly impaired. Bearing in mind that thenumber of shares of stock of the Benguet Consolidated Mining company is so large, the diminution of thevoting power of the original shares of stock in this case cannot possibly affect or influence the control of the policies of the corporation which is vested in the owners of the g reat block of shares. This would notbe a sufficient reason for modifying the doctrine of the Bachrach case.In view of the foregoing, the judgment appealed from is reversed, and it is declared that the stockdividends amounting to 28,570 shares, above mentioned, belongs to the plaintiff-appellant Jacinto delSaz Orozco y Mortera exclusively and in absolute ownership.
G.R. No. L-4452, October 1, 1908 Facts: The plaintiff, Juan Pichay, in April, 1905, conveyed to the defendants an undivided one-third interest in twenty- five parcels of land situated in the Province of Ilocos Sur, as payment of a debt of P1,500 which she owed them. The defendants and appellants claim that their agreement gave plaintiff no right of usufruct in the land, saying that it appears that she only asked for this right and it does not appear that the defendants gave it to her. On the 10th of August, 1905, the owners of the twenty- five parcels of land made apartition thereof among themselves, in which the plaintiff took no part, and in this partition certain specific tracts of land were assigned to the defendants as the third to which they were entitled by reason of the conveyance from the plaintiff to them. They have been in possession of the tracts so assigned to them

in partition since the date thereof, and are now in such possession, and have refused to recognized in the plaintiff any right of usufruct therein. Issue: Whether or not the usufructuary is bound by the partition made by the owners of the undivided property although he took no part therein. Held: The usufructuary shall be bound by the partition made by the owners of the undivided property although he took no part in the partition but the naked owner to whom the part held in usufruct has been alloted must respect the usufruct. The right of the usufructuary is not affected by the division but is limited to the fruits of said part alloted to the co-owner.

FIRST DIVISION

[G.R. No. 148830. April 13, 2005]

NATIONAL HOUSING AUTHORITY, petitioner, vs. COURT OF APPEALS, BULACAN GARDEN CORPORATION and MANILA SEEDLING BANK FOUNDATION, INC., respondents. DECISION
CARPIO, J.:

The Case This is a petition for review[1] seeking to set aside the Decision[2] dated 30 March 2001 of the Court of Appeals (appellate court) in CA-G.R. CV No. 48382, as well as its Resolution dated 25 June 2001 denying the motion for reconsideration. The appellate court reversed the Decision[3] of Branch 87 of the Regional Trial Court of Quezon City (trial court) dated 8 March 1994 in Civil Case No. Q-53464. The trial court dismissed the complaint for injunction filed by Bulacan Garden Corporation (BGC) against the National Housing Authority (NHA). BGC wanted to enjoin the NHA from demolishing BGCs facilities on a lot leased from Manila Seedling Bank Foundation, Inc. (MSBF). MSBF allegedly has usufructuary rights over the lot leased to BGC.

Antecedent Facts

On 24 October 1968, Proclamation No. 481 issued by then President Ferdinand Marcos set aside a 120-hectare portion of land in Quezon City owned by the NHA [4] as reserved property for the site of the National Government Center (NGC). On 19 September 1977, President Marcos issued Proclamation No. 1670, which removed a seven-hectare portion from the coverage of the NGC. Proclamation No. 1670 gave MSBF usufructuary rights over this segregated portion, as follows:

Pursuant to the powers vested in me by the Constitution and the laws of the Philippines, I, FERDINAND E. MARCOS, President of the Republic of the Philippines, do hereby exclude from the operation of Proclamation No. 481, dated October 24, 1968, which established the National Government Center Site, certain parcels of land embraced therein and reserving the same for the Manila Seedling Bank Foundation, Inc., for use in its operation and projects, subject to private rights if any there be, and to future survey, under the administration of the Foundation. This parcel of land, which shall embrace 7 hectares, shall be determined by the future survey based on the technical descriptions found in Proclamation No. 481, and most particularly on the original survey of the area, dated July 1910 to June 1911, and on the subdivision survey dated April 19-25, 1968. (Emphasis added)
MSBF occupied the area granted by Proclamation No. 1670. Over the years, MSBFs occupancy exceeded the seven-hectare area subject to its usufructuary rights. By 1987, MSBF occupied approximately 16 hectares. By then the land occupied by MSBF was bounded by Epifanio de los Santos Avenue (EDSA) to the west, Agham Road to the east, Quezon Avenue to the south and a creek to the north. On 18 August 1987, MSBF leased a portion of the area it occupied to BGC and other stallholders. BGC leased the portion facing EDSA, which occupies 4,590 square meters of the 16-hectare area. On 11 November 1987, President Corazon Aquino issued Memorandum Order No. 127 (MO 127) which revoked the reserved status of the 50 hectares, more or less, remaining out of the 120 hectares of the NHA property reserved as site of the National Government Center. MO 127 also authorized the NHA to commercialize the area and to sell it to the public. On 15 August 1988, acting on the power granted under MO 127, the NHA gave BGC ten days to vacate its occupied area. Any structure left behind after the expiration of the ten-day period will be demolished by NHA. BGC then filed a complaint for injunction on 21 April 1988 before the trial court. On 26 May 1988, BGC amended its complaint to include MSBF as its co-plaintiff. The Trial Courts Ruling

The trial court agreed with BGC and MSBF that Proclamation No. 1670 gave MSBF the right to conduct the survey, which would establish the seven-hectare area covered by MSBFs usufructuary rights. However, the trial court held that MSBF failed to act seasonably on this right to conduct the survey. The trial court ruled that the previous surveys conducted by MSBF covered 16 hectares, and were thus inappropriate to determine the seven-hectare area. The trial court concluded that to allow MSBF to determine the seven-hectare area now would be grossly unfair to the grantor of the usufruct. On 8 March 1994, the trial court dismissed BGCs complaint for injunction. Thus:

Premises considered, the complaint praying to enjoin the National Housing Authority from carrying out the demolition of the plaintiffs structure, improvements and facilities in the premises in question is hereby DISMISSED, but the suggestion for the Court to rule that Memorandum Order 127 has repealed Proclamation No. 1670 is DENIED. No costs. SO ORDERED.[5]
The NHA demolished BGCs facilities soon thereafter. The Appellate Courts Ruling Not content with the trial courts ruling, BGC appealed the trial courts Decision to the appellate court. Initially, the appellate court agreed with the trial court that Proclamation No. 1670 granted MSBF the right to determine the location of the sevenhectare area covered by its usufructuary rights. However, the appellate court ruled that MSBF did in fact assert this right by conducting two surveys and erecting its main structures in the area of its choice. On 30 March 2001, the appellate court reversed the trial courts ruling. Thus:

WHEREFORE, premises considered, the Decision dated March 8, 1994 of the Regional Trial Court of Quezon City, Branch 87, is hereby REVERSED and SET ASIDE. The National Housing Authority is enjoined from demolishing the structures, facilities and improvements of the plaintiff-appellant Bulacan Garden Corporation at its leased premises located in Quezon City which premises were covered by Proclamation No. 1670, during the existence of the contract of lease it (Bulacan Garden) had entered with the plaintiff-appellant Manila Seedling Bank Foundation, Inc. No costs. SO ORDERED.[6]

The NHA filed a motion for reconsideration, which was denied by the appellate court on 25 June 2001. Hence, this petition.

The Issues The following issues are considered by this Court for resolution:

WHETHER THE PETITION IS NOW MOOT BECAUSE OF THE DEMOLITION OF THE STRUCTURES OF BGC; and WHETHER THE PREMISES LEASED BY BGC FROM MSBF IS WITHIN THE SEVEN-HECTARE AREA THAT PROCLAMATION NO. 1670 GRANTED TO MSBF BY WAY OF USUFRUCT.
The Ruling of the Court We remand this petition to the trial court for a joint survey to determine finally the metes and bounds of the seven-hectare area subject to MSBFs usufructuary rights.

Whether the Petition is Moot because of the Demolition of BGCs Facilities BGC claims that the issue is now moot due to NHAs demolition of BGCs facilities after the trial court dismissed BGCs complaint for injunction. BGC argues that there is nothing more to enjoin and that there are no longer any rights left for adjudication. We disagree. BGC may have lost interest in this case due to the demolition of its premises, but its co-plaintiff, MSBF, has not. The issue for resolution has a direct effect on MSBFs usufructuary rights. There is yet the central question of the exact location of the sevenhectare area granted by Proclamation No. 1670 to MSBF. This issue is squarely raised in this petition. There is a need to settle this issue to forestall future disputes and to put this 20-year litigation to rest.

On the Location of the Seven-Hectare Area Granted by Proclamation No. 1670 to MSBF as Usufructuary

Rule 45 of the 1997 Rules of Civil Procedure limits the jurisdiction of this Court to the review of errors of law.[7] Absent any of the established grounds for exception,[8] this Court will not disturb findings of fact of lower courts. Though the matter raised in this petition is factual, it deserves resolution because the findings of the trial court and the appellate court conflict on several points. The entire area bounded by Agham Road to the east, EDSA to the west, Quezon Avenue to the south and by a creek to the north measures approximately 16 hectares. Proclamation No. 1670 gave MSBF a usufruct over only a seven-hectare area. The BGCs leased portion is located along EDSA. A usufruct may be constituted for a specified term and under such conditions as the parties may deem convenient subject to the legal provisions on usufruct. [9] A usufructuary may lease the object held in usufruct.[10] Thus, the NHA may not evict BGC if the 4,590 square meter portion MSBF leased to BGC is within the seven-hectare area held in usufruct by MSBF. The owner of the property must respect the lease entered into by the usufructuary so long as the usufruct exists. [11] However, the NHA has the right to evict BGC if BGC occupied a portion outside of the seven-hectare area covered by MSBFs usufructuary rights. MSBFs survey shows that BGCs stall is within the seven-hectare area. On the other hand, NHAs survey shows otherwise. The entire controversy revolves on the question of whose land survey should prevail. MSBFs survey plots the location of the seven-hectare portion by starting its measurement from Quezon Avenue going northward along EDSA up until the creek, which serves as the northern boundary of the land in question. Mr. Ben Malto (Malto), surveyor for MSBF, based his survey method on the fact that MSBFs main facilities are located within this area. On the other hand, NHAs survey determines the seven-hectare portion by starting its measurement from Quezon Avenue going towards Agham Road. Mr. Rogelio Inobaya (Inobaya), surveyor for NHA, based his survey method on the fact that he saw MSBFs gate fronting Agham Road. BGC presented the testimony of Mr. Lucito M. Bertol (Bertol), General Manager of MSBF. Bertol presented a map,[12] which detailed the area presently occupied by MSBF. The map had a yellow-shaded portion, which was supposed to indicate the seven-hectare area. It was clear from both the map and Bertols testimony that MSBF knew that it had occupied an area in excess of the seven-hectare area granted by Proclamation No. 1670.[13] Upon cross-examination, Bertol admitted that he personally did not know the exact boundaries of the seven-hectare area.[14]Bertol also admitted that MSBF prepared the map without consulting NHA, the owner of the property. [15] BGC also presented the testimony of Malto, a registered forester and the Assistant Vice-President of Planning, Research and Marketing of MSBF. Malto testified that he conducted the land survey, which was used to construct the map presented by Bertol.[16] Bertol clarified that he authorized two surveys, one in 1984 when he first joined MSBF, and the other in 1986.[17] In both instances, Mr. Malto testified that he was asked to survey a total of 16 hectares, not just seven hectares. Malto testified that he

conducted the second survey in 1986 on the instruction of MSBFs general manager. According to Malto, it was only in the second survey that he was told to determine the seven-hectare portion. Malto further clarified that he based the technical descriptions of both surveys on a previously existing survey of the property.[18] The NHA presented the testimony of Inobaya, a geodetic engineer employed by the NHA. Inobaya testified that as part of the NHAs Survey Division, his duties included conducting surveys of properties administered by the NHA.[19] Inobaya conducted his survey in May 1988 to determine whether BGC was occupying an area outside the seven-hectare area MSBF held in usufruct.[20]Inobaya surveyed the area occupied by MSBF following the same technical descriptions used by Malto. Inobaya also came to the same conclusion that the area occupied by MSBF, as indicated by the boundaries in the technical descriptions, covered a total of 16 hectares. He further testified that the seven-hectare portion in the map presented by BGC,[21] which was constructed by Malto, does not tally with the boundaries BGC and MSBF indicated in their complaint. Article 565 of the Civil Code states:

ART. 565. The rights and obligations of the usufructuary shall be those provided in the title constituting the usufruct; in default of such title, or in case it is deficient, the provisions contained in the two following Chapters shall be observed.
In the present case, Proclamation No. 1670 is the title constituting the usufruct. Proclamation No. 1670 categorically states that the seven-hectare area shall be determined by future survey under the administration of the Foundation subject to private rights if there be any. The appellate court and the trial court agree that MSBF has the latitude to determine the location of its seven-hectare usufruct portion within the 16-hectare area. The appellate court and the trial court disagree, however, whether MSBF seasonably exercised this right. It is clear that MSBF conducted at least two surveys. Although both surveys covered a total of 16 hectares, the second survey specifically indicated a seven-hectare area shaded in yellow. MSBF made the first survey in 1984 and the second in 1986, way before the present controversy started. MSBF conducted the two surveys before the lease to BGC. The trial court ruled that MSBF did not act seasonably in exercising its right to conduct the survey. Confronted with evidence that MSBF did in fact conduct two surveys, the trial court dismissed the two surveys as self-serving. This is clearly an error on the part of the trial court. Proclamation No. 1670 authorized MSBF to determine the location of the seven-hectare area. This authority, coupled with the fact that Proclamation No. 1670 did not state the location of the seven-hectare area, leaves no room for doubt that Proclamation No. 1670 left it to MSBF to choose the location of the seven-hectare area under its usufruct. More evidence supports MSBFs stand on the location of the seven-hectare area. The main structures of MSBF are found in the area indicated by MSBFs survey. These structures are the main office, the three green houses, the warehouse and the composting area. On the other hand, the NHAs delineation of the sevenhectare area would cover only the four hardening bays and the display area. It is easy

to distinguish between these two groups of structures. The first group covers buildings and facilities that MSBF needs for its operations. MSBF built these structures before the present controversy started. The second group covers facilities less essential to MSBFs existence. This distinction is decisive as to which survey should prevail. It is clear that the MSBF intended to use the yellow-shaded area primarily because it erected its main structures there. Inobaya testified that his main consideration in using Agham Road as the starting point for his survey was the presence of a gate there. The location of the gate is not a sufficient basis to determine the starting point. MSBFs right as a usufructuary as granted by Proclamation No. 1670 should rest on something more substantial than where MSBF chose to place a gate. To prefer the NHAs survey to MSBFs survey will strip MSBF of most of its main facilities. Only the main building of MSBF will remain with MSBF since the main building is near the corner of EDSA and Quezon Avenue. The rest of MSBFs main facilities will be outside the seven-hectare area. On the other hand, this Court cannot countenance MSBFs act of exceeding the seven-hectare portion granted to it by Proclamation No. 1670. A usufruct is not simply about rights and privileges. A usufructuary has the duty to protect the owners interests. One such duty is found in Article 601 of the Civil Code which states:

ART. 601. The usufructuary shall be obliged to notify the owner of any act of a third person, of which he may have knowledge, that may be prejudicial to the rights of ownership, and he shall be liable should he not do so, for damages, as if they had been caused through his own fault.
A usufruct gives a right to enjoy the property of another with the obligation of preserving its form and substance, unless the title constituting it or the law otherwise provides.[22] This controversy would not have arisen had MSBF respected the limit of the beneficial use given to it. MSBFs encroachment of its benefactors property gave birth to the confusion that attended this case. To put this matter entirely to rest, it is not enough to remind the NHA to respect MSBFs choice of the location of its seven-hectare area. MSBF, for its part, must vacate the area that is not part of its usufruct. MSBFs rights begin and end within the seven-hectare portion of its usufruct. This Court agrees with the trial court that MSBF has abused the privilege given it under Proclamation No. 1670. The direct corollary of enforcing MSBFs rights within the seven-hectare area is the negation of any of MSBFs acts beyond it. The seven-hectare portion of MSBF is no longer easily determinable considering the varied structures erected within and surrounding the area. Both parties advance different reasons why their own surveys should be preferred. At this point, the determination of the seven-hectare portion cannot be made to rely on a choice between the NHAs and MSBFs survey. There is a need for a new survey, one conducted jointly by the NHA and MSBF, to remove all doubts on the exact location of the seven-hectare area and thus avoid future controversies. This new survey should consider existing

structures of MSBF. It should as much as possible include all of the facilities of MSBF within the seven-hectare portion without sacrificing contiguity. A final point. Article 605 of the Civil Code states:

ART. 605. Usufruct cannot be constituted in favor of a town, corporation, or association for more than fifty years. If it has been constituted, and before the expiration of such period the town is abandoned, or the corporation or association is dissolved, the usufruct shall be extinguished by reason thereof. (Emphasis added)
The law clearly limits any usufruct constituted in favor of a corporation or association to 50 years. A usufruct is meant only as a lifetime grant. Unlike a natural person, a corporation or associations lifetime may be extended indefinitely. The usufruct would then be perpetual. This is especially invidious in cases where the usufruct given to a corporation or association covers public land. Proclamation No. 1670 was issued 19 September 1977, or 28 years ago. Hence, under Article 605, the usufruct in favor of MSBF has 22 years left. MO 127 released approximately 50 hectares of the NHA property as reserved site for the National Government Center. However, MO 127 does not affect MSBFs sevenhectare area since under Proclamation No. 1670, MSBFs seven-hectare area was already exclude[d] from the operation of Proclamation No. 481, dated October 24, 1968, which established the National Government Center Site. WHEREFORE, the Decision of the Court of Appeals dated 30 March 2001 and its Resolution dated 25 June 2001 in CA-G.R. CV No. 48382 are SET ASIDE. This case is REMANDED to Branch 87 of the Regional Trial Court of Quezon City, which shall order a joint survey by the National Housing Authority and Manila Seedling Bank Foundation, Inc. to determine the metes and bounds of the seven-hectare portion of Manila Seedling Bank Foundation, Inc. under Proclamation No. 1670. The seven-hectare portion shall be contiguous and shall include as much as possible all existing major improvements of Manila Seedling Bank Foundation, Inc. The parties shall submit the joint survey to the Regional Trial Court for its approval within sixty days from the date ordering the joint survey. SO ORDERED.
G.R. No. L-33507 July 20, 1981 FE P. VELASCO, represented by ALFREDO GONZALES, petitioner, vs. HON. VICENTE N. CUSI, JR. and THE CITY OF DAVAO, respondents.

DE CASTRO, J.: Petitioner filed in the Court of First Instance of Davao an action against Davao City to quiet title to her lot known as Lot 77-B-2, a portion of which she claims to having been occupied illegally as part

of Bolton Street, Davao City. On a motion to dismiss filed by the defendant, on the ground that the complaint states no cause of action, the Court, presided over by respondent Judge Hon. Vicente Cusi Jr., dismissed the case. Hence, this petition for certiorari seeking a review of the Order of dismissal dated July 11, 1970 (Annex D to tile Petition). 1 The dismissal being on the ground that the complaint does not state a cause of action, the allegations of the complaint have to be closely examined, as the court a quo did in its Order aforecited which quoted the material allegations of the complaint as follows: The action is to quiet title and damages. But the complaint does not allege any cloud or doubt on the title, 'Transfer Certificate of Title No. T-7000 of the Register of Deeds of the City of Davao, of the plaintiff to Lot No. 77-B-2, subdivision plan Psd-22295. According to the complaint, ' . . . when plaintiff bought the said lot 77-B-2 from the original owner in 1956, the Bolton Street was already existing; that without ascertaining the monuments along Bolton Street, she had her house constructed on her said lot and built fence along said Bolton Street which she believed to be the boundary between her lot and said street and in line with other offences already existing when she bought said lot; 6. That plaintiff has just discovered, after a relocation of the monuments of her lot, Lot No. 77-B-2, that the Bolton Street of the defendant has encroached at least TWENTY-FIVE (25) SQUARE METERS with dimension of 2.5 meters by 10 meters, making her actual occupation of her lot 10 meters by 47.5 meters, as indicated in the plan Annex "A" hereon enclosed thereon by red pencil lines; 7. That plaintiff has just discovered also that the width of the Bolton Street is only NINE (9) METERS and since the defendant is now asphalting the said Bolton Street, plaintiff has filed this complaint in order to quiet her title to the said portion of 2.5 meters by 10 meters as shown in the plan enclosed in red pencil oil Annex "A" hereon because the continued occupation of said portion by the defendant has cast a cloud of doubt on the title of the plaintiff over the portion of plaintiff's Lot No. 77-B-2 now being occupied by Bolton Street, valued at four hundred pesos per square meters. After quoting the material allegations of the complaint as above set forth, the court a quo analyzed them carefully and scrutinizingly, and came up with the conclusion that the allegations of the complaint state no cause of action. Thus The allegations in the complaint that the Bolton Street encroached on the lot of the plaintiff and that the defendant had continuously occupied the portion so encroached upon do not, contrary to the conclusion of the plaintiff found in the complaint, cast ' . . a cloud of doubt on the title of the plaintiff over said portion which would justify this action. In her present petition, petitioner assigned as error of the court a quo the following: 1. THE LOWER COURT ERRED IN DECLARING THAT THE BOLTON STREET AS AN EASEMENT MUST REMAIN A BURDEN ON LOT 77-B-2 (LOT IN QUESTION) PURSUANT TO SECTION 39 OF ACT 496 ON THE GROUND THAT IT IS SUBJECT TO EASEMENT OF PUBLIC HIGHWAY. 2. THE LOWER COURT ERRED IN DECLARING THAT THE PORTION OF THE LAND OF PETITIONER ENCROACHED UPON BY THE RESPONDENT CITY OF DAVAO'S BOLTON STREET DOES NOT CAST A CLOUD OF DOUBT IN THE TITLE OF PETITIONER.

3. THE LOWER COURT ERRED IN DECLARING THAT ASSUMING THE FACTS ALLEGED IN THE COMPLAINT TO BE TRUE, A JUDGMENT UPON THE SAME IN ACCORDANCE WITH THE PRAYER COULD NOT BE RENDERED. 4. THE LOWER COURT ERRED IN DISMISSING THE COMPLAINT FOR LACK OF CAUSE OF ACTION. As alleged by petitioner, the lot in question, Lot No. 77-B-2, which she bought in 1956, was part of Lot No. 77-B, which was in turn originally a portion of Lot No. 77, covered by O.C.T. No. 683, issued on July 21, 1911. For the lot she bought, she received Transfer Certificate of Title No. T-7000. In 1970, petitioner discovered that the Bolton Street of the City of Davao had encroached upon her a lot of portion of 2.5 meters wide and 10 meters long, along said Street, or an area of 25 Square meters. She also discovered that Bolton Street was delimited to nine (9) meters wide, but the proposed width was 15 meters, and in that same year 1970, the Bolton Street had already encroached on her lot, on the northwestern part thereof, to the extent as above stated (par. 7, Complaint, Annex A. to Petition). From The allegations of the complaint as set forth above, as well as inhe questioned Order quoted earlier, We agree with respondent judge that the complaint states no cause of action upon which to render judgment in favor of petitioner, even assuming S the said allegations to be true, indeed, in a motion to dismiss for lack of cause of action, the allegations of the complaint must be hypothetically admitted. 2 It appears on the face of the complaint that Bolton Street has been where it is from time immemorial. When the mother title of petitioner's Transfer Certificate of Title No. T- 7000, which is O.C.T. No. 638, was issued in 1911, it was issued subject to the provisions of Section 39 of Act 496 which reads: Section 39. Every person receiving a certificate of title in pursuance of a decree or registration, and every subsequent purchasers of registered land who takes a certificate of title for value in good faith shall hold the same free of all encumbrances, except those noted on said certificate, and any of the following encumbrances which may be subsisting namely: xxx xxx xxx Third. Any public highway, way, private way, ... or any government irrigation, canal, or lateral thereof ... From the foregoing provision, Bolton Street which is a public highway, already subsisting when O.C.T. No. 638 was issued, as this fact is apparent too from the face of the complaint itself, is deemed to have attached as a legal encumbrance to the lot originally registered lot No. 77, notwithstanding the lack of an annotation thereof on O.C.T. No. 638. petitioner, therefore, cannot rely, as she almost entirely does for the relief she seeks, on the aforequoted provision, which she had repeatedly cited but without making mention, perhaps conveniently, of the exception as expressly provided in the later part of the legal provision invoked (Sec. 39, Act 496). If from the undisputed fact Chat when Lot -77 was registered, Bolton Street had already been a legal encumbrance on said lot, pursuant to Section 39 of Act 496, contrary to petitioner's theory based on the same legal provision but o committing the portion pertinent to the instant case, there can be no

gainsaying the fact that petitioner's lot, Lot No. 77-B-2, which admittedly was originally a part of Lot No. 77, must have to remain subject to the same legal encumbrance of a public highway. From her own allegations in her complaint, Bolton Street cannot be a discontinuous easement as she claims it to be, which may not be acquired by prescription. Nonetheless, whether the mode of acquisition of the easement that Bolton Street is, would be only by virtue of title, as petitioner contends, this is not material or of any consequence, in the present proceedings, once it indubitably appears as it does, from the allegations of the complaint itself, that Bolton Street constituted an easement of public highway on Lot No. 77, from which petitioner's lot was taken, when the said bigger lot was original registered. It remained as such legal encumbrance, as effectively as if it had been duly noted on the certificate of title, by virtue of the clear and express provision of Section 39 of Act 496, it being admitted that at the time of the registration of Lot 77, the public highway was already in existence or subsisting. This fact erases whatever cause of action petitioner may have to bring the complaint she filed in the court a quofor quieting of title on a portion of the street which she claims to be part of her lot, free from encumbrance of any kind. The Order complained of has only this legal postulate as its basis. Nothing has been mentioned therein on the acquisition by the City of Davao of the lot in question by prescription, and a discussion of this matter as is found in petitioner's brief 3 would be entirely irrelevant. WHEREFORE, no reversible error having been found in the Order complained of, the same is hereby affirmed, and the instant petition, dismissed. Costs against petitioner.

VALISNO V. ADRIANO- Doctrine of Apparent Sign

Water rights, such as the right to use a drainage ditch for irrigation purposes, which are appurtenant to a parcel of land, pass with the conveyance of the land, although not specifically mentioned in the conveyance. The purchaser's easement of necessity in a water ditch running across the grantor's land cannot be defeated even if the water is supplied by a third person.

FACTS:
Plaintiff is the absolute owner and actual possessor of a land in Nueva Ecija, with TCT No. NT-16281. He bought the land from the respondents sister, Honorata Adriano Francisco. The land which is planted with watermelon, peanuts, corn, tobacco, and other vegetables adjoins that of the respondent Adriano on the bank of the Pampanga River. Both parcels of land had been inherited by Honorata and Felipe from their father. At the time of the sale of the land to Valisno, the land was irrigated by water from the Pampanga River through a canal about seventy (70) meters long, traversing the Respondent's land. In 1959, Respondent levelled a portion of the irrigation canal so that Plaintiff was deprived of the irrigation water and prevented from cultivating his 57-hectare land. Plaintiff filed in the Bureau of Public Works and Communications a complaint for deprivation of water rights. A decision was rendered ordering Adriano to reconstruct the irrigation canal. Instead of restoring the irrigation canal, the appellee asked for a reinvestigation of the case by the Bureau of Public Works and Communications. A reinvestigation was granted. In the meantime, Plaintiff rebuilt the irrigation canal at his own expense because his need for water to irrigate his watermelon fields was urgent. Later, he filed a complaint for damages in the RTC claiming that he suffered damages when he failed to plant his fields that yearfor lack of irrigation water, and when he reconstructed the canal. Meanwhile, the Secretary of Public Works and Communications reversed the Bureau's decision by issuing a final resolution dismissing Valisno's complaint. The Secretary held that Eladio Adriano's water rights which had been granted in 1923 ceased to be enjoyed by him in 1936 or 1937, when his irrigation

canal collapsed. His non-use of the water right since then for a period of more than five years extinguished the grant by operation of law, hence the water rights did not form part of his hereditary estate which his heirs partitioned among themselves.

ISSUE:
Whether or not Plaintiff has acquired the easement of water over Respondents land.

RULING: Yes.
The existence of the irrigation canal on Respondents land for the passage of water from the Pampanga River to Honorata's land prior to and at the time of the sale of Honorata's land to the plaintiff was equivalent to a title for the vendee of the land to continue using it as provided in Article 624 of the Civil Code (Doctrine of Apparent Sign): Article 624. The existence of an apparent sign of easement between two estates, established or maintained by the owner of both shall be considered, should either of them be alienated, as a title in order that he easement may continue actively and passively, unless at the time, theownership of the two estates is divided, the contrary should be provided in the title of conveyance of either of them, or the sign aforesaid should be removed before the execution of the deed. The deed of sale in favor of Plaintiff included the "conveyance and transfer of the water rights and improvements" appurtenant to Honorata's property. According to the Plaintiff, the water right was the primary consideration for his purchase of Honorata's property, for without it the property would be unproductive. Water rights, such as the right to use a drainage ditch for irrigation purposes, which are appurtenant to a parcel of land, pass with the conveyance of the land, although not specifically mentioned in the conveyance. The purchaser's easement of necessity in a water ditch running across the grantor's land cannot be defeated even if the water is supplied by a third person. The fact that an easement by grant may also have qualified as an easement of necessity does detract from its permanency as property right, which survives the determination of the necessity. As an easement of waters in favor of the appellant has been established, he is entitled to enjoy it free from obstruction, disturbance or wrongful interference, such as the appellee's act of levelling the irrigation canal to deprive him of the use of water from the Pampanga River.

AMOR v. FLORENTINO- Easement

FACTS:
Maria Florentino owned a house and a camarin (warehouse). By a will, she transferred the house to Jose Florentino and the warehouse to Maria Florentino. Maria sold the warehouse to Amor. Amor then demolished the old warehouse in order to build a new 2-storey structure. The problem is it will shut off the light and air that come in through the window of the adjacent house owned by Jose. Hence the latter files for prohibition claiming there is a negative easement prohibiting Amor from constructing any structure at any height that would block the window. Amor counters that there is no easement. Moreover, since the death of testator was before the Civil Code took effect, the rules on easement do not apply.

ISSUE:
1. Whether or not there is an easement prohibiting Amor from doing said construction. 2. Whether or not the Civil Code may be applied

RULING:
1. Yes. Easement are established by law or by will of the owners or by title. Under Art. 624, there is title by the doctrine of apparent sign. When the estate is subsequently owned by two different persons and the service (it cannot be an easement before the transfer) is not revoked in the title nor removed, an easement is established.

The Cortez case cannot be invoked by Amor because it involved acquisition by prescription. Art. 624 is acquisition by title. 2. Amor failed to prove that the death of the testator occurred before the effectivity of the Old Civil Code. The facts show that it happened after the effectivity of the said code so the law on easement is already applicable. In any case, even if we assume Amors supposition, the law on easement was already integrated into the Spanish Law and in fact, had been established by Jurisprudence. Therefore, Amor is prohibitied from constructing the warehouse above the level of the window.

DISSENTING OPINION OF OZAETA.

1) The Majority opinio committed a travesty on justice when it ignored the evidence produced by Amor that the testators death occurred before the effectivity of the Code. 2) Hence, the law on easement will not apply. Moreover, the Spanish Law and the Partidas provided for only three ways of acquiring easements: 1) contract 2) testament 3) prescription. There was no provision similar to the doctrine of apparent sign. 3) There is no doctrine established by the Spanish Tribunal regarding the doctrine. 4) In this modern age of flourescent lights and air conditioning devices, the easement of light and view would be obsolete and deterrent to economic progress especially when in the cities, buildings are side to side with each other.