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1 | P a g e

Fels Energy, Inc. vs. Province of Batangas
G.R. o. !"#$$%. Fe&r'ary !", ())%.
Callejo Sr., J.
*octrine+ In Consolidated Edison Company of New York, Inc., et al. v. The City of
New York, et al., a power company ro!ght an action to review property ta"
assessment. #n the city$s motion to dismiss, the %!preme Co!rt of New York held
that the arges on which were mo!nted gas t!rine power plants designated to
generate electrical power, the f!el oil arges which s!pplied f!el oil to the power
plant arges, and the accessory e&!ipment mo!nted on the arges were s!'ect to
real property ta"ation.
(oreover, )rticle *1+ ,-. of the New Civil Code provides that /docks and str!ct!res
which, tho!gh 0oating, are intended y their nat!re and o'ect to remain at a 1"ed
place on a river, lake, or coast2 are considered immovale property. Th!s, power
arges are categori3ed as immovale property y destination, eing in the nat!re
of machinery and other implements intended y the owner for an ind!stry or work
which may e carried on in a !ilding or on a piece of land and which tend directly
to meet the needs of said ind!stry or work.
Facts+ #n 4an!ary 15, 1--6, NPC entered into a lease contract with Polar Energy,
Inc. over 6768 (9 diesel engine power arges moored at :alayan :ay in Calaca,
:atangas. The contract, denominated as an Energy Conversion )greement, was for
a period of 1ve years. )rticle 18 states that NPC shall e responsile for the
payment of ta"es. ,other than ,i. ta"es imposed or calc!lated on the asis of the
net income of P#;)< and Personal Income Ta"es of its employees and ,ii.
constr!ction permit fees, environmental permit fees and other similar fees and
charges. Polar Energy then assigned its rights !nder the )greement to =els despite
NPC$s initial opposition.
=E;% received an assessment of real property ta"es on the power arges from
Provincial )ssessor ;a!ro C. )ndaya of :atangas City. =E;% referred the matter to
NPC, reminding it of its oligation !nder the )greement to pay all real estate ta"es.
It then gave NPC the f!ll power and a!thority to represent it in any conference
regarding the real property assessment of the Provincial )ssessor. NPC 1led a
petition with the ;:)). The ;:)) ordered =els to pay the real estate ta"es. The
;:)) r!led that the power plant facilities, while they may e classi1ed as movale
or personal property, are nevertheless considered real property for ta"ation
p!rposes eca!se they are installed at a speci1c location with a character of
permanency. The ;:)) also pointed o!t that the owner of the arges>=E;%, a
private corporation>is the one eing ta"ed, not NPC. ) mere agreement making
NPC responsile for the payment of all real estate ta"es and assessments will not
'!stify the e"emption of =E;%? s!ch a privilege can only e granted to NPC and
cannot e e"tended to =E;%. =inally, the ;:)) also r!led that the petition was 1led
o!t of time.
=els appealed to the C:)). The C:)) reversed and r!led that the power arges
elong to NPC? since they are act!ally, directly and e"cl!sively !sed y it, the
power arges are covered y the e"emptions !nder %ection @6*,c. of <.). No.
A1B8. )s to the other '!risdictional iss!e, the C:)) r!led that prescription did not
precl!de the NPC from p!rs!ing its claim for ta" e"emption in accordance with
%ection @8B of <.). No. A1B8. Cpon (<, the C:)) reversed itself.
Iss'e+ 9hether or not the petitioner may e assessed of real property ta"es.
,el-+ YE%. The C:)) and ;:)) power arges are real property and are th!s
s!'ect to real property ta". This is also the inevitale concl!sion, considering that
D.<. No. 1B+116 was dismissed for fail!re to s!Eciently show any reversile error.
Ta" assessments y ta" e"aminers are pres!med correct and made in good faith,
with the ta"payer having the !rden of proving otherwise. :esides, fact!al 1ndings
of administrative odies, which have ac&!ired e"pertise in their 1eld, are generally
inding and concl!sive !pon the Co!rt? we will not ass!me to interfere with the
sensile e"ercise of the '!dgment of men especially trained in appraising property.
9here the '!dicial mind is left in do!t, it is a so!nd policy to leave the assessment
!ndist!red. 9e 1nd no reason to depart from this r!le in this case.
In Consolidated Edison Company of New York, Inc., et al. v. The City of New York, et
al., a power company ro!ght an action to review property ta" assessment. #n the
city$s motion to dismiss, the %!preme Co!rt of New York held that the arges on
which were mo!nted gas t!rine power plants designated to generate electrical
power, the f!el oil arges which s!pplied f!el oil to the power plant arges, and
the accessory e&!ipment mo!nted on the arges were s!'ect to real property
(oreover, )rticle *1+ ,-. of the New Civil Code provides that /docks and str!ct!res
which, tho!gh 0oating, are intended y their nat!re and o'ect to remain at a 1"ed
place on a river, lake, or coast2 are considered immovale property. Th!s, power
arges are categori3ed as immovale property y destination, eing in the nat!re
of machinery and other implements intended y the owner for an ind!stry or work
which may e carried on in a !ilding or on a piece of land and which tend directly
to meet the needs of said ind!stry or work.
Petitioners maintain nevertheless that the power arges are e"empt from real
estate ta" !nder %ection @6* ,c. of <.). No. A1B8 eca!se they are act!ally,
directly and e"cl!sively !sed y petitioner NPC, a governmentF owned and
controlled corporation engaged in the s!pply, generation, and transmission of
electric power.
9e aErm the 1ndings of the ;:)) and C:)) that the owner of the ta"ale
properties is petitioner =E;%, which in 1ne, is the entity eing ta"ed y the local
government. )s stip!lated !nder %ection @.11, )rticle @ of the )greementG
@ | P a g e
/#9NE<%HIP #= P#9E< :)<DE%. P#;)< shall own the Power :arges and all the
1"t!res, 1ttings, machinery and e&!ipment on the %ite !sed in connection with the
Power :arges which have een s!pplied y it at its own cost. P#;)< shall operate,
manage and maintain the Power :arges for the p!rpose of converting =!el of
N)P#C#< into electricity.2
It follows then that =E;% cannot escape liaility from the payment of realty ta"es
y invoking its e"emption in %ection @6* ,c. of <.). No. A1B8. Indeed, the law
states that the machinery m!st e act!ally, directly and e"cl!sively !sed y the
government owned or controlled corporation? nevertheless, petitioner =E;% still
cannot 1nd solace in this provision eca!se %ection +.+, )rticle + of the )greement
/#PE<)TI#N. P#;)< !ndertakes that !ntil the end of the ;ease Period, s!'ect to
the s!pply of the necessary =!el p!rs!ant to )rticle B and to the other provisions
hereof, it will operate the Power :arges to convert s!ch =!el into electricity in
accordance with Part ) of )rticle A.
It is a asic r!le that oligations arising from a contract have the force of law
etween the parties. Not eing contrary to law, morals, good c!stoms, p!lic order
or p!lic policy, the parties to the contract are o!nd y its terms and conditions.
Time and again, the %!preme Co!rt has stated that ta"ation is the r!le and
e"emption is the e"ception. The law does not look with favor on ta" e"emptions
and the entity that wo!ld seek to e th!s privileged m!st '!stify it y words too
plain to e mistaken and too categorical to e misinterpreted. Th!s, applying the
r!le of strict constr!ction of laws granting ta" e"emptions, and the r!le that do!ts
sho!ld e resolved in favor of provincial corporations, we hold that =E;% is
considered a ta"ale entity.
The mere !ndertaking of petitioner NPC !nder %ection 18.1 of the )greement, that
it shall e responsile for the payment of all real estate ta"es and assessments,
does not '!stify the e"emption. The privilege granted to petitioner NPC cannot e
e"tended to =E;%. The covenant is etween =E;% and NPC and does not ind a
third person not privy thereto, in this case, the Province of :atangas.
It m!st e pointed o!t that the protracted and circ!ito!s litigation has serio!sly
res!lted in the local government$s deprivation of reven!es. The power to ta" is an
incident of sovereignty and is !nlimited in its magnit!de, acknowledging in its very
nat!re no perimeter so that sec!rity against its a!se is to e fo!nd only in the
responsiility of the legislat!re which imposes the ta" on the constit!ency who are
to pay for it. The right of local government !nits to collect ta"es d!e m!st always
e !pheld to avoid severe ta" erosion. This consideration is consistent with the
%tate policy to g!arantee the a!tonomy of local governments and the o'ective of
the ;ocal Dovernment Code that they en'oy gen!ine and meaningf!l local
a!tonomy to empower them to achieve their f!llest development as selfFreliant
comm!nities and make them eIective partners in the attainment of national goals.
In concl!sion, we reiterate that the power to ta" is the most potent instr!ment to
raise the needed reven!es to 1nance and s!pport myriad activities of the local
government !nits for the delivery of asic services essential to the promotion of
the general welfare and the enhancement of peace, progress, and prosperity of the
*A.AO SA/0I11 CO. v *A.AO 1IG,T 2 PO/ER CO.
"! SCRA %)3
Kavao %awmill placed machinery in a !ilding sit!ated on the land of
another person. Their contract stip!lated that G the machinery was not incl!ded in
the improvements which wo!ld pass to the lessor on the e"piration or
aandonment of the land leased. The sawmill company has treated the machinery
as personal property y e"ec!ting chattel mortgages in favor of third persons. The
machinery has een levied !pon y the sheriI as personalty.
9hether or not the machinery is personal property.
Yes. The machinery in this case was personal property. (achinery
which is movale in nat!re only ecomes immoili3ed when placed in a plant y
the owner of the property or the plant, !t not when so placed y a tenant, a
!s!fr!ct!ary or any person having only temporary right !nless s!ch person acted
as the agent of the owner. The owner of the machinery is not pres!med to have
intended to deprive himself of the property y an act of immoili3ation to ecome
the property of another.
Boar- of Assess5ent A66eals, 7.C. vs 0eralco
!) SCRA "# GR o. 18!$99:
;an'ary 9!, !3":
#n Novemer 1+, 1-++, the LC City )ssessor declared the (E<);C#Ms steel towers
s!'ect to real property ta". )fter the denial of (E<);C#Ms petition to cancel these
declarations, an appeal was taken to the LC :oard of )ssessment )ppeals, which
re&!ired respondent to pay P11,B+1.5B as real property ta" on the said steel
towers for the years 1-+@ to 1-+B.
(E<);C# paid the amo!nt !nder protest, and 1led a petition for review in the
Co!rt of Ta" )ppeals ,CT). which rendered a decision ordering the cancellation of
the said ta" declarations and the ref!nding to (E<);C# y the LC City Treas!rer
of P11,B+1.5B.
6 | P a g e
)re the steel towers or poles of the (E<);C# considered real or personal
Pole > long, comparatively slender, !s!ally cylindrical piece of wood, timer,
o'ect of metal or the like? an !pright standard to the top of which something is
aE"ed or y which something is s!pported.
(E<);C#Ms steel s!pports consists of a framework of * steel arsOstrips which are
o!nd y steel crossFarms atop of which are crossFarms s!pporting + highFvoltage
transmission wires, and their sole f!nction is to s!pportOcarry s!ch wires. The
e"emption granted to poles as &!oted from Part II, Par.3 of respondentMs
franchise is determined y the !se to which s!ch poles are dedicated.
It is evident that the word /poles2, as !sed in Act o. :#: and incorporated in the
petitionerMs franchise, sho!ld not e given a restrictive and narrow interpretation,
as to defeat the very o'ect for which the franchise was granted. The poles sho!ld
e taken and !nderstood as part of (E<);C#Ms electric power system for the
conveyance of electric c!rrent to its cons!mers.
Art. :!$ of the NCC classify the following as immovale propertyG
,1. ;ands, !ildings, roads and constr!ctions of all kinds adhered to the soil?
,6. Everything attached to an immovale in a 1"ed manner, in s!ch a way that it
cannot e separated there from witho!t reaking the material or deterioration of
the o'ect?
,+. (achinery, receptacles, instr!ments or implements intended y the owner pf
the tenement for an ind!stry of works which may e carried on in a !ilding or on
a piece of land, and which tend directly to meet the needs of the said ind!stry or
=ollowing these classi1cations, MERALCO's steel towers should be considered
personal property. It sho!ld e noted that the steel towersG
,a. are neither !ildings or constr!ctions adhered to the soil?
,. are not attached to an immovale in a 1"ed manner > they can e separated
witho!t reaking the material or deterioration of the o'ect?
P are not machineries, receptacles or instr!ments, and even if they are, they are
not intended for an ind!stry to e carried on in the premises.
;'lian S. Ya6 vs. ,on. Santiago O. Ta<a-a an-
Go'l-s P'56s International =P>il?, Inc.,
G.R. o. 189(3!%, ;'ly !#, !3##
ar!asa, J.
*octrine+ )rticle *1+, par. 6 of the Civil Code considers and immovale property
as /everything attached to an immovale in a 1"ed manner, in s!ch a way that it
cannot e separated therefrom witho!t reaking the material or deteriorating the
o'ect.2 The p!mp does not 1t this description. It co!ld e, and was, in
fact,separated from Yap$s premises witho!t eing roken of s!Iering deterioration.
#vio!sly, the separation or removal of the p!mp involved nothing more
complicated that the loosening of olts or dismantling of other fasteners.
Facts+ The case egan in the City Co!rt of Ce! with the 1ling of Do!lds P!mps
International ,Phil., Inc. of a complaint against Yap and his wife seeking recovery of
P1,*+-.68, representing the alance of the price and installation cost of a water
p!mp in the latter$s premises. The Co!rt rendered '!dgment in favor of herein
respondent after they presented evidence e"Fparte d!e to fail!re of petitioner Yap
to appear efore the Co!rt. Petitioner then appealed to the C=I, partic!larly to the
sale of 4!dge Tanada. =or again fail!re to appear for preFtrial, Yap was declared in
defa!lt. He 1led for a motion for reconsideration which was denied y 4!dge
Tanada. #n #ctoer 1+, 1-B-, Tanada granted Do!ld$s (otion for Iss!ance of 9rit
of E"ec!tion. Yap forthwith 1led an Crgent (otion for <econsideration of the said
#rder. In the meantime, the %heriI levied on the water p!mp in &!estion and y
notice sched!led the e"ec!tion sale thereof. :!t in view of the pendency of Yap$s
motion, s!spension of sale was directed y 4!dge Tanada. It appears, however, that
this was not made known to the %heriI whocontin!ed with the a!ction sale and
sold the property to the highest idder, Do!lds. :eca!se of s!ch, petitioner 1led a
(otion to %et )side E"ec!tion %ale and to L!ash )lias 9rit of E"ec!tion. #ne of his
arg!ments was that the sale was made witho!t the notice re&!ired y %ec. 15,
<!le @- of the New <!les of Co!rt, /i.e. notice y p!lication in case of e"ec!tion of
sale of real property, the p!mp and its accessories eing immovale eca!se
attached to the gro!nd with the character of permanency.2 %!ch motion was
denied y the C=I.
Iss'e+ 9hether or not the p!mp and its accessories are immovale property
,el-+ No. The water p!mp and its accessories are N#T immovale properties. The
arg!ment of Yap that the water p!mp had ecome immovale property y its
eing installed in his residence is !ntenale. )rticle *1+, par. 6 of the Civil Code
considers and immovale property as /everything attached to an immovale in a
1"ed manner, in s!ch a way that it cannot e separated therefrom witho!t
reaking the material or deteriorating the o'ect.2 The p!mp does not 1t this
description. It co!ld e, and was, in fact,separated from Yap$s premises witho!t
eing roken of s!Iering deterioration. #vio!sly, the separation or removal of the
p!mp involved nothing more complicated that the loosening of olts or dismantling
of other fasteners.
*ER et al .S. YAP et al G.R. o. !"%%)% Octo&er #, ())#
* | P a g e
#n Novemer 18, !3%#, then President (arcos iss!ed Proc. No. !#)! declaring
:oracay Island, among other islands, caves and penins!las in the Philippines,
as to'rist @ones an- 5arine reserves !nder the administration of the
Philippine To!rism )!thority ,PT).. President (arcos later approved the iss!ance
of PTA Circ'lar 98#( dated %eptemer 6, 1-5@, to implement Proclamation No.
Claiming that Proclamation No. 1581 and PT) Circ!lar No 6F5@ precl!ded them
from 1ling an application for '!dicial con1rmation of imperfect title or s!rvey of
land for titling p!rposes, respondentsFclaimants (ayor . Yap, 4r., and others 1led
a petition for declaratory relief with the <TC in Qalio, )klan
In their petition, respondentsFclaimants alleged that Proc. No. 1581 and PT)
Circ!lar No. 6F5@ raised do!ts on their right to sec!re titles over their occ!pied
lands. They declared that they themselves, or thro!gh their predecessorsFinF
interest, had een in open, contin!o!s, e"cl!sive, and notorio!s possession and
occ!pation in :oracay since 4!ne 1@, 1-*+, or earlier since time immemorial. They
declared their lands for ta" p!rposes and paid realty ta"es on them. <espondentsF
claimants posited that Proclamation No. 1581 and its implementing Circ!lar did not
place :oracay eyond the commerce of man. %ince the Island was classi1ed as a
to!rist 3one, it was s!sceptile of private ownership. Cnder %ection *5,. of the
P!lic ;and )ct, they had the right to have the lots registered in their names
thro!gh '!dicial con1rmation of imperfect titles.
The <ep!lic, thro!gh the #%D, opposed the petition for declaratory relief. The
#%D co!ntered that :oracay Island was an 'nclassiAe- lan- of the p!lic
domain. It formed part of the mass of lands classi1ed as /p!lic forest,2 which was
not availale for disposition p!rs!ant to %ection 6,a. of the <evised =orestry
Code, as amended. The #%D maintained that respondentsFclaimants$ reliance on
PK No. 1581 and PT) Circ!lar No. 6F5@ was misplaced. Their right to '!dicial
con1rmation of title was governed y P!lic ;and )ct and <evised =orestry
Code, as amended. %ince :oracay Island had not een classi1ed as alienale and
disposale, whatever possession they had cannot ripen into ownership.
#n 4!ly 1*, 1---, the <TC rendered a decision in favor of respondentsFclaimants,
declaring that, /PK 1518 and PT) Circ!lar No. 6F5@ <evised =orestry Code,as
The #%D moved for reconsideration !t its motion was denied. The <ep!lic then
appealed to the C). #n In @88*, the appellate co!rt aErmed in toto the <TC
decision. )gain, the #%D so!ght reconsideration !t it was similarly denied. Hence,
the present petition !nder <!le *+.
#n (ay @@, @88B, d!ring the pendency the petition in the trial co!rt, President
Dloria (acapagalF)rroyo iss!ed Proclamation No. 18B* classifying :oracay Island
partly reserved forest land ,protection p!rposes. and partly agric!lt!ral land
,alienale and disposale..
#n )!g!st 18, @88B, petitionersFclaimants %acay,and other landowners in :oracay
1led with this Co!rt an original petition for prohiition, mandam!s, and n!lli1cation
of Proclamation No. 18B*. They allege that the Proclamation infringed on their
/prior vested rights2 over portions of :oracay. They have een in contin!ed
possession of their respective lots in :oracay since time immemorial.
#n Novemer @1, @88B, this Co!rt ordered the consolidation of the two petitions
ISS4E+ the main iss!e is whether private claimants have a right to sec!re titles
over their occ!pied portions in :oracay.

Petitions KENIEK. The C) decision is reversed.
Except for lands already covered by existing titles, Boracay was an
unclassifed land of the public domain prior to Proclamation No. 1!".
#uch unclassifed lands are considered public forest under P$ No. %&.
PK No. A8+ iss!ed y President (arcos categori3ed all !nclassi1ed lands of the
p!lic domain as p!lic forest. %ection 6,a. of PK No. A8+ de1nes a 6'&lic forest
as /a mass of lands of the p!lic domain which has not been the subject o" the
present syste# o" classi$cation for the determination of which lands are needed
for forest p!rpose and which are not.2 )pplying PK No. A8+, all !nclassi1ed lands,
incl!ding those in :oracay Island, are ipso "acto considered p!lic forests. PK No.
A8+, however, respects titles already e"isting prior to its eIectivity.
The 1-6+ Constit!tion classi1ed lands of the p!lic domain into agric!lt!ral, forest
or timer, s!ch classi1cation modi1ed y the 1-A6 Constit!tion. The 1-5A
Constit!tion reverted to the 1-6+ Constit!tion classi1cation with one additionG
national parks. #f these, only agric!lt!ral lands may e alienated. Prior to
Proclamation No. 18B* of (ay @@, @88B, :oracay Island had never een e"pressly
and administratively classi1ed !nder any of these grand divisions. :oracay was an
!nclassi1ed land of the p!lic domain.
' positive act declaring land as alienable and disposable is re(uired. In
keeping with the 6res'56tion of %tate ownership, the Co!rt has time and again
emphasi3ed that there m!st e a 6ositive act of t>e govern5ent, s!ch as a
presidential proclamation or an e"ec!tive order? an administrative action?
investigation reports of :!rea! of ;ands investigators? and a legislative act or a
stat!te. The applicant may also sec!re a certi1cation from the government that
the land claimed to have een possessed for the re&!ired n!mer of years is
alienale and disposale. The !rden of proof in overcoming s!ch6res'56tion is
on the person applying for registration ,or claiming ownership., who m!st prove
that the land s!'ect of the application is alienale or disposale.
In the case at ar, no s!ch proclamation, e"ec!tive order, administrative action,
report, stat!te, or certi1cation was presented to the Co!rt. The records are ereft
of evi-ence showing that, prior to @88B, the portions of :oracay occ!pied y
private claimants were s!'ect of a government proclamation that the land is
+ | P a g e
alienale and disposale. (atters of land classi1cation or reclassi1cation cannot e
ass!med. They call for proof.
Proc. No. 1581 cannot e deemed the positive act needed to classify :oracay
Island as alienale and disposale land. If President (arcos intended to classify
the island as alienale and disposale or forest, or oth, he wo!ld have identi1ed
the speci1c limits of each, as President )rroyo did in Proclamation No. 18B*. This
was not done in Proclamation No. 1581.
1. Private claimants$ reliance on An%ron and &e Aldecoa is misplaced.
An%ron and &e Aldecoa were decided at a time when the President of the
Philippines had no power to classify lands of the p!lic domain into mineral,
timer, and agric!lt!ral. )t that time, the co!rts were free to make corresponding
classi1cations in '!sticiale cases, or were vested with implicit power to do so,
depending !pon the preponderance of the evidence. )ct No. (#%:, prom!lgated
in 1-1- and reprod!ced in %ection B of P!lic ;and )ct, gave the E"ec!tive
Kepartment, thro!gh the President, the eBcl'sive prerogative to classify or
reclassify p!lic lands into alienale or disposale, mineral or forest. %ince then,
co!rts no longer had the a!thority, whether e"press or implied, to determine the
classi1cation of lands of the p!lic domain.
@. Eac> case 5'st &e -eci-e- '6on t>e 6roof in t>at 6artic'lar
case, >aving regar- for its 6resent or f't're val'e for one or t>e ot>er
6'r6oses. 9e elieve, however, considering the fact that it is a matter of p!lic
knowledge that a ma'ority of the lands in the Philippine Islands are agric!lt!ral
lands that the co!rts have a right to pres!me, in the asence of evidence to the
contrary, that in each case the lands are agric!lt!ral lands !ntil the contrary is
shown. />atever t>e lan- involve- in a 6artic'lar lan- registration case
is forestry or 5ineral lan- 5'st, t>erefore, &e a 5atter of 6roof. Its
s'6erior val'e for one 6'r6ose or t>e ot>er is a C'estion of fact to &e
settle- &y t>e 6roof in eac> 6artic'lar case
=orests, in the conte"t of oth the P!lic ;and )ct and the Constit!tion classifying
lands of the p!lic domain into /a'ricultural, "orest or ti#ber, #ineral lands, and
national par%s,2 do not necessarily refer to large tracts of wooded land or e"panses
covered y dense growths of trees and !nderr!shes. The disc!ssion in (eirs o"
A#unate'ui !. &irector o" )orestry is partic!larly instr!ctiveG
) forested area classi1ed as forest land of the p!lic domain does not lose s!ch
classi1cation simply eca!se loggers or settlers may have stripped it of its forest
cover. Parcels of land classi1ed as forest land may act!ally e covered with grass
or planted to crops y %ain'in c!ltivators or other farmers. /=orest lands2 do not
have to e on mo!ntains or in o!t of the way places. %wampy areas covered y
mangrove trees, nipa palms, and other trees growing in rackish or sea water may
also e classi1ed as forest land. T>e classiAcation is -escri6tive of its legal
nat're or stat's an- -oes not >ave to &e -escri6tive of D>at t>e lan-
act'ally looEs liEe. Cnless and !ntil the land classi1ed as /forest2 is released in
an oEcial proclamation to that eIect so that it may form part of the disposale
agric!lt!ral lands of the p!lic domain, the r!les on con1rmation of imperfect title
do not apply.
There is a ig diIerence etween /forest2 as de1ned in a dictionary and /forest or
timer land2 as a classi1cation of lands of the p!lic domain as appearing in o!r
stat!tes. #ne is descriptive of what appears on the land while the other is a legal
stat!s, a classi1cation for legal p!rposes. )t any rate, the Co!rt is tasked to
determine the legal stat!s of :oracay Island, and not look into its physical layo!t.
Hence, even if its forest cover has een replaced y each resorts, resta!rants
and other commercial estalishments, it has not een a!tomatically converted
from p!lic forest to alienale agric!lt!ral land.
6. )ll is not lost, however, for private claimants. 9hile they may not e eligile to
apply for '!dicial con1rmation of imperfect title !nder %ection *5,. of C) No. 1*1,
as amended, this does not denote their a!tomatic o!ster from the residential,
commercial, and other areas they possess now classi1ed as agric!lt!ral. Neither
will this mean the loss of their s!stantial investments on their occ!pied alienale
lands. ;ack of title does not necessarily mean lack of right to possess.
=or one thing, those with lawf!l possession may claim good faith as !ilders of
improvements. They can take steps to preserve or protect their possession. =or
another, they may look into other modes of applying for original registration of
title, s!ch as y homestead or sales patent, s!'ect to the conditions imposed y
(ore realistically, Congress may enact a law to entitle private claimants to ac&!ire
title to their occ!pied lots or to e"empt them from certain re&!irements !nder the
present land laws. There is one s!ch ill now pending in the Ho!se of
.illarico v. Sar5iento
Rillarico here is an owner of a lot that is separated from the Ninoy )&!ino
)ven!e highway y a stri6 of lan- &elonging to t>e govern5ent.
Rivencio %armiento had a !ilding constr!cted on a portion of the said
government land and a part thereof was occ!pied y )ndoks ;itson Corp.
In 1--6, y means of a Keed of E"change of <eal Property, .illarico acC'ire-
a 6ortion of t>e sa5e area oDne- &y t>e govern5ent.
B | P a g e
o He then 1led an accion p!liciana alleging that respondents ,Rivencio. on the
government land closed his right of way to the Ninoy )&!ino )ven!e and
encroached on a portion of his lot.
9hether or not RIllarico has a right of way to the N)).
o. It is not -is6'te- in t>is case t>at t>e allege- rig>t of Day to t>e lot
&elongs to t>e state or 6ro6erty of 6'&lic -o5inion.
o It is intended for p!lic !se meaning that it is not con1ned to privileged
individ!als !t is open to the inde1nite p!lic. <ecords show that the lot on which
the stairways were !ilt is for the !se of the people as passageway hence, it is a
property for p!lic dominion.
o P'&lic -o5inion 6ro6erty is o'tsi-e t>e co55erce of 5an an- >ence, it
cannot &e+
)lienated or leased or otherwise e the s!'ect matter of contracts
)c&!ired y prescription against the state
Cannot e the s!'ect of attachment and e"ec!tion
:e !rdened y any vol!ntary easement
It cannot e !rdened y a vol!ntary easement of right of way in favor of the
petitioner and petitioner cannot appropriate it for himself and he cannot claim any
right of possession over it.
1a'rel v. Garcia =G.R. o. 3()!9?
OFe-a v. EBec'tive Secretary =G.R. o. 3():%?
These two ,@. petitions for prohiition seek to en'oin respondents from proceeding
with the idding for the sale of the 6,1A- s&!are meters of land at 68B <oppongi,
+FChrome (inatoFk! Tokyo, 4apan. The latter case also, prays for a writ of
mandam!s to f!lly disclose to the p!lic the asis of their decision to p!sh thro!gh
with the sale of the <oppongi property.
The <oppongi case is one of the fo!r properties in 4apan ac&!ired y the Philippine
government !nder the <eparation )greement entered into with 4apan. The other
three ,6. properties incl!de a56ei-ai Pro6erty ,present site of the Philippine
Emassy Chancery., Go&e Co55ercial Pro6erty ,commercial lot eing !sed as
a wareho!se and parking lot for cons!late staI. and Go&e Resi-ential Pro6erty
,resident lot which is now vacant..
The <eparations )greement provides that reparations val!ed at S++8( wo!ld e
payale in twenty ,@8. years in accordance with ann!al sched!les of proc!rements
to e 1"ed y the Philippine and 4apanese governments. The proc!rements are to
e divided into government sector and those for private parties in pro'ects, the
latter shall e made availale only to =ilipino citi3ens or to 188T =ilipinoFowned
entities in national development pro'ects.
The <oppongi property was ac&!ired !nder the heading /Dovernment %ector2 for
the Chancery of the Philippine Emassy !ntil the latter was transferred to
Nampeida d!e to the need for ma'or repairs. However, the <oppongi property has
remained !nderdeveloped since that time.
)ltho!gh there was a proposal to lease the property with the provision to have
!ildings !ilt at the e"pense of the lessee, the same was not acted favoraly
!pon y the government. Instead, President )&!ino iss!ed E# No. @-B entitling
nonF=ilipino citi3ens or entities to avail of separations$ capital goods and services in
the event of sale, lease or dispositions. Thereafter, amidst the oppositions y
vario!s sectors, the E"ec!tive ranch of the government p!shed for the sale of
reparation properties, starting with the <oppongi lot. The property has twice een
set for idding at a minim!m 0oor price of S@@+(. The 1rst was a fail!re, while the
second has een postponed and later restrained y the %C.
)mongst the arg!ments of the respondents is that the s!'ect property is not
governed y o!r Civil Code, !t rather y the laws of 4apan where the property is
located. They relied !pon the r!le of le* situs which is !sed in determining the
applicale law regarding the ac&!isition, transfer and devol!tion of the title to a
1. Can the <oppongi property and others of its kind e alienated y the
Philippine DovernmentN
O. T>ere can &e no -o'&t t>at t>e 6ro6erty is of 6'&lic -o5inion an-
t>e res6on-ents >ave faile- to s>oD t>at it >as &eco5e 6atri5onial.
The property is correctly classi1ed !nder )rt *@8 of the Civil Code as property
elonging to the %tate and intended for some p!lic service. The fact that it has
not een !sed for act!al Emassy service does not a!tomatically convert it to
patrimonial property. %!ch conversion happens only if property is withdrawn from
p!lic !se, thro!gh an aandonment of the intention to !se the <oppongi property
for p!lic service and to make it patrimonial property. )andonment m!st e a
certain and positive act ased on correct legal premises.
A | P a g e
The E# does not declare that the properties lost their p!lic character, merely
intending the properties to e made availale to foreigners and not to =ilipinos
alone, in case of sale, lease or other disposition. =!rthermore, it is ased on the
wrong premise that the 4apan properties can e sold to endF!sers, when in fact it
Neither does the C)<P ;aw reFclassify the properties into patrimonial properties,
merely stating that so!rces of f!nds for its implementation e so!rced from
proceeds of the disposition of the Dovernment in foreign co!ntries, !t not that the
<oppongi property e withdrawn from eing classi1ed as a property of p!lic
)*N+,-). *+ ,'/
=!rthermore, the respondents$ arg!ment that the 4apanese law and not o!r Civil
Code shall apply is incorrect. There is no conHict of laD in t>is sit'ation. )
con0ict of law arises only whenG
a. There is a -is6'te over t>e title or ownership of an i55ova&le,
s!ch that the capacity to take and transfer immovales, the formalities
of conveyance, the essential validity and eIect of the transfer, or the
interpretation and eIect of a conveyance, are to e determined.
&. ) foreign laD on lan- oDners>i6 an- its conveyance is asserte-
to conHict Dit> a -o5estic laD on t>e sa5e 5atters.
Hence, the need to determine which law sho!ld apply. :oth elements does not
e"ist in the case. The iss!es are not concerned with the validity of ownership or
title. There is no &!estion that the property elongs to the Philippines. The iss!e is
the a!thority of the government oEcials to validly dispose of property elonging to
the state and the validity of the proced!res adopted to eIect the sale, which
sho!ld e governed y Philippine law The r!le of le* situs does not apply.
@. Koes the Chief E"ec!tive, her oEcers and agents, have the a!thority and
'!risdiction, to sell the <oppongi propertyN
N#. ) law or a formal declaration to withdraw the <oppongi property from p!lic
domain to make it alienale and a need for legislative a't>ority to allow the sale
of the property is needed. None has een enacted for this p!rpose.
6. 9ON E# No. @-B is constit!tionalN
The %C did not anymore pass !pon its constit!tionality.
G.R. o. !#:(($ Se6te5&er :, ())3
ESPIOSA, <espondents.
K E C I % I # N
)ssailed in this petition
for review on certiorari is the (arch @*, @885 Kecision
the Co!rt of )ppeals in C)FD.<. CR No. 88116 1nding petitioners, %po!ses <ogelio
=. ;ope3 and Teotima D. ;ope3, liale for forcile entry and damages as well as the
)!g!st A, @885 <esol!tion
denying petitioners$ motion for reconsideration.
<espondents, %po!ses %am!el <. Espinosa and )ngelita %. Espinosa, owned a
ho!se located at :arangay 9ashington, %!rigao City. Constr!cted in 1-56, the
ho!se was sit!ated at the ack of petitioners$ residence and stood over a portion
of a parcel of land covered y Transfer Certi1cate of Title No. TF1@66@
, which was
iss!ed !nder the name of petitioners on 4!ne @5, 1--B.
It appears from the records that the parties have had con0icting claims over the
s!'ect property since 1--* when petitioners, together with a (r. Nolan Qaimo,
1led an action for recovery of possession against respondents. The case was
docketed as Civil Case No. *681 efore :ranch @ of the (!nicipal Trial Co!rt in
Cities of %!rigao City, !t was dismissed on %eptemer A, 1--* on technical
#n 4!ne -, 1--A and 4!ly @, 1--A, petitioners were also s!mmoned y
the #Ece of the P!nong :arangay of :arangay 9ashington, in connection with a
complaint for malicio!s mischief 1led y respondents.
(eanwhile, the instant case stemmed from a complaint
for =orcile Entry with
Kamages 1led y respondents against petitioners on %eptemer 68, @88@. The
case was docketed as Civil Case No. 8@F+-+8 efore :ranch @ of the (!nicipal Trial
Co!rt in Cities of %!rigao City.
<espondents alleged that on (ay 18, @88@, petitioners took advantage of their
asence and demolished their ho!se y means of stealth and strategy. )ided y
hired personnel, petitioners removed and destroyed respondents$ ho!se and
enclosed the property with a concrete fence.
In their )nswer,
petitioners denied having demolished respondents$ ho!se and
claimed that it was destroyed y the elements. They also averred that respondents
permanently transferred residence in 1--- considering that they paid their water
ill only !ntil =er!ary 1--- while the electrical !tility was disconnected on the
same year.
#n =er!ary +, @88*, the (!nicipal Trial Co!rt in Cities r!led in favor of
respondents and held that petitioners forcily entered the s!'ect premises. It
noted thatG
UIVn 1--* defendant ;ope3 and a certain Nolan Qaimo 1led a case for recovery of
possession vers!s herein plaintiIs UrespondentsV who were already occ!pants of a
portion thereof, !t the same was dismissed for technical reasons. In 1--B, the
defendants were ale to sec!re TCT TF1@66@ in their name and which cover not
only their residential lot !t also the ad'acent lot which plaintiIs occ!pied and
where their ho!se was erected. Then, in 1--A the plaintiIs had a clash with
5 | P a g e
defendants when the latter allegedly destroyed plaintiIs$ fence which con0ict
reached :arangay Captain ;a"a$s attention. These series of events clearly tend to
show the many attempts of defendant ;ope3 to o!st the plaintiIs from the
premises and occ!py the same as his own. )nd, the last event is the one related in
the instant case where the defendants, sensing that plaintiIs were not present and
their ho!se already destroyed y the elements, had the lot relocated and fenced as
a conse&!ence of which plaintiIs were totally deprived of possession thereof.
The (!nicipal Trial Co!rt did not lend credence to petitioners$ claims that
respondents aandoned their ho!se and that the same was destroyed y nat!ral
elements. It held that despite petitioners$ constr!ctive possession following the
iss!ance of TCT No. TF1@66@, they were not '!sti1ed in making s!ch forcile
The dispositive portion of the Kecision
9HE<E=#<E, '!dgment is herey renderedG
1. Kirecting defendants UpetitionersV to remove the concrete fence, steel gate,
grills and other str!ct!res fo!nd on the premises occ!pied y plaintiIs previo!s to
the forcile entry, and after which to deliver possession thereof to plaintiIs
smoothly and peacef!lly?
@. Kirecting defendants UpetitionersV to pay the val!e of the ho!se and
improvements in the s!m of P5+,@88.88?
6. #rdering defendants UpetitionersV to f!rther pay litigation e"penses and the
costs, and the s!m of P18,888.88 as attorney$s fees.
%# #<KE<EK.
Petitioners appealed to the <egional Trial Co!rt of %!rigao CityO%!rigao del Norte,
which reversed the r!ling of the (!nicipal Trial Co!rt in Cities. In its )!g!st 1A,
@88* Kecision,
the <egional Trial Co!rt dismissed the case on the gro!nd that
the evidence clearly prove aandonment on the part of respondents.
<espondents 1led a petition for review
efore the Co!rt of )ppeals which
aErmed in toto the Kecision of the (!nicipal Trial Co!rt in Cities. It fo!nd that
while respondents left the ho!se in 1--- when respondent %am!el was assigned to
Placer, %!rigao del Norte, this fact alone does not estalish aandonment.
(oreover, the appellate co!rt noted that respondents en'oy priority of possession,
and that they paid the corresponding ta"es d!e on the ho!se.
9HE<E=#<E, the instant petition is herey D<)NTEK. The Kecision dated 1A
)!g!st @88* of the <egional Trial Co!rt, Tenth ,18th. 4!dicial <egion, :ranch No. @-
of %!rigao City in Civil Case No. B@@- is <ERE<%EK and %ET )%IKE. The 4!dgment
dated 8+ =er!ary @88* of the (!nicipal Trial Co!rt in Cities, :ranch No. @ of
%!rigao City in Civil Case No. 8@F+-+8 for =orcile Entry with Kamages is )==I<(EK
IN T#T#.
%# #<KE<EK.
Petitioners$ motion for reconsideration was denied, hence this petition on the
following gro!ndsG
N#:#KY 9)% ;E=T %T)YIND IN THE NIP) H#C%E =#< YE)<% )NK THE 9)TE< )NK
E;ECT<IC); C#NNECTI#N% IN THE NIP) H#C%E 9E<E );<E)KY CCT #== )% E)<;Y
)% 1---.
Petitioners arg!e that the disconnection of water and electric s!pply in
respondents$ ho!se is proof of their intention to aandon the ho!se, especially
eca!se respondents are not the owners of the land on which the ho!se stood.
Petitioners also allege that, even ass!ming ar'uendo that the (!nicipal Trial Co!rt
correctly decided on the iss!e of possession, the award of Php5+,@88.88
representing the val!e of improvements and attorney$s fees is not s!pported y
#n the other hand, respondents claim that they did not aandon their ho!se, and
that the aandonment of a right, claim or property m!st e clear, asol!te, and
irrevocale. #n the award of Php5+,@88.88, respondents aver that the iss!e was
raised for the 1rst time on appeal.
The petition lacks merit.
In &y !. Mandy Co##odities Co., +nc.,
the Co!rt held that there is forcile entry or
desah!cio when one is deprived of physical possession of land or !ilding y
means of force, intimidation, threat, strategy or stealth. The asic in&!iry centers
on who has the prior possession de facto. The plaintiI m!st prove that he was in
prior possession and that he was deprived thereof.
In the instant case, respondents$ ho!se was constr!cted in 1-56 and they had
prior physical possession !ntil they were deprived thereof y petitioners. To
s!stantiate their claims, respondents s!mitted the aEdavit, dated %eptemer
@8, @88@,
of Carlos C. (enil and ;olito %. :ito, who witnessed the demolition of
respondents$ ho!se d!ring the latter$s asence. (r. (enil and (r. :ito attested that
they saw petitioner <ogelio personally s!pervising the demolition of respondents$
ho!se, and that he erected a concrete fence enclosing the area where the ho!se
formerly stood. Petitioners failed to ref!te the foregoing allegations e"cept with
are denials.
9hile petitioners hold title to the s!'ect property where the ho!se was located,
the sole iss!e in forcile entry cases is who had prior possession de "acto of the
disp!ted property.
In Ky, the Co!rt held that these are s!mmary proceedings
intended to provide an e"peditio!s means of protecting act!al possession or right
of possession of property. Title is not involved? that is why it is a special civil action
with a special proced!re.
The Co!rt of )ppeals correctly held that respondents did not aandon their ho!se.
)andonment re&!ires ,a. a clear and asol!te intention to reno!nce a right or
claim or to desert a right or property? and ,. an e"ternal act y which that
intention is e"pressed or carried into eIect. The intention to aandon implies a
- | P a g e
depart!re, with the avowed intent of never ret!rning, res!ming or claiming the
right and the interest that have een aandoned.
There is none in this case.
The disconnection of water and electric s!pply and the fact that respondents left
the ho!se when respondent %am!el was assigned to %!rigao del Norte in 1---, do
not constit!te aandonment. )s correctly fo!nd y the Co!rt of )ppeals,
respondents left val!ales inside the ho!se and had the same padlocked, which
acts constit!te assertion and protection of their right over the s!'ect ho!se and
negate ren!nciation and intention to lose the same.
It ears stressing that the instant case was preceded y the 1ling of actions for
recovery of possession and malicio!s mischief efore the #Ece of the P!nong
:arangay. ;ikewise, !pon discovery of petitioners$ acts of intr!sion, respondents
immediately 1led a complaint for forcile entry and damages efore the (!nicipal
Trial Co!rt in Cities. The Certi1cation to =ile )ction dated )!g!st @B, @88@ shows
that no settlement or conciliation was reached.
It is clear from the foregoing that
respondents have not een remiss in asserting their rights and that petitioners$
claims over the s!'ect property have not gone !nchallenged.
The Co!rt aErms the award of Php5+,@88.88 representing the val!e of
improvements and attorney$s fees. The iss!e on the propriety of the award was
raised for the 1rst time on motion for reconsideration efore the Co!rt of )ppeals.
9ellFsettled is the r!le that iss!es not raised elow cannot e raised for the 1rst
time on appeal.
9HE<E=#<E, ased on the foregoing, the petition is KENIEK. The (arch @*, @885
Kecision of the Co!rt of )ppeals in C)FD.<. %P No. 88116F(IN 1nding petitioners
liale for forcile entry is )==I<(EK.