Sergs Products, Inc. vs. PCI Leasing G.R. No. 137705.

August 22, 2000

FACTS:
PCI Leasing and Finance filed a complaint for sum of money, with an application for a
writ of replevin.
Judge issued a writ of replevin 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.
The sheriff proceeded to petitioner's factory, seized one machinery, with word that he
would return for other machineries.
Petitioner (Sergs Products) filed a motion for special protective order to defer
enforcement of the writ of replevin.
PCI Leasing opposed the motion on the ground that the properties were still personal
and therefore can still be subjected to seizure and writ of replevin.
Petitioner asserted that properties sought to be seized were immovable as defined in
Article 415 of the Civil Code.
Sheriff was still able to take possession of two more machineries
In its decision on the original action for certiorari filed by the Petitioner, the appellate
court, Citing the Agreement of the parties, held that the subject machines were personal
property, and that they had only been leased, not owned, by petitioners; and ruled that
the "words of the contract are clear and leave no doubt upon the true intention of the
contracting parties."
ISSUE: Whether or not the machineries became real property by virtue of
immobilization.
Ruling:
Petitioners contend that the subject machines used in their factory were not proper
subjects of the Writ issued by the RTC, because they were in fact real property.
Writ of Replevin: Rule 60 of the Rules of Court provides that writs of replevin are issued
for the recovery of personal property only.
Article 415 (5) of the Civil Code provides that machinery, receptacles, instruments or
implements intended by the owner of the tenement for an industry or works which may
be carried on in a building or on a piece of land, and which tend directly to meet the
needs of the said industry or works
In the present case, the machines that were the subjects of the Writ of Seizure were
placed by petitioners in the factory built on their own land.They were essential and
principal elements of their chocolate-making industry.Hence, 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.
However, contracting parties may validly stipulate that a real property be considered as
personal. After agreeing to such stipulation, they are consequently estopped from
claiming otherwise.Under the principle of estoppel, a party to a contract is ordinarily
precluded from denying the truth of any material fact found therein.
Section 12.1 of the Agreement between the parties provides The PROPERTY is, and
shall at all times be and remain, personal property notwithstanding that the PROPERTY
or any part thereof may now be, or hereafter become, in any manner affixed or attached
to or embedded in, or permanently resting upon, real property or any building thereon,
or attached in any manner to what is permanent.

The machines are personal property and they are proper subjects of the Writ of
Replevin

TUMALAD vs. VICENCIO, G.R. No. L-30173, September 30, 1971

41 SCRA 143
FACTS:
Vicencio and Simeon executed a chattel mortgage in favor of plaintiffs Tumalad over
their house, which was being rented by Madrigal and company. This was executed to
guarantee a loan, payable in one year with a 12% per annum interest.
The mortgage was extrajudicially foreclosed upon failure to pay the loan. The house
was sold at a public auction and the plaintiffs were the highest bidder. A corresponding
certificate of sale was issued. Thereafter, the plaintiffs filed an action for ejectment
against the defendants, praying that the latter vacate the house as they were the proper
owners.
ISSUE:
W/N the chattel mortgage was null and void ab initio because only personal properties
can be subject of a chattel mortgage.
HELD:
Certain deviations have been allowed from the general doctrine that buildings are
immovable property such as when through stipulation, parties may agree to treat as
personal property those by their nature would be real property. This is partly based on
the principle of estoppel wherein the principle is predicated on statements by the owner
declaring his house as chattel, a conduct that may conceivably stop him from
subsequently claiming otherwise.
In the case at bar, though there be no specific statement referring to the subject house
as personal property, yet by ceding, selling or transferring a property through chattel
mortgage could only have meant that defendant conveys the house as chattel, or at
least, intended to treat the same as such, so that they should not now be allowed to
make an inconsistent stand by claiming otherwise.

VILLANUEVA, ET. AL. VS CASTAEDA, JR., ET. AL.

G.R. No. L-61311 September 2l, 1987 (damnun absque injuria)
Appeal from a decision of CFI Pampanga holding that the land in question, being public
in nature, was beyond the commerce of man and therefore could not be the subject of
private occupancy.
CRUZ, J.:
Facts: In the vicinity of the public market of San Fernando, Pampanga, there stands on
a strip of land, a conglomeration of vendors stalls together. The petitioners claim they
have a right to remain in and conduct business in this area by virtue of a previous
authorization (Resolution no. 28) granted to them by the municipal government. The
respondents deny this and justify the demolition of their stalls as illegal constructions on
public property per municipal council Resolution G.R. No. 29, which declared the
subject area as "the parking place and as the public plaza of the municipality, thereby
impliedly revoking Resolution No. 218.
Issue: WON petitioners have the right to occupy the subject land.

Ruling: Petition Dismissed.

SC held that The SC held that a public plaza is beyond the commerce of man and cannot be
subject of lease or any other contractual undertaking.

It is a well-settled doctrine that the town plaza cannot be used for the construction of
market stalls, and that such structures constitute a nuisance subject to abatement
according to law. The petitioners had no right in the first place to occupy the disputed
premises and cannot insist in remaining there now on the strength of their alleged lease
contracts. Even assuming a valid lease of the property in dispute, the resolution could
have effectively terminated the agreement for it is settled that the police power cannot
be surrendered or bargained away through the medium of a contract. Hence, the loss or
damage caused to petitioners, in the case at bar, does not constitute a violation of a
legal right or amount to a legal wrong.

Maneclang v. Intermediate Appellate Court

Facts:
Adriano Maneclang in this case filed a complaint for
quieting of title over a certain fishpond located within the 4 parcels of
land belonging to them
situated in Pangasinan but the trial court dismissed it by saying that the body of water is
a creek constituting a tributary to Agno River
therefore public in nature and not subject to private appropriation.
They appealed it to the IAC which affirmed the aforementioned decision. Hence,
this review on certiorari.
However, after having been asked to comment to the case there on, they manifested
their lack of interest and the parties to the case (the complainant and the awardee in the
public bidding Maza) decided to amicably settle the case saying that judgment be
rendered and that thecourt
recognize the ownership of the petitioners over the land the body of water found within their
titled properties.
They say that there would be no benefit since the NIA already constructed a dike and no
water now gets in and out of the land.
Issue:
Whether or not the fishpond is public in nature.
Ratio:
Yes. A creek is defined as a recess or arm extending from a river and participating in
the ebb and flow of the sea.
It is a property belonging to the public domain and is not susceptible to private
appropriation and acquisitive prescription.
The mere construction of the dikes by NIA nor its conversion to a fishpond altered or
changed the nature of the creek as property of the public domain.
The compromise agreement is null and void and of no legal effect because it is contrary
to law and public policy.

Director of Lands v. MERALCO

153 SCRA 686
DOCTRINE: Open, exclusive and undisputed possession of alienable public land for the period
prescribed by law creates the legal fiction whereby the land ceases to be public land and
becomes private property.

FACTS:
Manila Electric Company (MERALCO) filed an amended application for registration of a parcel
of land located in Taguig, Metro Manila. Applicant acquired the land applied for registration by
purchase from Ricardo Natividad who in turn acquired the same from his father Gregorio
Natividad as evidenced by a Deed of Original Absolute Sale. Applicant's predecessors-ininterest have possessed the property under the concept of an owner for more than 30 years.
The property was declared for taxation purposes under the name of the applicant and the taxes
due thereon have been paid.
The respondent Judge rendered a decision ordering the registration of the property in the name
of the private respondent. The petitioner Director of Lands interposed this petition raising the
issue of whether or not a corporation may apply for registration of title to land. Petitioner
contends that a corporation is not among those that may apply for confirmation of title under
Section 48 of Commonwealth Act No. 141, the Public Land Act.
ISSUES:
1. Whether or not a corporation may apply for registration of titles to public land.
2. Whether or not open, exclusive and undisputed possession of alienable public land for the
period prescribed by law creates the legal fiction whereby the land ceases to be public land and
becomes private property.
HELD:
1. Yes.
The legal issue raised by the petitioner Director of Lands has been squarely dealt with in two
recent cases (The Director of Lands v. Intermediate Appellate Court and Acme Plywood &
Veneer Co., Inc., etc., No. L-73002 (December 29, 1986), 146 SCRA 509. The Director of
Lands v. Hon. Bengzon and Dynamarine Corporation, etc., No. 54045 (July 28, 1987)], and
resolved in the affirmative. There can be no different answer in the case at bar.
Coming to the case at bar, if the land was already private at the time Meralco bought it from
Natividad, then the prohibition in the 1973 Constitution against corporations holding
alienable lands of the public domain except by lease (1973 Const., Art. XIV, See. 11) does
not apply.
The fact that the confirmation proceedings were instituted by a corporation is simply another
accidental circumstance, "productive of a defect hardly more than procedural and in nowise
affecting the substance and merits of the right of ownership sought to be confirmed in said
proceedings." Considering that it is not disputed that the Natividads could have had their title
confirmed, only a rigid subservience to the letter of the law would deny private respondent
the right to register its property which was validly acquired.
2. Yes.
In the Acme decision, Supreme Court upheld the doctrine that open, exclusive and
undisputed possession of alienable public land for the period prescribed by law creates the

legal fiction whereby the land, upon completion of the requisite period ipso jure and without
the need of judicial or other sanction, ceases to be public land and becomes private
property.
WHEREFORE, the petition is DENIED. The questioned decision of the respondent Judge is
AFFIRMED.
Ignacio v. Director of Lands
108 Phil. 335
DOCTRINE: Citing Article 457 of the New Civil Code (Article 366, Old Civil Code), which
provides that: To the owners of lands adjoining the banks of rivers belong the accretion which
they gradually receive from the effects of the current of the waters.
The article cited is clearly inapplicable because it refers to accretion or deposits on the banks of
rivers, while the accretion in the present case was caused by action of the Manila Bay.
FACTS:
Ignacio filed an application alleging that among others that he owned the parcel applied for by
right of accretion. The Director of Lands, Laureano Valeriano and Domingo Gutierrez filed
oppositions. Gutierrez later withdrew his opposition. The Director of Lands claimed the parcel
applied for as a portion of the public domain, for the reason that neither the applicant nor his
predecessor-in-interest possessed sufficient title thereto, not having acquired it either by
composition title from the Spanish government or by possessory information title under the
Royal Decree and that he had not possessed the same openly, continuously and adversely
under a bona fide claim of ownership since July 26, 1894. In his turn, Valeriano alleged he was
holding the land by virtue of a permit granted him by the Bureau of Fisheries and approved by
the President.
It is not disputed that the land applied for adjoins a parcel owned by the applicant which he had
acquired from the Government by virtue of a free patent title in 1936. It has also been
established that the parcel in question was formed by accretion and alluvial deposits caused by
the action of the Manila Bay which boarders it on the southwest.
On the other hand, the Director of Lands sought to prove that the parcel is foreshore land,
covered by the ebb and flow of the tide and, therefore, formed part of the public domain.
After hearing, the trial court dismissed the application, holding that the parcel formed part of the
public domain.
ISSUE:
Whether or not the disputed land is part of public domain -- Yes. It is part of public domain
HELD:
Appellant contends that the parcel belongs to him by the law of accretion, having been formed
by gradual deposit by action of the Manila Bay, and he cites Article 457 of the New Civil Code
(Article 366, Old Civil Code), which provides that:
To the owners of lands adjoining the banks of rivers belong the accretion which they
gradually receive from the effects of the current of the waters.
The article cited is clearly inapplicable because it refers to accretion or deposits on the banks of
rivers, while the accretion in the present case was caused by action of the Manila Bay.
Interpreting Article 4 of the Law of Waters of 1866, in the case of Natividad vs. Director of
Lands, (CA) 37 Off. Gaz., 2905, it was there held that:
Article 4 of the Law of Waters of 1866 provides that when a portion of the shore is no longer
washed by the waters of the sea and is not necessary for purposes of public utility, or for the
establishment of special industries, or for coastguard service, the government shall declare it to
be the property of the owners of the estates adjacent thereto and as an increment thereof. We
believe that only the executive and possibly the legislative departments have the authority and
the power to make the declaration that any land so gained by the sea, is not necessary for

purposes of public utility, or for the establishment of special industries, on for coast-guard
service. If no such declaration has been made by said departments, the lot in question forms
part of the public domain.

HILARIO vs. CITY OF MANILA

19 SCRA 931
G.R. No. L-19570
April 27, 1967
BENGZON, J.P., J.:
FACTS:
The Hilario estate was bounded on the western side by the San Mateo River. To prevent
its entry into the land, a bamboo and lumber post dike or ditch was constructed on the
northwestern side. This was further fortified by a stonewall built on the northern side.
For years, these safeguards served their purpose.
However, in 1937, a great and extraordinary flood occurred which inundated the entire
place including the neighboring barrios and municipalities. The river destroyed the dike
on the northwest, left its original bed and meandered into the Hilario estate, segregating
from the rest thereof a lenticular place of land the
disputed area. In 1945 the U.S. Army opened a sand and gravel plant within the
premises and started scraping, excavating and extracting soil, gravel and sand from the
nearby areas the River. The operations eventually extended northward into this strip of
land. Consequently, a claim for damages was filed by the Hilarios.
ISSUES:
Whether or not, when a river leaving its old bed, changes its original course and opens
a new one through private property, the new riverbanks lining said course would be of
public ownership.
HELD:
Yes. Under the laws, all riverbanks are of public ownership including those formed
when a river leaves its old bed and opens a new course through a private estate. Art.
339 of the old Civil Code is very clear. Without any qualifications, it provides that
property of public ownership is that devoted to public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, riverbanks,
shores, roadsteads, and that of a similar character. Moreover, the riverbank is part of
the riverbed. Art. 73 of the Law of Waters provides that by the phrase "banks of a river"
is understood those lateral strips or
zones of its bed which are washed by the stream only during such high floods as do not
cause in inundations. The farthest extremity of the bank on the west side would,
therefore, be that lateral line or strip which is reached by the waters during those high
floods that do not cause inundations. In other words, the extent reached by the waters
when the River is at high tide. Defendants have not gone beyond the receding western
extremities of the west riverbank. They have confined their extraction of gravel and sand
only from within the banks of the river which constitute part of the public domain
wherein they had the right to operate. Plaintiff cannot, therefore, recover from them.

Lanzar v. Director of Lands

78 SCRA 130
DOCTRINE: Properties formed by accretion through the action of the sea belong to the public
domain unless the government decrees otherwise.

FACTS:

o
o
o

Petitioner Lanzar filed an application for the registration of

a property in Molo, Iloilo City.

The Director of Lands filed an opposition to such

application on the following grounds:
the said property is foreshore land
the City of Iloilo needs the same property as a road right of way for Molo Blvd.
the petitioner had not possessed the property in such manner as to grant him ownership
The CFI ruled in favor of the plaintiff on the ground of valid prescription.
The CA reversed, ruling in favor of the respondent on the ground that the property was
formed by accretion from the sea making it public domain.
ISSUE:
W/N the title to property formed by action of the sea as an accretion may be registered to an
applicant on the basis of adverse possession for over 30 years -HELD: The land is of public domain.
Article 4 of the Law of Waters provides that:
Lands added to the shores by accretions and alluvium deposits caused by the action of the
sea, form part of the public domain. When they are no longer washed by the waters of the sea,
and are not necessary for the purposes of public utility, or for the establishment of special
industries, or for the coastguard service, the Government shall declare them to be the property
of the owners of the estates adjacent thereto and as an increment thereof.
In sum, properties formed by accretion through the action of the sea belong to the public domain
unless the government decree otherwise. As applied to the case on hand, it is undisputed that
the property was formed by accretion through the action of the sea and that there was no such
declaration by the government that the said property is no longer part of public domain. As such,
the petitioner could not have acquired the property by mere adverse possession for the requisite
number of years.