Property: Questions, Jurisprudence & Principles

PROPERTY
questions, jurisprudence & principles

larry p. ignacio ©
1. What is property?
Anything that may be the object of appropriation, which may be either an

immovable/real property or movable/personal property (Art. 414, Civil Code).
2. What are the characteristics/requisites of property?
The requisites/characteristics of property are:
a) Utility – The ability to satisfy human wants.

b) Substantivity or individuality – The ability of having existence apart
from any other thing.
c) Appropriability – The susceptibility of being possessed by man.
§ Property and thing.
An object to be considered as a property must meet all of the above requisites

otherwise it is not classified as a property; it may be considered as a “thing.” A
thing is then generic and more extensive than property. A thing is necessarily a
property but a property may not be thing. Things include all objects that exist and
can be of use for man. Thus, the heavenly bodies, like the stars, the moon and
the sun are considered things but are not properties because they are outside
the commerce of man and cannot be appropriated. The word “thing” and
“property” are nevertheless used interchangeably. It seems that the distinction is
more academic than real.
§ The human body and human body parts: property or thing?
There are laws pertaining to the human body or body organs such as:
1. RA No. 349: An act to legalize the permission to use human organs or

any portion of the human body for medical, surgical or scientific
purposes, under certain conditions (1949)
2. RA 7170: Organ Donation Act of 1991
3. RA 7719: National Blood Services Act
However, it is not clear how to properly classify the human body (dead or alive)
or the body parts, whether as property or thing. There is a dearth of discussion
on this topic. In one case, a dead body was ruled to be outside the commerce of
man and the recognition of the right to possess the same. It was ruled: “It is
generally recognized that the corpse of an individual is outside the commerce of
man. However, the law recognizes that a certain right of possession over the
corpse exists, for the purpose of a decent burial, and for the exclusion of the
intrusion by third persons who have no legitimate interest in it. This quasi-
property right, arising out of the duty of those obligated by law to bury their dead,
also authorizes them to take possession of the dead body for purposes of burial
to have it remain in its final resting place, or to even transfer it to a proper place
where the memory of the dead may receive the respect of the living. This is a
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Property
Prof. Larry P. Ignacio
family right. There can be no doubt that persons having this right may recover the
corpse from third persons” (Valino v. Adriano, G.R. No. 182894, April 22, 2014
citing Arturo M. Tolentino).
The same case stated the persons who are entitled to give the dead body a
decent burial:
“Article 305 of the Civil Code, in relation to what is now Article 1996
of the Family Code, specifies the persons who have the right and
duty to make funeral arrangements for the deceased. Thus:
Art. 305. The duty and the right to make arrangements for the
funeral of a relative shall be in accordance with the order
established for support, under Article 294. In case of descendants
of the same degree, or of brothers and sisters, the oldest shall be
preferred. In case of ascendants, the paternal shall have a better
right. [Emphases supplied]
Art. 199. Whenever two or more persons are obliged to give

support, the liability shall devolve upon the following persons in the
order herein provided:
(1) The spouse;

(2) The descendants in the nearest degree;
(3) The ascendants in the nearest degree; and
(4) The brothers and sisters. (294a)
[Emphasis supplied]
Further, Article 308 of the Civil Code provides:
Art. 308. No human remains shall be retained, interred, disposed of

or exhumed without the consent of the persons mentioned in
Articles 294 and 305. [Emphases supplied]
In this connection, Section 1103 of the Revised Administrative

Code provides:
Section 1103. Persons charged with the duty of burial. – The

immediate duty of burying the body of a deceased person,
regardless of the ultimate liability for the expense thereof, shall
devolve upon the persons herein below specified:
(a) If the deceased was a married man or woman, the duty of the
burial shall devolve upon the surviving spouse if he or she
possesses sufficient means to pay the necessary expenses;
x x x x. [Emphases supplied]
3. Immovable and Movable property.
Δ Immovable property.
There is no known, specific or particular definition of an immovable property.

Article 415 of the Civil Code simply gives an enumeration of what are immovable
property, which are following:
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(1) Land, buildings, roads and constructions of all kinds adhered to the soil;
(2) Trees, plants, and growing fruits, while they are attached to the land or
form an integral part of an immovable;
(3) Everything attached to an immovable in a fixed manner, in such a way that
it cannot be separated therefrom without breaking the material or
deterioration of the object;
(4) Statues, reliefs, paintings, or other objects for use or ornamentation,
placed in buildings or on lands by the owner of the immovable in such a
manner that it reveals the intention to attach them permanently to the
tenements;
(5) 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;
(6) Animal houses, pigeon-houses, beehives, fish ponds or breeding places of
similar nature, in case their owner has placed them or preserves them with
the intention to have them permanently attached to the land, and forming
a permanent part of it; the animals in these places are included;
(7) Fertilizer actually used on a piece of land;
(8) Mines, quarries, and slag dumps, while the matter thereof forms part of the
bed, and waters either running or stagnant;
(9) Docks and structures which, thought floating, are intended by their nature
and object to remain at a fixed place on a river, lake, or coast;
(10) Contracts for public works, and servitudes and other real rights over
immovable property.
The above enumeration appears to be exclusive in view of the provisions of

Article 416 which reads: “Those movables susceptible of appropriation which
are not included in the preceding article.”
The enumeration in Article 415 maybe classified as immovable by:
Nature : cannot be moved from place to place by nature

ex. roads, land, trees, mines, quarries
Incorporation: essentially movables but are attached as an integral

part of an immovable
ex. trees, plants & growing fruits adhered to the soil,
statues, animal houses
Destination : movables but the purpose is to partake an integral
part of an immovable
ex. machineries, fertilizers when applied to the soil,
docks & floating structures
Analogy or by law
ex. contracts for public works and servitudes and other
real rights over immovable property
415
§ Is a building/house an immovable property?
A building/house is always an immovable property whether constructed on a land

belonging to another and regardless of the nature of the materials used in
constructing the same. However, the building/house must be more or less a
permanent structure and not merely superimposed, like a barong-barong, which
is not considered as immovable.
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The mere fact that the parties to a contract dealt with the building separate and
apart from the land on which it stood in no wise changed its character as
immovable property (Punsalan, Jr. v. vda. de Lacsamana, 121 SCRA 331 (1983);
Prudential Bank v. Panis, 153 SCRA 390). A building by itself is a real or
immovable property distinct from the land on which it is constructed and therefore
can be a separate subject of contracts (Midway Maritime and Technological
Foundation v. Castro, 732 SCRA 192, 06 August 2014).
§ Effect if parties will consider a building as a movable property.
The parties may, however, regard the building as a personal property so that a
building maybe the subject of a chattel mortgage. However, such agreement is
valid only as between the contracting parties and does not affect third parties
(Tsai v. CA, 366 SCRA 324 (2001); Standard Oil v. Jaranillo, 44 Phil 631;
Evangelista v. Alto Surety, 103 Phil. 401). Even if the property is considered
immovable by nature, nothing detracts the parties from treating them as chattels
to secure an obligation under the principle of estoppel (Tsai v. CA, 366 SCRA
324 [2001]). A building is a real property and the mere fact that the parties dealt
with it as a personal property and registered it as a chattel mortgage does not
change its character as a real property. The agreement of the parties does not
affect third parties (Leung Yee v. Strong Machinery Co., 37 Phil 644).
§ But once a house is demolished, its character as immovable ceases

(Bicerra v. Teneza, 6 SCRA 649).
§ Power barges are categorized as immovable property by destination.
NPC entered into a lease contract with Polar Energy, Inc. over diesel engine
power barges moored at Balayan Bay in Calaca, Batangas. Polar assigned its
rights to FELS. The Provincial Assessor of Batangas City subsequently issued an
assessment of real property taxes on the power barges from. NPC and FELS
contested the assessment.
Whether power barges, which are floating and movable, are personal properties
and therefore, not subject to real property tax.
Article 415 (9) of the New Civil Code provides that “[d]ocks and structures which,
though floating, are intended by their nature and object to remain at a fixed place
on a river, lake, or coast” are considered immovable property. Thus power
barges are categorized as immovable property by destination, being in the nature
of machinery and other implements intended by the owner for an industry or work
which may be carried on in a building or on a piece of land and which tend
directly to meet the needs of said industry or work (FELS Energy, Inc. v.
Province of Batangas, 516 SCRA 186 [2007]).
§ Even objects in or on a body of water may be classified as immovables,

as "waters" is classified as an immovable under Article 415(8) of the Code.
A boathouse which, by its nature, is a vessel and, therefore, a personal property

but, if it is tied to the shore and used as a residence, and since it floats on waters
which is immovable, is considered real property. Besides, the Court has already
held that "it is a familiar phenomenon to see things classed as real property
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for purposes of taxation which on general principle might be considered

personal property." (Capitol Wireless, Inc. v. Provincial Assessor of Batangas,
GR No. 180110, 301 May 2016, 791 SCRA 272)
§ What is a machinery?
The Civil Code does not define machinery. It is merely enumerated as an

immovable property in Paragraph 5, Art. 415 of the Civil Code: Machinery,
receptacles, instruments or implements intended by the owner of the
tenement for an industry or works which may be carried on in a building or
on a piece of land, and which tend directly to meet the needs of the said
industry or works.
In MERALCO v. The City Assessor, GR No. 166102, 05 August 2015, the

following definitions were cited:
"Machine" is a piece of equipment with moving parts that does work

when it is given power from electricity, gasoline, etc.; an
assemblage of parts that transmit forces, motion, and energy one to
another in a predetermined manner; an instrument (as a lever)
designed to transmit or modify the application of power, force, or
motion; or a mechanically, electrically, or electronically operated
device for performing a task. (http://www.men-iam-
webster.com/dictionary/machine, last visited on July 15, 2015)
"Equipment" is the set of articles or physical resources serving to
equip a person or thing; apparatus; the implements used in an
operation or activity; or all the fixed assets other than land and
buildings of a business enterprise; or a piece of such equipment.
(http://www.merriam- webster.com/dictionary/equipment, last visited
on July 15, 2015)
"Contrivance" is a machine or piece of equipment made with skill

and cleverness; or a thing contrived, especially, a mechanical
device. (http://www.merriam-webster.com/ dictionary/ contrivance,
last visited on July 15, 2015)
"Instrument" is a tool or device used for a particular purpose,

especially, a tool or device designed to do careful and exact work;
implement, especially, one designed for precision work; a relatively
simple device for performing work. (http://www.merriam-
webster.com/dictionary/instrument, last visited July 15,2015)
"Appliance" is a piece of equipment for adapting a tool or machine

to a special purpose; an instrument or device designed for a
particular use or function (an orthodontic appliance); specifically, a
household or office device (as a stove, fan, or refrigerator) operated
by gas or electric current; or a tool or instrument utilising a power
source and suggests portability or temporary attachment
(household appliances). (http://www.merriam-
webster.com/dictionary/appliance, last visited on July 15, 2015)
"Apparatus" is a tool or piece of equipment used for specific

activities; or an instrument or appliance designed for a specific
operation. (http://www.merriam-webster.com/dictionary/ apparatus,
last visited July 15, 2015)
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"Installation" is something (such as a piece of equipment) that is put

together and made ready for use. (http://www.merriam-
webster.com/dictionary/installation. last visited on July 15, 2015)
"Mobile" means capable of moving or being moved; or movable (a

mobile missile launcher). (http://www.inerriam-
webster.com/dictionary/mobile, last visited July 15, 2015)
§ What is the classification of machinery: movable or immovable?
Machinery is by nature a movable property and becomes immobilized only by

destination subject to the following requirements:
a) The machinery must be placed by the owner or his agent (Davao

Sawmill v. Castillo, 61 Phil 709);
- But NOT when so placed by a tenant, a usufructuary, or person

having only a temporary right, UNLESS such person acted as
agent of the owner.
- One having a temporary right to the possession or enjoyment of
the land cannot be deprived of the machinery, which is personal by
nature, by immobilizing it to become the property of another.
b) The industry or work must be carried on in a building or piece of land

(Mindanao Bus v. City Assessor, 6 SCRA 197);
c) The machinery must be essential and principal to the industry or work

and not merely incidental (Mindanao Bus v. City Assessor, 6 SCRA 197),
or they tend to directly meet the needs of said industry or work (Art.
415[5]; MERALCO v. The City Assessor, GR No. 166102, 05 August
2015, 765 SCRA 52; FELS Energy, Inc. v. Province of Batangas, 516
SCRA 186 [2007]).
¤ Machinery must be essential not merely incidental to the business

or industry.
For movable equipment to be immobilized under Art. 415 of the Civil

Code, said equipment must be an essential and principal element of an
industry or works carried on in a building or on a piece of land by the
owner of the equipment and tenement. As the owner of the equipment is
engaged in transportation business, said business can be carried on
without a repair or service shop. Hence, said equipment is merely
incidental to the business of transportation and not subject to realty tax.
Cash registers, typewriters, etc., usually found in hotels, restaurants,

theaters, etc. are merely incidentals and should not be considered
immobilized by destination, for these businesses can continue or carry
their functions without these equipment. Airline companies use forklifts,
jeep-wagons, pressure pumps, IBM machines, etc. which are incidentals,
not essentials, and thus retain their movable nature. On the other hand,
machineries of breweries used in the manufacture of liquor and soft
drinks, though movable in nature, are immobilized because they are
essential to said industries; but the delivery trucks and adding machines
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which they usually own and use and are found within their industrial
compounds are merely incidentals and retain their movable nature.
(Mindanao Bus v. City Assessor, 6 SCRA 197)
Ω The machines placed by Serg’s Products in its factory built on its own land
were essential and principal elements of its chocolate-making industry. 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. They are real, not personal, property pursuant to Article
415 (5) of the Civil Code (Serg’s Products, Inc. v. PCI Leasing, 338 SCRA 499
[2000]).
Ψ The parties may treat machinery that is immobilized by destination, as a

movable property.
If a house of strong material may be considered as personal property for

purposes of executing a chattel mortgage thereon as long as the parties to the
contract so agree and no innocent third party will be prejudiced thereby, there is
absolutely no reason why a machinery, which is movable by its nature and
becomes immobilized only by destination or purpose, may not be likewise treated
as such. (Makati Leasing & Finance Corp. v. Wearever Textile Mills, 122 SCRA
296). Where a chattel mortgage is constituted on a machinery permanently
attached to the ground, the machinery is to be considered as personal property,
and the chattel mortgage constituted thereon is not null and void, regardless of
who owns the land (Makati Leasing & Finance Corp. v. Wearever Textile Mills,
122 SCRA 296). 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 (Serg’s Products, Inc. v. PCI Leasing, 338 SCRA 499 [2000]).
Ψ For determining whether machinery is real property subject to real

property tax, the definition and requirements under the Local
Government Code are controlling (MERALCO v. The City Assessor, GR No.
166102, 05 August 2015, 765 SCRA 52).
"Machinery" embraces machines, equipment, mechanical contrivances,

instruments, appliances or apparatus which may or may not be attached,
permanently or temporarily, to the real property. It includes the physical
facilities for production, the installations and appurtenant service facilities,
those which are mobile, self-powered or self-propelled, and those not
permanently attached to the real property which are actually, directly, and
exclusively used to meet the needs of the particular industry, business or
activity and which by their very nature and purpose are designed for, or
necessary to its manufacturing, mining, logging, commercial, industrial or
agricultural purposes (Section 199(o), RA No. 7160, Local Government
Code of 1991).
It was ruled:
“The Court highlights that under Section 199(o) of the Local

Government Code, machinery, to be deemed real property subject
to real property tax, need no longer be annexed to the land or
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building as these "may or may not be attached, permanently or

temporarily to the real property," and in fact, such machinery may
even be "mobile." The same provision though requires that to be
machinery subject to real property tax, the physical facilities for
production, installations, and appurtenant service facilities, those
which are mobile, self-powered or self-propelled, or not
permanently attached to the real property (a) must be actually,
directly, and exclusively used to meet the needs of the particular
industry, business, or activity; and (2) by their very nature and
purpose, are designed for, or necessary for manufacturing, mining,
logging, commercial, industrial, or agricultural purposes. Thus,
Article 290(o) of the Rules and Regulations Implementing the Local
Government Code of 1991 recognizes the following exemption:
Machinery which are of general purpose use

including but not limited to office equipment,
typewriters, telephone equipment, breakable or easily
damaged containers (glass or cartons),
microcomputers, facsimile machines, telex machines,
cash dispensers, furnitures and fixtures, freezers,
refrigerators, display cases or racks, fruit juice or
beverage automatic dispensing machines which are
not directly and exclusively used to meet the needs of
a particular industry, business or activity shall not be
considered within the definition of machinery under
this Rule. (Emphasis supplied.)”
 Unlike and in contrast to Article 415(5) of the Civil Code, the Local
Government Code considers as real property machinery which “may
or may not be attached, permanently or temporarily to the real
property,” and even those which are “mobile” (MERALCO v. The City
Assessor, GR No. 166102, 05 August 2015, 765 SCRA 52).
Thus, the transformers, electric posts, transmission lines, insulators,

and electric meters constituting the physical facilities through which
MERALCO delivers electricity to its consumers may be qualified as
“machinery” under the Local Government Code subject to real
property tax (MERALCO v. The City Assessor, GR No. 166102, 05
August 2015, 765 SCRA 52).
Ω Submarine or undersea communications cables are akin to electric

transmission lines which are "no longer exempted from real property tax"
and may qualify as "machinery" subject to real property tax under the
Local Government Code.
Capwire is a Philippine corporation in the business of providing international

telecommunications services. As such provider, Capwire signed agreements with
other local and foreign telecommunications companies covering an international
network of submarine cable systems. A segment of its cable system is located in
Nasugbu, Batangas which was later assessed by the Provincial Assessor as
taxable real property. Capwire assailed the assessment.
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Issue: Whether the submarine wires or cables used for communications may be
taxed like other real estate.
Ruling: Submarine or undersea communications cables are akin to electric

transmission lines which are "no longer exempted from real property tax" and
may qualify as "machinery" subject to real property tax under the Local
Government Code. The submarine cables used for communications and aerial or
underground wires or lines used for electric transmission do not merit a different
treatment in the aspect of real property taxation. Both electric lines and
communications cables, in the strictest sense, are not directly adhered to the soil
but pass through posts, relays or landing stations, but both may be classified
under the term "machinery" as real property under Article 415(5) of the Civil Code
for the simple reason that such pieces of equipment serve the owner's business
or tend to meet the needs of his industry or works that are on real estate. Even
objects in or on a body of water may be classified as such, as "waters" is
classified as an immovable under Article 415(8) of the Code. A classic example
is a boathouse which, by its nature, is a vessel and, therefore, a personal
property but, if it is tied to the shore and used as a residence, and since it floats
on waters which is immovable, is considered real property. Besides, the Court
has already held that "it is a familiar phenomenon to see things classed as real
property for purposes of taxation which on general principle might be considered
personal property." (Capitol Wireless, Inc. v. Provincial Assessor of Batangas,
GR No. 180110, 301 May 2016, 791 SCRA 272)
§ Machines and equipment installed by a tenant/lessee on a leased land

may be classified as immovable property for taxation purposes.
1) Caltex v. BAA, 114 SCRA 297. The machines and equipment –

underground tanks, elevated tank, elevated water tanks, water tanks,
gasoline pumps, computing pumps, water pumps, car washer, car hoists,
truck hoists, air compressors and tireflators – installed by Caltex on a
leased land, are classified as real properties for realty taxation purposes.
The above equipment and machinery, as appurtenances to the gas station

building or shed owned by Caltex (as to which it is subject to realty tax)
and which fixtures are necessary to the operation of the gas station, for
without them the gas station would be useless, and which have been
attached or affixed permanently to the gas station site or embedded
therein, are taxable improvements and machinery within the meaning of
the Assessment Law and the Real Property Tax Code.
The question is whether the gas station equipment and machinery

permanently affixed by Caltex to its gas station and pavement (which are
indubitably taxable realty) should be subject to the realty tax. This
question is different from the issued raised in the Davao Sawmill case.
Improvements on land are commonly taxed as realty even though for

some purposes they might be considered personalty (84 C.J.S. 181-2,
notes 40 and 41). “It is a familiar phenomenon to see things classed
as real property for purposes of taxation which on general principle
might be considered personal property” (Standard Oil Co. of New York
vs. Jaramillo, 44 Phil. 630, 633).
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2) MERALCO v. CBAA, 114 SCRA 273. While the two storage tanks are
not embedded in the land, they may, nevertheless, be considered as
improvements on the land, enhancing its utility and rendering it useful to
the oil industry. It is undeniable that the two tanks have been installed with
some degree of permanence as receptacles for the considerable
quantities or oil needed by Meralco for its operations.
§ The MERALCO steel poles and towers.
Poles and steel towers on a land, which are attached by means of bolts, are
movable properties. They are not buildings or construction adhered to the soil;
they are attached to square metal frames by means of bolts that could easily be
dismantled and moved from place to place, and can be separated without
breaking the material or deterioration of the object to which they are attached.
They are not machineries to fall under par. 5 of Art. 415. Even if they are, they
are not intended for industry or works on the land in which they are constructed
(Board of Assessment Appeals v. MERALCO, 10 SCRA 68).
CONTRA: It was ruled in MERALCO v. The City Assessor, GR No.

166102, 05 August 2015, 765 SCRA 52 that the conclusions in the
above case do not hold true anymore under RA 7160, the Local
Government Code of 1991.
 For purposes of taxation, the term "real property" may include

things which should generally be regarded as personal property (84
C.J.S. 171, Note 8). It is a familiar phenomenon to see things
classed as real property for purposes of taxation which on
general principle might be considered personal property
(Standard Oil Co. of New York vs. Jaramillo, 44 Phil. 630, 633).
Δ Movable property.
Article 416 of the Civil Code states that the following things are deemed to be
movable/personal property:
(1) Those movables susceptible of appropriation which are not

included in the preceding article;
(2) Real property which by any special provision of law is considered
as personal property;
(3) Forces of nature which are brought under control by science;
and
(4) In general, all things which can be transported from place to place
without impairment of the real property to which they are fixed.
In Article 335 of the Civil Code of Spain, “personal property” is defined as “anything
susceptible of appropriation and not included in the foregoing chapter (not real property)”
(Laurel v. Abrogar, G.R. No. 155076, 13 January 2009).
General test of movable property:

1) Whether it can be carried from place to place.
2) Whether the change of location can be carried without injury to an
immovable to which the object maybe attached.
3) Whether the object is not included in any of the enumeration. in Art.
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§ Forces of nature and electricity.
Electricity is personal property under Article 416(3) of the Civil Code, which
enumerate “forces of nature which are brought under the control by science.”
(Laurel v. Abrogar, 576 SCRA 41, 13 January 2009). Electricity, like gas, is a valuable
merchandise, and may be stolen. The true test of what may be stolen is not
whether it is corporeal or incorporeal, but whether, being possessed of value, a
person other than the owner, may appropriate the same (US v. Carlos, 21 Phil 543).
§ Interest in business.
Interest in business was declared to be personal property since it is capable of

appropriation and not included in the enumeration of real properties (Laurel v.
Abrogar, 576 SCRA 41, 13 January 2009). A half interest in a drugstore
business, being capable of appropriation, but not included in the enumeration of
real properties under Art. 415, should be considered personal property, and may
thus be subject of a chattel mortgage (Strochecker v. Ramirez, 44 Phil 933).
§ International long distance calls are personal properties.
A telephone call is electrical energy and electrical energy is capable of

appropriation because it may be taken and carried away. Electricity is personal
property under Article 416 (3) of the Civil Code: forces of nature which are
bought under control by science. International long distance calls take the
form of electrical energy. Hence, classified as personal property. (PLDT v.
Alvarez, GR No. 179408, 05 March 2014)
Ω Case:
Laurel was charged with theft for unlawfully and feloniously take, steal and use
the international long distance calls belonging to PLDT by conducting
International Simple Resale (ISR), which is a method of routing and completing
international long distance calls using lines, cables, antenae, and/or air wave
frequency which connect directly to the local or domestic exchange facilities of
the country where the call is destined, effectively stealing this business from
PLDT while using its facilities in the estimated amount of P20,370,651.92 to the
damage and prejudice of PLDT, in the said amount.
Laurel filed a motion to quash claiming that the factual allegations in the
information do not constitute the felony of theft. He said that a telephone call or
coversation is not synonymous to electric current and not considered as personal
property that is susceptible of appropriation. PLDT does not produce or generate
telephone calls but only provides the facilities or services for the transmission
and swtiching of the calls. Laurel added that the business of PLDT is not
personal property.
Issue: Whether or not the international calls as well as the business of providing
telecommunication or telephone service are personal properties capable of
appropriation that can be objects of theft.
Ruling: A telephone call is electrical energy and electrical energy is capable of

appropriation because it may be taken and carried away. Electricity is personal
property under Article 416 (3) of the Civil Code: forces of nature which are
bought under control by science. International long distance calls take the
form of electrical energy. Hence, classified as personal property.
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However, it cannot be said that such international long distance calls were
personal properties belonging to PLDT since the latter could not have acquired
ownership over such calls. PLDT merely encodes, augments, enhances,
decodes and transmits said calls using its complex communications
infrastructure and facilities. PLDT not being the owner of said telephone calls,
then it could not validly claim that such telephone calls were taken without its
consent. It is the use of these communications facilities without the consent of
PLDT that constitutes the crime of theft, which is the unlawful taking of the
telephone services and business.
The business of providing telecommunication or telephone service is personal

property which can be the object of theft under Article 308 of the Revised Penal
Code. Business maybe appropriated under Section 2 of Act No 3952 (Bulk Sales
Law), hence, could be the object of theft. (Laurel v. Abrogar, G.R. No. 155076,
13 January 2009; see also PLDT v. Alvarez, GR No. 179408, 05 March 2014)
4. Property of public dominion and private property
§ Nature/Characteristic of a property of public dominion.
a) It is inalienable and outside the commerce of man (Republic v. Bacas, 710

SCRA 411, 20 November 2013);
b) it cannot be the subject of lease or any contractual undertaking
(Villanueva v. Castañeda, 154 SCRA 142);
c) Occupation thereof in the concept of owner, no matter how long, cannot
ripen into ownership and be registered as a title. (Pagkatipunan v. CA,
379 SCRA 621 (2002)
Pagkatipunan v. CA, 379 SCRA 621 (2002)
- Unless public land is shown to have been reclassified or alienated to a
private person by the State, it remains part of the inalienable public
domain. Occupation thereof in the concept of owner, no matter how long,
cannot ripen into ownership and be registered as a title.
§ Public plaza.
A public plaza is beyond the commerce of man and so cannot be the subject of
lease or any other contractual undertaking (Villanueva v. Castañeda, 154 SCRA
142).
§ Military Reservation
When a property is officially declared a military reservation, it becomes

inalienable and outside the commerce of man (Republic v. Bacas, 710 SCRA
411, 20 November 2013).
§ Ancestral land and ancestral domain: classified as private property
Ancestral lands and ancestral domains are not part of the lands of the public
domain. They are private and belong to the indigenous cultural communities
(ICCs) or indigenous people (IPs). [Separate opinion of Justice Puno] (Cruz v.
Sec. of ENR, 347 SCRA 128 (2000)
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Ancestral domains remain as such even when possession or occupation of these

areas has been interrupted by causes provided under the law, such as voluntary
dealings entered into by the government and private individuals/corporations—
the issuance of TLA No. 43 in 1952 did not cause the Indigenous Cultural
Communities/Indigenous Peoples (ICCs/IPs) to lose their possession or
occupation over the area covered by TLA No. 43. (Alvarez v. PICOP Resources,
Inc., 606 SCRA 444, 03 Dec. 2009)
Agricultural/Ancestral land (Republic v. Cosalan, GR No. 216999, 04 July 2018)
Section 12, Chapter III of the IPRA Law states that individually owned ancestral
lands, which are agricultural in character and actually used for agricultural,
residential, pasture, and tree farming purposes, including those with a slope of
18% or more, are classified as alienable and disposable agricultural lands.
Ancestral lands are covered by the concept of native title that "refers to pre-
conquest rights to lands and domains which, as far back as memory reaches,
have been held under a claim of private ownership by ICCs/IPs, have never been
public lands and are thus indisputably presumed to have been held that way
since before the Spanish Conquest." To reiterate, they are considered to have
never been public lands and are thus indisputably presumed to have been held
that way.
It appears that lands covered by the concept of native title are considered an
exception to the Regalian Doctrine embodied in Article XII, Section 2 of the
Constitution which provides that all lands of the public domain belong to the State
which is the source of any asserted right to any ownership of land.
The IPRA Law expressly provides that ancestral lands are considered public
agricultural lands, the provisions of the Public Land Act or C.A. No. 141 govern
the registration of the subject land.
§ Homestead Patent
A homestead patent is a gratuitous grant from the government "designed to

distribute disposable agricultural lots of the State to land-destitute citizens
for their home and cultivation.” Being a gratuitous grant, a homestead patent
applicant must strictly comply with the requirements laid down by the law.
Only lands of the public domain which have been classified as public
agricultural lands may be disposed of through homestead settlement.
The mere issuance of a homestead patent does not automatically remove

the land from inalienability and convert it into alienable agricultural land.
When the property covered by a homestead patent is part of the inalienable land
of the public domain, the title issued pursuant to it is null and void, and the
rule on indefeasibility of title will not apply.
(Republic v. Heirs of Ignacio Daquer, GR No. 193657, 04 September 2018, J.
Leonen)
§ Foreshore and submerged areas form part of the public domain and are
inalienable. Land reclaimed from foreshore and submerged areas also form
part of the public domain (Chavez v. PEA, GR No. 133250, 09 July 2002).
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Foreshore and submerged areas irrefutably belonged to the public domain and
were inalienable unless reclaimed, classified as alienable land open to
disposition and further declared no longer needed for public service. The fact
that alienable lands of the public domain were transferred to the Public Estate
Authority (PEA) (now Philippine Reclamation Authority [PRA]) and issued land
patents or certificates of title in PEA's name did not automatically make such
lands private (Republic v. City of Parañaque, 677 SCRA 246, 18 July 2012).
Ω Case:
The Roppongi property is classified under paragraph 2 of Article 420 of the Civil
Code. It is a property belonging to the State and intended for some public
service.
As property of public dominion, the Roppongi lot is outside the commerce of

man. It cannot be alienated. Its ownership is a special collective ownership for
general use and enjoyment, and application to the satisfaction of collective
needs, and resides in the social group. The purpose is to serve the State as a
juridical person, but the citizens; it is indeed for the common public welfare and
cannot be the object of appropriation.
The fact that the Roppongi site has not been used for a long time for actual
Embassy service does not automatically convert it to patrimonial property. Any
such conversion happens only if the property is withdrawn from public use (Cebu
Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]). A property
continues to be part of the public domain, not available for private appropriation
or ownership “until there is a formal declaration on the part of the government to
withdraw it from being such (Ignacio v. Dir. of Lands, 108 Phil 335 [1960]).
An abandonment of the intention to use the Roppongi property for public service
and to make it patrimonial property under Article 422 of the Civil Code must be
definite. Abandonment cannot be inferred from the non-use alone specially if the
non-use was attributable not to the government’s own deliberate and indubitable
will but to a lack of financial support to repair and improve the property (See heirs
of Felino Santiago v. Lazaro, 166 SCRA 368 [1988]. Abandonment must be a
certain and positive act based on correct legal premises.
RA No. 6657 (the CARP Law) does not authorize the Executive Department to
sell the Roppongi property. It merely enumerates possible sources of future
funding to augment (as and when needed) the Agrarian Reform Fund created
under Executive Order No. 299. Obviously, any property outside of the
commerce of man cannot be tapped as a source of funds. (Laurel v. Garcia, 187
SCRA 797)
§ Art. 422 of the Civil Code provides that property of public dominion, when
no longer intended for public use or for public service, shall form part of
the patrimonial property of the State. Will the mere non-use of the property
for public dominion convert it into a patrimonial property?
Under Article 422 of the Civil Code, public domain lands become patrimonial
property only if there is a declaration that these are alienable or disposable,
together with an express government manifestation that the property is already
patrimonial or no longer retained for public service or the development of national
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wealth (Dream Village Neighborhood Association, Inc. v. BCDA, 702 SCRA 222,
24 July 2013).
Under the Regalian doctrine, all lands not otherwise appearing to be clearly
within private ownership are presumed to belong to the State. Hence, a positive
act of the government is needed to declassify a forest land into alienable or
disposable land for agricultural or other purpose (Director of Lands v. IAC, 219
SCRA 339).
A positive act declaring land as alienable and disposable is required. In

keeping with the presumption of State ownership, the Court has time and again
emphasized that there must be a positive act of the government, such as an
official proclamation, declassifying inalienable public land into disposable land for
agricultural or other purposes.
Positive act of the government may consist of a presidential proclamation or

an executive order; an administrative action; investigation reports of
Bureau of Lands investigators; and a legislative act or a statute (Sec. of the
DENR, etc. v. Mayor Jose Yap, et al. GR Nos. 167707 & 173775, 08 October
2008).
The Supreme Court considered the issuance of a presidential decree and a

special patent proclaiming the land as alienable and disposable as a positive act
of the Executive Department that converted the reclaimed areas into alienable
and disposable agricultural lands. (Republic v. Heirs of Ignacio Daquer, GR No.
193657, 04 September 2018, J. Leonen)
A mere declaration of a public official that the land is alienable and

disposable would not suffice; there must be an official declaration of the
State to that effect.
There must be an official declaration by the State that that public dominion
property is no longer intended for public use, public service or for the
development of national wealth before it can be acquired by prescription; that a
mere declaration by government officials that a land of the public domain is
already alienable and disposable would not suffice for purposes of registration
under Section 12(2) of Presidential Decree (PD) No. 1529 (Republic v. Heirs of
Sps. Tomasa Estacio and Eulalio Ocol, 808 SCRA 549, 14 November 2016).
§ The general law governing the classification and disposition of land of the public
domain.
The Public Land Act or Commonwealth Act No. 141, until this day, is the existing
general law governing the classification and disposition of lands of the public
domain, except for timber and mineral lands. Under the Regalian Doctrine
embodied in our Constitution, land that had not been acquired from the
government, either by purchase, grant, or any other mode recognized by law,
belongs to the State as part of the public domain (Republic v. Jaralve, 684 SCRA
495, 24 October 2012).
In the absence of incontrovertible evidence to prove that the subject property is

already classified as alienable and disposable, it must be considered as still
inalienable lands of the public domain. The burden of proof in overcoming the
presumption of State ownership of the lands of the public domain is on the
person applying for registration (or claiming ownership), who must prove that the
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land subject of the application is alienable or disposable (Valiao, et al., v.

Republic, GR No. 170757, 28 Nov. 2011).
§ Mere possession or occupation will not convert a public land into a

patrimonial/private property.
It is well-settled that land of the public domain is not ipso facto converted into
patrimonial or private property by the mere possession and occupation by an
individual over a long period of time (Republic v. Bacas, 710 SCRA 411, 20
November 2013).
Possession and occupation of an alienable and disposable public land for the
periods provided under the Civil Code will not convert it to patrimonial or private
property. There must be an express declaration that the property is no longer
intended for public service or the development of national wealth (Tan v.
Republic, 669 SCRA 499, 16 April 2012).
§ Best proof of classification of public land as alienable and disposable

land.
The best proofs in registration proceedings that a land is alienable and

disposable are a certification from the CENRO or Provincial Environment and
Natural Resources Office (PENRO) and a certified true copy of the DENR’s
original classification of the land (Republic v. Vega, GR No. 177790, 11 January
2011).
To prove that the land subject of the application for registration is alienable, the
applicant must establish the existence of a positive act of the government such
as a presidential proclamation or an executive order; an administrative action;
investigation reports of the Bureau of Lands investigators; and legislative act or
statute (Buenaventura v. Pascual, 572 SCRA 143 (27 Nov. 2008)
Mere reclamation by PEA "does not convert these inalienable natural

resources of the State into alienable or disposable lands of the public
domain.
The mere issuance of a homestead patent does not automatically remove

the land from inalienability and convert it into alienable agricultural land.
There must be a law or presidential proclamation officially classifying

these reclaimed lands as alienable or disposable and open to disposition
or concession. (Republic v. Heirs of Ignacio Daquer, GR No. 193657, 04
September 2018, J. Leonen)
Their transfer to the Public Estate Authority (PEA) (now Philippine

Reclamation Authority [PRA]) and the issuance of land patents or
certificates of title in PEA's name did not automatically make such lands
private. (Republic v. City of Parañaque, 677 SCRA 246, 18 July 2012)
§ Any period of possession PRIOR to the classification of the land as

inalienable and disposable is INCONSEQUENTIAL.
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Any period of possession prior to the classification of the land as alienable and
disposable was inconsequential and should be excluded from the computation of
the period of possession (Heirs of Malabanan v. Republic, GR No. 179987, 03
September 2013). Only when the property has become patrimonial can the
prescriptive period for the acquisition of property of public dominion begin to run
(Republic v. Gielcyzk, GR No. 179990, 23 October 2013).
Public lands not shown to have been classified, reclassified or released as

alienable agricultural land or alienated to a private person by the State
remain part of the inalienable lands of public domain …
*****
§ Action for reversion
Any application for a homestead settlement recognizes that the land belongs to
the public domain. Prior to its disposition, the public land has to be classified first
as alienable and disposable through a positive act of the government. This act
must be direct and express, not merely inferred from an instrument such as the
homestead patent. The State has the right to institute an action for the
reversion of an inalienable land of the public domain erroneously awarded by its
officials and agents.
Despite the registration of the land and the issuance of a Torrens title, the State
may still file an action for reversion of a homestead land that was granted in
violation of the law. The action is not barred by the statute of limitations,
especially against the State.
The State may recover non-disposable public lands registered under the Land
Registration Act "at any time and the defense of res judicata would not apply as
courts have no jurisdiction to dispose of such lands of the public domain."
Lands of the public domain can only be classified as alienable and disposable
through a positive act of the government. The State cannot be estopped by the
omission, mistake, or error of its officials or agents. It may revert the land at any
time, where the concession or disposition is void ab initio.
(Republic v. Heirs of Ignacio Daquer, GR No. 193657, 04 September 2018, J.
Leonen)
§ Categories of alienable and disposable lands of the public domain.
Alienable and disposable lands of the State fall into two categories, to wit:
(a) patrimonial lands of the State, or those classified as lands of private

ownership under Article 425 of the Civil Code, without limitation; and
(b) lands of the public domain, or the public lands as provided by the
Constitution, but with the limitation that the lands must only be
agricultural (Heirs of Mario Malabanan v. Republic, 704 SCRA, 561, 03
September 2013).
In Art. XII, Sec. 3, Constitution, lands of the public domain are classified into 4
categories:
1) agricultural
2) forest or timber lands
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3) mineral lands
4) national parks
§ Only agricultural lands may be alienated.
Of the four classes of public land, i.e., agricultural lands, forest or timber lands,
and national parks, only agricultural lands may be alienated. Public land that has
not been classified as alienable agricultural land remains part of the inalienable
public domain. Thus, it is essential for any applicant for registration of title to land
derived through a public grant to establish foremost the alienable and disposable
nature of the land (Fortuna v. Republic, 718 SCRA 35, 05 March 2014).
§ What is an agricultural land?
An agricultural land, according to Republic Act (RA) No. 6657, is one that is
devoted to agricultural activity and not classified as mineral, forest, residential,
commercial or industrial land (Holy Trinity Realty & Dev’t. Corp. v. de la Cruz,
739 SCRA 229, 22 October 2014).
§ The classification of land is descriptive of its legal nature or status.
The classification of land is descriptive of its legal nature or status and does not
have to be descriptive of what the land actually looks like (Yu Chang v. Republic,
GR No. 171726, 23 Feb. 2011).
§ May private corporations acquire alienable lands of the public domain?
Private corporations or associations may not hold such alienable lands of the
public domain except by lease (Sec. 3, Art. XII, Constitution; Chavez v. PEA, GR
No. 133250, 09 July 2002). They are reserved in favor of Philippine citizens who
are natural persons. Private corporations may acquire private lands but NOT
alienable public lands.
Alienable lands of the public domain, increasingly becoming scarce natural

resources, are to be distributed equitably among our ever-growing population. To
insure such equitable distribution, the 1973 and 1987 Constitutions have barred
private corporations from acquiring any kind of alienable land of the public
domain.
§ The Regalian Doctrine.
Art. XII, Sec. 2, Constitution: All mineral land and other natural resources found
either in public or private lands are owned by the State.
Jura Regalia simply means that the State is the original proprietor of all lands
and, as such, is the general source of all private titles (Republic v. Espinosa, 677
SCRA 92, 18 July 2012).
The Regalian Doctrine dictates that all lands of the public domain belong to the
State, that the State is the source of any asserted right to ownership of land and
charged with the conservation of such patrimony.
All lands not otherwise appearing to be clearly within private ownership are
presumed to belong to the State. Thus, all lands that have not been acquired
from the government, either by purchase or by grant, belong to the State as part
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of the inalienable public domain. Necessarily, it is up to the State to determine if

lands of the public domain will be disposed of for private ownership. The
government, as the agent of the state, is possessed of the plenary power as the
persona in law to determine who shall be the favored recipients of public lands,
as well as under what terms they may be granted such privilege, not excluding
the placing of obstacles in the way of their exercise of what otherwise would be
ordinary acts of ownership. (Sec. of the DENR, etc. v. Mayor Jose Yap, et al. GR
Nos. 167707 & 173775, 08 October 2008**).
Under the Regalian doctrine, all lands not otherwise appearing to be clearly
within private ownership are presumed to belong to the State. Hence, a positive
act of the government is needed to declassify a forest land into alienable or
disposable land for agricultural or other purpose (Director of Lands v. IAC, 219
SCRA 339).
Ω Chavez v. PEA, 384 SCRA 152 (2002)

The Regalian doctrine is deeply implanted in our legal system. Foreshore
and submerged areas form part of the public domain and are inalienable.
Land reclaimed from foreshore and submerged areas also form part of the
public domain and are also inalienable, unless converted pursuant to law
into alienable or disposable lands of the public domain. Historically, lands
reclaimed by the government are sui generis, not available to private
parties unlike other alienable public lands. Reclaimed lands retain their
inherent potential as areas for public use or public service. Alienable lands
of the public domain, increasingly becoming scarce natural resources, are
to be distributed equitably among our ever-growing population. To insure
such equitable distribution, the 1973 and 1987 Constitutions have barred
private corporations from acquiring any kind of alienable land of the public
domain.
7. May private corporations acquire alienable lands of the public domain?

- NO. Private corporations or associations may not hold such alienable
lands of the public domain except by lease (Sec. 3, Art. XII, Constitution; Chavez
v. PEA, GR No. 133250, 09 July 2002).
8. What is the Regalian Doctrine?

- The Regalian Doctrine dictates that all lands of the public domain belong
to the State, that the State is the source of any asserted right to ownership of
land and charged with the conservation of such patrimony.
- All lands not otherwise appearing to be clearly within private ownership
are presumed to belong to the State. Thus, all lands that have not been acquired
from the government, either by purchase or by grant, belong to the State as part
of the inalienable public domain. Necessarily, it is up to the State to determine if
lands of the public domain will be disposed of for private ownership. The
government, as the agent of the state, is possessed of the plenary power as the
persona in law to determine who shall be the favored recipients of public lands,
as well as under what terms they may be granted such privilege, not excluding
the placing of obstacles in the way of their exercise of what otherwise would be
ordinary acts of ownership. (Sec. of the DENR, etc. v. Mayor Jose Yap, et al. GR
Nos. 167707 & 173775, 08 October 2008).
9. What is ownership?
- It is the independent right of a person to the exclusive enjoyment and
control of a thing or a right including its disposition and recovery subject only to
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the restrictions or limitations established by law and the rights of others (Arts. 427
& 428).
10. What is the principle/doctrine of self-help?

- The use of force as maybe reasonably necessary to repel or prevent an
actual or threatened unlawful physical invasion or usurpation of one’s property
(Art. 429).
11. What is the state of necessity/doctrine of incomplete privilege?

- It is the valid interference necessary to avert an imminent danger and
threatened damage to the actor or third person. It is required that the damage to
another is much greater than the damage to the property (Art. 432).
12. What is a hidden treasure?

- It is any hidden and unknown deposit of money, jewelry, or other
precious object, the lawful ownership is not known (Art. 439).
12.1. To whom shall hidden treasure belong?

- The owner of the land, building or other property if he is the finder. One-
half shall belong to the finder if he is not the owner of the land, building or other
property (Art. 438).
12.2. Who owns the hidden treasure if it is of interest to the science or the
arts?
- The State may acquire them at their just price, which price shall be paid
to the owner if he is also the finder. It shall be divided equally between the owner
and the finder if they are different persons.
12.3. Is the finder entitled to a share of the treasure if he is a trespasser?

- NO.
12.4. The finding of the hidden treasure must be by CHANCE; by luck; by

stroke of good fortune.
13. What is accession?

- The right of the owner of a thing, real or personal, to become the owner
of everything which is produced thereby, or incorporated or attached thereto,
either naturally or artificially (Art. 440).
- It is not one of the modes of acquiring ownership but merely a
consequence of incidence of ownership.
13.1. What are the kinds of accession?
- The kinds of accession are:
a) accession discreta – the products or fruits of a thing

ex. young of animals or fruits of a tree
b) accession continua – those that are incorporated or attached
b.1. real property: a) accession industrial

ex. buildings, plants
b) accession natural
ex. alluvion, avulsion
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b.2. personal property a) conjunction/adjunction

b) commixtion/confusion
c) specification
13.2. Define the following:
a) natural fruits: Spontaneous products of the soil, the young and

other products of soil.
b) industrial fruits: Those produced by land of any kind though

cultivation or labor.
c) civil fruits: The rents of buildings, price or lease of land and other
property and other similar income.
14. What is the principle “the accession follows the principal”?

- The owner of the land owns the building, fruits and improvements or
repairs made thereon (Art. 445). The landowner is further presumed to have
made the works, sowing and planting on the land unless the contrary is proved
(Art. 446).
15. Who is a builder in good faith?

- One who builds or plants on land with the belief that he is the owner
thereof, unaware of any flaw in his title to the land at the time he builds or plants
on it (Republic v. Ballocanag, 572 SCRA 436 (28 November 2008; Pleasantville
v. CA, 253 SCRA 10)
Good faith is presumed, and the party claiming otherwise has the burden
of proving bad faith (Art. 527; Pleasantville v. CA, 253 SCRA 10).
The term "builder in good faith" as used in reference to Article 448 of the Civil
Code, refers to one who, not being the owner of the land, builds on that land
believing himself to be its owner and unaware of the land, builds on that land,
believing himself to be its owner and unaware of the defect in his title or mode of
acquisition. The essence of good faith lies in an honest belief in the validity of
one's right, ignorance of a superior claim, and absence of intention to overreach
another. (Sps. Aquino v. Sps. Aguilar, G.R. No. 182754, June 29, 2015)
§ Builders in good faith: the owner of the land and the builder are two
distinct persons.
The Civil Code provisions on builders in good faith presuppose that the owner of
the land and the builder are two distinct persons who are not bound either by
specific legislation on the subject property or by contract.
Properties recorded in accordance with Section 41 of Republic Act No. 47262
(otherwise known as the Condominium Act) are governed by said Act; while the
Master Deed and the By Laws of the condominium corporation establish the
contractual relations between said condominium corporation and the unit owners.
(Leviste Management System, Inc. v. Legaspi Towers, Inc., GR No. 199353, 04
April 2018)
May you be considered in good faith even if you are negligent?

- YES. Good faith does not preclude negligence. In negligence
there is no intention to do wrong or cause damage (Art. 456).
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The application of Art. 448: builders in good faith
15.1. The land, does it matter that it is a private or public land?

- No. Art. 448 applies both to public and private lands.
15.2. Will you apply Art. 448 if the buildings/improvements are merely
transferable?
- NO. Art. 448 shall not apply if the improvements/construction are
transferable in nature. Tolentino explains: “To fall within the provision of this
article, the construction must be of permanent character, attached to the soil with
an idea of perpetuity; but if it is of a transitory character or is transferable, there is
no accession, and the builder must remove the construction. The proper remedy
of the landowner is an action to eject the builder from the land.” (Sps. Alviola v.
CA, 24 April 1988, 289 SCRA 537)
The right of choice always belongs to the landowner.
15.3. What are the options of the landowner?

- The landowner shall have the right to appropriate the
improvement or to oblige the one who built to pay the price of the land (Ignao v.
IAC, 193 SCRA 17).
The option is to sell the land, not to buy (Sps. Benitez v. CA, 266
SCRA 242)
15.4. May the right of choice shift from the landowner to the builder?
- NO. The right of choice belongs solely and exclusively to the landowner.
It will never shift. Not even a declaration of the builder, planter or sower’s bad
faith shifts this option to him per Art. 450 of the Civil Code (Sps. Benitez v. CA,
266 SCRA 242).
15.5. May the courts dictate upon the landowner which option to select?
- NO. The law is clear and unambiguous when it confers the right of
choice upon the landowner and not upon the builder and the courts (Ignao v.
IAC, 193 SCRA 17).
15.6. May the landowner change his options once made?

- NO. Once the landowner made his option that is communicated to the
builder a contract is perfected. Hence, the landowner may not change his option
unless the builder consents.
15.7. May the landowner refuse to exercise his options? May the
landowner compel the builder to remove the improvements?
- NO. The rule that the choice under Article 448 of the Civil Code belongs
to the owner of the land is in accord with the principle of accession, i.e., that the
accessory follows the principal and not the other way around. Even as the option
lies with the landowner, the grant to him, nevertheless, is preclusive. The
landowner cannot refuse to exercise either option and compel instead the owner
of the building to remove it from the land. The raison d’etre for this provision has
been enunciated thus: Where the builder, planter or sower has acted in good
faith, a conflict of rights arises between the owners, and it becomes necessary to
protect the owner of he improvements without causing injustice to the owner of
the land. (Tuatis v. Escol, 604 SCRA 471, 27 October 2009).
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15.8. May the builder in good faith compel the landowner to sell the land?
- NO. Under Article 448, the right to appropriate the works or
improvements or “to oblige the one who built or planted to pay the price of the
land” belongs to the owner of the land. The only right given to the builder in good
faith is the right to reimbursement for the improvements; the builder cannot
compel the owner of the land to sell such land to the former (Quemuel v. Olaes, 1
SCRA 1159 (1961).
- The builder in good faith can compel the landowner to make a choice
between appropriating the building by paying the proper indemnity or obliging the
builder to pay the price of the land. The choice belongs to the owner of the land,
a rule that accords with the principle of accession, i.e., that the accessory follows
the principal and not the other way around. However, even as the option lies with
the landowner, the grant to him, nevertheless, is preclusive. He must choose
one. He cannot, for instance, compel the owner of the building to remove the
building from the land without first exercising either the option. It is only if the
owner chooses to sell his land, and the builder or planter fails to purchase it
where its value is not more than the value of the improvements, that the owner
may remove the improvements from the land. The owner is entitled to such
remotion only when, after having chosen to sell his land, the other party fails to
pay for the same. (Luciano/Nelly Briones v. Jose Macabagdal, et al., GR No.
150666 [2010])
15.9. What are the remedies of the landowner in case the builder fails to
pay the value of the land, which is not considerably higher than the value of the
improvement?
- The remedies of the landowner are:
a) Assume the relation of lessor-lessee;
b) Landowner may file an action for the recovery of the land OR to have
the improvements removed as the builder’s expense.
The rights of the builder in good faith.
15.10. May the builder in good faith compel the landowner to sell the land?
- NO. Under Article 448, the right to appropriate the works or

improvements or “to oblige the one who built or planted to pay the price of the
land” belongs to the owner of the land. The only right given to the builder in good
faith is the right to reimbursement for the improvements; the builder cannot
compel the owner of the land to sell such land to the former (Quemuel v. Olaes, 1
SCRA 1159 (1961).
15.11. May the builder remove the improvements?

- NO. The options that the builder may exercise under Articles 448 and
546 of the Civil Code have been restricted. It is no longer feasible to permit the
builder to remove the trees he planted. The only equitable alternative would be to
order the landowner to pay the value of the improvements introduced on the
property. (Republic v. Ballocanag, 572 SCRA 436 (28 November 2008).
15.12. What is the builder’s right of retention? May the builder retain
both the land and the improvements in case the landowner does not pay him
after the latter opts to appropriate the improvements?
- The owner of a building erected in good faith on a land owned by
another, is entitled to possession of the land until he is paid the value of his
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Property
building under Art. 546 (Sarmiento v. Agana, 129 SCRA 122). Articles 448 and
546 of the Civil Code grant the builder or planter in good faith full reimbursement
of useful improvements and retention of the premises until reimbursement is
made (Republic v. Ballocanag, 572 SCRA 436 (28 November 2008).
15.13. Is the right of retention applicable to properties of public dominion?

- NO. It applies only to private lands. It cannot be invoked against a
property of public dominion because public interest is involved (Calapan Lumber
v. Community Sawmill, 11 SCRA 346 [1964]).
15.14. May lessees exercise this right of retention?

- NO. Introductions of valuable improvements on the lease premises does
not give the lessee the right of retention and reimbursement which rightfully
belongs to a builder in good faith—the doctrine is that a lessee is neither a
builder in good faith nor in bad faith that would call for the application of Articles
448 and 546 of the Civil Code since his rights are governed by Article 1678 (Sulo
sa Nayon, Inc. v. Nayong Pilipino Foundation, 576 SCRA 655, 20 January 2009).
15.15. What is a forced lease? What happens if the landowner opts to

sell his land but the value is considerably more than the value of the
improvement?
- A forced lease is created. The builder or planter shall pay reasonable
rent. The court shall fix the rent in case the parties cannot agree thereon.
When Art. 448 is not applicable.
Article 448 applies only when the builder, planter or sower believes that he
has the right so to build, plant or sow because he thinks he owns the land or
believes himself to have a claim of title (Floreza v. Evangelista, 96 SCRA 130
(1980).
a) Art. 448 does not apply to a case where the owner of the land is the
builder, sower, or planter who then later loses ownership of the land by sale or
donation (Pecson v. CA, 244 SCRA 407).
b) An OWNER-POSSESSOR of the lot is certainly not merely a possessor

or builder in good faith (this phrase presupposes ownership in another); much
less is he a builder in bad faith. (Pershing Tan Queto v. CA, 148 SCRA 54
(1987)
c) Lessees, much less, sublessees, are not possessors or builders in good

faith over rented land because they know that their occupancy of the premises
continues only during the life of the lease, or sublease as the case maybe; and
they cannot as a matter of right recover the value of their improvements from the
lessor, much less retain the premises until they are reimbursed. Instead, their
rights are governed by Art. 1678 of the Civil Code which allows reimbursement of
lessees up to one-half (1/2) of the value of their improvements if the lessor so
elects. (Jimenez v. Patricia, Inc., 340 SCRA 525 (2000)
d) There is no builder in good faith in case the builder constructed a house

of strong materials at the tolerance of the landowner in consideration of the loans
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Property
extended by the former to the latter (Floreza v. Evangelista, 96 SCRA 130

(1980).
As a general rule, Art. 448 on builders on good faith does not apply when
there is a contractual relation between the parties.
Art. 448 and 546 of the Civil Code on builders on good faith are therefore
inapplicable in cases covered by the Condominium Act where the owner of the
land and the builder are already bound by specific legislation on the subject
property (the Condominium Act, and by contract (the Master Deed and Bylaws of
the condominium corporation). (Leviste Management System, Inc. v. Legaspi
Towers, Inc., GR No. 199353, 04 April 2018)
16. What are the rights, if any, of a builder in BAD faith?

- The builder in bad faith is entitled to REIMBURSEMENT of: a) necessary
expenses for the preservation of the land (Art. 449); and b) expenses for the
production, gathering and preservation of the fruits (Art. 450).
16.1. May the landowner compel the builder in bad faith to buy the land
even if it is considerably higher than the value of the improvement?
- Yes. (Art. 450)
17. What is alluvion? Accretion?

- Alluvion is the increment, which lands abutting rivers gradually receive as
a result of the current of the waters.
Accretion denotes the process. Alluvion refers to the deposit of soil or to
the soil itself. Alluvion is brought about by accretion. However, the two terms may
be used interchangeably.
17.1. What are the requisites of alluvion?

- The following are the requisites:
a) The deposit must be gradual and imperceptible.

- Not when it is caused by a sudden and forceful action like flooding
(Binalay v. Manalo, 195 SCRA 374).
b) The alluvion must be the result of the action of the current of the waters
of the river, lake (like the Laguna de Bay) (Republic v. CA, 131 SCRA
532) or creek (Zapata v. Dir. of Lands, 6 SCRA 335 [1962]).
- Not by the sea (like the Manila Bay) (Heirs of Navarro v. IAC, 268
SCRA 78).
- Not man made (Vda. de Nazareno v. CA, 257 SCRA 589 (1996).
c) The land must be adjacent to the bank of the river.

- Not when the land is opposite the bank (Binalay v. Manalo, 195
SCRA 374).
18. What is avulsion?

- Whenever the current of a river, creek or torrent segregates from an
estate on its bank a known portion of land and transfer it to another estate (Art.
459).
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Property
18.1. Within what period should the owner recover the transferred
estate/uprooted trees?
- Two (2) years for the estate and six (6) months for the uprooted trees.
Otherwise, they shall belong to the owner of the land upon which they may be
cast (Arts. 459 & 460)
19. May repairs for preservation be undertaken by one of the co-owners even
without the consent of the other co-owners?
- YES. The co-owner need only, if practicable, first notify the other co-
owners (Art. 489).
The lack of notice will not exempt the other co-owners from contributing. In
fact, a c-owner may compel the other co-owners to contribute expenses for the
preservation of the right owned in common (Arts. 488 & 492).
19.1. May a co-owner incur expenses for improvement or embellishment

even without the consent of the other co-owners?
- NO. This is a matter of administration that needs the consent of majority
of the co-owners.
19.2. May a co-owner alter a property owned in common even without the
consent of the other co-owners?
- NO. The unanimous consent of the other co-owners is required (Art.
491).
19.3. What is the legal or juridical dissolution of co-ownership?

- When the thing owned in common is essentially indivisible or physically
indivisible, the property may be allotted to one of the co-owners who shall
indemnify the others, or be sold at public auction and the proceeds distributed
among the co-owners.
20. What are the different kinds of expenses?

- The different kinds of expenses are:
a) Necessary expenses – Expenses for the preservation, prevention pf
waste, deterioration or loss of the thing (Art. 546).
b) Useful expenses – Expenses that add value to a thing or augment its
income (Art. 546).
c) Luxurious expenses – Expenses only for embellishment, convenience
or enjoyment of particular possessors (Art. 548).
21. What is the doctrine of irrevindicability?

- The possession of a movable property acquired in good faith is
equivalent to a title (Art. 559).
21.1. May a possessor who lost or was unlawfully deprived of a movable

recover the same?
- YES. One who has lost or was unlawfully deprived of a movable property
may recover it from the person in possession of the same (Art. 559).
IF said movable was acquired in good faith at a public sale, the owner or
possessor cannot obtain it without reimbursing the price paid thereof.
HOWEVER, the owner can no longer recover the movable property if such
was acquired from a merchant’s stores, fairs or markets (Art. 1505).
22. What are the requirements for an easement right of way to be compulsory
and legally demandable?
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Property
- The requirements are:

a) The person demanding must be the owner of an enclosed estate, one
with a real right;
b) There is no adequate outlet to a public highway.
c) The right of way must be absolutely necessary.
- Not only for the convenience of the owner of the enclosed estate.
d) Isolation must not be due to the claimant’s own act.
e) The right of way must be established a point least prejudicial to the
servient estate.
- The shortest and the least damage should be chose. If not
possible, the way that will cause the least damage, even if not the
shortest, should be used.
22.1. Can one acquire easement of light and view via prescription? If yes,
when shall prescription commence?
- YES. In cases of positive easement, it shall be counted from the opening
of the easement on a party wall or on a balcony or a projection extending over
the adjoining owner. For a negative easement (made on a wall/construction on
the dominant estate), it will commence upon a formal prohibition (Art. 668) and
the observance of the distances in Art. 670 (2 meters for direct view and 60cm
for oblique view). The said distance shall not apply to buildings separated by a
public way or alley which is not less than 3meters wide (Art. 672).
23. Is acceptance of a donation essential?

- YES. It is explicit in Article 725 of the Civil Code that acceptance is
necessary in a donation. This applies to all kinds of donation because the law
does not make any distinction. The rationale behind the requirement of
acceptance is that nobody is obliged to receive a benefit against his will (Vita v.
Montanano, 194 SCRA 180 (1991).
23.1. When should the acceptance be made?

- The donation should be made during the lifetime of the donor and the
donee (Art. 746). This pertains to an inter vivos donation.
A donation mortis causa takes effect only after the death of the donor,
consequently it is only after the latter’s death that acceptance maybe made (Vita
v. Montanano, 194 SCRA 180 (1991).
23.2. What is the effect of illegal or impossible conditions in simple and

remuneratory donations?
- They are considered as not imposed. The conditions are merely
accessory clauses and their nullity should not affect the validity of the donation
(Art. 727).
23.3. When is donation perfected?

- From the moment the donor knows of the acceptance by the donee (Art.
734).
23.4. Is a donation of a real property in a private instrument valid IF it was

already impliedly admitted?
- NO. A donation of a real property in a private instrument is void and
inexistent from the beginning. The implied admission is of no moment and no
effect (Heirs of Doronio vs. Heirs of Doronio, G.R. No. 169454, December 27,
2007).
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Property
24. Squatters have no possessory rights

- Squatters have no possessory rights over the land intruded upon. The
length of time that they may have physically occupied the land is immaterial; they
are deemed to have entered the same in bad faith, such that the nature of their
possession is presumed to have retained the same character throughout their
occupancy (Pilar Dev’t. Corp., v. Dumadag, 693 SCRA 96, 11 March 2013).
25. Doctrine of Stale Demands

- The principle of laches or “stale demands” ordains that the failure or
neglect, for an unreasonable and unexplained length of time, to do that which by
exercising due diligence could or should have been done earlier—negligence or
omission to assert a right within a reasonable time—warrants a presumption that
the party entitled to assert it has abandoned it or declined to assert it. (Manila v.
Gallardo-Manzo, 657 SCRA 20, 07 Sept. 2011)
*****LPI*****
Page 28 of 28

Property: Questions, Jurisprudence & Principles

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Property: Questions, Jurisprudence & Principles

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PROPERTY

questions, jurisprudence & principles

Anything that may be the object of appropriation, which may be either an

2. What are the characteristics/requisites of property?

The requisites/characteristics of property are:

a) Utility – The ability to satisfy human wants.

§ Property and thing.

An object to be considered as a property must meet all of the above requisites

§ The human body and human body parts: property or thing?

1. RA No. 349: An act to legalize the permission to use human organs or

Art. 199. Whenever two or more persons are obliged to give

(1) The spouse;

Further, Article 308 of the Civil Code provides:

Art. 308. No human remains shall be retained, interred, disposed of

In this connection, Section 1103 of the Revised Administrative

Section 1103. Persons charged with the duty of burial. – The

3. Immovable and Movable property.

There is no known, specific or particular definition of an immovable property.

The above enumeration appears to be exclusive in view of the provisions of

The enumeration in Article 415 maybe classified as immovable by:

Nature : cannot be moved from place to place by nature

Incorporation: essentially movables but are attached as an integral

A building/house is always an immovable property whether constructed on a land

§ Effect if parties will consider a building as a movable property.

§ But once a house is demolished, its character as immovable ceases

§ Power barges are categorized as immovable property by destination.

§ Even objects in or on a body of water may be classified as immovables,

A boathouse which, by its nature, is a vessel and, therefore, a personal property

for purposes of taxation which on general principle might be considered

The Civil Code does not define machinery. It is merely enumerated as an

In MERALCO v. The City Assessor, GR No. 166102, 05 August 2015, the

"Machine" is a piece of equipment with moving parts that does work

"Contrivance" is a machine or piece of equipment made with skill

"Instrument" is a tool or device used for a particular purpose,

"Appliance" is a piece of equipment for adapting a tool or machine

"Apparatus" is a tool or piece of equipment used for specific

"Installation" is something (such as a piece of equipment) that is put

"Mobile" means capable of moving or being moved; or movable (a

§ What is the classification of machinery: movable or immovable?

Machinery is by nature a movable property and becomes immobilized only by

a) The machinery must be placed by the owner or his agent (Davao

- But NOT when so placed by a tenant, a usufructuary, or person

b) The industry or work must be carried on in a building or piece of land

c) The machinery must be essential and principal to the industry or work

¤ Machinery must be essential not merely incidental to the business

For movable equipment to be immobilized under Art. 415 of the Civil

Cash registers, typewriters, etc., usually found in hotels, restaurants,

Ψ The parties may treat machinery that is immobilized by destination, as a

If a house of strong material may be considered as personal property for

Ψ For determining whether machinery is real property subject to real

"Machinery" embraces machines, equipment, mechanical contrivances,

“The Court highlights that under Section 199(o) of the Local

building as these "may or may not be attached, permanently or

Machinery which are of general purpose use

Thus, the transformers, electric posts, transmission lines, insulators,

Ω Submarine or undersea communications cables are akin to electric

Capwire is a Philippine corporation in the business of providing international

Ruling: Submarine or undersea communications cables are akin to electric

§ Machines and equipment installed by a tenant/lessee on a leased land

1) Caltex v. BAA, 114 SCRA 297. The machines and equipment –

The above equipment and machinery, as appurtenances to the gas station

The question is whether the gas station equipment and machinery

Improvements on land are commonly taxed as realty even though for