Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 179987               April 29, 2009

HEIRS OF MARIO MALABANAN, Petitioner,

vs.
REPUBLIC OF THE PHILIPPINES, Respondent.

DECISION

TINGA, J.:

One main reason why the informal sector has not become formal is that from Indonesia to Brazil, 90
percent of the informal lands are not titled and registered. This is a generalized phenomenon in the
so-called Third World. And it has many consequences.

xxx

The question is: How is it that so many governments, from Suharto's in Indonesia to Fujimori's in
Peru, have wanted to title these people and have not been able to do so effectively? One reason is
that none of the state systems in Asia or Latin America can gather proof of informal titles. In Peru,
the informals have means of proving property ownership to each other which are not the same
means developed by the Spanish legal system. The informals have their own papers, their own
forms of agreements, and their own systems of registration, all of which are very clearly stated in the
maps which they use for their own informal business transactions.

If you take a walk through the countryside, from Indonesia to Peru, and you walk by field after field--
in each field a different dog is going to bark at you. Even dogs know what private property is all
about. The only one who does not know it is the government. The issue is that there exists a
"common law" and an "informal law" which the Latin American formal legal system does not know
how to recognize.

- Hernando De Soto1

This decision inevitably affects all untitled lands currently in possession of persons and entities other
than the Philippine government. The petition, while unremarkable as to the facts, was accepted by
the Court en banc in order to provide definitive clarity to the applicability and scope of original
registration proceedings under Sections 14(1) and 14(2) of the Property Registration Decree. In
doing so, the Court confronts not only the relevant provisions of the Public Land Act and the Civil
Code, but also the reality on the ground. The countrywide phenomenon of untitled lands, as well as
the problem of informal settlement it has spawned, has unfortunately been treated with benign
neglect. Yet our current laws are hemmed in by their own circumscriptions in addressing the
phenomenon. Still, the duty on our part is primarily to decide cases before us in accord with the
Constitution and the legal principles that have developed our public land law, though our social
obligations dissuade us from casting a blind eye on the endemic problems.

I.
On 20 February 1998, Mario Malabanan filed an application for land registration covering a parcel of
land identified as Lot 9864-A, Cad-452-D, Silang Cadastre, 2 situated in Barangay Tibig, Silang
Cavite, and consisting of 71,324 square meters. Malabanan claimed that he had purchased the
property from Eduardo Velazco,3 and that he and his predecessors-in-interest had been in open,
notorious, and continuous adverse and peaceful possession of the land for more than thirty (30)
years.

The application was raffled to the Regional Trial Court of (RTC) Cavite-Tagaytay City, Branch 18.
The Office of the Solicitor General (OSG) duly designated the Assistant Provincial Prosecutor of
Cavite, Jose Velazco, Jr., to appear on behalf of the State. 4 Apart from presenting documentary
evidence, Malabanan himself and his witness, Aristedes Velazco, testified at the hearing. Velazco
testified that the property was originally belonged to a twenty-two hectare property owned by his
great-grandfather, Lino Velazco. Lino had four sons– Benedicto, Gregorio, Eduardo and Esteban–
the fourth being Aristedes’s grandfather. Upon Lino’s death, his four sons inherited the property and
divided it among themselves. But by 1966, Esteban’s wife, Magdalena, had become the
administrator of all the properties inherited by the Velazco sons from their father, Lino. After the
death of Esteban and Magdalena, their son Virgilio succeeded them in administering the properties,
including Lot 9864-A, which originally belonged to his uncle, Eduardo Velazco. It was this property
that was sold by Eduardo Velazco to Malabanan.5

Assistant Provincial Prosecutor Jose Velazco, Jr. did not cross-examine Aristedes Velazco. He
further manifested that he "also [knew] the property and I affirm the truth of the testimony given by
Mr. Velazco."6 The Republic of the Philippines likewise did not present any evidence to controvert
the application.

Among the evidence presented by Malabanan during trial was a Certification dated 11 June 2001,
issued by the Community Environment & Natural Resources Office, Department of Environment and
Natural Resources (CENRO-DENR), which stated that the subject property was "verified to be within
the Alienable or Disposable land per Land Classification Map No. 3013 established under Project
No. 20-A and approved as such under FAO 4-1656 on March 15, 1982." 7

On 3 December 2002, the RTC rendered judgment in favor of Malabanan, the dispositive portion of
which reads:

WHEREFORE, this Court hereby approves this application for registration and thus places under the
operation of Act 141, Act 496 and/or P.D. 1529, otherwise known as Property Registration Law, the
lands described in Plan Csd-04-0173123-D, Lot 9864-A and containing an area of Seventy One
Thousand Three Hundred Twenty Four (71,324) Square Meters, as supported by its technical
description now forming part of the record of this case, in addition to other proofs adduced in the
name of MARIO MALABANAN, who is of legal age, Filipino, widower, and with residence at Munting
Ilog, Silang, Cavite.

Once this Decision becomes final and executory, the corresponding decree of registration shall
forthwith issue.

SO ORDERED.

The Republic interposed an appeal to the Court of Appeals, arguing that Malabanan had failed to
prove that the property belonged to the alienable and disposable land of the public domain, and that
the RTC had erred in finding that he had been in possession of the property in the manner and for
the length of time required by law for confirmation of imperfect title.
On 23 February 2007, the Court of Appeals rendered a Decision 8 reversing the RTC and dismissing
the application of Malabanan. The appellate court held that under Section 14(1) of the Property
Registration Decree any period of possession prior to the classification of the lots as alienable and
disposable was inconsequential and should be excluded from the computation of the period of
possession. Thus, the appellate court noted that since the CENRO-DENR certification had verified
that the property was declared alienable and disposable only on 15 March 1982, the Velazcos’
possession prior to that date could not be factored in the computation of the period of possession.
This interpretation of the Court of Appeals of Section 14(1) of the Property Registration Decree was
based on the Court’s ruling in Republic v. Herbieto. 9

Malabanan died while the case was pending with the Court of Appeals; 10 hence, it was his heirs who
appealed the decision of the appellate court. Petitioners, before this Court, rely on our ruling in
Republic v. Naguit,11 which was handed down just four months prior to Herbieto. Petitioners suggest
that the discussion in Herbieto cited by the Court of Appeals is actually obiter dictum since the
Metropolitan Trial Court therein which had directed the registration of the property had no jurisdiction
in the first place since the requisite notice of hearing was published only after the hearing had
already begun. Naguit, petitioners argue, remains the controlling doctrine, especially when the
property in question is agricultural land. Therefore, with respect to agricultural lands, any possession
prior to the declaration of the alienable property as disposable may be counted in reckoning the
period of possession to perfect title under the Public Land Act and the Property Registration Decree.

The petition was referred to the Court en banc,12 and on 11 November 2008, the case was heard on
oral arguments. The Court formulated the principal issues for the oral arguments, to wit:

1. In order that an alienable and disposable land of the public domain may be registered
under Section 14(1) of Presidential Decree No. 1529, otherwise known as the Property
Registration Decree, should the land be classified as alienable and disposable as of June
12, 1945 or is it sufficient that such classification occur at any time prior to the filing of the
applicant for registration provided that it is established that the applicant has been in open,
continuous, exclusive and notorious possession of the land under a bona fide claim of
ownership since June 12, 1945 or earlier?

2. For purposes of Section 14(2) of the Property Registration Decree may a parcel of land
classified as alienable and disposable be deemed private land and therefore susceptible to
acquisition by prescription in accordance with the Civil Code?

3. May a parcel of land established as agricultural in character either because of its use or
because its slope is below that of forest lands be registrable under Section 14(2) of the
Property Registration Decree in relation to the provisions of the Civil Code on acquisitive
prescription?

4. Are petitioners entitled to the registration of the subject land in their names under Section
14(1) or Section 14(2) of the Property Registration Decree or both? 13

Based on these issues, the parties formulated their respective positions.

With respect to Section 14(1), petitioners reiterate that the analysis of the Court in Naguit is the
correct interpretation of the provision. The seemingly contradictory pronouncement in Herbieto, it is
submitted, should be considered obiter dictum, since the land registration proceedings therein was
void ab initio due to lack of publication of the notice of initial hearing. Petitioners further point out that
in Republic v. Bibonia,14 promulgated in June of 2007, the Court applied Naguit and adopted the
same observation that the preferred interpretation by the OSG of Section 14(1) was patently absurd.
For its part, the OSG remains insistent that for Section 14(1) to apply, the land should have been
classified as alienable and disposable as of 12 June 1945. Apart from Herbieto, the OSG also cites
the subsequent rulings in Buenaventura v. Republic, 15 Fieldman Agricultural Trading v.
Republic16 and Republic v. Imperial Credit Corporation, 17 as well as the earlier case of Director of
Lands v. Court of Appeals.18

With respect to Section 14(2), petitioners submit that open, continuous, exclusive and notorious
possession of an alienable land of the public domain for more than 30 years ipso jure converts the
land into private property, thus placing it under the coverage of Section 14(2). According to them, it
would not matter whether the land sought to be registered was previously classified as agricultural
land of the public domain so long as, at the time of the application, the property had already been
"converted" into private property through prescription. To bolster their argument, petitioners cite
extensively from our 2008 ruling in Republic v. T.A.N. Properties. 19

The arguments submitted by the OSG with respect to Section 14(2) are more extensive. The OSG
notes that under Article 1113 of the Civil Code, the acquisitive prescription of properties of the State
refers to "patrimonial property," while Section 14(2) speaks of "private lands." It observes that the
Court has yet to decide a case that presented Section 14(2) as a ground for application for
registration, and that the 30-year possession period refers to the period of possession under Section
48(b) of the Public Land Act, and not the concept of prescription under the Civil Code. The OSG
further submits that, assuming that the 30-year prescriptive period can run against public lands, said
period should be reckoned from the time the public land was declared alienable and disposable.

Both sides likewise offer special arguments with respect to the particular factual circumstances
surrounding the subject property and the ownership thereof.

II.

First, we discuss Section 14(1) of the Property Registration Decree. For a full understanding of the
provision, reference has to be made to the Public Land Act.

A.

Commonwealth Act No. 141, also known as the Public Land Act, has, since its enactment, governed
the classification and disposition of lands of the public domain. The President is authorized, from
time to time, to classify the lands of the public domain into alienable and disposable, timber, or
mineral lands.20 Alienable and disposable lands of the public domain are further classified according
to their uses into (a) agricultural; (b) residential, commercial, industrial, or for similar productive
purposes; (c) educational, charitable, or other similar purposes; or (d) reservations for town sites and
for public and quasi-public uses.21

May a private person validly seek the registration in his/her name of alienable and disposable lands
of the public domain? Section 11 of the Public Land Act acknowledges that public lands suitable for
agricultural purposes may be disposed of "by confirmation of imperfect or incomplete titles" through
"judicial legalization."22 Section 48(b) of the Public Land Act, as amended by P.D. No. 1073, supplies
the details and unmistakably grants that right, subject to the requisites stated therein:

Sec. 48. The following described citizens of the Philippines, occupying lands of the public domain or
claiming to own any such land or an interest therein, but whose titles have not been perfected or
completed, may apply to the Court of First Instance of the province where the land is located for
confirmation of their claims and the issuance of a certificate of title therefor, under the Land
Registration Act, to wit:
 xxx

(b) Those who by themselves or through their predecessors in interest have been in open,
continuous, exclusive, and notorious possession and occupation of alienable and disposable lands
of the public domain, under a bona fide claim of acquisition of ownership, since June 12, 1945, or
earlier, immediately preceding the filing of the application for confirmation of title except when
prevented by war or force majeure. These shall be conclusively presumed to have performed all the
conditions essential to a Government grant and shall be entitled to a certificate of title under the
provisions of this chapter.

Section 48(b) of Com. Act No. 141 received its present wording in 1977 when the law was amended
by P.D. No. 1073. Two significant amendments were introduced by P.D. No. 1073. First, the term
"agricultural lands" was changed to "alienable and disposable lands of the public domain." The OSG
submits that this amendment restricted the scope of the lands that may be registered. 23 This is not
actually the case. Under Section 9 of the Public Land Act, "agricultural lands" are a mere subset of
"lands of the public domain alienable or open to disposition." Evidently, alienable and disposable
lands of the public domain are a larger class than only "agricultural lands."

Second, the length of the requisite possession was changed from possession for "thirty (30) years
immediately preceding the filing of the application" to possession "since June 12, 1945 or earlier."
The Court in Naguit explained:

When the Public Land Act was first promulgated in 1936, the period of possession deemed
necessary to vest the right to register their title to agricultural lands of the public domain commenced
from July 26, 1894. However, this period was amended by R.A. No. 1942, which provided that
the bona fide claim of ownership must have been for at least thirty (30) years. Then in 1977, Section
48(b) of the Public Land Act was again amended, this time by P.D. No. 1073, which pegged the
reckoning date at June 12, 1945. xxx

It bears further observation that Section 48(b) of Com. Act No, 141 is virtually the same as Section
14(1) of the Property Registration Decree. Said Decree codified the various laws relative to the
registration of property, including lands of the public domain. It is Section 14(1) that operationalizes
the registration of such lands of the public domain. The provision reads:

SECTION 14. Who may apply.— The following persons may file in the proper Court of First Instance
an application for registration of title to land, whether personally or through their duly authorized
representatives:

(1) those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of alienable and disposable lands of
the public domain under a bona fide claim of ownership since June 12, 1945, or earlier.

Notwithstanding the passage of the Property Registration Decree and the inclusion of Section 14(1)
therein, the Public Land Act has remained in effect. Both laws commonly refer to persons or their
predecessors-in-interest who "have been in open, continuous, exclusive and notorious possession
and occupation of alienable and disposable lands of the public domain under a bona fide claim of
ownership since June 12, 1945, or earlier." That circumstance may have led to the impression that
one or the other is a redundancy, or that Section 48(b) of the Public Land Act has somehow been
repealed or mooted. That is not the case.

The opening clauses of Section 48 of the Public Land Act and Section 14 of the Property
Registration Decree warrant comparison:
Sec. 48 [of the Public Land Act]. The following described citizens of the Philippines, occupying lands
of the public domain or claiming to own any such land or an interest therein, but whose titles have
not been perfected or completed, may apply to the Court of First Instance of the province where the
land is located for confirmation of their claims and the issuance of a certificate of title therefor, under
the Land Registration Act, to wit:

xxx

Sec. 14 [of the Property Registration Decree]. Who may apply.— The following persons may file in
the proper Court of First Instance an application for registration of title to land, whether personally or
through their duly authorized representatives:

xxx

It is clear that Section 48 of the Public Land Act is more descriptive of the nature of the right enjoyed
by the possessor than Section 14 of the Property Registration Decree, which seems to presume the
pre-existence of the right, rather than establishing the right itself for the first time. It is proper to
assert that it is the Public Land Act, as amended by P.D. No. 1073 effective 25 January 1977, that
has primarily established the right of a Filipino citizen who has been "in open, continuous, exclusive,
and notorious possession and occupation of alienable and disposable lands of the public domain,
under a bona fide claim of acquisition of ownership, since June 12, 1945" to perfect or complete his
title by applying with the proper court for the confirmation of his ownership claim and the issuance of
the corresponding certificate of title.

Section 48 can be viewed in conjunction with the afore-quoted Section 11 of the Public Land Act,
which provides that public lands suitable for agricultural purposes may be disposed of by
confirmation of imperfect or incomplete titles, and given the notion that both provisions declare that it
is indeed the Public Land Act that primarily establishes the substantive ownership of the possessor
who has been in possession of the property since 12 June 1945. In turn, Section 14(a) of the
Property Registration Decree recognizes the substantive right granted under Section 48(b) of the
Public Land Act, as well provides the corresponding original registration procedure for the judicial
confirmation of an imperfect or incomplete title.

There is another limitation to the right granted under Section 48(b). Section 47 of the Public Land Act
limits the period within which one may exercise the right to seek registration under Section 48. The
provision has been amended several times, most recently by Rep. Act No. 9176 in 2002. It currently
reads thus:

Section 47. The persons specified in the next following section are hereby granted time, not to
extend beyond December 31, 2020 within which to avail of the benefits of this Chapter: Provided,
That this period shall apply only where the area applied for does not exceed twelve (12) hectares:
Provided, further, That the several periods of time designated by the President in accordance with
Section Forty-Five of this Act shall apply also to the lands comprised in the provisions of this
Chapter, but this Section shall not be construed as prohibiting any said persons from acting under
this Chapter at any time prior to the period fixed by the President. 24

Accordingly under the current state of the law, the substantive right granted under Section 48(b) may
be availed of only until 31 December 2020.

B.
Despite the clear text of Section 48(b) of the Public Land Act, as amended and Section 14(a) of the
Property Registration Decree, the OSG has adopted the position that for one to acquire the right to
seek registration of an alienable and disposable land of the public domain, it is not enough that the
applicant and his/her predecessors-in-interest be in possession under a bona fide claim of
ownership since 12 June 1945; the alienable and disposable character of the property must have
been declared also as of 12 June 1945. Following the OSG’s approach, all lands certified as
alienable and disposable after 12 June 1945 cannot be registered either under Section 14(1) of the
Property Registration Decree or Section 48(b) of the Public Land Act as amended. The absurdity of
such an implication was discussed in Naguit.

Petitioner suggests an interpretation that the alienable and disposable character of the land should
have already been established since June 12, 1945 or earlier. This is not borne out by the plain
meaning of Section 14(1). "Since June 12, 1945," as used in the provision, qualifies its antecedent
phrase "under a bonafide claim of ownership." Generally speaking, qualifying words restrict or
modify only the words or phrases to which they are immediately associated, and not those distantly
or remotely located.25 Ad proximum antecedents fiat relation nisi impediatur sentencia.

Besides, we are mindful of the absurdity that would result if we adopt petitioner’s position. Absent a
legislative amendment, the rule would be, adopting the OSG’s view, that all lands of the public
domain which were not declared alienable or disposable before June 12, 1945 would not be
susceptible to original registration, no matter the length of unchallenged possession by the occupant.
Such interpretation renders paragraph (1) of Section 14 virtually inoperative and even precludes the
government from giving it effect even as it decides to reclassify public agricultural lands as alienable
and disposable. The unreasonableness of the situation would even be aggravated considering that
before June 12, 1945, the Philippines was not yet even considered an independent state.

Accordingly, the Court in Naguit explained:

[T]he more reasonable interpretation of Section 14(1) is that it merely requires the property sought to
be registered as already alienable and disposable at the time the application for registration of title is
filed. If the State, at the time the application is made, has not yet deemed it proper to release the
property for alienation or disposition, the presumption is that the government is still reserving the
right to utilize the property; hence, the need to preserve its ownership in the State irrespective of the
length of adverse possession even if in good faith. However, if the property has already been
classified as alienable and disposable, as it is in this case, then there is already an intention on the
part of the State to abdicate its exclusive prerogative over the property.

The Court declares that the correct interpretation of Section 14(1) is that which was adopted in
Naguit. The contrary pronouncement in Herbieto, as pointed out in Naguit, absurdly limits the
application of the provision to the point of virtual inutility since it would only cover lands actually
declared alienable and disposable prior to 12 June 1945, even if the current possessor is able to
establish open, continuous, exclusive and notorious possession under a bona fide claim of
ownership long before that date.

Moreover, the Naguit interpretation allows more possessors under a bona fide claim of ownership to
avail of judicial confirmation of their imperfect titles than what would be feasible under Herbieto. This
balancing fact is significant, especially considering our forthcoming discussion on the scope and
reach of Section 14(2) of the Property Registration Decree.

Petitioners make the salient observation that the contradictory passages from Herbieto are obiter
dicta since the land registration proceedings therein is void ab initio in the first place due to lack of
the requisite publication of the notice of initial hearing. There is no need to explicitly overturn
Herbieto, as it suffices that the Court’s acknowledgment that the particular line of argument used
therein concerning Section 14(1) is indeed obiter.

It may be noted that in the subsequent case of Buenaventura, 26 the Court, citing Herbieto, again
stated that "[a]ny period of possession prior to the date when the [s]ubject [property was] classified
as alienable and disposable is inconsequential and should be excluded from the computation of the
period of possession…" That statement, in the context of Section 14(1), is certainly erroneous.
Nonetheless, the passage as cited in Buenaventura should again be considered as obiter. The
application therein was ultimately granted, citing Section 14(2). The evidence submitted by
petitioners therein did not establish any mode of possession on their part prior to 1948, thereby
precluding the application of Section 14(1). It is not even apparent from the decision whether
petitioners therein had claimed entitlement to original registration following Section 14(1), their
position being that they had been in exclusive possession under a bona fide claim of ownership for
over fifty (50) years, but not before 12 June 1945.

Thus, neither Herbieto nor its principal discipular ruling Buenaventura has any precedental value
with respect to Section 14(1). On the other hand, the ratio of Naguit is embedded in Section 14(1),
since it precisely involved situation wherein the applicant had been in exclusive possession under a
bona fide claim of ownership prior to 12 June 1945. The Court’s interpretation of Section 14(1)
therein was decisive to the resolution of the case. Any doubt as to which between Naguit or Herbieto
provides the final word of the Court on Section 14(1) is now settled in favor of Naguit.

We noted in Naguit that it should be distinguished from Bracewell v. Court of Appeals 27 since in the
latter, the application for registration had been filed before the land was declared alienable or
disposable. The dissent though pronounces Bracewell as the better rule between the two. Yet two
years after Bracewell, its ponente, the esteemed Justice Consuelo Ynares-Santiago, penned the
ruling in Republic v. Ceniza,28 which involved a claim of possession that extended back to 1927 over
a public domain land that was declared alienable and disposable only in 1980. Ceniza cited
Bracewell, quoted extensively from it, and following the mindset of the dissent, the attempt at
registration in Ceniza should have failed. Not so.

To prove that the land subject of an application for registration is alienable, an 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 Bureau of Lands investigators; and
a legislative act or a statute.

In this case, private respondents presented a certification dated November 25, 1994, issued by
Eduardo M. Inting, the Community Environment and Natural Resources Officer in the Department of
Environment and Natural Resources Office in Cebu City, stating that the lots involved were "found to
be within the alienable and disposable (sic) Block-I, Land Classification Project No. 32-A, per map
2962 4-I555 dated December 9, 1980." This is sufficient evidence to show the real character of the
land subject of private respondents’ application. Further, the certification enjoys a presumption of
regularity in the absence of contradictory evidence, which is true in this case. Worth noting also was
the observation of the Court of Appeals stating that:

[n]o opposition was filed by the Bureaus of Lands and Forestry to contest the application of
appellees on the ground that the property still forms part of the public domain. Nor is there any
showing that the lots in question are forestal land....

Thus, while the Court of Appeals erred in ruling that mere possession of public land for the period
required by law would entitle its occupant to a confirmation of imperfect title, it did not err in ruling in
favor of private respondents as far as the first requirement in Section 48(b) of the Public Land Act is
concerned, for they were able to overcome the burden of proving the alienability of the land subject
of their application.

As correctly found by the Court of Appeals, private respondents were able to prove their open,
continuous, exclusive and notorious possession of the subject land even before the year 1927. As a
rule, we are bound by the factual findings of the Court of Appeals. Although there are exceptions,
petitioner did not show that this is one of them.29

Why did the Court in Ceniza, through the same eminent member who authored Bracewell, sanction
the registration under Section 48(b) of public domain lands declared alienable or disposable thirty-
five (35) years and 180 days after 12 June 1945? The telling difference is that in Ceniza, the
application for registration was filed nearly six (6) years after the land had been declared alienable or
disposable, while in Bracewell, the application was filed nine (9) years before the land was declared
alienable or disposable. That crucial difference was also stressed in Naguit to contradistinguish it
from Bracewell, a difference which the dissent seeks to belittle.

III.

We next ascertain the correct framework of analysis with respect to Section 14(2). The provision
reads:

SECTION 14. Who may apply. — The following persons may file in the proper Court of First
Instance an application for registration of title to land, whether personally or through their duly
authorized representatives:

xxx

(2) Those who have acquired ownership over private lands by prescription under the provisions of
existing laws.

The Court in Naguit offered the following discussion concerning Section 14(2), which we did even
then recognize, and still do, to be an obiter dictum, but we nonetheless refer to it as material for
further discussion, thus:

Did the enactment of the Property Registration Decree and the amendatory P.D. No. 1073 preclude
the application for registration of alienable lands of the public domain, possession over which
commenced only after June 12, 1945? It did not, considering Section 14(2) of the Property
Registration Decree, which governs and authorizes the application of "those who have acquired
ownership of private lands by prescription under the provisions of existing laws."

Prescription is one of the modes of acquiring ownership under the Civil Code.[ 30 ] There is a
consistent jurisprudential rule that properties classified as alienable public land may be converted
into private property by reason of open, continuous and exclusive possession of at least thirty (30)
years.[31 ] With such conversion, such property may now fall within the contemplation of "private
lands" under Section 14(2), and thus susceptible to registration by those who have acquired
ownership through prescription. Thus, even if possession of the alienable public land commenced on
a date later than June 12, 1945, and such possession being been open, continuous and exclusive,
then the possessor may have the right to register the land by virtue of Section 14(2) of the Property
Registration Decree.
Naguit did not involve the application of Section 14(2), unlike in this case where petitioners have
based their registration bid primarily on that provision, and where the evidence definitively
establishes their claim of possession only as far back as 1948. It is in this case that we can properly
appreciate the nuances of the provision.

A.

The obiter in Naguit cited the Civil Code provisions on prescription as the possible basis for
application for original registration under Section 14(2). Specifically, it is Article 1113 which provides
legal foundation for the application. It reads:

All things which are within the commerce of men are susceptible of prescription, unless otherwise
provided. Property of the State or any of its subdivisions not patrimonial in character shall not be the
object of prescription.

It is clear under the Civil Code that where lands of the public domain are patrimonial in character,
they are susceptible to acquisitive prescription. On the other hand, among the public domain lands
that are not susceptible to acquisitive prescription are timber lands and mineral lands. The
Constitution itself proscribes private ownership of timber or mineral lands.

There are in fact several provisions in the Civil Code concerning the acquisition of real property
through prescription. Ownership of real property may be acquired by ordinary prescription of ten (10)
years,32 or through extraordinary prescription of thirty (30) years.33 Ordinary acquisitive prescription
requires possession in good faith, 34 as well as just title.35

When Section 14(2) of the Property Registration Decree explicitly provides that persons "who have
acquired ownership over private lands by prescription under the provisions of existing laws," it
unmistakably refers to the Civil Code as a valid basis for the registration of lands. The Civil Code is
the only existing law that specifically allows the acquisition by prescription of private lands, including
patrimonial property belonging to the State. Thus, the critical question that needs affirmation is
whether Section 14(2) does encompass original registration proceedings over patrimonial property of
the State, which a private person has acquired through prescription.

The Naguit obiter had adverted to a frequently reiterated jurisprudence holding that properties
classified as alienable public land may be converted into private property by reason of open,
continuous and exclusive possession of at least thirty (30) years.36 Yet if we ascertain the source of
the "thirty-year" period, additional complexities relating to Section 14(2) and to how exactly it
operates would emerge. For there are in fact two distinct origins of the thirty (30)-year rule.

The first source is Rep. Act No. 1942, enacted in 1957, which amended Section 48(b) of the Public
Land Act by granting the right to seek original registration of alienable public lands through
possession in the concept of an owner for at least thirty years.

The following-described citizens of the Philippines, occupying lands of the public domain or claiming
to own any such lands or an interest therein, but whose titles have not been perfected or completed,
may apply to the Court of First Instance of the province where the land is located for confirmation of
their claims and the issuance of a certificate of title therefor, under the Land Registration Act, to wit:

xxxxxxxxx
(b) Those who by themselves or through their predecessors in interest have been in open,
continuous, exclusive and notorious possession and occupation of agricultural lands of the public
domain, under a bona fide claim of acquisition of ownership, for at least thirty years immediately
preceding the filing of the application for confirmation of title, except when prevented by war or force
majeure. These shall be conclusively presumed to have performed all the conditions essential to a
Government grant and shall be entitled to a certificate of title under the provisions of this Chapter.
(emphasis supplied)37

This provision was repealed in 1977 with the enactment of P.D. 1073, which made the date 12 June
1945 the reckoning point for the first time. Nonetheless, applications for registration filed prior to
1977 could have invoked the 30-year rule introduced by Rep. Act No. 1942.

The second source is Section 14(2) of P.D. 1529 itself, at least by implication, as it applies the rules
on prescription under the Civil Code, particularly Article 1113 in relation to Article 1137. Note that
there are two kinds of prescription under the Civil Code–ordinary acquisitive prescription and
extraordinary acquisitive prescription, which, under Article 1137, is completed "through uninterrupted
adverse possession… for thirty years, without need of title or of good faith."

Obviously, the first source of the thirty (30)-year period rule, Rep. Act No. 1942, became unavailable
after 1977. At present, the only legal basis for the thirty (30)-year period is the law on prescription
under the Civil Code, as mandated under Section 14(2). However, there is a material difference
between how the thirty (30)-year rule operated under Rep. Act No. 1942 and how it did under the
Civil Code.

Section 48(b) of the Public Land Act, as amended by Rep. Act No. 1942, did not refer to or call into
application the Civil Code provisions on prescription. It merely set forth a requisite thirty-year
possession period immediately preceding the application for confirmation of title, without any
qualification as to whether the property should be declared alienable at the beginning of, and
continue as such, throughout the entire thirty-(30) years. There is neither statutory nor jurisprudential
basis to assert Rep. Act No. 1942 had mandated such a requirement, 38 similar to our earlier finding
with respect to the present language of Section 48(b), which now sets 12 June 1945 as the point of
reference.

Then, with the repeal of Rep. Act No. 1942, the thirty-year possession period as basis for original
registration became Section 14(2) of the Property Registration Decree, which entitled those "who
have acquired ownership over private lands by prescription under the provisions of existing laws" to
apply for original registration. Again, the thirty-year period is derived from the rule on extraordinary
prescription under Article 1137 of the Civil Code. At the same time, Section 14(2) puts into operation
the entire regime of prescription under the Civil Code, a fact which does not hold true with respect to
Section 14(1).

B.

Unlike Section 14(1), Section 14(2) explicitly refers to the principles on prescription under existing
laws. Accordingly, we are impelled to apply the civil law concept of prescription, as set forth in the
Civil Code, in our interpretation of Section 14(2). There is no similar demand on our part in the case
of Section 14(1).

The critical qualification under Article 1113 of the Civil Code is thus: "[p]roperty of the State or any of
its subdivisions not patrimonial in character shall not be the object of prescription." The identification
what consists of patrimonial property is provided by Articles 420 and 421, which we quote in full:
Art. 420. The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores, roadsteads, and others of similar character;

(2) Those which belong to the State, without being for public use, and are intended for some
public service or for the development of the national wealth.

Art. 421. All other property of the State, which is not of the character stated in the preceding article,
is patrimonial property

It is clear that property of public dominion, which generally includes property belonging to the State,
cannot be the object of prescription or, indeed, be subject of the commerce of man. 39 Lands of the
public domain, whether declared alienable and disposable or not, are property of public dominion
and thus insusceptible to acquisition by prescription.

Let us now explore the effects under the Civil Code of a declaration by the President or any duly
authorized government officer of alienability and disposability of lands of the public domain. Would
such lands so declared alienable and disposable be converted, under the Civil Code, from property
of the public dominion into patrimonial property? After all, by connotative definition, alienable and
disposable lands may be the object of the commerce of man; Article 1113 provides that all things
within the commerce of man are susceptible to prescription; and the same provision further provides
that patrimonial property of the State may be acquired by prescription.

Nonetheless, Article 422 of the Civil Code states that "[p]roperty of public dominion, when no longer
intended for public use or for public service, shall form part of the patrimonial property of the State."
It is this provision that controls how public dominion property may be converted into patrimonial
property susceptible to acquisition by prescription. After all, Article 420 (2) makes clear that those
property "which belong to the State, without being for public use, and are intended for some public
service or for the development of the national wealth" are public dominion property. For as long as
the property belongs to the State, although already classified as alienable or disposable, it remains
property of the public dominion if when it is "intended for some public service or for the development
of the national wealth".

Accordingly, there must be an express declaration by the State that the public dominion property is
no longer intended for public service or the development of the national wealth or that the property
has been converted into patrimonial. Without such express declaration, the property, even if
classified as alienable or disposable, remains property of the public dominion, pursuant to Article
420(2), and thus incapable of acquisition by prescription. It is only when such alienable and
disposable lands are expressly declared by the State to be no longer intended for public service or
for the development of the national wealth that the period of acquisitive prescription can begin to run.
Such declaration shall be in the form of a law duly enacted by Congress or a Presidential
Proclamation in cases where the President is duly authorized by law.

It is comprehensible with ease that this reading of Section 14(2) of the Property Registration Decree
limits its scope and reach and thus affects the registrability even of lands already declared alienable
and disposable to the detriment of the bona fide possessors or occupants claiming title to the lands.
Yet this interpretation is in accord with the Regalian doctrine and its concomitant assumption that all
lands owned by the State, although declared alienable or disposable, remain as such and ought to
be used only by the Government.
Recourse does not lie with this Court in the matter. The duty of the Court is to apply the Constitution
and the laws in accordance with their language and intent. The remedy is to change the law, which
is the province of the legislative branch. Congress can very well be entreated to amend Section
14(2) of the Property Registration Decree and pertinent provisions of the Civil Code to liberalize the
requirements for judicial confirmation of imperfect or incomplete titles.

The operation of the foregoing interpretation can be illustrated by an actual example. Republic Act
No. 7227, entitled "An Act Accelerating The Conversion Of Military Reservations Into Other
Productive Uses, etc.," is more commonly known as the BCDA law. Section 2 of the law authorizes
the sale of certain military reservations and portions of military camps in Metro Manila, including Fort
Bonifacio and Villamor Air Base. For purposes of effecting the sale of the military camps, the law
mandates the President to transfer such military lands to the Bases Conversion Development
Authority (BCDA)40 which in turn is authorized to own, hold and/or administer them. 41 The President
is authorized to sell portions of the military camps, in whole or in part. 42 Accordingly, the BCDA law
itself declares that the military lands subject thereof are "alienable and disposable pursuant to the
provisions of existing laws and regulations governing sales of government properties." 43

From the moment the BCDA law was enacted the subject military lands have become alienable and
disposable. However, said lands did not become patrimonial, as the BCDA law itself expressly
makes the reservation that these lands are to be sold in order to raise funds for the conversion of the
former American bases at Clark and Subic.44 Such purpose can be tied to either "public service" or
"the development of national wealth" under Article 420(2). Thus, at that time, the lands remained
property of the public dominion under Article 420(2), notwithstanding their status as alienable and
disposable. It is upon their sale as authorized under the BCDA law to a private person or entity that
such lands become private property and cease to be property of the public dominion.

C.

Should public domain lands become patrimonial because they are declared as such in a duly
enacted law or duly promulgated proclamation that they are no longer intended for public service or
for the development of the national wealth, would the period of possession prior to the conversion of
such public dominion into patrimonial be reckoned in counting the prescriptive period in favor of the
possessors? We rule in the negative.

The limitation imposed by Article 1113 dissuades us from ruling that the period of possession before
the public domain land becomes patrimonial may be counted for the purpose of completing the
prescriptive period. Possession of public dominion property before it becomes patrimonial cannot be
the object of prescription according to the Civil Code. As the application for registration under
Section 14(2) falls wholly within the framework of prescription under the Civil Code, there is no way
that possession during the time that the land was still classified as public dominion property can be
counted to meet the requisites of acquisitive prescription and justify registration.

Are we being inconsistent in applying divergent rules for Section 14(1) and Section 14(2)? There is
no inconsistency. Section 14(1) mandates registration on the basis of possession, while Section
14(2) entitles registration on the basis of prescription. Registration under Section 14(1) is extended
under the aegis of the Property Registration Decree and the Public Land Act while registration under
Section 14(2) is made available both by the Property Registration Decree and the Civil Code.

In the same manner, we can distinguish between the thirty-year period under Section 48(b) of the
Public Land Act, as amended by Rep. Act No. 1472, and the thirty-year period available through
Section 14(2) of the Property Registration Decree in relation to Article 1137 of the Civil Code. The
period under the former speaks of a thirty-year period of possession, while the period under the
latter concerns a thirty-year period of extraordinary prescription. Registration under Section 48(b) of
the Public Land Act as amended by Rep. Act No. 1472 is based on thirty years of possession alone
without regard to the Civil Code, while the registration under Section 14(2) of the Property
Registration Decree is founded on extraordinary prescription under the Civil Code.

It may be asked why the principles of prescription under the Civil Code should not apply as well to
Section 14(1). Notwithstanding the vaunted status of the Civil Code, it ultimately is just one of
numerous statutes, neither superior nor inferior to other statutes such as the Property Registration
Decree. The legislative branch is not bound to adhere to the framework set forth by the Civil Code
when it enacts subsequent legislation. Section 14(2) manifests a clear intent to interrelate the
registration allowed under that provision with the Civil Code, but no such intent exists with respect to
Section 14(1).

IV.

One of the keys to understanding the framework we set forth today is seeing how our land
registration procedures correlate with our law on prescription, which, under the Civil Code, is one of
the modes for acquiring ownership over property.

The Civil Code makes it clear that patrimonial property of the State may be acquired by private
persons through prescription. This is brought about by Article 1113, which states that "[a]ll things
which are within the commerce of man are susceptible to prescription," and that [p]roperty of the
State or any of its subdivisions not patrimonial in character shall not be the object of prescription."

There are two modes of prescription through which immovables may be acquired under the Civil
Code. The first is ordinary acquisitive prescription, which, under Article 1117, requires possession in
good faith and with just title; and, under Article 1134, is completed through possession of ten (10)
years. There is nothing in the Civil Code that bars a person from acquiring patrimonial property of
the State through ordinary acquisitive prescription, nor is there any apparent reason to impose such
a rule. At the same time, there are indispensable requisites–good faith and just title. The
ascertainment of good faith involves the application of Articles 526, 527, and 528, as well as Article
1127 of the Civil Code,45 provisions that more or less speak for themselves.

On the other hand, the concept of just title requires some clarification. Under Article 1129, there is
just title for the purposes of prescription "when the adverse claimant came into possession of the
property through one of the modes recognized by law for the acquisition of ownership or other real
rights, but the grantor was not the owner or could not transmit any right." Dr. Tolentino explains:

Just title is an act which has for its purpose the transmission of ownership, and which would have
actually transferred ownership if the grantor had been the owner. This vice or defect is the one cured
by prescription. Examples: sale with delivery, exchange, donation, succession, and dacion in
payment.46

The OSG submits that the requirement of just title necessarily precludes the applicability of ordinary
acquisitive prescription to patrimonial property. The major premise for the argument is that "the
State, as the owner and grantor, could not transmit ownership to the possessor before the
completion of the required period of possession." 47 It is evident that the OSG erred when it assumed
that the grantor referred to in Article 1129 is the State. The grantor is the one from whom the person
invoking ordinary acquisitive prescription derived the title, whether by sale, exchange, donation,
succession or any other mode of the acquisition of ownership or other real rights.
Earlier, we made it clear that, whether under ordinary prescription or extraordinary prescription, the
period of possession preceding the classification of public dominion lands as patrimonial cannot be
counted for the purpose of computing prescription. But after the property has been become
patrimonial, the period of prescription begins to run in favor of the possessor. Once the requisite
period has been completed, two legal events ensue: (1) the patrimonial property is ipso jure
converted into private land; and (2) the person in possession for the periods prescribed under the
Civil Code acquires ownership of the property by operation of the Civil Code.

It is evident that once the possessor automatically becomes the owner of the converted patrimonial
property, the ideal next step is the registration of the property under the Torrens system. It should be
remembered that registration of property is not a mode of acquisition of ownership, but merely a
mode of confirmation of ownership. 48

Looking back at the registration regime prior to the adoption of the Property Registration Decree in
1977, it is apparent that the registration system then did not fully accommodate the acquisition of
ownership of patrimonial property under the Civil Code. What the system accommodated was the
confirmation of imperfect title brought about by the completion of a period of possession ordained
under the Public Land Act (either 30 years following Rep. Act No. 1942, or since 12 June 1945
following P.D. No. 1073).

The Land Registration Act49 was noticeably silent on the requisites for alienable public lands
acquired through ordinary prescription under the Civil Code, though it arguably did not preclude such
registration.50 Still, the gap was lamentable, considering that the Civil Code, by itself, establishes
ownership over the patrimonial property of persons who have completed the prescriptive periods
ordained therein. The gap was finally closed with the adoption of the Property Registration Decree in
1977, with Section 14(2) thereof expressly authorizing original registration in favor of persons who
have acquired ownership over private lands by prescription under the provisions of existing laws,
that is, the Civil Code as of now.

V.

We synthesize the doctrines laid down in this case, as follows:

(1) In connection with Section 14(1) of the Property Registration Decree, Section 48(b) of the
Public Land Act recognizes and confirms that "those who by themselves or through their
predecessors in interest have been in open, continuous, exclusive, and notorious possession
and occupation of alienable and disposable lands of the public domain, under a bona fide
claim of acquisition of ownership, since June 12, 1945" have acquired ownership of, and
registrable title to, such lands based on the length and quality of their possession.

(a) Since Section 48(b) merely requires possession since 12 June 1945 and does not
require that the lands should have been alienable and disposable during the entire
period of possession, the possessor is entitled to secure judicial confirmation of his
title thereto as soon as it is declared alienable and disposable, subject to the
timeframe imposed by Section 47 of the Public Land Act. 51

(b) The right to register granted under Section 48(b) of the Public Land Act is further
confirmed by Section 14(1) of the Property Registration Decree.

(2) In complying with Section 14(2) of the Property Registration Decree, consider that under
the Civil Code, prescription is recognized as a mode of acquiring ownership of patrimonial
property. However, public domain lands become only patrimonial property not only with a
 declaration that these are alienable or disposable. There must also be an express
government manifestation that the property is already patrimonial or no longer retained for
public service or the development of national wealth, under Article 422 of the Civil Code. And
only when the property has become patrimonial can the prescriptive period for the
acquisition of property of the public dominion begin to run.

(a) Patrimonial property is private property of the government. The person acquires
ownership of patrimonial property by prescription under the Civil Code is entitled to
secure registration thereof under Section 14(2) of the Property Registration Decree.

(b) There are two kinds of prescription by which patrimonial property may be
acquired, one ordinary and other extraordinary. Under ordinary acquisitive
prescription, a person acquires ownership of a patrimonial property through
possession for at least ten (10) years, in good faith and with just title. Under
extraordinary acquisitive prescription, a person’s uninterrupted adverse possession
of patrimonial property for at least thirty (30) years, regardless of good faith or just
title, ripens into ownership.

B.

We now apply the above-stated doctrines to the case at bar.

It is clear that the evidence of petitioners is insufficient to establish that Malabanan has acquired
ownership over the subject property under Section 48(b) of the Public Land Act. There is no
substantive evidence to establish that Malabanan or petitioners as his predecessors-in-interest have
been in possession of the property since 12 June 1945 or earlier. The earliest that petitioners can
date back their possession, according to their own evidence—the Tax Declarations they presented
in particular—is to the year 1948. Thus, they cannot avail themselves of registration under Section
14(1) of the Property Registration Decree.

Neither can petitioners properly invoke Section 14(2) as basis for registration. While the subject
property was declared as alienable or disposable in 1982, there is no competent evidence that is no
longer intended for public use service or for the development of the national evidence, conformably
with Article 422 of the Civil Code. The classification of the subject property as alienable and
disposable land of the public domain does not change its status as property of the public dominion
under Article 420(2) of the Civil Code. Thus, it is insusceptible to acquisition by prescription.

VI.

A final word. The Court is comfortable with the correctness of the legal doctrines established in this
decision. Nonetheless, discomfiture over the implications of today’s ruling cannot be discounted. For,
every untitled property that is occupied in the country will be affected by this ruling. The social
implications cannot be dismissed lightly, and the Court would be abdicating its social responsibility to
the Filipino people if we simply levied the law without comment.

The informal settlement of public lands, whether declared alienable or not, is a phenomenon tied to
long-standing habit and cultural acquiescence, and is common among the so-called "Third World"
countries. This paradigm powerfully evokes the disconnect between a legal system and the reality
on the ground. The law so far has been unable to bridge that gap. Alternative means of acquisition of
these public domain lands, such as through homestead or free patent, have
proven unattractive due to limitations imposed on the grantee in the encumbrance or alienation of
said properties.52 Judicial confirmation of imperfect title has emerged as the most viable, if not the
most attractive means to regularize the informal settlement of alienable or disposable lands of the
public domain, yet even that system, as revealed in this decision, has considerable limits.

There are millions upon millions of Filipinos who have individually or exclusively held residential
lands on which they have lived and raised their families. Many more have tilled and made productive
idle lands of the State with their hands. They have been regarded for generation by their families and
their communities as common law owners. There is much to be said about the virtues of according
them legitimate states. Yet such virtues are not for the Court to translate into positive law, as the law
itself considered such lands as property of the public dominion. It could only be up to Congress to
set forth a new phase of land reform to sensibly regularize and formalize the settlement of such
lands which in legal theory are lands of the public domain before the problem becomes insoluble.
This could be accomplished, to cite two examples, by liberalizing the standards for judicial
confirmation of imperfect title, or amending the Civil Code itself to ease the requisites for the
conversion of public dominion property into patrimonial.

One’s sense of security over land rights infuses into every aspect of well-being not only of that
individual, but also to the person’s family. Once that sense of security is deprived, life and livelihood
are put on stasis. It is for the political branches to bring welcome closure to the long pestering
problem.

WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals dated 23 February
2007 and Resolution dated 2 October 2007 are AFFIRMED. No pronouncement as to costs.

SO ORDERED.

DANTE O. TINGA
Associate Justice

WE CONCUR:
EN BANC

[ G.R. No. 155076, January 13, 2009 ]

LUIS MARCOS P. LAUREL, PETITIONER, VS. HON. ZEUS C. ABROGAR, PRESIDING JUDGE OF THE

REGIONAL TRIAL COURT, MAKATI CITY, BRANCH 150, PEOPLE OF THE PHILIPPINES & PHILIPPINE LONG
DISTANCE TELEPHONE COMPANY, RESPONDENTS.

DECISION

YNARES-SANTIAGO, J.:

On February 27, 2006, this Court's First Division rendered judgment in this case as follows:

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed Orders of the Regional Trial
Court and the Decision of the Court of Appeals are REVERSED and SET ASIDE. The Regional Trial Court is
directed to issue an order granting the motion of the petitioner to quash the Amended Information.

SO ORDERED.[1]

By way of brief background, petitioner is one of the accused in Criminal Case No. 99-2425, filed with the
Regional Trial Court of Makati City, Branch 150. The Amended Information charged the accused with
theft under Article 308 of the Revised Penal Code, committed as follows:

On or about September 10-19, 1999, or prior thereto in Makati City, and within the jurisdiction of this
Honorable Court, the accused, conspiring and confederating together and all of them mutually helping
and aiding one another, with intent to gain and without the knowledge and consent of the Philippine
Long Distance Telephone (PLDT), did then and there willfully, 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.

CONTRARY TO LAW.[2]

Petitioner filed a "Motion to Quash (with Motion to Defer Arraignment)," on the ground that the factual
allegations in the Amended Information do not constitute the felony of theft. The trial court denied the
Motion to Quash the Amended Information, as well petitioner's subsequent Motion for Reconsideration.

Petitioner's special civil action for certiorari was dismissed by the Court of Appeals. Thus, petitioner filed
the instant petition for review with this Court.

In the above-quoted Decision, this Court held that the Amended Information does not contain material
allegations charging petitioner with theft of personal property since international long distance calls and
the business of providing telecommunication or telephone services are not personal properties under
Article 308 of the Revised Penal Code.

Respondent Philippine Long Distance Telephone Company (PLDT) filed a Motion for Reconsideration
with Motion to Refer the Case to the Supreme Court En Banc. It maintains that the Amended
Information charging petitioner with theft is valid and sufficient; that it states the names of all the
accused who were specifically charged with the crime of theft of PLDT's international calls and business
of providing telecommunication or telephone service on or about September 10 to 19, 1999 in Makati
City by conducting ISR or International Simple Resale; that it identifies the international calls and
business of providing telecommunication or telephone service of PLDT as the personal properties which
were unlawfully taken by the accused; and that it satisfies the test of sufficiency as it enabled a person
of common understanding to know the charge against him and the court to render judgment properly.

PLDT further insists that the Revised Penal Code should be interpreted in the context of the Civil Code's
definition of real and personal property. The enumeration of real properties in Article 415 of the Civil
Code is exclusive such that all those not included therein are personal properties. Since Article 308 of
the Revised Penal Code used the words "personal property" without qualification, it follows that all
"personal properties" as understood in the context of the Civil Code, may be the subject of theft under
Article 308 of the Revised Penal Code. PLDT alleges that the international calls and business of providing
telecommunication or telephone service are personal properties capable of appropriation and can be
objects of theft.

PLDT also argues that "taking" in relation to theft under the Revised Penal Code does not require
"asportation," the sole requisite being that the object should be capable of "appropriation." The
element of "taking" referred to in Article 308 of the Revised Penal Code means the act of depriving
another of the possession and dominion of a movable coupled with the intention, at the time of the
"taking," of withholding it with the character of permanency. There must be intent to appropriate,
which means to deprive the lawful owner of the thing. Thus, the term "personal properties" under
Article 308 of the Revised Penal Code is not limited to only personal properties which are "susceptible of
being severed from a mass or larger quantity and of being transported from place to place."

PLDT likewise alleges that as early as the 1930s, international telephone calls were in existence; hence,
there is no basis for this Court's finding that the Legislature could not have contemplated the theft of
international telephone calls and the unlawful transmission and routing of electronic voice signals or
impulses emanating from such calls by unlawfully tampering with the telephone device as within the
coverage of the Revised Penal Code.

According to respondent, the "international phone calls" which are "electric currents or sets of electric
impulses transmitted through a medium, and carry a pattern representing the human voice to a
receiver," are personal properties which may be subject of theft. Article 416(3) of the Civil Code deems
"forces of nature" (which includes electricity) which are brought under the control by science, are
personal property.

In his Comment to PLDT's motion for reconsideration, petitioner Laurel claims that a telephone call is a
conversation on the phone or a communication carried out using the telephone. It is not synonymous to
electric current or impulses. Hence, it may not be considered as personal property susceptible of
appropriation. Petitioner claims that the analogy between generated electricity and telephone calls is
misplaced. PLDT does not produce or generate telephone calls. It only provides the facilities or services
for the transmission and switching of the calls. He also insists that "business" is not personal property. It
is not the "business" that is protected but the "right to carry on a business." This right is what is
considered as property. Since the services of PLDT cannot be considered as "property," the same may
not be subject of theft.

The Office of the Solicitor General (OSG) agrees with respondent PLDT that "international phone calls
and the business or service of providing international phone calls" are subsumed in the enumeration
and definition of personal property under the Civil Code hence, may be proper subjects of theft. It noted
that the cases of United States v. Genato,[3] United States v. Carlos[4]  and United States v. Tambunting,
[5]
 which recognized intangible properties like gas and electricity as personal properties, are deemed
incorporated in our penal laws. Moreover, the theft provision in the Revised Penal Code was
deliberately couched in broad terms precisely to be all-encompassing and embracing even such scenario
that could not have been easily anticipated.

According to the OSG, prosecution under Republic Act (RA) No. 8484 or the Access Device Regulations
Act of 1998 and RA 8792 or the Electronic Commerce Act of 2000 does not preclude prosecution under
the Revised Penal Code for the crime of theft. The latter embraces unauthorized appropriation or use of
PLDT's international calls, service and business, for personal profit or gain, to the prejudice of PLDT as
owner thereof. On the other hand, the special laws punish the surreptitious and advanced technical
means employed to illegally obtain the subject service and business. Even assuming that the correct
indictment should have been under RA 8484, the quashal of the information would still not be proper.
The charge of theft as alleged in the Information should be taken in relation to RA 8484 because it is the
elements, and not the designation of the crime, that control.

Considering the gravity and complexity of the novel questions of law involved in this case, the Special
First Division resolved to refer the same to the Banc.

We resolve to grant the Motion for Reconsideration but remand the case to the trial court for proper
clarification of the Amended Information.

Article 308 of the Revised Penal Code provides:

Art. 308. Who are liable for theft. - Theft is committed by any person who, with intent to gain but
without violence against, or intimidation of persons nor force upon things, shall take personal property
of another without the latter's consent.

The elements of theft under Article 308 of the Revised Penal Code are as follows: (1) that there be taking
of personal property; (2) that said property belongs to another; (3) that the taking be done with intent
to gain; (4) that the taking be done without the consent of the owner; and (5) that the taking be
accomplished without the use of violence against or intimidation of persons or force upon things.
Prior to the passage of the Revised Penal Code on December 8, 1930, the definition of the term
"personal property" in the penal code provision on theft had been established in Philippine
jurisprudence. This Court, in United States v. Genato, United States v. Carlos, and United States v.
Tambunting, consistently ruled that any personal property, tangible or intangible, corporeal or
incorporeal, capable of appropriation can be the object of theft.

Moreover, since the passage of the Revised Penal Code on December 8, 1930, the term "personal
property" has had a generally accepted definition in civil law. 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)." Thus, the term "personal property" in the Revised Penal Code
should be interpreted in the context of the Civil Code provisions in accordance with the rule on statutory
construction that where words have been long used in a technical sense and have been judicially
construed to have a certain meaning, and have been adopted by the legislature as having a certain
meaning prior to a particular statute, in which they are used, the words used in such statute should be
construed according to the sense in which they have been previously used. [6] In fact, this Court used the
Civil Code definition of "personal property" in interpreting the theft provision of the penal code
in United States v. Carlos.

Cognizant of the definition given by jurisprudence and the Civil Code of Spain to the term "personal
property" at the time the old Penal Code was being revised, still the legislature did not limit or qualify
the definition of "personal property" in the Revised Penal Code. Neither did it provide a restrictive
definition or an exclusive enumeration of "personal property" in the Revised Penal Code, thereby
showing its intent to retain for the term an extensive and unqualified interpretation. Consequently, any
property which is not included in the enumeration of real properties under the Civil Code and capable of
appropriation can be the subject of theft under the Revised Penal Code.

The only requirement for a personal property to be the object of theft under the penal code is that it be
capable of appropriation. It need not be capable of "asportation," which is defined as "carrying
away."[7] Jurisprudence is settled that to "take" under the theft provision of the penal code does not
require asportation or carrying away.[8]

To appropriate means to deprive the lawful owner of the thing. [9] The word "take" in the Revised Penal
Code includes any act intended to transfer possession which, as held in the assailed Decision, may be
committed through the use of the offenders' own hands, as well as any mechanical device, such as an
access device or card as in the instant case. This includes controlling the destination of the property
stolen to deprive the owner of the property, such as the use of a meter tampering, as held in Natividad
v. Court of Appeals,[10] use of a device to fraudulently obtain gas, as held in United States v. Tambunting,
and the use of a jumper to divert electricity, as held in the cases of United States v. Genato, United
States v. Carlos, and United States v. Menagas.[11]

As illustrated in the above cases, appropriation of forces of nature which are brought under control by
science such as electrical energy can be achieved by tampering with any apparatus used for generating
or measuring such forces of nature, wrongfully redirecting such forces of nature from such apparatus, or
using any device to fraudulently obtain such forces of nature. In the instant case, petitioner was charged
with engaging in International Simple Resale (ISR) or the unauthorized routing and completing of
international long distance calls using lines, cables, antennae, and/or air wave frequency and connecting
these calls directly to the local or domestic exchange facilities of the country where destined.

As early as 1910, the Court declared in Genato that ownership over electricity (which an international
long distance call consists of), as well as telephone service, is protected by the provisions on theft of the
Penal Code. The pertinent provision of the Revised Ordinance of the City of Manila, which was involved
in the said case, reads as follows:

Injury to electric apparatus; Tapping current; Evidence. - No person shall destroy, mutilate, deface, or
otherwise injure or tamper with any wire, meter, or other apparatus installed or used for generating,
containing, conducting, or measuring electricity, telegraph or telephone service, nor tap or otherwise
wrongfully deflect or take any electric current from such wire, meter, or other apparatus.

No person shall, for any purpose whatsoever, use or enjoy the benefits of any device by means of which
he may fraudulently obtain any current of electricity or any telegraph or telephone service; and the
existence in any building premises of any such device shall, in the absence of satisfactory explanation, be
deemed sufficient evidence of such use by the persons benefiting thereby.

It was further ruled that even without the above ordinance the acts of subtraction punished therein are
covered by the provisions on theft of the Penal Code then in force, thus:

Even without them (ordinance), the right of the ownership of electric current is secured by articles 517
and 518 of the Penal Code; the application of these articles in cases of subtraction of gas, a fluid used for
lighting, and in some respects resembling electricity, is confirmed by the rule laid down in the decisions
of the supreme court of Spain of January 20, 1887, and April 1, 1897, construing and enforcing the
provisions of articles 530 and 531 of the Penal Code of that country, articles 517 and 518 of the code in
force in these islands.

The acts of "subtraction" include: (a) tampering with any wire, meter, or other apparatus installed or
used for generating, containing, conducting, or measuring electricity, telegraph or telephone service; (b)
tapping or otherwise wrongfully deflecting or taking any electric current from such wire, meter, or other
apparatus; and (c) using or enjoying the benefits of any device by means of which one may fraudulently
obtain any current of electricity or any telegraph or telephone service.

In the instant case, the act of conducting ISR operations by illegally connecting various equipment or
apparatus to private respondent PLDT's telephone system, through which petitioner is able to resell or
re-route international long distance calls using respondent PLDT's facilities constitutes all three acts of
subtraction mentioned above.

The business of providing telecommunication or telephone service is likewise personal property which
can be the object of theft under Article 308 of the Revised Penal Code. Business may be appropriated
under Section 2 of Act No. 3952 (Bulk Sales Law), hence, could be object of theft:

Section 2. Any sale, transfer, mortgage, or assignment of a stock of goods, wares, merchandise,
provisions, or materials otherwise than in the ordinary course of trade and the regular prosecution of
the business of the vendor, mortgagor, transferor, or assignor, or any sale, transfer, mortgage, or
assignment of all, or substantially all, of the business or trade theretofore conducted by the vendor,
mortgagor, transferor or assignor, or all, or substantially all, of the fixtures and equipment used in and
about the business of the vendor, mortgagor, transferor, or assignor, shall be deemed to be a sale and
transfer in bulk, in contemplation of the Act. x x x.

In Strochecker v. Ramirez,[12] this Court stated:

With regard to the nature of the property thus mortgaged which is one-half interest in the business
above described, such interest is a personal property capable of appropriation and not included in the
enumeration of real properties in article 335 of the Civil Code, and may be the subject of mortgage.

Interest in business was not specifically enumerated as personal property in the Civil Code in force at the
time the above decision was rendered. Yet, interest in business was declared to be personal property
since it is capable of appropriation and not included in the enumeration of real properties. Article 414 of
the Civil Code provides that all things which are or may be the object of appropriation are considered
either real property or personal property. Business is likewise not enumerated as personal property
under the Civil Code. Just like interest in business, however, it may be appropriated. Following the ruling
in Strochecker v. Ramirez, business should also be classified as personal property. Since it is not included
in the exclusive enumeration of real properties under Article 415, it is therefore personal property. [13]

As can be clearly gleaned from the above disquisitions, petitioner's acts constitute theft of respondent
PLDT's business and service, committed by means of the unlawful use of the latter's facilities. In this
regard, the Amended Information inaccurately describes the offense by making it appear that what
petitioner took were the international long distance telephone calls, rather than respondent PLDT's
business.

A perusal of the records of this case readily reveals that petitioner and respondent PLDT extensively
discussed the issue of ownership of telephone calls. The prosecution has taken the position that said
telephone calls belong to respondent PLDT. This is evident from its Comment where it defined the issue
of this case as whether or not "the unauthorized use or appropriation of PLDT international telephone
calls, service and facilities, for the purpose of generating personal profit or gain that should have
otherwise belonged to PLDT, constitutes theft." [14]

In discussing the issue of ownership, petitioner and respondent PLDT gave their respective explanations
on how a telephone call is generated. [15] For its part, respondent PLDT explains the process of generating
a telephone call as follows:

38. The role of telecommunication companies is not limited to merely providing the medium (i.e.
the electric current) through which the human voice/voice signal of the caller is transmitted.
Before the human voice/voice signal can be so transmitted, a telecommunication company,
using its facilities, must first break down or decode the human voice/voice signal into electronic
impulses and subject the same to further augmentation and enhancements. Only after such
process of conversion will the resulting electronic impulses be transmitted by a
telecommunication company, again, through the use of its facilities. Upon reaching the
destination of the call, the telecommunication company will again break down or decode the
electronic impulses back to human voice/voice signal before the called party receives the same.
 In other words, a telecommunication company both converts/reconverts the human voice/voice
signal and provides the medium for transmitting the same.

39. Moreover, in the case of an international telephone call, once the electronic impulses
originating from a foreign telecommunication company country (i.e. Japan) reaches the
Philippines through a local telecommunication company (i.e. private respondent PLDT), it is the
latter which decodes, augments and enhances the electronic impulses back to the human
voice/voice signal and provides the medium (i.e. electric current) to enable the called party to
receive the call. Thus, it is not true that the foreign telecommunication company provides (1)
the electric current which transmits the human voice/voice signal of the caller and (2) the
electric current for the called party to receive said human voice/voice signal.

40. Thus, contrary to petitioner Laurel's assertion, once the electronic impulses or electric current
originating from a foreign telecommunication company (i.e. Japan) reaches private respondent
PLDT's network, it is private respondent PLDT which decodes, augments and enhances the
electronic impulses back to the human voice/voice signal and provides the medium (i.e. electric
current) to enable the called party to receive the call. Without private respondent PLDT's
network, the human voice/voice signal of the calling party will never reach the called party. [16]

In the assailed Decision, it was conceded that in making the international phone calls, the human voice
is converted into electrical impulses or electric current which are transmitted to the party called. A
telephone call, therefore, is electrical energy. It was also held in the assailed Decision that intangible
property such as 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, which enumerates "forces of
nature which are brought under control by science." [17]

Indeed, while it may be conceded that "international long distance calls," the matter alleged to be stolen
in the instant case, take the form of electrical energy, 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.

Therefore, the business of providing telecommunication and the telephone service are personal
property under Article 308 of the Revised Penal Code, and the act of engaging in ISR is an act of
"subtraction" penalized under said article. However, the Amended Information describes the thing taken
as, "international long distance calls," and only later mentions "stealing the business from PLDT" as the
manner by which the gain was derived by the accused. In order to correct this inaccuracy of description,
this case must be remanded to the trial court and the prosecution directed to amend the Amended
Information, to clearly state that the property subject of the theft are the services and business of
respondent PLDT. Parenthetically, this amendment is not necessitated by a mistake in charging the
proper offense, which would have called for the dismissal of the information under Rule 110, Section 14
and Rule 119, Section 19 of the Revised Rules on Criminal Procedure. To be sure, the crime is properly
designated as one of theft. The purpose of the amendment is simply to ensure that the accused is fully
and sufficiently apprised of the nature and cause of the charge against him, and thus guaranteed of his
rights under the Constitution.

ACCORDINGLY, the motion for reconsideration is GRANTED. The assailed Decision dated February 27,
2006 is RECONSIDERED and SET ASIDE. The Decision of the Court of Appeals in CA-G.R. SP No. 68841
affirming the Order issued by Judge Zeus C. Abrogar of the Regional Trial Court of Makati City, Branch
150, which denied the Motion to Quash (With Motion to Defer Arraignment) in Criminal Case No. 99-
2425 for theft, is AFFIRMED. The case is remanded to the trial court and the Public Prosecutor of Makati
City is hereby DIRECTED to amend the Amended Information to show that the property subject of the
theft were services and business of the private offended party.

SO ORDERED.

Puno, C.J., Quisumbing, Carpio, Austria-Martinez, Carpio Morales, Azcuna, Chico-Nazario, Velasco, Jr.,
Nachura, Leonardo-De Castro,  and  Brion, JJ., concur.
Corona, J., see separate opinion.
Tinga, J., please see concurring opinion.

[1]
 Rollo, p. 728.

[2]
 Id. at 57-58.

[3]
 15 Phil. 170 (1910).

[4]
 21 Phil. 553 (1911).

[5]
 41 Phil. 364 (1921).

[6]
 Krivenko v. Register of Deeds, 79 Phil. 461 (1947).

[7]
 People v. Mercado, 65 Phil. 665 (1938).

[8]
 Id.; Duran v. Tan, 85 Phil 476 (1950).

[9]
 Regalado, Criminal Law Conspectus (2000 ed.), p. 520.

[10]
 G.R. No. L-14887, January 31, 1961, 1 SCRA 380.

[11]
 11 N.E. 2d 403 (1937).

[12]
 44 Phil. 933 (1922).

[13]
 II Tolentino, Commentaries and Jurisprudence on the Civil Code of the Philippines 26 (1992 ed.).
[14]
 Rollo, p. 902.

[15]
 Id. at 781-783; 832-837; 872, 874-877.

[16]
 Id. at 875-877.

[17]
 Supra note 13.

SEPARATE OPINION

CORONA, J.:

The bone of contention in this case is: who owns the telephone calls that we make? If respondent
Philippine Long Distance Telephone Company (PLDT) can claim ownership over them, then
petitioner Luis Marcos P. Laurel (Laurel) can be charged with theft of such telephone calls under Article
308 of the Revised Penal Code. If PLDT does not own them, then the crime of theft was not committed
and Laurel cannot be charged with this crime.

One view is that PLDT owns the telephone calls because it is responsible for creating such calls. The
opposing view is that it is the caller who owns the phone calls and PLDT merely encodes and transmits
them.

The question of whether PLDT creates the phone calls or merely encodes and transmits them is a

question of fact that can be answered by science. I agree with Justice Consuelo Ynares-Santiago that,
while telephone calls "take the form of electrical energy, it cannot be said that such [telephone] 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 infrastructure and facilites."

In my view, it is essential to differentiate between the conversation of a caller and recipient of the call,
and the telephone service that made the call possible. Undoubtedly, any conversation between or
among individuals is theirs alone. For example, if two children use two empty cans and a string as a
makeshift play phone, they themselves create their "phone call." However, if individuals separated by
long distances use the telephone and have a conversation through the telephone lines of the PLDT, then
the latter owns the service which made possible the resulting call. The conversation, however, remains
protected by our privacy laws.

Accordingly, I vote to GRANT the motion for reconsideration.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-24440             March 28, 1968

THE PROVINCE OF ZAMBOANGA DEL NORTE, plaintiff-appellee,

vs.
CITY OF ZAMBOANGA, SECRETARY OF FINANCE and COMMISSIONER OF INTERNAL
REVENUE, defendants-appellants.

Fortugaleza, Lood, Sarmiento, M. T. Yap & Associates for plaintiff-appellee.

Office of the Solicitor General for defendants-appellants.

BENGZON, J.P., J.:

          Prior to its incorporation as a chartered city, the Municipality of Zamboanga used to be the
provincial capital of the then Zamboanga Province. On October 12, 1936, Commonwealth Act 39
was approved converting the Municipality of Zamboanga into Zamboanga City. Sec. 50 of the Act
also provided that —

          Buildings and properties which the province shall abandon upon the transfer of the
capital to another place will be acquired and paid for by the City of Zamboanga at a price to
be fixed by the Auditor General.

          The properties and buildings referred to consisted of 50 lots and some buildings constructed
thereon, located in the City of Zamboanga and covered individually by Torrens certificates of title in
the name of Zamboanga Province. As far as can be gleaned from the records, 1 said properties were
being utilized as follows —

No. of Lots Use

1 ................................................ Capitol Site
3 ................................................ School Site
3 ................................................ Hospital Site
3 ................................................ Leprosarium
1 ................................................ Curuan School
1 ................................................ Trade School
2 ................................................ Burleigh School
2 ................................................ High School Playground
9 ................................................ Burleighs
1 ................................................ Hydro-Electric Site (Magay)
1 ................................................ San Roque
23 ................................................ vacant

          It appears that in 1945, the capital of Zamboanga Province was transferred to

Dipolog. 2 Subsequently, or on June 16, 1948, Republic Act 286 was approved creating the
municipality of Molave and making it the capital of Zamboanga Province.
          On May 26, 1949, the Appraisal Committee formed by the Auditor General, pursuant to
Commonwealth Act 39, fixed the value of the properties and buildings in question left by Zamboanga
Province in Zamboanga City at P1,294,244.00. 3

          On June 6, 1952, Republic Act 711 was approved dividing the province of Zamboanga into
two (2): Zamboanga del Norte and Zamboanga del Sur. As to how the assets and obligations of the
old province were to be divided between the two new ones, Sec. 6 of that law provided:

          Upon the approval of this Act, the funds, assets and other properties and the
obligations of the province of Zamboanga shall be divided equitably between the Province of
Zamboanga del Norte and the Province of Zamboanga del Sur by the President of the
Philippines, upon the recommendation of the Auditor General.

          Pursuant thereto, the Auditor General, on January 11, 1955, apportioned the assets and
obligations of the defunct Province of Zamboanga as follows: 54.39% for Zamboanga del Norte and
45.61% for Zamboanga del Sur. Zamboanga del Norte therefore became entitled to 54.39% of
P1,294,244.00, the total value of the lots and buildings in question, or P704,220.05 payable by
Zamboanga City.

          On March 17, 1959, the Executive Secretary, by order of the President, issued a
ruling 4 holding that Zamboanga del Norte had a vested right as owner (should be co-owner pro-
indiviso) of the properties mentioned in Sec. 50 of Commonwealth Act 39, and is entitled to the price
thereof, payable by Zamboanga City. This ruling revoked the previous Cabinet Resolution of July 13,
1951 conveying all the said 50 lots and buildings thereon to Zamboanga City for P1.00, effective as
of 1945, when the provincial capital of the then Zamboanga Province was transferred to Dipolog.

          The Secretary of Finance then authorized the Commissioner of Internal Revenue to deduct an
amount equal to 25% of the regular internal revenue allotment for the City of Zamboanga for the
quarter ending March 31, 1960, then for the quarter ending June 30, 1960, and again for the first
quarter of the fiscal year 1960-1961. The deductions, all aggregating P57,373.46, was credited to
the province of Zamboanga del Norte, in partial payment of the P764,220.05 due it.

          However, on June 17, 1961, Republic Act 3039 was approved amending Sec. 50 of
Commonwealth Act 39 by providing that —

          All buildings, properties and assets belonging to the former province of Zamboanga
and located within the City of Zamboanga are hereby transferred, free of charge, in favor of
the said City of Zamboanga. (Stressed for emphasis).

          Consequently, the Secretary of Finance, on July 12, 1961, ordered the Commissioner of
Internal Revenue to stop from effecting further payments to Zamboanga del Norte and to return to
Zamboanga City the sum of P57,373.46 taken from it out of the internal revenue allotment of
Zamboanga del Norte. Zamboanga City admits that since the enactment of Republic Act 3039,
P43,030.11 of the P57,373.46 has already been returned to it.

          This constrained plaintiff-appellee Zamboanga del Norte to file on March 5, 1962, a complaint
entitled "Declaratory Relief with Preliminary Mandatory Injunction" in the Court of First Instance of
Zamboanga del Norte against defendants-appellants Zamboanga City, the Secretary of Finance and
the Commissioner of Internal Revenue. It was prayed that: (a) Republic Act 3039 be declared
unconstitutional for depriving plaintiff province of property without due process and just
compensation; (b) Plaintiff's rights and obligations under said law be declared; (c) The Secretary of
Finance and the Internal Revenue Commissioner be enjoined from reimbursing the sum of
P57,373.46 to defendant City; and (d) The latter be ordered to continue paying the balance of
P704,220.05 in quarterly installments of 25% of its internal revenue allotments.

          On June 4, 1962, the lower court ordered the issuance of preliminary injunction as prayed for.
After defendants filed their respective answers, trial was held. On August 12, 1963, judgment was
rendered, the dispositive portion of which reads:

          WHEREFORE, judgment is hereby rendered declaring Republic Act No. 3039

unconstitutional insofar as it deprives plaintiff Zamboanga del Norte of its private properties,
consisting of 50 parcels of land and the improvements thereon under certificates of title
(Exhibits "A" to "A-49") in the name of the defunct province of Zamboanga; ordering
defendant City of Zamboanga to pay to the plaintiff the sum of P704,220.05 payment thereof
to be deducted from its regular quarterly internal revenue allotment equivalent to 25%
thereof every quarter until said amount shall have been fully paid; ordering defendant
Secretary of Finance to direct defendant Commissioner of Internal Revenue to deduct 25%
from the regular quarterly internal revenue allotment for defendant City of Zamboanga and to
remit the same to plaintiff Zamboanga del Norte until said sum of P704,220.05 shall have
been fully paid; ordering plaintiff Zamboanga del Norte to execute through its proper officials
the corresponding public instrument deeding to defendant City of Zamboanga the 50 parcels
of land and the improvements thereon under the certificates of title (Exhibits "A" to "A-49")
upon payment by the latter of the aforesaid sum of P704,220.05 in full; dismissing the
counterclaim of defendant City of Zamboanga; and declaring permanent the preliminary
mandatory injunction issued on June 8, 1962, pursuant to the order of the Court dated June
4, 1962. No costs are assessed against the defendants.

          It is SO ORDERED.

          Subsequently, but prior to the perfection of defendants' appeal, plaintiff province filed a motion
to reconsider praying that Zamboanga City be ordered instead to pay the P704,220.05 in lump
sum with 6% interest per annum. Over defendants' opposition, the lower court granted plaintiff
province's motion.

          The defendants then brought the case before Us on appeal.

          Brushing aside the procedural point concerning the property of declaratory relief filed in the
lower court on the assertion that the law had already been violated and that plaintiff sought to give it
coercive effect, since assuming the same to be true, the Rules anyway authorize the conversion of
the proceedings to an ordinary action, 5 We proceed to the more important and principal question of
the validity of Republic Act 3039.

          The validity of the law ultimately depends on the nature of the 50 lots and buildings thereon in
question. For, the matter involved here is the extent of legislative control over the properties of a
municipal corporation, of which a province is one. The principle itself is simple: If the property is
owned by the municipality (meaning municipal corporation) in its public and governmental capacity,
the property is public and Congress has absolute control over it. But if the property is owned in its
private or proprietary capacity, then it is patrimonial and Congress has no absolute control. The
municipality cannot be deprived of it without due process and payment of just compensation. 6

          The capacity in which the property is held is, however, dependent on the use to which it is
intended and devoted. Now, which of two norms, i.e., that of the Civil Code or that obtaining under
the law of Municipal Corporations, must be used in classifying the properties in question?
          The Civil Code classification is embodied in its Arts. 423 and 424 which provide: 1äwphï1.ñët

          ART. 423. The property of provinces, cities, and municipalities is divided into property
for public use and patrimonial property.

          ART. 424. Property for public use, in the provinces, cities, and municipalities, consists
of the provincial roads, city streets, municipal streets, the squares, fountains, public waters,
promenades, and public works for public service paid for by said provinces, cities, or
municipalities.

All other property possessed by any of them is patrimonial and shall be governed by this
Code, without prejudice to the provisions of special laws. (Stressed for emphasis).

          Applying the above cited norm, all the properties in question, except the two (2) lots used as
High School playgrounds, could be considered as patrimonial properties of the former Zamboanga
province. Even the capital site, the hospital and leprosarium sites, and the school sites will be
considered patrimonial for they are not for public use. They would fall under the phrase "public works
for public service" for it has been held that under the ejusdem generis rule, such public works must
be for free and indiscriminate use by anyone, just like the preceding enumerated properties in the
first paragraph of Art 424. 7 The playgrounds, however, would fit into this category.

          This was the norm applied by the lower court. And it cannot be said that its actuation was
without jurisprudential precedent for in Municipality of Catbalogan v. Director of Lands, 8 and
in Municipality of Tacloban v. Director of Lands, 9 it was held that the capitol site and the school sites
in municipalities constitute their patrimonial properties. This result is understandable because, unlike
in the classification regarding State properties, properties for public service in the municipalities are
not classified as public. Assuming then the Civil Code classification to be the chosen norm, the lower
court must be affirmed except with regard to the two (2) lots used as playgrounds.

          On the other hand, applying the norm obtaining under the principles constituting the law of
Municipal Corporations, all those of the 50 properties in question which are devoted to public service
are deemed public; the rest remain patrimonial. Under this norm, to be considered public, it is
enough that the property be held and, devoted for governmental purposes like local administration,
public education, public health, etc. 10

          Supporting jurisprudence are found in the following cases: (1) HINUNANGAN V. DIRECTOR
OF LANDS, 11 where it was stated that "... where the municipality has occupied lands distinctly for
public purposes, such as for the municipal court house, the public school, the public market, or other
necessary municipal building, we will, in the absence of proof to the contrary, presume a grant from
the States in favor of the municipality; but, as indicated by the wording, that rule may be invoked only
as to property which is used distinctly for public purposes...." (2) VIUDA DE TANTOCO V.
MUNICIPAL COUNCIL OF ILOILO 12 held that municipal properties necessary for governmental
purposes are public in nature. Thus, the auto trucks used by the municipality for street sprinkling, the
police patrol automobile, police stations and concrete structures with the corresponding lots used as
markets were declared exempt from execution and attachment since they were not patrimonial
properties. (3) MUNICIPALITY OF BATANGAS VS. CANTOS 13 held squarely that a municipal lot
which had always been devoted to school purposes is one dedicated to public use and is not
patrimonial property of a municipality.

          Following this classification, Republic Act 3039 is valid insofar as it affects the lots used as
capitol site, school sites and its grounds, hospital and leprosarium sites and the high school
playground sites — a total of 24 lots — since these were held by the former Zamboanga province in
its governmental capacity and therefore are subject to the absolute control of Congress. Said lots
considered as public property are the following:

TCT
Lot Number Use
Number
2200 ...................................... 4-B ...................................... Capitol Site
2816 ...................................... 149 ...................................... School Site
3281 ...................................... 1224 ...................................... Hospital Site
3282 ...................................... 1226 ...................................... Hospital Site
3283 ...................................... 1225 ...................................... Hospital Site
3748 ...................................... 434-A-1 ...................................... School Site
5406 ...................................... 171 ...................................... School Site
High School Play-
5564 ...................................... 168 ......................................
ground
157 &
5567 ...................................... ...................................... Trade School
158
High School Play-
5583 ...................................... 167 ......................................
ground
6181 ...................................... (O.C.T.) ...................................... Curuan School
11942 ...................................... 926 ...................................... Leprosarium
11943 ...................................... 927 ...................................... Leprosarium
11944 ...................................... 925 ...................................... Leprosarium
5557 ...................................... 170 ...................................... Burleigh School
5562 ...................................... 180 ...................................... Burleigh School
5565 ...................................... 172-B ...................................... Burleigh
5570 ...................................... 171-A ...................................... Burleigh
5571 ...................................... 172-C ...................................... Burleigh
5572 ...................................... 174 ...................................... Burleigh
5573 ...................................... 178 ...................................... Burleigh
5585 ...................................... 171-B ...................................... Burleigh
5586 ...................................... 173 ...................................... Burleigh
5587 ...................................... 172-A ...................................... Burleigh

          We noticed that the eight Burleigh lots above described are adjoining each other and in turn
are between the two lots wherein the Burleigh schools are built, as per records appearing herein and
in the Bureau of Lands. Hence, there is sufficient basis for holding that said eight lots constitute the
appurtenant grounds of the Burleigh schools, and partake of the nature of the same.

          Regarding the several buildings existing on the lots above-mentioned, the records do not
disclose whether they were constructed at the expense of the former Province of Zamboanga.
Considering however the fact that said buildings must have been erected even before 1936 when
Commonwealth Act 39 was enacted and the further fact that provinces then had no power to
authorize construction of buildings such as those in the case at bar at their own expense, 14 it can be
assumed that said buildings were erected by the National Government, using national funds. Hence,
Congress could very well dispose of said buildings in the same manner that it did with the lots in
question.

          But even assuming that provincial funds were used, still the buildings constitute mere
accessories to the lands, which are public in nature, and so, they follow the nature of said lands,
i.e., public. Moreover, said buildings, though located in the city, will not be for the exclusive use and
benefit of city residents for they could be availed of also by the provincial residents. The province
then — and its successors-in-interest — are not really deprived of the benefits thereof.

          But Republic Act 3039 cannot be applied to deprive Zamboanga del Norte of its share in the
value of the rest of the 26 remaining lots which are patrimonial properties since they are not being
utilized for distinctly, governmental purposes. Said lots are:

TCT Number Lot Number Use

5577 ...................................... 177 ...................................... Mydro, Magay
13198 ...................................... 127-0 ...................................... San Roque
5569 ...................................... 169 ...................................... Burleigh 15
5558 ...................................... 175 ...................................... Vacant
5559 ...................................... 188 ...................................... "
5560 ...................................... 183 ...................................... "
5561 ...................................... 186 ...................................... "
5563 ...................................... 191 ...................................... "
5566 ...................................... 176 ...................................... "
5568 ...................................... 179 ...................................... "
5574 ...................................... 196 ...................................... "
5575 ...................................... 181-A ...................................... "
5576 ...................................... 181-B ...................................... "
5578 ...................................... 182 ...................................... "
5579 ...................................... 197 ...................................... "
5580 ...................................... 195 ...................................... "
5581 ...................................... 159-B ...................................... "
5582 ...................................... 194 ...................................... "
5584 ...................................... 190 ...................................... "
5588 ...................................... 184 ...................................... "
5589 ...................................... 187 ...................................... "
5590 ...................................... 189 ...................................... "
5591 ...................................... 192 ...................................... "
5592 ...................................... 193 ...................................... "
5593 ...................................... 185 ...................................... "
7379 ...................................... 4147 ...................................... "

          Moreover, the fact that these 26 lots are registered strengthens the proposition that they are
truly private in nature. On the other hand, that the 24 lots used for governmental purposes are also
registered is of no significance since registration cannot convert public property to private. 16

          We are more inclined to uphold this latter view. The controversy here is more along the
domains of the Law of Municipal Corporations — State vs. Province — than along that of Civil Law.
Moreover, this Court is not inclined to hold that municipal property held and devoted to public service
is in the same category as ordinary private property. The consequences are dire. As ordinary private
properties, they can be levied upon and attached. They can even be acquired thru adverse
possession — all these to the detriment of the local community. Lastly, the classification of
properties other than those for public use in the municipalities as patrimonial under Art. 424 of the
Civil Code — is "... without prejudice to the provisions of special laws." For purpose of this article, the
principles, obtaining under the Law of Municipal Corporations can be considered as "special laws".
Hence, the classification of municipal property devoted for distinctly governmental purposes as
public should prevail over the Civil Code classification in this particular case.

          Defendants' claim that plaintiff and its predecessor-in-interest are "guilty of laches is without
merit. Under Commonwealth Act 39, Sec. 50, the cause of action in favor of the defunct Zamboanga
Province arose only in 1949 after the Auditor General fixed the value of the properties in question.
While in 1951, the Cabinet resolved transfer said properties practically for free to Zamboanga City, a
reconsideration thereof was seasonably sought. In 1952, the old province was dissolved. As
successor-in-interest to more than half of the properties involved, Zamboanga del Norte was able to
get a reconsideration of the Cabinet Resolution in 1959. In fact, partial payments were effected
subsequently and it was only after the passage of Republic Act 3039 in 1961 that the present
controversy arose. Plaintiff brought suit in 1962. All the foregoing, negative laches.

          It results then that Zamboanga del Norte is still entitled to collect from the City of Zamboanga
the former's 54.39% share in the 26 properties which are patrimonial in nature, said share to
computed on the basis of the valuation of said 26 properties as contained in Resolution No. 7, dated
March 26, 1949, of the Appraisal Committee formed by the Auditor General.

          Plaintiff's share, however, cannot be paid in lump sum, except as to the P43,030.11 already
returned to defendant City. The return of said amount to defendant was without legal basis. Republic
Act 3039 took effect only on June 17, 1961 after a partial payment of P57,373.46 had already been
made. Since the law did not provide for retroactivity, it could not have validly affected a completed
act. Hence, the amount of P43,030.11 should be immediately returned by defendant City to plaintiff
province. The remaining balance, if any, in the amount of plaintiff's 54.39% share in the 26 lots
should then be paid by defendant City in the same manner originally adopted by the Secretary of
Finance and the Commissioner of Internal Revenue, and not in lump sum. Plaintiff's prayer,
particularly pars. 5 and 6, read together with pars. 10 and 11 of the first cause of action recited in the
complaint 17 clearly shows that the relief sought was merely the continuance of the quarterly
payments from the internal revenue allotments of defendant City. Art. 1169 of the Civil Code on
reciprocal obligations invoked by plaintiff to justify lump sum payment is inapplicable since there has
been so far in legal contemplation no complete delivery of the lots in question. The titles to the
registered lots are not yet in the name of defendant Zamboanga City.

          WHEREFORE, the decision appealed from is hereby set aside and another judgment is
hereby entered as follows:.

          (1) Defendant Zamboanga City is hereby ordered to return to plaintiff Zamboanga del Norte in
lump sum the amount of P43,030.11 which the former took back from the latter out of the sum of
P57,373.46 previously paid to the latter; and

          (2) Defendants are hereby ordered to effect payments in favor of plaintiff of whatever balance
remains of plaintiff's 54.39% share in the 26 patrimonial properties, after deducting therefrom the
sum of P57,373.46, on the basis of Resolution No. 7 dated March 26, 1949 of the Appraisal
Committee formed by the Auditor General, by way of quarterly payments from the allotments of
defendant City, in the manner originally adopted by the Secretary of Finance and the Commissioner
of Internal Revenue. No costs. So ordered.

Reyes, J.B.L., Actg. C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ.,
concur.
Concepcion, C.J., is on leave.
 EN BANC

[G.R. No. L-17898. October 31, 1962.]

PASTOR D. AGO, Petitioner, v. THE HON. COURT OF APPEALS, HON. MONTANO

A. ORTIZ, Judge of the Court of First Instance of Agusan, THE PROVINCIAL
SHERIFF OF SURIGAO and GRACE PARK ENGINEERING, INC., Respondents.

Jose M. Luison for Petitioner.

Norberto J . Quisumbing for respondent Grace Park Engineering, Inc.

The Provincial Fiscal of Surigao for respondent Sheriff of Surigao.

SYLLABUS

1. JUDGMENT; WHAT CONSTITUTES RENDITION OF JUDGMENT IN COURTS OF FIRST

INSTANCE. — It is the filing of the signed decision with the clerk of court, and not the
pronouncement of the judgment in open court, that constitutes rendition of a decision
by a court of first instance. Before such filing, the decision may still be subject to
amendment and change and may not yet be considered effective and binding.

2. ID.; ID.; NOTICE BY PARTY OF JUDGMENT DICTATED IN OPEN COURT NOT VALID
NOTICE. — The fact that a party heard the judge dictating the judgment in open court,
is not a valid notice of said judgment, because it is the filing with the clerk of court of a
signed decision that constitutes the rendition of the judgment. Besides, Section 7, Rule
27 of the Rules of Court, expressly requires that final orders or judgments be served
personally or by registered mail.

3. PROPERTY; IMMOVABLES BY DESTINATION; INSTALLATION OF SAWMILL

MACHINERIES IN BUILDING OF SAWMILL COMPANY. — By the installation of the
sawmill machineries in the building of the sawmill company, for use in the sawing of
logs carried on in said building, the same became a necessary and permanent part of
the building or real estate on which the same was constructed, converting the said
machineries and equipments into real estate within the meaning of Article 415 (5) of
the Civil Code.

DECISION
 LABRADOR, J.:

Appeal by certiorari to review the decision of respondent Court of Appeals in CA-G.R.

No. 26723-R entitled "Pastor D. Ago. v. The Provincial Sheriff of Surigao, Et. Al." which
in part reads:jgc:chanrobles.com.ph

"In this case for certiorari and prohibition with preliminary injunction, it appears from
the records that the respondent Judge of the Court of First Instance of Agusan rendered
judgment (Annex ‘A’) in open court on January 28, 1959, basing said judgment on a
compromise agreement between the parties.

"On August 15, 1959, upon petition, the Court of First Instance issued a writ of
execution.

"Petitioner’s motion for reconsideration dated October 12, 1959 alleges that he, or his
counsel, did not receive a formal and valid notice of said decision, which motion for
reconsideration was denied by the court below in the order of November 14, 1959.

"Petitioner now contends that the respondent Judge exceeded in his jurisdiction in
ordering the execution without valid and formal notice of the decision.

"A compromise agreement is binding between the parties and becomes the law
between them. (Gonzales v. Gonzales, G.R. No. L-1254, May 21, 1948, 81 Phil. 38;
Martin v. Martin, G.R. No. L-12439, May 22, 1959)

"It is a general rule in this jurisdiction that a judgment based on a compromise

agreement is not appealable and is immediately executory, unless a motion is filed on
the ground of fraud, mistake or duress. (De los Reyes v. Ugarte, 75 Phil. 505; Lapeña
v. Morfe, G.R. No. L-10089, July 31, 1957)

"Petitioner’s claim that he was not notified or served notice of the decision is untenable.
The judgment on the compromise agreement rendered by the court below dated
January 28, 1959 was given in open court. This alone is a substantial compliance as to
notice. (De los Reyes v. Ugarte, supra) chanroblesvirtuallawlibrary

"IN VIEW THEREOF, we believe that the lower court did not exceed nor abuse its
jurisdiction in ordering the execution of the judgment. The petition for certiorari is
hereby dismissed and the writ of preliminary injunction heretofore dissolved, with costs
against the petitioner.

"IT IS SO ORDERED." cralaw virtua1aw library

The facts of the case may be briefly stated as follows: In 1957, petitioner Pastor D. Ago
bought sawmill machineries and equipments from respondent Grace Park Engineering,
Inc., executing a chattel mortgage over said machineries and equipments to secure the
payment of a balance of the price remaining unpaid of P32,000.00, which petitioner
agreed to pay on installment basis.

Petitioner Ago defaulted in his payments and so, in 1958, respondent Grace Park
Engineering, Inc. instituted extrajudicial foreclosure proceedings of the mortgage. To
enjoin said foreclosure, petitioner herein instituted Special Civil Case No. 53 in the
Court of First Instance of Agusan. The parties to the case arrived at a compromise
agreement and submitted the same in court in writing, signed by Pastor D. Ago and the
Grace Park Engineering, Inc. The Hon. Montano A. Ortiz, Judge of the Court of First
Instance of Agusan, then presiding dictated a decision in open court on January 28,
1959.

Petitioner continued to default in his payments as provided in the judgment by

compromise, so Grace Park Engineering, Inc. filed with the lower court a motion for
execution, which was granted by the court on August 15, 1959. A writ of execution,
dated September 23, 1959, later followed.

The herein respondent Provincial Sheriff of Surigao, acting upon the writ of execution
issued by the lower court, levied upon and ordered the sale of the sawmill machineries
and equipments in question. These machineries and equipments had been taken to and
installed in a sawmill building located in Lianga, Surigao del Sur, and owned by the
Golden Pacific Sawmill, Inc., to whom, petitioner alleges, he had sold them on February
16, 1959 (a date after the decision of the lower court but before levy by the Sheriff).

Having been advised by the sheriff that the public auction sale was set for December 4,
1959, Petitioner, on December 1, 1959, filed the petition for certiorari and prohibition
with preliminary injunction with respondent Court of Appeals, alleging that a copy of the
aforementioned judgment given in open court on January 28, 1959 was served upon
counsel for petitioner only on September 25, 1959 (writ of execution is dated
September 23, 1959); that the order and writ of execution having been issued by the
lower court before counsel for petitioner received a copy of the judgment, its resultant
last order that the "sheriff may now proceed with the sale of the properties levied,"
constituted a grave abuse of discretion and was in excess of its jurisdiction; and that
the respondent Provincial Sheriff of Surigao was acting illegally upon the allegedly void
writ of execution by levying the same upon the sawmill machineries and equipments
which have become real properties of the Golden Pacific Sawmill, Inc., and is about to
proceed in selling the same without prior publication of the notice of sale thereof in
some newspaper of general circulation as required by the Rules of Court.

The Court of Appeals on December 8, 1959, issued a writ of preliminary injunction

against the sheriff but it turned out that the latter had already sold at public auction the
machineries in question, on December 4, 1959, as scheduled. The respondent Grace
Park Engineering, Inc. was the only bidder for P15,000.00, although the certificate of
sale was not yet executed. The Court of Appeals instructed the sheriff to suspend the
issuance of a certificate of sale of the said sawmill machineries and equipments sold by
him on December 4, 1959 until the final decision of the case. On November 9, 1960 the
Court of Appeals rendered the afore-quoted decision.  cralawnad

Before this Court, petitioner alleges that the Court of Appeals erred (1) in holding that
the rendition of the judgment on compromise in open court on January 29, 1959 was a
sufficient notice; and (2) in not resolving the other issues raised before it, namely, (a)
the legality of the public auction sale made by the sheriff, and (b) the nature of the
machineries in question, whether they are movables or immovables.
The Court of Appeals held that as a judgment was entered by the court below in open
court upon the submission of the compromise agreement, the parties may be
considered as having been notified of said judgment and this fact constitutes due notice
of said judgment. This raises the following legal question: Is the order dictated in open
court the judgment of the court, and is the fact that the petitioner herein was present in
open court when the judgment was dictated, sufficient notice thereof? The provisions of
the Rules of Court decree otherwise. Section 1 of Rule 35 describes the manner in
which judgments shall be rendered, thus: jgc:chanrobles.com.ph

"SECTION 1. How judgment rendered. — All judgments determining the merits of cases
shall be in writing personally and directly prepared by the judge, and signed by him,
stating clearly and distinctly the facts and the law on which it is based, and filed with
the clerk of the court."
cralaw virtua1aw library

The court of first instance being a court of record, in order that a judgment may be
considered as rendered it must not only be in writing, signed by the judge, but it must
also be filed with the clerk of court. The mere pronouncement of the judgment in open
court with the stenographer taking note thereof does not, therefore, constitute a
rendition of the judgment. It is the filing of the signed decision with the clerk of court
that constitutes rendition. While it is to be presumed that the judgment that was
dictated in open court will be the judgment of the court, the court may still modify said
order as the same is being put into writing. And even if the order or judgment has
already been put into writing and signed, while it has not yet been delivered to the
clerk for filing, it is still subject to amendment or change by the judge. It is only when
the judgment signed by the judge is actually filed with the clerk of court that it
becomes a valid and binding judgment. Prior thereto, it could still be subject to
amendment and change and may not, therefore, constitute the real judgment of the
court.

Regarding the notice of judgment, the mere fact that a party heard the judge dictating
the judgment in open court, is not a valid notice of said judgment. If rendition thereof
is constituted by the filing with the clerk of court of a signed copy (of the judgment), it
is evident that the fact that a party or an attorney heard the order or judgment being
dictated in court cannot be considered as notice of the real judgment. No judgment can
be notified to the parties unless it has previously been rendered. The notice, therefore,
that a party has of a judgment that was being dictated is of no effect because at that
time no judgment has as yet been signed by the judge and filed with the clerk.  chanroblesvirtual|awlibrary

Besides, the Rules expressly require that final orders or judgments be served personally
or by registered mail. Section 7 of Rule 27 provides as follows: jgc:chanrobles.com.ph

"SECTION 7. Service of final orders or judgments. — Final orders or judgments shall be

served either personally or by registered mail." cralaw virtua1aw library

In accordance with this provision, a party is not considered as having been served with
the judgment merely because he heard the judge dictating the said judgment in open
court; it is necessary that he be served with a copy of the signed judgment that has
been filed with the clerk in order that he may legally be considered as having been
served with the judgment.
For all the foregoing, the fact that the petitioner herein heard the trial judge dictating
the judgment in open court, is not sufficient to constitute the service of judgment as
required by the above-quoted section 7 of Rule 27; the signed judgment not having
been served upon the petitioner, said judgment could not be effective upon him
(petitioner) who had not received it. It follows as a consequence that the issuance of
the writ of execution was null and void, having been issued before petitioner herein was
served, personally or by registered mail, a copy of the decision.

The second question raised in this appeal, which has not been passed upon by the
Court of Appeals, concerns the validity of the proceedings of the sheriff in selling the
sawmill machineries and equipments at public auction without a notice of the sale
having been previously published.

The record shows that after petitioner herein Pastor D. Ago had purchased the sawmill
machineries and equipments, he assigned the same to the Golden Pacific Sawmill, Inc.
in payment of his subscription to the shares of stock of said corporation. Thereafter the
sawmill machineries and equipments were installed in a building and permanently
attached to the ground. By reason of such installment in a building, the said sawmill
machineries and equipments became real estate properties in accordance with the
provision of Art. 415(5) of the Civil Code, thus: jgc:chanrobles.com.ph

"ARTICLE 415. The following are immovable property: chanrob1es virtual 1aw library

x          x           x

"(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;"

This Court in interpreting a similar question raised before it in the case of Berkenkotter
v. Cu Unjieng e Hijos, 61 Phil. 683, held that the installation of the machinery and
equipment in the central of the Mabalacat Sugar Co., Inc. for use in connection with the
industry carried by that company, converted the said machinery and equipment into
real estate by reason of their purpose. Paraphrasing the language of said decision we
hold that by the installation of the sawmill machineries in the building of the Golden
Pacific Sawmill, Inc., for use in the sawing of logs carried on in said building, the same
became a necessary and permanent part of the building or real estate on which the
same was constructed, converting the said machineries and equipments into real estate
within the meaning of Article 415(5) above-quoted of the Civil Code of the Philippines.

Considering that the machineries and equipments in question valued at more than
P15,000.00 appear to have been sold without the necessary advertisement of sale by
publication in a newspaper, as required in Sec. 16 of Rule 39 of the Rules of Court,
which is as follows:jgc:chanrobles.com.ph

"SECTION 16. Notice of sale of property on execution. — Before the sale of property or
execution, notice thereof must be given as follows: chanrob1es virtual 1aw library

x          x           x
"(c) In case of real property, by posting a similar notice particularly describing the
property for twenty days in three public places in the municipality or city where the
property is situated, and also where the property is to be sold, and, if the assessed
value of the property exceeds four hundred pesos, by publishing a copy of the notice
once a week, for the same period, in some newspaper published or having general
circulation in the province, if there be one. If there are newspapers published in the
province in both the English and Spanish languages, then a like publication for a like
period shall be made in one newspaper published in the English language, and in one
published in the Spanish language." cralaw virtua1aw library

the sale made by the sheriff must be declared null and void.  chanrobles.com.ph : virtual law library

WHEREFORE, the decision of the Court of Appeals sought to be reviewed is hereby set
aside and We declare that the issuance of the writ of execution in this case against the
sawmill machineries and equipments purchased by petitioner Pastor D. Ago from the
Grace Park Engineering, Inc., as well as the sale of the same by the Sheriff of Surigao,
are null and void. Costs shall be against the respondent Grace Park Engineering, Inc.

Bengzon, C.J. Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon,

Regala and Makalintal, JJ., concur.

Padilla, J., took no part.

 THIRD DIVISION

[G.R. No. 137705. August 22, 2000.]

SERG’S PRODUCTS, INC., and SERGIO T. GOQUIOLAY, Petitioners, v. PCI

LEASING AND FINANCE, INC., Respondent.

DECISION

PANGANIBAN, J.:

After agreeing to a contract stipulating that a real or immovable property be considered

as personal or movable, a party is estopped from subsequently claiming otherwise.
Hence, such property is a proper subject of a writ of replevin obtained by the other
contracting party. chanrob1es virtua1 1aw 1ibrary

The Case

Before us is a Petition for Review on Certiorari assailing the January 6, 1999 Decision 1

of the Court of Appeals (CA) 2 in CA-GR SP No. 47332 and its February 26, 1999
Resolution 3 denying reconsideration. The decretal portion of the CA Decision reads as
follows:chanrob1es virtua1 1aw 1ibrary

"WHEREFORE, premises considered, the assailed Order dated February 18, 1998 and
Resolution dated March 31, 1998 in Civil Case No. Q-98-33500 are hereby AFFIRMED.
The writ of preliminary injunction issued on June 15, 1998 is hereby LIFTED." 4

In its February 18, 1998 Order, 5 the Regional Trial Court (RTC) of Quezon City (Branch
218) 6 issued a Writ of Seizure. 7 The, March 18, 1998 Resolution 8 denied petitioners’
Motion for Special Protective Order, praying that the deputy sheriff be enjoined "from
seizing immobilized or other real properties in [petitioners’] factory in Cainta, Rizal and
to return to their original place whatever immobilized machineries or equipments he
may have removed." 9

The Facts

The undisputed facts are summarized by the Court of Appeals as follows: 10

"On February 13, 1998, respondent PCI Leasing and Finance, Inc. ("PCI Leasing" for
short) filed worth the RTC-QC a complaint for [a] sum of money (Annex ‘E’), with an
application for a writ of replevin docketed as Civil Case No. Q-98-33500.

"On March 6, 1998, upon an ex-parte application of PCI Leasing, respondent judge
issued a writ of replevin (Annex ‘B’) directing its sheriff to seize and deliver the
machineries and equipment to PCI Leasing after 5 days and upon the payment of the
necessary expenses.

"On March 24, 1998, in implementation of said writ, the sheriff proceeded to
petitioner’s factory, seized one machinery with [the] word that he [would] return for
the other machineries.

"On March 25, 1998, petitioners filed a motion for special protective order (Annex ‘C’),
invoking the power of the court to control the conduct of its officers and amend and
control its processes, praying for a directive for the sheriff to defer enforcement of the
writ of replevin.

"This motion was opposed by PCI Leasing (Annex ‘F’), on the ground that the properties
[were] still personal and therefore still subject to seizure and a writ of replevin.

"In their Reply, petitioners asserted that the properties sought to be seized [were]
immovable as defined in Article 415 of the Civil Code, the parties’ agreement to the
contrary notwithstanding. They argued that to give effect to the agreement would be
prejudicial to innocent third parties. They further stated that PCI Leasing [was]
estopped from treating these machineries as personal because the contracts in which
the alleged agreement [were] embodied [were] totally sham and farcical.

"On April 6, 1998, the sheriff again sought to enforce the writ of seizure and take
possession of the remaining properties. He was able to take two more, but was
prevented by the workers from taking the rest.

"On April 7, 1998, they went to [the CA] via an original action for certiorari." cralaw virtua1aw library

Ruling of the Court of Appeals

Citing the Agreement of the parties, the appellate court held that the subject machines
were personal property, and that they had only been leased, not owned, by petitioners.
It also ruled that the "words of the contract are clear and leave no doubt upon the true
intention of the contracting parties." Observing that Petitioner Goquiolay was an
experienced businessman who was "not unfamiliar with the ways of the trade," it ruled
that he "should have realized the import of the document he signed." The CA further
held:jgc:chanrobles.com.ph

"Furthermore, to accord merit to this petition would be to preempt the trial court in
ruling upon the case below, since the merits of the whole matter are laid down before
us via a petition whose sole purpose is to inquire upon the existence of a grave abuse
of discretion on the part of the [RTC] in issuing the assailed Order and Resolution. The
issues raised herein are proper subjects of a full-blown trial, necessitating presentation
of evidence by both parties. The contract is being enforced by one, and [its] validity is
attacked by the other — a matter . . . which respondent court is in the best position to
determine." cralaw virtua1aw library

Hence, this Petition. 11

The Issues

In their Memorandum, petitioners submit the following issues for our consideration: jgc:chanrobles.com.ph

"A. Whether or not the machineries purchased and imported by SERG’S became real
property by virtue of immobilization.

B. Whether or not the contract between the parties is a loan or a lease." 12

In the main, the Court will resolve whether the said machines are personal, not
immovable, property which may be a proper subject of a writ of replevin. As a
preliminary matter, the Court will also address briefly the procedural points raised
by Respondent.

The Court’s Ruling

The Petition is not meritorious.

Preliminary Matter: chanrob1es virtual 1aw library

Procedural Questions

Respondent contends that the Petition failed to indicate expressly whether it was being
filed under Rule 45 or Rule 65 of the Rules of Court. It further alleges that the Petition
erroneously impleaded Judge Hilario Laqui as Respondent.

There is no question that the present recourse is under Rule 45. This conclusion finds
support in the very title of the Petition, which is "Petition for Review on Certiorari." 13

While Judge Laqui should not have been impleaded as a respondent, 14 substantial
justice requires that such lapse by itself should not warrant the dismissal of the present
Petition. In this light, the Court deems it proper to remove, motu proprio, the name of
Judge Laqui from the caption of the present case.

Main Issue: chanrob1es virtual 1aw library

Nature of the Subject Machinery

Petitioners contend that the subject machines used in their factory were not proper
subjects of the Writ issued by the RTC because they were in fact real property. Serious
policy considerations, they argue, militate against a contrary characterization.
Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery
of personal property only. 15 Section 3 thereof reads: jgc:chanrobles.com.ph

"SECTION 3. Order. — Upon the filing of such affidavit and approval of the bonds the
court shall issue an order and the corresponding writ of replevin describing the personal
property alleged to be wrongfully detained and requiring the sheriff forthwith to take
such property into his custody." cralaw virtua1aw library

On the other hand, Article 415 of the Civil Code enumerates immovable or real property
as follows: chanrob1es virtua1 1aw 1ibrary

ARTICLE 415. The following are immovable property: chanrob1es virtua1 1aw 1ibrary

x          x           x

(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.

x       x       x"

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. Indisputably, 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." 16 In that sense, petitioners are correct in arguing that the said machines
are real, not personal, property pursuant to Article 415 (5) of the Civil Code. 17

Be that as it may, we disagree with the submission of the petitioners that the said
machines are not proper subjects of the Writ of Seizure.

The Court has held that contracting parties may validly stipulate that a real property be
considered as personal. 18 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.

Hence, in Trinidad v. Vicencio, 19 the Court upheld the intention of the parties to treat
a house as a personal property because it had been made the subject of a chattel
mortgage. The Court ruled: jgc:chanrobles.com.ph

". . . Although there is no specific statement referring to the subject house as personal
property, yet by ceding, selling or transferring a property by way of chattel mortgage
defendants-appellants could only have meant to convey 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." cralaw virtua1aw library

Applying Tumalad, the Court in Makati Leasing and Finance Corp. v. Wearever Textile
Mills 20 also held that the machinery used in a factory and essential to the industry, as
in the present case, was a proper subject of a writ of replevin because it was treated as
personal property in a contract. Pertinent portions of the Court’s ruling are reproduced
hereunder: jgc:chanrobles.com.ph

". . . if a house of strong materials, like what was involved in the above Tumalad case,
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 in its nature and becomes immobilized only by destination or purpose, may
not be likewise treated as such. This is really because one who has so agreed is
estopped from denying the existence of the chattel mortgage." cralaw virtua1aw library

In the present case, the Lease Agreement clearly provides that the machines in
question are to be considered as personal property. Specifically, Section 12.1 of the
Agreement reads as follows: 21

"12.1 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." cralaw virtua1aw library

Clearly then, petitioners are estopped from denying the characterization of the subject
machines as personal property. Under the circumstances, they are proper subjects of
the Writ of Seizure.

It should be stressed, however, that our holding — that the machines should be
deemed personal property pursuant to the Lease Agreement — is good only insofar as
the contracting parties are concerned. 22 Hence, while the parties are bound by the
Agreement, third persons acting in good faith are not affected by its stipulation
characterizing the subject machinery as personal. 23 In any event, there is no showing
that any specific third party would be adversely affected.

Validity of the Lease Agreement

In their Memorandum, petitioners contend that the Agreement is a loan and not a
lease. 24 Submitting documents supposedly showing that they own the subject
machines, petitioners also argue in their Petition that the Agreement suffers from
"intrinsic ambiguity which places in serious doubt the intention of the parties and the
validity of the leak agreement itself." 25 In their Reply to respondent’s Comment, they
further allege that the Agreement is invalid. 26

These arguments are unconvincing. The validity and the nature of the contract are the
lis mota of the civil action pending before the RTC. A resolution of these questions,
therefore, is effectively a resolution of the merits of the case. Hence, they should be
threshed out in the trial, not in the proceedings involving the issuance of the Writ of
Seizure.

Indeed, in La Tondeña Distillers v. CA, 27 the Court explained that the policy under
Rule 60 was that questions involving title to the subject property — questions which
petitioners are now raising — should be determined in the trial. In that case, the Court
noted that the remedy of defendants under Rule 60 was either to post a counter-bond
or to question the sufficiency of the plaintiff’s bond. They were not allowed, however, to
invoke the title to the subject property. The Court ruled: jgc:chanrobles.com.ph

"In other words, the law does not allow the defendant to file a motion to dissolve or
discharge the writ of seizure (or delivery) on ground of insufficiency of the complaint or
of the grounds relied upon therefor, as in proceedings on preliminary attachment or
injunction, and thereby put at issue the matter of the title or right of possession over
the specific chattel being replevied, the policy apparently being that said matter should
be ventilated and determined only at the trial on the merits." 28

Besides, these questions require a determination of facts and a presentation of

evidence, both of which have no place in a petition for certiorari in the CA under Rule
65 or in a petition for review in this Court under Rule 45. 29

Reliance on the

Lease Agreement

It should be pointed out that the Court in this case may rely on the Lease Agreement,
for nothing on record shows that it has been nullified or annulled. In fact, petitioners
assailed it first only in the RTC proceedings, which had ironically been instituted
by Respondent. Accordingly, it must be presumed valid and binding as the law between
the parties.

Makati Leasing and Finance Corporation 30 is also instructive on this point In that case,
the Deed of Chattel Mortgage, which characterized the subject machinery as personal
property, was also assailed because respondent had allegedly been required "to sign a
printed form of chattel mortgage which was in a blank form at the time of signing." The
Court rejected the argument and relied on the Deed, ruling as follows: chanrob1es virtua1 1aw 1ibrary

". . . Moreover, even granting that the charge is true, such fact alone does not render a
contract void ab initio, but can only be a ground for rendering said contract voidable, or
annullable pursuant to Article 1390 of the new Civil Code, by a proper action in court.
There is nothing on record to show that the mortgage has been annulled. Neither is it
disclosed that steps were taken to nullify the same. . ."
cralaw virtua1aw library

Alleged Injustice Committed

on the Part of Petitioners

Petitioners contend that "if the Court allows these machineries to be seized, then its
workers would be out of work and thrown into the streets." 31 There also allege that
the seizure would nullify all efforts to rehabilitate the corporation.

Petitioners’ arguments do not preclude the implementation of the Writ. As earlier

discussed, law and jurisprudence support its propriety. Verily, the above-mentioned
consequences, if they come true, should not be blamed on this Court, but on the
petitioners for failing to avail themselves of the remedy under Section 5 of Rule 60,
which allows the filing of a counter-bond. The provision states: jgc:chanrobles.com.ph

"SECTION 5. Return of property. — if the adverse party objects to the sufficiency of the
applicant’s bond, or of the surety or sureties thereon, he cannot immediately require
the return of the property, but if he does not so object, he may, at any time before the
delivery of the property to the applicant, require the return thereof, by filing with the
court where the action is pending a bond executed to the applicant, in double the value
of the property as stated in the applicant’s affidavit for the delivery thereof to the
applicant, if such delivery be adjudged, and for the payment of such sum to him as may
be recovered against the adverse party, and by serving a copy bond on the applicant."
library
cralaw virtua1aw

WHEREFORE, the Petition is DENIED and the assailed Decision of the Court of Appeals
AFFIRMED. Costs against petitioners.

SO ORDERED. chanrob1es virtua1 1aw 1ibrary

Melo, Vitug, Purisima and Gonzaga-Reyes, JJ., concur.

 FIRST DIVISION

[G.R. No. 156295. September 23, 2003.]

MARCELO R. SORIANO, Petitioner, v. SPOUSES RICARDO and ROSALINA

GALIT, Respondents.

DECISION

YNARES-SANTIAGO, J.:

Petitioner was issued a writ of possession in Civil Case No. 6643 1 for Sum of Money by
the Regional Trial Court of Balanga, Bataan, Branch 1. The writ of possession was,
however, nullified by the Court of Appeals in CA-G.R. SP No. 65891 2 because it
included a parcel of land which was not among those explicitly enumerated in the
Certificate of Sale issued by the Deputy Sheriff, but on which stand the immovables
covered by the said Certificate. Petitioner contends that the sale of these immovables
necessarily encompasses the land on which they stand. chanrob1es virtua1 1aw 1ibrary

Dissatisfied, petitioner filed the instant petition for review on certiorari.

Respondent Ricardo Galit contracted a loan from petitioner Marcelo Soriano, in the total
sum of P480,000.00, evidenced by four promissory notes in the amount of P120,000.00
each dated August 2, 1996; 3 August 15, 1996; 4 September 4, 1996 5 and September
14, 1996. 6 This loan was secured by a real estate mortgage over a parcel of land
covered by Original Certificate of Title No. 569. 7 After he failed to pay his obligation,
Soriano filed a complaint for sum of money against him with the Regional Trial Court of
Balanga City, Branch 1, which was docketed as Civil Case No. 6643. 8

Respondents, the Spouses Ricardo and Rosalina Galit, failed to file their answer. Hence,
upon motion of Marcelo Soriano, the trial court declared the spouses in default and
proceeded to receive evidence for petitioner Soriano ex parte.

On July 7, 1997, the Regional Trial Court of Balanga City, Branch 1 rendered judgment
9 in favor of petitioner Soriano, the dispositive portion of which reads: chanrob1es virtual 1aw library

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the
defendant ordering the latter to pay: chanrob1es virtual 1aw library

1. the plaintiff the amount of P350,000.00 plus 12% interest to be computed from the
dates of maturity of the promissory notes until the same are fully paid;
2. the plaintiff P20,000.00, as attorney’s fees; and

3. the costs of suit.

SO ORDERED. 10

The judgment became final and executory. Accordingly, the trial court issued a writ of
execution in due course, by virtue of which, Deputy Sheriff Renato E. Robles levied on
the following real properties of the Galit spouses: chanrob1es virtual 1aw library

1. A parcel of land covered by Original Certificate of Title No. T-569 (Homestead Patent
No. 14692) situated in the Bo. of Tapulac, Orani, Bataan. Bounded on the SW, along
line 1-2 by Lot No. 3, Cad. 145; containing an area of THIRTY FIVE THOUSAND SEVEN
HUNDRED FIFTY NINE (35,759) SQUARE METERS, more or less . . .;

2. STORE/HOUSE — CONSTRUCTED on Lot No. 1103 made of strong materials G.I.

roofing situated at Centro I, Orani, Bataan, . . . containing an area of 30 sq. meters,
more or less . . . (constructed on TCT No. T40785);

3. BODEGA — constructed on Lot 1103, made of strong materials, G.I. roofing, situated
in Centro I, Orani, Bataan, . . . with a floor area of 42.75 sq. m. more or less . . . . 11

At the sale of the above-enumerated properties at public auction held on December 23,
1998, petitioner was the highest and only bidder with a bid price of P483,000.00.
Accordingly, on February 4, 1999, Deputy Sheriff Robles issued a Certificate of Sale of
Execution of Real Property, 12 which reads: chanrob1es virtual 1aw library

CERTIFICATE OF SALE ON EXECUTION OF REAL PROPERTY

TO ALL WHO MAY SEE THESE PRESENTS: chanrob1es virtual 1aw library

GREETINGS: chanrob1es virtual 1aw library

I HEREBY that (sic) by virtue of the writ of execution dated October 16, 1998, issued in
the above-entitled case by the HON. BENJAMIN T. VIANZON, ordering the Provincial
Sheriff of Bataan or her authorized Deputy Sheriff to cause to be made (sic) the sum of
P350,000.00 plus 12% interest to be computed from the date of maturity of the
promissory notes until the same are fully paid; P20,000.00 as attorney’s fees plus legal
expenses in the implementation of the writ of execution, the undersigned Deputy
Sheriff sold at public auction on December 23, 1998 the rights and interests of
defendants Sps. Ricardo and Rosalina Galit, to the plaintiff Marcelo Soriano, the highest
and only bidder for the amount of FOUR HUNDRED EIGHTY THREE THOUSAND PESOS
(P483,000.00, Philippine Currency), the following real estate properties more
particularly described as follows: chanrob1es virtual 1aw library

ORIGINAL CERTIFICATE OF TITLE NO. T-569

A parcel of land (Homestead Patent No. 14692) situated in the Bo. of Tapulac, Orani,
Bataan, . . . . Bounded on the SW., along line 1-2 by Lot No. 3, Cad. 145, containing an
area of THIRTY FIVE THOUSAND SEVEN HUNDRED FIFTY NINE (35,759) SQUARE
METERS, more or less . . .

TAX DEC. NO. — PROPERTY INDEX NO. 018-09-001-02

STOREHOUSE — constructed on Lot 1103, made of strong materials G.I. roofing

situated at Centro I, Orani, Bataan . . . containing an area of 30 sq. meters, more or
less . . . (constructed on TCT No. 40785)

TAX DEC. NO. 86 — PROPERTY INDEX No. 018-09-001-02

BODEGA — constructed on Lot 1103, made of strong materials G.I. roofing situated in
Centro I, Orani, Bataan, . . . with a floor area of 42.75 sq. m. more or less . . .

IT IS FURTHER CERTIFIED, that the aforesaid highest and lone bidder, Marcelo Soriano,
being the plaintiff did not pay to the Provincial Sheriff of Bataan the amount of
P483,000.00, the sale price of the above described property which amount was credited
to partial/full satisfaction of the judgment embodied in the writ of execution.

The period of redemption of the above described real properties together with all the
improvements thereon will expire One (1) year from and after the registration of this
Certificate of Sale with the Register of Deeds.

This Certificate of Sheriff’s Sale is issued to the highest and lone bidder, Marcelo
Soriano, under guarantees prescribed by law.

Balanga, Bataan, February 4, 1999.

On April 23, 1999, petitioner caused the registration of the "Certificate of Sale on
Execution of Real Property" with the Registry of Deeds. chanrob1es virtua1 1aw 1ibrary

The said Certificate of Sale registered with the Register of Deeds includes at the dorsal
portion thereof the following entry, not found in the Certificate of Sale on file with
Deputy Sheriff Renato E. Robles: 13

ORIGINAL CERTIFICATE OF TITLE NO. T-40785

A parcel of land (Lot No. 1103 of the Cadastral Survey of Orani), with the
improvements thereon, situated in the Municipality of Orani, Bounded on the NE; by
Calle P. Gomez; on the E. by Lot No. 1104; on the SE by Calle Washington; and on the
W. by Lot 4102, containing an area of ONE HUNDRED THIRTY NINE (139) SQUARE
METERS, more or less. All points referred to are indicated on the plan; bearing true;
declination 0 deg. 40’E., date of survey, February 191-March 1920.

On February 23, 2001, ten months from the time the Certificate of Sale on Execution
was registered with the Registry of Deeds, petitioner moved 14 for the issuance of a
writ of possession. He averred that the one-year period of redemption had elapsed
without the respondents having redeemed the properties sold at public auction; thus,
the sale of said properties had already become final. He also argued that after the lapse
of the redemption period, the titles to the properties should be considered, for all legal
intents and purposes, in his name and favor. 15
On June 4, 2001, the Regional Trial Court of Balanga City, Branch 1 granted the motion
for issuance of writ of possession. 16 Subsequently, on July 18, 2001, a writ of
possession 17 was issued in petitioner’s favor which reads: chanrob1es virtual 1aw library

WRIT OF POSSESSION

Mr. Renato E. Robles

Deputy Sheriff

RTC, Br. 1, Balanga City

Greetings: chanrob1es virtual 1aw library

WHEREAS on February 3, 2001, the counsel for plaintiff filed Motion for the Issuance of
Writ of Possession;

WHEREAS on June 4, 2001, this court issued an order granting the issuance of the Writ
of Possession;

WHEREFORE, you are hereby commanded to place the herein plaintiff Marcelo Soriano
in possession of the property involved in this case situated (sic) more particularly
described as: chanrob1es virtual 1aw library

1. STORE HOUSE constructed on Lot No. 1103 situated at Centro 1, Orani, Bataan
covered by TCT No. 40785;

2. BODEGA constructed on Lot No. 1103 with an area of 42.75 square meters under
Tax Declaration No. 86 situated at Centro 1, Orani, Bataan;

3. Original Certificate of Title No. 40785 with an area of 134 square meters known as
Lot No. 1103 of the Cadastral Survey of Orani. . .

against the mortgagor/former owners Sps. Ricardo and Rosalinda (sic) Galit, her (sic)
heirs, successors, assigns and all persons claiming rights and interests adverse to the
petitioner and make a return of this writ every thirty (30) days from receipt hereof
together with all the proceedings thereon until the same has been fully satisfied.

WITNESS THE HONORABLE BENJAMIN T. VIANZON, Presiding Judge, this 18th day of
July 2001, at Balanga City.

(Sgd) GILBERT S. ARGONZA

OIC

Respondents filed a petition for certiorari with the Court of Appeals, which was

docketed as CA-G.R. SP No. 65891, assailing the inclusion of the parcel of land covered
by Transfer Certificate of Title No. T-40785 among the list of real properties in the writ
of possession. 18 Respondents argued that said property was not among those sold on
execution by Deputy Sheriff Renato E. Robles as reflected in the Certificate of Sale on
Execution of Real Property.

In opposition, petitioner prayed for the dismissal of the petition because respondent
spouses failed to move for the reconsideration of the assailed order prior to the filing of
the petition. Moreover, the proper remedy against the assailed order of the trial court is
an appeal, or a motion to quash the writ of possession.

On May 13, 2002, the Court of Appeals rendered judgment as follows: chanrob1es virtual 1aw library

WHEREFORE, the instant petition is hereby GRANTED. Accordingly, the writ of

possession issued by the Regional Trial Court of Balanga City, Branch 1, on 18 July
2001 is declared NULL and VOID.

In the event that the questioned writ of possession has already been implemented, the
Deputy Sheriff of the Regional Trial Court of Balanga City, Branch 1, and private
respondent Marcelo Soriano are hereby ordered to cause the redelivery of Transfer
Certificate of Title No. T-40785 to the petitioners.

SO ORDERED. 19

Aggrieved, petitioner now comes to this Court maintaining that —

1.) THE SPECIAL CIVIL ACTION OF CERTIORARI UNDER RULE 65 IS NOT THE PLAIN,
SPEEDY AND ADEQUATE REMEDY OF THE RESPONDENTS IN ASSAILING THE WRIT OF
POSSESSION ISSUED BY THE LOWER COURT BUT THERE WERE STILL OTHER
REMEDIES AVAILABLE TO THEM AND WHICH WERE NOT RESORTED TO LIKE THE
FILING OF A MOTION FOR RECONSIDERATION OR MOTION TO QUASH OR EVEN
APPEAL.

2.) THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN DECLARING THE

CERTIFICATE OF SALE ON EXECUTION OF REAL PROPERTY AS NULL AND VOID AND
SUBSEQUENTLY THE WRIT OF POSSESSION BECAUSE THE SAME IS A PUBLIC
DOCUMENT WHICH ENJOYS THE PRESUMPTION OF REGULARITY AND IT CANNOT BE
OVERCOME BY A MERE STRANGE FEELING THAT SOMETHING IS AMISS ON ITS
SURFACE SIMPLY BECAUSE THE TYPEWRITTEN WORDS ON THE FRONT PAGE AND AT
THE DORSAL PORTION THEREOF IS DIFFERENT OR THAT IT IS UNLIKELY FOR THE
SHERIFF TO USE THE DORSAL PORTION OF THE FIRST PAGE BECAUSE THE SECOND
PAGE IS MERELY HALF FILLED AND THE NOTATION ON THE DORSAL PORTION COULD
STILL BE MADE AT THE SECOND PAGE.

On the first ground, petitioner contends that respondents were not without remedy
before the trial court. He points out that respondents could have filed a motion for
reconsideration of the Order dated June 4, 1999, but they did not do so. Respondents
could also have filed an appeal but they, likewise, did not do so. When the writ of
possession was issued, respondents could have filed a motion to quash the writ. Again
they did not. Respondents cannot now avail of the special civil action for certiorari as a
substitute for these remedies. They should suffer the consequences for sleeping on
their rights.
chanrob1es virtua1 1aw 1ibrary
We disagree.

Concededly, those who seek to avail of the procedural remedies provided by the rules
must adhere to the requirements thereof, failing which the right to do so is lost. It is,
however, equally settled that the Rules of Court seek to eliminate undue reliance on
technical rules and to make litigation as inexpensive as practicable and as convenient
as can be done. 20 This is in accordance with the primary purpose of the 1997 Rules of
Civil Procedure as provided in Rule 1, Section 6, which reads: chanrob1es virtual 1aw library

Section 6. Construction. — These rules shall be liberally construed in order to promote

their objective of securing a just, speedy and inexpensive determination of every action
and proceeding. 21

The rules of procedure are not to be applied in a very rigid, technical sense and are
used only to help secure substantial justice. If a technical and rigid enforcement of the
rules is made, their aim would be defeated. 22 They should be liberally construed so
that litigants can have ample opportunity to prove their claims and thus prevent a
denial of justice due to technicalities. 23 Thus, in China Banking Corporation v.
Members of the Board of Trustees of Home Development Mutual Fund, 24 it was held:
1aw library
chanrob1es virtual

. . .while certiorari as a remedy may not be used as a substitute for an appeal,

especially for a lost appeal, this rule should not be strictly enforced if the petition is
genuinely meritorious. 25 It has been said that where the rigid application of the rules
would frustrate substantial justice, or bar the vindication of a legitimate grievance, the
courts are justified in exempting a particular case from the operation of the rules. 26
(Emphasis ours)

Indeed, well-known is the rule that departures from procedure may be forgiven where
they do not appear to have impaired the substantial rights of the parties. 27 Apropos in
this regard is Cometa v. CA, 28 where we said that —

There is no question that petitioners were remiss in attending with dispatch to the
protection of their interests as regards the subject lots, and for that reason the case in
the lower court was dismissed on a technicality and no definitive pronouncement on the
inadequacy of the price paid for the levied properties was ever made. In this regard, it
bears stressing that procedural rules are not to be belittled or dismissed simply because
their non-observance may have resulted in prejudice to a party’s substantive rights as
in this case. Like all rules, they are required to be followed except when only for the
most persuasive of reasons they may be relaxed to relieve a litigant of an injustice not
commensurate with the degree of his thoughtlessness in not complying with the
procedure prescribed. 29 (emphasis and Italics supplied.)

In short, since rules of procedure are mere tools designed to facilitate the attainment of
justice, their strict and rigid application which would result in technicalities that tend to
frustrate rather than promote substantial justice must always be avoided. 30
Technicality should not be allowed to stand in the way of equitably and completely
resolving the rights and obligations of the parties. 31

Eschewing, therefore, the procedural objections raised by petitioner, it behooves us to

address the issue of whether or not the questioned writ of possession is in fact a nullity
considering that it includes real property not expressly mentioned in the Certificate of
Sale of Real Property.

Petitioner, in sum, dwells on the general proposition that since the certificate of sale is
a public document, it enjoys the presumption of regularity and all entries therein are
presumed to be done in the performance of regular functions.

The argument is not persuasive.

There are actually two (2) copies of the Certificate of Sale on Execution of Real
Properties issued on February 4, 1999 involved, namely: (a) copy which is on file with
the deputy sheriff; and (b) copy registered with the Registry of Deeds. The object of
scrutiny, however, is not the copy of the Certificate of Sale on Execution of Real
Properties issued by the deputy sheriff on February 4, 1999, 32 but the copy thereof
subsequently registered by petitioner with the Registry of Deeds on April 23, 1999, 33
which included an entry on the dorsal portion of the first page thereof describing a
parcel of land covered by OCT No. T-40785 not found in the Certificate of Sale of Real
Properties on file with the sheriff.

True, public documents by themselves may be adequate to establish the presumption

of their validity. However, their probative weight must be evaluated not in isolation but
in conjunction with other evidence adduced by the parties in the controversy, much
more so in this case where the contents of a copy thereof subsequently registered for
documentation purposes is being contested. No reason has been offered how and why
the questioned entry was subsequently intercalated in the copy of the certificate of sale
subsequently registered with the Registry of Deeds. Absent any satisfactory explanation
as to why said entry was belatedly inserted, the surreptitiousness of its inclusion
coupled with the furtive manner of its intercalation casts serious doubt on the
authenticity of petitioner’s copy of the Certificate of Sale. Thus, it has been held that
while a public document like a notarized deed of sale is vested with the presumption of
regularity, this is not a guarantee of the validity of its contents. 34

It must be pointed out in this regard that the issuance of a Certificate of Sale is an end
result of judicial foreclosure where statutory requirements are strictly adhered to;
where even the slightest deviations therefrom will invalidate the proceeding 35 and the
sale. 36 Among these requirements is an explicit enumeration and correct description of
what properties are to be sold stated in the notice. The stringence in the observance of
these requirements is such that an incorrect title number together with a correct
technical description of the property to be sold and vice versa is deemed a substantial
and fatal error which results in the invalidation of the sale. 37

The certificate of sale is an accurate record of what properties were actually sold to
satisfy the debt. The strictness in the observance of accuracy and correctness in the
description of the properties renders the enumeration in the certificate exclusive. Thus,
subsequently including properties which have not been explicitly mentioned therein for
registration purposes under suspicious circumstances smacks of fraud. The explanation
that the land on which the properties sold is necessarily included and, hence, was
belatedly typed on the dorsal portion of the copy of the certificate subsequently
registered is at best a lame excuse unworthy of belief. chanrob1es virtua1 1aw 1ibrary
The appellate court correctly observed that there was a marked difference in the
appearance of the typewritten words appearing on the first page of the copy of the
Certificate of Sale registered with the Registry of Deeds 38 and those appearing at the
dorsal portion thereof. Underscoring the irregularity of the intercalation is the clearly
devious attempt to let such an insertion pass unnoticed by typing the same at the back
of the first page instead of on the second page which was merely half-filled and could
accommodate the entry with room to spare.

The argument that the land on which the buildings levied upon in execution is
necessarily included is, likewise, tenuous. Article 415 of the Civil Code provides: chanrob1es virtual 1aw library

ART. 415. The following are immovable property: chanrob1es virtual 1aw library

(1) Land, buildings, roads and constructions of all kinds adhered to the soil: chanrob1es virtual 1aw library

x          x           x

(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 also included;

x          x           x

(9) Docks and structures which, though floating, are intended by their nature and
object to remain at a fixed place on a river, lake or coast;

x       x       x.

The foregoing provision of the Civil Code enumerates land and buildings separately.
This can only mean that a building is, by itself, considered immovable. 39 Thus, it has
been held that —

. . . while it is true that a mortgage of land necessarily includes, in the absence of

stipulation of the improvements thereon, buildings, still a building by itself may be
mortgaged apart from the land on which it has been built. Such mortgage would be still
a real estate mortgage for the building would still be considered immovable property
even if dealt with separately and apart from the land. 40 (emphasis and Italics
supplied)

In this case, considering that what was sold by virtue of the writ of execution issued by
the trial court was merely the storehouse and bodega constructed on the parcel of land
covered by Transfer Certificate of Title No. T-40785, which by themselves are real
properties of respondents spouses, the same should be regarded as separate and
distinct from the conveyance of the lot on which they stand.

WHEREFORE, in view of all the foregoing, the petition is hereby DENIED for lack of
merit. The Decision dated May 13, 2002 of the Court of Appeals in CA-G.R. SP No.
65891, which declared the writ of possession issued by the Regional Trial Court of
Balanga City, Branch 1, on July 18, 2001, null and void, is AFFIRMED in toto. chanrob1es virtua1 1aw 1ibrary

SO ORDERED.

Davide, Jr., C.J., Vitug and Carpio, JJ., concur.

Azcuna, J., is on leave.
 THIRD DIVISION

[G.R. NO. 136438 : November 11, 2004]

TEOFILO C. VILLARICO, Petitioner, v. VIVENCIO SARMIENTO, SPOUSES BESSIE

SARMIENTO-DEL MUNDO & BETH DEL MUNDO, ANDOK'S LITSON
CORPORATION and MARITES' CARINDERIA, Respondents.

DECISION

SANDOVAL-GUTIERREZ, J.:

Before us is a Petition for Review on Certiorari of the Decision1 of the Court of Appeals
dated December 7, 1998 in CA-G.R. CV No. 54883, affirming in toto the Decision 2 of the
Regional Trial Court (RTC) of Parañaque City, Branch 259, dated November 14, 1996,
in Civil Case No. 95-044.

The facts of this case, as gleaned from the findings of the Court of Appeals, are:

Teofilo C. Villarico, petitioner, is the owner of a lot in La Huerta, Parañaque City,

Metro Manila with an area of sixty-six (66) square meters and covered by Transfer
Certificate of Title (T.C.T.) No. 95453 issued by the Registry of Deeds, same city.

Petitioner's lot is separated from the Ninoy Aquino Avenue (highway) by a strip of land
belonging to the government. As this highway was elevated by four (4) meters and
therefore higher than the adjoining areas, the Department of Public Works and
Highways (DPWH) constructed stairways at several portions of this strip of public land
to enable the people to have access to the highway.

Sometime in 1991, Vivencio Sarmiento, his daughter Bessie Sarmiento and her
husband Beth Del Mundo, respondents herein, had a building constructed on a portion
of said government land. In November that same year, a part thereof was occupied by
Andok's Litson Corporation and Marites' Carinderia, also impleaded as respondents.

In 1993, by means of a Deed of Exchange of Real Property, petitioner acquired a 74.30

square meter portion of the same area owned by the government. The property was
registered in his name as T.C.T. No. 74430 in the Registry of Deeds of Parañaque
City.

In 1995, petitioner filed with the RTC, Branch 259, Parañaque City, a complaint for
accion publiciana against respondents, docketed as Civil Case No. 95-044. He alleged
inter alia that respondents' structures on the government land closed his "right of way"
to the Ninoy Aquino Avenue; and encroached on a portion of his lot covered by T.C.T.
No. 74430.

Respondents, in their answer, specifically denied petitioner's allegations, claiming that

they have been issued licenses and permits by Parañaque City to construct their
buildings on the area; and that petitioner has no right over the subject property as it
belongs to the government.

After trial, the RTC rendered its Decision, the dispositive portion of which reads:

"WHEREFORE, premises considered, judgment is hereby rendered:

1. Declaring the defendants to have a better right of possession over the subject land
except the portion thereof covered by Transfer Certificate of Title No. 74430 of the
Register of Deeds of Parañaque;

2. Ordering the defendants to vacate the portion of the subject premises described in
Transfer Certificate of Title No. 74430 and gives its possession to plaintiff; and
cralawlibrary

3. Dismissing the claim for damages of the plaintiff against the defendants, and likewise
dismissing the claim for attorney's fees of the latter against the former.

Without pronouncement as to costs.

SO ORDERED."3

The trial court found that petitioner has never been in possession of any portion of the
public land in question. On the contrary, the defendants are the ones who have been in
actual possession of the area. According to the trial court, petitioner was not deprived
of his "right of way" as he could use the Kapitan Tinoy Street as passageway to the
highway.

On appeal by petitioner, the Court of Appeals issued its Decision affirming the trial
court's Decision in toto, thus:

"WHEREFORE, the judgment hereby appealed from is hereby AFFIRMED in toto, with
costs against the plaintiff-appellant.

SO ORDERED."4

In this petition, petitioner ascribes to the Court of Appeals the following assignments of
error:

"I

THE FINDINGS OF FACT OF THE HON. COURT OF APPEALS CONTAINED A CONCLUSION

WITHOUT CITATION OF SPECIFIC EVIDENCE ON WHICH THE SAME WAS BASED.

II
THE HON. COURT OF APPEALS ERRED IN CONSIDERING THAT THE ONLY ISSUE IN
THIS CASE IS WHETHER OR NOT THE PLAINTIFF-APPELLANT HAS ACQUIRED A RIGHT
OF WAY OVER THE LAND OF THE GOVERNMENT WHICH IS BETWEEN HIS PROPERTY
AND THE NINOY AQUINO AVENUE.

III

THE HON. COURT OF APPEALS ERRED IN CONCLUDING THAT ACCION PUBLICIANA IS

NOT THE PROPER REMEDY IN THE CASE AT BAR.

IV

THE HON. COURT OF APPEALS ERRED IN CONCLUDING THAT THE EXISTENCE OF THE
PLAINTIFF-APPELLANT'S RIGHT OF WAY DOES NOT CARRY POSSESSION OVER THE
SAME.

THE HON. COURT OF APPEALS ERRED IN NOT RESOLVING THE ISSUE OF WHO HAS
THE BETTER RIGHT OF POSSESSION OVER THE SUBJECT LAND BETWEEN THE
PLAINTIFF-APPELLANT AND THE DEFENDANT-APPELLEES." 5

In their comment, respondents maintain that the Court of Appeals did not err in ruling
that petitioner's action for accion publiciana is not the proper remedy in asserting his
"right of way" on a lot owned by the government.

Here, petitioner claims that respondents, by constructing their buildings on the lot in
question, have deprived him of his "right of way" and his right of possession over a
considerable portion of the same lot, which portion is covered by his T.C.T. No. 74430
he acquired by means of exchange of real property.

It is not disputed that the lot on which petitioner's alleged "right of way" exists belongs
to the state or property of public dominion. Property of public dominion is defined by
Article 420 of the Civil Code as follows:

"ART. 420. The following things are property of public dominion:

(1) Those intended for public use such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads, and other of similar
character.

(2) Those which belong to the State, without being for public use, and are intended for
some public service or for the development of the national wealth."

Public use is "use that is not confined to privileged individuals, but is open to the
indefinite public."6 Records show that the lot on which the stairways were built is for the
use of the people as passageway to the highway. Consequently, it is a property of
public dominion.
Property of public dominion is outside the commerce of man and hence it: (1) cannot
be alienated or leased or otherwise be the subject matter of contracts; (2) cannot be
acquired by prescription against the State; (3) is not subject to attachment and
execution; and (4) cannot be burdened by any voluntary easement. 7

Considering that the lot on which the stairways were constructed is a property of public
dominion, it can not be burdened by a voluntary easement of right of way in favor of
herein petitioner. In fact, its use by the public is by mere tolerance of the government
through the DPWH. Petitioner cannot appropriate it for himself. Verily, he can not claim
any right of possession over it. This is clear from Article 530 of the Civil Code which
provides:

"ART. 530. Only things and rights which are susceptible of being appropriated may be
the object of possession."

Accordingly, both the trial court and the Court of Appeals erred in ruling that
respondents have better right of possession over the subject lot.

However, the trial court and the Court of Appeals found that defendants' buildings were
constructed on the portion of the same lot now covered by T.C.T. No. 74430 in
petitioner's name. Being its owner, he is entitled to its possession.

WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals
dated December 7, 1998 in CA-G.R. CV No. 54883 is AFFIRMED with MODIFICATION in
the sense that neither petitioner nor respondents have a right of possession over the
disputed lot where the stairways were built as it is a property of public dominion. Costs
against petitioner.

SO ORDERED.

Panganiban, (Chairman), Carpio Morales and Garcia, JJ., concur.

Corona, J., on leave.
 THIRD DIVISION

[G.R. NO. 152115 : January 26, 2005]

NIMFA USERO, Petitioner, v. COURT OF APPEALS and SPS. HERMINIGILDO &

CECILIA POLINAR, Respondents.

[G.R. NO. 155055 : January 26, 2005]

LUTGARDA R. SAMELA, Petitioner, v. COURT OF APPEALS and SPS.

HERMINIGILDO & CECILIA POLINAR, Respondents.

DECISION

CORONA, J.:

Before this Court are two consolidated Petitions for Review on Certiorari under Rule 45
of the Rules of Court. The first petition, docketed as G.R. No. 152115, filed by Nimfa
Usero, assails the September 19, 2001 decision1 of the Court of Appeals in CA-GR SP
No. 64718. The second petition, docketed as G.R. No. 155055, filed by Lutgarda R.
Samela, assails the January 11, 2002 decision2 of the Court of Appeals in CA-GR SP NO.
64181.

The undisputed facts follow.

Petitioners Lutgarda R. Samela and Nimfa Usero are the owners respectively of lots 1
and 2, Block 5, Golden Acres Subdivision, Barrio Almanza, Las Piñas City.

Private respondent spouses Polinar are the registered owners of a parcel of land at no.
18 Anahaw St., Pilar Village, Las Piñas City, behind the lots of petitioners Samela and
Usero.

Situated between the lots of the parties is a low-level strip of land, with a stagnant
body of water filled with floating water lilies; abutting and perpendicular to the lot of
petitioner Samela, the lot of the Polinars and the low-level strip of land is the perimeter
wall of Pilar Village Subdivision.

Apparently, every time a storm or heavy rains occur, the water in said strip of land
rises and the strong current passing through it causes considerable damage to the
house of respondent Polinars. Frustrated by their predicament, private respondent
spouses, on July 30, 1998, erected a concrete wall on the bank of the low-level strip of
land about three meters from their house and rip-rapped the soil on that portion of the
strip of land.

Claiming ownership of the subject strip of land, petitioners Samela and Usero
demanded that the spouses Apolinar stop their construction but the spouses paid no
heed, believing the strip to be part of a creek. Nevertheless, for the sake of peace, the
Polinars offered to pay for the land being claimed by petitioners Samela and Usero.
However, the parties failed to settle their differences.

On November 9, 1998, petitioners filed separate complaints for forcible entry against
the Polinars at the Metropolitan Trial Court of Las Piñas City. The case filed by petitioner
Samela was docketed as Civil Case No. 5242, while that of petitioner Usero was
docketed as Civil Case No. 5243.

In Civil Case No. 5242, petitioner Samela adduced in evidence a copy of her Transfer
Certificate of Title, plan of consolidation, subdivision survey, the tax declaration in her
name, and affidavits of petitioner Usero and a certain Justino Gamela whose property
was located beside the perimeter wall of Pilar Village.

The spouses Polinar, on the other hand, presented in evidence their own TCT; a
barangay certification as to the existence of the creek; a certification from the district
engineer that the western portion of Pilar Village is bound by a tributary of Talon Creek
throughout its entire length; boundary and index map of Pilar Village showing that the
village is surrounded by a creek and that the Polinar property is situated at the edge of
said creek; and pictures of the subject strip of land filled with water lilies.

On March 22, 1999, the trial court rendered a decision in favor of petitioner Samela:

WHEREFORE, the Court hereby renders judgment ordering the defendants to vacate
and remove at their expense the improvements made on the subject lot; ordering the
defendants to pay the plaintiff P1,000.00 a month as reasonable compensation for the
use of the portion encroached from the filing of the complaint until the same is finally
vacated; and to pay plaintiff P10,000.00 as reasonable attorney's fees plus costs of
suit.3 
ςηαñrοblεš νιr†υαl  lαω lιbrαrÿ

In a parallel development, the Metropolitan Trial Court, in Civil Case No. 5243, issued
an order on February 29, 2000, directing petitioner Usero and the Polinar spouses to
commission a professional geodetic engineer to conduct a relocation survey and to
submit the report to the trial court.

On April 24, 2000, Mariano Flotilde, a licensed geodetic engineer, conducted a

relocation survey of Usero's property covered by TCT No. T - 29545. The result of the
said relocation survey, as stated in his affidavit, was as follows:

1. That I executed a relocation survey of Lot 2, Block 5, (LRC) PCS-4463 covered by

TCT No. T-29545 registered in the name of Nimfa O. Usero;

2. That according to my survey, I found out that there is no existing creek on the
boundary of the said lot;
3. That based on the relocation plan surveyed by the undersigned, attached herewith,
appearing is the encroachment on the above-mentioned lot by Spouses Herminigildo
and Cecilia Polinar with an area of FORTY THREE (43) SQUARE METERS;

4. That this affidavit was made in compliance with Court Order dated February 23, 2000
of Metropolitan Trial Court, Las Piñas City, Branch LXXIX. 4

On August 25, 2000, the Metropolitan Trial Court decided in favor of petitioner Usero:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the
defendants ordering them:

a) To vacate and remove at their expense the improvement made on the subject lot;

b) To pay the plaintiff P1,000.00 a month as reasonable compensation for the portion

encroached from the time of the filing of the complaint until the same is finally vacated;

c) To pay plaintiff P10,000.00 as reasonable attorney's fees plus costs of suit.

SO ORDERED.5

The Polinar spouses appealed the decisions of the two Municipal Trial Courts to the
Regional Trial Court of Las Piñas, Branch 253 which heard the appeals separately.

On December 20, 2000, the Regional Trial Court, deciding Civil Case No. 5242,
reversed the decision of the trial court and ordered the dismissal of the complaint. It
confirmed the existence of the creek between the northwestern portion of the lot of
petitioner Samela and the southwestern portion of the lot of the spouses Polinar:

Finding the existence of a creek between the respective properties of the parties,
plaintiff-appellee cannot therefore lay claim of lawful ownership of that portion because
the same forms part of public dominion. ςηαñrοblεš  νιr†υαl  lαω lιbrαrÿ

Consequently, she cannot legally stop the defendants-appellants from rip-rapping the
bank of the creek to protect the latter's property from soil erosion thereby avoiding
danger to their lives and damage to property.

Absent a lawful claim by the plaintiff-appellee over the subject portion of that lot,
defendants-appellants are not duty bound to pay the former compensation for the use
of the same. As a result, they may maintain the said improvements introduced thereon
subject to existing laws, rules and regulations and/or ordinances appurtenant thereto.

WHEREFORE, premises considered, the Decision rendered by Branch 79 of the

Metropolitan Trial Court, Las Piñas is REVERSED. Accordingly, the instant complaint is
DISMISSED.

SO ORDERED.6
On March 16, 2001, the Regional Trial Court, in Civil Case No. 5243, also reversed the
finding of the Municipal Trial Court:

From the foregoing, defendants-appellants may maintain the improvements introduced

on the subject portion of the lot subject to existing laws, rules and regulations and/or
ordinances pertaining thereto. Consequently, no compensation may be awarded in
favor of the plaintiff-appellee.

WHEREFORE, premises considered, the above-mentioned Decision rendered by Branch

79 of the Las Piñas City Metropolitan Trial Court is REVERSED. Accordingly, the instant
complaint is DISMISSED.

From the adverse decisions of the Regional Trial Court, petitioners filed their respective
Petitions for Review on Certiorari to the Court of Appeals. Petitioner Samela's case was
docketed as CA-G.R. SP 64181 while that of petitioner Usero was docketed as CA-G.R.
SP 64718. ςηαñrοblεš νιr†υαl  lαω lιbrαrÿ

Both petitions failed in the CA. Thus the instant consolidated petitions.

The pivotal issue in the case at bar is whether or not the disputed strip of land,
allegedly encroached upon by the spouses Polinar, is the private property of petitioners
or part of the creek and therefore part of the public domain. Clearly this an issue which
calls for a review of facts already determined by the Court of Appeals.

The jurisdiction of the Court in Petitions for Review on Certiorari under Rule 45 of the
Rules of Court is limited to reviewing only errors of law, not of fact, unless the factual
findings complained of are devoid of support by the evidence on record or the assailed
judgment is based on a misapprehension of facts.7 This is obviously not the case here.

A careful scrutiny of the records reveals that the assailed decisions are founded on
sufficient evidence. That the subject strip of land is a creek is evidenced by: (1) a
barangay certification that a creek exists in the disputed strip of land; (2) a certification
from the Second Manila Engineering District, NCR-DPWH, that the western portion of
Pilar Village where the subject strip of land is located is bounded by a tributary of Talon
Creek and (3) photographs showing the abundance of water lilies in the subject strip of
land. The Court of Appeals was correct: the fact that water lilies thrive in that strip of
land can only mean that there is a permanent stream of water or creek there.

In contrast, petitioners failed to present proof sufficient to support their claim.

Petitioners presented the TCTs of their respective lots to prove that there is no creek
between their properties and that of the Polinars. However, an examination of said
TCTs reveals that the descriptions thereon are incomplete. In petitioner Samela's TCT
No. T-30088, there is no boundary description relative to the northwest portion of the
property pertaining to the site of the creek. Likewise in TCT No. T-22329-A of the
spouses Polinar, the southeast portion which pertains to the site of the creek has no
described boundary. Moreover the tax declaration presented by petitioner is devoid of
any entry on the "west boundary" vis-a-vis the location of the creek. All the pieces of
evidence taken together, we can only conclude that the adjoining portion of these
boundaries is in fact a creek and belongs to no one but the state.
Property is either of public dominion or of private ownership. 8 Concomitantly, Article
420 of the Civil Code provides:

ART. 420. The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads, and others of similar
character;

The phrase "others of similar character" includes a creek which is a recess or an arm of
a river. It is property belonging to the public domain which is not susceptible to private
ownership.9 Being public water, a creek cannot be registered under the Torrens System
in the name of any individual10 .

Accordingly, the Polinar spouses may utilize the rip-rapped portion of the creek to
prevent the erosion of their property.

WHEREFORE, the consolidated petitions are hereby denied. The assailed decisions of
the Court of Appeals in CA-G.R. SP 64181 and CA-G.R. SP 64718 are affirmed in toto.

SO ORDERED.

Panganiban, (Chairman), Sandoval-Gutierrez, Carpio-Morales, and Garcia, JJ.,

concur.