[ART.

414, NCC]
HPS SOFTWARE AND COMMUNICATION CORPORATION v. PHILIPPINE LONG DISTANCE
TELEPHONE COMPANY, G.R. No. 170217, 10 December 2012.
https://lawphil.net/judjuris/juri2012/dec2012/gr_170217_2012.html

- Two consolidated petitions for review on certiorari under Rule 45 of the Rules of Court
- Seeks to annul CA ruling concerning the May 23, 2001 Joint Order issued by the RTC of
Mandaue City, Branch 55.
- In G.R. No. 170217, petitioners HPS Corporation, et al. seek to nullify the March 26, 2004
Decision as well as the September 27, 2005 Resolution of the former 4th Division of the Court of
Appeals

May 23, 2001 Joint Order: (RTC)

- directed the immediate return of the seized items to HPS Corporation.
o WHEREFORE, premises considered, the motion to quash the search warrants and return the
things seized is hereby granted. Search Warrant Nos. 2000-10-467 and 2000-10-468 are ordered
quashed. The things seized under the said search warrants are hereby ordered to be immediately
returned to respondent HPS Software and Communication Corporation.

March 26, 2004 Decision: (CA)

- modified the May 23, 2001 Joint Order of the trial court
- set aside the portion that directed the Philippine National Police (PNP) - Special Task Force Group – Visayas
to retrieve possession and take custody of all the seized items pending the final disposition of the appeal
filed by PLDT on the said May 23, 2001 Joint Order.

September 27, 2005 Resolution: (CA)

- denied for lack of merit HPS Corporation, et al.’s subsequent Motion for Reconsideration.

- In G.R. No. 170694, petitioner PLDT seeks to set aside the April 8, 2005 Decision as well as the
December 7, 2005 Resolution of the former Eighteenth Division of the Court of Appeals in CA-
G.R. CV No. 75838

April 8, 2005 Decision:

- affirmed the May 23, 2001 Joint Order of the trial court.

December 7, 2005 Resolution:

- denied for lack of merit PLDT’s subsequent Motion for Reconsideration.

FACTS:

On October 20, 2000, the complainant Philippine Anti-Organized Crime Task Force (PAOCTF) filed
with this Honorable Court two applications for the issuance of search warrant for Violation of Article
308 of the Revised Penal Code for Theft of Telephone Services and for Violation of P.D. 401 for
unauthorized installation of telephone communication equipment following the complaint of PLDT
that they were able to monitor the use of the respondents in their premises of Mabuhay card and
equipment capable of receiving and transmitting calls from the USA to the Philippines without these
calls passing through the facilities of PLDT.

Complainant’s witnesses Richard Dira and Reuben Hinagdanan testified that they found out that the
Respondents are engaged in the business of International Simple Resale or unauthorized sale of
international long-distance calls when they conducted a test call using Mabuhay Card. Although the
test calls were incoming international calls from the United States, they discovered in the course of
their test calls that PLDT telephone lines/numbers were identified as the calling party. They testified
that the test calls passing through the Mabuhay Card were being reflected as local calls only and not
overseas calls.

ISR is a method of routing and completing international long-distance call using pre-paid card which respondents
are selling in the States. These calls are made through access number and by passes the PLDT International Gate
Way Facilities and by passes the monitoring system, thus making the international long-distance calls appear as
local calls, to the damage and prejudice of PLDT which is deprived of revenues as a result thereof.

Upon verification, they discovered that the lines were subscribed by Philip Yap and were transferred
to the address, HPS Software Communication Corporation at Plaridel St., Alang-alang, Mandaue
City. They further testified that the respondents committed these crimes by installing

YJM
telecommunication equipment like multiplexers, lines, cables, computers and other switching
equipment in the HPS Building and connected this equipment with PLDT telephone lines.

October 20, 2000, the trial court issued two search warrants which both contained identical orders
directing that several items are to be seized from the premises of HPS Corporation and from the
persons of Hyman Yap, et al. The police team searched the premises of HPS Corporation and
seized the articles specified in the search warrants on the same day.

Subsequently, a preliminary investigation was conducted the Office of the City Prosecutor of
Mandaue City who thereafter issued a Resolution dated April 2, 2001 which found probable cause
that all the crimes charged were committed by all the respondents, excluding Fatima Cimafranca,
and were probably guilty thereof.

HSP’s officers and directors filed for a Motion to Quash and/or Suppress Illegally Seized Evidence.

- On November 23, 2000, Philip and Hyman Yap filed a Motion to Quash and/or Suppress
Illegally Seized Evidence.
- On December 11, 2000, HPS Corporation filed a Motion to Quash Search Warrant and
Return of the Things Seized.
- Both pleadings sought to quash the search warrants at issue on the grounds that the same
did not refer to a specific offense; that there was no probable cause; and that the search
warrants were general warrants and were wrongly implemented.

The trial court then conducted hearings on whether or not to quash the subject search warrants and, in the course thereof, the
parties produced their respective evidence.

- HPS Corporation, et al. presented, as testimonial evidence;

o The testimonies of Mr. Jesus M. Laureano, the Chief Enforcement and Operation Officer of the National
Telecommunications Commission (NTC)-Region VII; and
o Ms. Marie Audrey Balbuena Aller, HPS Corporation’s administrative officer
- PLDT presented;
o Engr. Policarpio Tolentino, who held the position of Engineer II, Common Carrier Authorization Division of the
NTC.

In the course of Engr. Tolentino’s testimony, he identified certain pieces of evidence which PLDT caused to be marked as its own
exhibits but was objected to by HPS Corporation, et al. on the grounds of immateriality. The trial court sustained the objection and
accordingly disallowed the production of said exhibits. Thus, PLDT filed a Manifestation with Tender of Excluded Evidence on April
18, 2001 which tendered the excluded evidence.

On April 19, 2001, PLDT formally offered in evidence, as part of Engr. Tolentino’s testimony and in support of PLDT’s opposition to
HPS Corporation, et al.’s motion to quash, the following:
a) Subpoena Duces Tecum and Ad Testificandum issued by the trial court to Engr. Tolentino, commanding him to appear and
testify before it on March 26, 27 and 28, 2001 (Exhibit "A");
b) Identification Card No. 180 of Engr. Tolentino (Exhibit "B");
c) PLDT’s letter dated September 22, 2000, addressed to then NTC Commissioner Joseph A. Santiago (Exhibit "C");
d) Travel Order No. 52-9-2000 issued to Engr. Tolentino and signed by then NTC Commissioner Joseph Santiago (Exhibit
"D"); and
e) Travel Order No. 07 03-2001 dated March 23, 2001 issued to Engr. Tolentino by then NTC Commissioner Eliseo M. Rio,
Jr., authorizing Engr. Tolentino to appear and testify before the trial court (Exhibit "F").

On May 3, 2001, trial court directed PLDT to file its Memorandum within twenty (20) days from
receipt of said Order.

However, the trial court issued the assailed Joint Order on May 23, 2001, before the period for the
filing of PLDT’s Memorandum had lapsed.

On July 18, 2001, PLDT filed a Petition for Certiorari under Rule 6524 with the Court of Appeals
assailing the trial court’s release of the seized equipment despite the fact that the Joint Order had
not yet attained finality.

CA issued a Decision dated March 26, 2004 which granted PLDT’s petition for certiorari and set
aside the trial court’s May 23, 2001 Joint Order insofar as it released the seized equipment at issue.

HPS Corporation, et al. moved for reconsideration of said Court of Appeals ruling but this motion
was denied for lack of merit via a Resolution dated September 27, 2005.

The case was brought to the SC by HPS Corporation.

YJM
The petitioners seek to nullify the March 26, 2004 Decision. HPS Corporation, et al. contends that
PLDT’s petition has already become moot and academic because the alleged criminal activity
which PLDT asserts as having been committed by HPS Corporation, et al. has been declared
by SC as not constituting the crime of Theft or any other crime for that matter. This contention
was based from the February 27, 2006 Decision of the Supreme Court in Laurel v. Abrogar.

PLDT sued Baynet Co., Ltd. (Baynet) and its corporate officers for the crime of Theft
through stealing the international long-distance calls belonging to PLDT by conducting
ISR. One of those impleaded in the Amended Information, Luis Marcos P. Laurel
(Laurel), argued that an ISR activity does not constitute the felony of Theft under Article
308 of the Revised Penal Code (RPC) and moved for the quashal of the Amended
Information.

this Court upheld Laurel’s contention by ruling 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.

ISSUE:

Whether or not the activity referred to as "international simple resale" (ISR) is considered a criminal
act of Theft.

HELD:

YES. SC had categorically stated and still maintains that an ISR activity is an act of subtraction
covered by the provisions on Theft, and that the business of providing telecommunication or
telephone service is personal property, which can be the object of Theft under Article 308 of the
Revised Penal Code.

PETITION IS DENIED FOR LACK OF MERIT

Under Article 308 of the Revised Penal Code, taking of personal property without the consent of the owner thereof
constitutes theft.

*Telecommunications service = personal property so, it is an object of theft under Art. 308

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 reroute international long distance calls using
respondent PLDT’s facilities constitutes all three acts of subtraction mentioned above.

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.

YJM
[PARAGRAPH 1, ART. 415, NCC]
CONRADO P. NAVARRO v. RUFINO G. PINEDA, RAMONA REYES, ET AL. G.R. No. L-18456, 30
November 1963.
https://lawphil.net/judjuris/juri1963/nov1963/gr_l-18456_1963.html

FACTS:

Defendants Rufino Pineda and his mother Juana Gonzales (married to Gregorio Pineda),
borrowed from Conrado P. Navarro, the sum of P2,500.00, payable 6 months after December 14,
1959 or on June 14, 1959.

To secure the indebtedness, Rufino executed a document captioned "DEED OF REAL ESTATE and
CHATTEL MORTGAGES", whereby;
- Juana Gonzales, by way of Real Estate Mortgage hypothecated (pledged) a parcel of land,
belonging to her, registered with the Register of Deeds of Tarlac, and
- Rufino G. Pineda, by way of Chattel Mortgage, mortgaged his two-story residential house
erected on a lot belonging to Atty. Vicente Castro, located at Bo. San Roque, Tarlac, Tarlac;
and one motor truck, registered in his name, under Motor Vehicle Registration Certificate No.
A-171806.
o Both mortgages were contained in one instrument, which was registered in both the
Office of the Register of Deeds and the Motor Vehicles Office of Tarlac.

When the mortgage became due and payable, the defendants failed to pay. The plaintiff, however,
gave them two extensions (dated June 30, 1960 and July 30, 1960) They still failed to pay.

In the second extension, Pineda in a document entitled "Promise", categorically stated that should
he fail to pay his debt by July 30, 1960, he would no longer ask for further extension and there would
be no need for any formal demand, and plaintiff could proceed to take whatever action he might
desire to enforce his rights, under the said mortgage contract.

When the plaintiff filed a complaint for foreclosure of the mortgage and damages, defendant
questioned the validity of the chattel mortgage over his house on the ground that the house, being
an immovable property, could not be the subject of a chattel mortgage.

- The mortgage and damages consisted of liquidated damages in the sum of P500.00 and
12% per annum interest on the principal, effective on the date of maturity, until fully paid.

Defendants admit that the loan is overdue but denied that they unreasonably failed and refuse to pay
their obligation to the plaintiff the truth being the defendants are hard up these days and pleaded to
the plaintiff to grant them more time within which to pay their obligation and the plaintiff refused.

Defendants prayed that the court grant them until January 31, 1961 to pay their obligation to the
plaintiff.

The lower court ordered the defendants to pay jointly and severally and within 90 days from the
receipt of the copy of this decision to the plaintiff the principal sum of P2,550.00 with 12%
compounded interest per annum from June 14, 1960, until said principal sum and interests are fully
paid, plus P500.00 as liquidated damages and the costs of this suit, with the warning that in default
of said payment of the properties mentioned in the deed of real estate mortgage and chattel
mortgage and to deliver immediately to the Provincial Sheriff of Tarlac the personal properties
mentioned.

The case was then brought to the SC and appealed the validity of the mortgaged land.

Defendants contend that article 415 of the New Civil Code makes no distinction whether the owner
of the land is or not the owner of the building; the fact that the land belongs to another is immaterial,
it is enough that the house adheres to the land in order to classify it as an immovable property; that
in case of immovables by incorporation, such as houses, trees, plants, etc; the Code does not

YJM
require that the attachment or incorporation be made by the owner of the land, the only criterion
being the union or incorporation with the soil.

Defendants argue that since only movables can be the subject of a chattel mortgage then the
mortgage in question which is the basis of the present action, cannot give rise to an action for
foreclosure, because it is nullity.

The defendants cited cases to support their contention.

- It is claimed that "a building is an immovable property, irrespective of whether or not said
structure and the land on which it is adhered to, belong to the same owner" (Lopez v. Orosa).
- Leung Yee v. Strong Machinery Co.
- Citing Associated Ins. Co., et al. v. Isabel Iya v. Adriano Valino, et al

ISSUE:

WON the residential house, subject of the mortgage therein, can be considered a Chattel and the
propriety of the attorney's fees. (Can a house be the object of a chattel mortgage?)

HELD:

YES. SC held that the Deed of Real Estate and Chattel Mortgage is valid. The parties to the contract
treated the house in question as personal or movable property. In the deed of chattel mortgage,
appellant Rufino G. Pineda conveyed by way of “Chattel Mortgage” “my personal properties,” a
residential house and a truck. The mortgagor himself grouped the house with the truck, which is,
inherently a movable property.

The trial court also predicate its decision declaring the deed of chattel mortgage valid principally on
the doctrine of estoppel, in that "the parties have so expressly agreed" in the mortgage to consider
the house as chattel. Since the parties so agreed that the house is a personal property and a proper
subject of the contract of chattel mortgage, they are estopped from denying the existence of the
chattel mortgage which, as between them, must be upheld.

The cases cited by appellants are not applicable to the present case. The Iya cases refer to a building or a house of
strong materials, permanently adhered to the land, belonging to the owner of the house himself. In the case of
Lopez vs. Orosa the subject building was a theater, built of materials worth more than P62,000.00 attached
permanently to the soil. In these two cases and in the Leung Yee Case, supra, third persons assailed the validity of
the deed of chattel mortgages; in the present case, it was one of the parties to the contract of mortgages who
assailed its validity.

DIGEST: https://runawaystude.wordpress.com/2018/08/08/navarro-v-pineda-case-digest/

YJM
[PARAGRAPH 3, ART. 415, NCC]
BOARD OF ASSESSMENT APPEALS, CITY ASSESSOR AND CITY TREASURER OF QUEZON
CITY V. MANILA ELECTRIC COMPANY, G.R. No. L-15334, 31 January 1964
https://lawphil.net/judjuris/juri1964/jan1964/gr_l-15334_1964.html

FACTS:

Meralco's electric power is generated by its hydro-electric plant located at Botocan Falls, Laguna
and is transmitted to the City of Manila by means of electric transmission wires. These electric
transmission wires which carry high voltage current, are fastened to insulators attached on steel
towers constructed by respondent at intervals, from its hydro-electric plant in the province of Laguna
to the City of Manila.

On November 15, 1955, petitioner City Assessor of Quezon City declared the aforesaid steel towers
for real property tax under Tax declaration Nos. 31992 and 15549.

After denying respondent's petition to cancel these declarations, an appeal was taken by the Manila
Electric Company to the Board of Assessment Appeals of Quezon City, which required respondent to
pay the amount of P11,651.86 as real property tax on the said steel towers for the years 1952 to
1956.

Respondent paid the amount under protest, and filed a petition for review in the Court of Tax
Appeals.

The court rendered a decision on December 29, 1958, ordering the cancellation of the said tax
declarations and the petitioner City Treasurer of Quezon City to refund to the respondent the sum of
P11,651.86. In April 22, 1959, the instant petition for review was filed.

In upholding the cause of respondents, the CTA held that:

(1) the steel towers come within the term "poles" which are declared exempt from taxes under
part II paragraph 9 of respondent's franchise;
(2) the steel towers are personal properties and are not subject to real property tax; and
(3) the City Treasurer of Quezon City is held responsible for the refund of the amount paid.

These are assigned as errors by the petitioner in the brief.

ISSUE:

WON steel towers are real or personal property.

HELD:

PERSONAL PROPERTY. They are removable and merely attached to a square metal frame by
means of bolts, which when unscrewed could easily be dismantled and moved from place to place.
They cannot be included under paragraph 3, as they are not attached to an immovable in a fixed
manner, and they can be separated without breaking the material or causing deterioration upon the
object to which they are attached.

The steel towers or supports in question, do not come within the objects mentioned in paragraph 1 of
Article 415 of the Civil Code, because they do not constitute buildings or constructions adhered to
the soil.

These steel towers or supports do not also fall under paragraph 5, for they are not machineries,
receptacles, instruments or implements, and even if they were, they are not intended for industry or
works on the land. Petitioner is not engaged in an industry or works in the land in which the steel
supports or towers are constructed.

YJM
[PARAGRAPH 3, ART. 415, NCC]
MERALCO SECURITIES INDUSTRIAL CORP. V. CENTRAL BOARD OF ASSESSMENT
APPEALS, G.R. No. L-46245, 31 May 1982
https://lawphil.net/judjuris/juri1982/may1982/gr_l_46245_1982.html

FACTS:

Petitioner, Meralco Securities installed from Batangas to Manila a pipeline system consisting of
cylindrical steel pipes joined together and buried not less than one meter below the surface along
the shoulder of the public highway.

The pipes are embedded in the soil and are firmly and solidly welded together so as to preclude
breakage or damage thereto and prevent leakage or seepage of the oil. The valves are welded to
the pipes so as to make the pipeline system one single piece of property from end to end. This
meant that in order to repair, replace, remove or transfer segments of the pipeline, the pipes have to
be cold cut by means of a rotary hard-metal pipe-cutter after digging or excavating them out of the
ground where they are buried.

Pursuant to the Assessment Law, Commonwealth Act No. 470, the provincial assessor of Laguna
treated the pipeline as real property and issued Tax Declarations. Meralco Securities appealed the
assessments to the Board of Assessment Appeals of Laguna but the board in its decision of June
18, 1975 upheld the assessments.

Meralco then brought the case to the Central Board of Assessment Appeals which also ruled that the
pipeline was subject to realty tax.

In this special civil action of certiorari, Meralco Securities Industrial Corporation assails the decision
of the Central Board of Assessment Appeals. Petitioner insists that its pipeline is not subject to realty
tax because it is not real property within the meaning of article 415, while The Central Board of
Assessment Appeals, in confirming the ruling of the provincial assessor and the provincial board of
assessment appeals that Meralco Securities' pipeline is subject to realty tax, reasoned out that the
pipes are machinery or improvements, as contemplated in the Assessment Law and the Real
Property Tax Code; that they do not fall within the category of property exempt from realty tax under
those laws; that articles 415 and 416 of the Civil Code, defining real and personal property, have no
application to this case; that even under article 415, the steel pipes can be regarded as realty
because they are constructions adhered to the soil and things attached to the land in a fixed manner
and that Meralco Securities is not exempt from realty tax under the Petroleum Law.

ISSUES:

WON the pipeline built by Meralco is a real property taxable by realty tax.

HELD:

The contention of the petitioner is not sustainable under the Civil Code. Article 415, Paragraph 1and
3 provides that real property may consist of constructions of all kinds adhered to the soil and
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. With that, SC held that the
pipelines are considered as real property and is subject to realty tax.

The pipeline system in question is indubitably a construction adhering to the soil. It is attached to the
land in such a way that it cannot be separated therefrom without dismantling the steel pipes which
were welded to form the pipeline.

YJM
With that, the court concluded that the Central Board of Assessment Appeals did not act with grave
abuse of discretion, did not commit any error of law and acted within its jurisdiction in sustaining the
holding of the provincial assessor and the local board of assessment appeals that Meralco
Securities' pipeline system in Laguna is subject to realty tax.

[PARAGRAPH 5, ARTICLE 415, NCC]

MINDANAO BUS COMPANY V. CITY ASSESSOR OF CAGAYAN DE ORO CITY, G.R. No. L-
17870, 29 September 1962.
https://lawphil.net/judjuris/juri1962/sep1962/gr_l-17870_1962.html

FACTS:

Mindanao Bus Company is a public utility solely engaged in the transportation business (transporting
passengers and cargo by motor trucks), over its authorized lines in the Island of Mindanao,
collecting rates approved by the Public Service Commission and its main office and shop is based at
Cagayan de Oro City.

Petitioner owns a land where it maintains and operates a garage for its TPU motor trucks serving as
a repair shop and blacksmith and carpentry shop, where its TPU trucks are made; body constructed;
and same are repaired in a condition to be serviceable in the TPU land transportation business it
operates

Petitioner had different types of machinery that were sitting on cement or wooden platforms therein
used to repair their machinery. These machineries have never been or were never used as industrial
equipment to produce finished products for sale, nor to repair machineries, parts, and the like offered
to the general public indiscriminately for business or commercial purposes for which petitioner has
never engaged in.

However, Respondent (1) City Assessor of Cagayan de Oro City assessed at P4,400 petitioner's
above-mentioned equipment for realty tax. The bus company appealed the assessment to the (2)
Board of Tax Appeals on the ground that the same are not realty. The Board of Tax Appeals of the
City, however, sustained the city assessor. Thus, the bus company appealed to the (3) Court of Tax
Appeals, which likewise sustained the city assessor. Respondents contend that said equipment,
though movable, are immobilized by destination, in accordance with paragraph 5 of Article 415 of the
New Civil Code

ISSUE:

WON the equipment should be considered as immovable or movable property.

HELD:

The Court reversed the decision of the lower courts.

It said that for movable equipment to be immobilized in contemplation of the law must first be
"essential and principal elements" of an industry or works without which such industry or works
would be "unable to function or carry on the industrial purpose for which it was established."

Under Art 415 Paragraph 5;

(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;

WHEREFORE, the decision subject of the petition for review is hereby set aside and the equipment
in question declared not subject to assessment as real estate for the purposes of the real estate tax.

YJM
[PARAGRAPH 5, ARTICLE 415, NCC]
PEOPLE’S BANK AND TRUST CO. v. DAHICAN LUMBER COMPANY, G.R. No. L-17500, 16 May
1967.
https://lawphil.net/judjuris/juri1967/may1967/gr_l-17500_1967.html

FACTS:

On September 8, 1948, Atlantic Gulf & Pacific Company hereinafter referred to as ATLANTIC - sold
and assigned all its rights in the Dahican Lumber Concession to Dahican Lumber Company -
referred to as DALCO.

Thereafter, to develop the concession, DALCO obtained various loans from the People's Bank &
Trust Company - referred to as the BANK – amounting to P200,000.00.

In addition, DALCO obtained, through the BANK, a loan of $250,000.00 from the Export-Import Bank
of Washington D.C., evidenced by five promissory notes... of $50,000.00 each, maturing on different
dates, executed by both DALCO and the Dahican American Lumber Corporation.

The loan was secured by a real estate mortgage executed in favor of the BANK — the BANK acting
for itself and as trustee for the Export-Import Bank of Washington D.C. over five parcels of land
situated in the province of Camarines Norte, including the buildings and improvements thereon.

Both deeds contained an identical provision extending the mortgage lien to properties to be
subsequently acquired by DALCO — referred to hereafter as "after acquired properties" including
but not limited to machinery, furniture, tools, and equipment which the mortgagor may install, use in
connection with the premises.

Both mortgages were registered in the Office of the Register of Deeds of Camarines Norte. In
addition, thereto DALCO and DAMCO pledged to the BANK 7,296 shares of stock of DALCO and
9,286 shares of DAMCO to secure the same obligations.

After July 13, 1950, DALCO purchased various machineries, equipment, spare parts and supplies in
addition to, or in replacement of some of those already owned and used by it on the date aforesaid.

Pursuant to the provisions of the mortgage deeds regarding "after acquired properties, the Bank
requested DALCO to submit complete lists of said properties but the latter failed to do so.

In connection with these purchases, there appeared in the books of DALCO as due to Connell Bros.
Company (Philippines) — a domestic corporation who was acting as the general purchasing agent of
DALCO — thereinafter called CONNELL — the sum of P452,860.55 and to DAMCO, the sum of
P2,151,678.34.

Thereafter, the DALCO passed a resolution to rescind the alleged sales of after-acquired properties
by Connel Bros. Company Philippines (CONNEL) and executed the said agreements.

The Bank demanded the cancellation of such agreements. When DALCO refused to do so, the Bank
and Atlantic commenced foreclosure proceedings of the mortgage deeds, including the after-
acquired properties.

DALCO and CONNEL contended that the mortgages were null and void as regards the “after-
acquired properties” because they were not registered in accordance with the Chattel Mortgage Law.

ISSUES:

YJM
WON the mortgages are valid and binding on the properties aforesaid in spite of the fact that they
were not registered in accordance with the provisions of the Chattel Mortgage Law.

HELD:

Conceding, on the other hand, that it is the law in this jurisdiction that, to affect third persons, a
chattel mortgage must be registered and must describe the mortgaged chattels or personal
properties sufficiently to enable the parties and any other person to identify them. We say that such
law does not apply to this case. Article 415 does not define real property but enumerates what are
considered as such, among them being machinery, receptacles, instruments or replacements
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 shall tend directly to meet the needs of the said industry or works. On
the strength of the above-quoted legal provisions, the lower court held that inasmuch as "the chattels
were placed in the real properties mortgaged to plaintiffs, they came within the operation of Art. 415,
paragraph 5 and Art. 2127 of the New Civil Code". It is not disputed in the case at bar that the "after
acquired properties" were purchased by DALCO in connection with, and for use in the development
of its lumber concession and that they were purchased in addition to, or in replacement of those
already existing in the... premises on July 13, 1950. In law, therefore, they must be deemed to have
been immobilized, with the result that the real estate mortgages involved herein - which were
registered as such - did not have to be registered a second time as chattel mortgages... in order to
bind the "after acquired properties" and affect third parties.

YJM
[ART. 420, NCC]
MANILA INTERNATIONAL AIRPORT AUTHORITY V. CA, G.R. No. 163072, 02 April 2009.
https://lawphil.net/judjuris/juri2009/apr2009/gr_163072_2009.html

FACTS:

Petitioner Manila International Airport Authority (MIAA) operates and administers the Ninoy Aquino
International Airport (NAIA) Complex. The NAIA Complex is located along the border between Pasay
City and Parañaque City. On 28 August 2001, MIAA received Final Notices of Real Property Tax
Delinquency from the City of Pasay for the taxable years 1992 to 2001 with a grand total of
₱1,016,213,836.33.

The City of Pasay, through its City Treasurer, issued notices of levy and warrants of levy for the
NAIA Pasay properties. MIAA received the notices and warrants of levy on 28 August 2001.
Thereafter, the City Mayor of Pasay threatened to sell at public auction the NAIA Pasay properties if
the delinquent real property taxes remain unpaid.

MIAA then filed with the Court of Appeals a petition for prohibition and injunction with prayer for
preliminary injunction or temporary restraining order. The petition sought to enjoin the City of Pasay
from imposing real property taxes on, levying against, and auctioning for public sale the NAIA Pasay
properties.

The Court of Appeals dismissed the petition and upheld the power of the City of Pasay to impose
and collect realty taxes on the NAIA Pasay properties. MIAA filed a motion for reconsideration, which
the Court of Appeals denied.

ISSUES:

WON the NAIA Pasay properties of MIAA are exempt from real property tax.

HELD:

YES. The Airport Lands and Buildings of MIAA are properties devoted to public use and thus are
properties of public dominion. Properties of public dominion are owned by the State or the Republic.
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;

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.

The term "ports x x x constructed by the State" includes airports and seaports. The Airport Lands
and
Buildings of MIAA are intended for public use, and at the very least intended for public service.
Whether

YJM
intended for public use or public service, the Airport Lands and Buildings are properties of public
dominion. As properties of public dominion, the Airport Lands and Buildings are owned by the
Republic and thus exempt from real estate tax under Section 234(a) of the Local Government Code.

However, under the same provision, if MIAA leases its real property to a taxable person, the specific
property leased becomes subject to real property tax. In this case, only those portions of the NAIA
Pasay properties which are leased to taxable persons like private parties are subject to real property
tax by the City of Pasay.

The Court declared the NAIA Pasay properties of the MIAA EXEMPT from real property tax imposed
by the City of Pasay. It declared VOID all the real property tax assessments, including the final
notices of real property tax delinquencies, issued by the City of Pasay on the NAIA Pasay properties
of the Manila International Airport Authority, except for the portions that the Manila International
Airport Authority has leased to private parties
SALVADOR H. LAUREL V. RAMON GARCIA, G.R. No. 92013, 25 July 1990
https://lawphil.net/judjuris/juri1990/jul1990/gr_92013_1990.html

FACTS:

The subject property in this case is one of the four (4) properties in Japan acquired by the Philippine
government under the Reparations Agreement entered into with Japan on May 9, 1956, the other
lots being: (1) The Nampeidai Property at 11-24 Nampeidai-machi, Shibuya-ku, Tokyo; (2) The Kobe
Commercial Property at 63 Naniwa-cho, Kobe; and (3) The Kobe Residential Property at 1-980-2
Obanoyama-cho, Shinohara, Nada-ku, Kobe.

The properties and the capital goods and services procured from the Japanese government for
national development projects are part of the indemnification to the Filipino people for their losses in
life and property and their suffering during World War II.

The said property was acquired from the Japanese government through Reparations Contract No.
300. It consists of the land and building for the Chancery of the Philippine Embassy. As intended, it
became the site of the Philippine Embassy until the latter was transferred to Nampeidai when the
Roppongi building needed major repairs. Due to the failure of our government to provide the
necessary funds, the Roppongi property has remained undeveloped since that time.

President Aquino created a committee to study the disposition/utilization of Philippine government

properties in Tokyo and Kobe, Japan. The President issued EO 296 entitling non-Filipino citizens or
entities to avail of separations' capital goods and services in the event of sale, lease or disposition.

Amidst opposition by various sectors, the Executive branch of the government has been pushing,
with great vigor, its decision to sell the reparations properties starting with the Roppongi lot. The
property has twice been set for bidding at a minimum floor price of $225 million. The first bidding
was a failure since only one bidder qualified. The second one, after postponements, has not yet
materialized. The last scheduled bidding on February 21, 1990 was restrained by this Court. Later,
the rules on bidding were changed such that the $225 million floor price became merely a suggested
floor price.

Petitioner Laurel asserts that the Roppongi property and the related lots were acquired as part of the
reparations from the Japanese government for diplomatic and consular use by the Philippine
government. Vice-President Laurel states that the Roppongi property is classified as one of public
dominion, and not of
private ownership under Article 420 of the Civil Code.

Petitioner submits that the Roppongi property comes under "property intended for public service" in
paragraph 2 of the above provision. He states that being one of public dominion, no ownership by
anyone can attach to it, not even by the State. The Roppongi and related properties were acquired
for "sites for chancery, diplomatic, and consular quarters, buildings and other improvements" The
petitioner states that they continue to be intended for a necessary service. They are held by the
State in anticipation of an opportune use. Hence, it cannot be appropriated, is outside the commerce
of man, or to put it in more simple terms, it cannot be alienated nor be the subject matter of
contracts. (Petitioner argues that under Philippine Law, the subject property is property of public
dominion. As such, it is outside the commerce of men. Therefore, it cannot be alienated.)

YJM
Noting the non-use of the Roppongi property at the moment, the petitioner avers that the same
remains property of public dominion so long as the government has not used it for other purposes
nor adopted any measure constituting a removal of its original purpose or use.

The respondents, for their part, refute the petitioner's contention by saying that the subject property
is not governed by our Civil Code but by the laws of Japan where the property is located. They rely
upon the rule of lex situs which is used in determining the applicable law regarding the acquisition,
transfer and devolution of the title to a property. (Respondents aver that Japanese Law, and not
Philippine Law, shall apply to the case because the property is located in Japan. They posit that the
principle of lex situs applies.)

The respondents added that even assuming for the sake of argument that the Civil Code is
applicable, the Roppongi property has ceased to become property of public dominion. It has become
patrimonial property because it has not been used for public service or for diplomatic purposes for
over thirteen (13) years now and because the intention by the Executive Department and the
Congress to convert it to private use has been manifested by overt acts, an acknowledgment by the
Senate of the government's intention to remove the Roppongi property from the public service
purpose.

ISSUE:

Can the Roppongi property and others of its kind be alienated by the Philippine
Government? and

Does the Chief Executive, her officers and agents, have the authority and jurisdiction, to sell the
Roppongi property?

HELD:

The court held that the Roppongi property is correctly classified under paragraph 2 of Article 420 of
the Civil Code as property belonging to the State and intended for some public service – “(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.”

As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot be
alienated. Its ownership is a special collective ownership for general use and enjoyment, an
application to the satisfaction of collective needs, and resides in the social group. The purpose is not
to serve the State as a juridical person, but the citizens; it is intended for the common and public
welfare and cannot be the object of appropriation.

The fact that the Roppongi site has not been used for a long time for actual embassy service does
not automatically convert it to patrimonial property. Any such conversion happens only if the property
is withdrawn from public use. A property continues to be part of the public domain, not available for
private appropriation or ownership until there is a formal declaration on the part of the government to
withdraw it from being such.

YJM
[ART. 425, NCC]
SECRETARY OF DENR V. YAP, G.R. No. 167707, 08 October 2008.
https://lawphil.net/judjuris/juri2008/oct2008/gr_167707_2008.html

FACTS:

On Nov. 10, 1978, then President Marcos issued Proclamation No. 1801 declaring Boracay Island
as a tourist zone and marine reserve under the administration of the Philippine Tourism Authority
(PTA).

Respondents-claimants claimed that Proc. No. 1801 precluded them from filing an application for
judicial confirmation of imperfect title or survey of land for titling purposes. In their petition,
respondents-claimants alleged that Proclamation No. 1801 raised doubts on their right to secure
titles over their occupied lands. They declared that they themselves, or through their predecessors-
in-interest, had been in open, continuous, exclusive, and notorious possession and occupation in
Boracay since June 12, 1945, or earlier since time immemorial. They declared their lands for tax
purposes and paid realty taxes on them.

Respondents-claimants posited that the said proclamation and its implementing Circular did not
place Boracay beyond the commerce of man. Since the Island was classified as a tourist zone, it
was susceptible of private ownership. Under the Public Land Act, they had the right to have the lots
registered in their names through judicial confirmation of imperfect titles.

The Republic, through the Office of the Solicitor General (OSG), opposed the petition for declaratory
relief. The OSG countered that Boracay Island was an unclassified land of the public domain. It
formed part of the mass of lands classified as "public forest," which was not available for disposition.
Since Boracay Island had not been classified as alienable and disposable, whatever possession
they had cannot ripen into ownership.

During pre-trial, respondents-claimants and the OSG stipulated on the following facts: (1)
respondents-claimants were presently in possession of parcels of land in Boracay Island; (2) these
parcels of land were planted with coconut trees and other natural growing trees; (3) the coconut
trees had heights of more or less twenty (20) meters and were planted more or less fifty (50) years
ago; and (4) respondents-claimants declared the land they were occupying for tax purposes.

RTC Kalibo granted the petition for declaratory relief filed by respondent-claimants Boracay Mayor
Jose Yap et al. and ordered the survey of Boracay for titling purposes. It ruled that neither
Proclamation No. 1801 nor PTA Circular No. 3-82 mentioned that lands in Boracay were inalienable
or could not be the subject of disposition and that the Circular itself recognized private ownership of
lands.

The CA affirmed RTC Kalibo’s decision to grant the petition for declaratory relief filed by respondent-
claimants and ordered the survey of Boracay for titling purposes.

ISSUE:

YJM
WON Proclamation No. 1801 and PTA Circular No. 3-82 pose any legal obstacle for respondents,
and all those similarly situated, to acquire title to their occupied lands in Boracay Island.

HELD:

The SC ruled against respondent-claimants. Under the Regalian Doctrine, all lands of the public
domain belong to the State, that the State is the source of any asserted right to ownership of land
and charged with the conservation of such patrimony. All lands not otherwise appearing to be clearly
within private ownership are presumed to belong to the State. All lands that have not been acquired
from the government, either by purchase or by grant, belong to the State as part of the inalienable
public domain.

Moreover, the determination it is up to the State, through their plenary power, to determine if lands of
the public domain will be disposed of for private ownership.

Consequently, there must be a positive act declaring land as alienable and disposable is required.
The positive act may be an official proclamation, declassifying inalienable public land into disposable
land for agricultural or other purposes.

The burden of proof in overcoming the presumption of State ownership of the lands of the public
domain is on the person applying for registration (or claiming ownership), who must prove that the
land subject of the application is alienable or disposable. To overcome this presumption,
incontrovertible evidence must be established that the land subject of the application (or claim) is
alienable or disposable. There must still be a positive act declaring land of the public domain as
alienable and disposable. To prove that the land subject of an application for registration is alienable,
the applicant must establish the existence of a positive act of the government such as a presidential
proclamation or an executive order; an administrative action; investigation reports of Bureau of
Lands investigators; and a legislative act or a statute. The applicant may also secure a certification
from the government that the land claimed to have been possessed for the required number of years
is alienable and disposable.

In the case at bar, no such proclamation, executive order, administrative action, report, statute, or
certification was presented to the Court. The records are bereft (lack) of evidence showing that, prior
to 2006, the portions of Boracay occupied by private claimants were subject of a government
proclamation that the land is alienable and disposable. Hence, it is still presumed that Boracay
Island is not an agricultural land but still public forest land.

There are two requisites for judicial confirmation of imperfect or incomplete title: (1) open,
continuous, exclusive, and notorious possession and occupation of the subject land by himself or
through his predecessors-in-interest under a bonafide claim of ownership since time immemorial or
from June 12, 1945; and (2) the classification of the land as alienable and disposable land of the
public domain. In this case, the claimants did not comply with the first requisite since their tax
declarations were issued in 1993, contrary to their claim that they are occupying the land since 1945.
Therefore, private claimants are not entitled to apply for judicial confirmation of imperfect title under
CA No. 141. Neither do they have vested rights over the occupied lands under the said law.

Private claimants posit that Boracay was already an agricultural land pursuant to the old cases
Ankron v. Government of the Philippine Islands. However, the cases of Ankron and de Aldecoa did
not make the whole of Boracay Island, or portions of it, agricultural lands.

It should be stressed that the Philippine Bill of 1902 and Act No. 926 merely provided the manner
through which land registration courts would classify lands of the public domain. Whether the land
would be classified as timber, mineral, or agricultural depended on proof presented in each case.

YJM
HALILI AND HALILI V. COURT OF APPEALS, et al., G.R. No. 113539, 12 March 1998
https://lawphil.net/judjuris/juri1998/mar1998/gr_113539_1998.html

FACTS:

Simeon de Guzman, an American citizen, died sometime in 1968, leaving real properties in the
Philippines. His forced heirs were his widow private respondent Helen Meyers Guzman, and his son,
defendant-appellee private respondent David Rey Guzman, both of whom are also American
citizens. On August 9, 1989, Helen executed a deed of quitclaim, assigning, transferring and
conveying to David Rey all her rights, titles and interests in and over six parcels of land which the
two of them inherited from Simeon.

Among the said parcels of land is that now in litigation situated in Bagbaguin, Sta. Maria, Bulacan,
containing an area of 6,695 square meters, the quitclaim having been registered and now issued in
the name of appellee David Rey Guzman.

On February 5, 1991, Guzman then sold the parcel of land to Emiliano Catanaig, who is one of
respondents in this case. Transfer Certificate Title.

Petitioners Celso and Arthur Halili, who are owners of the adjoining lot, filed a complaint before the
Regional Trial Court of Malolos, Bulacan, questioning the constitutionality and validity of the two
conveyances — between Helen Guzman and David Rey Guzman, and between the latter and
Emiliano Cataniag — and claiming ownership thereto based on their right of legal redemption under
Art. 1621 of the Civil Code.

The RTC dismissed the complaint. It ruled that Helen Guzman's waiver of her inheritance in favor of
her son was not contrary to the constitutional prohibition against the sale of land to an alien, since
the purpose of the waiver was simply authorizing David Rey Guzman to dispose of their properties in
accordance with the Constitution and the laws of the Philippines, and not to subvert them. On the
second issue, it held that the subject land was urban; hence, petitioners had no reason to invoke
their right of redemption under Art. 1621 of the Civil Code.

The Halilis sought a reversal from the Court of Appeals which, however, denied their appeal.
Respondent Court affirmed the factual finding of the trial court that the subject land was urban. Citing
Tejido vs. Zamacoma, and Yap vs. Grageda, it further held that, although the transfer of the land to
David Rey may have been invalid for being contrary to the Constitution, there was no more point in
allowing herein petitioners to recover the property, since it has passed on to and was thus already
owned by a qualified person.

Hence, this petition.

ISSUE:

WON the sale to Cataniag was valid.

YJM
HELD:

YES. The court did not find any reversible error in the appellate court's holding that the sale of the
subject land to Private Respondent Cataniag renders moot any question on the constitutionally of
the prior transfer made by Helen Guzman to her son David Rey.

True, Helen Guzman's deed of quitclaim — in which she assigned, transferred and conveyed to
David Rey all her rights, titles and interests over the property she had inherited from her husband —
collided with the Constitution, Article XII, Section 7 of which provides:

Sec. 7. Save in cases of hereditary succession, no private lands shall be transferred

or conveyed except to individuals, corporations, or associations qualified to acquire
or hold lands of the public domain.

The Krivenko rule was recently reiterated in Ong Ching Po vs. Court of Appeals, which involves a
sale of land to a Chinese citizen. The Court said:

The capacity to acquire private land is made dependent upon the capacity to acquire
or hold lands of the public domain. Private land may be transferred or conveyed only
to individuals or entities "qualified to acquire lands of the public domain" (II Bernas,
The Constitution of the Philippines 439-440 [1988 ed.]).

The 1935 Constitution reserved the right to participate in the "disposition,

exploitation, development and utilization" of all "lands of the public domain and other
natural resources of the Philippines" for Filipino citizens or corporations at least sixty
percent of the capital of which was owned by Filipinos. Aliens, whether individuals or
corporations, have been disqualified from acquiring public lands; hence, they have
also been disqualified from acquiring private lands.

In fine, non-Filipinos cannot acquire or hold title to private lands or to lands of the public domain,
except only by way of legal succession.

But what is the effect of a subsequent sale by the disqualified alien vendee to a qualified Filipino
citizen? This is not a novel question. Jurisprudence is consistent that "if land is invalidly transferred
to an alien who subsequently becomes a citizen or transfers it to a citizen, the flaw in the original
transaction is considered cured and the title of the transferee is rendered valid.

Thus, in United Church Board of Word Ministries vs. Sebastian, in which an alien resident who
owned properties in the Philippines devised to an American non-stock corporation part of his shares
of stock in a Filipino corporation that owned a tract of land in Davao del Norte, the Court sustained
the invalidity of such legacy. However, upon proof that ownership of the American corporation has
passed on to a 100 percent Filipino corporation, the Court ruled that the defect in the will was
"rectified by the subsequent transfer of the property."

The present case is similar to De Castro vs. Tan. In that case, a residential lot was sold to a
Chinese. Upon his death, his widow and children executed an extrajudicial settlement, whereby said
lot was allotted to one of his sons who became a naturalized Filipino. The Court did not allow the
original vendor to have the sale annulled and to recover the property, for the reason that the land
has since become the property of a naturalized Filipino citizen who is constitutionally qualified to own
land.

Accordingly, since the disputed land is now owned by Private Respondent Cataniag, a Filipino
citizen, the prior invalid transfer can no longer be assailed. The objective of the constitutional
provision — to keep our land in Filipino hands — has been served.

WHEREFORE, the petition is hereby DENIED. The challenged Decision is AFFIRMED. Costs
against petitioner.

YJM
[ART. 435, NCC]
MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY V. LOZADA, G.R. No. 176625, Feb.
25, 2010.
https://lawphil.net/judjuris/juri2010/feb2010/gr_176625_2010.html

FACTS: (1017 sqm) – 3php per sqm

Subject of this case is a lot located in Lahug, Cebu City. Its original owner was Anastacio Deiparine
when the same was subject to expropriation proceedings, initiated by Republic for the expansion
and improvement of the Lahug Airport.

During the pendency of the expropriation proceedings, respondent Bernardo L. Lozada, Sr. acquired
Lot No. 88 from Deiparine. The trial court ruled for the Republic and ordered the latter to pay Lozada
the fair market value of the lot.

The Republic assured Lozada that should the expansion be abandoned; they will be prioritized in
repurchasing the lot.

When the projected improvement and expansion plan of the old Lahug Airport was not pursued,
Lozada contacted the Republic and asked to reacquire the lots. The Republic declined and that they
might need the lots for an emergency airport.

Thereafter, the general aviation operations of Lahug Airport were transferred to Mactan Airport.

The creation of Mactan Airport virtually took the assets and operations of Lahug and closed the
previous airport. The public purpose of the land that was bought never materialized since the old
airport became a commercial complex while Lot No. 88 became a jail inhabited by squatters.

The plaintiff-respondents filed a complaint for the recovery of possession and reconveyance of
ownership since the lot, which was expropriated for the Lahug Airport’s improvement, was
abandoned and have NOT been sold to them.

The petitioners asked for the immediate dismissal of the complaint. They specifically denied that the
Government had made assurances to reconvey Lot No. 88 to respondents in the event that the
property would no longer be needed for airport operations.

Petitioners instead asserted that the judgment of condemnation was unconditional, and
respondents were, therefore, not entitled to recover the expropriated property notwithstanding non-
use or abandonment thereof.

The RTC ruled in favor of Lozada and ordered petitioner to return the lot upon payment of
expropriation price and complete the transfer of the TCTs. The CA affirmed RTC ruling.

YJM
ISSUE:

WON Lozada has the right to repurchase their expropriated property.

HELD:

YES. It is well-settled that the taking of private property by the Government’s power of eminent
domain is subject to two mandatory requirements: (1) that it is for a particular public purpose;
and (2) that just compensation be paid to the property owner. These requirements partake of the
nature of implied conditions that should be complied with to enable the condemnor to keep the
property expropriated.

More particularly, with respect to the element of public use, the expropriator should commit to use
the property pursuant to the purpose stated in the petition for expropriation filed, failing which, it
should file another petition for the new purpose. If not, it is then incumbent upon the expropriator to
return the said property to its private owner, if the latter desires to reacquire the same.

[ART. 435, NCC]

REPUBLIC OF THE PHILIPPINES V. SARABIA, G.R. No. 157847, August 25, 2005.
https://lawphil.net/judjuris/juri2005/aug2005/gr_157847_2005.html

FACTS:

Sometime in 1956, the Air Transportation Office (ATO) took possession and control of a portion
(4,901square-meter) of Lot 6068, a 10,468 square-meter lot located at Pook Kalibo, Aklan in the
names of the private respondents who are heirs of the late Segundo De la Cruz to make as the
airport’s parking space.

In time, several structures were erected thereon, including the control tower, the Kalibo crash fire
rescue station, the Kalibo airport terminal and the headquarters of the PNP Aviation Security
Group.

In 1997, private respondents filed a complaint for Recovery of Possession with Damages before the
Municipal Trial Court of Kalibo.

Petitioner assured private respondents that they would be paid the fair market value of the subject
land. However, the parties did not agree on the amount of compensation therefor.

In 1998, petitioner filed an action for the expropriation of the entire lot. However, expropriation and
writ of possession was granted only as to the actual portion occupied and not on its entirety.

Through the court-appointed commissioners’ reports, the trial court fixed the just compensation for
the occupied portion at its current market value in 1999. The trial court fixed the just compensation
based on the current market value not at the time of the taking which was in 1956, but at the time of
the issuance of the writ of possession in 1999.

To the trial court, the date of the issuance of the writ has to be considered in fixing the just
compensation because the same signified petitioner’s proper acquisition and taking of the property
which involves not only physical possession but also the legal right to possess and own the same.
CA affirmed the trial court’s order.

ISSUE:

WON the market value should be determined by the time the property was expropria or the time the
expropriation case was filed.

HELD:

Compensation for property expropriated must be determined as of the time the expropriating
authority takes possession thereof and not as of the institution of the proceedings.

YJM
The value of the property should be fixed as of the date when it was taken and not the date of the
filing of the proceedings. For where property is taken ahead of the filing of the condemnation
proceedings, the value thereof may be enhanced by the public purpose for which it is taken; the
entry by the plaintiff upon the property may have depreciated its value thereby; or, there may have
been a natural increase in the value of the property from the time it is taken to the time the complaint
is filed, due to general economic conditions. The owner of private property should be compensated
only for what he actually loses; it is not intended that his compensation shall extend beyond his loss
or injury. And what he loses is only the actual value of his property at the time it is taken. This is the
only way the compensation to be paid can be truly just; i.e., "just" not only to the individual whose
property is taken, "but to the public, which is to pay for it”.

[ART. 448, NCC]

SPS. ESPINOZA V. SPS. MAYANDOC, G.R. No. 211170, 03 July 2017.
https://lawphil.net/judjuris/juri2017/jul2017/gr_211170_2017.html

FACTS:

ISSUE:

HELD:

YJM