property cases by gabz

8/10/2019 Property Cases by Gabz

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Compilation by: Mark Gabriel B. Maranga

“You can’t fall if you don’t climb. But there is no joy in living your whole life on the ground ”

Insular Government v. Aldecoa

19 Phil. 505

FACTS:In 1907, the government demanded from Aldecoa and Co., the possession of a

piece of land which had been formed by the action of the sea. Aldecoa andcompany claimed ownership on the ground that the adjacent land was theirs,

and that their erection of a wall was responsible for the forming of the new

parcel of land.

HELD:The land produced by the action of the sea is of public ownership and cannot

therefore be acquired by any private person or entity inasmuch as same belongsto the state. Furthermore, the company did not ask government permission to

set up the wall.

(Article 420)

Government v. Cabangis53 Phil. 112

FACTS:In 1896, A owned a parcel of land, but because of the action of the waves of

Manila Bay, part of said land was gradually submerged in the sea. It remainedsubmerged until 1912 when the government decided to make the necessary

dredging to reclaim the land from the sea. As soon as the land had been

recovered A took possession of it.

ISSUE: the ownership of the reclaimed land.

HELD:

The government owns the reclaimed land in the sense that it has becomeproperty of public dominion, because in letting it remain submerged, A may be

said to have abandoned the same. Having become part of the sea or theseashore, it became property for public use. When the government took steps to

make it land again, its status as public dominion remained unchanged;

therefore, A is not entitled to the land.

Government v. Cabangis53 Phil. 112

FACTS:

In 1896, A owned a parcel of land, but because of the action of the waves ofManila Bay, part of said land was gradually submerged in the sea. It remained

submerged until 1912 when the government decided to make the necessary

dredging to reclaim the land from the sea. As soon as the land had beenrecovered A took possession of it.

Issue: the ownership of the reclaimed land.

HELD:

The government owns the reclaimed land in the sense that it has become

property of public dominion, because in letting it remain submerged, A may besaid to have abandoned the same. Having become part of the sea or the

seashore, it became property for public use. When the government took steps tomake it land again, its status as public dominion remained unchanged;

therefore, A is not entitled to the land.

Maneclang v. Intermediate Appellate CourtFacts:

Adriano Maneclang in this case filed a complaint for quieting of title over acertain fishpond located within the 4 parcels of land belonging to them

situated in Pangasinan but the trial court dismissed it by saying that the body ofwater is a creek constituting a tributary to Agno River therefore public in

nature and not subject to private appropriation. They appealed it to the IAC

which affirmed the aforementioned decision. Hence, this review on certiorari.

However, after having been asked to comment to the case thereon, they

manifested their lack of interest and the parties to the case (the complainantand the awardee in the public bidding Maza) decided to amicably settle the case

saying that judgment be rendered and that the court recognize the

ownership of the petitioners over the land the body of water foundwithin their titled properties.

They say that there would be no benefit since the NIA already constructed a

dike and no water now gets in and out of the land.

Issue:

Whether or not the fishpond is public in nature.

Ratio:

Yes. A creek is defined as a recess or arm extending from a river andparticipating in the ebb and flow of the sea.

It is a property belonging to the public domain and is not susceptible toprivate appropriation and acquisitive prescription.





The mere construction of the dikes by NIA nor its conversion to a fishpond

altered or changed the nature of the creek as property of the public domain.

The compromise agreement is null and void and of no legal effect because it is

contrary to law and public policy.

Second Division, Fernan (J): 4 concurFacts:

Adriano Maneclang, et.al., petitioners, filed before the then CFI Pangasinan(Branch XI) a complaint for quieting of title over a certain fishpond located

within 4 parcels of land belonging to them situated in Barrio Salomague,Bugallon, Pangasinan, and the annulment of Resolutions 38 and 95 of the

Municipal Council of Bugallon, Pangasinan. On 15 August 1975, the trial court

dismissed the complaint upon a finding that the body of water traversing thetitled properties is a creek constituting a tributary of the Agno River (therefore

public in nature and not subject to private appropriation); and held thatResolution 38, ordering an ocular inspection of the Cayangan Creek situated

between Barrios Salomague Sur and Salomague Norte, and Resolution 95authorizing public bidding for the lease of all municipal ferries and fisheries were

passed by the members of the Municipal Council of Bugallon, Pangasinan in the

exercise of their legislative powers.Manaclang appealed said decision to the IAC, which affirmed the same on 29April 1983. Hence, the petition for review on certiorari. Before the respondents

were able to comment on the petition, the petitioners manifested that for lack ofinterest on the part of respondent Alfredo Maza, the awardee in the public

bidding of the fishpond, as the parties desire to amicably settle the case by

submitting to the Court a Compromise Agreement praying that judgment be rendered recognizing the ownership of the petitioners over the land

the body of water found within their titled properties. The Supreme Courtdismissed the petition for lack of merit, and set aside the Compromise

Agreement and declare the same null and void for being contrary to law andpublic policy.

1. Stipulations null and void for being contrary to law and public policyThe stipulations contained in the Compromise Agreement partake of the nature

of an adjudication of

Maneclang v. Intermediate Appellant Court , the Supreme Court declared as null

and void the compromise agreement between the parties since the stipulationscontained therein partake of the nature of an adjudication of ownership in favor

of one of the parties of the fishpond in dispute which was found to be originally

a creek forming a tributary of the Agno River.

Republic v. Lat Vda. de Castillo

GR 69002, Jan. 30, 1988

Lots which had always formed part of a lake, washed and inundated by the

waters thereof are not subject to registration, being outside the commerce ofmen. Since the lots are of public domain (Art. 502, par. 4, Civil Code), the

registration court does not have jurisdiction to adjudicate said lots as privateproperty, hence res judicata does not apply.

Republic vs Lat vda de Castillo et al.

G.R. No. L-69002 June 30, 1988

Facts:

In 1951, the late Modesto Castillo applied for the registration of two parcels of

land, Lots 1 and 2, located in Banadero, Tanauan, Batangas, as the true and

absolute owner of the land with the improvements thereon, which was issued tohim by the Register of Deeds of Batangas. He was married to Amanda Lat.

By virtue of an instrument dated in March 1960, the two parcels of land with

Original Certificate of Title (OCT) were consolidated and divided into Lots 1 to 9

which was covered by Transfer Certificate of Title (TCT). After the death of

Modesto Castillo on August 31, 1960, Amanda Lat Vda. de Castillo, et al.,

executed a deed of partition and assumption of mortgage in favor of Florencio L.

Castillo, et al., as a result of which Original Certificate of Title was cancelled,

and in lieu thereof, new transfer certificates of title (TCT) were issued to the

following appellants-defendants.

The Republic of the Philippines filed Civil Case No. 2044 with the lower court forthe annulment of the certificates of title issued to defendants Amanda Lat Vda.

de Castillo, et al., as heirs/successors of Modesto Castillo, and for the reversion

of the lands covered thereby (Lots 1 and 2, Psu-119166) to the State.

It was alleged that said lands had always formed part of the Taal Lake and being





of public ownership, it could not be the subject of registration as private

property.

They alleged in their answer that the Government's action was already barred

by the decision of the registration court; that the action has prescribed; and that

the government was estopped from questioning the ownership and possession

of appellants.

The then Court of First Instance of Batangas, Branch VI, decided that theRegister of Deeds of Batangas to order the cancellation of the OCT in the name

of Modesto Castillo and the subsequent TCT issued over the property in the

names of the defendants. Lots Nos. 1 and 2 of Plan Psu-19166 are hereby

declared public lands belonging to the state. Without pronouncement as to

costs.

Defendants appealed their case. The Court of Appeals, in a decision promulgated

on April 26,1984, reversed and set aside the appealed decision, and dismissed

the complaint.

Issue:

The sole issue raised in this case is whether or not the decision of the Land

Registration Court involving shore lands constitutes res adjudicata.

Held:

There is no question that one of the requisites of res judicata is that the court

rendering the final judgment must have jurisdiction over the subject matter

(Ramos v. Pablo, 146 SCRA 24 [1986]; that shores are properties of the public

domain intended for public use (Article 420, Civil Code) and, therefore, not

registrable.

Thus, it has long been settled that portions of the foreshore or of the territorialwaters and beaches cannot be registered. Their inclusion in a certificate of title

does not convert the same into properties of private ownership or confer title

upon the registrant (Republic v. Ayala y Cia, 14 SCRA, 259 [1965], citing the

cases of Dizon, et al. v. Bayona, et al., 98 Phil. 943; and Dizon, et al. v.

Rodriguez, et al., 13 SCRA 704).

But an important bone of contention is the nature of the lands involved in this

case.

Petitioner contends "that "Lots 1 and 2, PSU-119166 had always formed part of

the Taal Lake, washed and inundated by the waters thereof. Consequently, the

same were not subject to registration, being outside the commerce of men; and

that since the lots in litigation are of public domain (Art. 502), par. 4 Civil Code)the registration court (of 1951) did not have jurisdiction to adjudicate said lands

as private property, hence, res judicata does not apply. (Rollo, pp. 37-38).

The Government presented both oral and documentary evidence.

Lakeshore land or lands adjacent to the lake, like the lands in question must be

differentiated from foreshore land or that part of the land adjacent to the sea

which is alternately covered and left dry by the ordinary flow of the tides

(Castillo, Law on Natural Resources, Fifth Edition, 1954, p. 67).

Such distinction draws importance from the fact that accretions on the bank of a

lake, like Laguna de Bay, belong to the owners of the estate to which they havebeen added (Gov't. v. Colegio de San Jose, 53 Phil. 423) while accretion on a

sea bank still belongs to the public domain, and is not available for private

ownership until formally declared by the government to be no longer needed for

public use (Ignacio v. Director of Lands, 108 Phil. 335 [1960]).

But said distinction will not help private respondents because there is no

accretion shown to exist in the case at bar. On the contrary, it was established

that the occupants of the lots who were engaged in duck raising filled up the

area with shells and sand to make it habitable.

The defense of long possession is likewise not available in this case because, as

already ruled by this Court, mere possession of land does not by itselfautomatically divest the land of its public character (Cuevas v. Pineda, 143

SCRA 674 [1968]).

PREMISES CONSIDERED, the April 26,1984 Decision of the then Intermediate

Appellate Court is hereby SET ASIDE and REVERSED and the February 6,1976





Decision of the then Court of First Instance of Batangas is hereby AFFIRMED and

REINSTATED. SO ORDERED.

Santos v. MorenoL-15829, Dec. 4, 1967

FACTS: Ayala y Cia owned a big tract of land in Macabebe, Pampanga, the

Hacienda San Esteban. To provide access to different parts of the property, theCompany dug interlinking canals, which through erosion, gradually acquired the

characteristics of rivers. The company sold part of the Hacienda to Santos, whoclosed some of the canals and converted them into fi shponds. The residents of

the surrounding barrios (now barangays) complainedthat the closure deprived them of their means of transportation,

as well as of their fi shing grounds.

Issue: May the canals be ordered open?

HELD: No, because said canals are of private ownership.

Reason: ―The said streams, considered as canals of which they originally were

are of private ownership. Under Art. 420, canals constructed by the State and

devoted to use are of public ownership. Conversely, canals constructed byprivate persons within private lands and devoted exclusively for private use

must be of private ownership.‘‘

Hilario v. City of Manila

L-19570, Apr. 27, 1967

FACTS: Sand and gravel were extracted by agencies of the City of Manila from

the San Mateo River banks of the Hilario Estate in the province of Rizal. WhenHilario sued for indemnity, it was alleged that river banks are of public

ownership.

Issue: Are they really of public ownership?

HELD: River banks are of public ownership; hence, no indemnity need be given.

Reason: The bed of a river is of public dominion, hence also the banks sincethey are part of the bed. While it is true that in Art. 638 on easements on river

banks, the law speaks of both public and private river banks, still these privateriver banks refer to those already existing prior to the Law of Waters of Aug. 3,

1866.

Jacinto v. Director of Lands [G.R. No. 26374. December 31, 1926.]

En Banc, Ostrand (J): 7 concurFacts: During the period from 1911 to 1913, sales certificates were issued by

the Bureau of Lands to Frank W. Carpenter for more than 100 lots of the Talaand Piedad Friar Lands states located in Novaliches, Caloocan, Rizal including

the lots 670, 690, 691, 695, 696, 697 698, 699, 700, 701, 950, 951, 952, 953,954, 955, 956, 957, and 1050. The total area of the land covered by the sales

certificates being over 1,490 hectares and the purchase price amounting to

about P56,600, of which amount Carpenter up to the year 1923, had paidin installments the sum of P16,272. Under a judgment rendered against

Carpenter in the CFI of Manila (Civil Case 24607), execution was levied upon allof his right, title and interest in the lots purchased together with the

improvements thereon, and on 16 November 1923, the sheriff of Rizal sold theproperty to Nicanor Jacinto. The sheriff‘s sale was registered in the Bureau of

Lands, assignments of the Bureau of Lands‘ sales certificates were duly

recorded, and certificates of assignment were issued and delivered to NicanorJacinto in September 1924.

On 31 March 1925, the Metropolitan Water District instituted proceedings in theCFI Rizal for the condemnation of certain parcels of land situated in the

municipality of Caloocan for the construction of an earth dam and a first-classhighway 3 kilometers long, in connection with the so-called Angat Water Works

Project, and on the same date the CFI Rizal issued an order authorizing the

Metropolitan Water District to take possession of said parcels of land upondeposit with the provincial treasurer of the sum of P3,000 as the provisionalvalue, fixed by the court, of the parcels so to be condemned. By virtue of this

order, theMetropolitan Water District entered into occupation of the land and began the

construction of permanent improvements thereon. Copies of the complaint as

well as of the order of 31 March 1925, were filed with the register of deeds ofthe Province of Rizal on 11 February 1926, to be recorded as notices of lis

pendens. The lots enumerated above were included in the land sought to beexpropriated and Nicanor Jacinto was made a party defendant in the

proceedings. He admitted the existence of the right of condemnation and thenecessity

for the expropriation, but demanded the sum of P64,839.33 as indemnity for the

expropriation. As the actual purchase price to be paid by the purchaser from theGovernment only amounts to P13,725, including interest, the Metropolitan

Water District considered Jacinto‘s demand excessive and declined to pay the

claim. In the month of July 1926, the applicant tendered payment to theDirector of Lands of the sum of P4,650 to

cover the remaining balance of the sales price of the lots in question and

demanded a corresponding deed of conveyance for said lots. The Director ofLands, upon the advice of the Attorney-General, rejected the tender and refused





to execute and deliver the instrument of conveyance demanded from him.

Applicant filed a petition for a writ of mandamus to compel the Director of Landsto execute a deed of conveyance in favor of the applicant for the lots

enumerated belonging to the Tala Friar Lands Estate in Novaliches. TheSupreme Court ordered the Director of Lands to receive the balance of the

purchase money for any or all of the lots in question if and when paymentthereof is tendered by Jacinto, and denied the petition as to the execution of

deeds of conveyance; without costs.

1. Proprietary rights, except that of occupation, not affected bycondemnation proceedings

The proprietary rights, except the right of occupation, are not affected by thecondemnation proceedings until the title has passed to the plaintiff and that

does not occur until the award of compensation or damages has been satisfied.

2. Petition for a writ of mandamus not proper remedy to compel a

conveyanceMandamus is not the proper remedy to enforce purely contract rights, such as

that in the present case sought to be enforced. (18 R. C. L., 121; Quiogue vs.Romualdez, 46 Phil., 337.)

3. Land is patrimonial property of the Government; Duty to executedeeds of conveyance devolved upon the Governor-GeneralThe writ cannot issue in the present case unless it appears that the Director of

Lands ―unlawfully neglects the performance of an act which the law speciallyenjoins as a duty resulting from an office, trust, or station.‖ (Section 222, Code

of Civil Procedure.) The land in question is private or patrimonial property of the

Philippine Government and we can find no law specially enjoining upon theDirector of Lands the duty to execute deeds of conveyance to purchasers of

such lands; on the contrary, that duty, under section 567 of theAdministrative Code, appears to devolve upon the Governor-General.

4. Director of Land has duty to receive purchase money payable under

Act 1120

By section 14 of Act No. 1120 the Director of Lands is charged with the duty ofreceiving the purchase money payable under that Act and may therefore be

compelled by mandamus to receive, as a purely ministerial act, such purchase

money when tendered.

Jacinto vs. Director of Lands

49 Phil. 853

Friar lands under the Friar Lands Law (Act No. 1120). They are intended to be

sold to actual settlers and occupants.

City of Manila v. Gerardo Garcia, et al.

L-26053, Feb. 21, 1967

FACTS: The City of Manila is the owner of parcels of land forming one area inMalate, Manila. Shortly after liberation, several persons entered upon these

premises without the City‘s knowledge and consent, built houses of second classmaterials, and continued to live there till action was instituted against them. In1947, the presence of the squatters having been discovered, they were then

given by then Mayor Valeriano Fugoso written permits each labeled a ―leasecontract.‖ For their occupancy, they were charged nominal rentals. In 1961, the

premises were needed by the City to expand the Epifanio de los Santos

Elementary School. When after due notice the squatters refused to vacate, this

suit was instituted to recover possession. Defense was that they were ―tenants.‖

HELD: They are squatters, not tenants. The mayor cannot legalize forcible entryinto public property by the simple expedient of giving permits, or for that

matter, executing leases. Squatting is unlawful and the grant of the permitsfosters moral decadence. The houses are public nuisances per se and they can

be summarily abated, even without the aid of the courts. The squatters can

therefore be ousted.

Manila International Airport Authority (MIAA) v. CA495 SCRA 591 (2006)

FACTS: The term ―ports‖ under Art. 420(1) of the Civil Code includes seaports

and airports.

HELD: The MIAA Airport Lands and Buildings constitute a ―port,‖ constructed bythe State.

Manila International Airport Authority vs CAGR No. 155650, July 20,

2006, 495 SCRA 591

Facts:

Manila International Airport Authority (MIAA) is the operator of the Ninoy

International Airport located at Paranaque City. The Officers of Paranaque City

sent notices to MIAA due to real estate tax delinquency. MIAA then settled someof the amount. When MIAA failed to settle the entire amount, the officers of

Paranaque city threatened to levy and subject to auction the land and buildingsof MIAA, which they did. MIAA sought for a Temporary Restraining Order from





the CA but failed to do so within the 60 days reglamentary period, so the

petition was dismissed. MIAA then sought for the TRO with the Supreme Court aday before the public auction, MIAA was granted with the TRO but unfortunately

the TRO was received by the Paranaque City officers 3 hours after the publicauction. MIAA claims that although the charter provides that the title of the land

and building are with MIAA still the ownership is with the Republic of thePhilippines. MIAA also contends that it is an instrumentality of the government

and as such exempted from real estate tax. That the land and buildings of MIAA

are of public dominion therefore cannot be subjected to levy and auction sale.On the other hand, the officers of Paranaque City claim that MIAA is a

government owned and controlled corporation therefore not exempted to realestate tax.

Issues:

Whether or not MIAA is an instrumentality of the government and not agovernment owned and controlled corporation and as such exempted from tax.

Whether or not the land and buildings of MIAA are part of the public dominion

and thus cannot be the subject of levy and auction sale.

Ruling:Under the Local government code, government owned and controlledcorporations are not exempted from real estate tax. MIAA is not a government

owned and controlled corporation, for to become one MIAA should either be a

stock or non-stock corporation. MIAA is not a stock corporation for its capital isnot divided into shares. It is not a non-stock corporation since it has no

members. MIAA is an instrumentality of the government vested with corporatepowers and government functions. Under the civil code, property may either be

under public dominion or private ownership. Those under public dominion areowned by the State and are utilized for public use, public service and for the

development of national wealth. The ports included in the public dominion

pertain either to seaports or airports. When properties under public dominioncease to be for public use and service, they form part of the patrimonial

property of the State. The court held that the land and buildings of MIAA arepart of the public dominion. Since the airport is devoted for public use, for the

domestic and international travel and transportation. Even if MIAA charge fees,

this is for support of its operation and for regulation and does not change the

character of the land and buildings of MIAA as part of the public dominion. Aspart of the public dominion the land and buildings of MIAA are outside the

commerce of man. To subject them to levy and public auction is contrary to

public policy. Unless the President issues a proclamation withdrawing the airport

land and buildings from public use, these properties remain to be of publicdominion and are inalienable. As long as the land and buildings are for public

use the ownership is with the Republic of the Philippines.

Heirs of Palanca vs Republic

FACTS

Petitioners acquired 2 pieces of lands by inheritance and in a court decision theywere declared as owners in fee simple. 23 years later the Republic filed a

petition to annul the judgment and cancel the decree of registration and titleand to reverse the property to the State as unclassified forest lands.

Issue:

The court ruled that the Executive Proclamation No. 219 classified these landsas a national reserve and it appears that the said property was never released

for public disposition. At the time of the petitioner‘s predecessor‘s occupancy,the land remained inalienable. For a public dominion to be subject for a

registration proceeding, the government should exercise a positive act to re-classify inalienable land to alienable for proper disposition. In an application for

a land registration of a property of public domain, the applicant for land

registration must secure a certification from the government that the landclaimed (1) has been possessed in the concept of an owner for more than 30years and (2) alienable and disposable. Moreover, action to recover property of

public domain never prescribes.

Cuevas vs. Pineda, 143 SCRA 674

FACTS:

The private respondents filed a complaint with the respondent court for"Quieting Of Title With A Prayer For A Writ of Preliminary Injunction." They

alleged that they are the heirs of the late Celestina Igaya and, as such, arethe owners of two adjoining parcels of land, located in Pasong Carga, Talon,

Las Pinas since 1924, as evidenced by tax declaration

October, 1977, petitioners had caused the preparation of a table survey-plan wherein the private respondents' two (2) lots were subdivided into

three (3) lots.

District Land Officer, Claudio C. Batiles (one of the defendants in thecomplaint), hastily granted said applications, resulting in the issuance of

free patents to petitioners Cuevas and Roxas.

As a result, private respondents filed a protest with Bureau of Lands againstthe issuance of said free patents. Moreover, they question the jurisdiction of





the Bureau of Lands, which they had just invoked claiming that it is the

courts and not the administrative tribunal that should settle the issue.

ISSUE:

Whether or not the respondent court has jurisdiction over the complaint of theprivate respondents

HELD:NO. The respondent court has no jurisdiction over the compliant of the private

respondents. The respondents implored the authority of the Bureau of Landswhen they filed their administrative proceeding. They cannot, now, reject said

authority by claiming that since the Bureau had already issued free patents, theland has become private and the agency had no jurisdiction at the time they

filed their protest. Before a litigant can bring a matter to court which has been

passed upon by the Director of Lands it is necessary that he first exhaust all theremedies in the administrative branch of the government, we find no law

expressly requiring such a prerequisite before the courts could acquire jurisdiction. Orderly procedure requires that the Bureau of Lands, on a matter

within its competence and expertise, should first resolve the issues before it.

(Mere possession of land does not by itself automatically divest it of its public

character. )

Ancheta v. Guersey–Dalayyon

490 SCRA 140 (2006)

As it now stands, Art. XII, Secs. 7 and 8 of the 1987 Philippine Constitution

explicitly prohibits non-Filipinos from acquiring or holding title to private lands orto lands of the

public domain. (Parity Rights Amendment of 1946)

MWSS v. Court of Appeals

143 SCRA 623 (1986)

The City of Dagupan (hereinafter referred to as the CITY) filed a complaint

against the former National Waterworks and Sewerage Authority (hereinafter

referred to as the NAWASA), now the Metropolitan Waterworks and SewerageSystem (hereinafter referred to as MWSS), for recovery of the ownership and

possession of the Dagupan Waterworks System. NAWASA interposed as one of

its special defenses R.A. No. 1383 which vested upon it the ownership,possession and control of all waterworks systems throughout the Philippines and

as one of its counterclaims the reimbursement of the expenses it had incurred

for necessary and useful improvements amounting to P255,000.00. Judgmentwas rendered by the trial court in favor of the CITY on the basis of a stipulation

of facts. The trial court found NAWASA to be a possessor in bad faith and hence,not entitled to the reimbursement claimed by it. NAWASA appealed to the then

Court of Appeals and argued in its lone assignment of error that the CITY shouldhave been held liable for the amortization of the balance of the loan secured by

NAWASA for the improvement of the Dagupan Waterworks System. The

appellate court affirmed the judgment of the trial court. MWSS, successor-in-interest of the NAWASA, appealed to this Court raising the sole issue of whether

or not it has the right to remove all the useful improvements introduced byNAWASA to the Dagupan Waterworks System, notwithstanding the fact that

NAWASA was found to be a possessor in bad faith. In support of its claim forremoval of said useful improvements, MWSS argues that the pertinent laws on

the subject, particularly Articles 546, 547 and 549 of the Civil Code of the

Philippines, do not definitely settle the question of whether a possessor in badfaith has the right to remove useful improvements.

The Supreme Court held —

―xxx Does a possessor in bad faith have the right to remove usefulimprovements? The answer is clearly in the negative. Recognized authorities on

the subject are agreed on this point. Article 449 of the Civil Code of the

Philippines provides that ―he who builds, plants or sows in bad faith on the landof another, loses what is built, planted or sown without right to indemnity.‖ As abuilder in bad faith, NAWASA lost whatever useful improvements it had made

without right to indemnity.(Santos v. Mojica, Jan. 31, 1969, 26 SCRA 703).

Moreover, under Article 546 of said code, only a possessor in good faith shall berefunded for useful expenses with the right of retention until reimbursed; and

under Article 547 thereof, only a possessor in good faith may remove usefulimprovements if this can be done without damage to the principal thing and if

the person who recovers the possession does not exercise the option ofreimbursing the useful expenses. The right given a possessor in bad faith is to

remove improvements applies only to improvements for pure luxury or mere

pleasure, provided the thing suffers no injury thereby and the lawful possessordoes not prefer to retain them by paying the value they have at the time he

enters into possession.

MWSS v. CA [G.R. No. L-54526. August 25, 1986.]

Second Division, Feria (J): 4 concur, 1 took no part





Facts:

The City of Dagupan filed a complaint against the former National Waterworksand Sewerage Authority (NAWASA), now the Metropolitan Waterworks and

Sewerage System (MWSS), for recovery of the ownership and possession of theDagupan Waterworks System. NAWASA interposed as one of its special defenses

RA 1383 which vested upon it the ownership, possession and control of allwaterworks systems throughout the Philippines and as one of its counterclaims

the reimbursement of the expenses it had incurred for necessary and useful

improvements amounting to P255,000.00. Judgment was rendered by the trialcourt in favor of the city on the basis of a stipulation of facts. The trial court

found NAWASA to be a possessor in bad faith and hence not entitled to thereimbursement claimed by it. NAWASA appealed to the then Court of Appeals

and argued in its lone assignment of error that the city should have been heldliable for the amortization of the balance of the loan secured by NAWASA for the

improvement of the Dagupan Waterworks System. The appellate court affirmed

the judgment of the trial court. MWSS, successor-in interest of the NAWASA,appealed (petition for review on certiorari) to the Supreme Court raising the sole

issue of whether or not it has the right to remove all the useful improvementsintroduced by NAWASA to the Dagupan Waterworks System, notwithstanding

the fact that NAWASA was found to be a possessor in bad faith.

The Supreme Court affirmed the decision of the appellate court, with costs

against MWSS.

Possessor in bad faith does not have the right to remove useful

improvements

Article 449 of the Civil Code of the Philippines provides that ―he who builds,

plants or sows in bad faith on the land of another, loses what is built, planted orsown without right to indemnity.‖ As a builder in bad faith, NAWASA lost

whatever useful improvements it had made without right to indemnity (Santos

vs. Mojica, Jan. 31, 1969, 26 SCRA 703).

Only possessor in good faith has right to be refunded for useful

expenses with right of retention until reimbursed; or removal of useful

improvements without damage to the principal thing

Under Article 546 of said code, only a possessor in good faith shall be refunded

for useful expenses with the right of retention until reimbursed; and underArticle 547 thereof, only a possessor in good faith may remove useful

improvements if the can be done without damage to the principal thing and if

the person who recovers the possession does not exercise the option ofreimbursing the useful expenses.

Possessor in bad faith has right to remove improvements for pureluxury or mere pleasure, provided such suffers no injury thereby

The right given a possessor in bad faith is to remove improvements applies only

to improvements for pure luxury or mere pleasure, provided the thing suffers noinjury thereby and the lawful possessor does not prefer to retain them by paying

the value they have at the time he enters into possession (Article 549, Id.).

Republic v. Southside Homeowners Assn., Inc.(502 SCRA 587 [2006]),

the Supreme Court informed: the President, upon the recommendation of the

Secretary of Environment and Natural Resouces, may designate by proclamation

any tract/s of land of the public domain as reservations for the use of theRepublic or any of its branches, or for quasi-public uses or purposes. In the

same decision, the Court posited that –– lands of the public domain classifi edas a military reservation remains as such until, by presidential fiat or

congressional act, the same is released from such classifi cation, and declaredopen to disposition. Art. XII, Sec. 3 of the 1987 Constitution forbids private

corporations from acquiring any kind of alienable land of the public domain,

except thru lease for a limited period.

Republic v. Southside Homeowners Association

Inc. (SHAI) G.R. No. 156951 & 173408, Sep. 22,2006

FACTS:Proclamation No 423 which established a military reservation known as Fort

William McKinley – later renamed Fort Bonifacio Military Reservation, was issuedby former President Carlos Garcia. Areas specified in the Proclamation were

withdrawn from sales and settlements and were reserved for military purposes.Several presidential proclamations would later be issued excluding certain

defined areas from the operation of Proclamation 423. What is mainly sought to

be declared as a nullity in this petition is the title over the parcels of land thatare referred to as JUSMAG housing are in Fort Bonifacio being occupied by

active and retired military officers and their families. SHAI , a non-stock

corporation organized mostly by wives of AFP military officers, was able tosecure title in its name over the bulk, if not the entire, JUSMAG area. The TCT

was issued by the Rizal Registry on the basis of a notarized deed of sale

purportedly executed by then Land Management Bureau Director Abelardo Palad





Jr. The investigation conducted by the DOJ, however, reported land scams at

the FBMR and also finding that the signature of Palad was forged

In 1993, then Pres Ramos ordered the OSG to institute an action towards thecancellation of TCT 15084 in SHAI‘s name as well as the t itle acquired by the

Navy Officer‘s Village Association (NOVA) over a bigger parcel of land within thereservation.

ISSUE:Whether the land sold was alienable.

HELD:

NO. As regards the issue of inalienability, the Court upheld the contention of theRepublic that the JUSMAG area is inalienable, the same having not effectively

been separated from the military reservation and declared as alienable and

disposable. Until a given parcel of land is released from its classification as partof the military reservation zone and reclassified by law or by presidential

proclamation as disposable and alienable, its status as part of a militaryreservation remains, even if incidentally it is devoted for a purpose other than

as a military camp or for defense. SHAI had not pointed to any proclamation orlegislative act for that matter segregating the property from the reservation and

classifying the same as alienable lands of public domain. Furthermore, the

Constitution also forbids private corporations from acquiring any kind ofalienable public land except through lease for a limited period. The wholeconveyance process was also suspicious since the whole process was

accomplished only in one day.

Phil Fisheries Dev't Authority vs Central Board of Assessment Appeals638 SCRA 644

FACTS:

Petitioner owned the Iloilo Fishing Port Complex which was on reclaimed landand consisted of a breakwater, landing quay, water and fuel oil supply system,

refrigeration building, market hall and a municipal shed. Petitioner then leased

portions of the IFPC to private firms engaged in the fishing business. Iloilo citythen assessed the entire IFPC for Real Property Tax.

ISSUE:Is the entirety of the IFPC subject to the Real Property Tax?

HELD:

NO. The Real Property Tax liability of the IFPC is only on portions leased out toprivate entities. PFDA is not a GOCC but is actually an instrumentality of the

national government exempt from Real Property Tax. Given this, it will only besubject to Real Property Tax on the portions of the IFPC which is leased to

private entities. It is not a GOCC since a GOCC must satisfy two requirements:(i) capital stock divided into shares and (ii) authorized to distribute

dividends/profits. PFDA does have capital stock but the same is not divided into

shares and neither is it a non-stock corporation because it does not havemembers.

(Note: This was the same decision reached in MIAA vs. Paranaque (July 20,2006) and again in MIAA vs. Pasay (April 2, 2009) where the property in

question was the airport premises. In those cases, the Court additionallyprovided that other examples of government instrumentalities vested with

corporate powers or what are know as ―government corporate entities‖ are

Philippine Ports Authority, BSP and University of the Philippines.)

Chavez v. Public Lands Authority415 SCRA 403

(2003)

FACTS:

Contracts of individuals who, not being personally disqualified to hold alienablelands of the public domain, have been able to acquire in good faith, reclaimedportions of

the subject property from AMARI Coastal Bay Development Corporation.

ISSUE: Should said contracts be duly-respected and upheld?

HELD:Yes. In instances where the successor-in-interest is itself a corporate entity, the

constitutional proscription would stand, but if the corporation has introducedstructures or permanent improvements thereon, such structures or

improvements, when so viewed, as having been made in good faith, could very

well be governed by the new Civil Code.The approval of the contracts, in the case at bar, clearly and unambigously

attested to the fact that the lands in question were no longer intended for

―public use‘‘ or ―public service. When the conversion activity such as co-production, joint venture or production-sharing agreements is authorized by the

Government thru a law, the qualified party to the agreement may own the

converted product or part of it, when so provided in the agreement. If there isany doubt as ―to the object of the prestation in this case, the Supreme Court





opined that the ‗interpretation which would render the contract valid is to be

favored.

Chavez v. Public Estates Authority, the Supreme Court held that submergedlands are part of the State‘s inalienable natural resources and classified as

property of public dominion.

Chavez v. Public Lands Authority

415 SCRA 403 (2003)

The Public Estates Authority is the central implementing agency tasked to

undertake reclamation projects nationwide. It took over the leasing and sellingfunctions of the DENR insofar as reclaimed or about to be reclaimed foreshorelands are concerned.

PEA sought the transfer to AMARI, a private corporation, of the ownership of77.34 hectares of the Freedom Islands. PEA also sought to have 290.156hectares of submerged areas of Manila Bay to AMARI.

ISSUE: Whether or not the transfer is valid.

HELD:No. To allow vast areas of reclaimed lands of the public domain to be transferredto PEA as private lands will sanction a gross violation of the constitutional ban

on private corporations from acquiring any kind of alienable land of the publicdomain.

The Supreme Court affirmed that the 157.84 hectares of reclaimed lands

comprising the Freedom Islands, now covered by certificates of title in the name

of PEA, are alienable lands of the public domain. The 592.15 hectares of

submerged areas of Manila Bay remain inalienable natural resources of the

public domain. Since the Amended JVA seeks to transfer to AMARI, a privatecorporation, ownership of 77.34 hectares of the Freedom Islands, such transfer

is void for being contrary to Section 3, Article XII of the 1987 Constitution which

prohibits private corporations from acquiring any kind of alienable land of thepublic domain. Furthermore, since the Amended JVA also seeks to transfer toAMARI ownership of 290.156 hectares of still submerged areas of Manila Bay,

such transfer is void for being contrary to Section 2, Article XII of the 1987

Constitution which prohibits the alienation of natural resources other thanagricultural lands of the public domain.

Francisco Chavez v. NHA, et al.

GR 164527, Aug. 15, 2007

FACTS : Presidential Proclamation Nos. 39 and 465 jointly with the specialpatents have classifi ed the reclaimed lands as alienable and disposable and

open to disposition or concession as they would be devoted to units for SmokeyMountain beneficiaries.

Issue: Because said lands are no longer intended for public use or service, shallthose lands form part of the patrimonial properties of the State?

HELD: Yes, under Art. 422 of the new Civil Code. The lands are classifi ed as

patrimonial parties of the NHA in the case at bar, and ready for disposition whenthe titles are registered in its name by the Register of Deeds.

Francisco Chavez v. NHA, et al.

GR 164527, Aug. 15, 2007

FACTS: On August 5, 2004, former Solicitor General Francisco Chavez, filed an instant

petition raising constitutional issues on the JVA entered by National Housing

Authority and R-II Builders, Inc.On March 1, 1988, then-President Cory Aquino issued Memorandum order No.(MO) 161 approving and directing implementation of the Comprehensive and

Integrated Metropolitan Manila Waste Management Plan. During this time,Smokey Mountain, a wasteland in Tondo, Manila, are being made residence of

many Filipinos living in a subhuman state.

As presented in MO 161, NHA prepared feasibility studies to turn the dumpsiteinto low-cost housing project, thus, Smokey Mountain Development and

Reclamation Project (SMDRP), came into place. RA 6957 (Build-Operate-Transfer Law) was passed on July 1990 declaring the importance of private

sectors as contractors in government projects. Thereafter, Aquino proclaimedMO 415 applying RA 6957 to SMDRP, among others. The same MO also

established EXECOM and TECHCOM in the execution and evaluation of the plan,

respectively, to be assisted by the Public Estates Authority (PEA).Notices of public bidding to become NHA‘s venture partner for SMDRP were

published in newspapers in 1992, from which R-II Builders, Inc. (RBI) won the

bidding process. Then-President Ramos authorized NHA to enter into a JointVenture Agreement with RBI.

Under the JVA, the project involves the clearing of Smokey Mountain for

eventual development into a low cost housing complex andindustrial/commercial site. RBI is expected to fully finance the development of





Smokey Mountain and reclaim 40 hectares of the land at the Manila Bay

Area. The latter together with the commercial area to be built on SmokeyMountain will be owned by RBI as enabling components. If the project is

revoked or terminated by the Government through no fault of RBI or by mutualagreement, the Government shall compensate RBI for its actual expenses

incurred in the Project plus a reasonable rate of return not exceeding that statedin the feasibility study and in the contract as of the date of such revocation,

cancellation, or termination on a schedule to be agreed upon by both parties.

To summarize, the SMDRP shall consist of Phase I and Phase II. Phase I of the

project involves clearing, levelling-off the dumpsite, and construction oftemporary housing units for the current residents on the cleared and levelled

site. Phase II involves the construction of a fenced incineration area for the on-site disposal of the garbage at the dumpsite.

Due to the recommendations done by the DENR after evaluations done, the JVA

was amended and restated (now ARJVA) to accommodate the design changesand additional work to be done to successfully implement the project. The

original 3,500 units of temporary housing were decreased to 2,992. Thereclaimed land as enabling component was increased from 40 hectares to 79

hectares, which was supported by the issuance of Proclamation No. 465 byPresident Ramos. The revision also provided for the 119-hectare land as an

enabling component for Phase II of the project.

Subsequently, the Clean Air Act was passed by the legislature which made theestablishment of an incinerator illegal, making the off-site dumpsite at Smokey

Mountain necessary. On August 1, 1998, the project was suspended, to belater reconstituted by President Estrada in MO No. 33.

On August 27, 2003, the NHA and RBI executed a Memorandum of Agreementwhereby both parties agreed to terminate the JVA and subsequent

agreements. During this time, NHA reported that 34 temporary housingstructures and 21 permanent housing structures had been turned over by RBI.

ISSUES:

1.

Whether respondents NHA and RBI have been granted the power and

authority to reclaim lands of the public domain as this power is vestedexclusively in PEA as claimed by petitioner

2.

Whether respondents NHA and RBI were given the power and authority

by DENR to reclaim foreshore and submerged lands3.

Whether respondent RBI can acquire reclaimed foreshore and

submerged lands considered as alienable and outside the commerce of

man

4.

Whether respondent RBI can acquire reclaimed lands when there was no

declaration that said lands are no longer needed for public use5.

Whether there is a law authorizing sale of reclaimed lands

6. Whether the transfer of reclaimed lands to RBI was done by publicbidding

7. Whether RBI, being a private corporation, is barred by the Constitutionto acquire lands of public domain

8.

Whether respondents can be compelled to disclose all information

related to the SMDRP9.

Whether the operative fact doctrine applies to the instant position

HELD:

1. Executive Order 525 reads that the PEA shall be primarily responsiblefor integrating, directing, and coordinating all reclamation projects for

and on behalf of the National Government. This does not mean that it

shall be responsible for all. The requisites for a valid and legalreclamation project are approval by the President (which were provided

for by MOs), favourable recommendation of PEA (which were seen as apart of its recommendations to the EXECOM), and undertaken either by

PEA or entity under contract of PEA or by the National GovernmentAgency (NHA is a government agency whose authority to reclaim lands

under consultation with PEA is derived under PD 727 and RA 7279).

2.

Notwithstanding the need for DENR permission, the DENR is deemed tohave granted the authority to reclaim in the Smokey Mountain Projectfor the DENR is one of the members of the EXECOM which provides

reviews for the project. ECCs and Special Patent Orders were given bythe DENR which are exercises of its power of supervision over the

project. Furthermore, it was the President via the abovementioned MOs

that originally authorized the reclamation. It must be noted that thereclamation of lands of public domain is reposed first in the Philippine

President.3.

The reclaimed lands were classified alienable and disposable via MO 415

issued by President Aquino and Proclamation Nos. 39 and 465 byPresident Ramos.

4.

Despite not having an explicit declaration, the lands have been deemed

to be no longer needed for public use as stated in Proclamation No. 39that these are to be ―disposed to qualified beneficiaries.‖ Furthermore,

these lands have already been necessarily reclassified as alienable and

disposable lands under the BOT law.5.

Letter I of Sec. 6 of PD 757 clearly states that the NHA can acquire

property rights and interests and encumber or otherwise dispose of

them as it may deem appropriate.





provided the doctrine] were promulgated after the petitioner filed this appeal on

4 August 1997, and decided to take cognizance of the present case.

(1) YES, the right to appeal is lost. Petitioner's insistence that the 30-dayreglementary period provided by Section 61 of Commonwealth Act No. 137, as

amended, applies, cannot be sustained by this Court. By providing a five-dayperiod within which to file an appeal on the decisions of the Director of Mines

and Geo-Sciences, Presidential Decree No. 463 unquestionably repealed Section

61 of Commonwealth Act No. 137.

Nor can petitioner invoke the doctrine that rules of technicality must yield to thebroader interest of substantial justice. The right to appeal is not part of due

process of law but is a mere statutory privilege to be exercised only in themanner and in accordance with the provisions of the law.

In the instant case, petitioner failed to state any compelling reason for not filingits appeal within the mandated period. Instead, the records show that after

failing to comply with the period within which to file their motion forreconsideration on time, they again failed to file their appeal before the Office of

the DENR Secretary within the time provided by law.

(2) NO, Even if petitioner had not lost its right to appeal, it cannot claim any

mining rights over Block 159 for failure to comply with the legal requirements.

SEC. 15. Government Reserved Land. – Lands reserved by the Government for

purposes other than mining are open to prospecting. Any interested party mayfile an application therefore with the head of the agency administering said land,

subject always to compliance with pertinent laws and rules and regulations

covering such reserved land. Such application shall be acted upon within thirty(30) days. In such cases, the compensation due the surface owner shall accrue

equally to the agency administering the reserved land and the Bureau ofMines.

The law enumerates the following requirements:

(1) a prospecting permit from the agency that has jurisdiction over the area, in

this case, the OEA;(2) an exploration permit from the BMGS;

(3) if the exploration reveals the presence of commercial deposit, the permitee

applies before the BMGS for the exclusion of the area from the reservation;(4) granting by the president of the application to exclude the area from the

reservation; and

(5) a mining agreement approved by the DENR Secretary.

In this case, petitioner complied with the first requirement and obtained a

prospecting permit from the OEA. In its correspondence with the petitioner, theOEA, however, advised the petitioner on two separate occasions to obtain a

"prospecting permit" from the BMGS, although the OEA was probably referringto an exploration permit. The petitioner did not apply for an exploration permit

with the BMGS, nor would the BMGS have granted petitioner an explorationpermit because when petitioner wrote to the BMGS informing the latter of its

intention to enter into an MPSA with the DENR over Block 159, the BMGS

informed the petitioner that the respondent's claim over Block 159 had alreadypreceded that of the petitioner. The advice given by the BMGS was justified

since at that time, the respondent already had a pending application for theexclusion of Block 159 from the Malangas Coal Reservation. Thereafter, the

petitioner filed his MPSA application, without complying with the second, thirdand fourth requisites. Since it ignored the sound advice of the OEA and the

BMGS, the government agencies concerned, and stubbornly insisted on its

incorrect procedure, petitioner cannot complain now that its MPSA was revokedfor failure to comply with the legal requirements.

OBITER DICTA:

(1) Decisions of the Supreme Court on mining disputes have recognized a

distinction between

(1) the primary powers granted by pertinent provisions of law to the thenSecretary of Agriculture and Natural Resources (and the bureau directors) of anexecutive or administrative nature, such as "granting of license, permits, lease

and contracts, or approving, rejecting, reinstating or cancelling applications, ordeciding conflicting applications," and

(2) controversies or disagreements of civil or contractual nature between

litigants which are questions of a judicial nature that may be adjudicated only bythe courts of justice.

(2) Findings of fact by the Mines Adjudication Board, which exercises appellate

jurisdiction over decisions or orders of the panel of arbitrators, shall beconclusive and binding on the parties, and its decision or order shall be final and

executory. But resort to the appropriate court, through a petition for review by

certiorari, involving questions of law, may be made within thirty days from thereceipt of the order or decision of the Mines Adjudication Board.

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